SHAREHOLDER SERVICES AGREEMENT
1. The parties to this Agreement, which is effective as of January 1, 1995,
are The Investment Company of America (hereinafter called "the Company") and
American Funds Service Company, a California corporation (hereinafter called
"AFS"). AFS is a wholly owned subsidiary of Capital Research and Management
Company (hereinafter called "CRMC"). This Agreement will continue in effect
until amended or terminated in accordance with its terms.
2. The Company hereby employs AFS, and AFS hereby accepts such employment by
the Company, as its transfer agent. In such capacity AFS will provide the
services of stock transfer agent, dividend disbursing agent, redemption agent,
and such additional related services as the Company may from time to time
require, all of which services are sometimes referred to herein as "shareholder
services."
3. AFS has entered into substantially identical agreements with other
investment companies for which CRMC serves as investment adviser. (For the
purposes of this Agreement, such investment companies, including the Company,
are called "participating investment companies.")
4. AFS has entered into an agreement with DST Systems, Inc. (hereinafter
called "DST"), to provide AFS with electronic data processing services
sufficient for the performance of the shareholder services referred to in
paragraph 2.
5. The Company, together with the other participating companies, will maintain
a Review and Advisory Committee, which Committee will review and may make
recommendations to the boards of the participating investment companies
regarding all fees and charges provided for in this Agreement, as well as
review the level and quality of the shareholder services rendered to the
participating investment companies and their shareholders. Each participating
investment company may select one director or trustee who is not affiliated
with CRMC, or any of its affiliated companies, or with Washington Management
Corporation or any of its affiliated companies, to serve on the Review and
Advisory Committee.
6. AFS will provide to the participating investment companies the shareholder
services referred to herein in return for the following fees:
ANNUAL ACCOUNT MAINTENANCE FEE (PAID MONTHLY):
$.67 per month for each open account on AFS books or in Level 2 or 4
Networking ($8.04 per year)
$.09 per month for each open account maintained in Street Name or Level 1 or
3 Networking ($1.08 per year)
No annual fee will be charged for a participant account underlying a 401(k)
or other defined contribution plan where the plan maintains a single account
on AFS books and responds to all participant inquiries
TRANSACTION FEES:
$2.00 per non-automated transaction
$0.50 per automated transaction
For this purpose, "transactions" shall include all types of transactions
included in an "activity index" as reported to the Review and Advisory
Committee at least annually. AFS will xxxx the Company monthly, on or shortly
after the first of each calendar month, and the Company will pay to AFS within
five business days of such billing.
Any revision of the schedule of charges set forth herein shall require the
affirmative vote of a majority of the members of the board of
directors/trustees of the Company.
7. All fund-specific charges from third parties -- including DST charges,
payments described in the next sentence, postage, NSCC transaction charges and
similar out-of-pocket expenses -- will be passed through directly to the
Company or other participating investment companies, as applicable. AFS,
subject to approval of its board of directors, is authorized in its discretion
to negotiate payments to third parties for account maintenance and/or
transaction processing services provided such payments do not exceed the
anticipated savings to the Company, either in fees payable to AFS hereunder or
in other direct Company expenses, that AFS reasonably anticipates would be
realized by the Company from using the services of such third party rather than
maintaining the accounts directly on AFS' books and/or processing non-automated
transactions.
8. It is understood that AFS may have income in excess of its expenses and may
accumulate capital and surplus. AFS is not, however, permitted to distribute
any net income or accumulated surplus to its parent, CRMC, in the form of a
dividend without the affirmative vote of a majority of the members of the
boards of directors/trustees of the Company and all participating investment
companies.
9. This Agreement may be amended at any time by mutual agreement of the
parties, with agreement of the Company to be evidenced by affirmative vote of a
majority of the members of the board of directors/trustees of the Company.
10. This Agreement may be terminated on 180 days' written notice by either
party. In the event of a termination of this Agreement, AFS and the Company
will each extend full cooperation in effecting a conversion to whatever
successor shareholder service provider(s) the Company may select, it being
understood that all records relating to the Company and its shareholders are
property of the Company.
11. In the event of a termination of this Agreement by the Company, the
Company will pay to AFS as a termination fee the Company's proportionate share
of any costs of conversion of the Company's shareholder service from AFS to a
successor. In the event of termination of this Agreement and all corresponding
agreements with all the participating investment companies, all assets of AFS
will be sold or otherwise converted to cash, with a view to the liquidation of
AFS when it ceases to provide shareholder services for the participating
investment companies. To the extent any such assets are sold by AFS to CRMC
and/or any of its affiliates, such sales shall be at fair market value at the
time of sale as agreed upon by AFS, the purchasing company or companies, and
the Review and Advisory Committee. After all assets of AFS have been converted
to cash and all liabilities of AFS have been paid or discharged, an amount
equal to any capital or paid-in surplus of AFS that shall have been contributed
by CRMC or its affiliates shall be set aside in cash for distribution to CRMC
upon liquidation of AFS. Any other capital or surplus and any assets of AFS
remaining after the foregoing provisions for liabilities and return of capital
or paid-in surplus to CRMC shall be distributed to the participating investment
companies in such proportions as may be determined by the Review and Advisory
Committee.
12. In the event of disagreement between the Company and AFS, or between the
Company and other participating investment companies as to any matter arising
under this Agreement, which the parties to the disagreement are unable to
resolve, the question shall be referred to the Review and Advisory Committee
for resolution. If the Review and Advisory Committee is unable to resolve the
question to the satisfaction of both parties, either party may elect to submit
the question to arbitration; one arbitrator to be named by each party to the
disagreement and a third arbitrator to be selected by the two arbitrators named
by the original parties. The decision of a majority of the arbitrators shall
be final and binding on all parties to the arbitration. The expenses of such
arbitration shall be paid by the party electing to submit the question to
arbitration.
13. The obligations of the Company under this Agreement are not binding upon
any of the directors, trustees, officers, employees, agents or shareholders of
the Company individually, but bind only the Company itself. AFS agrees to look
solely to the assets of the Company for the satisfaction of any liability of
the Company in respect to this Agreement and will not seek recourse against
such directors, trustees, officers, employees, agents or shareholders, or any
of them or their personal assets for such satisfaction.
AMERICAN FUNDS SERVICE COMPANY THE INVESTMENT COMPANY OF AMERICA
By /s/ Xxx X. Xxxxxx By /s/ Xxx X. Xxxxxxxx, Jr.
Xxx X. Xxxxxx, Chairman Xxx X. Xxxxxxxx, Jr., Chairman
By /s/ Xxxxxxx X. Xxxxxxxxxx By /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxxx X. Xxxxx, Secretary