INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 28th day of July, 1975, is made
and entered into by and between ENDOWMENTS, INC., a Delaware corporation,
(hereinafter called the "Fund"), and CAPITAL RESEARCH AND MANAGEMENT COMPANY, a
Delaware corporation, (hereinafter called the "Adviser"). The parties agree as
follows:
1.
The Fund hereby employs the Adviser to furnish advice to the Fund with respect
to the investment and reinvestment of the assets of the Fund. 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 Fund.
2.
The Adviser agrees to provide supervision of the portfolio of the Fund and, to
the extent authorized by the Board of Directors of the Fund, to determine what
securities or other property shall be purchased or sold by the Fund, giving due
consideration to the policies of the Fund as expressed in the Fund's
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
Fund's status as a regulated investment company under the Internal Revenue Code
of 1954, 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 Fund. 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 Fund, shall endeavor as the
primary objective to obtain the most favorable prices and executions of orders.
Subject to such primary objective, the Adviser may place orders with brokerage
firms which have sold shares of the Fund 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 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
Adviser shall pay the compensation and travel expenses of all such persons, and
they shall serve without additional compensation from the Fund. The Adviser
shall also, at its expense, provide the Fund with suitable office space (which
may be in the offices of the Adviser); all necessary small office equipment and
utilities; and general purpose accounting forms, supplies, and postage used at
the offices of the Fund.
4.
The Fund shall pay all its expenses not assumed by the Adviser as provided
herein. Such expenses shall include, but shall not be limited to, custodian,
registrar, stock transfer and dividend disbursing 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 and redemption
of shares of the Fund (including stock certificates, registration and
qualification fees and expenses); legal and auditing expenses; compensation,
fees, and expenses paid to directors; association dues; and costs of stationery
and forms prepared exclusively for the Fund.
5.
For the services to be rendered and for the facilities to be furnished as
provided in Section 1 above, the Fund shall pay and the Adviser shall be
entitled to receive an aggregate fee as follows:
(a) On the first $150,000,000 of net asset value of the Fund, a fee of fifty
one-hundredths of one percent (50/lOOths of 1%) per annum;
(b) On any amount over $150,000,000 of net asset value of the Fund, forty
one-hundredths of one percent (40/lOOths of 1%) per annum.
Such fee shall be computed and accrued daily at one three-hundred-sixty-fifth
(1/365th) of the applicable annual rate set forth in (a) and (b) above. The
net asset value of the Fund shall be determined in the manner set forth in the
Certificate of Incorporation and prospectus of the Fund 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 at the close of the last preceding day on which said Exchange shall
have been open. The amounts thus computed and accrued during each calendar
month shall be paid to the Adviser on or before the tenth (lOth) day of the
succeeding calendar month, provided, however, that in the event of any
termination of this Agreement, such fee shall be computed and paid to the date
of such termination.
6.
The Adviser agrees to reduce the fee payable to it under this Agreement by the
amount by which the ordinary operating expenses of the Fund for any fiscal year
of the Fund, excluding interest, taxes and extraordinary expenses, shall exceed
one and one-half percent (1 1/2%) of the first $30 million of average net
assets of the Fund determined pursuant to Section 5, plus one percent (1%) of
such average net assets in excess thereof. 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. Proper accruals shall be made by the
Fund for any projected reduction hereunder, and corresponding amounts shall be
withheld from the fees paid by the Fund to the Adviser. Any additional
reduction computed at the end of the fiscal year shall be deducted from the fee
for the last month of such fiscal year, and any excess shall be paid to the
Fund immediately after the fiscal year end, and in any event prior to
publication of the Fund's annual report as a reduction of the fees previously
paid during the fiscal year.
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, or to prohibit
affiliates of the Adviser from engaging in such businesses or in other related
or unrelated businesses.
8.
The Adviser shall have no liability to the Fund, or its shareholders, 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.
9.
This Agreement shall continue in effect until the close of business on July
27, 1977. It may thereafter be renewed from year to year by mutual consent,
provided that such renewal shall be specifically approved at least annually by
(i) the Board of Directors of the Fund, or by the vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities of the Fund, 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, without payment of any penalty,
by the Board of Directors of the Fund 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 Fund. This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
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.
CAPITAL RESEARCH AND
MANAGEMENT COMPANY ENDOWMENTS, INC.
By /s/ XXXXXX X. XXXX By /s/ XXXXXXX X. X. XXXXXX
By /s/ XXXXX X. XXXXXXXX By /s/ XXXXXX X. XXXXX
RENEWAL OF INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, made this 16th day of May, 1997, between ENDOWMENTS, INC., a
Delaware 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:
WHEREAS, there is now in effect an Investment Advisory and Service Agreement
dated July 28, 1975, to be in effect through July 27, 1997, between the Fund
and the Investment Adviser, providing for research, portfolio management
services, and administrative services, to be furnished to the Fund by the
Investment Adviser on certain terms and conditions and subject to certain
provisions set forth therein; and
WHEREAS, said Agreement was approved by the vote of the holders of a majority
of the outstanding shares of the capital stock of the Fund at the Special
Meeting of Stockholders held July 22, 1975, and said Agreement provides for
year to year renewals by mutual consent, upon certain specified conditions, and
the renewal of such Agreement has been approved by the Board of Directors of
the Fund on May 15, 1997; and
WHEREAS, the Fund and the Investment Adviser wish to renew said Agreement for
the additional period of one year from July 28, 1997 through July 27, 1998, and
such renewal has been approved as required by the terms of the Agreement;
NOW, THEREFORE, such parties agree as follows:
1. The Investment Advisory and Service Agreement dated July 28, 1975, is
hereby renewed for the additional period of one year, beginning July 28, 1997
and ending at the close of business on July 27, 1998.
2. In all other respects said Investment Advisory and Service Agreement, as
now amended and in effect, is reaffirmed and shall continue in effect for the
period provided by such Agreement as renewed by this Agreement.
3. This Agreement shall be executed in several counterparts, each of which
shall be original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names by their duly authorized officers as of the
day and year first above written.
ENDOWMENTS, INC.
By
Xxxxxx X. Xxxxxxxx, Chairman of the Board
By
Xxxxxxx X. Xxxx, Secretary
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
By
Xxxxx X. Xxxxxxxxxx, President
By
Xxxxxxx X. Xxxxxx, Secretary
