<PAGE> PAGE 1
000 A000000 04/30/1999
000 C000000 0001058413
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
001 B000000 811-08875
001 C000000 7138316903
002 A000000 2919 ALLEN PARKWAY, L7-01
002 B000000 HOUSTON
002 C000000 TX
002 D010000 77019
003 000000 Y
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 23
007 C010100 1
007 C020100 AMERICAN GENERAL STOCK INDEX FUND
007 C030100 N
007 C010200 2
007 C020200 AMERICAN GENERAL MID CAP INDEX FUND
007 C030200 N
007 C010300 3
007 C020300 AMERICAN GENERAL SMALL CAP INDEX FUND
007 C030300 N
007 C010400 4
007 C020400 AMERICAN GENERAL INTERNATIONAL GROWTH FUND
007 C030400 N
007 C010500 5
007 C020500 AMERICAN GENERAL LARGE CAP GROWTH FUND
007 C030500 N
007 C010600 6
007 C020600 AMERICAN GENERAL MID CAP GROWTH FUND
007 C030600 N
007 C010700 7
007 C020700 AMERICAN GENERAL SMALL CAP GROWTH FUND
007 C030700 N
007 C010800 8
007 C020800 AMERICAN GENERAL INTERNATIONAL VALUE FUND
007 C030800 N
007 C010900 9
007 C020900 AMERICAN GENERAL LARGE CAP VALUE FUND
007 C030900 N
007 C011000 10
007 C021000 AMERICAN GENERAL MID CAP VALUE FUND
<PAGE> PAGE 2
007 C031000 N
007 C011100 11
007 C021100 AMERICAN GENERAL SMALL CAP VALUE FUND
007 C031100 N
007 C011200 12
007 C021200 AMERICAN GENERAL SOCIALLY RESPONSIBLE FUND
007 C031200 N
007 C011300 13
007 C021300 AMERICAN GENERAL BALANCED FUND
007 C031300 N
007 C011400 14
007 C021400 AMERICAN GENERAL HIGH YIELD BOND FUND
007 C031400 N
007 C011500 15
007 C021500 AMERICAN GENERAL STRATEGIC BOND FUND
007 C031500 N
007 C011600 16
007 C021600 AMERICAN GENERAL DOMESTIC BOND FUND
007 C031600 N
007 C011700 17
007 C021700 AMERICAN GENERAL CORE BOND FUND
007 C031700 N
007 C011800 18
007 C021800 AMERICAN GENERAL MUNICIPAL BOND FUND
007 C031800 N
007 C011900 19
007 C021900 AMERICAN GENERAL MONEY MARKET FUND
007 C031900 N
007 C012000 20
007 C022000 AMERICAN GENERAL MUNICIPAL MONEY MARKET FUND
007 C032000 N
007 C012100 21
007 C022100 AMERICAN GENERAL GROWTH LIFSTYLE FUND
007 C032100 N
007 C012200 22
007 C022200 AMERICAN GENERAL MODERATE GROWTH LIFSTYLE FUN
007 C032200 N
007 C012300 23
007 C022300 AMERICAN GENERAL CONSERVATIVE GROWTH LIFESTYE
007 C032300 N
007 C012400 24
007 C012500 25
007 C012600 26
007 C012700 27
007 C012800 28
007 C012900 29
007 C013000 30
010 A00AA01 VALIC RETIREMENT SERVICES COMPANY
010 C01AA01 HOUSTON
010 C02AA01 TX
010 C03AA01 77019
<PAGE> PAGE 3
010 A00AA02 VALIC INVESTMENT SERVICES COMPANY
010 B00AA02 8-50018
010 C01AA02 HOUSTON
010 C02AA02 TX
010 C03AA02 77019
010 A00AA03 THE VARIABLE ANNUNITY LIFE INSURANCE COMPANY
010 C01AA03 HOUSTON
010 C02AA03 TX
010 C03AA03 77019
011 A00AA01 VALIC INVESTMENT SERVICES COMPANY
011 B00AA01 8-50018
011 C01AA01 HOUSTON
011 C02AA01 TX
011 C03AA01 77019
012 A00AA01 NATIONAL FINANCIAL DATA SERVICES, INC.
012 B00AA01 84-1078
012 C01AA01 KANSAS CITY
012 C02AA01 MO
012 C03AA01 64105
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 HOUSTON
013 B02AA01 TX
013 B03AA01 77010
014 A00AA01 VALIC INVESTMENT SERVICES COMPANY
014 B00AA01 8-50018
014 A00AA02 A.G. DISTRIBUTORS, INC.
014 B00AA02 8-00000
014 A00AA03 THE VALIC ANNUITY MARKETING COMPANY
014 B00AA03 8-00000
014 A00AA04 STATE STREET BROKERAGE SERVICES, INC.
014 B00AA04 8-0000
014 A00AA05 AMERICAN FUNDS DISTRIBUTORS
014 B00AA05 8-000
014 A00AA06 JP MORGAN SECURITIES INC. (NORTH AMERICA)
014 B00AA06 8-0000
014 A00AA07 JP MORGAN SECURITIES LTD. (EUROPE)
014 B00AA07 8-0000
014 A00AA08 JP MORGAN SECURITIES ASIA (FAR EAST)
014 B00AA08 8-0000
014 A00AA09 NEUBERGER BERMAN, LLC
014 B00AA09 8-0000
014 A00AA10 BTALEX BROWN
014 B00AA10 8-0000
014 A00AA11 BTALEX BROWN INTERNATIONAL
014 B00AA11 8-0000
014 A00AA12 BANKERS TRUST INTERNATIONAL PLC
014 B00AA12 8-0000
014 A00AA13 BT FUTURES CORPORATION
014 B00AA13 8-0000
014 A00AA14 BT BROKERAGE CORP.
014 B00AA14 8-0000
<PAGE> PAGE 4
014 A00AA15 IBT ITAU BANKERS TRUST BANCO DE INVESTIMENTO
014 B00AA15 8-0000
014 A00AA16 BT CANADA SECURITIES, INC.
014 B00AA16 8-0000
014 A00AA17 BTALEX BROWN CANADA, INC.
014 B00AA17 8-0000
014 A00AA18 BT AUSTRIA LIMITED
014 B00AA18 8-0000
014 A00AA19 BT ASIA SECURITIES LIMITED
014 B00AA19 8-0000
014 A00AA20 P.T. BT PRIMA SECURITIES
014 B00AA20 8-0000
014 A00AA21 GOLDMAN SACHS & COMPANY
014 B00AA21 8-0000
014 A00AA22 SUMITOMO CAPITAL MARKETS
014 B00AA22 8-0000
014 A00AA23 KOTAK MAHINDRA CAPITAL COMPANY
014 B00AA23 8-0000
014 A00AA24 PT BAHANA PEMBINAAN USHA INDONESIA
014 B00AA24 8-00000
015 A00AA01 STATE STREET BANK AND TRUST COMPANY
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02110
015 E01AA01 X
015 A00AA02 WESTPAC BANKING CORPORATION
015 B00AA02 S
015 C01AA02 N/A
015 D01AA02 AUSTRALIA
015 E04AA02 X
015 A00AA03 ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN A
015 B00AA03 S
015 C01AA03 N/A
015 D01AA03 AUSTRIA
015 E04AA03 X
015 A00AA04 GENERALE DE BANQUE
015 B00AA04 S
015 C01AA04 N/A
015 D01AA04 BELGIUM
015 E04AA04 X
015 A00AA05 STATE STREET TRUST COMPANY CANADA
015 B00AA05 S
015 C01AA05 N/A
015 D01AA05 CANADA
015 E04AA05 X
015 A00AA06 DEN DANSKE BANK
015 B00AA06 S
015 C01AA06 N/A
015 D01AA06 DENMARK
015 E04AA06 X
<PAGE> PAGE 5
015 A00AA07 MERITA BANK LIMITED
015 B00AA07 S
015 C01AA07 N/A
015 D01AA07 FINLAND
015 E04AA07 X
015 A00AA08 BANQUE PARIBAS
015 B00AA08 S
015 C01AA08 N/A
015 D01AA08 FRANCE
015 E04AA08 X
015 A00AA09 DRESDNER BANK AG
015 B00AA09 S
015 C01AA09 N/A
015 D01AA09 GERMANY
015 E04AA09 X
015 A00AA10 STANDARD CHARTERED BANK
015 B00AA10 S
015 C01AA10 N/A
015 D01AA10 HONG KONG
015 E04AA10 X
015 A00AA11 BANK OF IRELAND
015 B00AA11 S
015 C01AA11 N/A
015 D01AA11 IRELAND
015 E04AA11 X
015 A00AA12 BANQUE PARIBAS
015 B00AA12 S
015 C01AA12 N/A
015 D01AA12 ITALY
015 E04AA12 X
015 A00AA13 THE FUJI BANK, LIMITED
015 B00AA13 S
015 C01AA13 N/A
015 D01AA13 JAPAN
015 E04AA13 X
015 A00AA14 STANDARD CHARTERED BANK MALAYSIA BERHAD
015 B00AA14 S
015 C01AA14 N/A
015 D01AA14 MALAYSIA
015 E04AA14 X
015 A00AA15 CITIBANK MEXICO, S.A.
015 B00AA15 S
015 C01AA15 N/A
015 D01AA15 MEXICO
015 E04AA15 X
015 A00AA16 MEES PIERSON N.V.
015 B00AA16 S
015 C01AA16 N/A
015 D01AA16 THE NETHERLANDS
015 E04AA16 X
015 A00AA17 ANZ BANKING GROUP
<PAGE> PAGE 6
015 B00AA17 S
015 C01AA17 N/A
015 D01AA17 NEW ZEALAND
015 E04AA17 X
015 A00AA18 CHRISTIANIA BANK OG KREDITKASSE
015 B00AA18 S
015 C01AA18 N/A
015 D01AA18 NORWAY
015 E04AA18 X
015 A00AA19 BANCO CMMERCIAL PORTUGUES
015 B00AA19 S
015 C01AA19 N/A
015 D01AA19 PORTUGAL
015 E04AA19 X
015 A00AA20 THE DEVELOPMENT BANK OF SINGAPORE LTD
015 B00AA20 S
015 C01AA20 N/A
015 D01AA20 SINGAPORE
015 E04AA20 X
015 A00AA21 BANCO SANTANDER, S.A.
015 B00AA21 S
015 C01AA21 N/A
015 D01AA21 SPAIN
015 E04AA21 X
015 A00AA22 SKANDINAVISKA ENSKILDA BANKEN
015 B00AA22 S
015 C01AA22 N/A
015 D01AA22 SWEDEN
015 E04AA22 X
015 A00AA23 UNION BANK OF SWITZERLAND, AG
015 B00AA23 S
015 C01AA23 N/A
015 D01AA23 SWITZERLAND
015 E04AA23 X
015 A00AA24 STATE STREET BANK LONDON LIMITED
015 B00AA24 S
015 C01AA24 N/A
015 D01AA24 UNITED KINGDOM
015 E04AA24 X
015 A00AA25 CITIBANK, N.A.
015 B00AA25 S
015 C01AA25 N/A
015 D01AA25 ARGENTINA
015 E04AA25 X
015 A00AA26 BRITISH BANK OF MIDDLE EAST
015 B00AA26 S
015 C01AA26 N/A
015 D01AA26 BAHRAIN
015 E04AA26 X
015 A00AA27 STANDARD CHARTERED BANK
015 B00AA27 S
<PAGE> PAGE 7
015 C01AA27 N/A
015 D01AA27 BANGLADESH
015 E04AA27 X
015 A00AA28 THE BANK OF BERMUDA LIMITED
015 B00AA28 S
015 C01AA28 N/A
015 D01AA28 BERMUDA
015 E04AA28 X
015 A00AA29 BANCO BOLIVIANO AMERICANO S.A.
015 B00AA29 S
015 C01AA29 N/A
015 D01AA29 BOLIVIA
015 E04AA29 X
015 A00AA30 BARCLAYS BANK OF BOTSWANA LIMITED
015 B00AA30 S
015 C01AA30 N/A
015 D01AA30 BOTSWANA
015 E04AA30 X
015 A00AA31 CITIBANK, N.A.
015 B00AA31 S
015 C01AA31 N/A
015 D01AA31 BRAZIL
015 E04AA31 X
015 A00AA32 ING BANK N.V.
015 B00AA32 S
015 C01AA32 N/A
015 D01AA32 BULGARIA
015 E04AA32 X
015 A00AA33 CITIBANK, N.A.
015 B00AA33 S
015 C01AA33 N/A
015 D01AA33 CHILE
015 E04AA33 X
015 A00AA34 THE HONG KONG AND SHANGHAI BANKING CORPORATIO
015 B00AA34 S
015 C01AA34 N/A
015 D01AA34 REPUBLIC OF CHINA
015 E04AA34 X
015 A00AA35 CITITRUST COLOMBIA S.A. SOCIEDAD FIDUCIARIA
015 B00AA35 S
015 C01AA35 N/A
015 D01AA35 COLOMBIA
015 E04AA35 X
015 A00AA36 BANCO BCT S.A.
015 B00AA36 S
015 C01AA36 N/A
015 D01AA36 COSTA RICA
015 E04AA36 X
015 A00AA37 PRIVREDNA BANKA ZAGREB D.D
015 B00AA37 S
015 C01AA37 N/A
<PAGE> PAGE 8
015 D01AA37 CROATIA
015 E04AA37 X
015 A00AA38 BARCLAYS BANK PLC. CYPRUS OFFSHORE BANKING
015 B00AA38 S
015 C01AA38 N/A
015 D01AA38 CYPRUS
015 E04AA38 X
015 A00AA39 CESKOSLOVENSKA OBCHODNI BANKA, A.S.
015 B00AA39 S
015 C01AA39 N/A
015 D01AA39 CZECH REPUBLIC
015 E04AA39 X
015 A00AA40 CITIBANK, N.A.
015 B00AA40 S
015 C01AA40 N/A
015 D01AA40 ECUADOR
015 E04AA40 X
015 A00AA41 NATIONAL BANK OF EGYPT
015 B00AA41 S
015 C01AA41 N/A
015 D01AA41 EGYPT
015 E04AA41 X
015 A00AA42 HANSABANK
015 B00AA42 S
015 C01AA42 N/A
015 D01AA42 ESTONIA
015 E04AA42 X
015 A00AA43 BARCLAYS BANK OF GHANA LIMITED
015 B00AA43 S
015 C01AA43 N/A
015 D01AA43 GHANA
015 E04AA43 X
015 A00AA44 NATIONAL BANK OF GREECE S.A.
015 B00AA44 S
015 C01AA44 N/A
015 D01AA44 GREECE
015 E04AA44 X
015 A00AA45 CITIBANK BUDAPEST RT.
015 B00AA45 S
015 C01AA45 N/A
015 D01AA45 HUNGARY
015 E04AA45 X
015 A00AA46 ICEBANK LTD
015 B00AA46 S
015 C01AA46 N/A
015 D01AA46 ICELAND
015 E04AA46 X
015 A00AA47 DEUTSCHE BANK AG
015 B00AA47 S
015 C01AA47 N/A
015 D01AA47 INDIA
<PAGE> PAGE 9
015 E04AA47 X
015 A00AA48 STANDARD CHARTERED BANK
015 B00AA48 S
015 C01AA48 N/A
015 D01AA48 INDONESIA
015 E04AA48 X
015 A00AA49 BANK HAPOALIM B.M.
015 B00AA49 S
015 C01AA49 N/A
015 D01AA49 ISRAEL
015 E04AA49 X
015 A00AA50 SOCIETE GENERALE DE BANQUES EN COTE D'IVOIRE
015 B00AA50 S
015 C01AA50 N/A
015 D01AA50 IVORY COAST
015 E04AA50 X
015 A00AA51 SCOTIABANK JAMAICA TRUST AND MERCHANT BANK
015 B00AA51 S
015 C01AA51 N/A
015 D01AA51 JAMAICA
015 E04AA51 X
015 A00AA52 BRITISH BANK OF MIDDLE EAST
015 B00AA52 S
015 C01AA52 N/A
015 D01AA52 JORDAN
015 E04AA52 X
015 A00AA53 BARCLAYS BANK OF KENYA LIMITED
015 B00AA53 S
015 C01AA53 N/A
015 D01AA53 KENYA
015 E04AA53 X
015 A00AA54 THE HONG KONG AND SHANGHAI BANKING CORPORATIO
015 B00AA54 S
015 C01AA54 N/A
015 D01AA54 REPUBLIC OF KOREA
015 E04AA54 X
015 A00AA55 JSC HANSABANK-LATVIJA
015 B00AA55 S
015 C01AA55 N/A
015 D01AA55 LATVIA
015 E04AA55 X
015 A00AA56 BRITISH BANK OF THE MIDDLE EAST
015 B00AA56 S
015 C01AA56 N/A
015 D01AA56 LEBANON
015 E04AA56 X
015 A00AA57 VILNIAUS BANKAS AB
015 B00AA57 S
015 C01AA57 N/A
015 D01AA57 LITHUANIA
015 E04AA57 X
<PAGE> PAGE 10
015 A00AA58 THE HONG KONG AND SHANGHAI BANKING CORPORATIO
015 B00AA58 S
015 C01AA58 N/A
015 D01AA58 MAURITIUS
015 E04AA58 X
015 A00AA59 BANQUE COMMERCIALE DU MAROC
015 B00AA59 S
015 C01AA59 N/A
015 D01AA59 MOROCCO
015 E04AA59 X
015 A00AA60 (VIA) STANDARD BANK OF SOUTH AFRICA
015 B00AA60 S
015 C01AA60 N/A
015 D01AA60 NAMIBIA
015 E04AA60 X
015 A00AA61 BRITISH BANK OF THE MIDDLE EAST
015 B00AA61 S
015 C01AA61 N/A
015 D01AA61 OMAN
015 E04AA61 X
015 A00AA62 DEUTSCHE BANK AG
015 B00AA62 S
015 C01AA62 N/A
015 D01AA62 PAKISTAN
015 E04AA62 X
015 A00AA63 CITIBANK, N.A.
015 B00AA63 S
015 C01AA63 N/A
015 D01AA63 PERU
015 E04AA63 X
015 A00AA64 STANDARD CHARTERED BANK
015 B00AA64 S
015 C01AA64 N/A
015 D01AA64 PHILIPPINES
015 E04AA64 X
015 A00AA65 CITIBANK (POLAND) S.A.
015 B00AA65 S
015 C01AA65 N/A
015 D01AA65 POLAND
015 E04AA65 X
015 A00AA66 ING BANK N.V.
015 B00AA66 S
015 C01AA66 N/A
015 D01AA66 ROMANIA
015 E04AA66 X
015 A00AA67 CREDIT SUISSE FIRST BOSTON AO, MOSCOW
015 B00AA67 S
015 C01AA67 N/A
015 D01AA67 RUSSIA
015 E04AA67 X
015 A00AA68 CESKOSLOVENSKA OBCHODNA BANKA, A.S.
<PAGE> PAGE 11
015 B00AA68 S
015 C01AA68 N/A
015 D01AA68 SLOVAK REPUBLIC
015 E04AA68 X
015 A00AA69 BANK AUSTRIA D.D. LJUBLJANA
015 B00AA69 S
015 C01AA69 N/A
015 D01AA69 SLOVENIA
015 E04AA69 X
015 A00AA70 STANDARD BANK OF SOUTH AFRICA LIMITED
015 B00AA70 S
015 C01AA70 N/A
015 D01AA70 SOUTH AFRICA
015 E04AA70 X
015 A00AA71 THE HONG KONG AND SHANGHAI BANKING CORPORATIO
015 B00AA71 S
015 C01AA71 N/A
015 D01AA71 SRI LANKA
015 E04AA71 X
015 A00AA72 STANDARD BANK OF SWAZILAND LIMITED
015 B00AA72 S
015 C01AA72 N/A
015 D01AA72 SWAZILAND
015 E04AA72 X
015 A00AA73 CENTRAL TRUST OF CHINA
015 B00AA73 S
015 C01AA73 N/A
015 D01AA73 TAIWAN-R.O.C.
015 E04AA73 X
015 A00AA74 STANDARD CHARTERED BANK
015 B00AA74 S
015 C01AA74 N/A
015 D01AA74 THAILAND
015 E04AA74 X
015 A00AA75 REPUBLIC BANK LIMITED
015 B00AA75 S
015 C01AA75 N/A
015 D01AA75 TRINIDAD & TOBAGO
015 E04AA75 X
015 A00AA76 BANQUE INTERNATIONALE ARABE DE TUNISIE
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015 C01AA76 N/A
015 D01AA76 TUNISIA
015 E04AA76 X
015 A00AA77 CITIBANK, N.A. OTTOMAN BANK
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015 C01AA77 N/A
015 D01AA77 TURKEY
015 E04AA77 X
015 A00AA78 ING BANK, UKRAINE
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<PAGE> PAGE 12
015 C01AA78 N/A
015 D01AA78 UKRAINE
015 E04AA78 X
015 A00AA79 CITIBANK, N.A.
015 B00AA79 S
015 C01AA79 N/A
015 D01AA79 URUGUAY
015 E04AA79 X
015 A00AA80 CITIBANK, N.A.
015 B00AA80 S
015 C01AA80 N/A
015 D01AA80 VENEZUELA
015 E04AA80 X
015 A00AA81 BARCLAYS BANK OF ZAMBIA LIMITED
015 B00AA81 S
015 C01AA81 N/A
015 D01AA81 ZAMBIA
015 E04AA81 X
015 A00AA82 BARCLAYS BANK OF ZIMBABWE LIMITED
015 B00AA82 S
015 C01AA82 N/A
015 D01AA82 ZIMBABWE
015 E04AA82 X
015 A00AA83 THE DAIWA BANK, LIMITED
015 B00AA83 S
015 C01AA83 N/A
015 D01AA83 JAPAN
015 E04AA83 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 54
019 C00AA00 AMERICANGE
020 A000001 SALOMON SMITH BARNEY
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020 A000002 INVESTMENT TECHNOLOGY GROUP
020 B000002 95-4339369
020 C000002 7
020 A000003 MORGAN STAINLEY DEAN WITTER
020 B000003 13-2655998
020 C000003 9
020 A000004 NEUBERGER BERMAN
020 B000004 13-5221910
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020 A000005 MERRILL LYNCH PIERCE FENNER
020 B000005 13-5674085
020 C000005 8
020 A000006 R.L. MANLEY
020 B000006 0000000000
020 C000006 6
020 A000007 CREDIT LYONNAIS
<PAGE> PAGE 13
020 B000007 0000000000
020 C000007 4
020 A000008 FIRST BOSTON CORP
020 B000008 13-5659485
020 C000008 3
020 A000009 SBC WARBURG
020 B000009 13-1939216
020 C000009 3
020 A000010 J.P. MORGAN
020 B000010 13-3224016
020 C000010 2
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022 A000001 MERRILL LYNCH PIERCE FENNER
022 B000001 13-5674085
022 C000001 1260792
022 D000001 144697
022 A000002 LEHMAN BROTHERS
022 B000002 13-2501855
022 C000002 645719
022 D000002 66583
022 A000003 STATE STREET BANK & TRUST
022 B000003 04-1867445
022 C000003 582391
022 D000003 1020
022 A000004 FIRST BOSTON CORP
022 B000004 13-5659485
022 C000004 361988
022 D000004 17724
022 A000005 SALOMON SMITH BARNEY
022 B000005 13-3082694
022 C000005 217645
022 D000005 99029
022 A000006 NATIONS BANK
022 B000006 56-1684171
022 C000006 181555
022 D000006 8732
022 A000007 PAINE WEBBER INC
022 B000007 13-2638166
022 C000007 127700
022 D000007 82783
022 A000008 MORGAN STANLEY DEAN WITTER
022 B000008 13-2655998
022 C000008 111150
022 D000008 57408
022 A000009 DONALDSUN, LUFKIN & JERNETT
022 B000009 13-2741729
022 C000009 101358
022 D000009 64381
022 A000010 DEUSTCHE BANK
022 B000010 13-6124068
022 C000010 57342
<PAGE> PAGE 14
022 D000010 83967
023 C000000 4293865
023 D000000 845544
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 Y
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 N
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 N
077 A000000 Y
077 B000000 N
077 C000000 N
077 D000000 Y
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
008 A000101 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000101 A
008 C000101 801-08318
<PAGE> PAGE 15
008 D010101 HOUSTON
008 D020101 TX
008 D030101 77019
008 A000102 BANKERS TRUST COMPANY
008 B000102 S
008 C000102 801-00000
008 D010102 NEW YORK
008 D020102 NY
008 D030102 10006
024 000100 Y
025 A000101 MORGAN STANEY DEAN WITTER DISCOVER
025 B000101 13-2655998
025 C000101 E
025 D000101 40
025 A000102 LEHMAN BROTHERS HOLDINGS, INC.
025 B000102 13-2501855
025 C000102 E
025 D000102 6
025 A000103 STATE STREET CORP
025 B000103 04-1867445
025 C000103 E
025 D000103 9
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025 A000105 DELETE
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025 A000106 DELETE
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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008 B000201 A
008 C000201 801-08318
008 D010201 HOUSTON
008 D020201 TX
008 D030201 77019
008 A000202 BANKERS TRUST COMPANY
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<PAGE> PAGE 21
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<PAGE> PAGE 22
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<PAGE> PAGE 23
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<PAGE> PAGE 24
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<PAGE> PAGE 25
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008 A000301 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000301 A
008 C000301 801-08318
008 D010301 HOUSTON
008 D020301 TX
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008 A000302 BANKERS TRUST COMPANY
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<PAGE> PAGE 26
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<PAGE> PAGE 27
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<PAGE> PAGE 28
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<PAGE> PAGE 29
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<PAGE> PAGE 30
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008 A000401 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000401 A
008 C000401 801-08318
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<PAGE> PAGE 31
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<PAGE> PAGE 32
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<PAGE> PAGE 33
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<PAGE> PAGE 34
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<PAGE> PAGE 35
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008 A000501 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000501 A
008 C000501 801-08318
008 D010501 HOUSTON
008 D020501 TX
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<PAGE> PAGE 36
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<PAGE> PAGE 37
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<PAGE> PAGE 38
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<PAGE> PAGE 39
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<PAGE> PAGE 40
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008 B000601 A
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<PAGE> PAGE 41
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<PAGE> PAGE 42
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<PAGE> PAGE 43
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<PAGE> PAGE 44
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<PAGE> PAGE 45
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008 B000701 A
008 C000701 801-08318
008 D010701 HOUSTON
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008 A000702 J.P. MORGAN INVESTMENT MANAGEMENT INC.
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<PAGE> PAGE 46
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<PAGE> PAGE 47
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<PAGE> PAGE 48
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<PAGE> PAGE 49
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<PAGE> PAGE 50
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008 A000801 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000801 A
008 C000801 801-08318
008 D010801 HOUSTON
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<PAGE> PAGE 51
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<PAGE> PAGE 52
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<PAGE> PAGE 53
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<PAGE> PAGE 54
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<PAGE> PAGE 55
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008 A000901 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B000901 A
008 C000901 801-08318
008 D010901 HOUSTON
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<PAGE> PAGE 56
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<PAGE> PAGE 57
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048 J010900 0
048 J020900 0.000
048 K010900 0
048 K020900 0.000
049 000900 N
050 000900 N
051 000900 N
052 000900 N
053 A000900 Y
053 B000900 Y
053 C000900 N
055 A000900 N
055 B000900 N
056 000900 Y
057 000900 N
058 A000900 N
059 000900 Y
<PAGE> PAGE 58
060 A000900 Y
060 B000900 Y
061 000900 50
062 A000900 N
062 B000900 0.0
062 C000900 0.0
062 D000900 0.0
062 E000900 0.0
062 F000900 0.0
062 G000900 0.0
062 H000900 0.0
062 I000900 0.0
062 J000900 0.0
062 K000900 0.0
062 L000900 0.0
062 M000900 0.0
062 N000900 0.0
062 O000900 0.0
062 P000900 0.0
062 Q000900 0.0
062 R000900 0.0
066 A000900 Y
066 B000900 N
066 C000900 N
066 D000900 Y
066 E000900 N
066 F000900 N
066 G000900 N
067 000900 N
068 A000900 N
068 B000900 N
069 000900 N
070 A010900 Y
070 A020900 N
070 B010900 Y
070 B020900 N
070 C010900 Y
070 C020900 N
070 D010900 Y
070 D020900 N
070 E010900 Y
070 E020900 N
070 F010900 Y
070 F020900 N
070 G010900 Y
070 G020900 N
070 H010900 Y
070 H020900 N
070 I010900 N
070 I020900 N
070 J010900 Y
<PAGE> PAGE 59
070 J020900 N
070 K010900 Y
070 K020900 N
070 L010900 Y
070 L020900 N
070 M010900 N
070 M020900 N
070 N010900 Y
070 N020900 N
070 O010900 Y
070 O020900 N
070 P010900 Y
070 P020900 N
070 Q010900 N
070 Q020900 N
070 R010900 N
070 R020900 N
071 A000900 8221
071 B000900 1929
071 C000900 5875
071 D000900 33
072 A000900 6
072 B000900 4
072 C000900 53
072 D000900 0
072 E000900 0
072 F000900 14
072 G000900 2
072 H000900 0
072 I000900 8
072 J000900 4
072 K000900 0
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072 M000900 1
072 N000900 26
072 O000900 0
072 P000900 0
072 Q000900 1
072 R000900 2
072 S000900 0
072 T000900 10
072 U000900 0
072 V000900 0
072 W000900 1
072 X000900 68
072 Y000900 30
072 Z000900 19
072AA000900 46
072BB000900 0
072CC010900 847
072CC020900 0
<PAGE> PAGE 60
072DD010900 5
072DD020900 16
072EE000900 0
073 A010900 0.0000
073 A020900 0.0000
073 B000900 0.0000
073 C000900 0.0000
074 A000900 14
074 B000900 0
074 C000900 110
074 D000900 0
074 E000900 0
074 F000900 7185
074 G000900 0
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074 K000900 10
074 L000900 33
074 M000900 0
074 N000900 7352
074 O000900 60
074 P000900 25
074 Q000900 0
074 R010900 0
074 R020900 0
074 R030900 0
074 R040900 23
074 S000900 0
074 T000900 7244
074 U010900 156
074 U020900 470
074 V010900 0.00
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074 W000900 0.0000
074 X000900 320
074 Y000900 0
075 A000900 0
075 B000900 6290
076 000900 0.00
008 A001001 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001001 A
008 C001001 801-08318
008 D011001 HOUSTON
008 D021001 TX
008 D031001 77019
008 A001002 NEUBERGER BERMAN MANGEMENT INC.
008 B001002 S
008 C001002 801-3908
008 D011002 NEW YORK
008 D021002 NY
<PAGE> PAGE 61
008 D031002 10158
008 D041002 0180
024 001000 N
028 A011000 4996
028 A021000 0
028 A031000 0
028 A041000 0
028 B011000 27
028 B021000 0
028 B031000 0
028 B041000 0
028 C011000 25
028 C021000 16
028 C031000 0
028 C041000 0
028 D011000 110
028 D021000 0
028 D031000 0
028 D041000 0
028 E011000 281
028 E021000 0
028 E031000 0
028 E041000 2
028 F011000 219
028 F021000 3
028 F031000 0
028 F041000 10
028 G011000 5658
028 G021000 19
028 G031000 0
028 G041000 12
028 H001000 364
029 001000 Y
030 A001000 8
030 B001000 5.75
030 C001000 0.00
031 A001000 4
031 B001000 0
032 001000 0
033 001000 4
034 001000 Y
035 001000 0
036 A001000 N
036 B001000 0
037 001000 N
038 001000 0
039 001000 N
040 001000 Y
041 001000 Y
042 A001000 0
042 B001000 0
<PAGE> PAGE 62
042 C001000 100
042 D001000 0
042 E001000 0
042 F001000 0
042 G001000 0
042 H001000 0
043 001000 0
044 001000 0
045 001000 Y
046 001000 N
047 001000 Y
048 001000 0.000
048 A011000 100000
048 A021000 0.750
048 B011000 150000
048 B021000 0.725
048 C011000 250000
048 C021000 0.700
048 D011000 250000
048 D021000 0.675
048 E011000 0
048 E021000 0.000
048 F011000 0
048 F021000 0.000
048 G011000 0
048 G021000 0.000
048 H011000 0
048 H021000 0.000
048 I011000 0
048 I021000 0.000
048 J011000 0
048 J021000 0.000
048 K011000 750000
048 K021000 0.650
049 001000 N
050 001000 N
051 001000 N
052 001000 N
053 A001000 Y
053 B001000 Y
053 C001000 N
055 A001000 Y
055 B001000 N
056 001000 Y
057 001000 N
058 A001000 N
059 001000 Y
060 A001000 Y
060 B001000 Y
061 001000 50
062 A001000 N
<PAGE> PAGE 63
062 B001000 0.0
062 C001000 0.0
062 D001000 0.0
062 E001000 0.0
062 F001000 0.0
062 G001000 0.0
062 H001000 0.0
062 I001000 0.0
062 J001000 0.0
062 K001000 0.0
062 L001000 0.0
062 M001000 0.0
062 N001000 0.0
062 O001000 0.0
062 P001000 0.0
062 Q001000 0.0
062 R001000 0.0
066 A001000 Y
066 B001000 N
066 C001000 N
066 D001000 Y
066 E001000 N
066 F001000 N
066 G001000 N
067 001000 N
068 A001000 N
068 B001000 N
069 001000 N
070 A011000 Y
070 A021000 N
070 B011000 Y
070 B021000 N
070 C011000 Y
070 C021000 N
070 D011000 Y
070 D021000 N
070 E011000 N
070 E021000 N
070 F011000 N
070 F021000 N
070 G011000 N
070 G021000 N
070 H011000 N
070 H021000 N
070 I011000 N
070 I021000 N
070 J011000 Y
070 J021000 N
070 K011000 Y
070 K021000 N
070 L011000 Y
<PAGE> PAGE 64
070 L021000 N
070 M011000 Y
070 M021000 N
070 N011000 Y
070 N021000 N
070 O011000 Y
070 O021000 N
070 P011000 Y
070 P021000 N
070 Q011000 N
070 Q021000 N
070 R011000 N
070 R021000 N
071 A001000 11562
071 B001000 5929
071 C001000 5683
071 D001000 104
072 A001000 6
072 B001000 6
072 C001000 52
072 D001000 0
072 E001000 0
072 F001000 21
072 G001000 2
072 H001000 0
072 I001000 7
072 J001000 4
072 K001000 0
072 L001000 0
072 M001000 1
072 N001000 26
072 O001000 0
072 P001000 0
072 Q001000 1
072 R001000 2
072 S001000 0
072 T001000 9
072 U001000 0
072 V001000 0
072 W001000 0
072 X001000 73
072 Y001000 30
072 Z001000 15
072AA001000 634
072BB001000 0
072CC011000 609
072CC021000 0
072DD011000 4
072DD021000 15
072EE001000 0
073 A011000 0.0000
<PAGE> PAGE 65
073 A021000 0.0000
073 B001000 0.0000
073 C001000 0.0000
074 A001000 17
074 B001000 0
074 C001000 110
074 D001000 0
074 E001000 0
074 F001000 6876
074 G001000 0
074 H001000 0
074 I001000 0
074 J001000 110
074 K001000 17
074 L001000 33
074 M001000 0
074 N001000 7163
074 O001000 193
074 P001000 31
074 Q001000 0
074 R011000 0
074 R021000 0
074 R031000 0
074 R041000 31
074 S001000 0
074 T001000 6908
074 U011000 134
074 U021000 425
074 V011000 0.00
074 V021000 0.00
074 W001000 0.0000
074 X001000 223
074 Y001000 0
075 A001000 0
075 B001000 6115
076 001000 0.00
008 A001101 THE VARIABLE ANUNITY LIFE INSURANCE COMPANY
008 B001101 A
008 C001101 801-08318
008 D011101 HOUSTON
008 D021101 TX
008 D031101 77019
008 A001102 BANKERS TRUST COMPANY
008 B001102 S
008 C001102 801-0000
008 D011102 NEW YORK
008 D021102 NY
008 D031102 10006
008 A001103 FIDUCIARY MANAGEMENT ASSOCIATES, INC.
008 B001103 S
008 C001103 801-21271
<PAGE> PAGE 66
008 D011103 CHICAGO
008 D021103 IL
008 D031103 60603
024 001100 N
028 A011100 4996
028 A021100 0
028 A031100 0
028 A041100 0
028 B011100 29
028 B021100 0
028 B031100 0
028 B041100 0
028 C011100 52
028 C021100 12
028 C031100 0
028 C041100 0
028 D011100 60
028 D021100 0
028 D031100 0
028 D041100 0
028 E011100 135
028 E021100 0
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028 E041100 24
028 F011100 168
028 F021100 11
028 F031100 0
028 F041100 3
028 G011100 5440
028 G021100 23
028 G031100 0
028 G041100 27
028 H001100 392
029 001100 Y
030 A001100 1
030 B001100 5.75
030 C001100 0.00
031 A001100 1
031 B001100 0
032 001100 0
033 001100 0
034 001100 Y
035 001100 0
036 A001100 N
036 B001100 0
037 001100 N
038 001100 0
039 001100 N
040 001100 Y
041 001100 Y
042 A001100 0
<PAGE> PAGE 67
042 B001100 0
042 C001100 100
042 D001100 0
042 E001100 0
042 F001100 0
042 G001100 0
042 H001100 0
043 001100 0
044 001100 0
045 001100 Y
046 001100 N
047 001100 Y
048 001100 0.000
048 A011100 50000
048 A021100 0.750
048 B011100 0
048 B021100 0.000
048 C011100 0
048 C021100 0.000
048 D011100 0
048 D021100 0.000
048 E011100 0
048 E021100 0.000
048 F011100 0
048 F021100 0.000
048 G011100 0
048 G021100 0.000
048 H011100 0
048 H021100 0.000
048 I011100 0
048 I021100 0.000
048 J011100 0
048 J021100 0.000
048 K011100 50000
048 K021100 0.650
049 001100 N
050 001100 N
051 001100 N
052 001100 N
053 A001100 Y
053 B001100 Y
053 C001100 N
055 A001100 N
055 B001100 N
056 001100 Y
057 001100 N
058 A001100 N
059 001100 Y
060 A001100 Y
060 B001100 Y
061 001100 50
<PAGE> PAGE 68
062 A001100 N
062 B001100 0.0
062 C001100 0.0
062 D001100 0.0
062 E001100 0.0
062 F001100 0.0
062 G001100 0.0
062 H001100 0.0
062 I001100 0.0
062 J001100 0.0
062 K001100 0.0
062 L001100 0.0
062 M001100 0.0
062 N001100 0.0
062 O001100 0.0
062 P001100 0.0
062 Q001100 0.0
062 R001100 0.0
066 A001100 Y
066 B001100 N
066 C001100 N
066 D001100 Y
066 E001100 N
066 F001100 N
066 G001100 N
067 001100 N
068 A001100 N
068 B001100 N
069 001100 N
070 A011100 Y
070 A021100 N
070 B011100 Y
070 B021100 N
070 C011100 Y
070 C021100 N
070 D011100 Y
070 D021100 Y
070 E011100 Y
070 E021100 N
070 F011100 Y
070 F021100 Y
070 G011100 Y
070 G021100 N
070 H011100 Y
070 H021100 N
070 I011100 N
070 I021100 N
070 J011100 Y
070 J021100 N
070 K011100 Y
070 K021100 Y
<PAGE> PAGE 69
070 L011100 Y
070 L021100 N
070 M011100 N
070 M021100 N
070 N011100 Y
070 N021100 N
070 O011100 Y
070 O021100 N
070 P011100 Y
070 P021100 N
070 Q011100 N
070 Q021100 N
070 R011100 N
070 R021100 N
071 A001100 5694
071 B001100 876
071 C001100 4592
071 D001100 19
072 A001100 6
072 B001100 12
072 C001100 43
072 D001100 0
072 E001100 0
072 F001100 18
072 G001100 1
072 H001100 0
072 I001100 7
072 J001100 3
072 K001100 0
072 L001100 0
072 M001100 1
072 N001100 26
072 O001100 0
072 P001100 0
072 Q001100 1
072 R001100 2
072 S001100 0
072 T001100 8
072 U001100 0
072 V001100 0
072 W001100 0
072 X001100 67
072 Y001100 36
072 Z001100 24
072AA001100 0
072BB001100 131
072CC011100 0
072CC021100 46
072DD011100 6
072DD021100 17
072EE001100 0
<PAGE> PAGE 70
073 A011100 0.0000
073 A021100 0.0000
073 B001100 0.0000
073 C001100 0.0000
074 A001100 4
074 B001100 0
074 C001100 630
074 D001100 0
074 E001100 0
074 F001100 4633
074 G001100 0
074 H001100 0
074 I001100 0
074 J001100 31
074 K001100 20
074 L001100 13
074 M001100 0
074 N001100 5331
074 O001100 17
074 P001100 27
074 Q001100 0
074 R011100 0
074 R021100 0
074 R031100 0
074 R041100 24
074 S001100 0
074 T001100 5263
074 U011100 134
074 U021100 413
074 V011100 0.00
074 V021100 0.00
074 W001100 0.0000
074 X001100 109
074 Y001100 50
075 A001100 0
075 B001100 4707
076 001100 0.00
008 A001201 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001201 A
008 C001201 801-08318
008 D011201 HOUSTON
008 D021201 TX
008 D031201 77019
024 001200 Y
025 A001201 MORGAN STANLEY DEAN WITTER & CO.
025 B001201 13-2655998
025 C001201 E
025 D001201 40
025 A001202 MERRILL LYNCH & CO., INC.
025 B001202 13-5674085
025 C001202 E
<PAGE> PAGE 71
025 D001202 17
025 A001203 STATE STREET CORP
025 B001203 04-1867445
025 C001203 E
025 D001203 9
025 D001204 0
025 D001205 0
025 D001206 0
025 D001207 0
025 D001208 0
028 A011200 4995
028 A021200 0
028 A031200 0
028 A041200 0
028 B011200 6
028 B021200 0
028 B031200 0
028 B041200 0
028 C011200 25
028 C021200 18
028 C031200 0
028 C041200 0
028 D011200 79
028 D021200 0
028 D031200 0
028 D041200 0
028 E011200 98
028 E021200 0
028 E031200 0
028 E041200 5
028 F011200 175
028 F021200 7
028 F031200 0
028 F041200 2
028 G011200 5378
028 G021200 25
028 G031200 0
028 G041200 7
028 H001200 55
029 001200 Y
030 A001200 3
030 B001200 5.75
030 C001200 0.00
031 A001200 2
031 B001200 0
032 001200 0
033 001200 1
034 001200 Y
035 001200 0
036 A001200 N
036 B001200 0
<PAGE> PAGE 72
037 001200 N
038 001200 0
039 001200 N
040 001200 Y
041 001200 Y
042 A001200 0
042 B001200 0
042 C001200 100
042 D001200 0
042 E001200 0
042 F001200 0
042 G001200 0
042 H001200 0
043 001200 0
044 001200 0
045 001200 Y
046 001200 N
047 001200 Y
048 001200 0.250
048 A011200 0
048 A021200 0.000
048 B011200 0
048 B021200 0.000
048 C011200 0
048 C021200 0.000
048 D011200 0
048 D021200 0.000
048 E011200 0
048 E021200 0.000
048 F011200 0
048 F021200 0.000
048 G011200 0
048 G021200 0.000
048 H011200 0
048 H021200 0.000
048 I011200 0
048 I021200 0.000
048 J011200 0
048 J021200 0.000
048 K011200 0
048 K021200 0.000
049 001200 N
050 001200 N
051 001200 N
052 001200 N
053 A001200 Y
053 B001200 Y
053 C001200 N
055 A001200 N
055 B001200 N
056 001200 Y
<PAGE> PAGE 73
057 001200 N
058 A001200 N
059 001200 Y
060 A001200 Y
060 B001200 Y
061 001200 50
062 A001200 N
062 B001200 0.0
062 C001200 0.0
062 D001200 0.0
062 E001200 0.0
062 F001200 0.0
062 G001200 0.0
062 H001200 0.0
062 I001200 0.0
062 J001200 0.0
062 K001200 0.0
062 L001200 0.0
062 M001200 0.0
062 N001200 0.0
062 O001200 0.0
062 P001200 0.0
062 Q001200 0.0
062 R001200 0.0
066 A001200 Y
066 B001200 N
066 C001200 N
066 D001200 Y
066 E001200 N
066 F001200 N
066 G001200 N
067 001200 N
068 A001200 N
068 B001200 N
069 001200 N
070 A011200 Y
070 A021200 N
070 B011200 Y
070 B021200 N
070 C011200 Y
070 C021200 N
070 D011200 Y
070 D021200 N
070 E011200 Y
070 E021200 N
070 F011200 Y
070 F021200 Y
070 G011200 Y
070 G021200 N
070 H011200 Y
070 H021200 N
<PAGE> PAGE 74
070 I011200 N
070 I021200 N
070 J011200 Y
070 J021200 N
070 K011200 Y
070 K021200 N
070 L011200 Y
070 L021200 Y
070 M011200 N
070 M021200 N
070 N011200 Y
070 N021200 N
070 O011200 Y
070 O021200 N
070 P011200 Y
070 P021200 N
070 Q011200 N
070 Q021200 N
070 R011200 N
070 R021200 N
071 A001200 6134
071 B001200 752
071 C001200 5551
071 D001200 14
072 A001200 6
072 B001200 20
072 C001200 31
072 D001200 0
072 E001200 0
072 F001200 7
072 G001200 2
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072 J001200 4
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072 M001200 1
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072 P001200 0
072 Q001200 1
072 R001200 2
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072 T001200 9
072 U001200 0
072 V001200 0
072 W001200 0
072 X001200 59
072 Y001200 32
072 Z001200 24
072AA001200 264
<PAGE> PAGE 75
072BB001200 0
072CC011200 715
072CC021200 0
072DD011200 6
072DD021200 19
072EE001200 0
073 A011200 0.0000
073 A021200 0.0000
073 B001200 0.0000
073 C001200 0.0000
074 A001200 31
074 B001200 0
074 C001200 199
074 D001200 0
074 E001200 0
074 F001200 6154
074 G001200 0
074 H001200 0
074 I001200 0
074 J001200 0
074 K001200 6
074 L001200 22
074 M001200 0
074 N001200 6412
074 O001200 0
074 P001200 18
074 Q001200 0
074 R011200 0
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074 R031200 0
074 R041200 15
074 S001200 0
074 T001200 6379
074 U011200 130
074 U021200 404
074 V011200 0.00
074 V021200 0.00
074 W001200 0.0000
074 X001200 274
074 Y001200 0
075 A001200 0
075 B001200 6124
076 001200 0.00
008 A001301 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001301 A
008 C001301 801-08318
008 D011301 HOUSTON
008 D021301 TX
008 D031301 77019
008 A001302 CAPITAL GUARDIAN TRUST COMPANY
008 B001302 S
<PAGE> PAGE 76
008 C001302 801-0000
008 D011302 LOS ANGELES
008 D021302 CA
008 D031302 90071
024 001300 Y
025 A001301 MORGAN STANLEY CAPITAL CMO
025 B001301 13-2655998
025 C001301 D
025 D001301 97
025 A001302 DONALDSON,LUFKIN & JENRETTE
025 B001302 13-2741729
025 C001302 E
025 D001302 49
025 D001303 0
025 D001304 0
025 D001305 0
025 D001306 0
025 D001307 0
025 D001308 0
028 A011300 4995
028 A021300 0
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028 D041300 2
028 E011300 687
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028 F021300 24
028 F031300 0
028 F041300 4
028 G011300 6575
028 G021300 43
028 G031300 0
028 G041300 6
028 H001300 181
029 001300 Y
030 A001300 6
030 B001300 5.75
<PAGE> PAGE 77
030 C001300 0.00
031 A001300 3
031 B001300 0
032 001300 0
033 001300 3
034 001300 Y
035 001300 0
036 A001300 N
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037 001300 N
038 001300 0
039 001300 N
040 001300 Y
041 001300 Y
042 A001300 0
042 B001300 0
042 C001300 100
042 D001300 0
042 E001300 0
042 F001300 0
042 G001300 0
042 H001300 0
043 001300 0
044 001300 0
045 001300 Y
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048 001300 0.000
048 A011300 25000
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048 D021300 0.000
048 E011300 0
048 E021300 0.000
048 F011300 0
048 F021300 0.000
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048 G021300 0.000
048 H011300 0
048 H021300 0.000
048 I011300 0
048 I021300 0.000
048 J011300 0
048 J021300 0.000
048 K011300 50000
048 K021300 0.450
049 001300 N
<PAGE> PAGE 78
050 001300 N
051 001300 N
052 001300 N
053 A001300 Y
053 B001300 Y
053 C001300 N
055 A001300 N
055 B001300 N
056 001300 Y
057 001300 N
058 A001300 N
059 001300 Y
060 A001300 Y
060 B001300 Y
061 001300 50
062 A001300 N
062 B001300 0.0
062 C001300 0.0
062 D001300 0.0
062 E001300 0.0
062 F001300 0.0
062 G001300 0.0
062 H001300 0.0
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066 C001300 N
066 D001300 N
066 E001300 Y
066 F001300 N
066 G001300 N
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068 B001300 N
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070 A011300 Y
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070 B011300 Y
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<PAGE> PAGE 79
070 D021300 N
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070 F021300 N
070 G011300 Y
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070 H011300 Y
070 H021300 N
070 I011300 N
070 I021300 N
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070 L011300 Y
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070 M021300 N
070 N011300 Y
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070 Q021300 N
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<PAGE> PAGE 80
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<PAGE> PAGE 81
076 001300 0.00
008 A001401 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001401 A
008 C001401 801-08318
008 D011401 HOUSTON
008 D021401 TX
008 D031401 77019
008 A001402 AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
008 B001402 S
008 C001402 801-00000
008 D011402 HOUSTON
008 D021402 TX
008 D031402 77019
024 001400 N
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<PAGE> PAGE 82
034 001400 Y
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<PAGE> PAGE 83
053 C001400 N
055 A001400 Y
055 B001400 N
056 001400 Y
057 001400 N
058 A001400 N
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064 A001400 N
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<PAGE> PAGE 84
070 H011400 Y
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070 J011400 Y
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070 K021400 N
070 L011400 Y
070 L021400 N
070 M011400 N
070 M021400 N
070 N011400 Y
070 N021400 N
070 O011400 Y
070 O021400 N
070 P011400 Y
070 P021400 N
070 Q011400 N
070 Q021400 N
070 R011400 N
070 R021400 N
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<PAGE> PAGE 85
072 Z001400 2515
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008 A001501 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001501 A
008 C001501 801-08318
008 D011501 HOUSTON
008 D021501 TX
008 D031501 77019
<PAGE> PAGE 86
008 A001502 AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
008 B001502 S
008 C001502 801-00000
008 D011502 HOUSTON
008 D021502 TX
008 D031502 77019
024 001500 N
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<PAGE> PAGE 87
040 001500 Y
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<PAGE> PAGE 88
060 A001500 Y
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064 A001500 N
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068 A001500 N
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<PAGE> PAGE 89
070 K021500 N
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<PAGE> PAGE 90
072EE001500 0
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008 A001601 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001601 A
008 C001601 801-08318
008 D011601 HOUSTON
008 D021601 TX
008 D031601 77019
008 A001602 CAPITAL GUARDIAN TRUST COMPANY
008 B001602 S
008 C001602 801-00000
008 D011602 LOS ANGELES
008 D021602 CA
008 D031602 90071
024 001600 Y
<PAGE> PAGE 91
025 A001601 MORGAN STANLEY
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<PAGE> PAGE 92
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<PAGE> PAGE 93
055 B001600 N
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<PAGE> PAGE 94
070 I011600 N
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<PAGE> PAGE 95
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008 A001701 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001701 A
008 C001701 801-08318
008 D011701 HOUSTON
008 D021701 TX
008 D031701 77019
008 A001702 AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
008 B001702 S
<PAGE> PAGE 96
008 C001702 801-0000
008 D011702 HOUSTON
008 D021702 TX
008 D031702 77019
024 001700 Y
025 A001701 MERRILL LYNCH & CO
025 B001701 13-5674085
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<PAGE> PAGE 97
032 001700 0
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<PAGE> PAGE 98
053 A001700 Y
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<PAGE> PAGE 99
070 G011700 Y
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<PAGE> PAGE 100
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008 A001801 THE VARIABLE ANNUNITY LIFE INSURANCE COMPANY
008 B001801 A
008 C001801 801-08318
008 D011801 HOUSTON
<PAGE> PAGE 101
008 D021801 TX
008 D031801 77019
008 A001802 AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
008 B001802 S
008 C001802 801-0000
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008 D021802 TX
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<PAGE> PAGE 102
038 001800 0
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050 001800 N
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<PAGE> PAGE 103
058 A001800 N
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<PAGE> PAGE 104
070 J021800 N
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<PAGE> PAGE 105
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008 A001901 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B001901 A
008 C001901 801-08318
008 D011901 HOUSTON
008 D021901 TX
008 D031901 77019
024 001900 Y
025 A001901 MORGAN STANLEY, DEAN WITTER DISCOVER
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<PAGE> PAGE 106
025 A001902 MERRILL LYNCH & CO
025 B001902 13-5674085
025 C001902 D
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<PAGE> PAGE 107
034 001900 Y
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<PAGE> PAGE 108
053 C001900 N
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<PAGE> PAGE 109
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<PAGE> PAGE 110
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008 A002001 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B002001 A
008 C002001 801-08318
008 D012001 HOUSTON
008 D022001 TX
008 D032001 77019
<PAGE> PAGE 111
008 A002002 AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
008 B002002 S
008 C002002 801-0000
008 D012002 HOUSTON
008 D022002 TX
008 D032002 77019
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<PAGE> PAGE 112
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<PAGE> PAGE 113
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<PAGE> PAGE 114
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<PAGE> PAGE 115
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008 A002101 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B002101 A
008 C002101 801-08318
008 D012101 HOUSTON
008 D022101 TX
008 D032101 77019
024 002100 N
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<PAGE> PAGE 116
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<PAGE> PAGE 117
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<PAGE> PAGE 118
062 N002100 0.0
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<PAGE> PAGE 119
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<PAGE> PAGE 120
074 J002100 0
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074 U012100 136
074 U022100 473
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074 W002100 0.0000
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074 Y002100 0
075 A002100 0
075 B002100 5610
076 002100 0.00
008 A002201 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B002201 A
008 C002201 801-08318
008 D012201 HOUSTON
008 D022201 TX
008 D032201 77019
024 002200 N
028 A012200 4995
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<PAGE> PAGE 121
028 F012200 570
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028 G022200 34
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029 002200 Y
030 A002200 12
030 B002200 5.75
030 C002200 0.00
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032 002200 0
033 002200 5
034 002200 Y
035 002200 0
036 A002200 N
036 B002200 0
037 002200 N
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039 002200 N
040 002200 N
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042 B002200 0
042 C002200 0
042 D002200 0
042 E002200 0
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042 G002200 0
042 H002200 0
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046 002200 N
047 002200 Y
048 002200 0.100
048 A012200 0
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048 B022200 0.000
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<PAGE> PAGE 122
048 G012200 0
048 G022200 0.000
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048 I012200 0
048 I022200 0.000
048 J012200 0
048 J022200 0.000
048 K012200 0
048 K022200 0.000
049 002200 N
050 002200 N
051 002200 N
052 002200 N
053 A002200 N
055 A002200 Y
055 B002200 N
056 002200 Y
057 002200 N
058 A002200 N
059 002200 Y
060 A002200 N
060 B002200 N
061 002200 50
062 A002200 N
062 B002200 0.0
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062 D002200 0.0
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066 A002200 Y
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066 C002200 N
066 D002200 N
066 E002200 Y
066 F002200 N
066 G002200 N
067 002200 N
068 A002200 N
<PAGE> PAGE 123
068 B002200 N
069 002200 N
070 A012200 Y
070 A022200 N
070 B012200 N
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070 C012200 N
070 C022200 N
070 D012200 N
070 D022200 N
070 E012200 N
070 E022200 N
070 F012200 N
070 F022200 N
070 G012200 N
070 G022200 N
070 H012200 N
070 H022200 N
070 I012200 N
070 I022200 N
070 J012200 N
070 J022200 N
070 K012200 Y
070 K022200 Y
070 L012200 N
070 L022200 N
070 M012200 N
070 M022200 N
070 N012200 N
070 N022200 N
070 O012200 Y
070 O022200 N
070 P012200 Y
070 P022200 Y
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070 Q022200 N
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<PAGE> PAGE 124
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<PAGE> PAGE 125
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008 A002301 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
008 B002301 A
008 C002301 801-08318
008 D012301 HOUSTON
008 D022301 TX
008 D032301 77019
024 002300 N
028 A012300 4995
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<PAGE> PAGE 126
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048 J022300 0.000
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048 K022300 0.000
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050 002300 N
051 002300 N
052 002300 N
<PAGE> PAGE 127
053 A002300 N
055 A002300 Y
055 B002300 N
056 002300 Y
057 002300 N
058 A002300 N
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068 A002300 N
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070 B022300 N
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070 C022300 N
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<PAGE> PAGE 128
070 G012300 N
070 G022300 N
070 H012300 N
070 H022300 N
070 I012300 N
070 I022300 N
070 J012300 N
070 J022300 N
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070 K022300 Y
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<PAGE> PAGE 129
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SIGNATURE EARL E. ALLEN, JR.
TITLE ASSISTANT TREASURER
<PAGE>
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE PAGE 1
--------------------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF BUSINESS
TRUST REGISTRATION OF "AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2", FILED IN
THIS OFFICE ON THE SIXTEENTH DAY OF MARCH, A.D. 1998, AT 10 O'CLOCK A.M.
/s/ EDWARD J. FREEL
----------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 9082534
DATE: 05-14-98
[SEAL]
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 03/16/1998
981098573 - 2871455
CERTIFICATE OF TRUST
OF
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
This Certificate of Trust ("Certificate") is filed in accordance with the
provisions of the Delaware Business Trust Act (12 Del. Code Ann. Tit., 12
Section 3801 et. seq.) and sets forth the following:
1. The name of the trust is: American General Series Portfolio Company 2
("Trust").
2. The business address of the registered office of the Trust and of the
registered agent of the Trust is:
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
3. This Certificate is effective upon filing.
4. The Declaration of Trust of the Trust is on file with the Secretary of
the Trust and was executed and made on behalf of the Trust by the
Trustees of the Trust as Trustees of the Trust, and not individually,
and the obligations of such instrument are not binding upon any of the
Trustees of the Trust individually or upon the holders of beneficial
interest in the Trust, but are binding only upon the assets and property
of the Trust, or the respective series of the Trust, as the case may be.
5. This Trust is a Delaware business trust to be registered under the
Investment Company Act of 1940. Notice is hereby given that the Trust
shall consist of one or more series. The debts, liabilities,
obligations, and expenses incurred, contracted for or otherwise existing
with respect to a particular series of the Trust shall be enforceable
against the assets of such series only, and not against the assets of
the Trust generally or any other series.
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being the initial Trustee, has
executed this Certificate on this 13th day of March, 1998.
/s/ NORI L. GABERT
----------------------------------------
Nori L. Gabert
Trustee and not individually
STATE OF TEXAS
COUNTY OF HARRIS
Before me this 13th day of March, 1998, personally appeared the above-named
Nori L. Gabert, known to me to be the person who executed the foregoing
instrument and who acknowledged that she executed the same.
/s/ CLARA S. WILBANKS
----------------------------------------
Notary Public
My commission expires June 27, 1999
---------------
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
March 16 , 1998
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
Index
<TABLE>
<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3. Nature of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.4. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.5. Real Property to be Converted into Personal Property . . . . . . . . . . . . . 5
ARTICLE 2 PURPOSE OF THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3 POWERS OF THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.1. Powers in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Ownership Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Form of Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Reorganization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Voting Trusts, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) Contracts, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(h) Guarantees, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(i) Partnerships, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(k) Pensions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(I) Power of Collection and Litigation . . . . . . . . . . . . . . . . . . . . . . 7
(m) Issuance and Repurchase of Shares . . . . . . . . . . . . . . . . . . . . . . 8
(n) Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(o) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(p) Agents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(q) Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(r) Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(s) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(t) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.2. Borrowings; Financings; Issuance of Securities . . . . . . . . . . . . . . . . 9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.3. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.5. Further Powers; Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4 TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Number, Designation, Election, Term, etc. . . . . . . . . . . . . . . . . . . . 10
(a) Initial Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Election and Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Resignation and Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Acceptance of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) Effect of Death, Resignation, etc. . . . . . . . . . . . . . . . . . . . . . . 11
(i) Conveyance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(j) No Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2. Trustees' Meetings; Participation by Telephone, etc. . . . . . . . . . . . . . 11
SECTION 4.3. Committees; Delegation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.4. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.5. Compensation of Trustees and Officers . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.6. Ownership of Shares and Securities of the Trust . . . . . . . . . . . . . . . 12
SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage in Business;
Authority of Trustees to Permit Others to Do Likewise . . . . . . . . . . . . 12
SECTION 4.8. Reliance on Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.9. Surety Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.10. Apparent Authority of Trustees and Officers . . . . . . . . . . . . . . . . . . 13
SECTION 4.11. Other Relationships Not Prohibited . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.12. Payment of Trust Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.13. Ownership of the Trust Property . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 4.14. By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . 14
SECTION 5.1. Appointment; Action by Less than All Trustees . . . . . . . . . . . . . . . . . 14
SECTION 5.2. Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Advisory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Transfer and Dividend Disbursing Agent . . . . . . . . . . . . . . . . . . . . 15
(f) Shareholder Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.3. Distribution Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.4. Service Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6 SERIES AND SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.1. Description of Series and Shares . . . . . . . . . . . . . . . . . . . . . . . 16
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Establishment, etc. of Series; Authorization of Shares . . . . . . . . . . . . 16
(c) Character of Separate Series and Shares Thereof . . . . . . . . . . . . . . . 16
(d) Consideration for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Assets Belonging to Series . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(f) Liabilities of Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Redemption by Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(k) Redemption at the Option of the Trust . . . . . . . . . . . . . . . . . . . . . 18
(l) Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(n) Equality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(o) Rights of Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . 19
(p) Conversion Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.2. Ownership of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.3. Investments in the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.4. No Pre-emptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 6.5. Status of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS . . . . . . . . . . . . . . . . . . . 20
SECTION 7.1. Voting Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.2. Number of Votes and Manner of Voting; Proxies . . . . . . . . . . . . . . . . . 21
SECTION 7.3. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.4. Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.5. Quorum and Required Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.6. Action by Written Consent . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.7. Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.8. Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 8 LIMITATION OF LIABILITY; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 22
SECTION 8.1. Trustees, Shareholders, etc. Not Personally Liable; Notice . . . . . . . . . . 22
SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No Bond or Surety . . . . . . . . . 23
SECTION 8.3. Indemnification of Shareholders . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.4. Indemnification of Trustees, Officers, etc. . . . . . . . . . . . . . . . . . 23
SECTION 8.5. Compromise Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.6. Indemnification Not Exclusive, etc. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.7. Liability of Third Persons Dealing with Trustees . . . . . . . . . . . . . . . 24
ARTICLE 9 DURATION; REORGANIZATION; INCORPORATION;
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.1. Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.2. Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.3. Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.4. Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 9.5. Amendments; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.6. Filing of Copies of Declaration and Amendments . . . . . . . . . . . . . . . . 26
ARTICLE 10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.3. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.4. Reliance by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.5. References; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.6. Provisions in Conflict With Law or Regulation . . . . . . . . . . . . . . . . . 26
SECTION 10.7. Use of the Name "American General" . . . . . . . . . . . . . . . . . . . . . . 27
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
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<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
This AGREEMENT AND DECLARATION OF TRUST, made at this 16th day of
March, 1998, by and between The Variable Annuity Life Insurance Company, a
corporation resident in Houston, Texas (the "Settlor"), and the Trustee whose
signature is set forth below (the "Initial Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, the Settlor proposes to deliver to the Initial Trustee the
sum of one hundred dollars ($100.00) lawful money of the United States of
America in trust hereunder and to authorize the Initial Trustee and all other
individuals acting as Trustees hereunder to employ such funds, and any other
funds coming into their hands or the hands of their successor or successors as
such Trustees, to carry on the business of an investment company and as such of
buying, selling, investing or otherwise dealing in and with stocks, bonds,
debentures, warrants and other securities and interests therein, financial
futures contracts, or options with respect to securities or financial futures
contracts, and such other and further investment media and other property as
the Trustees may deem advisable, which are not prohibited by law or the terms
of this Declaration; and
WHEREAS, the Initial Trustee is willing to accept such sum, together
with any and all additions thereto and the income or increments thereof, upon
the terms, conditions and trusts hereinafter set forth; and
WHEREAS, the beneficial interest in the assets held by the Trustees
shall be divided into transferable Shares, all in accordance with the
provisions hereinafter set forth; and
WHEREAS, it is desired that the trust established hereby be managed
and operated as a trust with transferable shares under the laws of Delaware
with respect to Delaware business trusts in accordance with the provisions
hereinafter set forth:
NOW, THEREFORE, the Initial Trustee, for him/her self and his/her
successors as Trustees, hereby declares and agrees with the Settlor, for
him/her self and for all Persons who shall hereafter become holders of Shares
that the Trustees will hold the sum delivered to them upon the execution
hereof, and all other and further cash, securities and other property of every
type and description which they may in any way acquire in their capacity as
such Trustees, together with the income therefrom and the proceeds thereof, IN
TRUST NEVERTHELESS, to manage and dispose of the same for the benefit of the
holders from time to time of the Shares being issued and to be issued hereunder
and in the manner and subject to the provisions hereof, to wit:
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<PAGE>
ARTICLE I
THE TRUST
SECTION 1.1 Name. The name of the Trust shall be
"AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2"
and so far as may be practicable, the Trustees shall conduct the Trust's
activities, execute all documents and sue or be sued under that name, which
name (and the word "Trust" wherever used in this Agreement and Declaration of
Trust, except where the context otherwise requires) shall refer to the Trustees
in their capacity as Trustees, and not individually or personally, and shall
not refer to the officers, agents or employees of the Trust or of such
Trustees, or to the holders of the Shares of the Trust or any Series. If the
Trustees determine that the use of such name is not practicable, legal or
convenient at any time or in any jurisdiction, or if the Trust is required to
discontinue the use of such name pursuant to Section 10.7 hereof, then subject
to that Section, the Trustees may use such other designation, or they may adopt
such other name for the Trust as they deem proper, and the Trust may hold
property and conduct its activities under such designation or name.
SECTION 1.2. Location. The Trust shall maintain a registered office in
the State of Delaware and may have such other offices or places of business as
the Trustees may from time to time determine to be necessary or expedient.
SECTION 1.3. Nature of Trust. The Trust shall be a trust with
transferable shares under the laws of The State of Delaware, of the type
defined in Title 12, Chapter 38, Section 3801 of the Delaware Code as a
business trust. The Trust is not intended to be, shall not be deemed to be, and
shall not be treated as, a general partnership, limited partnership, joint
venture, corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder.
SECTION 1.4. Definitions. As used in this Agreement and Declaration of
Trust, the following terms shall have the meanings set forth below unless the
context thereof otherwise requires:
"Accounting Agent" shall have the meaning designated in Section 5.2(g)
hereof.
"Administrator" shall have the meaning designated in Section 5.2(b)
hereof.
"Affiliated Person" shall have the meaning assigned to it in the 1940
Act.
"By-Laws" shall mean the By-Laws of the Trust, as amended from time to
time.
"Certificate of Designation" shall have the meaning designated in
Section 6.1 hereof.
"Certificate of Termination" shall have the meaning designated in
Section 6.1 hereof.
"Class" or "Classes" shall mean, with respect to the Trust (or any
Series thereof), any unissued Shares of the Trust (or such Series) in
respect of which the Trustees shall from time to time fix and
determine any special provisions relating to sales charges, any rights
of redemption and the price, terms and manner of redemption, special
and relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions, conversion rights,
and conditions under which the Shareholders of such Class shall have
separate voting rights or no voting rights.
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<PAGE>
"Commission" shall have the same meaning as in the 1940 Act.
"Contracting Party" shall have the meaning designated in the preamble
to Section 5.2 hereof.
"Conversion Date" shall mean with respect to Shares of any Class that
are convertible automatically into Shares of any other Class of the
Trust (or Series thereof) the date fixed by the Trustees for such
conversion.
"Covered Person" shall have the meaning designated in Section 8.4
hereof.
"Custodian" shall have the meaning designated in Section 5.2(d)
hereof.
"Declaration" and "Declaration of Trust" shall mean this Agreement and
Declaration of Trust and all amendments or modifications thereof as
from time to time in effect. This Agreement and Declaration of Trust
is the "governing instrument" of the Trust within the meaning of the
laws of the State of Delaware with respect to Delaware Business
Trusts. References in this Agreement and Declaration of Trust to
"hereof", "herein" and "hereunder" shall be deemed to refer to the
Declaration of Trust generally, and shall not be limited to the
particular text, Article or Section in which such words appear.
"Disabling Conduct" shall have the meaning designated in Section 8.4
hereof.
"Distributor" shall have the meaning designated in Section 5.2(c)
hereof.
"Dividend Disbursing Agent" shall have the meaning designated in
Section 5.2(e) hereof.
"General Items" shall have the meaning defined in Section 6.2(a)
hereof.
"Initial Trustee" shall have the meaning defined in the preamble
hereto.
"Investment Adviser" shall have the meaning defined in Section 5.2(a)
hereof.
"Majority of the Trustees" shall mean a majority of the Trustees in
office at the time in question. At any time at which there shall be
only one (1) Trustee in office, such term shall mean such Trustee.
"Majority Shareholder Vote," as used with respect to (a) the election
of any Trustee at a meeting of Shareholders, shall mean the vote for
the election of such Trustee of a plurality of all outstanding Shares
of the Trust, without regard to Series, represented in person or by
proxy and entitled to vote thereon, provided that a quorum (as
determined in accordance with the By-Laws) is present, (b) any other
action required or permitted to be taken by Shareholders, shall mean
the vote for such action of the holders of that majority of all
outstanding Shares (or, where a separate vote of Shares of any
particular Series is to be taken, the affirmative vote of that
majority of the outstanding Shares of that Series) of the Trust which
consists of: (i) a majority of all Shares (or of Shares of the
particular Series) represented in person or by proxy and entitled to
vote on such action at the meeting of Shareholders at which such
action is to be taken, provided that a quorum (as determined in
accordance with the By-Laws) is present; or (ii) if such action is to
be taken by written consent of Shareholders, a majority of all Shares
(or of Shares of the particular Series) issued and outstanding and
entitled to vote on such action; provided that (iii) as used with
respect to any action requiring the affirmative vote of "a majority of
the outstanding voting securities," as the quoted phrase is defined in
the 1940 Act, of the Trust or of any Series, "Majority Shareholder
Vote" means the vote for such action at a meeting of Shareholders of
the smallest majority of all outstanding Shares of the Trust (or of
Shares of the particular Series) entitled to vote on such action which
satisfies such 1940 Act voting requirement.
3
<PAGE>
"1940 Act" shall mean the provisions of the Investment Company Act of
1940 and the rules and regulations thereunder, both as amended from
time to time, and any order or orders thereunder which may from time
to time be applicable to the Trust.
"Person" shall mean and include individuals, as well as corporations,
limited partnerships, general partnerships, joint stock companies,
joint ventures, associations, banks, trust companies, land trusts,
business trusts or other organizations established under the laws of
any jurisdiction, whether or not considered to be legal entities, and
governments and agencies and political subdivisions thereof.
"Principal Underwriter" shall have the meaning designated in Section
5.2(c) hereof.
"Prospectus," as used with respect to the Trust (or the Shares of a
particular Series), shall mean the prospectus relating to the Trust
(or such Series) which constitutes part of the currently effective
Registration Statement of the Trust under the Securities Act of 1933,
as such prospectus may be amended or supplemented from time to time.
"Securities" shall have the same meaning ascribed to that term in the
Securities Act of 1993.
"Series" shall mean one or more of the series of Shares authorized by
the Trustees to represent the beneficial interest in one or more
separate components of the assets of the Trust which are now or
hereafter established and designated under or in accordance with the
provisions of Article 6 hereof.
"Settlor" shall have the meaning defined in the preamble hereto.
"Shareholder" shall mean as of any particular time any Person shown of
record at such time on the books of the Trust as a holder of
outstanding Shares of any Series, and shall include a pledgee into
whose name any such Shares are transferred in pledge.
"Shareholder Servicing Agent" shall have the meaning designated in
Section 5.2(f) hereof.
"Shares" shall mean the transferable units into which the beneficial
interest in the Trust and each Series of the Trust (as the context may
require) shall be divided from time to time, and includes fractions of
Shares as well as whole Shares. All references herein to "Shares"
which are not accompanied by a reference to any particular Series or
Class shall be deemed to apply to outstanding Shares without regard to
Series or Class.
"Single Class Voting," as used with respect to any matter to be acted
upon at a meeting or by written consent of Shareholders, shall mean a
style of voting in which each holder of one or more Shares shall be
entitled to one vote on the matter in question for each Share standing
in his/her name on the records of the Trust, irrespective of Series or
Class of a Series, and all outstanding Shares of all Series vote as a
single class.
"Statement of Additional Information," as used with respect to the
Trust (or any Series), shall mean the statement of additional
information relating to the Trust (or such Series) which constitutes
part of the currently effective Registration Statement of the Trust
under the Securities Act of 1933, as such statement of additional
information may be amended or supplemented from time to time.
"Transfer Agent" shall have the meaning defined in Section 5.2(e)
hereof.
4
<PAGE>
"Trust" shall mean the trust named in Section 1.1 hereof.
"Trust Property" shall mean, as of any particular time, any and all
property which shall have been transferred, conveyed or paid to the
Trust or the Trustees, and all interest, dividends, income, earnings,
profits and gains therefrom, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, and which at such time is owned or
held by, or for the account of, the Trust or the Trustees, without
regard to the Series to which such property is allocated.
"Trustees" shall mean, collectively, the Initial Trustee, so long as
he/she shall continue in office, and all other individuals who at the
time in question have been duly elected or appointed as Trustees of
the Trust in accordance with the provisions hereof and who have
qualified and are then in office. At any time at which there shall be
only one (I) Trustee in office, such term shall mean such single
Trustee.
SECTION 1.5. Real Property to be Converted into Personal Property.
Notwithstanding any other provision hereof, any real property at any time
forming part of the Trust Property shall be held in trust for sale and
conversion into personal property at such time or times and in such manner and
upon such terms as the Trustees shall approve, but the Trustees shall have
power until the termination of this Trust to postpone such conversion as long
as they in their uncontrolled discretion shall think fit, and for the purpose
of determining the nature of the interest of the Shareholders therein, all such
real property shall at all times be considered as personal property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to (a) manage, conduct, operate and carry
on the business of an investment company; (b) subscribe for, invest in,
reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose of any and all
sorts of property, tangible or intangible, including but not limited to
Securities of any type whatsoever, whether equity or nonequity, of any issuer,
evidences of indebtedness of any person and any other rights, interest,
instruments or property of any sort to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such investment
of every kind and description, including without limitation, the right to
consent and otherwise act with respect thereto, with power to designate one or
more Persons to exercise any of said rights, powers and privileges in respect
of any of said investments. The Trustees shall not be limited by any law
limiting the investments which may be made by fiduciaries.
ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1. Powers in General. The Trustees shall have, without other or
further authorization, full, entire, exclusive and absolute power, control and
authority over, and management of, the business of the Trust and over the Trust
Property, to the same extent as if the Trustees were the sole owners of the
business and property of the Trust in their own right, and with such powers of
delegation as may be permitted by this Declaration, subject only to such
limitations as may be expressly imposed by this Declaration of Trust or by
applicable law. The enumeration of any specific power or authority herein shall
not be construed as limiting the aforesaid power or authority or any specific
power or authority. Without limiting the foregoing; they may select, and from
time to time change, the fiscal year of the Trust; they may adopt and use a
seal for the Trust, provided that unless otherwise required by the Trustees, it
shall
5
<PAGE>
not be necessary to place the seal upon, and its absence shall not impair the
validity of, any document, instrument or other paper executed and delivered by
or on behalf of the Trust; they may from time to time in accordance with the
provisions of Section 6.1 hereof establish one or more Series to which they may
allocate such of the Trust Property, subject to such liabilities, as they shall
deem appropriate, each such Series to be operated by the Trustees as a separate
and distinct investment medium and with separately defined investment
objectives and policies and distinct investment purposes, all as established by
the Trustees, or from time to time changed by them; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the foregoing
of whom may be a Trustee; they may appoint from their own number, and
terminate, any one or more committees consisting of one or more Trustees,
including without implied limitation an Executive Committee, which may, when
the Trustees are not in session and subject to the 1940 Act, exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
in accordance with Section 5.2 they may employ one or more Investment Advisers,
Administrators and Custodians and may authorize any such service provider to
employ one or more other or service providers and to deposit all or any part of
such assets in a system or systems for the central handling of Securities,
retain Transfer, Dividend Disbursing, Accounting or Shareholder Servicing
Agents or any of the foregoing, provide for the distribution of Shares by the
Trust through one or more Distributors, Principal Underwriters or otherwise,
set record dates or times for the determination of Shareholders entitled to
participate in, benefit from or act with respect to various matters; and in
general they may delegate to any officer of the Trust, to any Committee of the
Trustees and to any employee, Investment Adviser, Administrator, Distributor,
Custodian, Transfer Agent, Dividend Disbursing Agent, or any other agent or
consultant of the Trust, such authority, powers, functions and duties as they
consider desirable or appropriate for the conduct of the business and affairs
of the Trust, including without implied limitation the power and authority to
act in the name of the Trust and of the Trustees, to sign documents and to act
as attorney-in-fact for the Trustees. Without limiting the foregoing and to the
extent not inconsistent with the 1940 Act or other applicable law, the Trustees
shall have power and authority:
(a) Investments. To subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute
or otherwise deal in or dispose of any and all sorts of property, tangible or
intangible, including but not limited to Securities of any type whatsoever,
whether equity or nonequity, of any issuer, evidences of indebtedness of any
person and any other rights, interest, instruments or property of any sort, to
exercise any and all rights, powers and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including without limitation the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons to exercise any of
said rights, powers and privileges in respect of any of said investments, in
every case without being limited by any law limiting the investments which may
be made by fiduciaries;
(b) Disposition of Assets. Upon such terms and conditions as they deem
best, to lend, sell, exchange, mortgage, pledge, hypothecate, grant security
interests in, encumber, negotiate, convey, transfer or otherwise dispose of,
and to trade in, any and all of the Trust Property, free and clear of all
trusts, for cash or on terms, with or without advertisement, and on such terms
as to payment, security or otherwise, all as they shall deem necessary or
expedient;
(c) Ownership Powers. To vote or give assent, or exercise any and all other
rights, powers and privileges of ownership with respect to, and to perform any
and all duties and obligations as owners of, any Securities or other property
forming part of the Trust Property, the same as any individual might do; to
exercise powers and rights of subscription or otherwise which in any manner
arise out of ownership of Securities, and to receive powers of attorney from,
and to execute and deliver proxies or powers of attorney to, such Person or
Persons as the Trustees shall deem proper, receiving from or granting to such
Person or Persons such power and discretion with relation to Securities or
other property of the Trust, all as the Trustees shall deem proper;
6
<PAGE>
(d) Form of Holding. To hold any Security or other property in a form not
indicating any trust, whether in bearer, unregistered or other negotiable form,
or in the name of the Trustees or of the Trust, or of the Series to which such
Securities or property belong, or in the name of a Custodian, subcustodian or
other nominee or nominees, or otherwise,upon such terms, in such manner or with
such powers, as the Trustees may determine, and with or without indicating any
trust or the interest of the Trustees therein;
(e) Reorganizations etc. To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust or any Series; to consent to any
contract, lease, mortgage, purchase or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to any Security forming
part of the Trust Property;
(f) Voting Trusts, etc. To join with other holders of any Securities in
acting through a committee, depository, voting trustee or otherwise, and in
that connection to deposit any Security with, or transfer any Security to, any
such committee, depository or trustee, and to delegate to them such power and
authority with relation to any Security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depository or trustee as the Trustees shall deem proper;
(g) Contracts. etc. To enter into, make and perform all such obligations,
contracts, agreements and undertakings of every kind and description, with any
Person or Persons, as the Trustees shall in their discretion deem expedient in
the conduct of the business of the Trust, for such terms as they shall see fit,
whether or not extending beyond the term of office of the Trustees, or beyond
the possible expiration of the Trust; to amend, extend, release or cancel any
such obligations, contracts, agreements or understandings; and to execute,
acknowledge, deliver and record all written instruments which they may deem
necessary or expedient in the exercise of their powers;
(h) Guarantees. etc. To endorse or guarantee the payment of any notes or
other obligations of any Person; to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust Property or any part thereof to secure any of or all such
obligations;
(i) Partnerships, etc. To enter into joint ventures, general or limited
partnerships and any other combinations or association;
(j) Insurance. To purchase and pay for entirely out of Trust Property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, Investment Advisers, managers,
Administrators, Distributors, Principal Underwriters, or other independent
contractors, or any thereof (or any Person connected therewith), of the Trust,
individually, against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such Person
in any such capacity, whether or not the Trust would have the power to
indemnify such Person against such liability;
(k) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit sharing, share bonus, share purchase, savings, thrift, deferred
compensation and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust;
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(l) Power of Collection and Litigation. To collect, sue for and receive all
sums of money coming due to the Trust, to employ counsel, and to commence,
engage in, prosecute, intervene in, join, defend, compound, compromise, adjust
or abandon, in the name of the Trust, any and all actions, suits, proceedings,
disputes, claims, controversies, demands or other litigation or legal
proceedings relating to the Trust, the business of the Trust, the Trust
Property, or the Trustees, officers, employees, agents and other independent
contractors of the Trust, in their capacity as such, at law or in equity, or
before any other bodies or tribunals, and to compromise, arbitrate or otherwise
adjust any dispute to which the Trust may be a party, whether or not any suit
is commenced or any claim shall have been made or asserted. Except to the
extent required for a Delaware Business Trust, the Shareholders shall have no
power to vote as to whether or not a court action, legal proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders.
(m) Issuance and Repurchase of Shares. To authorize, issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of,
transfer, and otherwise deal in Shares of any Series, and, subject to Article 6
hereof, to apply to any such repurchase, redemption, retirement, cancellation
or acquisition of Shares of any Series, any of the assets belonging to the
Series to which such Shares relate, whether constituting capital or surplus or
otherwise, to the full extent now or hereafter permitted by applicable law;
provided that any Shares belonging to the Trust shall not be voted, directly or
indirectly;
(n) Offices. To have one or more offices, and to carry on all or any of the
operations and business of the Trust, in any of the States, Districts or
Territories of the United States, and in any and all foreign countries, subject
to the laws of such State, District, Territory or country;
(o) Expenses. To incur and pay any and all such expenses and charges as
they may deem advisable (including without limitation appropriate fees to
themselves as Trustees), and to pay all such sums of money for which they may
be held liable by way of damages, penalty, fine or otherwise;
(p) Agents, etc. To retain and employ any and all such servants, agents,
employees, attorneys, brokers, Investment Advisers, accountants, architects,
engineers, builders, escrow agents, depositories, consultants, ancillary
trustees, custodians, agents for collection, insurers, banks and officers, as
they think best for the business of the Trust or any Series, to supervise and
direct the acts of any of the same, and to fix and pay their compensation and
define their duties;
(q) Accounts. To determine, and from time to time change, the method or
form in which the accounts of the Trust or any Series shall be kept;
(r) Valuation. Subject to the requirements of the 1940 Act, to determine
from time to time the value of all or any part of the Trust Property and of any
services, Securities, property or other consideration to be furnished to or
acquired by the Trust, and from time to time to revalue all or any part of the
Trust Property in accordance with such appraisals or other information as is,
in the Trustees' sole judgment, necessary and satisfactory;
(s) Indemnification. In addition to the mandatory indemnification provided
for in Article 8 hereof and to the extent permitted by law, to indemnify or
enter into agreements with respect to indemnification with any Person with whom
this Trust has dealings, including, without limitation, any independent
contractor, to such extent as the Trustees shall determine; and
(t) General. Subject to the fundamental policies in effect from time to
time with respect to the Trust, to do all such other acts and things and to
conduct, operate, carry on and engage in such other lawful businesses or
business activities as they shall in their sole and absolute discretion
consider to be incidental to the business of the Trust or any Series as
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an investment company, and to exercise all powers which they shall in their
discretion consider necessary, useful or appropriate to carry on the business
of the Trust or any Series, to promote any of the purposes for which the Trust
is formed, whether or not such things are specifically mentioned herein, in
order to protect or promote the interests of the Trust or any Series, or
otherwise to carry out the provisions of this Declaration.
SECTION 3.2. Borrowings; Financings: Issuance of Securities. The Trustees
have power, subject to the fundamental policies in effect from time to time
with respect to the Trust, to borrow or in any other manner raise such sum or
sums of money, and to incur such other indebtedness for goods or services, or
for or in connection with the purchase or other acquisition of property, as
they shall deem advisable for the purposes of the Trust, in any manner and on
any terms, and to evidence the same by negotiable or nonnegotiable Securities
which may mature at any time or times, even beyond the possible date of
termination of the Trust; to issue Securities of any type for such cash,
property, services or other considerations, and at such time or times and upon
such terms, as they may deem advisable; and to reacquire any such Securities.
Any such Securities of the Trust may, at the discretion of the Trustees, be
made convertible into Shares of any Series, or may evidence the right to
purchase, subscribe for or otherwise acquire Shares of any Series, at such
times and on such terms as the Trustees may prescribe.
SECTION 3.3. Deposits. Subject to the requirements of the 1940 Act, the
Trustees shall have power to deposit any moneys or Securities included in the
Trust Property with any one or more banks, trust companies or other banking
institutions, whether or not such deposits will draw interest. Such deposits
are to be subject to withdrawal in such manner as the Trustees may determine,
and the Trustees shall have no responsibility for any loss which may occur by
reason of the failure of the bank, trust company or other banking institution
with which any such moneys or Securities have been deposited, except as
provided in Section 8.2 hereof.
SECTION 3.4. Allocations. The Trustees shall have power to determine
whether moneys or other assets received by the Trust shall be charged or
credited to income or capital, or allocated between income and capital,
including the power to amortize or fail to amortize any part or all of any
premium or discount, to treat any part or all of the profit resulting from the
maturity or sale of any asset, whether purchased at a premium or at a discount,
as income or capital, or to apportion the same between income and capital, to
apportion the sale price of any asset between income and capital, and to
determine in what manner any expenses or disbursements are to be borne as
between income and capital, whether or not in the absence of the power and
authority conferred by this Section 3.4 such assets would be regarded as income
or as capital or such expense or disbursement would be charged to income or to
capital; to treat any dividend or other distribution on any investment as
income or capital, or to apportion the same between income and capital; to
provide or fail to provide reserves, including reserves for depreciation,
amortization or obsolescence in respect of any Trust Property in such amounts
and by such methods as they shall determine; to allocate less than all of the
consideration paid for Shares of any Series to surplus with respect to the
Series to which such Shares relate and to allocate the balance thereof to
paid-in capital of that Series, and to reallocate such amounts from time to
time; all as the Trustees may reasonably deem proper.
SECTION 3.5. Further Powers: Limitations. The Trustees shall have power
to do all such other matters and things, and to execute all such instruments,
as they deem necessary, proper or desirable in order to carry out, promote or
advance the interests of the Trust, although such matters or things are not
herein specifically mentioned. Any determination as to what is in the interests
of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Declaration of Trust, the presumption shall
be in favor of a grant of power to the Trustees. The Trustees shall not be
required to obtain any court order to deal with the Trust Property. The
Trustees may limit their right to exercise any of their powers through express
restrictive provisions in the instruments evidencing or providing the terms for
any Securities of the Trust or in other contractual instruments adopted on
behalf of the Trust.
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ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1. Number. Designation, Election. Term, etc.
(a) Initial Trustee. Upon his/her execution of this Agreement and
Declaration of Trust dated March 18, 1998 or a counterpart hereof or some other
writing in which he/she accepted such Trusteeship and agreed to the provisions
hereof, the individual whose signature is affixed thereto as Initial Trustee
became the Initial Trustee thereof.
(b) Number. The Trustees serving as such, whether named above or hereafter
becoming Trustees, may increase (to not more than eight (8)) or decrease the
number of Trustees to a number other than the number theretofore determined by
a written instrument signed by a Majority of the Trustees (or by an officer of
the Trust pursuant to the vote of a Majority of the Trustees). No decrease in
the number of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his or her term, but the number of Trustees
may be decreased in conjunction with the removal of a Trustee pursuant to
Section (e) of this Section 4.1.
(c) Election and Term. The Trustees shall be elected by the Shareholders of
the Trust at the first meeting of Shareholders immediately prior to the initial
issuance of shares of the Trust in a public offering and the term of office of
any Trustees in office before such election shall terminate at the time of such
election. Subject to Section 16(a) of the 1940 Act and to the preceding
sentence of this subsection (c) and to any requirements specified in the
By-Laws, the Trustees shall have the power to set and alter the terms of office
of the Trustees, and at any time to lengthen or shorten their own terms or make
their terms of unlimited duration, to elect their own successors and, pursuant
to subsection (f) of this Section 4.1, to appoint Trustees to fill vacancies;
provided that Trustees shall be elected by a Majority Shareholder Vote at any
such time or times as the Trustees shall determine that such action is required
under Section 16(a) of the 1940 Act or, if not so required, that such action is
advisable; and further provided that, after the initial election of Trustees by
the Shareholders, the term of office of any incumbent Trustee shall continue
until the termination of this Trust or his/her earlier death, resignation,
retirement, bankruptcy, adjudicated incompetency or other incapacity or
removal, or if not so terminated, until the election of such Trustee's
successor in office has become effective in accordance with this subsection
(c).
(d) Resignation and Retirement. Any Trustee may resign his/her trust or
retire as a Trustee, by a written instrument signed by him/her and delivered to
the other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument.
(e) Removal. Any Trustee may be removed: (i) by vote of shareholders
holding a majority of the Shares of the Trust then outstanding, cast in person
or by proxy at any meeting called for the purpose; or (ii) by a written
declaration signed by Shareholders holding not less than a majority of the
Shares of the Trust then outstanding.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
reason, including an increase in the number of Trustees, may (but need not
unless required by the 1940 Act) be filled by a Majority (or a supermajority if
required by the By-Laws) of the Trustees, subject to the provisions of Section
16(a) of the 1940 Act, through the appointment in writing of such other
individual as such remaining Trustees in their discretion shall determine;
provided that if there
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shall be no Trustees in office, such vacancy or vacancies shall be filled by
Majority Shareholders Vote. Any such appointment or election shall be effective
upon such individual's written acceptance of his/her appointment as a Trustee
and his/her agreement to be bound by the provisions of this Declaration of
Trust, except that any such appointment in anticipation of a vacancy to occur
by reason of retirement, resignation or increase in the number of Trustees to
be effective at a later date shall become effective only at or after the
effective date of said retirement, resignation or increase in the number of
Trustees.
(g) Acceptance of Trusts. Whenever any conditions to the appointment or
election of any individual as a Trustee hereunder who was not, immediately
prior to such appointment or election, acting as a Trustee shall have been
satisfied, such individual shall become a Trustee and the Trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance. Such new Trustee shall accept such appointment or
election in writing and agree in such writing to be bound by the provisions
hereof, but the execution of such writing shall not be requisite to the
effectiveness of the appointment or election of a new Trustee.
(h) Effect of Death. Resignation, etc. No vacancy, whether resulting from
the death, resignation, retirement, bankruptcy, adjudicated incompetency,
incapacity, or removal of any Trustee, an increase in the number of Trustees or
otherwise, shall operate to annul or terminate the Trust hereunder or to revoke
or terminate any existing agency or contract created or entered into pursuant
to the terms of this Declaration of Trust. Until such vacancy is filled as
provided in this Section 4.1, the Trustees in office (if any), regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration. Upon
incapacity or death of any Trustee, his/her legal representative shall execute
and deliver on his/her behalf such documents as the remaining Trustees shall
require in order to effect the purpose of this Paragraph.
(i) Conveyance. In the event of the resignation or removal of a Trustee or
his/her otherwise ceasing to be a Trustee, such former Trustee or his/her legal
representative shall, upon request of the continuing Trustees, execute and
deliver such documents as may be required for the purpose of consummating or
evidencing the conveyance to the Trust or the remaining Trustees of any Trust
Property held in such former Trustee's name, but the execution and delivery of
such documents shall not be requisite to the vesting of title to the Trust
Property in the remaining Trustees, as provided in subsection (g) of this
Section 4.1 and in Section 4.13 hereof.
(j) No Accounting. Except to the extent required by the 1940 Act or under
circumstances which would justify his/her removal for cause, no Person ceasing
to be a Trustee (nor the estate of any such Person) shall be required to make
an accounting to the Shareholders or remaining Trustees upon such cessation.
SECTION 4.2. Trustees' Meetings: Participation by Telephone. etc. Annual
and special meetings may be held from time to time, in each case, upon the call
of such officers as may be thereunto authorized by the By-Laws or vote of the
Trustees, or by any three (3) Trustees, or pursuant to a vote of the Trustees
adopted at a duly constituted meeting of the Trustees, and upon such notice as
shall be provided in the By-Laws. Any such meeting may be held within or
without the state of Delaware. The Trustees may act with or without a meeting,
and a written consent to any matter, signed by all of the Trustees, shall be
equivalent to action duly taken at a meeting of the Trustees, duly called and
held. Except as otherwise provided by the 1940 Act or other applicable law, or
by this Declaration of Trust or the By-Laws, any action to be taken by the
Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (a quorum, consisting of at least a Majority of the Trustees, being
present), within or without Delaware. If authorized by the By-Laws, all or any
one or more Trustees may participate in a meeting of the Trustees or any
Committee thereof by means of conference telephone or similar means of
communication by means of which all Persons participating in the meeting can
hear each other, and participation in a meeting pursuant to such means of
communication shall constitute
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presence in person at such meeting. The minutes of any meeting thus held shall
be prepared in the same manner as a meeting at which all participants were
present in person.
SECTION 4.3. Committees; Delegation. The Trustees shall have power,
consistent with their ultimate responsibility to supervise the affairs of the
Trust, to delegate from time to time to one or more other Committees, or to any
single Trustee, the doing of such things and the execution of such deeds or
other instruments, either in the name of the Trust or the names of the Trustees
or as their attorney or attorneys in fact, or otherwise as the Trustees may
from time to time deem expedient, and any agreement, deed, mortgage, lease or
other instrument or writing executed by the Trustee or Trustees or other Person
to whom such delegation was made shall be valid and binding upon the Trustees
and upon the Trust.
SECTION 4.4. Officers. The Trustees shall annually elect such officers or
agents, who shall have such powers, duties and responsibilities as the Trustees
may deem to be advisable, and as they shall specify by resolution or in the
By-Laws. Except as may be provided in the By-Laws, any officer elected by the
Trustees may be removed at any time with or without cause. Any two (2) or more
offices may be held by the same individual.
SECTION 4.5. Compensation of Trustees and Officers. The Trustees shall fix
the compensation of all officers and Trustees. Without limiting the generality
of any of the provisions hereof, the Trustees shall be entitled to receive
reasonable compensation for their general services as such, and to fix the
amount of such compensation, and to pay themselves or any one or more of
themselves such compensation for special services, including legal, accounting,
or other professional services, as they in good faith may deem reasonable. No
Trustee or officer resigning (except where a right to receive compensation for
a definite future period shall be expressly provided in a written agreement
with the Trust, duly approved by the Trustees) and no Trustee or officer
removed shall have any right to any compensation as such Trustee or officer for
any period following his/her resignation or removal, or any right to damages on
account of his/her removal, whether his/her compensation be by the month, or
the year or otherwise.
SECTION 4.6. Ownership of Shares and Securities of the Trust. Any Trustee,
and any officer, employee or agent of the Trust, and any organization in which
any such Person is interested, may acquire, own, hold and dispose of Shares of
any Series and other Securities of the Trust for his/her or its individual
account, and may exercise all rights of a holder of such Shares or Securities
to the same extent and in the same manner as if such Person were not such a
Trustee, officer, employee or agent of the Trust; subject, in the case of
Trustees and officers, to the same limitations as directors or officers (as the
case may be) of a Delaware business corporation; and the Trust may issue and
sell or cause to be issued and sold and may purchase any such Shares or other
Securities from any such Person or any such organization, subject only to the
general limitations, restrictions or other provisions applicable to the sale or
purchase of Shares of such Series or other Securities of the Trust generally.
SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage in
Business; Authority of Trustees to Permit Others to Do Likewise. The Trustees,
in their capacity as Trustees, and (unless otherwise specifically directed by
vote of the Trustees) the officers of the Trust in their capacity as such,
shall not be required to devote their entire time to the business and affairs
of the Trust. Except as otherwise specifically provided by vote of the
Trustees, or by agreement in any particular case, any Trustee or officer of the
Trust may acquire, own, hold and dispose of, for his/her own individual
account, any property, and acquire, own, hold, carry on and dispose of, for
his/her own individual account, any business entity or business activity,
whether similar or dissimilar to any property or business entity or business
activity invested in or carried on by the Trust, and without first offering the
same as an investment opportunity to the Trust, and may exercise all rights in
respect thereof as if he/she were not a Trustee or officer of the Trust. The
Trustees shall also have power, generally or in specific cases, to permit
employees or agents of the Trust to have the
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same rights (or lesser rights) to acquire, hold, own and dispose of property
and businesses, to carry on businesses, and to accept investment opportunities
without offering them to the Trust, as the Trustees have by virtue of this
Section 4.7.
SECTION 4.8. Reliance on Experts. The Trustees and officers may consult
with counsel, engineers, brokers, appraisers, auctioneers, accountants,
investment bankers, securities analysts or other Persons (any of which may be a
firm in which one or more of the Trustees or officers is or are members or
otherwise interested) whose profession gives authority to a statement made by
them on the subject in question, and who are reasonably deemed by the Trustees
or officers in question to be competent, and the advice or opinion of such
Persons shall be full and complete personal protection to all of the Trustees
and officers in respect of any action taken or suffered by them in good faith
and in reliance on or in accordance with such advice or opinion. In discharging
their duties, Trustees and officers, when acting in good faith, may rely upon
financial statements of the Trust represented to them to be correct by any
officer of the Trust having charge of its books of account, or stated in a
written report by an independent certified public accountant fairly to present
the financial position of the Trust. The Trustees and officers may rely, and
shall be personally protected in acting, upon any instrument or other document
believed by them to be genuine.
SECTION 4.9. Surety Bonds. No Trustee, officer, employee or agent of the
Trust shall, as such, be obligated to give any bond or surety or other security
for the performance of any of his/her duties, unless required by applicable law
or regulation, or unless the Trustees shall otherwise determine in any
particular case.
SECTION 4.10. Apparent Authority of Trustees and Officers. No purchaser,
lender, transfer agent or other Person dealing with the Trustees or any officer
of the Trust shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by such officer, or to
make inquiry concerning or be liable for the application of money or property
paid, loaned or delivered to or on the order of the Trustees or of such
officer.
SECTION 4.11. Other Relationships Not Prohibited. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager, adviser,
principal underwriter or distributor or agent of or for any Contracting Party
(as defined in Section 5.2 hereof), or of or for any parent or affiliate of any
Contracting Party, or that the Contracting Party or any parent or affiliate
thereof is a Shareholder or has an interest in the Trust or any Series, or that
(ii) any Contracting Party may have a contract providing for the rendering
of any similar services to one or more other corporations, trusts,
associations, partnerships, limited partnerships or other organizations, or
have other business or interests, shall not affect the validity of any contract
for the performance and assumption of services, duties and responsibilities to,
for or of the Trust and/or the Trustees or disqualify any Shareholder, Trustee
or officer of the Trust from voting upon or executing the same or create any
liability or accountability to the Trust or to the holders of Shares of any
Series; provided that, in the case of any relationship or interest referred to
in the preceding clause (i) on the part of any Trustee or officer of the Trust,
either (x) the material facts as to such relationship or interest have been
disclosed to or are known by the Trustees not having any such relationship or
interest and the contract involved is approved in good faith by a majority of
such Trustees not having any such relationship or interest (even though such
unrelated or disinterested Trustees are less than a quorum of all of the
Trustees), (y) the material facts as to such relationship or interest and as to
the contract have been disclosed to or are known by the Shareholders entitled
to vote thereon and the contract involved is specifically approved in good
faith by vote of the Shareholders, or (z) the specific contract involved is
fair to the Trust as of the time it is authorized, approved or ratified by the
Trustees or by the Shareholders.
SECTION 4.12. Payment of Trust Expenses. The Trustees are authorized to pay
or to cause to be paid out of the principal or income of the Trust, or partly
out of principal and partly out of income, and according to any allocation to
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a particular Series and Class made by them pursuant to Section 6.1(f) hereof,
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the business and affairs of the Trust or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, Investment Adviser, Administrator, Distributor, Principal
Underwriter, auditor, counsel, Custodian, Transfer Agent, Dividend Disbursing
Agent, Accounting Agent, Shareholder Servicing Agent, and such other agents,
consultants, and independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur.
SECTION 4.13. Ownership of the Trust Property. Legal title to all the Trust
Property shall be vested in the Trustees as joint tenants, except that the
Trustees shall have power to cause legal title to any Trust Property to be held
by or in the name of one or more of the Trustees, or in the name of the Trust,
or of any particular Series, or in the name of any other Person as nominee, on
such terms as the Trustees may determine; provided that the interest of the
Trust and of the respective Series therein is appropriately protected. The
right, title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office of a Trustee as provided in Section 4.1(c),
(d) or (e) hereof, such Trustee shall automatically cease to have any right,
title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to Section 4.1(i) hereof.
SECTION 4.14. By-Laws. The Trustees may adopt and from time to time amend
or repeal By-Laws for the conduct of the business of the Trust.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1. Appointment; Action by Less than All Trustees. The Trustees
shall be responsible for the general operating policy of the Trust and for the
general supervision of the business of the Trust conducted by officers, agents,
employees or advisers of the Trust or by independent contractors, but the
Trustees shall not be required personally to conduct all the business of the
Trust and, consistent with their ultimate responsibility as stated herein, the
Trustees may appoint, employ or contract with one or more officers, employees
and agents to conduct, manage and/or supervise the operations of the Trust, and
may grant or delegate such authority to such officers, employees and/or agents
as the Trustees may, in their sole discretion, deem to be necessary or
desirable, without regard to whether such authority is normally granted or
delegated by trustees. With respect to those matters of the operation and
business of the Trust which they shall elect to conduct themselves, except as
otherwise provided by this Declaration or the By-Laws, if any, the Trustees may
authorize any single Trustee or defined group of Trustees, or any committee
consisting of a number of Trustees less than the whole number of Trustees then
in office without specification of the particular Trustees required to be
included therein, to act for and to bind the Trust, to the same extent as the
whole number of Trustees could do, either with respect to one or more
particular matters or classes of matters, or generally.
SECTION 5.2. Certain Contracts. Subject to compliance with the provisions
of the 1940 Act, but notwithstanding any limitations of present and future law
or custom in regard to delegation of powers by trustees generally, the Trustees
may, at any time and from time to time in their discretion and without limiting
the generality of their powers and authority otherwise set forth herein, enter
into one or more contracts with any one or more corporations, trusts,
associations, partnerships, limited partnerships or other types of
organizations, or individuals ("Contracting Party"), to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for
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or on behalf of the Trust and/or any Series, and/or the Trustees, and to
provide for the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below, as the Trustees may deem
appropriate:
(a) Advisory. An investment advisory or management agreement whereby the
agent shall undertake to furnish the Trust (or any Series thereof) such
management, investment advisory or supervisory, statistical and research
facilities and services, and such other facilities and services, if any, as
the Trustees shall from time to time consider desirable, all upon such
terms and conditions as the Trustees may in their discretion determine to
be not inconsistent with this Declaration, the applicable provisions of the
1940 Act or any applicable provisions of the By-Laws (any such agent being
herein referred to as an "Investment Adviser"). To the extent required by
the 1940 Act, regulations or exemptions thereunder, any such advisory or
management agreement and any amendment thereto shall be subject to approval
by a Majority Shareholder Vote at a meeting of the Shareholders of the
Trust (or applicable Series). Notwithstanding any provisions of this
Declaration, the Trustees may authorize the Investment Adviser (subject to
such general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales, loans or exchanges of securities of the
Trust on behalf of the Trustees or may authorize any officer or employee of
the Trust or any Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of the Investment Adviser (and all
without further action by the Trustees). Any such purchases, sales, loans
and exchanges shall be deemed to have been authorized by all of the
Trustees. The Trustees may, in their sole discretion, call a meeting of
Shareholders in order to submit to a vote of Shareholders of the Trust (or
applicable Series) at such meeting the approval of continuance of any such
investment advisory or management agreement.
(b) Administration. An agreement whereby the agent, subject to the general
supervision of the Trustees and in conformity with any policies of the
Trustees with respect to the operations of the Trust and each Series
thereof, will supervise all or any part of the operations of the Trust (or
any Series thereof), and will provide all or any part of the administrative
and clerical personnel, office space and office equipment and services
appropriate for the efficient administration and operations of the Trust
(or any Series thereof) (any such agent being herein referred to as an
"Administrator").
(c) Underwriting. An agreement providing for the sale of Shares of the
Trust (or any Series thereof) to net the Trust not less than the net asset
value per Share (as described in Section 6.1(l) hereof) and pursuant to
which the Trust may appoint the other party to such agreement as its
principal underwriter or sales agent for the distribution of such Shares.
The agreement shall contain such terms and conditions as the Trustees may
in their discretion determine to be not inconsistent with this Declaration,
the applicable provisions of the 1940 Act and any applicable provisions of
the By-Laws (any such agent being herein referred to as a "Distributor" or
a "Principal Underwriter," as the case may be).
(d) Custodian. The appointment of an agent meeting the requirements for a
custodian for the assets of Investment Companies contained in the 1940 Act
as custodian of the Securities and cash of the Trust (or any Series
thereof) and of the accounting records in connection therewith (any such
agent being herein referred to as a "Custodian").
(e) Transfer and Dividend Disbursing Agent. An agreement with an agent to
maintain records of the ownership of outstanding Shares, the issuance and
redemption and the transfer thereof (any such agent being herein referred
to as a "Transfer Agent"), and to disburse any dividends declared by the
Trustees and in accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any such dividends
(any such agent being herein referred to as a "Dividend Disbursing Agent").
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(f) Shareholder Servicing. An agreement with an agent to provide service
with respect to the relationship of the Trust and its Shareholders, records
with respect to Shareholders and their Shares, and similar matters (any
such agent being herein referred to as a "Shareholder Servicing Agent").
(g) Accounting. An agreement with an agent to handle all or any part of the
accounting responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise (any such agent being herein referred
to as an "Accounting Agent").
In addition, the Trustees may from time to time cause the Trust (or any Series
thereof) to enter into agreements with respect to such other services and upon
such other terms and conditions as they may deem necessary, appropriate or
desirable. The same Person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust and/or the
Trustees, and the contracts with respect thereto may contain such terms
interpretive of or in addition to the delineation of the services, duties and
responsibilities provided for, including provisions that are not inconsistent
with the 1940 Act relating to the standard of duty of and the rights to
indemnification of the Contracting Party and others, as the Trustees may
determine. Nothing herein shall preclude, prevent or limit the Trust or a
Contracting Party from entering into subcontractual arrangements relative to
any of the matters referred to in subsections (a) through (g) of this Section
5.2.
Section 5.3. Distribution Arrangements. Subject to compliance with the 1940
Act, the Trustees may adopt and amend or repeal from time to time and implement
one or more plans of distribution pursuant to Rule 12b-1 of the 1940 Act which
plan(s) will provide for the payment of specified marketing, distribution and
shareholder relations expenses of the Trust and any or all Series and their
agents and the agents of such agents.
Section 5.4. Service Arrangements. Subject to compliance with the 1940
Act, the Trustees may adopt and amend or repeal from time to time and implement
one or more service plans which plans will provide for the payment of ongoing
services to holders of the shares of such Trust (or any Series thereof) and in
connection with the maintenance of such shareholders' accounts.
ARTICLE 6
SERIES AND SHARES
SECTION 6.1. Description of Series and Shares.
(a) General. The beneficial interest in the Trust shall be divided into
Shares (either full or fractional) with $.01 par value per Share, of which an
unlimited number may be issued. The Trustees shall have the authority from time
to time to establish and designate one or more separate, distinct and
independent Series of Shares (each of which Series shall represent interests
only in the asset attributed by the Trustees to such Series), and to authorize
separate Classes of Shares of the Trust (or any such Series), as they deem
necessary or desirable. All Shares shall be of one class, provided that the
Trustees shall have the power to classify or reclassify any unissued Shares of
any Series into any number of additional Classes of such Series.
(b) Establishment. etc. of Series and Classes; Authorization of Shares. The
establishment and designation of any Series and the authorization of the Shares
thereof shall be effective upon the execution by a Majority of the Trustees (or
by an officer of the Trust pursuant to the vote of a Majority of the Trustees)
of an instrument setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series or Class and the
manner in which the same may be amended (a "Certificate of Designation"), and
may provide that the number of Shares of such Series or Class which may be
issued is unlimited, or may limit the number issuable. At any time that there
are no Shares outstanding of any particular Series or Class previously
established and designated, the Trustees may by an instrument executed by a
Majority of the Trustees (or by an officer of the Trust pursuant to the vote of
a Majority of
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the Trustees) terminate such Series or Class and the establishment and
designation thereof and the authorization of its Shares (a "Certificate of
Termination"). Each Certificate of Designation, Certificate of Termination and
any instrument amending a Certificate of Designation shall have the status of
an amendment to this Declaration of Trust.
(c) Character of Separate Series and Shares Thereof. Each Series
established hereunder shall represent beneficial interests in a separate
component of the assets of the Trust. Holders of Shares of a Series shall be
considered Shareholders of such Series, but such Shareholders shall also be
considered Shareholders of the Trust for purposes of receiving reports and
notices and, except as otherwise provided herein or in the Certificate of
Designation of a particular Series, or as required by the 1940 Act or other
applicable law, the right to vote, all without distinction by Series. The
Trustees shall have exclusive power without the requirement of Shareholder
approval to establish and designate such separate and distinct Series, and to
fix and determine the relative rights and preferences as between the shares of
the respective Series, and as between the Classes of the Trust (or any Series
thereof), as to rights of redemption and the price, terms and manner of
redemption, special and relative rights as to dividends and other distributions
and on liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the Shareholders of the several Series or the several
Classes of any Series of Shares shall have separate voting rights or no voting
rights. Except as otherwise provided as to a particular Series herein, or in
the Certificate of Designation therefor, the Trustees shall have all the rights
and powers, and be subject to all the duties and obligations, with respect to
each such Series and the assets and affairs thereof as they have under this
Declaration with respect to the Trust and the Trust Property in general.
Separate and distinct records shall be maintained for each Series of Shares and
the assets and liabilities attributable thereto.
(d) Consideration for Shares. The Trustees may issue Shares of the Trust
(or any Series thereof) for such consideration (which may include property
subject to, or acquired in connection with the assumption of, liabilities) and
on such terms as they may determine (or for no consideration if pursuant to a
Share dividend or split-up), all without action or approval of the
Shareholders. All Shares when so issued on the terms determined by the Trustees
shall be fully paid and nonassessable (but may be subject to mandatory
contribution back to the Trust (or applicable Series) as provided in Section
6.1(l) hereof. The Trustees may classify or reclassify any unissued Shares, or
any Shares of the Trust (or any Series thereof) previously issued and
reacquired by the Trust, into Shares of the Trust or one or more other Series
that may be established and designated from time to time.
(e) Assets Belonging to Series. Any portion of the Trust Property
allocated to a particular Series, and all consideration received by the Trust
for the issue or sale of Shares of such Series, together with all assets in
which such consideration is invested or reinvested, all interest, dividends,
income, earnings, profits and gains therefrom, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series and shall irrevocably belong to
that Series for all purposes, and shall be so recorded upon the books of
account of the Trust, and the Shareholders of such Series shall not have, and
shall be conclusively deemed to have waived, any claims to the assets of any
Series of which they are not Shareholders. Such consideration, assets,
interest, dividends, income, earnings, profits, gains and proceeds, together
with any General Items allocated to that Series as provided in the following
sentence, are herein referred to collectively as assets "belonging to" that
Series. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively, "General Items"), the
Trustees shall allocate such General Items to and among any one or more of the
Series established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series shall belong to and be part
of the assets belonging to that Series. Each such allocation by the Trustees
shall be conclusive and binding upon the Shareholders of all Series for all
purposes.
(f) Liabilities of Series. The assets belonging to each particular Series
shall be charged with the liabilities in respect of that Series and all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as pertaining to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the
Series established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. The
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indebtedness, expenses, costs, charges and reserves allocated and so charged to
a particular Series are herein referred to as "liabilities of" that Series.
Each allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of all Series
for all purposes. Any creditor of any Series may look only to the assets
belonging to that Series to satisfy such creditor's debt.
(g) Dividends. Dividends and distributions on Shares of a particular Series
may be paid with such frequency as the Trustees may determine, which may be
daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, to the
Shareholders of that Series, from such of the income, accrued or realized, and
capital gains, realized or unrealized, and out of the assets belonging to that
Series, as the Trustees may determine, after providing for actual and accrued
liabilities of that Series. All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the Shareholders of that
Series in proportion to the number of such Shares held by such holders at the
date and time of record established for the payment of such dividends or
distributions, except that the dividends and distributions of investment income
and capital gains with respect to each Class of Shares of a particular Series
shall be in such amount as may be declared from time to time by the Trustees,
and such dividends and distributions may vary as between such Classes to
reflect differing allocations of the expenses of the Series between the
Shareholders of such several Classes and any resultant differences between the
net asset value of such several Classes to such extent and for such purposes as
the Trustees may deem appropriate and further except that, in connection with
any dividend or distribution program or procedure, the Trustees may determine
that no dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Trustees under such program or procedure, or that
dividends or distributions shall be payable on Shares which have been tendered
by the holder thereof for redemption or repurchase, but the redemption or
repurchase proceeds of which have not yet been paid to such Shareholder. Such
dividends and distributions may be made in cash, property or Shares of any
Class of that Series or a combination thereof as determined by the Trustees, or
pursuant to any program that the Trustees may have in effect at the time for
the election by each Shareholder of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or distribution paid in
Shares will be paid at the net asset value thereof as determined in accordance
with subsection (l) of this Section 6.1.
(h) Liquidation. In the event of the liquidation or dissolution of the
Trust (or any particular Series), the Shareholders of the Trust (or that
Series) shall be entitled to receive, when and as declared by the Trustees, the
excess of the assets belonging to the Trust (or that Series) over the
liabilities of such Series. The assets so distributable to the Shareholders of
the Trust (or that Series) shall be distributed among such Shareholders in
proportion to the number of Shares of the Trust (or that Series) held by them
and recorded on the books of the Trust. The liquidation of the Trust (or any
particular Series) may be authorized by vote of a Majority of the Trustees,
subject to the affirmative vote of "a majority of the outstanding voting
securities" of that Series, as the quoted phrase is defined in the 1940 Act,
determined in accordance with clause (iii) of the definition of "Majority
Shareholder Vote" in Section 1.4 hereof.
(i) Voting. The Shareholders shall have the voting rights set forth in or
determined under Article 7 hereof.
(j) Redemption by Shareholder. Each holder of Shares of the Trust (or a
particular Series thereof) shall have the right at such times as may be
permitted by the Trust, but no less frequently than required by the 1940 Act,
to require the Trust (or such Series) to redeem all or any part of his Shares
of the Trust (or such Series) at a redemption price equal to the net asset
value per Share of the Trust (or Series) next determined in accordance with
subsection (l) of this Section 6.1 after the Shares are properly tendered for
redemption; provided, that the Trustees may from time to time, in their
discretion, determine and impose a fee for such redemption and that the
proceeds of the redemption of Shares (including a fractional Share) of any
Class of the Trust (or any Series thereof) shall be reduced by the amount of
any applicable contingent deferred sales charge or other sales charge, if any,
payable on such redemption to the distributor of Shares of such Class pursuant
to the terms of the initial issuance of the Shares of such Class (to the extent
consistent with the 1940 Act or regulations or exemptions thereunder) and the
Trust shall promptly pay to such distributor the amount of such deferred sales
charge. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in Securities or other assets belonging
to such Series at
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the value of such Securities or assets used in such determination of net asset
value. Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of the Trust
(or any Series thereof) to require the Trust to redeem Shares of the Trust (or
such Series) during any period or at any time when and to the extent permissible
under the 1940 Act.
(k) Redemption at the Option of the Trust. The Trustees shall have the
power to redeem Shares of the Trust (or any Series thereof) at a redemption
price determined in accordance with Section 6.1(j), if at any time (i) the
total investment in such account does not have a value of at least such minimum
amount as may be specified in the Prospectus for the Trust (or such Series)
from time to time (ii) the number of Shares held in such account is equal to or
in excess of a specified percentage of Shares of the Trust or any Series as set
forth from time to time in the applicable Prospectus. In the event the Trustees
determine to exercise their power to redeem Shares provided in this Section
6.1(k), the Shareholder shall be notified that the value of his/her account is
less than the applicable minimum amount and shall be allowed 30 days to make an
appropriate investment before redemption is processed.
(l) Net Asset Value. The net asset value per Share of the Trust (or any
Series or Class) at any time shall be the quotient obtained by dividing the
value of the net assets of the Trust (or such Series or Class) at such time
(being the current value of the assets belonging to the Trust (or such Series
or Class), less its then existing liabilities) by the total number of Shares of
the Trust (or such Series) then outstanding, all determined in accordance with
the methods and procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time in accordance with the
requirements of the 1940 Act. The net asset value of the several Classes of the
Trust (or a particular Series) shall be separately computed, and may vary from
one another. The Trustees shall establish procedures for the allocation of
investment income or capital gains and expenses and liabilities of a particular
Series between the several Classes of the Trust (or such Series). The Trustees
may determine to maintain the net asset value per Share of the Trust or any
Series or Class at a designated constant dollar amount and in connection
therewith may adopt procedures not inconsistent with the 1940 Act for the
continuing declaration of income attributable to the Trust or such Series or
Class as dividends payable in additional Shares of the Trust or such Series or
Class at the designated constant dollar amount and for the handling of any
losses attributable to the Trust or such Series or Class. Such procedures may
provide that in the event of any loss each Shareholder shall be deemed to have
contributed to the shares of beneficial interest account of the Trust or such
Series or Class his pro rata portion of the total number of Shares required to
be canceled in order to permit the net asset value per Share of the Trust or
such Series or Class to be maintained, after reflecting such loss, at the
designated constant dollar amount. Each Shareholder of the Trust shall be
deemed to have expressly agreed, by his/her investment in the Trust (or any
Series thereof) with respect to which the Trustees shall have adopted any such
procedure, to make the contribution referred to in the preceding sentence in
the event of any such loss.
(m) Transfer. All Shares of the Trust and each Series shall be
transferable, but transfers of Shares of the Trust or a particular Series will
be recorded on the Share transfer records of the Trust applicable to the Trust
or such Series only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of the Trust or such Series and at such
other times as may be permitted by the Trustees.
(n) Equality. All Shares of each particular Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities of that Series), and each Share of any particular Series shall be
equal to each other Share thereof; but the provisions of this sentence shall
not restrict any distinctions between the several Classes of a Series
permissible under this Section 6.1 or under Section 7. 1 hereof nor any
distinctions permissible under subsection (g) of this Section 6.1 that may
exist with respect to dividends and distributions on Shares of the same Series.
The Trustees may from time to time divide or combine the Shares of any class of
particular Series into a greater or lesser number of Shares of that class of a
Series without thereby changing the proportionate beneficial interest in the
assets belonging to that Series or in any way affecting the rights of the
holders of Shares of any other Series.
(o) Rights of Fractional Shares. Any fractional Share of the Trust (or any
Series thereof) shall carry proportionately all the rights and obligations of a
whole Share of the Trust (or such Series), including rights and obligations
with respect to voting, receipt of dividends and distributions, redemption of
Shares, and liquidation of the Trust or of the Series to which they pertain.
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(p) Conversion Rights. (i) Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Series shall have the right to convert said Shares into Shares of
one or more other Series, that holders of any Class of the Trust or a Series of
Shares shall have the right to convert said Shares of such Class into Shares of
one or more other Classes of the Trust or such Series, and that Shares of any
Class of the Trust or a Series shall be automatically converted into Shares of
another Class of the Trust or such Series, in each case in accordance with such
requirements and procedures as the Trustees may establish.
(ii) The number of Shares of into which a convertible Share shall convert
shall equal the number (including for this purpose fractions of a Share)
obtained by dividing the net asset value per Share for purposes of sales and
redemptions of the converting Share on the Conversion Date by the net asset
value per Share for purposes of sales and redemptions of the Class of Shares
into which it is converting on the Conversion Date.
(iii) On the Conversion Date, the Share converting into another share will
cease to accrue dividends and will no longer be deemed outstanding and the
rights of the holders thereof (except the right to receive the number of target
Shares into which the converting Shares have been converted and declared but
unpaid dividends to the Conversion Date) will cease. Certificates representing
Shares resulting from the conversion need not be issued until certificates
representing Shares converted, if issued, have been received by the Trust or
its agent duly endorsed for transfer.
(iv) The Trust will appropriately reflect the conversion of Shares of one
Class of the Trust (or a Series thereof) into Shares of another Class of the
Trust (or such Series) on the first periodic statements of account sent to
Shareholders of record affected which provide account information with respect
to a reporting period which includes the date such conversion occurred.
SECTION 6.2. Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or of a Transfer Agent or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
that has been authorized. Certificates evidencing the ownership of Shares need
not be issued except as the Trustees may otherwise determine from time to time,
and the Trustees shall have power to call outstanding Share certificates and to
replace them with book entries. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the use of
facsimile signatures, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any Transfer Agent or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders and as
to the number of Shares of the Trust and, if designated, each Series thereof
held from time to time by each such Shareholder.
The holders of Shares of the Trust and, if designated, each Series thereof
shall upon demand disclose to the Trustees in writing such information with
respect to their direct and indirect ownership of Shares of the Trust or, if
designated, such Series as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code, or to comply with the requirements of
any other authority.
SECTION 6.3. Investments in the Trust. The Trustees may accept investments
in any Series of the Trust from such Persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any Distributor,
Principal Underwriter, Custodian, Transfer Agent or other Person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares, whether or not conforming to such
authorized terms.
SECTION 6.4. No Preemptive Rights. No Shareholder, by virtue of holding
Shares of the Trust or, if designated, any Series thereof, shall have any
preemptive or other right to subscribe to any additional Shares of the Trust or
such Series, or to any shares of any other Series, or any other Securities
issued by the Trust.
SECTION 6.5. Status of Shares. Every Shareholder, by virtue of having
become a Shareholder, shall be held to have expressly assented and agreed to
the terms hereof and to have become a party hereto. Shares shall be deemed to
be personal property, giving only the rights provided herein. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust Property or right to call for a partition or division of the
same or for an
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accounting, nor shall the ownership of Shares constitute the Shareholders
partners. The death of a Shareholder during the continuance of the Trust shall
not operate to terminate the Trust or any Series, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Declaration of Trust.
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1. Voting Powers. The Shareholders shall have power to vote only
(i) for the election or removal of Trustees as provided in Sections 4.1(c) and
(e) hereof, (ii) with respect to the approval or termination in accordance with
the 1940 Act of any contract with a Contracting Party as provided in Section
5.2 hereof as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 9.2, 9.3 and 9.4 hereof, (iv) with
respect to any amendment of this Declaration of Trust to the extent and as
provided in Section 9.5 hereof, (v) to the same extent as the stockholders of a
Delaware business corporation as to whether or not a court action, proceeding
or claim should or should not be brought or maintained derivatively or as a
class action on behalf of the Trust or any Series, or the Shareholders of any
of them (provided. however, that a Shareholder of a particular Series shall not
in any event be entitled to maintain a derivative or class action on behalf of
any other Series or the Shareholders thereof), and (vi) with respect to such
additional matters relating to the Trust as may be required by the 1940 Act,
this Declaration of Trust, the By-Laws or any registration of the Trust with
the Commission (or any successor agency) or any State, or as the Trustees may
consider necessary or desirable. If and to the extent that the Trustees shall
determine that such action is required by law or by this Declaration, they
shall cause each matter required or permitted to be voted upon at a meeting or
by written consent of Shareholders to be submitted to a separate vote of the
outstanding Shares of each Series entitled to vote thereon; provided, that (i)
when expressly required by the 1940 Act or by other law, actions of
Shareholders shall be taken by Single Class Voting of all outstanding Shares
whose holders are entitled to vote thereon; and (ii) when the Trustees
determine that any matter to be submitted to a vote of Shareholders affects
only the rights or interests of Shareholders of one or more but not all Series
or of one or more but not all Classes of the Trust or a single Series
(including without limitation any distribution plan pursuant to Rule 12b-1 of
the 1940 Act applicable to such Class), then only the Shareholders of the
Series or Classes so affected shall be entitled to vote thereon. Any matter
required to be submitted to shareholders and affecting one or more Series shall
require separate approval by the required vote of Shareholders of the Trust or
each affected Series; provided, however, that to the extent required by the
1940 Act, there shall be no separate Series votes on the election or removal of
Trustees, the selection of auditors for the Trust and its Series or approval of
any agreement or contract entered into by the Trust or any Series. Shareholders
of a particular Series shall not be entitled to vote on any matter that affects
only one or more other Series.
SECTION 7.2. Number of Votes and Manner of Voting: Proxies. On each matter
submitted to a vote of the Shareholders, each holder of Shares of the Trust or,
if applicable, any Series shall be entitled to a number of votes equal to the
number of Shares of the Trust or such Series standing in his name on the books
of the Trust. There shall be no cumulative voting in the election or removal of
Trustees. Shares may be voted in person or by proxy. A proxy with respect to
Shares held in the name of two (2) or more Persons shall be valid if executed
by any one of them unless at or prior to exercise of the proxy the Trust
receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
SECTION 7.3. Meetings. Meetings of Shareholders may be called by the
Trustees from time to time for the purpose of taking action upon any matter
requiring the vote or authority of the Shareholders as herein provided, or upon
any
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other matter deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given or caused to be given by
the Trustees by mailing such notice at least seven (7) days before such
meeting, postage prepaid, stating the time, place and purpose of the meeting,
to each Shareholder at the Shareholder's address as it appears on the records
of the Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not less than ten
percent (10%) of the Shares then outstanding. If the Trustees shall fail to
call or give notice of any meeting of Shareholders for a period of thirty (30)
days after written application by Shareholders holding at least ten percent
(10%) of the Shares then outstanding requesting that a meeting be called for
any other purpose requiring action by the Shareholders as provided herein or in
the By-Laws, then Shareholders holding at least ten percent (10%) of the Shares
then outstanding may call and give notice of such meeting, and thereupon the
meeting shall be held in the manner provided for herein in case of call thereof
by the Trustees. Any meetings may be held within or without The State of
Delaware. Shareholders may only act with respect to matters set forth in the
notice to Shareholders.
SECTION 7.4. Record Dates. For the purpose of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding thirty (30) days (except at or in
connection with the termination of the Trust), as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date and time not
more than ninety (90) days prior to the date of any meeting of Shareholders or
other action as the date and time of record for the determination of
Shareholders entitled to vote at such meeting or any adjournment thereof or to
be treated as Shareholders of record for purposes of such other action, and any
Shareholder who was a Shareholder at the date and time so fixed shall be
entitled to vote at such meeting or any adjournment thereof or to be treated as
a Shareholder of record for purposes of such other action, even though he has
since that date and time disposed of his Shares, and no Shareholder becoming
such after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for
purposes of such other action.
SECTION 7.5. Quorum and Required Vote. A majority of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
Majority Shareholder Vote at a meeting of which a quorum is present shall
decide any question, except when a different vote is required or permitted by
any provision of the 1940 Act or other applicable law or by this Declaration of
Trust or the By-Laws, or when the Trustees shall in their discretion require a
larger vote or the vote of a majority or larger fraction of the Shares of one
or more particular Series.
SECTION 7.6. Action By Written Consent. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof or of the Shares of any particular
Series as shall be required by the 1940 Act or by any express provision of this
Declaration of Trust or the By-Laws or as shall be permitted by the Trustees)
consent to the action in writing and if the writings in which such consent is
given are filed with the records of the meetings of Shareholders, to the same
extent and for the same period as proxies given in connection with a
Shareholders' meeting. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
SECTION 7.7. Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is permitted stockholders
of a Delaware business corporation under the Delaware business corporation law.
SECTION 7.8. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
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ARTICLE 8
LIMITATION OF LIABILITY: INDEMNIFICATION
SECTION 8.1. Trustees. Shareholders. etc. Not Personally Liable; Notice.
The Trustees, officers, employees and agents of the Trust, in incurring any
debts, liabilities or obligations, or in limiting or omitting any other actions
for or in connection with the Trust, are or shall be deemed to be acting as
Trustees, officers, employees or agents of the Trust and not in their own
capacities. No Shareholder shall be subject to any personal liability
whatsoever in tort, contract or otherwise to any other Person or Persons in
connection with the assets or the affairs of the Trust or of any Series, and
subject to Section 8.4 hereof, no Trustee, officer, employee or agent of the
Trust shall be subject to any personal liability whatsoever in tort, contract,
or otherwise, to any other Person or Persons in connection with the assets or
affairs of the Trust or of any Series, save only that arising from his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office or the discharge of his functions.
The Trust (or if the matter relates only to a particular Series, that Series)
shall be solely liable for any and all debts, claims, demands, judgments,
decrees, liabilities or obligations of any and every kind, against or with
respect to the Trust or such Series in tort, contract or otherwise in
connection with the assets or the affairs of the Trust or such Series, and all
Persons dealing with the Trust or any Series shall be deemed to have agreed
that resort shall be had solely to the Trust Property of the Trust or the
Series Assets of such Series, as the case may be, for the payment or
performance thereof.
The Trustees shall use their best efforts to ensure that every note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officers or officer shall give notice that a Certificate of Trust in
respect of the Trust is on file with the Secretary of the state of Delaware and
shall recite to the effect that the same was executed or made by or on behalf
of the Trust or by them as Trustees or Trustee or as officers or officer, and
not individually, and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, or the particular Series in question, as the
case may be, but the omission thereof shall not operate to bind any Trustees or
Trustee or officers or officer or Shareholders or Shareholder individually, or
to subject the Series Assets of any Series to the obligations of any other
Series.
SECTION 8.2. Trustees' Good Faith Action; Expert Advice: No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. Subject to Section 8.4 hereof, a Trustee
shall be liable for his/her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law. Subject to the foregoing, (i) the Trustees
shall not be responsible or liable in any event for any neglect or wrongdoing
of any officer, agent, employee, consultant, Investment Adviser, Administrator,
Distributor or Principal Underwriter, Custodian or Transfer Agent, Dividend
Disbursing Agent, Shareholder Servicing Agent or Accounting Agent of the Trust,
nor shall any Trustee be responsible for the act or omission of any other
Trustee; (ii) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust and their
duties as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and (iii) in
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written
reports made to the Trustees by any officer appointed by them, any independent
public accountant, and (with respect to the subject matter of the contract
involved) any officer, partner or responsible employee of a Contracting Party
appointed by the Trustees pursuant to Section 5.2 hereof. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties.
SECTION 8.3. Indemnification of Shareholders. If any Shareholder (or former
Shareholder) of the Trust shall be charged or held to be personally liable for
any obligation or liability of the Trust solely by reason of being or having
been a Shareholder and not because of such Shareholder's acts or omissions or
for some other reason, the Trust (upon proper and timely request by the
Shareholder) may assume the defense against such charge and satisfy any
judgment thereon or may reimburse the Shareholders for expenses, and the
Shareholder or former Shareholder (or the heirs, executors, administrators or
other legal representatives thereof, or in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled (but solely
out of the assets of the Series of which such Shareholder or former Shareholder
is or was the holder of Shares) to be held harmless from and indemnified
against all loss and expense arising from such liability.
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SECTION 8.4. Indemnification of Trustees. Officers, etc. Subject to the
limitations, if applicable, hereinafter set forth in this Section 8.4, the
Trust shall indemnify (from the assets of one or more Series to which the
conduct in question relates) each of its Trustees, officers, employees and
agents (including Persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise (hereinafter, together with
such Person's heirs, executors, administrators or personal representative,
referred to as a "Covered Person")) against all liabilities, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and expenses, including reasonable accountants' and counsel
fees, incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Trustee or officer,
director or trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to
the best interests of the Trust; (ii) had acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (iii) for a criminal proceeding, had
reasonable cause to believe that his conduct was unlawful (the conduct
described in (i), (ii) and (iii) being referred to hereafter as "Disabling
Conduct"). A determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a
court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum
of Trustees who are neither "interested persons" of the Trust as defined in
Section 2(a)(19) of the 1940 Act nor parties to the proceeding (the
"Disinterested Trustees"), or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments,
in compromise or as fines or penalties), may be paid from time to time by one
or more Series to which the conduct in question related in advance of the final
disposition of any such action, suit or proceeding; provided that the Covered
Person shall have undertaken to repay the amounts so paid to such Series if it
is ultimately determined that indemnification of such expenses is not
authorized under this Article 8 and (i) the Covered Person shall have provided
security for such undertaking, (ii) the Trust shall be insured against losses
arising by reason of any lawful advances, or (iii) a majority of a quorum of
the Disinterested Trustees, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily available facts
(as opposed to a full trial type inquiry), that there is reason to believe that
the Covered Person ultimately will be found entitled to indemnification.
SECTION 8.5. Compromise Payment. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 8.4
hereof, pursuant to a consent decree or otherwise, no such indemnification
either for said payment or for any other expenses shall be provided unless such
indemnification shall be approved (i) by a majority of a quorum of the
Disinterested Trustees or (ii) by an independent legal counsel in a written
opinion. Approval by the Trustees pursuant to clause (i) or by independent
legal counsel pursuant to clause (ii) shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with
either of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
Covered Person's office.
SECTION 8.6. Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article 8 shall not be exclusive of or affect
any other rights to which any such Covered Person or shareholder may be
entitled. As used in this Article 8, a "disinterested" Person is one against
whom none of the actions, suits or other proceedings in question, and no other
action, suit or other proceeding on the same or similar grounds is then or has
been pending or threatened. Nothing contained in this Article 8 shall affect
any rights to indemnification to which personnel of the Trust, other than
Trustees and officers, and other Persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such Person.
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SECTION 8.7. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE 9
DURATION: REORGANIZATION: INCORPORATION; AMENDMENTS
SECTION 9.1. Duration of Trust. Unless terminated as provided herein, the
Trust shall have perpetual existence.
SECTION 9.2. Termination of Trust. The Trust may be terminated at any time
by a Majority of the Trustees, subject to the favorable vote of the holders of
not less than a majority of the Shares outstanding and entitled to vote of each
Series of the Trust, or by an instrument or instruments in writing without a
meeting, consented to by the holders of not less than a majority of such
Shares, or by such greater or different vote of Shareholders of any Series as
may be established by the Certificate of Designation by which such Series was
authorized. Upon termination, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, Securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with
the provisions of Section 6.1(h) hereof. After termination of the Trust or any
Series and distribution to the Shareholders as herein provided, a majority of
the Trustees shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination. Upon
termination of the Trust, the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease. Upon termination of any Series, the
Trustees shall thereupon be discharged from all further liabilities and duties
with respect to such Series, and the rights and interests of all Shareholders
of such Series shall thereupon cease.
SECTION 9.3. Reorganization. The Trustees may sell, convey and transfer all
or substantially all of the assets of the Trust, or the assets belonging to any
one or more Series, to another trust, partnership, association, corporation or
other entity organized under the laws of any state of the United States, or may
transfer such assets to another Series of the Trust, in exchange for cash,
Shares or other Securities (including, in the case of a transfer to another
Series of the Trust, Shares of such other Series), or to the extent permitted
by law then in effect may merge or consolidate the Trust or any Series with any
other Trust or any corporation, partnership, or association organized under the
laws of any state of the United States, all upon such terms and conditions and
for such consideration when and as authorized by vote or written consent of a
Majority of the Trustees and approved by the affirmative vote of the holders of
not less than a majority of the Shares outstanding and entitled to vote of each
Series whose assets are affected by such transaction, or by an instrument or
instruments in writing without a meeting, consented to by the holders of not
less than a majority of such Shares, and/or by such other vote of any Series as
may be established by the Certificate of Designation with respect to such
Series. Following such transfer, the Trustees shall distribute the cash, Shares
or other Securities or other consideration received in such transaction (giving
due effect to the assets belonging to and indebtedness of, and any other
differences among, the various Series of which the assets have so been
transferred) among the Shareholders of the Series of which the assets have been
so transferred; and if all of the assets of the Trust have been so transferred,
the Trust shall be terminated. Nothing in this Section 9.3 shall be construed
as requiring approval of Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or
other organizations, and to sell, convey or transfer less than substantially
all of the Trust Property or the assets belonging to any Series to such
organizations or entities.
SECTION 9.4. Incorporation. Upon approval by Majority Shareholder Vote,
the Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust,
partnership, association or other organization to take over all of the Trust
Property or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such
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corporation, trust, association or organization, in exchange for the shares or
securities thereof, or otherwise, and to lend money to, subscribe for the
shares of securities of, and enter into any contracts with any such
corporation, trust, partnership, association or organization in which the Trust
holds or is about to acquire shares or any other interests. The Trustees may
also cause a merger or consolidation between the Trust or any successor thereto
and any such corporation, trust, partnership, association or other organization
if and to the extent permitted by law, as provided under the law then in
effect. Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporation, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to such
organizations or entities.
SECTION 9.5. Amendments; etc. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right
to amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or
Trustee or the prohibition of assessment upon the Shareholders (otherwise than
as permitted under Section 6.1(l)) without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the provisions of
this Declaration of Trust (whether or not related to the rights of
Shareholders) may be amended at any time, so long as such amendment does not
adversely affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such amendment is not
in contravention of applicable law, including the 1940 Act, by an instrument in
writing signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees). Any amendment to this
Declaration of Trust that adversely affects the rights of all Shareholders may
be adopted at any time by an instrument in writing signed by a Majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a Majority of the
Trustees) when authorized to do so by the vote in accordance with Section 7. I
hereof of Shareholders holding a majority of all the Shares outstanding and
entitled to vote, without regard to Series, or if said amendment adversely
affects the rights of the Shareholders of less than all of the Series, by the
vote of the holders of a majority of all the Shares entitled to vote of each
Series so affected. Notwithstanding any other provisions set forth in this
Declaration of Trust, a provision in this Declaration of Trust requiring
shareholder approval of any action may be amended only with like shareholder
approval.
SECTION 9.6. Filing of Copies of Declaration and Amendments. The original
or a copy of this Declaration and of each amendment hereto (including each
Certificate of Designation and Certificate of Termination) shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A restated
Declaration, integrating into a single instrument all of the provisions of this
Declaration which are then in effect and operative, may be executed from time
to time by a Majority of the Trustees and shall, upon execution, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto. A
Certificate of Trust shall be filed in the office of the Secretary of State of
the State of Delaware.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the applicable register of the
Trust.
SECTION 10.2. Governing Law. This Declaration of Trust is, with reference
to the laws thereof, and the rights of all parties and the construction and
effect of every provision hereof shall be, subject to and construed according
to the laws of said The State of Delaware.
SECTION 10.3. Counterparts. This Declaration of Trust and any amendment
thereto may be simultaneously executed in several counterparts, each of which
so executed shall be deemed to be an original, and such counterparts, together,
shall constitute but one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
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SECTION 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust is a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Shareholders, (b) the
due authorization of the execution of any instrument or writing, (c) the form
of any vote passed at a meeting of Trustees or Shareholders, (d) the fact that
the number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration of Trust, (e)
the form of any By-Law adopted, or the identity of any officers elected, by the
Trustees, (f) the existence or nonexistence of any fact or facts which in any
manner relate to the affairs of the Trust, or (g) the name of the Trust or the
establishment of a Series shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees, or any of them, and
the successors of such Person.
SECTION 10.5. References; Headings. The masculine gender shall include the
feminine and neuter genders. Headings are placed herein for convenience of
reference only and shall not be taken as a part of this Declaration or control
or affect the meaning, construction or effect hereof.
SECTION 10.6. Provisions in Conflict With Law or Regulation. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986 or with other applicable laws and regulations,
the conflicting provision shall be deemed never to have constituted a part of
this Declaration; provided, however, that such determination shall not affect
any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
SECTION 10.7. Use of the Name "American General". The Trust acknowledges
that it is adopting its name through permission of American General Corporation
(hereinafter referred to as "American General") and agrees that if American
General or a successor to its business (whether such succession be by merger,
consolidation, purchase of assets or otherwise) or a subsidiary thereof should,
at any time and for any cause, cease to be the investment adviser to the Trust,
the Trust shall at the written request of American General and/or any such
successor eliminate the name "American General" from the Trust's corporate name
and from the designations of its shares and will not thereafter use the name
"American General" in any form or combination whatsoever in the conduct of the
Trust's business. The Trust further acknowledges that American General and its
subsidiaries reserve the right to grant the non-exclusive right to use the name
"American General" to any other corporation, including other investment
companies, whether now in existence or hereafter created. The foregoing
agreements on the part of the Trust are hereby made binding upon it, its
trustees, officers, shareholders, creditors and all other persons claiming
under or through it.
IN WITNESS WHEREOF, the undersigned, being the initial Trustee, has set her
hand and seal, for herself and her assigns, unto this Declaration of Trust of
the Trust, as of the day and year first above written.
/s/ NORI L. GABERT
- ------------------------------
Initial Trustee
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<PAGE>
A C K N O W L E D G M E N T
STATE OF TEXAS )
) ss
COUNTY OF HARRIS )
March 16, 1998
(Date)
Then personally appeared the above named individual and acknowledged
the foregoing instrument to be her free act and deed.
Before me,
/s/ CLARA S. WILBANKS
-------------------------------
(Notary Public)
My commission expires: 6/27/99
-----------
[Notary Seal]
Clara S. Wilbanks
Notary Public, State of Texas
My Commission Expires
June 27, 1999
28
<PAGE>
AMENDMENT DATED AUGUST 26, 1998
TO THE AGREEMENT AND DECLARATION OF TRUST
OF
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
DATED MARCH 16, 1998
This Amendment dated August 26, 1998 to the Agreement and Declaration of Trust
of American General Series Portfolio Company 2 (the "Trust") dated March 16,
1998, is made in accordance with Section 9.5 thereof to restate paragraph (b) of
Section 4.1 to read as follows:
(b) Number. The Trustees serving as such, whether named above or
hereafter becoming Trustees, may increase (to not more than twelve (12)) or
decrease the number of Trustees to a number other than the number theretofore
determined by a written instrument signed by a Majority of the Trustees (or by
an officer of the Trust pursuant to the vote of a Majority of the Trustees). No
decrease in the number of Trustees shall have the effect of removing any Trustee
from office prior to the expiration of his or her term, but the number of
Trustees may be decreased in conjunction with the removal of a Trustee pursuant
to Section (e) of this Section 4.1.
WITNESS the signature of the undersigned this 26th day of
August, 1998.
/s/ NORI L. GABERT
- -------------------------------
Nori L. Gabert,
Vice President and Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Designation
of
American General Core Bond Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Core Bond Fund (the "Fund") with the following
rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Designation
of
American General High Yield Bond Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General High Yield Bond Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Designation
of
American General Strategic Bond Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Strategic Bond Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Designation
of
American General Municipal Bond Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Municipal Bond Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Designation
of
American General Municipal Money Market Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Municipal Money Market Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate
of
Designation of American General International Growth Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General International Growth Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Large Cap Growth Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Large Cap Growth Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Mid Cap Growth Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Mid Cap Growth Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Small Cap Growth Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Small Cap Growth Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate
of
Designation of American General International Value Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General International Value Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Large Cap Value Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Large Cap Value Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Mid Cap Value Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Mid Cap Value Fund (the "Fund") with the following
rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or
<PAGE>
with respect to any other proper purpose affecting only holders of
shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Small Cap Value Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Small Cap Value Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
EXHIBIT 1(c)(9)
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Socially Responsible Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Socially Responsible Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Balanced Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Balanced Fund (the "Fund") with the following
rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Domestic Bond Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Domestic Bond Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Money Market Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Money Market Fund (the "Fund") with the following
rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Growth Lifestyle Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Growth Lifestyle Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Moderate Growth Lifestyle Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Moderate Growth Lifestyle Fund (the "Fund") with
the following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Conservative Growth Lifestyle Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Conservative Growth Lifestyle Fund (the "Fund")
with the following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be initially divided
into four classes --Class A, Class B, Institutional Class I and
Institutional Class II. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A, Class B, Institutional Class I and
Institutional Class II Share shall be subject to such sales charges, if
any, as may be established from time to time by the Trustees in
accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General S&P 500 Index Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General S&P 500 Index Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes -- Class A and Class B. The Trustees shall have the authority
from time to time to authorize additional Classes of Shares of the
Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to
such sales charges, if any, as may be established from time to time by
the Trustees in accordance with the Investment Company Act of 1940
(the "1940 Act") and applicable rules and regulations of the National
Association of Securities Dealers, Inc., all as set forth in the
Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Mid Cap Index Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Mid Cap Index Fund (the "Fund") with the following
rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes --Class A and Class B. The Trustees shall have the authority
from time to time to authorize additional Classes of Shares of the
Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to
such sales charges, if any, as may be established from time to time by
the Trustees in accordance with the Investment Company Act of 1940 (the
"1940 Act") and applicable rules and regulations of the National
Association of Securities Dealers, Inc., all as set forth in the Fund's
prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Small Cap Index Fund
The undersigned, being the Vice President and Assistant Secretary of
American General Series Portfolio Company 2, a Delaware business trust
(the "Trust"), pursuant to the authority conferred upon the Trustees of
the Trust by Section 6.1 of the Trust's Agreement and Declaration of
Trust ("Declaration"), and by the affirmative vote of a Majority of the
Trustees does hereby establish and designate as a Series of the Trust
the American General Small Cap Index Fund (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests
only in the Fund. The Trustees shall have the authority from time to
time to authorize separate Series of Shares for the Trust as they deem
necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes --Class A and Class B. The Trustees shall have the authority
from time to time to authorize additional Classes of Shares of the
Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to
such sales charges, if any, as may be established from time to time by
the Trustees in accordance with the Investment Company Act of 1940 (the
"1940 Act") and applicable rules and regulations of the National
Association of Securities Dealers, Inc., all as set forth in the Fund's
prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be
established by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other
arrangement, however designated) shall be borne by the Class and shall
be appropriately reflected (in a manner determined by the Trustees) in
the net asset value, dividends, distribution and liquidation rights of
the Shares of that Class.
<PAGE>
6. Special Meetings. A special meeting of Shareholders of a Class of
the Fund may be called with respect to the Rule 12b-1 distribution plan
applicable to such Class or with respect to any other proper purpose
affecting only holders of shares of such Class at any time by a
Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of
any Series of the Trust or with respect to any Class of Shares set
forth in the Declaration shall apply to Shares of the Fund unless
otherwise specified in this Certificate of Designation, in which case
this Certificate of Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of
Designation may be amended by an instrument signed in writing by a
Majority of the Trustees (or by an Officer of the Trust pursuant to the
vote of a Majority of the Trustees) or when authorized to do so by the
vote in accordance with the Declaration of the holders of a majority of
all the Shares of the Fund outstanding and entitled to vote or, if such
amendment affects the Shares of one or more but not all of the Classes
of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms
in the Declaration.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Municipal Bond Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees does hereby establish and
designate as a Series of the Trust the American General Municipal Bond Fund
(the "Fund") with the following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into Shares
having a nominal or par value of $0.01 per Share, of which an unlimited number
may be issued, which Shares shall represent interests only in the Fund. The
Trustees shall have the authority from time to time to authorize separate
Series of Shares for the Trust as they deem necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes -- Class A and Class B. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to such
sales charges, if any, as may be established from time to time by the Trustees
in accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of Securities
Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the Shareholder
thereof, into Class A Share of the Fund at such times and pursuant to such
terms, conditions and restrictions as may be established by the Trustees and as
set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses under an
administrative or service agreement, plan or other arrangement, however
designated) shall be borne by the Class and shall be appropriately reflected
(in a manner determined by the Trustees) in the net asset value, dividends,
distribution and liquidation rights of the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of the
Fund may be called with respect to the Rule 12b-1 distribution plan applicable
to such Class or with respect to any other proper purpose affecting only
holders of shares of such Class at any time by a Majority of the Trustees.
<PAGE>
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of any
Series of the Trust or with respect to any Class of Shares set forth in the
Declaration shall apply to Shares of the Fund unless otherwise specified in
this Certificate of Designation, in which case this Certificate of Designation
shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section 9.5
of the Declaration and applicable law, this Certificate of Designation may be
amended by an instrument signed in writing by a Majority of the Trustees (or by
an Officer of the Trust pursuant to the vote of a Majority of the Trustees) or
when authorized to do so by the vote in accordance with the Declaration of the
holders of a majority of all the Shares of the Fund outstanding and entitled to
vote or, if such amendment affects the Shares of one or more but not all of the
Classes of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms in the
Declaration.
October 28, 1998
/s/ NORI L. GABERT
- -------------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Amended and Restated Certificate of Designation
of
American General Municipal Money Market Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees does hereby establish and
designate as a Series of the Trust the American General Municipal Money Market
Fund (the "Fund") with the following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into Shares
having a nominal or par value of $0.01 per Share, of which an unlimited number
may be issued, which Shares shall represent interests only in the Fund. The
Trustees shall have the authority from time to time to authorize separate
Series of Shares for the Trust as they deem necessary or desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes --Class A and Class B. The Trustees shall have the authority from time
to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to such
sales charges, if any, as may be established from time to time by the Trustees
in accordance with the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations of the National Association of Securities
Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the Shareholder
thereof, into Class A Share of the Fund at such times and pursuant to such
terms, conditions and restrictions as may be established by the Trustees and as
set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses under an
administrative or service agreement, plan or other arrangement, however
designated) shall be borne by the Class and shall be appropriately reflected
(in a manner determined by the Trustees) in the net asset value, dividends,
distribution and liquidation rights of the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of the
Fund may be called with respect to the Rule 12b-1 distribution plan applicable
to such Class or with respect to any other proper purpose affecting only
holders of shares of such Class at any time by a Majority of the Trustees.
<PAGE>
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of any
Series of the Trust or with respect to any Class of Shares set forth in the
Declaration shall apply to Shares of the Fund unless otherwise specified in
this Certificate of Designation, in which case this Certificate of Designation
shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section 9.5
of the Declaration and applicable law, this Certificate of Designation may be
amended by an instrument signed in writing by a Majority of the Trustees (or by
an Officer of the Trust pursuant to the vote of a Majority of the Trustees) or
when authorized to do so by the vote in accordance with the Declaration of the
holders of a majority of all the Shares of the Fund outstanding and entitled to
vote or, if such amendment affects the Shares of one or more but not all of the
Classes of the Fund, the holders of a majority of all the Shares of the
affected Classes outstanding and entitled to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms in the
Declaration.
October 28, 1998
/s/ NORI L. GABERT
- ------------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Second Amended and Restated Certificate of Designation
of
American General S&P 500 Index Fund
The undersigned, being the Assistant Secretary of American General Series
Portfolio Company 2, a Delaware business trust (the "Trust"), pursuant to
the authority conferred upon the Trustees of the Trust by Section 6.1 of
the Trust's Agreement and Declaration of Trust ("Declaration"), and by the
affirmative vote of a Majority of the Trustees does hereby amend and
restate the Amended and Restated Certificate of Designation dated August
26, 1998 by re-designating the American General S&P 500 Index Fund Series
as the American General Stock Index Fund Series (the "Fund") with the
following rights, preferences and characteristics:
1. Shares. The beneficial interest in the Fund shall be divided into
Shares having a nominal or par value of $0.01 per Share, of which an
unlimited number may be issued, which Shares shall represent interests only
in the Fund. The Trustees shall have the authority from time to time to
authorize separate Series of Shares for the Trust as they deem necessary or
desirable.
2. Classes of Shares. The Shares of the Fund shall be divided into two
classes -- Class A and Class B. The Trustees shall have the authority from
time to time to authorize additional Classes of Shares of the Fund.
3. Sales Charges. Each Class A and Class B Share shall be subject to such
sales charges, if any, as may be established from time to time by the
Trustees in accordance with the Investment Company Act of 1940 (the "1940
Act") and applicable rules and regulations of the National Association of
Securities Dealers, Inc., all as set forth in the Fund's prospectus.
4. Conversion. Each Class B Share of the Fund shall be converted
automatically, and without any action or choice on the part of the
Shareholder thereof, into Class A Share of the Fund at such times and
pursuant to such terms, conditions and restrictions as may be established
by the Trustees and as set forth in the Fund's Prospectus.
5. Allocation of Expenses Among Classes. Expenses related solely to a
particular Class (including, without limitation, distribution expenses
under an administrative or service agreement, plan or other arrangement,
however designated) shall be borne by the Class and shall be appropriately
reflected (in a manner determined by the Trustees) in the net asset value,
dividends, distribution and liquidation rights of the Shares of that Class.
6. Special Meetings. A special meeting of Shareholders of a Class of the
Fund
1
<PAGE>
may be called with respect to the Rule 12b-1 distribution plan applicable
to such Class or with respect to any other proper purpose affecting only
holders of shares of such Class at any time by a Majority of the Trustees.
7. Other Rights Governed by Declaration. All other rights, preferences,
qualifications, limitations and restrictions with respect to Shares of any
Series of the Trust or with respect to any Class of Shares set forth in the
Declaration shall apply to Shares of the Fund unless otherwise specified in
this Certificate of Designation, in which case this Certificate of
Designation shall be govern.
8. Amendments etc. Subject to the provisions and limitations of Section
9.5 of the Declaration and applicable law, this Certificate of Designation
may be amended by an instrument signed in writing by a Majority of the
Trustees (or by an Officer of the Trust pursuant to the vote of a Majority
of the Trustees) or when authorized to do so by the vote in accordance with
the Declaration of the holders of a majority of all the Shares of the Fund
outstanding and entitled to vote or, if such amendment affects the Shares
of one or more but not all of the Classes of the Fund, the holders of a
majority of all the Shares of the affected Classes outstanding and entitled
to vote.
9. Incorporation of Defined Terms. All capitalized terms which are not
defined herein shall have the same meaning as ascribed to those terms in
the Declaration.
October 28, 1998
/s/ Nori L. Gabert
-----------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
2
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Termination of
Institutional Class I and Institutional Class II
of American General S&P 500 Index Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees, and upon the finding that no
such Shares of these Classes are outstanding, does hereby terminate the
Institutional Class I and Institutional Class II Classes of Shares of the
American General S&P 500 Index Fund.
August 26, 1998
/s/ NORI L. GABERT
---------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Termination
of Institutional Class I and Institutional Class II of
American General Mid Cap Index Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees, and upon the finding that no
such Shares of these Classes are outstanding, does hereby terminate the
Institutional Class I and Institutional Class II Classes of Shares of the
American General Mid Cap Index Fund.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Termination
of Institutional Class I and Institutional Class II
American General Small Cap Index Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees, and upon the finding that no
such Shares of these Classes are outstanding, does hereby terminate the
Institutional Class I and Institutional Class II Classes of Shares of the
American General Small Cap Index Fund.
August 26, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Termination
of Institutional Class I and Institutional Class II of
American General Municipal Bond Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees, and upon the finding that no
such Shares of these Classes are outstanding, does hereby terminate the
Institutional Class I and Institutional Class II Classes of Shares of the
American General Municipal Bond Fund.
October 28, 1998
/s/ NORI L. GABERT
------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
Certificate of Termination
of Institutional Class I and Institutional Class II of
American General Municipal Money Market Fund
The undersigned, being the Vice President and Assistant Secretary of American
General Series Portfolio Company 2, a Delaware business trust (the "Trust"),
pursuant to the authority conferred upon the Trustees of the Trust by Section
6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by
the affirmative vote of a Majority of the Trustees, and upon the finding that
no such Shares of these Classes are outstanding, does hereby terminate the
Institutional Class I and Institutional Class II Classes of Shares of the
American General Municipal Money Market Fund.
October 28, 1998
/s/ NORI L. GABERT
---------------------------
Nori L. Gabert,
Vice President and
Assistant Secretary
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
BYLAWS
<PAGE>
American General Series Portfolio Company 2
Bylaws
March 16, 1998
Index
<TABLE>
<S> <C>
ARTICLE 1 SHAREHOLDERS AND SHAREHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Presiding Officer; Secretary . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Authority of Chairman of Meeting to Interpret Declaration and Bylaws . . . 2
Section 1.4. Voting; Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5. Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Records at Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7 Shareholders' Action in Writing . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Regular Meetings of Trustees . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Special Meetings of Trustees . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.5. Quorum; Presiding Trustee . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Participation by Telephone . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7. Location of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.8. Actions by Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.9. Rulings of Presiding Trustee . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.10. Trustees' Action in Writing . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.11. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE 3 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Officers of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Time and Terms of Election . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3. Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4. Fidelity Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.5. President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.6. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.7. Treasurer and Assistant Treasurers . . . . . . . . . . . . . . . . . . . . 6
Section 3.8. Controller and Assistant Controllers . . . . . . . . . . . . . . . . . . . 6
Section 3.9. Secretary and Assistant Secretaries . . . . . . . . . . . . . . . . . . . 7
Section 3.10. Substitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.11. Execution of Deeds, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.12. Power to Vote Securities . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 4 COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1. Power of Trustees to Designate Committees . . . . . . . . . . . . . . . . 8
Section 4.2. Rules for Conduct of Committee Affairs . . . . . . . . . . . . . . . . . 8
Section 4.3. Trustees May Alter, Abolish, etc., Committees . . . . . . . . . . . . . . 8
Section 4.4. Minutes; Review by Trustees . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 5 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 6 SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.1. Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.2. Uncertificated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.3. Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.4. Lost, Stolen, etc., Certificates . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE 7 TRANSFERS OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.1. Transfer Agents, Registrars, etc. . . . . . . . . . . . . . . . . . . . . 10
Section 7.2. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.3. Registered Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 8 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8.1. Bylaws Subject to Amendment . . . . . . . . . . . . . . . . . . . . . . 10
Section 8.2. Notice of Proposal to Amend Bylaws Required . . . . . . . . . . . . . . . 11
</TABLE>
iii
<PAGE>
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
BYLAWS
March 16, 1998
These are the Bylaws of American General Series Portfolio Company 2, a
trust with transferable shares established under the laws of The State of
Delaware (the "Trust"), pursuant to an Agreement and Declaration of Trust of
the Trust (the "Declaration") made the 16th day of March, 1998, and a
Certificate of Trust filed in the office of the Secretary of State pursuant to
Section 3810 of The Delaware Business Trust Act, Title 12, Chapter 38 of the
Delaware Code. These Bylaws have been adopted by the Trustees pursuant to the
authority granted by Section 4.14 of the Declaration.
All words and terms capitalized in these Bylaws, unless otherwise
defined herein, shall have the same meanings as they have in the
Declaration.
ARTICLE 1
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
SECTION 1.1. Meetings. A meeting of the Shareholders of the Trust
shall be held whenever called by the Chairman, the President or a majority of
the Trustees and whenever election of a Trustee or Trustees by Shareholders is
required by the provisions of the 1940 Act. Meetings of Shareholders shall
also be called by the Trustees when requested in writing by Shareholders
holding at least ten percent (10%) of the Shares then outstanding for the
purpose of voting upon removal of any Trustee, or if the Trustees shall fail to
call or give notice of any such meeting of Shareholders for a period of thirty
(30) days after such application, then Shareholders holding at least ten
percent (10%) of the Shares then outstanding may call and give notice of such
meeting. Notice of Shareholders' meetings shall be given as provided in the
Declaration.
SECTION 1.2. Presiding Officer; Secretary. The President shall
preside at each Shareholders' meeting as Chairman of the meeting, or in the
absence of the President, the Trustees present at the meeting shall elect one
of their number as chairman of the meeting. Unless otherwise provided for by
the Trustees, the Secretary or Assistant Secretary of the Trust shall be the
secretary of all meetings of Shareholders and shall record the minutes thereof.
1
<PAGE>
SECTION 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws. At any Shareholders' meeting the Chairman of the
meeting shall be empowered to determine the construction or interpretation of
the Declaration or these Bylaws, or any part thereof or hereof, and their
ruling shall be final.
SECTION 1.4. Voting; Quorum. At each meeting of Shareholders, except
as otherwise provided by the Declaration, every holder of record of Shares
entitled to vote shall be entitled to a number of votes equal to the number of
Shares standing in his or her name on the Share register of the Trust on the
record date of the meeting. Shareholders may vote by proxy and the form of any
such proxy may be prescribed from time to time by the Trustees. A quorum shall
exist if the holders of a majority of the outstanding Shares of the Trust
entitled to vote are present in person or by proxy, but any lesser number shall
be sufficient for adjournments. At all meetings of the Shareholders, votes
shall be taken by ballot for all matters which may be binding upon the Trustees
pursuant to Section 7.1 of the Declaration. On other matters, votes of
Shareholders need not be taken by ballot unless otherwise provided for by the
Declaration or by vote of the Trustees, or as required by the 1940 Act, but the
chairman of the meeting may in his or her discretion authorize any matter to be
voted upon by ballot.
SECTION 1.5. Inspectors. At any meeting of Shareholders, the
Chairman of the meeting may appoint one or more Inspectors of Election or
Balloting to supervise the voting at such meeting or any adjournment thereof.
If Inspectors are not so appointed, the chairman of the meeting may, and on the
request of any Shareholder present or represented and entitled to vote shall,
appoint one or more Inspectors for such purpose. Each Inspector, before
entering upon the discharge of his or her duties, shall take and sign an oath
faithfully to execute the duties of Inspector of Election or Balloting, as the
case may be, at such meeting with strict impartiality and according to the best
of his or her ability. If appointed, Inspectors shall take charge of the polls
and, when the vote is completed, shall make a certificate of the result of the
vote taken and of such other facts as may be required by law.
SECTION 1.6. Records at Shareholder Meetings. At each meeting of the
Shareholders there shall be open for inspection the minutes of the last
previous Meeting of Shareholders of the Trust and a list of the Shareholders of
the Trust, certified to be true and correct by the Secretary or other proper
agent of the Trust, as of the record date of the meeting or the date of closing
of transfer books, as the case may be. Such list of Shareholders shall contain
the name of each Shareholder. Shareholders shall have such other rights and
procedures of inspection of the books and records of the Trust as are granted
to shareholders of a Delaware corporation.
2
<PAGE>
SECTION 1.7. Shareholders' Action in Writing. Nothing in this
Article 1 shall limit the power of the Shareholders to take any action by means
of written instruments without a meeting, as permitted by Section 7.6 of the
Declaration.
ARTICLE 2
TRUSTEES AND TRUSTEES' MEETINGS
SECTION 2.1. Number of Trustees. There shall be initially one (1)
Trustee, and thereafter be such number, authorized by the Declaration, as from
time to time, shall be fixed by a vote adopted by a Majority of the Trustees.
SECTION 2.2. Regular Meetings of Trustees. Regular meetings of the
Trustees may be held without call or notice at such places and at such times as
the Trustees may from time to time determine; provided, that notice of such
determination, and of the time and place of the first regular meeting
thereafter, shall be given to each absent Trustee in accordance with Section
2.4 hereof.
SECTION 2.3. Special Meetings of Trustees. Special meetings of the
Trustees may be held at any time and at any place when called by the President
or the Treasurer or by three (3) or more Trustees, or if there shall be less
than three (3) Trustees, by any Trustee; provided, that notice of the time and
place thereof is given to each Trustee in accordance with Section 2.4 hereof by
the Secretary or an Assistant Secretary or by the officer or the Trustees
calling the meeting.
SECTION 2.4. Notice of Meetings. Notice of any regular or special
meeting of the Trustees shall be sufficient if given in writing to each
Trustee, and if sent by mail at least five (5) days, by a nationally recognized
overnight delivery service at least two (2) days or by facsimile at least
twenty-four (24) hours, before the meeting, addressed to his or her usual or
last known business or residence address, or if delivered to him or her in
person at least twenty-four (24) hours before the meeting. Notice of a special
meeting need not be given to any Trustee who was present at an earlier meeting,
not more than thirty-one (31) days prior to the subsequent meeting, at which
the subsequent meeting was called. Unless statute, these bylaws or a
resolution of the Trustees might otherwise dictate, notice need not state the
business to be transacted at or the purpose of any meeting of the Board of
Trustees. Notice of a meeting may be waived by any Trustee by written waiver
of notice, executed by him or her before or after the meeting, and such waiver
shall be filed with the records of the meeting. Attendance by a Trustee at a
meeting shall constitute a waiver of notice, except where a Trustee attends a
meeting for the purpose of
3
<PAGE>
protesting prior thereto or at its commencement the lack of notice. No notice
need be given of action proposed to be taken by unanimous written consent.
SECTION 2.5. Quorum: Presiding Trustee. At any meeting of the
Trustees, a Majority of the Trustees shall constitute a quorum. Any meeting may
be adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Unless the Trustees shall otherwise elect,
generally or in a particular case, the Chairman shall be the presiding Trustee
at each meeting of the Trustees or in the absence of the Chairman, the
President shall preside over the meeting. In the absence of both the Chairman
and the President, the Trustees present at the meeting shall elect one of their
number as presiding Trustee of the meeting.
SECTION 2.6. Participation by Telephone. One or more of the Trustees
may participate in a meeting thereof or of any Committee of the Trustees by
means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
SECTION 2.7. Location of Meetings. Trustees' meetings may be held at
any place, within or without the State of Delaware.
SECTION 2.8. Actions by Trustees. Unless statute, the charter or
Bylaws requires a greater proportion, action of a majority of the Trustees
present at a meeting at which a quorum is present is action of the Board of
Trustees. The results of all voting shall be recorded by the Secretary in the
minute book.
SECTION 2.9. Rulings of Presiding Trustee. All other rules of
conduct adopted and used at any Trustees' meeting shall be determined by the
presiding Trustee of such meeting, whose ruling on all procedural matters
shall be final.
SECTION 2.10. Trustees' Action in Writing. Nothing in this Article 2
shall limit the power of the Trustees to take action by means of a written
instrument without a meeting, as provided in Section 4.2 of the Declaration.
SECTION 2.11. Resignations. Any Trustee may resign at any time by
written instrument signed by him or her and delivered to the Chairman, the
President or the Secretary or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time.
4
<PAGE>
ARTICLE 3
OFFICERS
SECTION 3.1. Officers of the Trust. The officers of the Trust shall
consist of a President, a Treasurer and a Secretary, and may include a
Controller and one or more Vice Presidents, Assistant Treasurers and Assistant
Secretaries, and such other officers as the Trustees may designate. Any person
may hold more than one office.
SECTION 3.2. Time and Terms of Election. The President, the
Treasurer and the Secretary shall be elected by the Trustees at their first
meeting and thereafter at the annual meeting of the Trustees, as provided in
Section 4.2 of the Declaration. Such officers shall hold office until the
next annual meeting of the Trustees and until their successors shall have been
duly elected and qualified, and may be removed at any meeting by the
affirmative vote of a Majority of the Trustees. All other officers of the
Trust may be elected or appointed at any meeting of the Trustees. Such
officers shall hold office for any term, or indefinitely, as determined by the
Trustees, and shall be subject to removal, with or without cause, at any time
by the Trustees.
SECTION 3.3. Resignation and Removal. Any officer may resign at any
time by giving written notice to the Trustees. Such resignation shall take
effect at the time specified therein, and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective. If the office of any officer or agent becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office or
otherwise, the Trustees may choose a successor, who shall hold office for the
unexpired term in respect of which such vacancy occurred. Except to the extent
expressly provided in a written agreement with the Trust, no officer resigning
or removed shall have any right to any compensation for any period following
such resignation or removal, or any right to damage on account of such removal.
SECTION 3.4. Fidelity Bond. The Trustees may, in their discretion,
direct any officer appointed by them to furnish at the expense of the Trust a
fidelity bond approved by the Trustees, in such amount as the Trustees may
prescribe.
SECTION 3.5. President. The President shall be the chief executive
officer of the Trust and, subject to the supervision of the Trustees, shall
have general charge and supervision of the business, property and affairs of
the Trust and such other powers and duties as the Trustees may prescribe.
5
<PAGE>
SECTION 3.6. Vice Presidents. In the absence or disability of the
President, the Vice President or, if there shall be more than one, the Vice
Presidents in the order of their seniority or as otherwise designated by the
Trustees, shall exercise all of the powers and duties of the President. The
Vice Presidents shall have the power to execute bonds, notes, mortgages and
other contracts, agreements and instruments in the name of the Trust, and shall
do and perform such other duties as the Trustees or the President shall direct.
SECTION 3.7. Treasurer and Assistant Treasurers. The Treasurer shall
be the chief financial officer of the Trust, and shall have the custody of the
Trust's funds and Securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit all
moneys, and other valuable effects in the name and to the credit of the Trust,
in such depositories as may be designated by the Trustees, taking proper
vouchers for such disbursements, shall have such other duties and powers as may
be prescribed from time to time by the Trustees, and shall render to the
Trustees, whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Trust. If no Controller is
elected, the Treasurer shall also have the duties and powers of the Controller,
as provided in these Bylaws. Any Assistant Treasurer shall have such duties and
powers as shall be prescribed from time to time by the Trustees or the
Treasurer, and shall be responsible to and shall report to the Treasurer. In the
absence or disability of the Treasurer, the Controller shall have the powers and
duties of the Treasurer. If no Controller is elected, the Assistant Treasurer
or, if there shall be more than one, the Assistant Treasurers in the order of
their seniority or as otherwise designated by the Trustees or the Chairman,
shall have the powers and duties of the Treasurer.
SECTION 3.8. Controller and Assistant Controllers. If a Controller
is elected, the Controller shall be the chief accounting officer of the Trust
and shall be in charge of its books of account and accounting records and of its
accounting procedures, and shall have such duties and powers as are commonly
incident to the office of a controller, and such other duties and powers as may
be prescribed from time to time by the Trustees. The Controller shall be
responsible to and shall report to the Trustees, but in the ordinary conduct of
the Trust's business, shall be under the supervision of the Treasurer. Any
Assistant Controller shall have such duties and powers as shall be prescribed
from time to time by the Trustees or the Controller, and shall be responsible to
and shall report to the Controller. In the absence or disability of the
Controller, the Assistant Controller or, if there shall be more than one, the
Assistant Controllers in the order of their seniority or as otherwise designated
by the Trustees, shall have the powers and duties of the Controller.
SECTION 3.9. Secretary and Assistant Secretaries. The Secretary
shall, if and to the extent requested by the Trustees, attend all meetings of
the Trustees, any Committee of the
6
<PAGE>
Trustees and/or the Shareholders and record all votes and the minutes of
proceedings in a book to be kept for that purpose, shall give or cause to be
given notice of all meetings of the Trustees, any Committee of the Trustees, and
of the Shareholders and shall perform such other duties as may be prescribed by
the Trustees. The Secretary, or in his or her absence any Assistant Secretary,
shall affix the Trust's seal to any instrument requiring it, and when so
affixed, it shall be attested by the signature of the Secretary or an Assistant
Secretary. The Secretary shall be the custodian of the Share records and all
other books, records and papers of the Trust (other than financial) and shall
see that all books, reports, statements, certificates and other documents and
records required by law are properly kept and filed. In the absence or
disability of the Secretary, the Assistant Secretary or, if there shall be more
than one, the Assistant Secretaries in the order of their seniority or as
otherwise designated by the Trustees, shall have the powers and duties of the
Secretary.
SECTION 3.10. Substitutions. In case of the absence or disability of
any officer of the Trust, or for any other reason that the Trustees may deem
sufficient, the Trustees may delegate, for the time being, the powers or
duties, or any of them, of such officer to any other officer, or to any
Trustee.
SECTION 3.11. Execution of Deeds, etc. Except as the Trustees may
generally or in particular cases otherwise authorize or direct, all deeds,
leases, transfers, contracts, proposals, bonds, notes, checks, drafts and other
obligations made, accepted or endorsed by the Trust shall be signed or endorsed
on behalf of the Trust by its properly authorized officers or agents as
provided in the Declaration.
SECTION 3.12. Power to Vote Securities. Unless otherwise ordered by
the Trustees, the Treasurer shall have full power and authority on behalf of
the Trust to give proxies for, and/or to attend and to act and to vote at, any
meeting of stockholders of any corporation in which the Trust may hold stock,
and at any such meeting the Treasurer or his or her proxy shall possess and may
exercise any and all rights and powers incident to the ownership of such stock
which, as the owner thereof, the Trust might have possessed and exercised if
present. The Trustees, by resolution from time to time, or, in the absence
thereof, the Treasurer, may confer like powers upon any other person or persons
as attorneys and proxies of the Trust.
ARTICLE 4
COMMITTEES
SECTION 4.1. Power of Trustees to Designate Committees. The
Trustees, by vote of a Majority of the Trustees, may elect from their number an
Executive Committee and any other
7
<PAGE>
Committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration or by these Bylaws may not be delegated;
provided, that an Executive Committee shall not be empowered to elect the
President, the Treasurer or the Secretary, to amend the Bylaws, to exercise the
powers of the Trustees under this Section 4.1 or under Section 4.3 hereof, or to
perform any act for which the action of a Majority of the Trustees is required
by law, by the Declaration or by these Bylaws. The members of any such
Committee shall serve at the pleasure of the Trustees.
SECTION 4.2. Rules for Conduct of Committee Affairs. Except as
otherwise provided by the Trustees, each Committee elected or appointed pursuant
to this Article 4 may adopt such standing rules and regulations for the conduct
of its affairs as it may deem desirable, subject to review and approval of such
rules and regulations by the Trustees at the next succeeding meeting of the
Trustees, but in the absence of any such action or any contrary provisions by
the Trustees, the business of each Committee shall be conducted, so far as
practicable, in the same manner as provided herein and in the Declaration for
the Trustees.
SECTION 4.3. Trustees May Alter, Abolish, etc., Committees. Trustees
may at any time alter or abolish any Committee, change membership of any
Committee, or revoke, rescind, waive or modify action of any Committee or the
authority of any Committee with respect to any matter or class of matters;
provided, that no such action shall impair the rights of any third parties.
SECTION 4.4. Minutes: Review by Trustees. Any Committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees.
ARTICLE 5
SEAL
The seal of the Trust, if any, may be affixed to any instrument, and
the seal and its attestation may be lithographed, engraved or otherwise printed
on any document with the same force and effect as if had been imprinted and
affixed manually in the same manner and with the same force and effect as if
done by a Delaware corporation. Unless otherwise required by the Trustees,
the seal shall not be necessary to be placed on, and its absence shall not
impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
8
<PAGE>
ARTICLE 6
SHARES
SECTION 6.1. Issuance of Shares. The Trustees may issue an unlimited
number of Classes of Shares of any or all Series either in certificated or
uncertificated form. They may issue certificates to the holders of a Class of
Shares of a Series which was originally issued in uncertificated form, and if
they have issued Shares of any Series in certificated form, they may at any
time discontinue the issuance of Share certificates for such Series and may, by
written notice to such Shareholders of such Series require the surrender of
their Share certificates to the Trust for cancellation, which surrender and
cancellation shall not affect the ownership of Shares for such Series.
SECTION 6.2. Uncertificated Shares. For any Class of Shares for
which the Trustees issue Shares without certificates, the Trust or the Transfer
Agent may either issue receipts therefor or may keep accounts upon the books of
the Trust for the record holders of such Shares, who shall in either case be
deemed, for all purposes hereunder, to be the holders of such Shares as if they
had received certificates therefor and shall be held to have expressly assented
and agreed to the terms hereof and of the Declaration.
SECTION 6.3. Share Certificates. For any Class of Shares for which
the Trustees shall issue Share certificates, each Shareholder of such Class
shall be entitled to a certificate stating the number of Shares owned by him or
her in such form as shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Trust. Such signatures may be facsimiles if the certificate is
countersigned by a Transfer Agent, or by a Registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall cease to be such
officer before such certificate is issued, it may be issued by the Trust with
the same effect as if he were such officer at the time of its issue.
SECTION 6.4. Lost, Stolen, etc., Certificates. If any certificate
for certificated Shares shall be lost, stolen, destroyed or mutilated, the
Trustees may authorize the issuance of a new certificate of the same tenor and
for the same number of Shares in lieu thereof. The Trustees shall require the
surrender of any mutilated certificate in respect of which a new certificate is
issued, and may, in their discretion, before the issuance of a new certificate,
require the owner of a lost, stolen or destroyed certificate, or the owner's
legal representative, to make an affidavit or affirmation setting forth such
facts as to the loss, theft or destruction as they deem
9
<PAGE>
necessary, and to give the Trust a bond in such reasonable sum as the Trustees
direct, in order to indemnify the Trust.
ARTICLE 7
TRANSFER OF SHARES
SECTION 7.1. Transfer Agents, Registrars, etc. As approved in
Section 5.2(e) of the Declaration, the Trustees shall have the authority to
employ and compensate such transfer agents and registrars with respect to the
Shares of the Trust as the Trustees shall deem necessary or desirable. In
addition, the Trustees shall have the power to employ and compensate such
dividend dispersing agents, warrant agents and agents for reinvestment of
dividends as they shall deem necessary or desirable. Any of such agents shall
have such power and authority as is delegated to any of them by the Trustees.
SECTION 7.2 Transfer of Shares. The Shares of the Trust shall be
transferable on the books of the Trust only upon delivery to the Trustees or a
transfer agent of the Trust of proper documentation as provided in Section
6.1(m) of the Declaration. The Trust, or its transfer agents, shall be
authorized to refuse any transfer unless and until presentation of such
evidence as may be reasonably required to show that the requested transfer is
proper.
SECTION 7.3 Registered Shareholders. The Trust may deem and treat
the holder of record of any Shares the absolute owner thereof for all purposes
and shall not be required to take any notice of any right or claim of right of
any other person.
ARTICLE 8
AMENDMENTS
SECTION 8.1. Bylaws Subject to Amendment. These Bylaws may be
altered, amended or repealed, in whole or in part, at any time by vote of the
holders of a majority of the Shares issued, outstanding and entitled to vote.
The Trustees, by vote of a Majority of the Trustees (unless a greater vote is
required by Section 2.8 hereof), may alter, amend or repeal these Bylaws, in
whole or in part, including Bylaws adopted by the Shareholders, except with
respect to any provision hereof which by law, the Declaration or these Bylaws
requires action by the Shareholders. Bylaws adopted by the Trustees may be
altered, amended or repealed by the Shareholders.
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<PAGE>
SECTION 8.2. Notice of Proposal to Amend Bylaws Required. No proposal
to amend or repeal these Bylaws or to adopt new Bylaws shall be acted upon at a
meeting unless either (i) such proposal is stated in the notice or in the
waiver of notice, as the case may be, of the meeting of the Trustees or
Shareholders at which such action is taken, or (ii) all of the Trustees or
Shareholders, as the case may be, are present at such meeting and all agree to
consider such proposal without protesting the lack of notice.
11
<PAGE>
INVESTMENT ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as the "ADVISER," and
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2, hereinafter referred to as the
"FUND."
The ADVISER and the FUND 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) The FUND is an investment company organized under the laws
of Delaware as a business trust, as a series type of investment company
issuing separate classes (or series) of shares of beneficial interest
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) The FUND currently consists of twenty-three portfolios
("Funds"): American General S&P 500 Index Fund, American General Mid
Cap Index Fund, American General Small Cap Index Fund, American General
Small Cap Value Fund, American General Mid Cap Growth Fund, American
General International Value Fund, American General Domestic Bond Fund,
American General Balanced Fund, American General Large Cap Growth Fund,
American General Small Cap Growth Fund, American General Mid Cap Value
Fund, American General Large Cap Value Fund, American General
International Growth Fund, American General Money Market Fund, American
General Socially Responsible Fund, American General Growth Lifestyle
Fund, American General Moderate Growth Lifestyle Fund, American General
Conservative Growth Lifestyle Fund, American General Municipal Market
Fund, American General Municipal Bond Fund, American General Core Bond
Fund, American General Strategic Bond Fund, and American General High
Yield Bond Fund. In accordance with the FUND's Agreement and
Declaration of Trust (the "Declaration") and Bylaws, new Funds may be
added to the FUND upon approval of the FUND's Board of Trustees without
approval of the FUND'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 the FUND AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY ADVISER
The ADVISER, subject to the control, direction, and supervision of the
FUND's Board of Trustees and in conformity with the 1940 Act, applicable laws
and regulations thereunder, all other applicable federal and state laws and
regulations, the FUND's Declaration, 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.
<PAGE>
(c) conduct and manage the day to day operations of each
Covered Fund including, for example, the preparation of registration
statements, prospectuses, reports, proxy solicitation materials and
amendments thereto, and the furnishing of legal services (except those
services provided by outside counsel to the FUND selected by the Board
of Trustees).
(d) furnish to the Covered Funds office space, facilities,
equipment and personnel adequate to provide the services described
above and pay the compensation to the FUND's trustees 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. Subject to prior authorization by the
FUND's Board of Trustees 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 the FUND's
Board of Trustees 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
the FUND 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 the FUND 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 trustees and
officers other than those persons who are interested persons of the ADVISER;
(iv) fees of outside counsel to and of independent auditors of the FUND selected
by the Board of Trustees; (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 the issuance of its
shares against payment therefor by, or on behalf of, the subscribers thereto;
(ix) fees and related expenses of registering and qualifying the FUND 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 the FUND;
(xi) all other expenses incidental to holding meetings of the FUND'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 the FUND's membership in
trade associations approved by the Board of Trustees; and (xv) such
non-recurring expenses as may arise, including those associated with actions,
suits, or proceedings to which the FUND is a party and the legal obligation
which the FUND may have to indemnify its officers, trustees and employees with
respect thereto. The FUND 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 Trustees.
2. COMPENSATION OF ADVISER
The FUND 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 Declaration and
Bylaws of the FUND. 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.
2
<PAGE>
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 the FUND's Declaration, for each business day during a given
calendar month. The FUND 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,
trustees, officers and employees of the FUND 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 the FUND.
The ADVISER shall not be liable to the FUND, or to any shareholder in
the FUND, 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, the FUND with respect to them.
Notwithstanding any other provision of this Agreement, the FUND 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 the FUND,
by the sub-adviser on notice to the ADVISER and the FUND, and by the FUND's
Board of Trustees 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
3
<PAGE>
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 FUND's trustees 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 of a majority of the
FUND's Board of Trustees or a majority of that Fund's outstanding voting
securities.
This Agreement shall automatically terminate in the event of its
assignment. The Agreement may be terminated as to any Covered Fund at any time
by the FUND's Board of Trustees, by vote of a majority of that Fund's
outstanding voting securities, 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. Such termination shall be without the payment of any
penalty.
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 the FUND by the Securities and
Exchange 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 the FUND by the Securities and Exchange
Commission (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 execution of this Agreement has been authorized by the FUND's
Trustees and by the sole shareholder. This Agreement is executed on behalf of
the FUND or the Trustees of the FUND as Trustees and not individually and that
the obligations of this Agreement are not binding upon any of the Trustees,
officers or shareholders of the FUND individually, but are binding only upon the
assets and property of the FUND. A Certificate of Trust in respect of the FUND
is on file with the Secretary of the State of Delaware.
All questions concerning the validity, meaning and effect of this
Agreement shall be determined in accordance with the laws (without giving effect
to the conflict-of-law principles thereof) of the State of Delaware applicable
to contracts made and to be performed in that state.
4
<PAGE>
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.
AMERICAN GENERAL SERIES PORTFOLIO
COMPANY 2
By: /s/ CRAIG RODBY
-------------------------------
Name: Craig Rodby
Title: Vice Chairman
ATTEST:
/s/ CYNTHIA TOLES
- -------------------------------
Secretary
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By: /s/ THOMAS WEST, JR.
-------------------------------
Name: Thomas West, Jr.
Title: Chairman
ATTEST:
/s/ CYNTHIA TOLES
- -------------------------------
Secretary
5
<PAGE>
SCHEDULE A
to Investment Advisory Agreement
Annual Fee computed at the following annual rate, based on average monthly net
asset value and payable monthly:
American General International
Value Fund.............. 1.00% on the first $25 million
0.85% on the next $25 million
0.675% on the next $200 million
0.625% over $250 million
American General International
Growth Fund............ 0.90% on the first $100 million
0.80% over $100 million
American General Large Cap
Value Fund.............. 0.50%
American General Large Cap
Growth Fund............ 0.55%
American General Mid Cap
Value Fund.............. 0.75% on the first $100 million
0.725% on the next $150 million
0.70% on the next $250 million
0.675% on the next $250 million
0.65% over $750 million
American General Mid Cap
Growth Fund............ 0.65% on the first $25 million
0.55% on the next $25 million
0.45% over $50 million
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and JACOBS
ASSET MANAGEMENT, hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers
Act").
(b) VALIC is engaged as the investment adviser of American
General International Growth Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of
1940, as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund,
American General Domestic Bond Fund, American General S&P 500 Index
Fund, American General Mid Cap Index Fund, American General Small Cap
Index Fund, American General Balanced Fund, American General
Conservative Growth Lifestyle Fund, American General Moderate Growth
Lifestyle Fund, American General Growth Lifestyle Fund, American
General Core Bond Fund, American General Strategic Bond Fund, American
General High Yield Bond Fund, American General Municipal Bond Fund and
American General Municipal Money Market Fund. In accordance with the
FUND's Agreement and Declaration of Trust (the "Declaration"), new
Funds may be added to the FUND upon approval of the FUND's Board of
Trustees without approval of the FUND's shareholders. This Agreement
will apply only to the Fund(s) set forth on the attached Schedule A,
and any other Funds as may be added or deleted by amendment to the
attached Schedule A ("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign
to the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"),
1
<PAGE>
the FUND's Declaration, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures
adopted by the FUND's Board of Trustees shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their request all of the Covered Funds' investment records and
ledgers to assist VALIC and the FUND in compliance with respect to each Covered
Fund's securities transactions as required by the 1940 Act and the Advisers
Act, as well as other applicable laws. The SUB-ADVISER will furnish the FUND's
Board of Trustees such periodic and special reports as VALIC and the FUND's
Board of Trustees may reasonably request. The SUB-ADVISER will furnish to
regulatory authorities any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
the Covered Funds are being conducted in a manner consistent with applicable
laws and regulations. The SUB-ADVISER will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this service relationship, and disclose such
information only if VALIC or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB- ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination
has been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for the FUND, on
a daily basis, such confirmation, trade tickets and other documents as may be
necessary to enable it to perform its administrative responsibilities with
respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
2
<PAGE>
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in
furtherance of the SUB-ADVISER's duties and responsibilities as set forth in
this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities
hereunder and VALIC shall pay, or arrange for others to pay, all VALIC's
expenses, except that VALIC shall in all events pay the compensation described
in Section 2 of this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the
SUB-ADVISER under this Agreement shall be the sole responsibility of VALIC and
shall not be the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered
Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB- ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
3
<PAGE>
(a) The SUB-ADVISER (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so
long as this Agreement remains in effect: (ii) is not prohibited by the
1940 Act or the Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will continue to meet for so long
as this Agreement remains in effect, any applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the
authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of
any event that would disqualify the SUB-ADVISER from serving as an
investment adviser of an investment company pursuant to Section 9(a) of
the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and if
it has not already done so, will provide VALIC and the FUND with a copy
of such code of ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a
copy of its Form ADV as most recently filed with the SEC and will
promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC:(i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the authority to
enter into and perform the services contemplated by this Agreement, and (v)
will immediately notify the SUB-ADVISER of the occurrence of any event that
would disqualify VALIC from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least 60
days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
4
<PAGE>
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at
any time, or from time to time, may reasonably request in order to discharge
obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement,
or (ii) as the result of any untrue statement of a material fact or any
omission to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the FUND,
except insofar as any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub- Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund)
or (ii) as the result of any untrue statement of a material fact or any
omission to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to
5
<PAGE>
the FUND to the extent any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations,
including definitions therein and such exemptions as may be granted to VALIC or
the SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
--------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- ---------------------
JACOBS ASSET MANAGEMENT
By: /s/ DANIEL L. JACOBS
--------------------------------
Name: Daniel L. Jacobs
Title: President
ATTEST:
/s/ [ILLEGIBLE]
- ---------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General International Growth Fund 0.65% of the first $100 million
0.55% on the excess over $100 million
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and GOLDMAN
SACHS ASSET MANAGEMENT, hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General Large Cap Growth Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of 1940,
as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign to
the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including the diversification requirements pursuant
to section 817(h) and Subchapter M
1
<PAGE>
of the Internal Revenue Code of 1986, as amended (the "Code"), the FUND's
Declaration, Bylaws, registration statements, prospectus and stated investment
objectives, policies and restrictions and any applicable procedures (which
procedures to the extent they govern transactions involving affiliates, will
identify any affiliate of VALIC or the Fund) adopted by the FUND's Board of
Trustees (provided that (i) the FUND or VALIC has provided the SUB-ADVISER with
copies of all applicable provisions of the foregoing FUND documents which relate
to the investment and management of the FUND and promptly notifies the
SUB-ADVISER of any changes in such FUND documents and (ii) VALIC informs the
SUB-ADVISER of all applicable state insurance laws relating to the investment
and management of the FUND, including restrictions or limitations on investments
in the Fund, and promptly notifies the SUB-ADVISER of any changes in such laws
or restrictions) shall:
(a) manage the investment and reinvestment of the assets.
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER will make available to VALIC and the FUND promptly
upon their request all of the Covered Funds' investment records and ledgers to
assist VALIC and the FUND in compliance with respect to each Covered Fund's
securities transactions as required by the 1940 Act and the Advisers Act, as
well as other applicable laws. The SUB-ADVISER will furnish the FUND's Board of
Trustees such periodic and special reports as VALIC and the FUND's Board of
Trustees may reasonably request. The SUB-ADVISER will furnish to regulatory
authorities any information or reports in connection with such services which
may be requested in order to ascertain whether the operations of the Covered
Funds are being conducted in a manner consistent with applicable laws and
regulations. VALIC and the SUB-ADVISER will not disclose or use any records or
information obtained pursuant to this Agreement (excluding investment research
and investment advice) in any manner whatsoever except as expressly authorized
in this Agreement, or in the ordinary course of business of performing the
services described herein and will keep confidential any information obtained
pursuant to this service relationship, and disclose such information only if
VALIC and the SUB-ADVISER or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities or as
may be required by the legal process or in connection with any litigation
arising out of this Agreement.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB- ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
2
<PAGE>
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for the FUND, on
a daily basis, such confirmation, trade tickets and other documents as may be
necessary to enable it to perform its administrative responsibilities with
respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
The SUB-ADVISER may on occasion when the purchase or sale of a security
is deemed to be in the best interest of the FUND as well as any other investment
advisory clients, to the extent permitted by applicable laws and regulations,
but shall not be obligated to aggregate the securities sold or purchased with
those of its other clients where such aggregation is not inconsistent with the
policies set forth in the FUND's registration statement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER,
3
<PAGE>
and any person controlling, controlled by or under common control with the
SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB- ADVISER.
VALIC shall perform quarterly and annual tax compliance tests and
promptly furnish reports of such tests to the SUB-ADVISER after each quarter end
to ensure that the Fund is in compliance with Subchapter M of the Code and
Section 817(h) of the Code. VALIC shall apprise the SUB-ADVISER promptly after
each quarter end of any potential non-compliance with the diversification
requirements in such Code provisions. If so advised, the SUB-ADVISER shall take
prompt action so that the Fund(s) comply with such Code diversification
provisions, as directed by VALIC.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement, (iv) has
the authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of any event
that would disqualify the SUB-ADVISER from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and if it has not already done
so, will provide VALIC and the FUND with a copy of such code of ethics together
with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a copy of its
Form ADV as most recently filed with the SEC and will promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such amendment to
VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC:(i) is registered as an investment adviser under the Advisers Act
and will continue to be so registered for so long as this Agreement remains in
effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify the SUB-ADVISER of the occurrence of any event that would
disqualify VALIC from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund on the date of the
Amendment to Schedule A adding such Fund in accordance with this Agreement.
4
<PAGE>
Unless sooner terminated as provided herein, this Agreement shall continue in
effect for two years from its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least 60
days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish SUB-ADVISER copies of any amendments or supplements thereto before or at
the time the amendments or supplements become effective. Until VALIC delivers
any amendments or supplements to the SUB-ADVISER, the SUB-ADVISER shall be
fully protected in relying on the documents previously furnished to it.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND by any of the
persons whose names, addresses and specimen signatures will be provided by VALIC
from time to time. The SUB-ADVISER shall not be liable for so acting in good
faith upon such instructions, confirmation or authority, notwithstanding that it
shall subsequently be shown that the same was not given or signed or sent by an
authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. It is understood that the name "Goldman, Sachs &
Co." or "Goldman Sachs" or any derivative thereof, any trade name, trade device,
service mark, symbol or logo associated with the names are the valuable property
of the SUB-ADVISER and that VALIC has the right to use such name (or simulation
or logo), in offering materials of the Fund with the prior written approval of
the SUB-ADVISER and for so long as the
5
<PAGE>
SUB-ADVISER is a SUB-ADVISER to the Fund. Upon termination of this Agreement
between the Fund, VALIC and the SUB-ADVISER, the Fund and VALIC shall forthwith
cease to use such name (or simulation or logo). In the event of termination of
this agreement, VALIC will continue to furnish to the SUB-ADVISER copies of any
of the above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC
shall furnish or otherwise make available to the SUB-ADVISER such other
information relating to the business affairs of VALIC and the FUND as the SUB-
ADVISER at any time, or from time to time, may reasonably request in order to
discharge obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement, or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND, except insofar as any
such statement or omission was made in reliance on information provided by the
SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by the SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub-Advisory
Agreement, including actions which may be based upon any willful malfeasance,
bad faith, or gross negligence of or by reckless disregard of, the SUB-ADVISER's
obligations and/or duties under this Agreement by the SUB-ADVISER or (ii) as the
result of any untrue statement of a material fact or any omission to state a
material fact required to be stated or necessary to make the statements, in
light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND to the extent any such
statement or omission was made in reliance on information provided by the
SUB-ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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
<PAGE>
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
---------------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- ---------------------
GOLDMAN SACHS ASSET MANAGEMENT
By: /s/ [ILLEGIBLE]
---------------------------------------
Name:
Title:
ATTEST:
/s/ [ILLEGIBLE]
- ---------------------
7
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
Covered Fund Fee
American General Large Cap Growth Fund 0.30%
8
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and BROWN
CAPITAL MANAGEMENT, INC., hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General Mid Cap Growth Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of 1940,
as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign to
the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"),
1
<PAGE>
the FUND's Declaration, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures
adopted by the FUND's Board of Trustees shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their request all of the Covered Funds' investment records and
ledgers to assist VALIC and the FUND in compliance with respect to each Covered
Fund's securities transactions as required by the 1940 Act and the Advisers Act,
as well as other applicable laws. The SUB-ADVISER will furnish the FUND's Board
of Trustees such periodic and special reports as VALIC and the FUND's Board of
Trustees may reasonably request. The SUB-ADVISER will furnish to regulatory
authorities any information or reports in connection with such services which
may be requested in order to ascertain whether the operations of the Covered
Funds are being conducted in a manner consistent with applicable laws and
regulations. The SUB-ADVISER will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as expressly
authorized in this Agreement, and will keep confidential any information
obtained pursuant to this service relationship, and disclose such information
only if VALIC or the Board of Trustees of the FUND has authorized such
disclosure, or if such information is or hereafter becomes ascertainable from
public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB-ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for the FUND, on
a daily basis, such confirmation, trade tickets and other documents as may be
necessary to enable it to perform its administrative responsibilities with
respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
2
<PAGE>
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB-ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
3
<PAGE>
(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement, (iv) has
the authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of any event
that would disqualify the SUB-ADVISER from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and if it has not already done
so, will provide VALIC and the FUND with a copy of such code of ethics together
with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a copy of its
Form ADV as most recently filed with the SEC and will promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such amendment to
VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify the SUB-ADVISER of the occurrence of any event that would
disqualify VALIC from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least 60
days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
4
<PAGE>
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at any
time, or from time to time, may reasonably request in order to discharge
obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement, or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND, except insofar as any
such statement or omission was made in reliance on information provided by the
the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub- Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund) or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading
5
<PAGE>
in any registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND to the extent any such
statement or omission was made in reliance on information provided by the SUB-
ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
-----------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- ---------------------------
BROWN CAPITAL MANAGEMENT, INC.
By: /s/ EDDIE C. BROWN
-----------------------------------
Name: Eddie C. Brown
Title: President
ATTEST:
/s/ LAZETTA RAINEY BRAXTON
- ---------------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General Mid Cap Growth Fund 0.40% of the first $25 million
0.30% of the next $25 million
0.20% on the excess over $50 million
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and J. P.
MORGAN INVESTMENT MANAGEMENT INC., hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General Small Cap Growth Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of 1940,
as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign to
the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"),
1
<PAGE>
the FUND's Declaration, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures
adopted by the FUND's Board of Trustees shall:
(a) manage the investment and reinvestment of the assets.
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In selecting brokers or dealers to execute transactions on behalf of
the Covered Funds, the SUB-ADVISER will seek the best overall terms available.
In assessing the best overall terms available for any transaction, the SUB-
ADVISER will consider factors it deems relevant, including, without limitation,
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the brokers or dealers and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, the SUB-ADVISER
is authorized to consider the brokerage and research services (within the
meaning of Section 28(e) of the Securities and Exchange Act of 1934, as amended)
provided to the Covered Funds and/or other accounts over which the SUB-ADVISER
or its affiliates exercise discretion.
The SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their request all of the Covered Funds' investment records and
ledgers to assist VALIC and the FUND in complying with regulations applicable to
each Covered Fund's securities transactions as required by the 1940 Act and the
Advisers Act, as well as other applicable laws. The SUB-ADVISER will furnish the
FUND's Board of Trustees such periodic and special reports as VALIC and the
FUND's Board of Trustees may reasonably request. The SUB-ADVISER will furnish to
regulatory authorities any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
the Covered Funds are being conducted in a manner consistent with applicable
laws and regulations. The SUB-ADVISER will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this service relationship, and disclose such
information only if VALIC or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for the FUND, on
a daily basis, such confirmation, trade tickets and other documents as may be
necessary to enable it to perform its administrative responsibilities with
respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
2
<PAGE>
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
VALIC understands that the SUB-ADVISER and its affiliates now act, will
continue to act and may act in the future as investment adviser to fiduciary and
other managed accounts and as investment adviser to other investment companies,
and VALIC has no objection to the SUB-ADVISER so acting, provided that whenever
a Covered Fund and one or more other accounts or investment companies advised by
the SUB-ADVISER have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a methodology believed
to be equitable to each entity. The SUB-ADVISER similarly agrees to allocate
opportunities to sell securities. VALIC recognizes that, in some cases, this
procedure may limit the size of the position that may be acquired or sold for a
Covered Fund. In addition, VALIC understands that the persons employed by the
SUB-ADVISER to assist in the performance of the SUB-ADVISER's duties hereunder
will not devote their full time to such service and nothing contained herein
shall be deemed to limit or restrict the right of the SUB-ADVISER or any
affiliate of the SUB- ADVISER to engage in and devote time and attention to
other business or to render services of whatever kind or nature.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this Agreement relates, so
long as there has been no willful
3
<PAGE>
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties on the part of the SUB- ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement, (iv) has
the authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of any event
that would disqualify the SUB-ADVISER from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and if it has not already done
so, will provide VALIC and the FUND with a copy of such code of ethics together
with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a copy of its
Form ADV as most recently filed with the SEC and will promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such amendment to
VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify the SUB-ADVISER of the occurrence of any event that would
disqualify VALIC from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the
4
<PAGE>
payment of any penalty, by vote of the FUND's Board of Trustees or by vote of a
majority of that Covered Fund's outstanding voting securities on at least 60
days' prior written notice to the SUB-ADVISER. This Agreement may also be
terminated by VALIC: (i) on at least 60 days' prior written notice to the
SUB-ADVISER, without the payment of any penalty; or (ii) if the SUB-ADVISER
becomes unable to discharge its duties and obligations under this Agreement. The
SUB-ADVISER may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior written notice to
VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish SUB-ADVISER copies of any amendments or supplements thereto before or at
the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at any
time, or from time to time, may reasonably request in order to discharge
obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement, or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, advertisements or sales literature,
pertaining to the FUND, except insofar as any such statement or omission was
made in reliance on information provided in writing by the SUB-ADVISER or its
affiliates.
5
<PAGE>
The SUB-ADVISER shall indemnify and hold harmless VALIC (and its
affiliated companies and their respective officers, directors and employees)
from any and all claims, losses, liabilities or damages (including reasonable
attorney's fees and other related expenses) arising out of or in connection with
(1) any willful misfeasance, bad faith, gross negligence, or reckless disregard
of obligations or duties of the SUB-ADVISER in performing hereunder; or (2) any
untrue statement of material fact or any omission to state a material fact
required to be stated or necessary to make statements, in light of the
circumstances under which they are made, not misleading in any registration
statement, proxy materials, advertisements or sales literature, pertaining to
the Funds to the extent any such statement or omission was made in reliance on
information provided in writing by the SUB-ADVISER to VALIC for the express
purpose of inclusion in such materials.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
-------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -------------------
J. P. MORGAN INVESTMENT MANAGEMENT INC.
By: /s/ DIANE J. MINARDI
-------------------------------
Name: Diane J. Minardi
Title: Vice President
ATTEST:
/s/ [ILLEGIBLE]
- -------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General Small Cap Growth Fund 0.60%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and CAPITAL
GUARDIAN TRUST COMPANY, hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers
Act").
(b) VALIC is engaged as the investment adviser of American
General International Value Fund, American General Domestic Bond Fund
and American General Balanced Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open- end,
management investment company under the Investment Company Act of
1940, as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small
Cap Value Fund, American General Small Cap Growth Fund, American
General Socially Responsible Fund, American General Money Market Fund,
American General Domestic Bond Fund, American General S&P 500 Index
Fund, American General Mid Cap Index Fund, American General Small Cap
Index Fund, American General Balanced Fund, American General
Conservative Growth Lifestyle Fund, American General Moderate Growth
Lifestyle Fund, American General Growth Lifestyle Fund, American
General Core Bond Fund, American General Strategic Bond Fund, American
General High Yield Bond Fund, American General Municipal Bond Fund and
American General Municipal Money Market Fund. In accordance with the
FUND's Agreement and Declaration of Trust (the "Declaration"), new
Funds may be added to the FUND upon approval of the FUND's Board of
Trustees without approval of the FUND's shareholders. This Agreement
will apply only to the Fund(s) set forth on the attached Schedule A,
and any other Funds as may be added or deleted by amendment to the
attached Schedule A ("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is exempt from registration
as an investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign
to the SUB- ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with provisions of:
(I) the 1940 Act; (ii) all applicable laws and regulations thereunder; and
1
<PAGE>
(iii) all other applicable federal and state laws and regulations, including
section 817(h) of the Internal Revenue Code of 1986, as amended (the "Code"),
as are set forth in the Fund's Compliance Manual as mutually agreed upon by
VALIC and the SUB-ADVISER and in conformity with the FUND's Declaration,
Bylaws, registration statements, prospectus and stated investment objectives,
policies and restrictions and any applicable procedures adopted by the FUND's
Board of Trustees, which are communicated in writing to the SUB-ADVISER, shall:
(a) manage the investment and reinvestment of the assets,
other than the investment of cash, 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 orders for the purchase
and sale of portfolio investments (which may include futures contracts
and options thereon) for each Covered Fund's account with brokers or
dealers (which may include futures commission merchants) selected by
the SUB-ADVISER, or arrange for any other entity to provide a trading
desk and to place orders with brokers and dealers (which may include
futures commission merchants) selected by the SUB-ADVISER, which
brokers or dealers may include brokers or dealers (which may include
futures commission merchants) affiliated with the SUB-ADVISER, subject
to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the
FUND promptly upon their request all of the Covered Funds' investment records
and ledgers to assist VALIC and the FUND in compliance with respect to each
Covered Fund's securities transactions as required by the 1940 Act and the
Advisers Act, as well as other applicable laws. The SUB-ADVISER will furnish
the FUND's Board of Trustees such periodic and special reports as VALIC and the
FUND's Board of Trustees may reasonably request. The SUB-ADVISER will furnish
to regulatory authorities any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
the Covered Funds are being conducted in a manner consistent with applicable
laws and regulations. The SUB-ADVISER will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this service relationship, and disclose such
information only if VALIC or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
required or requested by applicable federal or state authorities.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB-ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination
has been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND.
The SUB-ADVISER will arrange for the transmission to the Custodian for the
FUND, on a daily basis, such confirmation, trade tickets and other documents as
may be necessary to enable it to perform its administrative responsibilities
with respect to the Covered Funds.
2
<PAGE>
The SUB-ADVISER will not invest cash for the Covered Funds. The
investment of cash will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in
furtherance of the SUB-ADVISER's duties and responsibilities as set forth in
this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities
hereunder and VALIC shall pay, or arrange for others to pay, all VALIC's
expenses, except that VALIC shall in all events pay the compensation described
in Section 2 of this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB- ADVISER, a quarterly fee or fees based
on each Covered Fund's average monthly net asset value computed for each
Covered Fund as provided for herein and 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
Declaration and Bylaws of the FUND. Any change in Schedule A pertaining to any
new or existing 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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar quarter as soon as
practicable after the end of that quarter but in any event no later than thirty
(30) days following the end of the quarter.
If the SUB-ADVISER serves for less than a whole quarter, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the
SUB-ADVISER under this Agreement shall be the sole responsibility of VALIC and
shall not be the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered
Funds.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this Agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB-ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (I) is exempt from registration as an investment
adviser under the Advisers Act: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state
3
<PAGE>
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the services
contemplated by this Agreement, (iv) has the authority to enter into and
perform the services contemplated by this Agreement, and (v) will immediately
notify VALIC of the occurrence of any event that would disqualify the
SUB-ADVISER from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and if it has not
already done so, will provide VALIC and the FUND with a copy of such code of
ethics together with evidence of its adoption.
VALIC represents, warrants, and agrees as follows:
VALIC: (I) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the authority to
enter into and perform the services contemplated by this Agreement, and (v)
will immediately notify the SUB-ADVISER of the occurrence of any event that
would disqualify VALIC from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (I) on at least
60 days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
4
<PAGE>
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
The parties agree that the name "Capital Guardian Trust Company," the
names of the SUB-ADVISER's affiliates within the Capital Group of Companies,
Inc., and any derivative or logo or trade or service mark, are the valuable
property of the SUB-ADVISER and its affiliates. VALIC shall have the right to
use such name(s), derivatives, logos, trade or service marks only with the
prior written approval of the SUB-ADVISER, which approval shall not be
unreasonably withheld so long as this Agreement is in effect. Upon termination
of this Agreement, VALIC shall forthwith cease to use such name(s),
derivatives, logos, trade or service marks. VALIC agrees that it will review
with the SUB-ADVISER any advertisement, sales literature or notice prior to its
use that makes reference to the SUB-ADVISER so that the SUB- ADVISER may review
the context in which it is referred to, it being agreed that the SUB-ADVISER
shall have no responsibility to ensure the adequacy of the form or content of
such materials for purposes of the 1940 Act or other applicable laws and
regulations. If the Covered Funds or VALIC makes any unauthorized use of the
SUB-ADVISER's name(s), derivatives, logos, trade or service marks, the parties
acknowledge that the SUB-ADVISER shall suffer irreparable harm for which
monetary damages are inadequate and thus, the SUB-ADVISER shall be entitle to
injunctive relief. VALIC shall furnish or otherwise make available to the
SUB-ADVISER such other information relating to the business affairs of VALIC
and the FUND as the SUB-ADVISER at any time, or from time to time, may
reasonably request in order to discharge obligations hereunder.
The SUB-ADVISER shall indemnify and hold harmless VALIC (and its
affiliated companies and their respective officers, directors and employees)
from any and all claims, losses, liabilities or damages (including reasonable
attorney's fees and other related expenses) arising out of or in connection
with (1) any willful misfeasance, bad faith, gross negligence, or reckless
disregard of obligations or duties of the SUB-ADVISER in performing hereunder;
or (2) any untrue statement of a material fact or any omission to state a
material fact required to be stated or necessary to make statements, in light
of the circumstances under which they are made, not misleading in any
registration statement, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Funds to the extent any such
statement or omission was made in reliance on information provided by the
SUB-ADVISER to VALIC for the express purpose of inclusion in such materials.
VALIC shall indemnify and hold harmless the SUB-ADVISER (and its
affiliated companies and their respective officers, directors and employees)
from any and all claims, losses, liabilities or damages (including reasonable
attorney's fees and other related expenses) arising out of any matter which
does not require the SUB-ADVISER to provide an indemnity under the preceding
paragraph, including without limitation, any claim that is based upon any
untrue statement of a material fact or any omission to state a material fact
required to be stated or necessary to make statements, in light of the
circumstances under which they are made, not misleading not misleading
contained
5
<PAGE>
in the registration statement, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Funds except those statements
that were provided by the SUB-ADVISER to VALIC for the express purpose of
inclusion in such materials.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations,
including definitions therein and such exemptions as may be granted to VALIC or
the SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
-------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- ---------------------
CAPITAL GUARDIAN TRUST COMPANY
By: /s/ ROBERTA A. CONROY
-------------------------------
Name: Roberta A. Conroy
Title: Senior Vice President
ATTEST:
/s/ [ILLEGIBLE]
- ---------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable quarterly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General International Value Fund* 0.75% of the first $25 million
0.60% of the next $25 million
0.425% of the next $200 million
0.375% on the excess over $250 million
American General Domestic Bond Fund* 0.35% of the first $50 million
0.20% of the next $50 million
0.18% of the next $200 million
0.15% on the excess over $300 million
American General Balanced Fund* 0.55% of the first $25 million
0.40% of the next $25 million
0.20% on the excess over $50 million
</TABLE>
*Fees with respect to each Fund are aggregated and the Sub-Adviser
applies a 5% discount to all fees if all fees are between $1.25
million and $4 million, a 7.5% discount to all fees between $4 million
and $8 million, and a 12.5% discount to all fees if total fees exceed
$12 million.
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and STATE
STREET BANK & TRUST COMPANY, through its division, STATE STREET GLOBAL ADVISORS,
hereinafter referred to as the "SUB- ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General Large Cap Value Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of 1940,
as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) The SUB-ADVISER is engaged in the business of rendering
investment advisory services and is a "bank" as defined under the
Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign to
the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal
1
<PAGE>
and state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"), the FUND's Declaration, Bylaws,
registration statements, prospectus and stated investment objectives, policies
and restrictions and any applicable procedures adopted by the FUND's Board of
Trustees and provided to the SUB- ADVISER shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their request all of the Covered Funds' investment records and
ledgers to assist VALIC and the FUND in compliance with respect to each Covered
Fund's securities transactions as required by the 1940 Act and the Advisers Act,
as well as other applicable laws. The SUB-ADVISER will furnish the FUND's Board
of Trustees such periodic and special reports as VALIC and the FUND's Board of
Trustees may reasonably request. The SUB-ADVISER will furnish to regulatory
authorities any information or reports in connection with such services which
may be requested in order to ascertain whether the operations of the Covered
Funds are being conducted in a manner consistent with applicable laws and
regulations. The SUB-ADVISER will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as expressly
authorized in this Agreement, and will keep confidential any information
obtained pursuant to this service relationship, and disclose such information
only if VALIC or the Board of Trustees of the FUND has authorized such
disclosure, or if such information is or hereafter becomes ascertainable from
public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB- ADVISER of such determination in writing,
the SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND (the
"Custodian"). The SUB-ADVISER will arrange for the transmission to the Custodian
for the FUND, on a daily basis, such confirmation, trade tickets and other
documents as may be necessary to enable it to perform its administrative
responsibilities the with respect to the Covered Funds. The SUB- ADVISER further
shall have the authority to instruct the custodian of the FUND (i) to pay cash
for securities and other
2
<PAGE>
property delivered to the Custodian for the FUND (ii) to deliver securities and
other property against payment for the FUND, and (iii) to transfer assets and
funds to such brokerage accounts as the SUB-ADVISER may designate, all
consistent with the powers, authorities and limitations set forth herein. The
SUB-ADVISER shall not have the authority to cause the Custodian to deliver
securities and other property except as expressly provided for in this
Agreement.
The SUB-ADVISER may aggregate sales and purchase orders of securities
held by the FUND with similar orders being made simultaneously for other
accounts managed by the SUB-ADVISER or with accounts of the affiliates of the
SUB-ADVISER, if in the SUB-ADVISER's reasonable judgment such aggregation shall
result in an overall economic benefit to the FUND considering the advantageous
selling or purchase price, brokerage commission and other expenses. In
accounting for such aggregated order price, commission and other expenses shall
be averaged on a per bond or share basis daily. VALIC acknowledges that the
determination of such economic benefit to the FUND by the SUB- ADVISER is
subjective and represents the SUB-ADVISER's evaluation that the FUND is
benefited by relatively better purchase or sales prices, lower commission
expenses and beneficial timing of transactions or a combination of these and
other factors.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and in the fee schedule attached hereto as Schedule
A. Schedule A may be amended from time to time with the express written consent
of the parties hereto, provided that amendments are made in conformity with
applicable laws and regulations and the Declaration and Bylaws of the FUND. Any
change in Schedule A pertaining to any new or existing 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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER terminates its services prior to month end, the
foregoing compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered Funds.
VALIC agrees that the
3
<PAGE>
SUB-ADVISER may give advice and take action in the performance of its duties
with respect to any of its other clients which differ from action taken with
respect to any Covered Fund.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB- ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is a "bank" as defined under the Advisers Act
and will continue to maintain such status for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify VALIC of the occurrence of any event that would disqualify
the SUB-ADVISER from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and if it has not already done
so, will provide VALIC and the FUND with a copy of such code of ethics together
with evidence of its adoption.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement including the authority to appoint a
SUB-ADVISER to the FUND, (iv) has the authority to enter into and perform the
services contemplated by this Agreement, and (v) will immediately notify the
SUB-ADVISER of the occurrence of any event that would disqualify VALIC from
serving as an investment adviser of an investment company pursuant to Section
9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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
4
<PAGE>
annually by the vote of a majority of the FUND's trustees 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 of a
majority of the FUND's Board of Trustees or a majority of that Fund's
outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least 60
days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at any
time, or from time to time, may reasonably request in order to discharge
obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory
5
<PAGE>
Agreement, or (ii) as the result of any untrue statement of a material fact or
any omission to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the FUND,
except insofar as any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub- Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund) or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND to the extent any such
statement or omission was made in reliance on information provided by the SUB-
ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -------------------
STATE STREET BANK & TRUST COMPANY, through its
division,
STATE STREET GLOBAL ADVISORS
By: /s/ TIMOTHY B. HARBERT
------------------------------
Name: Timothy B. Harbert
Title: Executive Vice President
ATTEST:
/s/ ILLEGIBLE
- -------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General Large Cap Value Fund 0.25%
$50,000 minimum annual fee
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and
NEUBERGER&BERMAN MANAGEMENT, INC., hereinafter referred to as the "SUB-ADVISER."
VALIC represents the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General Mid Cap Value Fund pursuant to an Investment Advisory Agreement
dated October 7, 1998 between VALIC and American General Series
Portfolio Company 2 ("FUND"), an investment company organized under the
laws of Delaware as a business trust, as a series type of investment
company issuing separate classes (or series) of shares of beneficial
interest and is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended
("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Fund(s) set forth on the attached Schedule A, and any other Funds
as may be added or deleted by amendment to the attached Schedule A
("Covered Funds") which VALIC determines from time to time to assign to
the SUB-ADVISER.
(e) The SUB-ADVISER represents that it is engaged principally
in the business of rendering investment advisory services and is
registered as an investment adviser under the Advisers Act.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
This Agreement will apply only to the Covered Funds.
1
<PAGE>
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"), the FUND's Declaration, Bylaws,
registration statements, prospectus and stated investment objectives, policies
and restrictions and any applicable procedures adopted by the FUND's Board of
Trustees shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their reasonable request all of the Covered Funds' investment
records and ledgers to assist VALIC and the FUND in compliance with respect to
each Covered Fund's securities transactions as required by the 1940 Act and the
Advisers Act, as well as other applicable laws. The SUB-ADVISER will furnish the
FUND's Board of Trustees such periodic and special reports as VALIC and the
FUND's Board of Trustees may reasonably request. The SUB-ADVISER will furnish to
regulatory authorities any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
the Covered Funds are being conducted in a manner consistent with applicable
laws and regulations. The SUB-ADVISER will not disclose any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this service relationship, and disclose such
information only if VALIC or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
Notwithstanding the foregoing, the SUB-ADVISER may disclose the total return
earned by the Covered Funds and may include such total return in the calculation
of composite performance information without prior approval by VALIC or the
Board of Trustees of the Fund.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB- ADVISER of such determination in writing,
the SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for
2
<PAGE>
the FUND, on a daily basis, such confirmation, trade tickets and other documents
as may be necessary to enable it to perform its administrative responsibilities
with respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than ten (10)
days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
claims, damages, liabilities or litigation (including reasonable counsel fees
and expenses) sustained in connection with the matters to which this Agreement
relates, so long as there has been no willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties on the part of the
SUB-ADVISER.
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4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so
long as this Agreement remains in effect: (ii) is not prohibited by the
1940 Act or the Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will continue to meet for so long
as this Agreement remains in effect, any applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the
authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of
any event that would disqualify the SUB-ADVISER from serving as an
investment adviser of an investment company pursuant to Section 9(a) of
the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and if
it has not already done so, will provide VALIC and the FUND with a copy
of such code of ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a
copy of its Form ADV as most recently filed with the SEC and will
promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify the SUB-ADVISER of the occurrence of any event that would
disqualify VALIC from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also
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be terminated by VALIC: (i) on at least 60 days' prior written notice to the
SUB-ADVISER, without the payment of any penalty; or (ii) if the SUB-ADVISER
becomes unable to discharge its duties and obligations under this Agreement. The
SUB-ADVISER may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior written notice to
VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at any
time, or from time to time, may reasonably request in order to discharge
obligations hereunder. Subject to provisions of this paragraph, SUB-ADVISER
grants VALIC and the FUND a non-exclusive right to use the "Neuberger&Berman"
name in connection with the SUB-ADVISER's management of the FUND (i) for so long
as the Agreement, any other investment management agreement between VALIC and
SUB-ADVISER with respect to the FUND, or to any extension, renewal or amendment
thereof, remain in effect, and (ii) for subsequent periods as long as required
by law, rule or regulation or to the extent necessary to refer to or illustrate
the historical performance of the FUND.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement, or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials
5
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pertaining to the FUND, except insofar as any such statement or omission was
made in reliance on information provided by the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by the SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub- Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund) or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND to the extent any such
statement or omission was made in reliance on information provided by the SUB-
ADVISER or its affiliates. Provided, however, that the SUB-ADVISER's
responsibility for indemnification pursuant to this paragraph shall not, for any
Covered Fund, exceed the lesser of $1,000,000 or 2% of the Covered Fund's net
assets (measured as of the end of the first calendar quarter during which
non-compliance occurred) for any failure to comply with the diversification
requirements specified in section 817(h) or the qualification of Subchapter M of
the Code.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -------------------
NEUBERGER & BERGMAN MANAGEMENT, INC.
By: /s/ MICHAEL WEINER
------------------------------
Name: Michael Weiner
Title: Senior Vice President
ATTEST:
/s/ LAWRENCE B. STOLLER
- --------------------------
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SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
Covered Fund Fee
- ------------ ---
American General Mid Cap Value Fund 0.50% of the first $100 million
0.475% of the next $150 million
0.45% of the next $250 million
0.425% of the next $250 million
0.40% on the excess over $750 million
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INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and
FIDUCIARY MANAGEMENT ASSOCIATES, INC., hereinafter referred to as the "SUB-
ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers
Act").
(b) VALIC is engaged as the investment adviser of American
General Small Cap Value Fund pursuant to an Investment Advisory
Agreement dated October 7, 1998 between VALIC and American General
Series Portfolio Company 2 ("FUND"), an investment company organized
under the laws of Delaware as a business trust, as a series type of
investment company issuing separate classes (or series) of shares of
beneficial interest and is registered as a diversified, open-end,
management investment company under the Investment Company Act of
1940, as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small
Cap Value Fund, American General Small Cap Growth Fund, American
General Socially Responsible Fund, American General Money Market Fund,
American General Domestic Bond Fund, American General S&P 500 Index
Fund, American General Mid Cap Index Fund, American General Small Cap
Index Fund, American General Balanced Fund, American General
Conservative Growth Lifestyle Fund, American General Moderate Growth
Lifestyle Fund, American General Growth Lifestyle Fund, American
General Core Bond Fund, American General Strategic Bond Fund, American
General High Yield Bond Fund, American General Municipal Bond Fund and
American General Municipal Money Market Fund. In accordance with the
FUND's Agreement and Declaration of Trust (the "Declaration"), new
Funds may be added to the FUND upon approval of the FUND's Board of
Trustees without approval of the FUND's shareholders. This Agreement
will apply only to the Fund(s) set forth on the attached Schedule A,
and any other Funds as may be added or deleted by amendment to the
attached Schedule A ("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign
to the SUB- ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"),
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the FUND's Declaration, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures
adopted by the FUND's Board of Trustees shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB- ADVISER, subject to applicable
law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the
FUND promptly upon their request all of the Covered Funds' investment records
and ledgers to assist VALIC and the FUND in compliance with respect to each
Covered Fund's securities transactions as required by the 1940 Act and the
Advisers Act, as well as other applicable laws. The SUB-ADVISER will furnish
the FUND's Board of Trustees such periodic and special reports as VALIC and the
FUND's Board of Trustees may reasonably request. The SUB-ADVISER will furnish
to regulatory authorities any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
the Covered Funds are being conducted in a manner consistent with applicable
laws and regulations. The SUB-ADVISER will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this service relationship, and disclose such
information only if VALIC or the Board of Trustees of the FUND has authorized
such disclosure, or if such information is or hereafter becomes ascertainable
from public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB-ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination
has been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND.
The SUB-ADVISER will arrange for the transmission to the Custodian for the
FUND, on a daily basis, such confirmation, trade tickets and other documents as
may be necessary to enable it to perform its administrative responsibilities
with respect to the Covered Funds.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
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The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in
furtherance of the SUB-ADVISER's duties and responsibilities as set forth in
this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities
hereunder and VALIC shall pay, or arrange for others to pay, all VALIC's
expenses, except that VALIC shall in all events pay the compensation described
in Section 2 of this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB- ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the
SUB-ADVISER under this Agreement shall be the sole responsibility of VALIC and
shall not be the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered
Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB-ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
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(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement, (iv)
has the authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of any event
that would disqualify the SUB-ADVISER from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and if it has not
already done so, will provide VALIC and the FUND with a copy of such code of
ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and the FUND with a copy of
its Form ADV as most recently filed with the SEC and will promptly after filing
any amendment to its Form ADV with the SEC, furnish a copy of such amendment to
VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the authority to
enter into and perform the services contemplated by this Agreement, and (v)
will immediately notify the SUB-ADVISER of the occurrence of any event that
would disqualify VALIC from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least
60 days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
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6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC
shall furnish or otherwise make available to the SUB-ADVISER such other
information relating to the business affairs of VALIC and the FUND as the
SUB-ADVISER at any time, or from time to time, may reasonably request in order
to discharge obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement,
or (ii) as the result of any untrue statement of a material fact or any
omission to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the FUND,
except insofar as any such statement or omission was made in reliance on
information provided by the SUB- ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub-Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund)
or (ii) as the result of any untrue statement of a material fact or any
omission to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to
5
<PAGE>
the FUND to the extent any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations,
including definitions therein and such exemptions as may be granted to VALIC or
the SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
---------------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -------------------
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
By: /s/ ROBERT W. THORNBURGH, JR.
---------------------------------------
Name: Robert W. Thornburgh, Jr., CFA
Title: Executive Vice President
ATTEST:
/s/ ILLEGIBLE
- -------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General Small Cap Value Fund 0.50% of the first $50 million
0.40% on the excess over $50 million
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and
AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P., hereinafter referred to as the
"SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers
Act").
(b) VALIC is engaged as the investment adviser of American
General Core Bond Fund, American General Strategic Bond Fund, American
General High Yield Bond Fund, American General Municipal Bond Fund and
American General Municipal Money Market Fund pursuant to an Investment
Advisory Agreement dated October 7, 1998 between VALIC and American
General Series Portfolio Company 2 ("FUND"), an investment company
organized under the laws of Delaware as a business trust, as a series
type of investment company issuing separate classes (or series) of
shares of beneficial interest and is registered as a diversified,
open-end, management investment company under the Investment Company
Act of 1940, as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small
Cap Value Fund, American General Small Cap Growth Fund, American
General Socially Responsible Fund, American General Money Market Fund,
American General Domestic Bond Fund, American General S&P 500 Index
Fund, American General Mid Cap Index Fund, American General Small Cap
Index Fund, American General Balanced Fund, American General
Conservative Growth Lifestyle Fund, American General Moderate Growth
Lifestyle Fund, American General Growth Lifestyle Fund, American
General Core Bond Fund, American General Strategic Bond Fund, American
General High Yield Bond Fund, American General Municipal Bond Fund and
American General Municipal Money Market Fund. In accordance with the
FUND's Agreement and Declaration of Trust (the "Declaration"), new
Funds may be added to the FUND upon approval of the FUND's Board of
Trustees without approval of the FUND's shareholders. This Agreement
will apply only to the Fund(s) set forth on the attached Schedule A,
and any other Funds as may be added or deleted by amendment to the
attached Schedule A ("Covered Funds").
(d) The SUB-ADVISER is engaged principally in the business of
rendering investment advisory services and is registered as an
investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign
to the SUB- ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in material conformity with the 1940
Act, all applicable laws and regulations thereunder, all other
1
<PAGE>
applicable federal and state securities and tax laws and regulations, including
section 817(h) and Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), the FUND's Declaration, Bylaws, registration statements,
prospectus and stated investment objectives, policies and restrictions and any
applicable procedures adopted by the FUND's Board of Trustees and provided to
the SUB-ADVISER shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB- ADVISER, subject to applicable
law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the best
execution of portfolio transactions. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 to the SUB-ADVISER. The SUB-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 in accordance with such
authorization.
The SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of its
services under this Agreement. The SUB-ADVISER will make available to VALIC
and the FUND promptly upon their reasonable written request all of the Covered
Funds' investment records and ledgers to assist VALIC and the FUND in
compliance with respect to each Covered Fund's securities transactions as
required by the 1940 Act and the Advisers Act, as well as other applicable
laws. The SUB-ADVISER will furnish the FUND's Board of Trustees such periodic
and special reports as VALIC and the FUND's Board of Trustees may reasonably
request. The SUB-ADVISER will furnish to regulatory authorities any
information or reports in connection with such services which may be requested
in order to ascertain whether the operations of the Covered Funds are being
conducted in a manner consistent with applicable laws and regulations. The
SUB-ADVISER will not disclose or use any records or information obtained
pursuant to this Agreement in any manner whatsoever except as expressly
authorized in this Agreement, and will keep confidential any non-public
information obtained directly as a result of this service relationship, and the
SUB-ADVISER shall disclose such non-public information only if VALIC or the
Board of Trustees of the FUND has authorized such disclosure, or if such
information is or hereafter otherwise is known by the SUB-ADVISER or has been
disclosed, directly or indirectly, by VALIC or the Fund to others becomes
ascertainable from public or published information or trade sources, or if such
disclosure is expressly required or requested by applicable federal or state
regulatory authorities, or to the extent such disclosure is reasonably required
by auditors or attorneys of the SUB-ADVISER in connection with the performance
of their professional services. Notwithstanding the foregoing, the SUB-ADVISER
may disclose the total return earned by the Covered Funds and may include such
total return in the calculation of composite performance information without
prior approval by VALIC or the Board of Trustees of the FUND.
Should VALIC at any time make any definite determination as to any
investment policy and notify the SUB-ADVISER in writing of such determination,
the SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination
has been revoked, provided such determination will permit SUB-ADVISER to comply
with the first paragraph of this Section.
2
<PAGE>
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND.
The SUB-ADVISER will arrange for the transmission to the Custodian for the
FUND, on a daily basis, such confirmation, trade tickets and other documents as
may be necessary to enable it to perform its administrative responsibilities
with respect to the Covered Funds. The SUB-ADVISER further shall have the
authority to instruct the custodian of the FUND (i) to pay cash for securities
and other property delivered to the Custodian for the FUND (ii) to deliver
securities and other property against payment for the FUND, and (iii) to
transfer assets and funds to such brokerage accounts as the SUB-ADVISER may
designate, all consistent with the powers, authorities and limitations set
forth herein. The SUB-ADVISER shall not have the authority to cause the
Custodian to deliver securities and other property except as expressly provided
for in this Agreement.
The SUB-ADVISER may aggregate sales and purchase orders of securities
held by the FUND with similar orders being made simultaneously for other
accounts managed by the SUB-ADVISER or with accounts of the affiliates of the
SUB- ADVISER, if in the SUB-ADVISER's reasonable judgment such aggregation
shall result in an overall economic benefit to the FUND considering the
advantageous selling or purchase price, brokerage commission and other
expenses. In accounting for such aggregated order price, commission and other
expenses shall be averaged on a per bond or share basis daily. VALIC
acknowledges that the determination of such economic benefit to the FUND by the
SUB-ADVISER is subjective and represents the SUB-ADVISER's evaluation that the
FUND is benefited by relatively better purchase or sales prices, lower
commission expenses and beneficial timing of transactions or a combination of
these and other factors.
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act or represent VALIC or the Fund other than in furtherance of
the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities
hereunder and VALIC shall pay, or arrange for others to pay, all VALIC's
expenses, except that VALIC shall in all events pay the compensation described
in Section 2 of the Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB- ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than ten
(10) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the
SUB-ADVISER under this Agreement shall be the sole responsibility of VALIC and
shall not be the responsibility of the FUND.
3
<PAGE>
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
VALIC understands that the SUB-ADVISER and its affiliates now act,
will continue to act and may act in the future as investment adviser to
fiduciary and other managed accounts and as investment adviser to other
investment companies, and VALIC has no objection to the SUB-ADVISER so acting,
provided that whenever a Covered Fund and one or more other accounts or
investment companies advised by the SUB-ADVISER have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a methodology believed to be equitable to each entity. The
SUB-ADVISER similarly agrees to allocate opportunities to sell securities.
VALIC recognizes that, in some cases, this procedure may limit the size of the
position that may be acquired or sold for a Covered Fund. In addition, VALIC
understands that the persons employed by the SUB-ADVISER to assist in the
performance of the SUB-ADVISER's duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict the right of the SUB-ADVISER or any affiliate of the SUB-ADVISER to
engage in and devote time and attention to other business or to render services
of whatever kind or nature.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB-ADVISER in
performing its duties under this Agreement.
VALIC shall perform quarterly and annual tax compliance tests and
promptly furnish reports of such tests to the SUB-ADVISER after each quarter
end to ensure that the Fund is in compliance with Subchapter M of the Code and
Section 817(h) of the Code. VALIC shall apprise the SUB-ADVISER promptly after
each quarter end of any potential non-compliance with the diversification
requirements in such Code provisions. If so advised, the SUB-ADVISER shall take
prompt action so that the Fund(s) comply with such Code diversification
provisions, as directed by VALIC.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement, (iv)
has the authority to enter into and perform the services contemplated by this
Agreement, and (v) will immediately notify VALIC of the occurrence of any event
that would disqualify the SUB-ADVISER from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and if it has not
already done so, will provide VALIC and the FUND with a copy of such code of
ethics together with evidence of its adoption.
4
<PAGE>
(c) The SUB-ADVISER has provided VALIC and the FUND with a copy of
its Form ADV as most recently filed with the SEC and will promptly after filing
any amendment to its Form ADV with the SEC, furnish a copy of such amendment to
VALIC.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement, (iv) has the authority to
enter into and perform the services contemplated by this Agreement, and (v)
will immediately notify the SUB-ADVISER of the occurrence of any event that
would disqualify VALIC from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (I) on at least
60 days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
6. OTHER MATTERS
The SUB-ADVISER may from time to time employ or associate with itself
any person or persons believed to be particularly fit to assist in its
performance of services under this Agreement, provided no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the 1940 Act. The compensation of any such
persons will be paid by the SUB-ADVISER, and no obligation will be incurred by,
or on behalf of, VALIC or the FUND with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in
accordance with the 1940 Act and rules thereunder. The SUB-ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act.
5
<PAGE>
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective. Until VALIC
delivers any amendments or supplements to the SUB-ADVISER, the SUB-ADVISER
shall be fully protected in relying on the documents previously furnished to
it.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC
shall furnish or otherwise make available to the SUB-ADVISER such other
information relating to the business affairs of VALIC and the FUND as the
SUB-ADVISER at any time, or from time to time, may reasonably request in order
to discharge obligations hereunder. Subject to provisions of this paragraph,
SUB-ADVISER grants VALIC and the FUND a non-exclusive right to use the
"American General Investment Management" name in connection with the
SUB-ADVISER's management of the FUND (i) for so long as the this Agreement, any
other investment management agreement between VALIC and SUB-ADVISER with
respect to the FUND, or to any extension, renewal or amendment thereof, remain
in effect, and (ii) for subsequent periods as long as required by law, rule or
regulation or to the extent necessary to refer to or illustrate the historical
performance of the FUND.
VALIC agrees to indemnify the SUB-ADVISER for losses, costs, fees,
expenses and claims which arise directly or indirectly (i) as a result of a
failure by VALIC to provide the services or furnish materials required under
the terms of this Investment Sub-Advisory Agreement, or (ii) as the result of
any untrue statement of a material fact or any omission to state a material
fact required to be stated or necessary to make the statements, in light of the
circumstances under which they were made, not misleading in any registration
statements, proxy materials, reports, advertisements, sales literature, or
other materials pertaining to the FUND, except insofar as any such statement or
omission was specifically made in reliance on written information provided by
the SUB-ADVISER to VALIC.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub-Advisory
Agreement, or (ii) as the result of any untrue statement of a material fact or
any omission to state a material fact required to be stated or necessary to
make the statements, in light of the circumstances under which they were made,
not misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the FUND,
but only to the extent that such statement or omission was specifically made in
reliance on written information provided by the SUB-ADVISER to VALIC. Provided,
however, that the SUB-ADVISER's responsibility, if any, to provide VALIC with
indemnification pursuant to this paragraph or any other provision of this
Agreement for any failure on the SUB-ADVISER's part to comply with the
diversification requirements specified in Section 817(h) of the Code or the
qualification standards of Subchapter M of the Code shall not for any Covered
Fund exceed the lesser of $1 million or 2% of the Covered Fund's net assets
(measured as of the end of the first calendar quarter during which
non-compliance with Section 817(h) or Subchapter M of the Code first occurred).
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
6
<PAGE>
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations,
including definitions therein and such exemptions as may be granted to VALIC or
the SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
---------------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -------------------
AMERICAN GENERAL INVESTMENT MANAGEMENT, L.P.
By: /s/ RICHARD W. SCOTT
---------------------------
Name: Richard W. Scott
Title: President and CEO
ATTEST:
/s/ PETER TUTERS
- -----------------------
7
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
Covered Fund Fee
------------ ---
American General Core Bond Fund 0.25% on first $200 million
0.20% on next $300 million
0.15% over $500 million
American General Strategic Bond Fund 0.35% on first $200 million
0.25% on next $300 million
0.20% over $500 million
American General High Yield Bond Fund 0.45% on first $200 million
0.35% on next $300 million
0.30% over $500 million
American General Municipal Bond Fund 0.25% on first $200 million
0.20% on first $300 million
0.15% on first $500 million
American General Municipal Money Market Fund 0.25% on first $200 million
0.20% on first $300 million
0.15% on first $500 million
8
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of October, 1998, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and BANKERS
TRUST COMPANY, hereinafter referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC 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, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of American
General S&P 500 Index Fund, American General Mid Cap Index Fund,
American General Small Cap Index Fund and American General Small Cap
Value Fund pursuant to an Investment Advisory Agreement dated
October 7, 1998 between VALIC and American General Series Portfolio
Company 2 ("FUND"), an investment company organized under the laws of
Delaware as a business trust, as a series type of investment company
issuing separate classes (or series) of shares of beneficial interest
and is registered as a diversified, open-end, management investment
company under the Investment Company Act of 1940, as amended ("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) The FUND currently consists of twenty-three portfolios
("Funds"): American General International Value Fund, American General
International Growth Fund, American General Large Cap Value Fund,
American General Large Cap Growth Fund, American General Mid Cap Value
Fund, American General Mid Cap Growth Fund, American General Small Cap
Value Fund, American General Small Cap Growth Fund, American General
Socially Responsible Fund, American General Money Market Fund, American
General Domestic Bond Fund, American General S&P 500 Index Fund,
American General Mid Cap Index Fund, American General Small Cap Index
Fund, American General Balanced Fund, American General Conservative
Growth Lifestyle Fund, American General Moderate Growth Lifestyle Fund,
American General Growth Lifestyle Fund, American General Core Bond
Fund, American General Strategic Bond Fund, American General High Yield
Bond Fund, American General Municipal Bond Fund and American General
Municipal Money Market Fund. In accordance with the FUND's Agreement
and Declaration of Trust (the "Declaration"), new Funds may be added to
the FUND upon approval of the FUND's Board of Trustees without approval
of the FUND's shareholders. This Agreement will apply only to the
Fund(s) set forth on the attached Schedule A, and any other Funds as
may be added or deleted by amendment to the attached Schedule A
("Covered Funds").
(d) The SUB-ADVISER is engaged in the business of rendering
investment advisory services and is a "bank" as defined under the
Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of the assets of
the Covered Funds which VALIC determines from time to time to assign to
the SUB-ADVISER.
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction, and supervision of
VALIC and the FUND's Board of Trustees and in conformity with the 1940 Act, all
applicable laws and regulations thereunder, all other applicable federal and
state laws and regulations, including section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"),
1
<PAGE>
the FUND's Declaration, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures
adopted by the FUND's Board of Trustees shall:
(a) manage the investment and reinvestment of the assets,
other than cash, 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 orders for the purchase
and sale of portfolio investments (including futures contracts and
options thereon) for each Covered Fund's account with brokers or
dealers (including futures commission merchants) selected by the
SUB-ADVISER, or arrange for any other entity to provide a trading desk
and to place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER, subject to the
SUB-ADVISER's control, direction, and supervision, which brokers or
dealers may include brokers or dealers (including futures commission
merchants) affiliated with the SUB-ADVISER, subject to applicable law.
In performing the services described in paragraph (b) above, the
SUB-ADVISER shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. Subject to approval by the FUND's Board
of Trustees of appropriate policies and procedures, the SUB-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 SUB-ADVISER. The
SUB-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 SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically to
VALIC and the FUND's Board of Trustees regarding the performance of services
under this Agreement. The SUB-ADVISER will make available to VALIC and the FUND
promptly upon their request all of the Covered Funds' investment records and
ledgers to assist VALIC and the FUND in compliance with respect to each Covered
Fund's securities transactions as required by the 1940 Act and the Advisers Act,
as well as other applicable laws. The SUB-ADVISER will furnish the FUND's Board
of Trustees such periodic and special reports as VALIC and the FUND's Board of
Trustees may reasonably request. The SUB-ADVISER will furnish to regulatory
authorities any information or reports in connection with such services which
may be requested in order to ascertain whether the operations of the Covered
Funds are being conducted in a manner consistent with applicable laws and
regulations. The SUB-ADVISER will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as expressly
authorized in this Agreement, and will keep confidential any information
obtained pursuant to this service relationship, and disclose such information
only if VALIC or the Board of Trustees of the FUND has authorized such
disclosure, or if such information is or hereafter becomes ascertainable from
public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state authorities or to
the extent such disclosure is reasonably required by auditors or attorneys of
the SUB-ADVISER in connection with the performance of their professional
services.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB- ADVISER of such determination, the
SUB-ADVISER shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The SUB-ADVISER will not hold money or investments on behalf of the
FUND. The money and investments will be held by the Custodian of the FUND. The
SUB-ADVISER will arrange for the transmission to the Custodian for the FUND, on
a daily basis, such information with respect to transactions as may be necessary
to enable it to perform its administrative responsibilities with respect to the
Covered Funds.
2
<PAGE>
The SUB-ADVISER will not perform cash management services for the
Covered Funds. The cash management function will be performed by VALIC.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent VALIC or the FUND other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the
SUB-ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses, except
that VALIC shall in all events pay the compensation described in Section 2 of
this Agreement.
2. COMPENSATION OF THE SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees based on
each Covered Fund's average monthly net asset value computed for each Covered
Fund as provided for herein and 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 Declaration and
Bylaws of the FUND. Any change in Schedule A pertaining to any new or existing
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 the FUND's Declaration, for each business day during a given
calendar month. VALIC shall pay this fee for each calendar month as soon as
practicable after the end of that month, but in any event no later than thirty
(30) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall not be
the responsibility of the FUND.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-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 SUB-ADVISER renders to the Covered Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and in
any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling, controlled by or
under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, the FUND, or to any
shareholder in the FUND, and VALIC shall indemnify the SUB-ADVISER, for any act
or omission in rendering services under this Agreement, or for any losses
sustained in connection with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties on the part of the SUB- ADVISER.
4. REPRESENTATIONS OF THE SUB-ADVISER AND VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
3
<PAGE>
(a) The SUB-ADVISER (i) is a "bank" as defined under the Advisers Act
and will continue to be so registered for so long as this Agreement remains in
effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify VALIC of the occurrence of any event that would disqualify
the SUB-ADVISER from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and if it has not already done
so, will provide VALIC and the FUND with a copy of such code of ethics together
with evidence of its adoption.
VALIC represents, warrants, and agrees as follows:
VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this Agreement remains
in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement, (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will
immediately notify the SUB-ADVISER of the occurrence of any event that would
disqualify VALIC from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund 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 its 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 FUND's trustees 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 of a majority of the FUND's Board of
Trustees or a majority of that Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and the FUND as
it relates to any Covered Fund. The Agreement may be terminated as to any
Covered Fund at any time, without the payment of any penalty, by vote of the
FUND's Board of Trustees or by vote of a majority of that Covered Fund's
outstanding voting securities on at least 60 days' prior written notice to the
SUB-ADVISER. This Agreement may also be terminated by VALIC: (i) on at least 60
days' prior written notice to the SUB-ADVISER, without the payment of any
penalty; or (ii) if the SUB-ADVISER becomes unable to discharge its duties and
obligations under this Agreement. The SUB-ADVISER may terminate this Agreement
at any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior written notice to VALIC.
6. OTHER MATTERS
The SUB-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 no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a
new written contract pursuant to the
4
<PAGE>
1940 Act. The compensation of any such persons will be paid by the SUB-ADVISER,
and no obligation will be incurred by, or on behalf of, VALIC or the FUND with
respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the FUND are the FUND's property. The SUB-ADVISER also agrees upon request
of VALIC or the FUND, to promptly surrender the books and records in accordance
with the 1940 Act and rules thereunder. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of the FUND's
Prospectus, Statement of Additional Information, Declaration and Bylaws as
currently in effect and agrees during the continuance of this Agreement to
furnish the SUB-ADVISER copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the FUND in writing
signed or sent by any of the persons whose names, addresses and specimen
signatures will be provided by VALIC from time to time. The SUB-ADVISER shall
not be liable for so acting in good faith upon such instructions, confirmation
or authority, notwithstanding that it shall subsequently be shown that the same
was not given or signed or sent by an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
interest holders of the FUND or the public that refer in any way to the
SUB-ADVISER, and not to use such material if the SUB-ADVISER reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of termination of this agreement,
VALIC will continue to furnish to the SUB-ADVISER copies of any of the
above-mentioned materials that refer in any way to the SUB-ADVISER. VALIC shall
furnish or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the FUND as the SUB-ADVISER at any
time, or from time to time, may reasonably request in order to discharge
obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Investment Sub-Advisory Agreement, or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND, except insofar as any
such statement or omission was made in reliance on information provided by the
the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of a failure by the SUB-ADVISER to provide the services or
furnish the materials required under the terms of this Investment Sub- Advisory
Agreement, including a negligent failure whether unintentional or in good faith
or otherwise, to comply with the diversification requirements specified in
section 817(h), and the qualification standards of Subchapter M of the Code, as
amended, and the regulations thereunder, (other than a failure which is
subsequently timely corrected by the SUB- ADVISER in accordance with applicable
law and regulations such that no loss is incurred by VALIC or a Covered Fund) or
(ii) as the result of any untrue statement of a material fact or any omission to
state a material fact required to be stated or necessary to make the statements,
in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the FUND to the extent any such
statement or omission was made in reliance on information provided by the SUB-
ADVISER or its affiliates.
7. APPLICABILITY OF FEDERAL SECURITIES LAWS
5
<PAGE>
This Agreement shall be interpreted in accordance with the laws of the
State of Texas and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the Securities and Exchange 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.
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.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ THOMAS L. WEST, JR.
-----------------------------------------
Name: Thomas L. West, Jr.
Title: Chairman and CEO
ATTEST:
/s/ NORI L. GABERT
- -----------------------
BANKERS TRUST COMPANY
By: /s/ IRENE S. GREENBERG
-----------------------------------------
Name: Irene S. Greenberg
Title: Vice President
ATTEST:
/s/ J.G. NOONE
- -----------------------
6
<PAGE>
SCHEDULE A
(Effective October 7, 1998)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month and payable monthly:
<TABLE>
<CAPTION>
Covered Fund Fee
------------ ---
<S> <C>
American General S & P 500 0.02% of the first $2 billion
Index Fund 0.01% on the excess over $2 billion
No minimum annual fee
American General Mid Cap 0.03% of the first $300 million
Index Fund 0.02% on the excess over $300 million
No minimum annual fee
American General Small Cap 0.03% of the first $150 million
Index Fund 0.02% on the excess over $150 million
No minimum annual fee
American General Small Cap 0.03%
Value Fund
</TABLE>
7
<PAGE>
SCHEDULE B
(Effective October 7, 1998)
Pursuant to Section 6, the following person has been given signature authority
to sign on behalf of VALIC:
x /s/ THOMAS L. WEST, JR.
------------------------
Thomas L. West, Jr.
Chairman and CEO
The person holding the office indicated above, whose signature appears above, is
authorized to sign pursuant to Section 6.
Accepted:
VALIC BANKERS TRUST COMPANY
By: /s/ THOMAS L. WEST, JR. By: /s/ IRENE S. GREENBERG
------------------------------ --------------------------
Thomas L. West, Jr. Irene S. Greenberg
Chairman and CEO Vice President
October 7, 1998
8
<PAGE>
SUB-ITEM 77D
On January 19, 1999, the Board of Trustees approved an amendment to the
non-fundamental investment restriction regarding investments in illiquid
securities for the Funds included in American General Series Portfolio Company
2. The amendment was needed to clarify the exact limitations placed on the Funds
with respect to illiquid and restricted securities and the inclusion of 4(2)
paper and 144A securities, both of which are restricted securities, in the
appropriate category.
On April 19, 1999, the Board of Trustees of American General Series Portfolio 2
approved certain changes to the non-fundamental investment policies regarding
social criteria for the American General Socially Responsible Fund. The Board
approved adding to the Fund's social criteria as companies in which the Fund
would not invest, companies that manufacture alcoholic beverages and companies
that operate gambling casinos. In addition, the Board approved refining the
social criteria to better account for the extent of a company's involvement in a
prohibited business (i.e., the slightest involvement by a company in one of the
prohibited businesses would render the company ineligible for investment). The
investment policies were revised to only prohibit investment in companies that
are significantly involved in a prohibited business.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001058413
<NAME> AMERICAN GENERAL PORTFOLIO COMPANY SERIES 2
<SERIES>
<NUMBER> 1
<NAME> STOCK INDEX FUND-CLASS A
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 9111509
<INVESTMENTS-AT-VALUE> 10201199
<RECEIVABLES> 53260
<ASSETS-OTHER> 63502
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10317961
<PAYABLE-FOR-SECURITIES> 4400
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62465
<TOTAL-LIABILITIES> 66865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2848016
<SHARES-COMMON-STOCK> 279983
<SHARES-COMMON-PRIOR> 250
<ACCUMULATED-NII-CURRENT> 5104
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8996
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 509303
<NET-ASSETS> 3371419
<DIVIDEND-INCOME> 17067
<INTEREST-INCOME> 7761
<OTHER-INCOME> 0
<EXPENSES-NET> 12848
<NET-INVESTMENT-INCOME> 11980
<REALIZED-GAINS-CURRENT> 8996
<APPREC-INCREASE-CURRENT> 509303
<NET-CHANGE-FROM-OPS> 530279
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11432
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 281718
<NUMBER-OF-SHARES-REDEEMED> 2960
<SHARES-REINVESTED> 975
<NET-CHANGE-IN-ASSETS> 279733
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3852
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23462
<AVERAGE-NET-ASSETS> 3133659
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 2.03
<PER-SHARE-DIVIDEND> 0.04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.04
<EXPENSE-RATIO> 0.41
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001058413
<NAME> AMERICAN GENERAL PORTFOLIO COMPANY SERIES 2
<SERIES>
<NUMBER> 1
<NAME> STOCK INDEX FUND-CLASS B
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 9111509
<INVESTMENTS-AT-VALUE> 10201199
<RECEIVABLES> 53260
<ASSETS-OTHER> 63502
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10317961
<PAYABLE-FOR-SECURITIES> 4400
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62465
<TOTAL-LIABILITIES> 66865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6269882
<SHARES-COMMON-STOCK> 573098
<SHARES-COMMON-PRIOR> 250
<ACCUMULATED-NII-CURRENT> (5417)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13338
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 601874
<NET-ASSETS> 6879677
<DIVIDEND-INCOME> 20710
<INTEREST-INCOME> 11288
<OTHER-INCOME> 0
<EXPENSES-NET> 32859
<NET-INVESTMENT-INCOME> (861)
<REALIZED-GAINS-CURRENT> 13338
<APPREC-INCREASE-CURRENT> 601874
<NET-CHANGE-FROM-OPS> 614351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 576441
<NUMBER-OF-SHARES-REDEEMED> 3593
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 572848
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4881
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40608
<AVERAGE-NET-ASSETS> 4159367
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 2.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.00
<EXPENSE-RATIO> 0.79
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001058413
<NAME> AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
<SERIES>
<NUMBER> 2
<NAME> MID CAP INDEX-CLASS A
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 5820513
<INVESTMENTS-AT-VALUE> 6292225
<RECEIVABLES> 26817
<ASSETS-OTHER> 12806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6331848
<PAYABLE-FOR-SECURITIES> 42957
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 43481
<TOTAL-LIABILITIES> 86438
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2558832
<SHARES-COMMON-STOCK> 255193
<SHARES-COMMON-PRIOR> 250
<ACCUMULATED-NII-CURRENT> 316
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 161780
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 250482
<NET-ASSETS> 2971410
<DIVIDEND-INCOME> 15669
<INTEREST-INCOME> 6171
<OTHER-INCOME> 0
<EXPENSES-NET> 11262
<NET-INVESTMENT-INCOME> 10578
<REALIZED-GAINS-CURRENT> 161780
<APPREC-INCREASE-CURRENT> 250482
<NET-CHANGE-FROM-OPS> 422840
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10261
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 254142
<NUMBER-OF-SHARES-REDEEMED> 83
<SHARES-REINVESTED> 884
<NET-CHANGE-IN-ASSETS> 254943
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22722
<AVERAGE-NET-ASSETS> 2681429
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 1.64
<PER-SHARE-DIVIDEND> 0.04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.64
<EXPENSE-RATIO> 0.42
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001058413
<NAME> AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
<SERIES>
<NUMBER> 2
<NAME> MID CAP INDEX-CLASS B
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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