AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT,
dated and effective as of the 1st day of January, 2007, is made and entered
into
by and between NEW
WORLD
FUND, INC.,
a Maryland
corporation, (hereinafter, the “Fund”), and CAPITAL
RESEARCH AND MANAGEMENT COMPANY,
a Delaware
corporation, (hereinafter, 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 “1940 Act”). The Investment Adviser is
registered under the Investment Advisers Act of 1940 and is engaged in the
business of providing investment advisory and related services to the Fund
and
to other investment companies.
B. The
Investment
Adviser has provided investment advisory services to the Fund since its
inception, and is currently providing such services under an amended Investment
Advisory and Services Agreement, dated March 10, 2005.
NOW,
THEREFORE, in
consideration of the premises and the mutual undertaking of the parties,
it is
covenanted and agreed as follows:
1. The
Investment
Adviser shall determine what securities and other assets 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 per share. The Investment Adviser
shall
pay the compensation and travel expenses of all such persons, and they shall
serve without any additional compensation from the Fund. The Investment Adviser
shall also, at its expense, provide the Fund with necessary office space
(which
may be in the offices of the Investment Adviser); all necessary office equipment
and utilities; and general purpose forms, supplies, and postage used at the
offices of the Fund.
3. 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, expenses incurred in
connection with the organization of the Fund, its qualification to do business
as a foreign corporation in the State of California, and its registration
as an
investment company under the 1940 Act; custodian, stock transfer and dividend
disbursing fees and expenses; distribution expenses pursuant to a plan under
rule 12b-1 under the 1940 Act; costs of designing and of printing and mailing
shareholders reports, prospectuses, proxy statements, and notices to its
shareholders; taxes; expenses of the issuance, sale, redemption, or repurchase
of shares of the Fund (including registration and qualification expenses);
legal
and auditing fees and expenses; compensation, fees, and expenses paid to
directors not affiliated with the Investment Adviser; association dues; and
costs of any share certificates, stationery and forms prepared exclusively
for
the Fund.
4. The
Fund shall pay
to the Investment Adviser on or before the tenth (10th) day of each month,
as
compensation for the services rendered by the Investment Adviser during the
preceding month a fee, calculated at the annual rates of:
0.85%
on the first
$500 million of the Fund’s net assets;
plus
0.77% of net
assets from $500 million to $1 billion,
plus
0.71% of net
assets from $1 billion to $1.5 billion,
plus
0.66% of net
assets from $1.5 billion to $2.5 billion,
plus
0.62% of net
assets from $2.5 billion to $4 billion,
plus
0.58% of net
assets from $4 billion to $6.5 billion,
plus
0.54% of net
assets from $6.5 billion to $10.5 billion,
plus
0.51% of net
assets in excess of $10.5 billion
The
net asset
portion shall be accrued daily based on the actual number of days per year.
For
the purposes hereof, the net assets of the Fund shall be determined in the
manner set forth in the Articles of Incorporation and Prospectus of the Fund.
The advisory fee shall be payable for the period commencing on the date on
which
operations of the Fund begin and ending on the date of termination hereof
and
shall be prorated for any fraction of a month at the termination of such
period.
5. The
Investment
Adviser agrees that in the event the expenses of the Fund (with the exclusion
of
interest, taxes, brokerage costs, extraordinary expenses such as litigation
and
acquisitions or other expenses excludable under applicable state securities
laws
or regulations) for any fiscal year ending on a date on which this Investment
Advisory and Service Agreement is in effect, exceed the expense limitations,
if
any, applicable to the Fund pursuant to state securities laws or any regulations
thereunder, it will reduce its fee by the extent of such excess and, if required
pursuant to any such laws or regulations, will reimburse the Fund in the
amount
of such excess.
6. The
expense
limitation described in Section 5 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 5 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.
7. This
Agreement may
be terminated at any time, without payment of any penalty, by the directors
of
the Fund or by vote of a majority (within the meaning of the 0000 Xxx) 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.
Unless sooner terminated in accordance with this provision, this Agreement
shall
continue until December 31, 2007. 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 of the Fund, or by vote of a majority
(within the meaning of the 0000 Xxx) of the outstanding voting securities
of the
Fund. In either event, it must be approved by a majority of those directors
who
are not parties to such Agreement nor interested persons of any such party,
cast
in person at a meeting called for the purpose of voting on such
approval.
8. This
Agreement
shall not be assignable by either party hereto, and in the event of assignment
(within the meaning of the 0000 Xxx) by the Investment Adviser shall
automatically be terminated forthwith.
9. Nothing
contained
in this Agreement shall be construed to prohibit the Investment Adviser from
performing investment advisory, management, or distribution services for
other
investment companies and other persons or companies, nor to prohibit affiliates
of the Investment Adviser from engaging in such businesses or in other related
or unrelated businesses.
10. The
Investment
Adviser shall not be liable to the Fund or 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.
11. It
is understood
that the name, “American Funds” and “Capital” or any derivatives thereof or logo
associated with those names are the valuable property of the Investment Adviser
and its affiliates, and that the Fund shall have the right to use such names
(or
derivatives or logos) only so long as this Agreement shall continue in effect.
Upon termination of this Agreement the Fund shall forthwith cease to use
such
names (or derivatives or logos).
IN
WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in duplicate
original by their duly authorized officers.
|
CAPITAL
RESEARCH AND
|
|
|
NEW
WORLD
FUND, INC.
|
MANAGEMENT
COMPANY
|
|
By
|
/s/
Xxxx X.
Xxxxxxx
|
By
|
/s/
Xxxxxxx
X. Xxxxxx
|
|
|
Xxxx
X.
Xxxxxxx,
|
Xxxxxxx
X.
Xxxxxx,
|
|||
|
Vice
Chairman
|
President
|
|
By
|
/s/
Xxxxxxx
X. Xxxxx
|
By
|
Xxxxxxx
X.
Xxxxxx
|
|
|
Xxxxxxx
X.
Xxxxx,
|
Xxxxxxx
X.
Xxxxxx,
|
|||
|
Secretary
|
Vice
President and Secretary
|
