INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT,
dated and effective as of the first day of February, 2007 is made and entered
into by and between AMERICAN
FUNDS
TARGET DATE RETIREMENT SERIES, INC.,
a Maryland
corporation, (hereinafter called the "Series"), and
CAPITAL
RESEARCH AND MANAGEMENT COMPANY, a Delaware corporation, (hereinafter called
the
"Adviser"). The
parties agree as
follows:
1.
The
Series hereby
employs the Adviser to furnish advice to the Series with respect to the
investment and reinvestment of the assets of the Series. The Adviser hereby
accepts such employment and agrees to render the services and to assume the
obligation to the extent herein set forth, for the compensation herein provided.
The Adviser shall, for all purposes herein, be deemed an independent contractor
and not an agent of the Series.
2.
The
Adviser agrees
to provide supervision of the underlying portfolios of the Series (the
"Funds")
and to determine
what securities (including investment companies advised by the adviser and
its
affiliates) or other property shall be purchased or sold by the Funds, giving
due consideration to the policies of the Series as expressed in the Series'
Certificate of Incorporation, By-Laws, Registration Statement under the
Investment Company Act of 1940, as amended (the "1940 Act"), Registration
Statement under the Securities Act of 1933, as amended (the "1933 Act"), and
Prospectus as in use from time to time, as well as to the factors affecting
the
Funds'
status as
regulated investment companies under the Internal Revenue Code of 1986, as
amended.
The
Adviser shall
provide adequate facilities and qualified personnel for the placement of orders
for the purchase, or other acquisition, and sale, or other disposition, of
portfolio securities for the Funds. With respect to such transactions, the
Adviser, subject to such directions as may be furnished from time to time by
the
Board of Directors of the Series, shall endeavor as the primary objective to
obtain the most favorable prices and execution of orders. Subject to such
primary objective, the Adviser may place orders with broker-dealer firms which
have sold shares of the Funds or which furnish statistical and other information
to the Adviser, taking into account the value and quality of the brokerage
services of such broker-dealers, including the availability and quality of
such
statistical and other information. Receipt by the Adviser of any such
statistical and other information and services shall not be deemed to give
rise
to any requirement for abatement of the advisory fee payable pursuant to Section
6 hereof.
3.
The
Adviser (a)
shall furnish to the Series the services of qualified personnel to
(i) manage the investments of the Funds, (ii) perform the executive and
related administrative functions of the Series with respect to the Funds and
(iii) if desired by the Series, serve as Directors of the Series, in all cases
without additional compensation of such persons by the Series; (b) pay the
expenses of all persons whose services are to be furnished by the Adviser under
this Section; (c) provide office space, furniture, small office equipment,
and
telephone facilities and utilities, all of which may be the same as occupied
or
used by the Adviser; and (d) provide general purpose forms, supplies,
stationery, and postage used at the offices of the Series relating to the
services to be furnished by the Adviser hereunder.
4.
Except
to the
extent expressly assumed by the Adviser herein, the Series shall pay all costs
and expenses in connection with its operations. Without limiting the generality
of the foregoing, such costs and expenses shall include the following:
compensation paid to the Board of Directors of the Series who are not affiliated
persons of the Adviser; service and distribution expenses pursuant to a plan
under rule 12b-1 under the 1940 Act; fees and expenses of the transfer agent,
dividend disbursing agent, expenses incurred for shareholder servicing,
recordkeeping, transactional services, tax and informational returns and reports
and fund and shareholder communications, legal counsel and independent public
accountants, and custodian, including charges of such custodian for the
preparation and maintenance of the books of account and records of the Series
and the daily determination of each Fund’s net asset value per share; costs of
designing, printing, and mailing reports, prospectuses, proxy statements and
notices to shareholders; fees and expenses of sale (including registration
and
qualification), issuance (including costs of any share certificates) and
redemption of shares; association dues; interest; and taxes.
5.
The
Adviser agrees
to pay the expenses incurred in connection with the organization of the Series,
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,
and all fees and expenses including fees of legal counsel to the Series, which
would otherwise be required to be paid by the Series pursuant to Section 4
which
are incurred by the Series prior to the effective date of its Registration
Statement
under the
Securities Act of 1933,
except for the
costs of any share certificates and transfer agent fees and costs.
6.
The
Series shall
pay to the 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 rate of:
0.10%
of the
Series' net assets.
Such
fee shall be
computed and accrued daily at one three-hundredth-sixty-fifth (1/365) of the
0.10% rate set forth above.
The
advisory fee
shall be accrued daily based on the number of days per year. The net asset
value
of the Funds shall be determined in the manner set forth in the Certificate
of
Incorporation
of the Series and
prospectus of the Series as of the close of the New York Stock Exchange on
each
day on which said Exchange is open, and in the case of Saturdays, Sundays,
and
other days on which said exchange shall not be open, as of the close of the
last
preceding day on which said Exchange shall have been open.
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 of the Series.
7.
Nothing
contained
in this Agreement shall be construed to prohibit the Adviser from performing
investment advisory, management, or distribution services for other investment
companies and other persons or companies, nor to prohibit affiliates of the
Adviser from engaging in such business or in other related or unrelated
businesses.
8.
The
Adviser shall
have no liability to the Series, 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
Series not involving willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties hereunder.
9.
This
Agreement
shall continue in effect until the close of business on January 31, 2008. It
may
thereafter be renewed from year to year thereafter by mutual consent, provided
that such renewal shall be specifically approved at least annually by (i) the
Board of Directors of the Series or by the vote of a majority (as defined in
the
0000 Xxx) of the outstanding voting securities of the Series, and (ii) a
majority of those Directors who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) 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 a writing
signed by both parties hereto.
10.
This
Agreement may
be terminated at any time with respect to any Fund, without payment of any
penalty, by the Board of Directors of the Series or by the vote of a majority
(as defined in the 0000 Xxx) of the outstanding voting securities of the Fund,
on sixty (60) days' written notice to the Adviser, or by the adviser on like
notice to the Series. This Agreement shall automatically terminate in the event
of its assignment (as defined in the 1940 Act).
[remainder
of
page left blank intentionally]
IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in duplicate
originals by their officers thereunto duly authorized as of the day and year
first above written.
AMERICAN
FUNDS
TARGET
DATE RETIREMENT
SERIES,
INC.
By
/s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx
X. Xxxxxx,
President
By
/s/ Xxxxxx X.
Xxxxxxxx
Xxxxxx
X. Xxxxxxxx,
Secretary
CAPITAL
RESEARCH
AND MANAGEMENT COMPANY
By
/s/ Xxxx X.
Xxxxx, Xx.
Xxxx
X. Xxxxx, Xx.,
Vice Chairman
By
/s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx
X. Xxxxxx,
President
