AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
AMENDED
INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT, dated and effective as of the 10th day of March, 2005, is made and
entered into by and between NEW
WORLD FUND, INC.,
a
Maryland corporation, (hereinafter called the “Fund”), and CAPITAL
RESEARCH AND MANAGEMENT COMPANY,
a
Delaware corporation, (hereinafter called the “Investment
Adviser”).
W
I T N E
S S E T H
A.
The
Fund is an open-end diversified investment company of the management type,
registered under the Investment Company Act of 1940 (the “1940 Act”). The
Investment Adviser is registered under the Investment Advisers Act of 1940
and
is engaged in the business of providing investment advisory and related services
to the Fund and to other investment companies.
B.
The
Investment Adviser has provided investment advisory services to the Fund since
its inception, and is currently providing such services under a written
agreement dated December 2, 1999, as renewed.
NOW,
THEREFORE, in consideration of the premises and the mutual undertaking of the
parties, it is covenanted and agreed as follows:
1.
The
Investment Adviser shall determine what securities and other assets shall be
purchased or sold by the Fund.
2.
The
Investment Adviser shall furnish the services of persons to perform the
executive, administrative, clerical, and bookkeeping functions of the Fund,
including the daily determination of net asset value per share. The Investment
Adviser shall pay the compensation and travel expenses of all such persons,
and
they shall serve without any additional compensation from the Fund. The
Investment Adviser shall also, at its expense, provide the Fund with necessary
office space (which may be in the offices of the Investment Adviser); all
necessary office equipment and utilities; and general purpose forms, supplies,
and postage used at the offices of the Fund.
3.
The
Fund shall pay all its expenses not assumed by the Investment Adviser as
provided herein. Such expenses shall include, but shall not be limited to,
expenses incurred in connection with the organization of the Fund, its
qualification to do business as a foreign corporation in the State of
California, and its registration as an investment company under the 1940 Act;
custodian, stock transfer and dividend disbursing fees and expenses;
distribution expenses pursuant to a plan under rule 12b-1 under the 1940 Act;
costs of designing and of printing and mailing to its shareholders reports,
prospectuses, proxy statements, and notices to its shareholders; taxes; expenses
of the issuance, sale, redemption, or repurchase of shares of the Fund
(including registration and qualification expenses); legal and auditing fees
and
expenses; compensation, fees, and expenses paid to directors not affiliated
with
the Investment Adviser; association dues; and costs of any share certificates,
stationery and forms prepared exclusively for the Fund.
4.
The
Fund shall pay to the Investment Adviser on or before the tenth (10th) day
of
each month, as compensation for the services rendered by the Investment Adviser
during the preceding month a fee, which shall be accrued daily, calculated
at
the annual rate of:
0.85%
on
first $500 million of average net assets;
0.77%
on
such assets in excess of $500 million to $1 billion;
0.71%
on
such assets in excess of $1 billion to $1.5 billion;
0.66%
on
such assets in excess of $1.5 billion to $2.5 billion;
0.62%
on
such assets in excess of $2.5 billion to $4 billion;
0.58%
on
such assets in excess of $4 billion to $6.5 billion;
0.54%
on
such assets in excess of $6.5 billion.
For
the
purposes hereof, the net assets of the Fund shall be determined in the manner
set forth in the Articles of Incorporation and Prospectus of the Fund. The
advisory fee shall be payable for the period commencing on the date on which
operations of the Fund begin and ending on the date of termination hereof and
shall be prorated for any fraction of a month at the termination of such
period.
5.
The
Investment Adviser agrees that in the event the expenses of the Fund (with
the
exclusion of interest, taxes, brokerage costs, extraordinary expenses such
as
litigation and acquisitions or other expenses excludable under applicable state
securities laws or regulations) for any fiscal year ending on a date on which
this Investment Advisory and Service Agreement is in effect, exceed the expense
limitations, if any, applicable to the Fund pursuant to state securities laws
or
any regulations thereunder, it will reduce its fee by the extent of such excess
and, if required pursuant to any such laws or regulations, will reimburse the
Fund in the amount of such excess.
6.
The
expense limitation described in Section 5 shall apply only to Class A shares
issued by the Fund and shall not apply to any other class(es) of shares the
Fund
may issue in the future. Any new class(es) of shares issued by the Fund will
not
be subject to an expense limitation. However, notwithstanding the foregoing,
to
the extent the Investment Adviser is required to reduce its management fee
pursuant to provisions contained in Section 5 due to the expenses of the Class
A
shares exceeding the stated limit, the Investment Adviser will either
(i) reduce its management fee similarly for other classes of shares, or
(ii) reimburse the Fund for other expenses to the extent necessary to result
in
an expense reduction only for Class A shares of the Fund.
7.
This
Agreement may be terminated at any time, without payment of any penalty, by
the
Directors of the Fund or by vote of a majority (within the meaning of the 0000
Xxx) of the outstanding voting securities of the Fund, on sixty (60) days'
written notice to the Investment Adviser, or by the Investment Adviser on like
notice to the Fund. Unless sooner terminated in accordance with this provision,
this Agreement shall continue until December 31, 2005. It may thereafter be
renewed from year to year by mutual consent; provided that such renewal shall
be
specifically approved at least annually by the Board of Directors of the Fund,
or by vote of a majority (within the meaning of the 0000 Xxx) of the outstanding
voting securities of the Fund. In either event, it must be approved by a
majority of those Directors who are not parties to such Agreement nor interested
persons of any such party, cast in person at a meeting called for the purpose
of
voting on such approval.
8.
This
Agreement shall not be assignable by either party hereto, and in the event
of
assignment (within the meaning of the 0000 Xxx) by the Investment Adviser shall
automatically be terminated forthwith.
9.
Nothing contained in this Agreement shall be construed to prohibit the
Investment Adviser from performing investment advisory, management, or
distribution services for other investment companies and other persons or
companies, nor to prohibit affiliates of the Investment Adviser from engaging
in
such businesses or in other related or unrelated businesses.
10.
The
Investment Adviser shall not be liable to the Fund or its stockholders for
any
error of judgment, act, or omission not involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of its obligations and duties
hereunder.
11.
It is
understood that the name, “American Funds” and “Capital” or any derivatives
thereof or logo associated with those names are the valuable property of the
Investment Adviser and its affiliates, and that the Fund shall have the right
to
use such names (or derivatives or logos) only so long as this Agreement shall
continue in effect. Upon termination of this Agreement the Fund shall forthwith
cease to use such names (or derivatives or logos).
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
in duplicate original by their duly authorized officers.
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CAPITAL
RESEARCH AND
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NEW
WORLD FUND, INC.
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MANAGEMENT
COMPANY
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By
/s/ Xxxx X. Xxxxxxx
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By
/s/ Xxxx X. Xxxxx, Xx.
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Xxxx
X. Xxxxxxx,
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Xxxx
X. Xxxxx, Xx.,
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Chairman
of the Board
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Executive
Vice President
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By
/s/ Xxxxxxx X. Xxxxx
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By
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxx,
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Xxxxxxx
X. Xxxxxx,
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Secretary
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Vice
President and Secretary
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