INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 1st day of March, 1995,
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 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 November 23, 1949, and is currently providing such
services under a written agreement dated March 1, 1990, as renewed.
NOW THEREFORE, in consideration of the premises and the mutual
undertakings 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:
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% of the portion of such net assets in excess of $8 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. 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 February 29, 1996. 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.
6. 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.
7. 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 May 5, 1992.
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.
AMERICAN MUTUAL FUND, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
(SEAL) President
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Secretary
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Vice Chairman of the Board
(SEAL)
By: /s/ Xxxx X. Xxxxx, Xx.
Xxxx X. Xxxxx, Xx.
Senior Vice President
