BUSINESS MANAGEMENT AGREEMENT
WASHINGTON MUTUAL INVESTORS FUND,
INC.
and
WASHINGTON MANAGEMENT
CORPORATION
AMENDED
AND RESTATED
AGREEMENT, dated this 19th day of June,
2008, by and between Washington Mutual Investors Fund, Inc. (the "Fund"), and
Washington Management Corporation (the "Corporation").
WHEREAS, the Fund is a registered
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, effective January 15, 2005,
the parties agreed to a new fee schedule which shall continue in effect under
this Business Management Agreement; and
WHEREAS, the Corporation is ready,
willing and able to act as business manager of the Fund;
NOW, THEREFORE, for good and valuable
consideration, the receipt whereof is hereby acknowledged, and the mutual
performance of the undertakings herein, it is agreed by and between the parties
hereto as follows:
1. The Corporation, as
business manager for the Fund, will:
(a) Furnish
the Fund the services of persons to perform the executive, administrative and
clerical services in the management and conduct of the corporate business and
affairs of the Fund. Such services shall include, but not be limited
to, those services set forth in Exhibit A, attached to this agreement and made a
part of it. The Corporation shall pay the compensation and travel
expenses of all such persons, who shall serve without additional compensation
from the Fund. The Corporation shall also, at its expense, provide
suitable office space (which may be in the office of the Corporation) and
utilities; all necessary office equipment; and general purpose accounting forms,
supplies, and postage used at the office of the Fund.
(b) The
Fund shall pay all its expenses not assumed by the Corporation 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; expenses of shareholders' meetings;
taxes; insurance; expenses of the issuance, sale (including stock certificates,
registration and qualification expenses), or repurchase of shares of the Fund;
legal and auditing expenses; expenses pursuant to the Fund's Plans of
Distribution; fees and expense reimbursements paid to directors and advisory
board members; association dues; and costs of stationery and
forms prepared exclusively for the Fund.
2. The
Fund shall pay to the Corporation on or before the tenth (10th) day of each
month, as compensation for the services and activities set forth in paragraph 1,
rendered by the Corporation during the preceding month, an amount to be computed
by applying to the daily net assets 1/365th of the applicable annual rates set
forth below:
0.175% of the first $3 billion of such
net assets
0.15% of the next $2 billion of such
net assets
0.135% of the next $3 billion of such
net assets
0.12% of the next $4 billion of such
net assets
0.095% of the next $9 billion of such
net assets
0.075% of the next $13 billion of such
net assets
0.06% of the next $10 billion of such
net assets
0.05% of the next $11 billion of such
net assets
0.04% of the next $12 billion of such
net assets
0.035% of the next $10 billion of such
net assets
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0.03%
of the portion of such net assets in excess of $77
billion.
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For the
purposes hereof, the daily net assets of the Fund shall be determined in
accordance with the method set forth in the currently effective Prospectus of
the Fund.
Upon any termination of this agreement
on a day other than the last day of the month the fee for the period from the
beginning of the month in which termination occurs to the date of termination
shall be prorated according to the proportion which such period bears to the
full month.
3. The
right of the Corporation to receive such compensation, and the obligation of the
Fund to pay the same, shall be subject to the following
conditions: All ordinary operating expenses of the
Fund shall in no event exceed in any fiscal year 1% of the average
net assets of the Fund as annually determined. Costs incurred in connection with
the purchase or sale of portfolio securities, including brokerage fees and
commissions, which are capitalized in accordance with generally accepted
accounting principles applicable to investment companies, shall be accounted for
as capital items and not as expenses. If all expenses (including
compensation to the Corporation) shall in any year exceed 1% of the average net
assets, then, to the extent of any excess, the compensation to the Corporation
shall be reduced or eliminated (as the case may be), notwithstanding which the
Corporation will fully and faithfully perform all services required under the
terms hereof. The Board of Directors of the Fund may in its discretion either
withhold a portion of the compensation owed for services if it shall appear to
the Board that the total compensation for the year will be subject to year-end
diminution, or recoup any excess compensation at year end.
4. The
expense limitation described in paragraph 3 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, not withstanding the
foregoing, to the extent the Business Manager is required to reduce its
management fee pursuant to provisions contained in paragraph 3 due to the
expenses of the Class A shares exceeding the stated limit, the reduction in the
management fee will reduce the Fund’s management fee
expense similarly for all other classes of shares of the Fund.
5. Nothing
contained in this agreement shall be construed to prohibit the Corporation from
performing investment advisory, business management, or distribution services
for other investment companies and other persons or companies, nor to prohibit
affiliates of the Corporation from engaging in such businesses or in other
related or unrelated businesses. The Corporation shall have no
liability to the Fund, or its shareholders or creditors, for any error of
judgment, mistake of law, or for any loss arising out of any investment, or for
any other act or omission in the performance of its obligations to the Fund not
involving willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties hereunder.
6. This agreement shall
become effective September 1, 2008 and continue in effect until the close of
business on August 31, 2009. It may thereafter be renewed from year
to year by mutual consent, provided that such renewal shall be specifically
approved at least annually (a) by the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Fund, and (b) by a majority of the Directors who are not parties to the
agreement nor interested persons (as that term is defined in the 0000 Xxx) of
any such party, by vote cast in person at a meeting called for the purpose of
voting on such continuance.
7. This
agreement may be terminated at any time, without payment of any penalty, by the
Board of Directors or by the vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund, on sixty (60) days'
written notice to the Corporation, or by the Corporation on like notice to the
Fund. This agreement shall automatically terminate in the event of
its assignment (as defined in the 1940 Act).
8. This
agreement may be amended, supplemented, or extended by the parties hereto at any
time.
IN WITNESS WHEREOF, the parties hereto
have caused this instrument to be executed in duplicate original by their
officers thereunto duly authorized as of the day and year first written
above.
Attest: WASHINGTON
MUTUAL INVESTORS FUND, INC
_____________________ By: _______________________________
Name: Xxxxxxx
X. Xxxxxx
Title: President
Attest: WASHINGTON
MANAGEMENT CORPORATION
_____________________ By: ______________________________
Name: Xxxxxxx
X. Xxxxxxxx
Title: Senior
Vice President
EXHIBIT
A
TO
AMENDED
AND RESTATED BUSINESS MANAGEMENT AGREEMENT
SERVICES
TO BE PERFORMED BY
WASHINGTON
MANAGEMENT CORPORATION (“WMC”)
PURSUANT
TO SECTION 1
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1.
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Provide
individuals that serve as officers and interested directors of the
Fund.
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2.
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Furnish
and compensate all employees required to perform WMC’s duties under the
Business Management Agreement.
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3.
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In
conjunction with the Fund’s Independent Board Chair, arrange and
coordinate all Board and Committee Meetings. Prepare and
distribute meeting schedules and maintain lists of regular agenda items
for Board and Committee Meetings. Maintain a schedule of Board
and Committee Meeting duties and requirements, including matters requiring
Board action. Schedule includes annual action items such as
action required for renewal of business management agreement, investment
adviser agreement, 12b-1 plans, principal underwriting agreement,
shareholder servicing agreements and regulatory
filings.
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4.
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Prepare,
collect and distribute, in conjunction with all service providers, Board
and Committee Meeting materials. Prepare and distribute
periodic and special reports to the Board in advance of
meetings.
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5.
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Attend
Board and Committee Meetings and draft Board and Committee Meeting
minutes. Distribute minutes for review and prepare final form of
minutes.
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6.
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Assist
the Board in developing Fund policies and
procedures.
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7.
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Establish
procedures to assist the Board of Directors with their oversight duties
(including fund governance, contracts, accountant selection, insurance,
net asset valuation, director independence, audit committee financial
expert, chief compliance officer and interfund
transactions).
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8.
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Assist
in Board members’ on-going education. Provide new Board member
orientation, and regularly inform the Board of industry and regulatory
developments. Carry out instructions of the Board with respect
to policy decisions.
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9.
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Assist
the Board with approval of key service provider
agreements. Work with the Governance Committee to provide all
necessary and requested data for evaluation
purposes.
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10.
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Assist
the Board in review and approval of WMC, the investment adviser, principal
underwriter and Fund compliance programs. The WMC Chief
Compliance Officer interfaces with the Chief Compliance Officer of the
Fund and serves as the liaison for regulatory
inquiries.
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11.
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Prepare
and analyze comparative statistical data on investment results, operating
expenses and growth of the Fund, sales and redemptions of the Fund’s
shares, and prepare and submit the following reports on such data to the
Board of Directors:
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a.
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Brokerage
commissions paid to securities dealers for transactions in portfolio
securities of the Fund,
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b.
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Sales
of the Fund shares by securities
dealers,
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c.
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Comparative
investment results and
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d.
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Net
sales and redemptions of Fund
shares.
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12.
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Assist
Board members in maintaining their status as independent
directors. Prepare, provide and review annual director and
advisory board member
questionnaires.
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13.
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Monitor
the number of Directors that have been elected by shareholders and the
percentage of the Board that is independent by maintaining a schedule and
periodically reviewing the ratio of Directors elected by shareholders and
the ratio of those that are
independent.
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14.
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Assist
the Board of Directors in overseeing the development and operation of
share class-based services to
shareholders.
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15.
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Assist
the Board and the Committee on Proxy Voting Procedures (the “Proxy
Committee”) with, and consult the investment adviser regarding,
developing, monitoring and updating proxy voting policies and
procedures. Coordinate the voting of all proxies of the
portfolio companies held by the Fund. Provide the personnel to
support the Principal Executive Officer (“PEO”) of the Fund (or his
designated voting officer) who votes all proxies in accordance with the
Board’s policies. Execute the voting of proxies, maintain paper
copy of proxy materials and voting record. Prepare monthly
voting report, which is reviewed by Fund officers. Advise the
Fund’s Board of any significant controversies relating to proxy
votes. Schedule meetings of the Proxy
Committee. Provide the Board with an annual report setting out
the voting record of proxies.
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16.
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Provide
copies of Securities and Exchange Commission (“SEC”) filings to Board
members.
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17.
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Assist
in making travel arrangements for Directors and officers attending
out-of-town meetings.
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18.
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Assist
the Board in designating an Audit Committee Financial
Expert.
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19.
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Assist
the Board in designating a Chief Compliance
Officer.
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20.
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Provide
support to the Fund’s Independent Board
Chairman.
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21.
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Maintain
or provide for the maintenance of Fund records, including corporate, tax
and accounting records; SEC filings; tax filings; Board and Committee
Meeting materials and minutes; code of ethics; Fund agreements; Fund
procedures; documents concerning fidelity bond and D&O/E&O
insurance; articles of incorporation and by-laws. Periodically
review files to verify
completeness.
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22.
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Prepare
or arrange for the preparation of all corporate licensing, applications
and tax returns.
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23.
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Monitor
the daily financial position of the
Fund.
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24.
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Perform
or arrange for the performance of fund accounting services other than the
calculation of daily net asset value which is calculated by the investment
adviser.
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25.
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Coordinate
and facilitate the annual audit of the Fund’s financial statements with
the independent registered public accountant for the
Fund.
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26.
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Create
and design shareholder reports. Plan, prepare and arrange for
the printing and timely distribution of the reports to
shareholders.
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27.
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Monitor
the activities of the investment adviser and principal underwriter for
compliance with the terms of their respective
contracts.
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28.
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Monitor
shareholder services provided by the Fund’s transfer
agent.
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29.
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Monitor
services provided by the custodian of the Fund’s investment assets and
cash balances. Review and negotiate fees for the services of
the custodian.
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30.
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Coordinate
and maintain continuous liaison with the officers and personnel of the
investment adviser, principal underwriter, transfer agent, custodian, Fund
counsel and independent registered public
accountant.
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31.
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Oversee
state registration of Fund shares, including oversight of the blue sky
service provider. Review filings and authorize payments in
connection with state registration requirements. Maintain a record of
geographical distribution of sales of Fund shares in connection with state
registration requirements.
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32.
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Consult
with Fund counsel and accountants on current legal, accounting and tax
matters.
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33.
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Assist
with disbursement of all dividends and capital gain
distributions.
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34.
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Oversee
proxy solicitations, including preparation of the proxy statement, related
SEC filings and printing and distribution of Notices of Meetings of
Shareholders, proxy statements and proxy cards. Coordinate review of the
proxy statement by Fund officers, Directors, Fund counsel and independent
registered public accountant. Coordinate and conduct
shareholder meetings, including attending the meetings and preparing the
minutes.
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35.
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Make
Board authorized transfers to the Fund's operating account from its
custody account.
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36.
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Pay
all Fund expenses from the Fund's operating account. Maintain a
record of and monitor all Fund expenditures. Provide Board with
regular reports setting out Fund
expenses.
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37.
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Reconcile
Fund’s operating account statement each
month.
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38.
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Review
and analyze Fund expense ratios and consider changes in accrual
rates.
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39.
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Maintain
filing schedule for all required Fund
filings.
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40.
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Prepare
and file necessary amendments to the Fund’s Registration Statement on Form
N-1A, including that required for the renewal of and updates to the Fund
prospectus. Coordinate review by Fund service providers,
including WMC, investment adviser, fund accountant, Fund counsel and
independent registered public accountant. Coordinate delivery
to current shareholders and principal underwriter. Prepare and
file supplements to the prospectus with the SEC and supervise printing and
distribution of the same.
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41.
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Prepare
and file the N-SAR semi-annual report of the Fund with the
SEC. N-SAR responses are generated from multiple sources and
reviewed by multiple Fund officers.
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42.
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Develop
and maintain disclosure controls and procedures in compliance with N-CSR
and N-Q requirements. WMC Disclosure Controls Committee meets
in connection with the filing of Form N-CSR and Form N-Q and as otherwise
appropriate. The Committee ensures that any material weakness
or fraud, of which it is aware, is reported directly to the Fund’s Audit
Committee and independent registered public
accountant.
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43.
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Prepare
and file Form N-CSR. Information required to be disclosed in Form N-CSR is
gathered and communicated to Fund management, including its PEO and
Principal Financial Officer (“PFO”) to allow timely decisions regarding
required disclosure.
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44.
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Prepare
and file Form N-Q. The quarterly holdings report is prepared in
coordination with fund accounting and is reviewed by the WMC Disclosure
Controls Committee as well as Fund service providers and Fund
officers.
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45.
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Prepare
and file Form N-PX.
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46.
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Prepare
and file Form 24f-2.
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47.
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Keep
informed with respect to regulatory and industry
developments.
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48.
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Develop,
administer and monitor the WMC and Fund Codes of
Ethics. Maintain a record of pre-clearance requests and monitor
pre-clearance procedures, and receive and review annual reports and
confirmation statements.
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49.
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Assist
the Board in development and implementation of Code of Professional
Standards for Fund PEO and PFO. File Code with Form
N-CSR.
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50.
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Develop
and monitor Codes of Conduct for Attorneys, including WMC
attorneys.
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51.
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Review
with Fund counsel compliance with provisions of the Investment Company Act
of 1940, as amended.
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52.
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Monitor,
review and file applicable tax filings. Monitor tax law changes
applicable to registered investment companies. Periodically
analyze general ledger to ensure that required distributions for income
and excise tax are met. Fund officers review the calculation of
distributions and submit the same to the Directors for
approval. Ensure elections and schedules are properly
calculated and included with tax returns. Maintain copies of
all final schedules. Ensure tax returns (including extensions)
are timely filed with federal and state
authorities.
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53.
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Monitor
and report regularly to the Board on the use of Fund assets for payments
under Rule 12b-1 Plans of Distribution to assure such expenditures are
limited to expenses authorized by the Board of Directors, and are within
overall Plan limits. Review all Plan payments for consistency
with the terms of the Plans. Assist the Board in review of materials
presented by principal underwriter and Fund counsel to assist Directors in
assessing annual required renewal of each 12b-1 Plan. Review sales
literature provided to WMC by principal underwriter for consistency with
Fund policies and procedures.
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54.
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Participate
in the development and implementation of the Fund’s privacy policy as
required under Regulation S-P. Implement and maintain WMC’s
privacy policy and periodically remind WMC staff of obligations under the
policy.
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55.
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Develop,
maintain and assist Fund in developing and maintaining, procedures related
to applicable anti-money laundering requirements and customer
identification program.
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56.
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Assist
Board in developing procedures and recommending changes to Audit Committee
Charter to comply with applicable
requirements.
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57.
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Reconcile
month-end custodian account statements with fund accounting records,
including security positions. Any discrepancies are noted,
researched and resolved. Copies of discrepancies are provided
to the Fund’s PEO and PFO.
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58.
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Monitor
reports and file required items necessary for compliance with Section
17f-4 of the Investment Company Act of
1940.
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59.
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Review
annual renewal information related to fidelity bond and other insurance
policies and complete necessary fidelity bond filings with the
SEC.
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60.
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Receive
and review a month-end portfolio pricing report of all Fund
assets. Any exceptions are investigated and
reconciled.
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61.
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Securities
without readily available market prices are priced using Board approved
valuation procedures. Maintain records of fair valued
securities. Prepare Board reports concerning fair valued
securities.
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62.
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Perform
periodic compliance reviews relating to policies and procedures of the
Fund, as deemed necessary by WMC.
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63.
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Receive
and review monthly fund accounting exception
reports.
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64.
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Receive
and review periodic compliance reports from the investment
adviser.
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65.
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Develop
and monitor “whistle blower” provision to allow WMC personnel to report
possible violations of Fund policies or
regulations.
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66.
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Coordinate
17a-7 interfund transactions.
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67.
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Monitor
10f-3 transactions.
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68.
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Monitor
17e-1 transactions.
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69.
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Respond
directly and/or in coordination with appropriate service provider to
inquiries received directly from shareholders and
dealers. Maintain a copy of related
correspondence. Make special reports to shareholders, as
requested.
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70.
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Maintain
a disaster recovery program to provide for effective contingent operations
as well as communication with key service providers in the event of
business location failure.
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71.
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Provide
information in response to regulatory examinations and provide exam
assistance, including serving as the liaison with the examiners during the
exam and assisting with preparation of any exam
response.
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72.
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Prepare
and file amendments to the articles of incorporation and prepare
amendments to the by-laws.
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73.
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Monitor
Fund shares outstanding in relation to shares that have been authorized
for sale.
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74.
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Provide
and administer Director website.
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75.
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Perform
such other activities, duties and responsibilities as promulgated by rule,
regulation or board request.
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76.
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Provide
office space, secretarial and clerical services, office equipment,
supplies and communication
facilities.
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