AMERICAN MUTUAL FUND, INC.
AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 1st day of
April, 2004, by and between AMERICAN MUTUAL 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
Investment Adviser is registered under the Investment Advisers Act of 1940 and
is engaged in the business of providing investment advisory services to
investment companies and others, and related activities.
B. The Investment Adviser has provided investment advisory
services to the Fund since November 23, 1949, and is currently providing such
services under a written agreement dated November 17, 1999, as renewed.
NOW THEREFORE, in consideration of the premises and the mutual
under takings of the parties, it is covenanted and agreed as follows:
1. The Investment Adviser shall furnish advice to the Fund
with respect to investing in and purchasing and selling securities. The
Investment Adviser shall make available to the Fund all investment information
and data maintained by the Investment Adviser and its facilities for obtaining
such information and data. In addition, the Investment Adviser shall determine
what securities 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 and
offering price per share. The Investment Adviser shall pay the compensation and
travel expenses of all such persons, and they shall serve without additional
compensation from the Fund. The Investment Adviser shall also, at its expense,
provide the Fund with suitable office space (which may be in the offices of the
Investment Adviser) and utilities; all necessary office equipment; and general
purpose accounting forms, supplies, and postage used at the offices of the Fund.
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, custodian, stock transfer and dividend disbursing agency fees
and expenses; costs of the designing, printing, and mailing of reports,
prospectuses, proxy statements, and notices to its shareholders; taxes; expenses
of the issuance, sale (including stock certificates, registration and
qualification expenses), or repurchase of shares of the Fund; legal and auditing
expenses; compensation, fees and expense reimbursements paid to directors;
association dues; and costs of stationery and forms prepared exclusively for the
Fund.
3. The Fund shall pay to the Investment Adviser on or before the tenth (10th)
day of each month, an amount to be computed by applying to the total net assets
of the Fund as of the last day of the preceding month one-twelfth (1/12th) of
the lower of the applicable annual rate(s) set forth below:
0.39% of the first $800 million of such net assets 0.336%
of the next $1 billion of such net assets 0.30% of the
next $1.2 billion of such net assets 0.276% of the portion
of such net assets in excess of $3.0 billion
or
0.384% of the first $1 billion of such net assets 0.33%
from $1 to $2 billion of such net assets 0.294% from $2
to $3 billion of such net assets 0.27% from $3 to $5
billion of such net assets 0.252% from $5 to $8 billion
of such net assets 0.24% from $8 to $13 billion of such
net assets 0.23% on the portion of such assets in excess
of $13 billion
For the purposes hereof, the total net assets of the Fund shall be determined in
accordance with the method set forth in the currently effective Prospectus of
the Fund.
4. In addition to paying the costs and expenses provided for
above, the Investment Adviser agrees to pay the Fund annually the amount by
which the total expenses for any particular fiscal year (November 1st to October
31st), except taxes and such expenses, if any, as may be incurred in connection
with any merger, reorganization, or recapitalization, exceed the sum of the
following: (i) an amount equal to one percent (1%) of the first $25 million of
the average of the net assets for the year; and (ii) an amount equal to
three-fourths of one percent (3/4 of 1%) of the average of the net assets for
the year which is in excess of $25 million. The average of the net assets for
the year in question shall be the average of the twelve (12) month-end net
assets computations made for that year pursuant to the provisions of Section 3
hereof.
5. The expense limitation described in Section 4 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 4 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.
6. This agreement may be terminated at any time, without
payment of any penalty, by the Board of Directors or by vote of a majority
(within the meaning of the Investment Company Act of 1940) 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. In
the event of termination other than at the end of a calendar month, the monthly
fee shall be prorated for the portion of the month prior to termination and paid
on or before the tenth (10th) day subsequent to termination. Unless sooner
terminated in accordance with this provision, this agreement shall continue
until the close of business on March 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 or by vote of a majority
(within the meaning of the Investment Company Act of 1940) of the outstanding
voting securities of the Fund. In either event, renewal of the agreement must be
approved by a majority of those directors who are not parties to the agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. Such mutual consent to renewal shall not
be deemed to have been given unless evidenced by writing signed by both parties.
7. This agreement shall not be assignable by either party
hereto, and in the event of assignment shall automatically be terminated
forthwith. The term "assignment" shall have the meaning defined in the
Investment Company Act of 1940.
8. The Investment Adviser shall not be liable to the Fund or to its shareholders
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.
9. This agreement shall supersede and replace the agreement
between the parties dated November 17, 1999.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in duplicate original by their officers thereunto duly
authorized and their corporate seals to be affixed as of the day and year first
above written.
AMERICAN MUTUAL FUND, INC. CAPITAL RESEARCH AND
MANAGEMENT COMPANY
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxx, Xx.
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Xxxxx X. Xxxxxx Xxxx X. Xxxxx, Xx.
Chairman Executive Vice President
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxx
Secretary Vice President and Secretary
