AMERICAN MUTUAL FUND, INC. AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
AMERICAN
MUTUAL FUND, INC.
AMENDED
INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT,
dated and effective as of the 1st
day of April, 2005,
by and between AMERICAN MUTUAL 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:
A.
The
Fund is an
open-end diversified investment company of the management type, registered
under
the Investment Company Act of 1940. The Investment Adviser is registered under
the Investment Advisers Act of 1940 and is engaged in the business of providing
investment advisory services to investment companies and others, and related
activities.
B. The
Investment
Adviser has provided investment advisory services to the Fund since November
23,
1949, and is currently providing such services under a written agreement dated
April 1, 2004.
NOW
THEREFORE, in
consideration of the premises and the mutual under takings of the parties,
it is
covenanted and agreed as follows:
1.
The
Investment
Adviser shall furnish advice to the Fund with respect to investing in and
purchasing and selling securities. The Investment Adviser shall make available
to the Fund all investment information and data maintained by the Investment
Adviser and its facilities for obtaining such information and data. In addition,
the Investment Adviser shall determine what securities 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 and offering price per share. The
Investment Adviser shall pay the compensation and travel expenses of all such
persons, and they shall serve without additional compensation from the Fund.
The
Investment Adviser shall also, at its expense, provide the Fund with suitable
office space (which may be in the offices of the Investment Adviser) and
utilities; all necessary office equipment; and general purpose accounting forms,
supplies, and postage used at the offices of the Fund.
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, 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; taxes; expenses of the issuance, sale (including stock
certificates, registration and qualification expenses), or repurchase of shares
of the Fund; legal and auditing expenses; compensation, fees and expense
reimbursements paid to directors; association dues; and costs of stationery
and
forms prepared exclusively for the Fund.
3. The
Fund shall pay
to the Investment Adviser on or before the tenth (10th) day of each month,
an
amount to be computed by applying to the total net assets of the Fund as of
the
last day of the preceding month one-twelfth (1/12th) of the lower of the
applicable annual rate(s) set forth below:
0.39%
of the first
$800 million of such net assets
0.336%
of the next
$1 billion of such net assets
0.30%
of the next
$1.2 billion of such net assets
0.276%
of the
portion of such net assets in excess of $3.0 billion
or
0.384%
of the first
$1 billion of such net assets
0.33%
from $1 to $2
billion of such net assets
0.294%
from $2 to $3
billion of such net assets
0.27%
from $3 to $5
billion of such net assets
0.252%
from $5 to $8
billion of such net assets
0.24%
from $8 to $13
billion of such net assets
0.23%
from $13 to
$21 billion of such net assets
0.225%
on the
portion of such assets in excess of $21 billion
For
the purposes
hereof, the total net assets of the Fund shall be determined in accordance
with
the method set forth in the currently effective Prospectus of the
Fund.
4. In
addition to
paying the costs and expenses provided for above, the Investment Adviser agrees
to pay the Fund annually the amount by which the total expenses for any
particular fiscal year (November 1st to October 31st), except taxes and such
expenses, if any, as may be incurred in connection with any merger,
reorganization, or recapitalization, exceed the sum of the following: (i) an
amount equal to one percent (1%) of the first $25 million of the average of
the
net assets for the year; and (ii) an amount equal to three-fourths of one
percent (3/4 of 1%) of the average of the net assets for the year which is
in
excess of $25 million. The average of the net assets for the year in question
shall be the average of the twelve (12) month-end net assets computations made
for that year pursuant to the provisions of Section 3 hereof.
5. The
expense
limitation described in Section 4 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, notwithstanding the foregoing, to
the
extent the Investment Adviser is required to reduce its management fee pursuant
to provisions contained in Section 4 due to the expenses of the Class A shares
exceeding the stated limit, the Investment Adviser will either (i) reduce
its management fee similarly for other classes of shares, or (ii) reimburse
the
Fund for other expenses to the extent necessary to result in an expense
reduction only for Class A shares of the Fund.
6. This
agreement may
be terminated at any time, without payment of any penalty, by the Board of
Directors or by vote of a majority (within the meaning of the Investment Company
Act of 1940) 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. 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. Unless sooner terminated in accordance with this provision, this
agreement shall continue until the close of business on March 31, 2006. 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 or by vote of a majority (within the meaning of the Investment Company
Act of 1940) of the outstanding voting securities of the Fund. In either event,
renewal of the agreement must be approved by a majority of those directors
who
are not parties to the agreement or interested persons 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 writing signed by both parties.
7. This
agreement shall
not be assignable by either party hereto, and in the event of assignment shall
automatically be terminated forthwith. The term “assignment” shall have the
meaning defined in the Investment Company Act of 1940.
8. The
Investment
Adviser shall not be liable to the Fund or to its shareholders 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.
9. This
agreement shall
supersede and replace the agreement between the parties dated April 1,
2004.
IN
WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in duplicate
original by their officers thereunto duly authorized and their corporate seals
to be affixed as of the day and year first above written.
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AMERICAN
MUTUAL FUND, INC.
|
CAPITAL
RESEARCH AND
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|
MANAGEMENT
COMPANY
|
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By
/s/
Xxxxx
X. Xxxxxx
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By
/s/
Xxxx X.
Xxxxx, Xx.
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|
Xxxxx
X.
Xxxxxx
|
Xxxx
X. Xxxxx,
Xx.
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Chairman
|
Executive
Vice
President
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By
/s/
Xxxxx
X. Xxxxxxxx
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By
/s/
Xxxxxxx
X. Xxxxxx
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|
Xxxxx
X.
Xxxxxxxx
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Xxxxxxx
X.
Xxxxxx
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Secretary
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Vice
President
and Secretary
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