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American Funds Distributors, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone 800/000-0000, ext. 59
Institutional selling group agreement
Ladies and Gentlemen:
We have entered into a principal underwriting agreement with each Fund in The
American Funds Group (Funds) under which we are appointed exclusive agent for
the sale of shares. You have indicated that you wish to act as agent for your
customers in connection with the purchase, sale and redemption of shares of the
Funds as are qualified for sale in your state. We agree to honor your request,
subject to the terms of this Selling Group Agreement (Agreement) set forth
below.
1. Authorization
a. As a member of a group of firms authorized to make shares of the Funds
available to institutional customers (Selling Group), you will make
available to retirement plans (each a Plan, and collectively, Plans) shares
of the Funds only as described in this Section 1. In placing orders for the
purchase and sale of shares of the Funds, you will be acting as agent for
your customers. We shall execute transactions for each of your customers
only upon your authorization, at the regular public price currently
determined by the respective Funds in the manner described in their
offering prospectuses (Prospectuses). This Agreement on your part runs to
us and to the respective Funds and is for the benefit of and enforceable by
each. The offering Prospectuses and this Agreement set forth the terms
applicable to sales of shares of the Funds through you and all other
representations or documents are subordinate.
b. Except as provided for in paragraphs c and d of this Section: (1) if
approved by us in writing prior to bidding, you will make Class A shares of
the Funds available only to a Plan of an entity whose retirement plan
assets are already invested in Class A shares and which total at least $50
million, and (2) you will make Class R shares of the Funds available only
to a Plan of an entity whose retirement plan assets total at least $50
million.
c. For a Plan of an entity whose retirement plan assets total less than $50
million, we may, at our discretion, approve in writing your making Class A
shares available to the Plan if the entity's retirement plan assets are
already invested in Class A shares and if the Plan uses the services of an
independent financial intermediary (e.g., broker, financial advisor,
consultant, or RIA). The financial intermediary must provide us with the
following information in writing prior to any approval we might give: (1)
the name of the financial intermediary and the firm with whom the financial
intermediary is affiliated, (2) the name of the proposed Plan, (3) the name
of the Fund(s) and share class (i.e., Class A or R) in which the Plan
intends to invest, (4) a statement that identifies you or another entity as
the one providing recordkeeping services to the Plan, and (5) a statement
from the financial intermediary that acknowledges you as the broker-dealer
of record and that no compensation under this Agreement will be paid to the
financial intermediary from American Funds.
d. For a Plan of an entity whose retirement plan assets total less than $50
million, we may, at our discretion, approve in writing your making Class R
shares available to the Plan if it uses the services of an independent
financial intermediary (e.g., broker, financial advisor, consultant, or
RIA). The financial intermediary must provide us in writing with the same
information listed in paragraph c prior to any approval we might give.
2. Compensation on Class A Shares
In consideration of your acting as agent for your customers in connection
with the purchase and redemption of Fund shares and to compensate you for
providing certain services to your customers, we will pay you compensation
as described below, subject to your compliance with the following terms.
Your eligibility to continue receiving this compensation will be evaluated
periodically, and your failure to comply with the terms below may result in
our discontinuing ongoing payments to you. Initial qualification does not
assure continued participation, and the payment of this compensation is
subject to the limitations contained in each Fund's Plan of Distribution
and may be varied or discontinued by us at any time.
a. You agree to cooperate as requested with programs that we provide to
enhance shareholder service. You also agree to assume an active role in
providing shareholder services such as processing purchase and redemption
transactions, establishing shareholder accounts, and providing certain
information and assistance with respect to the Funds.
b. You agree to support our marketing efforts by granting reasonable requests
for visits to your offices by our wholesalers.
c. You agree to assign an individual to each Plan account on your books and to
reassign the account should that individual no longer be assigned to the
account. You agree to instruct each such individual to regularly contact
shareholders having accounts so assigned.
d. You agree to pass through either directly or indirectly to the
individual(s) assigned to such accounts a share of the compensation paid to
you pursuant to this Agreement. You recognize that payments under this
Agreement are intended to compensate the individual for providing, and
encourage the individual to continue to provide, service to the account
holder.
e. You acknowledge that (i) all compensation is subject to the limitations
contained in each Fund's Plan of Distribution and may be varied or
discontinued at any time, (ii) in order to receive a payment for a
particular month, the payment must amount to at least $100, and (iii) no
compensation will be paid on shares purchased under the net asset value
purchase privilege as described in the Funds' statements of additional
information.
f. You will be paid a monthly fee in respect of Class A shares of Funds held
in accounts that are assigned to you. The fee shall be the product of the
average daily net asset value of Class A shares of Funds in Category 1 and
Category 2 on the attached Schedule A held in such accounts for the
applicable month multiplied by one-twelfth of 0.25%. The rate for Class A
shares of Funds in Category 3 on the attached Schedule A shall be
one-twelfth of 0.15%.
3. Retirement Plan Share Classes (R shares) and Account Options (for
retirement plans only)
a. We will pay you ongoing compensation on a quarterly basis, at the
applicable annual rate set forth below, of the average daily net asset
value of R shares of Funds listed in Category 1, Category 2 and Category 3
on the attached Schedule A that are held in a Plan account assigned to you
at the end of the quarter for which payment is made. The payment of this
ongoing compensation is subject to the limitations contained in each Fund's
Plan of Distribution and may be varied or discontinued at any time. We
expect that you will maintain one account for each of your Plan customers
on the books of the Funds.
R Share Class Annual Compensation Rate
Class R-1 1.00%
Class R-2 0.75%
Class R-3 0.50%
Class R-4 0.25%
Class R-5 No compensation paid
b. If you hold Plan accounts in an omnibus account (i.e., multiple Plans in
one account on the books of the Funds), Plans that are added to the omnibus
account after May 15, 2002 may invest only in R shares, and you must
execute an Omnibus Addendum to the Selling Group Agreement, which you can
obtain by calling our Home Office Service Team at 800/421-5475, extension
59.
4. Order Processing
Any order by you for the purchase of shares of the respective Funds through
us shall be accepted at the time when it is received by us (or any
clearinghouse agency that we may designate from time to time), and at the
offering and sale price next determined, unless rejected by us or the
respective Funds. In addition to the right to reject any order, the Funds
have reserved the right to withhold shares from sale temporarily or
permanently. We will not accept any order from you that is placed on a
conditional basis or subject to any delay or contingency prior to
execution. The procedure relating to the handling of orders shall be
subject to instructions that we shall forward from time to time to all
members of the Selling Group. The shares purchased will be issued by the
respective Funds only against receipt of the purchase price, in collected
New York or Los Angeles Clearing House funds. If payment for the shares
purchased is not received within three days after the date of confirmation
the sale may be cancelled forthwith, by us or by the respective Funds,
without any responsibility or liability on our part or on the part of the
Funds, and we and/or the respective Funds may hold you responsible for any
loss, expense, liability or damage, including loss of profit suffered by us
and/or the respective Funds, resulting from your delay or failure to make
payment as aforesaid. If this section conflicts with provisions of any
operational agreement you have with any of our affiliates, such operational
agreement shall control.
5. Timeliness of Submitting Orders
You are obliged to date and indicate the time of receipt of all orders you
receive from your customers and to transmit promptly all orders to us in
time to provide for processing at the price next determined after receipt
by you, in accordance with the Prospectuses. You are not to withhold
placing with us orders received from any customers for the purchase of
shares. You shall not purchase shares through us except for the purpose of
covering purchase orders already received by you, or for your bona fide
investment.
6. Repurchase of Shares
If any share is repurchased by any of the Funds or is tendered thereto for
redemption within seven business days after confirmation by us of the
original purchase order from you for such security, you shall forthwith
refund to us the full compensation paid to you on the original sale.
7. Processing Redemption Requests
You shall not purchase any share of any of the Funds from a record holder
at a price lower than the net asset value next determined by or for the
Funds' shares. You shall, however, be permitted to sell any shares for the
account of a shareholder of the Funds at the net asset value currently
quoted by or for the Funds' shares, and may charge a fair service fee for
handling the transaction provided you disclose the fee to the record owner.
8. Prospectuses and Marketing Materials
We shall furnish you without charge reasonable quantities of offering
Prospectuses (including any supplements currently in effect), current
shareholder reports of the Funds, and sales materials issued by us from
time to time. In the purchase of shares through us, you are entitled to
rely only on the information contained in the offering Prospectus(es). You
may not publish any advertisement or distribute sales literature or other
written material to the public that makes reference to us or any of the
Funds (except material that we furnished to you) without our prior written
approval.
9. Effect of Prospectus
This Agreement is in all respects subject to statements regarding the sale
and repurchase or redemption of shares made in offering Prospectuses of the
Funds, which shall control and override any provision to the contrary in
this Agreement.
10. Relationship of Parties
You shall make available shares of the Funds only through us. In no
transaction (whether of purchase or sale) shall you have any authority to
act as agent for, partner of, or participant in a joint venture with us or
with the Funds or any other entity having either a Selling Group Agreement
or other agreement with us.
11. State Securities Qualification
We act solely as agent for the Funds and are not responsible for qualifying
the Funds or their shares for sale in any jurisdiction. Upon written
request we will provide you with a list of the jurisdictions in which the
Funds or their shares are qualified for sale. We also are not responsible
for the issuance, form, validity, enforceability or value of Fund shares.
12. Representations
a. You represent that you are (a) a properly registered or licensed broker or
dealer under applicable federal and state securities laws and regulations
and are complying with and will continue to comply with all applicable
federal and state laws, rules and regulations; a member of the National
Association of Securities Dealers, Inc. (NASD); and your membership with
the NASD is not currently suspended or terminated; or (b) a "bank" as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934 (or other
financial institution) and not otherwise required to register as a broker
or dealer under such Act or any state laws. You agree to notify us
immediately in writing if any of the foregoing representations ceases to be
true to a material extent. You also agree that, if you are a bank or other
financial institution as set forth above, you will comply with the
applicable rules of the NASD, that you will maintain adequate records with
respect to your customers and their transactions, and that such
transactions will be without recourse against you by your customers. We
recognize that, in addition to applicable provisions of state and federal
securities laws, you may be subject to the provisions of other laws
governing, among other things, the conduct of activities by federal- and
state-chartered and supervised financial institutions and their affiliated
organizations. Because you will be the only entity having a direct
relationship with the customer in connection with securities purchases
hereunder, you will be responsible in that relationship for ensuring
compliance with all applicable federal and state laws, rules and
regulations relating to securities purchases hereunder.
b. We represent that (a) we are acting as an underwriter within the meaning of
the applicable rules of the NASD and are complying with and will continue
to comply with all applicable federal and state laws, rules and
regulations, (b) we are a member of the NASD and (c) our membership with
the NASD is not currently suspended or terminated. We agree to notify you
immediately in writing if any of the foregoing representations ceases to be
true to a material extent.
13. Confidentiality
Each party to this Agreement agrees to maintain all information received
from the other party pursuant to this Agreement in confidence, and each
party agrees not to use any such information for any purpose, or disclose
any such information to any person, except as permitted by applicable laws,
rules and regulations. This provision shall survive the termination of this
Agreement.
14. Termination
Either of us may cancel this Agreement at any time by written notice to the
other.
15. Notices
All communications to us should be sent to the above address. Any notice to
you shall be duly given if mailed or sent by overnight courier to you at
the address specified by you below.
* * * * *
Execute this Agreement in duplicate and return one of the duplicate originals to
us for our file. This Agreement (i) may be amended by notification from us and
orders received following such notification shall be deemed to be an acceptance
of any such amendment and (ii) shall be construed in accordance with the laws of
the State of California.
Very truly yours,
American Funds Distributors, Inc.
By___________________________________________________________
Xxxxx X. Xxxxxxxx
President
Accepted
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Firm
By___________________________________________________________
Officer or Partner
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Print Name
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Title
Address:
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Date:
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Schedule A
January 15, 2001
(supersedes Schedule A dated May 3, 1999)
Category 1 Category 2
AMCAP Fund American High-Income Trust
American Balanced Fund Bond Fund of America
American Mutual Fund Capital World Bond Fund
Capital Income Builder Intermediate Bond Fund of America
Capital World Growth and Income Fund U.S. Government Securities Fund
EuroPacific Growth Fund
Fundamental Investors
Growth Fund of America
Income Fund of America
Investment Company of America
New Economy Fund
New Perspective Fund
New World Fund
SMALLCAP World Fund
Washington Mutual Investors Fund
Category 3
Cash Management Trust of America
U.S. Treasury Money Fund of America
