FORM OF
INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 15th day of March, 2000, by and
between [NAME OF FUND], 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 Adviser's 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 [initial agreement date], and is currently providing such services under
a written agreement dated [current agreement date], as renewed.
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 applicable annual rate(s) set forth below:
[fee schedule]
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 ([first day of the month fiscal
year begins to last day of the month fiscal year ends]), 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: [fee
expense cap]
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 [agreement expiration date]. 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.
8. This agreement shall supersede and replace the agreement between the parties
dated [date].
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.
[NAME OF FUND] CAPITAL RESEARCH AND MANAGEMENT COMPANY
By: By:
[ ] Xxxxx X. Xxxxxxxxxx
President President
By: By:
[ ] Xxxxxxx X. Xxxxxx
Secretary Secretary
