THE INVESTMENT COMPANY OF AMERICA INVESTMENT ADVISORY AND SERVICE AGREEMENT
THE
INVESTMENT COMPANY OF AMERICA
THIS INVESTMENT
ADVISORY AND SERVICE AGREEMENT, dated and effective as of the 1st day of March,
2010, is made and entered into by and between THE INVESTMENT COMPANY OF AMERICA,
a Delaware statutory trust (the “Fund”), and CAPITAL RESEARCH AND MANAGEMENT
COMPANY, a Delaware corporation (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, as amended (the “1940 Act”). The
Investment Adviser is registered under the Investment Advisers Act of 1940, as
amended, 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
Fund hereby employs the Investment Adviser to provide investment advisory and
administrative services to the Fund. The Investment Adviser hereby
accepts such employment and agrees to render the services to the extent herein
set forth, for the compensation herein provided. The Investment Adviser shall,
for all purposes herein, be deemed an independent contractor and not an agent of
the Fund.
2. (a) The
Investment Adviser will provide general management services to the Fund,
including overall supervisory responsibility for the general management and
investment of the Fund’s assets, giving due consideration to the policies of the
Fund as expressed in the Fund’s agreement and declaration of trust, by-laws,
registration statement under the 1940 Act and registration statement under the
Securities Act of 1933, as amended (the “1933 Act”), as well as to the factors
affecting the Fund’s status as a regulated investment company under the Internal
Revenue Code of 1986, as amended.
(b) The
Investment Adviser may delegate its investment management responsibilities under
paragraph 2(a), or a portion thereof, to one or more entities that are direct or
indirect subsidiaries of the Investment Adviser or at least majority owned
subsidiaries of The Capital Group Companies, Inc. and registered as investment
advisers under the Investment Adviser’s Act of 1940 (each a “Subsidiary”),
pursuant to an agreement between the Investment Adviser and the Subsidiary (the
“Subsidiary Agreement”). Any Subsidiary to which the Investment Adviser proposes
to delegate its investment management responsibilities must be approved by the
Fund’s Board of Trustees, including a majority of the Trustees who are not
parties to this Agreement nor interested persons of any such party (“Independent
Trustees”).
(c) The
Investment Adviser will, subject to review and approval of the Board of Trustees
of the Fund: (i) set the Fund’s overall investment strategies; (ii) evaluate,
select and recommend Subsidiaries to manage all or a part of the Fund’s assets;
(iii) when appropriate, allocate and reallocate the Fund’s assets among multiple
Subsidiaries; (iv) monitor and evaluate the performance of Subsidiaries; and (v)
implement procedures reasonably designed to ensure that the Subsidiaries comply
with the Fund’s investment objective, policies and restrictions. The
Investment Adviser shall be solely responsible for paying the fees of any
Subsidiary.
(d) Any
Subsidiary Agreement may provide that the Subsidiary, subject to the control and
supervision of the Fund’s Board of Trustees and the
Investment Adviser, shall have full investment discretion for the
Fund and shall make all determinations with respect to (i) the investment
of the Fund’s assets assigned to the Subsidiary; (ii) the purchase and sale of
portfolio securities with those assets, and (iii) any steps that may be
necessary to implement an investment decision. Any delegation of duties pursuant
to this paragraph shall comply with all applicable provisions of Section 15 of
the 1940 Act, except to the extent permitted by any exemptive order of the
Securities and Exchange Commission (“SEC”), or similar relief. The
Investment Adviser will periodically evaluate the continued advisability of
retaining any Subsidiary and will make recommendations to the Fund’s Board of
Trustees as needed.
(e) 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.
(f) The
Investment Adviser shall maintain all books and records with respect to the
Fund’s investment management activities that are required to be maintained
pursuant to the Investment Company Act of 1940 and the rules thereunder, as well
as any other applicable legal requirements. The Investment Adviser
acknowledges and agrees that all such records are the property of the Fund, and
it shall maintain and preserve such records in accordance with applicable law
and provide such records promptly to the Fund upon request.
(g) The
Investment Adviser shall prepare and submit to the Fund all data on the
performance of its duties as investment adviser for required filings with
governmental agencies or for the preparation of reports to the Board of Trustees
or the shareholders of the Fund.
(h) The
Investment Adviser shall furnish from time to time such other appropriate
information as may be reasonably requested by 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 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; service and distribution
expenses pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940
Act; expenses incurred for shareholder servicing, recordkeeping, transactional
services, tax and informational returns and fund and shareholder communications;
costs of 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 Independent Trustees and
members of the Advisory Board; association dues; and costs of any share
certificates, stationery and forms prepared exclusively for the
Fund.
4. (a) 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 rate of:
0.390% on first $1
billion of net assets,
plus 0.336% on net
assets over $1 billion to $2 billion,
plus 0.300% on net
assets over $2 billion to $3 billion,
plus 0.276% on net
assets over $3 billion to $5 billion,
plus 0.258% on net
assets over $5 billion to $8 billion,
plus 0.246% on net
assets over $8 billion to $13 billion,
plus 0.240% on net
assets over $13 billion to $21 billion,
plus 0.234% on net
assets over $21 billion to $34 billion,
plus 0.231% on net
assets over $34 billion to $44 billion,
plus 0.228% on net
assets over $44 billion to $55 billion,
plus 0.225% on net
assets over $55 billion to $71 billion,
plus 0.222% on net
assets over $71 billion to $89 billion,
plus 0.219% on net
assets over $89 billion.
(b) Such
fee shall be accrued daily and the daily rate shall be computed 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 agreement
and declaration of trust and registration statement 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 beginning or the
termination of such period.
5. This
Agreement may be terminated at any time, without payment of any penalty, by the
Trustees of the Fund or by vote of a majority (within the meaning of the ▇▇▇▇
▇▇▇) 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 April 30, 2010. 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 ▇▇▇▇ ▇▇▇) of the outstanding
voting securities of the Fund. In either event, any such renewal must
be approved by a majority of the Independent Trustees at a meeting called for
the purpose of voting on such approval.
6. This
Agreement shall not be assignable by either party hereto, and in the event of
assignment (within the meaning of the ▇▇▇▇ ▇▇▇) by the Investment Adviser shall
automatically be terminated forthwith.
7. 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.
8. The
Investment Adviser shall not be liable to the Fund or its shareholders for any
error of judgment, for any mistake of law, for any loss arising out of any
investment or for any act, or omission not involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of its obligations and duties
hereunder.
9. 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’s 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.
10. The
Fund acknowledges and agrees that the names, “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.
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CAPITAL
RESEARCH AND
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THE
INVESTMENT COMPANY
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MANAGEMENT
COMPANY
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OF
AMERICA
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By
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By
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▇▇▇▇▇▇
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▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
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President
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Vice Chairman
and Principal
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Executive
Officer
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By
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By
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▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
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Senior Vice
President and Secretary
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Secretary
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