INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 1st day of December, 1993,
is made and entered into by and between SMALLCAP 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
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.
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. For the services to be rendered and for the facilities to be furnished
as provided in sections 1 and 2 above, the Fund shall pay and the Adviser shall
be entitled to receive an aggregate fee as follows:
Net Assets of
Annual Fee as Percent of Net Assets of the Fund the Fund
Not exceeding $1 billion .80%
In excess of $1 billion but not exceeding $2 billion .70%
In excess of $2 billion but not exceeding $3 billion .67%
In excess of $3 billion but not exceeding $5 billion .65%
In excess of $5 billion but not exceeding $8 billion .635%
In excess of $8 billion .625%
Such fee shall be computed and accrued daily at one three-hundred
sixty-fifth (1/365th) of the applicable rates set forth above. The net assets
of the Fund shall be determined in the manner set forth in the Articles of
Incorporation and prospectus of 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.
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. 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 November 30, 1994. 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.
7. 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. The term "assignment"
shall have the meaning defined in the 1940 Act.
8. 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.
9. 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.
10. It is understood that the name "American Funds" or any derivative
thereof or logo associated with that name is the valuable property of the
Investment Adviser and its affiliates, and that the Fund shall have the right
to use such name (or derivative or logo) only so long as this Agreement shall
continue in effect. Upon termination of this Agreement the Fund shall
forthwith cease to use such name (or derivative or logo).
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in duplicate original by their duly authorized officers.
SMALLCAP World Fund, Inc. Capital Research and Management
Company
By _______________________ By ___________________________
Xxxxxxx X. Xxxxxxxx, President Xxxx X. Xxxxx, Xx., Senior Vice
President
By _______________________ By ___________________________
Xxxxxxx X. Xxxxx, Secretary Xxxxxx X. Xxxxx, Vice President
and Secretary
