AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT,
dated and effective as of the 16th day of December 2008, is made and entered
into by and between NEW WORLD
FUND, INC., a Maryland corporation, (hereinafter, the “Fund”), and CAPITAL RESEARCH AND MANAGEMENT
COMPANY, a Delaware corporation, (hereinafter, 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 an amended
Investment Advisory and Services Agreement, dated December 4, 2007.
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 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, calculated at the annual rates
of:
0.85% on the first
$500 million of the Fund’s net assets,
plus 0.77% of net
assets from $500 million to $1 billion,
plus 0.71% of net
assets from $1 billion to $1.5 billion,
plus 0.66% of net
assets from $1.5 billion to $2.5 billion,
plus 0.62% of net
assets from $2.5 billion to $4 billion,
plus 0.58% of net
assets from $4 billion to $6.5 billion,
plus 0.54% of net
assets from $6.5 billion to $10.5 billion,
plus 0.51% of net
assets from $10.5 billion to $17 billion,
plus 0.50% of net
assets from $17 billion to $21 billion,
plus 0.49% of net
assets in excess of $21 billion.
Such fee shall be
accrued daily and the daily rate computed based on the actual number of days per
year. 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 as of the date of this Agreement 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, 2008. 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 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.
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.
CAPITAL RESEARCH AND
NEW WORLD FUND,
INC. MANAGEMENT
COMPANY
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By
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/s/ Xxxx X. Xxxxxxx
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By
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/s/ Xxxxxxx X. Xxxxxx
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Xxxx X.
Xxxxxxx
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Xxxxxxx X.
Xxxxxx
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Vice Chairman
and
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President
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Principal
Executive Officer
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By
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/s/ Xxxxxxx X. Xxxxx
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By
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/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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Senior Vice
President and Secretary
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