INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 1st day of February, 1994 is
made and entered into by and between AMERICAN HIGH-INCOME TRUST, a
Massachusetts business trust, (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
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.
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 and offering
price 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, registrar, stock transfer and dividend disbursing fees and expenses;
distribution expenses pursuant to a plan under Rule 12b-1 of the 1940 Act;
costs of the designing and of printing and mailing to its 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; 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, the sum of the following
amounts:
(a) 0.30% per annum on the first $60 million of the Fund's
average daily net assets during the month; plus 0.21% per annum on the portion
of such net assets between $60 million and $1 billion; plus 0.18% per annum on
the portion of such net assets in excess of $1 billion ("Net Asset Portion"),
plus
(b) 3% of the first $100 million of annual gross income; plus
2.5% of such annual gross investment income in excess of $100 million
("Investment Income Portion").
The Net Asset Portion shall be accrued daily at 1/365th of the applicable
annual rate set forth above. The net assets of the Fund shall be determined in
the manner and on the dates set forth in the prospectus of the Fund and, on
days on which the net assets are not determined, shall be as of the last
preceding day on which the net assets shall have been determined.
The Investment Income Portion shall be accrued daily and "gross investment
income" for this purpose shall include accrual of discount as defined for
Federal income tax purposes but shall not include gains from the sale of
securities or gains from closing transactions in options.
For the purposes hereof, the net assets of the Fund shall be determined in
the manner set forth in the Declaration of Trust 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, distribution
expenses pursuant to a plan under Rule 12b-1 and extraordinary expenses such as
litigation and acquisitions) 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 Investment Adviser agrees to pay the expenses of the Fund referred
to in paragraph 3 above (with the exclusion of interest, taxes, brokerage costs
and extraordinary expenses such as litigation and acquisitions) for a period
ending not later than December 14, 1997, all subject to reimbursement by the
Fund. To accomplish such reimbursement, the Fund shall pay the Investment
Adviser an expense reimbursement fee which on an annual basis is equivalent to
the difference between the fees of the Investment Adviser described in
paragraph 4 above and 1.50% of the average daily net assets of the Fund. The
expense reimbursement fees are for reimbursement of actual expenses incurred by
or on behalf of the Fund and are intended to have the effect of assuring that
the total normal operating expenses of the Fund during the expense
reimbursement period will not exceed 1.50%. Such expense reimbursement fee
arrangement will terminate either when all of such reimbursable expenses of the
Fund which have been paid by the Investment Adviser pursuant thereto have been
reimbursed by the Fund for a period of twelve consecutive months or on December
14, 1997, whichever is earlier.
7. This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority (within
the meaning of the Investment Company Act of l940) 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 October 31, 1994. 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 Trustees 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 Trustees 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. The term "assignment"
shall have the meaning defined in the 1940 Act.
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 business or in other related or unrelated businesses.
10. The Investment Adviser shall not be liable to the Fund or its
stockholders 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. The obligations of the Fund under this Agreement are not binding upon
any of the Trustees, officers, employees, agents or shareholders of the Fund
individually, but bind only the Fund estate. The Investment Adviser agrees to
look solely to the assets of the Fund for the satisfaction of any liability in
respect of the Fund under this Agreement and will not seek recourse against
such Trustees, officers, employees, agents or shareholders, or any of them, or
any of their personal assets for such satisfaction.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in duplicate original by their duly authorized officers.
AMERICAN HIGH-INCOME TRUST CAPITAL RESEARCH AND
MANAGEMENT COMPANY
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxxx, Vice
Chairman
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Secretary Xxxxxx X. Xxxxxxxx, Vice
President and Treasurer
