SEC. File Nos. 2-14728
811-862
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
Registration Statement
Under
the Securities Act of 1933
Post-Effective Amendment No. 69
and
Registration Statement
Under
The Investment Company Act of 1940
Amendment No. 28
THE GROWTH FUND OF AMERICA, INC.
(Exact Name of Registrant as specified in charter)
P. O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Address of principal executive offices)
Registrant's telephone number, including area code:
(415) 421-9360
JULIE F. WILLIAMS, Secretary
THE GROWTH FUND OF AMERICA, INC.
P. O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(name and address of agent for service)
Copies to:
ROBERT E. CARLSON, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
555 S. Flower Street
Los Angeles, CA 90071-2371
(Counsel for the Registrant)
Approximate date of proposed public offering:
It is proposed that this filing will become effective on
March 15, 2000, pursuant to paragraph (a) of rule 485.
<PAGE>
The Growth Fund of America/(R)/
Prospectus
MARCH 15, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED OF THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
---------------------------------------------------------
THE GROWTH FUND OF AMERICA, INC.
One Market
Steuart Tower, Suite 1800
San Francisco, California 94105
<TABLE>
<CAPTION>
TICKER NEWSPAPER FUND
SYMBOL ABBREVIATION NUMBER
------------------------------------------------------------
<S> <C> <C> <C>
Class A AGTHX Gwth 05
Class B XXX XXX 205
</TABLE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-------------------------------------------------------
<S> <C>
Risk/Return Summary 2
-------------------------------------------------------
Fees and Expenses of the Fund 5
-------------------------------------------------------
Investment Objective, Strategies and Risks 6
-------------------------------------------------------
Management and Organization 9
-------------------------------------------------------
Shareholder Information 11
-------------------------------------------------------
Choosing a Share Class 12
-------------------------------------------------------
Purchase and Exchange of Shares 13
-------------------------------------------------------
Sales Charges 14
-------------------------------------------------------
Sales Charge Reductions and Waivers 16
-------------------------------------------------------
Plans of Distribution 17
-------------------------------------------------------
How to Sell Shares 18
-------------------------------------------------------
Distributions and Taxes 19
-------------------------------------------------------
Financial Highlights 20
-------------------------------------------------------
</TABLE>
1
GFA-010-0300/RRD
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to make your investment grow by investing primarily in common
stocks of companies that appear to offer superior opportunities for growth of
capital.
The fund is designed for investors seeking capital appreciation through stocks.
Investors in the fund should have a long-term perspective and be able to
tolerate potentially wide price fluctuations. An investment in the fund is
subject to risks, including the possibility that the fund may decline in value
in response to economic, political or social events in the U.S. or abroad. The
prices of equity securities owned by the fund may be affected by events
specifically involving the companies issuing those securities.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS IS
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.
2
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
INVESTMENT RESULTS
The following information illustrates how the fund's results fluctuate. Past
results are not an indication of future results.
Calendar Year Total Returns for Class A Shares
(Results do not include a sales charge, if one were included, results would
be lower.)
[BAR CHART]
1990 -4.12
1991 35.79
1992 7.40
1993 14.50
1994 .02
1995 29.80
1996 14.84
1997 26.86
1998 31.78
1999 x.xx
------------------------------------------------------------------------------
The fund's highest/lowest quarterly results during this time period were:
<TABLE>
<CAPTION>
<S> <C> <C>
Highest 27.17% (quarter ended December 31, 1998)
Lowest -17.64% (quarter ended September 30, 1990)
</TABLE>
3
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
For periods ended DECEMBER 31, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN ONE YEAR FIVE YEARS TEN YEARS LIFETIME
<S> <C> <C> <C> <C>
Class A x.xx% x.xx% x.xx% x.xx%/1/
--------------------------------------------------------------------
Class B N/A N/A N/A N/A/2/
--------------------------------------------------------------------
S&P 500/3/ x.xx% x.xx% x.xx% x.xx%
--------------------------------------------------------------------
Consumer Price Index/4/ x.xx% x.xx% x.xx% x.xx%
--------------------------------------------------------------------
</TABLE>
1 The fund began investment operations for Class A shares on December 1, 1973
when Capital Research and Management Company became the fund's investment
adviser.
2 The fund began investment operations for Class B shares on March 15, 2000.
3 The Standard & Poor's 500 Composite Index is a broad-based measurement of
changes in stock market conditions based on the average performance of 500
widely held common stocks. This index is unmanaged and does not reflect sales
charges, commissions or expenses.
4 The Consumer Price Index is a measure of inflation and is computed from data
supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
Unlike the bar chart on the previous page, this table reflects the fund's
investment results with the maximum initial or deferred sales charge deducted,
as required by Securities and Exchange Commission rules. Class A share results
are shown with the maximum initial sales charge of 5.75% deducted. Results
would be higher if they were calculated at net asset value. All fund results
reflect the reinvestment of dividend and capital gain distributions.
Class B shares are subject to a maximum deferred sales charge of 5.00% if
shares are redeemed within the first year of purchasing them. The deferred
sales charge is reduced for shares redeemed between two-six years after their
purchase. No results were available for Class B shares as of the date of this
prospectus.
4
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
FEES AND EXPENSES OF THE FUND
Fees and expenses that you may pay if you buy and hold shares of the FUND.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B
--------------------------------------------------------------------------
<S> <C> <C>
Maximum sales charge imposed on purchases 5.75%/1/ 0.00%
(as a percentage of offering price)
--------------------------------------------------------------------------
Maximum sales charge imposed on reinvested dividends 0.00% 0.00%
--------------------------------------------------------------------------
Maximum deferred sales charge 0.00%/2/ 5.00%/3/
--------------------------------------------------------------------------
Redemption or exchange fees 0.00% 0.00%
</TABLE>
1 Sales charges are reduced or eliminated for purchases of $25,000 or more.
2 A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following purchases of $1 million or more made without a
sales charge.
3 Deferred sales charges are reduced after 12 months and eliminated after six
years.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets) CLASS A CLASS B/1/
-----------------------------------------------
<S> <C> <C>
Management Fees 0.34% 0.34%
Distribution and/or Service (12b-1) Fees 0.25%/2/ 1.00%/3/
Other Expenses 0.11% 0.11%
Total Annual Fund Operating Expenses 0.70% 1.45%
</TABLE>
1 Based on estimated amounts for the current fiscal year.
2 Class A 12b-1 expenses may not exceed 0.25% of the fund's average net assets
annually.
3 Class B 12b-1 expenses may not exceed 1.00% of the fund's average net assets
annually.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. Class B is also shown assuming that
shares are not redeemed at the end of the period. The Example also assumes that
your investment has a 5% return each year and that the fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your cumulative expenses would be:
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR
ONE THREE FIVE TEN
<S> <C> <C> <C> <C>
Class A $642 $786 $942 $1,395
-----------------------------------------------------------------------------
Class B - assuming redemption $548 $759 $892 $1,434*
Class B - assuming no redemption $148 $459 $792 $1,434*
</TABLE>
* Assumes shares convert to Class A shares after eight years.
5
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you with growth of capital. It
invests primarily in common stocks.
The prices of equity securities held by the fund will decline in response to
certain events, including those directly involving the companies whose
securities are owned in the fund, adverse conditions affecting the general
economy, overall market declines, world political, social and economic
instability, and currency fluctuations. The growth-oriented, equity-type
securities generally purchased by the fund may involve large price swings and
potential for loss.
The fund may also hold cash or money market instruments. The size of the fund's
cash position will vary and will depend on various factors, including market
conditions and purchases and redemptions of fund shares. A larger cash position
could detract from the achievement of the fund's objectives, but it also
provides greater liquidity to meet redemptions or to make additional
investments, and it would reduce the fund's exposure in the event of a market
downturn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of the investment adviser is to
seek undervalued securities that represent good long-term investment
opportunities. Securities may be sold when the investment adviser believes they
no longer represent good long-term value.
OTHER IMPORTANT INVESTMENT PRACTICES
In addition to the principal investment strategies described above, the fund
has other investment practices that are described here and in the statement of
additional information.
The fund may invest up to 10% of its assets in securities of issuers domiciled
outside the U.S. and not included in the Standard & Poor's 500 Composite Index.
Investments outside the U.S. may be subject to certain risks. For example,
the prices of non-U.S. securities can decline in response to currency
fluctuations or political, social and economic instability.
The fund may invest up to 10% of its assets in lower-quality debt securities
(rated Ba and BB or below or unrated but determined to be of equivalent
quality). The prices of debt securities fluctuate depending on such factors as
changing interest rates, credit quality of the issuers and maturity. For
example, their prices decline when interest rates rise and vice versa.
6
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
Debt securities are also subject to credit risk which is the possibility that
an issuer of a debt security will fail to make timely payments of principal or
interest and the security will go into default. The values of lower quality and
longer maturity bonds will be subject to greater price fluctuations than higher
quality and shorter maturity bonds. The fund's investment adviser attempts to
reduce these risks through diversification of the portfolio and by doing a
credit analysis of each issuer as well as by monitoring economic and
legislative developments.
ADDITIONAL INVESTMENT RESULTS
For periods ended DECEMBER 31, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN/1/ ONE YEAR FIVE YEARS TEN YEARS LIFETIME
<S> <C> <C> <C> <C>
Class A x.xx% x.xx% x.xx% x.xx%/2/
------------------------------------------------------------------------
Class B N/A N/A N/A N/A/3/
------------------------------------------------------------------------
Lipper Capital Appreciation x.xx% x.xx% x.xx% x.xx%
Funds Index/4/
------------------------------------------------------------------------
</TABLE>
1 These fund results were calculated at net asset value according to a formula
that is required for all stock and bond funds and include the reinvestment of
dividend and capital gain distributions.
2 The fund began investment operations for Class A shares on December 1, 1973
when Capital Research and Management Company became the fund's investment
adviser.
3 The fund began investment operations for Class B shares on March 15, 2000.
4 The Lipper Capital Appreciation Funds Index is an equally weighted
performance index that represents funds that aim for maximum capital
appreciation. The results of the underlying funds in the index include the
reinvestment of dividend and capital gain distributions, but do not reflect
sales charges and commissions.
7
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
The following chart illustrates the asset mix of the fund's investment
portfolio as of the end of the fund's fiscal year, August 31, 1999.
[pie chart]
U.S. Equities 77.59%
Non-U.S. Equities 11.82%*
Casn and Equivalents 10.59%
* Includes 2.02% of non-U.S. securities that are in the Standard &
Poor's 500 Composite Index.
<TABLE>
<CAPTION>
PERCENT OF
Largest Industry Holdings NET ASSETS
--------------------------------------------------------------------------------
<S> <C>
Broadcasting & Publishing 17.49%
--------------------------------------------------------------------------------
Electronic Components 17.15
--------------------------------------------------------------------------------
Data Processing & Reproduction 8.22
--------------------------------------------------------------------------------
Health & Personal Care 6.56
--------------------------------------------------------------------------------
Business & Public Services 6.41
Other Industries 33.58
Largest Equity Holdings
--------------------------------------------------------------------------------
Time Warner 3.92%
--------------------------------------------------------------------------------
Viacom 3.06
--------------------------------------------------------------------------------
AT&T -- Liberty Media Group 2.98
--------------------------------------------------------------------------------
Texas Instruments 2.50
--------------------------------------------------------------------------------
Fannie Mae 2.09
--------------------------------------------------------------------------------
Philip Morris 1.78
--------------------------------------------------------------------------------
Intel 1.75
--------------------------------------------------------------------------------
Applied Materials 1.67
--------------------------------------------------------------------------------
News Corp. 1.58
--------------------------------------------------------------------------------
Microsoft 1.58
</TABLE>
LOGO
Because the fund is actively managed, its holdings will change from time to
time.
8
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
MANAGEMENT AND ORGANIZATION
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and
other funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio and business
affairs of the fund. The total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is discussed earlier under
"Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated into the fund's code of ethics.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach the portfolio of
a fund is divided into segments which are managed by individual counselors.
Counselors decide how their respective segments will be invested, within the
limits provided by a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee. In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for THE GROWTH FUND OF AMERICA are listed on the following
page.
9
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE YEARS OF EXPERIENCE
AS AN INVESTMENT PROFESSIONAL
YEARS OF EXPERIENCE (INCLUDNG THE LAST FIVE YEARS)
AS PORTFOLIO COUNSELOR -----------------------------------
PORTFOLIO (AND RESEARCH PROFESSIONAL, WITH CAPITAL
COUNSELORS FOR IF APPLICABLE) FOR RESEARCH AND
THE GROWTH FUND THE GROWTH FUND OF AMERICA MANAGEMENT
OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) COMPANY
------------------------------------------------------------------------------- OR AFFILIATES TOTAL YEARS
-----------------------------------
<S> <C> <C> <C> <C>
JAMES F. Chairman of the fund. 11 years (plus 3 years as a 29 years 29 years
ROTHENBERG PRESIDENT AND DIRECTOR, research professional prior
CAPITAL RESEARCH AND to becoming a portfolio
MANAGEMENT COMPANY counselor for the fund)
-----------------------------------
-------------------------------------------------------------------------------
JAMES E. DRASDO President and Director of the 14 years (plus 9 years as a 22 years 28 years
fund. SENIOR VICE PRESIDENT, research professional prior
CAPITAL RESEARCH AND to becoming a portfolio
MANAGEMENT COMPANY counselor for the fund)
------------------------------------------------------------------------------------------------------------------
GORDON CRAWFORD Senior Vice President of the 8 years (plus 16 years as a 28 years 28 years
fund. SENIOR VICE PRESIDENT research professional prior
AND DIRECTOR, CAPITAL to becoming a portfolio
RESEARCH AND MANAGEMENT counselor for the fund)
COMPANY
------------------------------------------------------------------------------------------------------------------
DONALD D. O'NEAL Senior Vice President of the 6 years (plus 6 years as a 14 years 14 years
fund. VICE PRESIDENT, CAPITAL research professional prior
RESEARCH AND MANAGEMENT to becoming a portfolio
COMPANY counselor for the fund)
------------------------------------------------------------------------------------------------------------------
MICHAEL T. Vice President of the fund. 1 year (plus 5 years as a 14 years 16 years
KERR Senior Vice President, research professional prior
Capital Research Company* to becoming a portfolio
counselor for the fund)
-----------------------------------
-------------------------------------------------------------------------------
WILLIAM C. SENIOR PARTNER, THE CAPITAL 26 years** 40 years 47 years
NEWTON GROUP PARTNERS L.P.*
------------------------------------------------------------------------------------------------------------------
R. MICHAEL CHAIRMAN OF THE BOARD AND 14 years 35 years 35 years
SHANAHAN PRINCIPAL EXECUTIVE OFFICER,
CAPITAL RESEARCH AND
MANAGEMENT COMPANY
* Company affiliated with Capital Research and Management Company.
** Since Capital Research and Management Company took over management of the fund in 1973.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services may be terminated or modified at
any time upon 60 days' written notice. For your convenience, American Funds
Service Company has four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-Free from anywhere in the U.S.
(8 a.m. to 8 p.m. ET):
800/421-0180
[map of the United States]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Western Western Central Eastern Central Eastern
Service Center Service Center Service Center Service Center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
92822-2205 78265-9522 46206-6007 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 Fax: 317/735-6620 Fax: 757/670-4773
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is
sent to new shareholders and is available by writing or calling American Funds
Service Company.
You may invest in the fund through various retirement plans. However, Class B
shares generally are not available to certain retirement plans (for example,
group retirement plans such as 401(k) plans, employer-sponsored 403(b) plans,
and money purchase pension and profit sharing plans). Additionally, some
retirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact American Funds Service
Company, your plan administrator/trustee or dealer.
11
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
CHOOSING A SHARE CLASS
The fund offers both Class A and Class B shares. Each share class has its own
sales charge and expense structure, allowing you to choose the class that best
meets your situation.
Factors you should consider in choosing a class of shares include:
- How long you expect to own the shares
- How much you intend to invest
- The expenses associated with owning shares of each class
- Whether you qualify for any reduction or waiver of sales charges (for
example, Class A shares may be a less expensive option over time if you
qualify for a sales charge reduction or waiver)
EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT. YOU SHOULD SPEAK
WITH YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST
FOR YOU.
Differences between Class A and Class B shares include:
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------------------------------
<S> <S>
Initial sales charge of up to 5.75%. No initial sales charge
Sales charges are reduced for
purchases of $25,000 or more (see
"Sales Charges - Class A")
------------------------------------------------------------------------------
Distribution and service (12b-1) Distribution and service (12b-1) fees
fees of up to 0.25% annually of up to 1.00% annually
------------------------------------------------------------------------------
Higher dividends than Class B shares Lower dividends than Class A shares
due to lower annual expenses due to higher distribution fees and
other expenses
------------------------------------------------------------------------------
No contingent deferred sales charge A contingent deferred sales charge
(except on certain redemptions on applies if you sell shares within six
purchases of $1 million or more years of buying them. The charge
bought without an initial sales starts at 5% and declines thereafter
charge) until it reaches 0% after six years.
(see "Sales Charges - Class B")
------------------------------------------------------------------------------
No purchase maximum Maximum purchase of $100,000
------------------------------------------------------------------------------
Automatically convert to Class A
shares after eight years, reducing
future annual expenses
------------------------------------------------------------------------------
</TABLE>
12
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell THE fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into shares of the same class of other funds in
The American Funds Group generally without a sales charge. For purposes of
computing the contingent deferred sales charge on Class B shares, the length of
time you have owned your shares will be measured from the date of original
purchase and will not be affected by any exchange.
Exchanges of shares from the money market funds initially purchased without a
sales charge generally will be subject to the appropriate sales charge.
Exchanges have the same tax consequences as ordinary sales and purchases. See
"Transactions by Telephone..." for information regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUND.
<TABLE>
<CAPTION>
PURCHASE MINIMUMS FOR CLASS A AND B SHARES
<S> <C>
To establish an account (including retirement plan accounts) $ 250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
Purchase Maximum for Class B Shares $100,000
</TABLE>
13
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
SHARE PRICE
THE fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time, which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value,
market prices are used when available. If a market price for a particular
security is not available, THE fund will determine the appropriate price for
the security.
Your shares will be purchased at the net asset value plus any applicable sales
charge in the case of Class A shares, or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request. Sales of certain Class A and B shares may be subject to contingent
deferred sales charges.
---------------------------------------------------------
SALES CHARGES
CLASS A
The initial sales charge you pay when you buy Class A shares differs depending
upon the amount you invest and may be reduced for larger purchases as indicated
below.
<TABLE>
<CAPTION> SALES CHARGE AS A
PERCENTAGE OF
-------------------- DEALER
NET COMMISSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
-----------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 5.00%
-----------------------------------------------------------------------
$25,000 but less than $50,000 5.00% 5.26% 4.25%
-----------------------------------------------------------------------
$50,000 but less than $100,000 4.50% 4.71% 3.75%
-----------------------------------------------------------------------
$100,000 but less than $250,000 3.50% 3.63% 2.75%
-----------------------------------------------------------------------
$250,000 but less than $500,000 2.50% 2.56% 2.00%
-----------------------------------------------------------------------
$500,000 but less than $750,000 2.00% 2.04% 1.60%
-----------------------------------------------------------------------
$750,000 but less than $1 million 1.50% 1.52% 1.20%
-----------------------------------------------------------------------
$1 million or more and certain other
investments described below see below see below see below
</TABLE>
CLASS A PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more are sold with no initial sales charge.
HOWEVER, A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE IMPOSED IF REDEMPTIONS
ARE MADE WITHIN ONE YEAR OF PURCHASE. Employer-sponsored defined contribution--
14
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
type plans investing $1 million or more, or with 100 or more eligible
employees, and Individual Retirement Account rollovers involving retirement
plan assets invested in the American Funds may invest with no sales charge and
are not subject to a contingent deferred sales charge. Investments made
through certain qualified fee-based programs, and retirement plans, endowments
or foundations with $50 million or more in assets may also be made with no
sales charge and are not subject to a contingent deferred sales charge. The
fund may pay a dealer concession of up to 1% under its Plan of Distribution on
investments made with no initial sales charge.
CLASS B
Class B shares are sold without any initial sales charge. However, a
contingent deferred sales charge may be applied to shares you sell within six
years of purchase, as shown in the table below.
<TABLE>
<CAPTION>
Contingent deferred sales charge
on shares sold within year as a % of shares being sold
---------------------------------------------------------------
<S> <S>
1 5.00%
2 4.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
</TABLE>
Shares acquired through reinvestment of dividends or capital gain distributions
are not subect to a contingent deferred sales charge. In addition, the
contingent deferred sales charge may be waived in certain circumstances. See
"Contingent Deferred Sales Charge Waivers for Class B shares" below. The
contingent deferred sales charge is based on the original purchase cost or the
current market value of the shares being sold, whichever is less. For purposes
of determining the contingent deferred sales charge, if you sell only some of
your shares, shares that are not subject to any contingent deferred sales
charge will be sold first and then shares that you have owned the longest.
CLASS B CONVERSION TO A SHARES
Class B shares automatically convert to Class A shares in the first month of
the eight-year anniversary of the purchase date. This will reduce future
annual expenses. For more information about the conversion of Class B shares,
including information about how shares acquired through reinvestment of
distributions are treated and certain circumstances under which Class B shares
may not convert to Class A shares, please see the statement of additional
information.
15
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
You must let your investment dealer or American Funds Service Company know if
you qualify for a reduction in your Class A sales charge or waiver of your
Class B contingent deferred sales charge using one or any combination of the
methods described below and in the statement of additional information and
"Welcome to the Family."
REDUCING YOUR CLASS A SALES CHARGES
You and your "immediate family" (your spouse and your children under the age of
21) may combine investments to reduce your Class A sales charge.
AGGREGATING ACCOUNTS
To receive a reduced Class A sales charge, investments made by you and your
immediate family (see above) may be aggregated if made for their own account(s)
and/or:
- trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, the trust account may be
aggregated with accounts of the person who is the primary beneficiary of
the trust.
- solely controlled business accounts.
- single-participant retirement plans.
Other types of accounts may also be aggregated. You should check with your
financial adviser or consult the statement of additional information or
"Welcome to the Family" for more information.
CONCURRENT PURCHASES
You may combine simultaneous purchases of Class A and/or B shares of two or
more American Funds, as well as individual holdings in various American Legacy
variable annuities or variable life insurance policies to qualify for a reduced
Class A sales charge. Direct purchases of money market funds are excluded.
RIGHTS OF ACCUMULATION
You may take into account the current value of your existing Class A and B
holdings in the American Funds, as well as individual holdings in various
American Legacy variable annuities or variable life insurance policies to
determine your Class A sales charge. Direct purchases of money market funds are
excluded.
STATEMENT OF INTENTION
You can reduce the sales charge you pay on your Class A share purchases by
establishing a Statement of Intention. A Statement of Intention allows you to
16
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
combine all Class A and B share non-money market fund purchases, as well as
individual American Legacy variable annuity and life insurance policies you
intend to make over a 13-month period to determine the applicable sales charge.
At your request purchases made during the previous 90 days may be included;
however, capital appreciation and reinvested dividends and capital gains do not
apply toward these combined purchases. A portion of your account may be held in
escrow to cover additional Class A sales charges which may be due if your total
investments over the 13-month period do not qualify for the applicable sales
charge reduction.
CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B SHARES
The contingent deferred sales charge on Class B shares may be waived in the
following cases:
- to receive payments through systematic withdrawal plans (up to 12% of the
value of your account);
- to receive certain distributions, such as required minimum distributions,
from retirement accounts; or
- for redemptions due to death or post-purchase disability of the
shareholder.
For more information, please consult your financial adviser, "Welcome to the
Family," and the statement of additional information.
---------------------------------------------------------
PLANS OF DISTRIBUTION
THE fund has Plans of Distribution or "12b-1 Plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by THE fund's board of directors. The plans
provide for annual expenses of up to 0.25% for Class A shares and up to 1.00%
for Class B shares. Up to 0.25% of these payments are used to pay service fees
to qualified dealers for providing certain shareholder services. The remaining
0.75% expense for Class B shares is used for financing commissions paid to your
dealer. The 12b-1 fees paid by THE fund, as a percentage of average net assets,
for the previous fiscal year is indicated earlier under "Fees and Expenses of
the Fund." Since these fees are paid out of THE fund's assets or income on an
ongoing basis, over time they will increase the cost and reduce the return of
an investment. The higher fees for Class B shares may cost you more over time
than paying the initial sales charge for Class A shares.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
17
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
- Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s).
- A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:
- Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day.
- Checks must be made payable to the registered shareholder.
- Checks must be mailed to an address of record that has been used with
the account for at least 10 days.
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), you agree to hold THE fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from
any losses, expenses, costs or liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided
American Funds Service Company employs reasonable procedures to confirm that
the instructions received from any person with appropriate account information
are
18
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
genuine. If reasonable procedures are not employed, THE fund may be liable for
losses due to unauthorized or fraudulent instructions.
---------------------------------------------------------
DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to you, usually in December. Capital
gains, if any, are usually distributed in December. When a dividend or capital
gain is distributed, the net asset value per share is reduced by the amount of
the payment.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash. Most shareholders do not elect
to take capital gain distributions in cash because these distributions reduce
principal value.
TAXES ON DISTRIBUTIONS
Distributions you receive from the FUND may be subject to income tax and may
also be subject to state or local taxes - unless you are exempt from taxation.
For federal tax purposes, any taxable dividends and distributions of short-term
capital gains are treated as ordinary income. The fund's distributions of net
long-term capital gains are taxable to you as long-term capital gains. Any
taxable distributions you receive from the fund will normally be taxable to you
when made, regardless of whether you reinvest distributions or receive them in
cash.
TAXES ON TRANSACTIONS
Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment in the FUND is
the difference between the cost of your shares, including any sales charges,
and the price you receive when you sell them.
Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.
19
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand THE fund's
results for the past five years and is currently only shown for Class A shares.
When available, a similar table will be shown for Class B shares. Certain
information reflects financial results for a single fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the FUND (assuming reinvestment of all dividends and
distributions). This information has been audited by DELOITTE & TOUCHE LLP,
whose report, along with THE fund's financial statements, is included in the
statement of additional information, which is available upon request.
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31/1/
----------------------------------------
1999 1998 1997 1996 1995
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, $17.95 $20.14 $15.39 $16.55 $13.81
Beginning of Year
-------------------------------------------------------------------------------------
Income From Investment
Operations:
Net investment income .07 .10 .13 .13 .13
Net gains or losses on
securities (both
realized and 10.48 (.10) 5.59 (.01) 3.21
unrealized)
-------------------------------------------------------------------------------------
Total from investment 10.55 .00 5.72 .12 3.34
operations
-------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (.09) (.13) (.11) (.14) (.08)
Distributions (from (2.21) (2.06) (.86) (1.14) (.52)
capital gains)
-------------------------------------------------------------------------------------
Total distributions (2.30) (2.19) (.97) (1.28) (.60)
-------------------------------------------------------------------------------------
Net Asset Value, $26.20 $17.95 $20.14 $15.39 $16.55
End of Year
-------------------------------------------------------------------------------------
Total Return/2/ 61.26% (.24)% 38.54% .90% 25.56%
-------------------------------------------------------------------------------------
Ratios/Supplemental
Data:
Net assets, end of $20,673 $11,798 $11,646 $8,511 $7,525
year (in millions)
-------------------------------------------------------------------------------------
Ratio of expenses to .70% .70% .72% .74% .75%
average net assets
-------------------------------------------------------------------------------------
Ratio of net income .28% .48% .73% .82% .90%
to average net assets
-------------------------------------------------------------------------------------
Portfolio turnover
rate 45.61% 38.84% 34.10% 27.95% 26.90%
1Adjusted to reflect the 100% share dividend effective at the close of business on
December 12, 1996.
2 Excludes maximum sales charge of 5.75%.
</TABLE>
20
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
NOTES
21
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
---------------------------------------------------------
NOTES
22
THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
American Funds Call your employer or American Funds
Service Company plan administrator Distributors
800/421-0180 800/421-9900 ext. 11
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FOR 24-HOUR INFORMATION
American FundsLine(R) American FundsLine OnLine(R)
800/325-3590 http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for verification,
recordkeeping and quality assurance purposes.
---------------------------------------------------------
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. If there is any
inconsistency or ambiguity as to the meaning of any word or phrase in a
translation, the English text will prevail.
---------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including financial statements,
investment results, portfolio holdings, a statement from portfolio management
discussing market conditions and the fund's investment strategies, and the
independent accountants' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODE OF ETHICS
The SAI contains more detailed information on all aspects of the fund,
including the fund's financial statements and is incorporated by reference into
this prospectus. The code of ethics describes the fund's personal investing
policy.
The fund's code of ethics and current SAI has been filed with the Securities
and Exchange Commission ("SEC"). These and other related materials about the
fund are available for review or to be copied at the SEC's Public Reference
Room in Washington, D.C. (1-800-SEC-0330) or on the SEC's Internet Web site at
http://www.sec.gov.
* * * * *
To request a free copy of any of the documents above:
<TABLE>
<CAPTION>
<S> <C> <C>
Call American Funds Write to the Secretary of the fund
Service Company or P.O. Box 7650
800/421-0180 ext. 1 San Francisco, California 94120
</TABLE>
Investment Company File No. 811-862
Printed on recycled paper
<PAGE>
THE GROWTH FUND OF AMERICA, INC.
Part B
Statement of Additional Information
March 15, 2000
This document is not a prospectus but should be read in conjunction with the
current prospectus of The Growth Fund of America (the "fund" or "GFA") dated
March 15, 2000. The prospectus may be obtained from your investment dealer or
financial planner or by writing to the fund at the following address:
The Growth Fund of America, Inc.
Attention: Secretary
One Market Steuart Tower, Suite 1800
San Francisco, California 94105
(415) 421-9360
Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them, and they should contact their employer for details.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page No.
- ---- --------
<S> <C>
Certain Investment Limitations and Guidelines . . . . . . . . . . . 2
Description of Certain Securities and Investment Techniques . . . . 2
Fundamental Policies and Investment Restrictions. . . . . . . . . . 6
Fund Organization and Voting Rights . . . . . . . . . . . . . . . . 7
Fund Directors and Officers . . . . . . . . . . . . . . . . . . . . 8
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . 15
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 20
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Sales Charge Reductions and Waivers . . . . . . . . . . . . . . . . 24
Individual Retirement Account (IRA) Rollovers . . . . . . . . . . . 27
Price of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Selling Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Shareholder Account Services and Privileges . . . . . . . . . . . . 30
Execution of Portfolio Transactions . . . . . . . . . . . . . . . . 33
General Information . . . . . . . . . . . . . . . . . . . . . . . . 33
Class A Share Investment Results and Related Statistics . . . . . . 35
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Financial Statements
</TABLE>
The Growth Fund of America -- Page 1
<PAGE>
CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES
The following limitations and guidelines are considered at the time of purchase,
under normal market conditions, and are based on a percentage of the fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the fund's investment limitations.
OBJECTIVE
. The fund will invest at least 65% of its assets in securities of companies
that appear to offer superior opportunities for growth of capital.
DEBT SECURITIES
. The fund may invest up to 10% of its assets in straight debt securities
rated Ba by Moody's Investors Service, Inc. and BB by Standard & Poor's
Corporation or below or unrated but determined to be of equivalent quality.
NON-U.S. SECURITIES
. The fund may invest up to 10% of its assets in securities of issuers
domiciled outside the U.S. and not included in the S&P 500 Composite Index.
The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
The descriptions below are intended to supplement the material in the prospectus
under "Investment Objective, Strategies and Risks."
EQUITY SECURITIES - Equity securities represent an ownership position in a
company. These securities may include common stocks and securities with equity
conversion or purchase rights. The prices of equity securities fluctuate based
on changes in the financial condition of their issuers and on market and
economic conditions. The fund's results will be related to the overall markets
for these securities.
The growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss.
INVESTING IN SMALLER CAPITALIZATION STOCKS - The fund may invest in the stocks
of smaller companies (typically companies with market capitalizations of less
than $1.5 billion at the time of purchase). The Investment Adviser believes that
the issuers of smaller capitalization stocks often provide attractive investment
opportunities. However, investing in smaller capitalization stocks can involve
greater risk than is customarily associated with investing in stocks of larger,
more established companies. For example, smaller companies often have limited
product lines, markets, or financial resources, may be dependent for management
on one or a few key persons, and can be more susceptible to losses. Also, their
securities may be thinly traded (and therefore have to be sold at a discount
from current prices or sold in small lots over an extended period of time), may
be followed by fewer investment research analysts, and may be subject to
The Growth Fund of America -- Page 2
<PAGE>
wider price swings thus creating a greater chance of loss than securities of
larger capitalization companies.
DEBT SECURITIES - Bonds and other debt securities are used by issuers to borrow
money. Issuers pay investors interest and generally must repay the amount
borrowed at maturity. Some debt securities, such as zero coupon bonds, do not
pay current interest, but are purchased at a discount from their face values.
The prices of debt securities fluctuate depending on such factors as interest
rates, credit quality, and maturity. In general their prices decline when
interest rates rise and vice versa.
High-yield, high-risk bonds rated Ba or below by Standard & Poor's Corporation
and BB or below by Moody's Investors Services, Inc. (or unrated but considered
to be of equivalent quality) are described by the rating agencies as speculative
and involve greater risk of default or price changes due to changes in the
issuer's creditworthiness than higher rated bonds, or they may already be in
default. The market prices of these securities may fluctuate more than higher
quality securities and may decline significantly in periods of general economic
difficulty. It may be more difficult to dispose of, or to determine the value
of, high-yield, high-risk bonds.
Certain risk factors relating to "high-yield, high-risk bonds" are discussed
below.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high-risk
bonds can be sensitive to adverse economic changes and political and
corporate developments and may be less sensitive to interest rate changes.
During an economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress that would
adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain
additional financing. In addition, periods of economic uncertainty and
changes can be expected to result in increased volatility of market prices
and yields of high-yield, high-risk bonds.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds, like other bonds, may
contain redemption or call provisions. If an issuer exercises these
provisions in a declining interest rate market, the fund would have to
replace the security with a lower yielding security, resulting in a
decreased return for investors. If the issuer of a bond defaults on its
obligations to pay interest or principal or enters into bankruptcy
proceedings, the fund may incur losses or expenses in seeking recovery of
amounts owed to it.
LIQUIDITY AND VALUATION - There may be little trading in the secondary
market for particular bonds, which may affect adversely the fund's ability
to value accurately or dispose of such bonds. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of high-yield, high-risk bonds,
especially in a thin market.
The Investment Adviser attempts to reduce the risks described above through
diversification of the portfolio and by credit analysis of each issuer as well
as by monitoring broad economic trends and corporate and legislative
developments, but there can be no assurance that it will be successful in doing
so.
WARRANTS AND RIGHTS - The fund may purchase warrants, which may be issued
together with bonds or preferred stocks. Warrants generally entitle the holder
to buy a proportionate amount of common stock at a specified price, usually
higher than the current market price. Warrants may be
The Growth Fund of America -- Page 3
<PAGE>
issued with an expiration date or in perpetuity. Rights are similar to warrants
except that they normally entitle the holder to purchase common stock at a lower
price than the current market price.
INVESTING IN VARIOUS COUNTRIES - Investing outside the U.S. involves special
risks, caused by, among other things: currency controls, fluctuating currency
values; different accounting, auditing, and financial reporting regulations and
practices in some countries; changing local and regional economic, political,
and social conditions; expropriation or confiscatory taxation; greater market
volatility; differing securities market structures; and various administrative
difficulties such as delays in clearing and settling portfolio transactions or
in receiving payment of dividends. However, in the opinion of Capital Research
and Management Company, investing outside the U.S. also can reduce certain
portfolio risks due to greater diversification opportunities.
The risks described above are potentially heightened in connection with
investments in developing countries. Although there is no universally accepted
definition, a developing country is generally considered to be a country which
is in the initial stages of its industrialization cycle with a low per capita
gross national product. For example, political and/or economic structures in
these countries may be in their infancy and developing rapidly. Historically,
the markets of developing countries have been more volatile than the markets of
developed countries. The fund may only invest in securities of issuers in
developing countries to a limited extent.
Additional costs could be incurred in connection with the fund's investment
activities outside the U.S. Brokerage commissions may be higher outside the
U.S., and the fund will bear certain expenses in connection with its currency
transactions. Furthermore, increased custodian costs may be associated with the
maintenance of assets in certain jurisdictions.
RESTRICTED SECURITIES AND LIQUIDITY - The fund may purchase securities subject
to restrictions on resale. All such securities not actively traded will be
considered illiquid unless they have been specifically determined to be liquid
under procedures that have been adopted by the fund's board of directors, taking
into account factors such as the frequency and volume of trading, the commitment
of dealers to make markets and the availability of qualified investors, all of
which can change from time to time. The fund may incur certain additional costs
in disposing of illiquid securities.
U.S. GOVERNMENT SECURITIES - Securities guaranteed by the U.S. Government
include: (1) direct obligations of the U.S. Treasury (such as Treasury bills,
notes and bonds) and (2) federal agency obligations guaranteed as to principal
and interest by the U.S. Treasury. For these securities, the payment of
principal and interest is unconditionally guaranteed by the U.S. Government, and
thus they are of the highest possible credit quality. Such securities are
subject to variations in market value due to fluctuations in interest rates,
but, if held to maturity, will be paid in full.
Certain securities issued by U.S. Government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
Treasury. However, they generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported by
the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality. These agencies and instrumentalities include, but are
not limited to, Farmers Home Administration,
The Growth Fund of America -- Page 4
<PAGE>
Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National
Mortgage Association, Tennessee Valley Authority, and Federal Farm Credit Bank
System.
FORWARD COMMITMENTS - The fund may enter into commitments to purchase or sell
securities at a future date. When the fund agrees to purchase such securities it
assumes the risk of any decline in value of the security beginning on the date
of the agreement. When the fund agrees to sell such securities it does not
participate in further gains or losses with respect to the securities beginning
on the date of the agreement. If the other party to such a transaction fails to
deliver or pay for the securities, the fund could miss a favorable price or
yield opportunity, or could experience a loss.
As the fund's aggregate commitments under these transactions increase, the
opportunity for leverage similarly increases. The fund will not use these
transactions for the purpose of leveraging and will segregate liquid assets
which will be marked to market daily in an amount sufficient to meet its payment
obligations in these transactions. Although these transactions will not be
entered into for leveraging purposes, to the extent the fund's aggregate
commitments under these transactions exceed its segregated assets, the fund
temporarily could be in a leveraged position (because it may have an amount
greater than its net assets subject to market risk). Should market values of the
fund's portfolio securities decline while the fund is in a leveraged position,
greater depreciation of its net assets would likely occur than were it not in
such a position. The fund will not borrow money to settle these transactions and
therefore, will liquidate other portfolio securities in advance of settlement if
necessary to generate additional cash to meet its obligations thereunder.
CASH AND CASH EQUIVALENTS - These securities include (i) commercial paper
(short-term notes up to 9 months in maturity issued by corporations or
governmental bodies), (ii) commercial bank obligations (e.g., certificates of
deposit, bankers' acceptances (time drafts on a commercial bank where the bank
accepts an irrevocable obligation to pay at maturity)), (iii) savings
association and saving bank obligations (e.g., certificates of deposit issued by
savings banks or savings associations), (iv) securities of the U.S. Government,
its agencies or instrumentalities that mature, or may be redeemed, in one year
or less, and (v) corporate bonds and notes that mature, or that may be redeemed,
in one year or less.
The fund may also engage in the following investment practices, although it has
no current intention to do so over the next twelve months:
CURRENCY TRANSACTIONS - The fund can purchase and sell currencies to facilitate
securities transactions and enter into forward currency contracts to protect
against changes in currency exchange rates. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. Forward currency contracts
entered into by the fund will involve the purchase or sale of one currency
against the U.S. dollar. While entering into forward currency transactions could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. The fund will not generally attempt to protect
against all potential changes in exchange rates. The fund will segregate liquid
assets which will be marked to market daily to meet its forward contract
commitments to the extent required by the Securities and Exchange Commission.
The Growth Fund of America -- Page 5
<PAGE>
Certain provisions of the Internal Revenue Code may affect the extent to which
the fund may enter into forward contracts. Such transactions may also affect,
for U.S. federal income tax purposes, the character and timing of income, gain
or loss recognized by the fund.
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
FUNDAMENTAL POLICIES - The fund has adopted the following fundamental policies
and investment restrictions which may not be changed without approval by holders
of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940 ("1940 Act") as the vote of the lesser of (i) 67%
or more of the outstanding voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present in
person or by proxy, or (ii) more than 50% of the outstanding voting securities.
All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.
The fund may not:
1. Purchase the securities of any issuer, except the U.S. Government or any
subdivision thereof, if upon such purchase more than 5% of the value of its
total assets would consist of securities of such issuer.
2. Purchase the securities of companies in a particular industry (other than
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities) if thereafter 25% or more of the value of its total assets
would consist of securities issued by companies in that industry.
3. Purchase more than 10% of the voting or non-voting securities of any one
issuer.
4. Invest more than 15% of the value of its assets in securities that are
illiquid.
5. Purchase securities on margin.
6. Purchase any real estate unless acquired as a result of ownership of
securities or other instruments (this shall not prevent the Fund from investing
in securities or other instruments backed by real estate or securities of
companies engaged in the real estate business).7. Make loans to anyone (the
purchase of a portion of an issue of bonds, debentures or other securities,
whether or not on the original issue of such securities, is not to be considered
the making of a loan).
7. Borrow more than an amount equal to 5% of the value of its total assets,
determined immediately after the time of the borrowing, and then only from
banks, as a temporary measure for extraordinary or emergency purposes.
8. Invest in the securities of any issuer for the purpose of exercising
control or management.
9. Deal in commodities or commodity contracts.
10. Act as underwriter of securities issued by other persons.
The Growth Fund of America -- Page 6
<PAGE>
For purposes of Investment Restriction #4, the fund will not invest more than
15% of its net assets in illiquid securities. Furthermore, Investment
Restriction #9 does not prevent the fund from engaging in transactions
involving forward currency contracts.
NON-FUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval.
1. The fund does not currently intend to sell securities short, except to the
extent that the fund contemporaneously owns, or has the right to acquire at no
additional cost, securities identical to those sold short.
2. The fund may not invest in securities of other investment companies, except
as permitted by the Investment Company Act of 1940, as amended.
FUND ORGANIZATION AND VOTING RIGHTS
The fund, an open-end, diversified management investment company, was organized
as a Delaware corporation on 1958 and reorganized as a Maryland corporation on
September 22, 1983.
All fund operations are supervised by the fund's Board of Directors which meets
periodically and performs duties required by applicable state and federal laws.
Members of the board who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
fund as described in "Directors and Director Compensation" below. They may elect
to defer all or a portion of these fees through a deferred compensation plan in
effect for the fund.
The fund currently has two classes of shares -- Class A and Class B. The shares
of each class represent an interest in the same investment portfolio. Each
class has equal rights as to voting, redemption, dividends and liquidation,
except that each class bears different distribution expenses and may bear
different transfer agent fees and other expenses properly attributable to the
particular class as approved by the Board of Directors. Class A and Class B
shareholders have exclusive voting rights with respect to the rule 12b-1 Plans
adopted in connection with the distribution of shares. Shares of all classes of
the fund vote together on matters that affect all classes in substantially the
same manner. Each class may have separate voting rights on matters in which the
interests of one class are different from interests of another class. Each
class votes as a class on matters that affect that class alone.
The fund does not hold annual meetings of shareholders. However, significant
matters which require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the fund will hold a meeting at which any member of the board could be removed
by a majority vote.
The Growth Fund of America -- Page 7
<PAGE>
FUND DIRECTORS AND OFFICERS
Directors and Director Compensation
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE (INCLUDING VOLUNTARILY
COMPENSATION DEFERRED
(INCLUDING VOLUNTARILY COMPENSATION/1/) FROM
DEFERRED ALL FUNDS MANAGED BY
COMPENSATION/1/) CAPITAL RESEARCH AND
FROM THE FUND MANAGEMENT COMPANY
POSITION DURING FISCAL YEAR OR ITS AFFILIATES/2/ FOR THE
WITH PRINCIPAL OCCUPATION(S) DURING ENDED YEAR ENDED AUGUST 31, 1999
NAME, ADDRESS AND AGE REGISTRANT PAST 5 YEARS AUGUST 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Guilford C. Babcock Director Associate Professor of Finance, $ 20,500 $ 38,500
1500 Park Place School of Business
San Marino, CA 91108 Administration, University of
Age: 68 Southern California
- ---------------------------------------------------------------------------------------------------------------------------------
+ James E. Drasdo President Senior Vice President, Capital None/5/ None/5/
333 South Hope Street and Research and Management Company
Los Angeles, CA 90071 Director
Age: 53
- ---------------------------------------------------------------------------------------------------------------------------------
Robert A. Fox Director President and Chief Executive $19,000/4/ $126,500/4/
P.O. Box 457 Officer, Foster Farms, Inc.
1000 Davis Street
Livingston, CA 95333
Age: 62
- ---------------------------------------------------------------------------------------------------------------------------------
Roberta L. Hazard Director Consultant; Rear Admiral, $ 20,500 $ 78,000
1419 Audmar Drive United States Navy (Retired)
McLean, VA 22101
Age: 65
- ---------------------------------------------------------------------------------------------------------------------------------
Leonade D. Jones Director Management consultant; former $ 21,833 $ 138,000
1536 Los Montes Drive Treasurer, The Washington Post
Burlingame, CA 94010 Company
Age: 52
- ---------------------------------------------------------------------------------------------------------------------------------
John G. McDonald Director The IBJ Professor of Finance, $ 27,400 $ 256,250
Graduate School of Graduate School of Business,
Business Stanford University
Stanford University
Stanford, CA 94305
Age: 62
- ---------------------------------------------------------------------------------------------------------------------------------
Gail L. Neale Director President, The Lovejoy $ 26,750 $ 91,500
The Lovejoy Consulting Consulting Group, Inc.; former
Group, Inc. Executive Vice President,
154 Prospect Parkway Salzburg Seminar
Burlington, VT 05401
Age: 65
- ---------------------------------------------------------------------------------------------------------------------------------
+ James W. Ratzlaff Director Senior Partner, The Capital None/5/ None/5/
333 South Hope Street Group Partners L.P.
Los Angeles, CA 90071
Age: 63
- ---------------------------------------------------------------------------------------------------------------------------------
Henry E. Riggs Director President, Keck Graduate $25,400/4/ $104,450/4/
Keck Graduate Institute Institute of Applied Life
of Sciences; former President and
Applied Life Science Professor of Engineering,
535 Watson Drive Harvey Mudd College
Claremont, CA 91711
Age: 65
- ---------------------------------------------------------------------------------------------------------------------------------
+ James F. Rothenberg Chairman President and Director, Capital None/5/ None/5/
333 South Hope Street of the Research and Management Company
Los Angeles, CA 90071 Board
Age: 52
- ---------------------------------------------------------------------------------------------------------------------------------
Patricia K. Woolf Director Private investor; Lecturer, $ 25,900 $ 138,950
506 Quaker Road Department of Molecular
Princeton, NJ 08540 Biology, Princeton University;
Age: 65 Corporate Director
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER
OF FUND
BOARDS
ON WHICH
DIRECTOR
NAME, ADDRESS AND AGE SERVES/3/
- -----------------------------------------------------
<S> <C>
Guilford C. Babcock 2
1500 Park Place
San Marino, CA 91108
Age: 68
- -----------------------------------------------------
+ James E. Drasdo 2
333 South Hope Street
Los Angeles, CA 90071
Age: 53
- -----------------------------------------------------
Robert A. Fox 6
P.O. Box 457
1000 Davis Street
Livingston, CA 95333
Age: 62
- -----------------------------------------------------
Roberta L. Hazard 4
1419 Audmar Drive
McLean, VA 22101
Age: 65
- -----------------------------------------------------
Leonade D. Jones 6
1536 Los Montes Drive
Burlingame, CA 94010
Age: 52
- -----------------------------------------------------
John G. McDonald 8
Graduate School of
Business
Stanford University
Stanford, CA 94305
Age: 62
- -----------------------------------------------------
Gail L. Neale 5
The Lovejoy Consulting
Group, Inc.
154 Prospect Parkway
Burlington, VT 05401
Age: 65
- -----------------------------------------------------
+ James W. Ratzlaff 8
333 South Hope Street
Los Angeles, CA 90071
Age: 63
- -----------------------------------------------------
Henry E. Riggs 5
Keck Graduate Institute
of
Applied Life Science
535 Watson Drive
Claremont, CA 91711
Age: 65
- -----------------------------------------------------
+ James F. Rothenberg 3
333 South Hope Street
Los Angeles, CA 90071
Age: 52
- -----------------------------------------------------
Patricia K. Woolf 6
506 Quaker Road
Princeton, NJ 08540
Age: 65
- -----------------------------------------------------
</TABLE>
The Growth Fund of America -- Page 8
<PAGE>
The Growth Fund of America -- Page 9
<PAGE>
1 Amounts may be deferred by eligible Directors under a non-qualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the Directors.
2 Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
Management Trust of America, Capital Income Builder, Inc., Capital World
Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
The Income Fund of America, Inc., Intermediate Bond Fund of America, The
Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc.,
SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
Money Fund of America, U.S. Government Securities Fund and Washington Mutual
Investors Fund, Inc. Capital Research and Management Company also manages
American Variable Insurance Series and Anchor Pathway Fund, which serve as the
underlying investment vehicle for certain variable insurance contracts; and
Endowments, whose shareholders are limited to (i) any entity exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended ("501(c)(3) organization"); (ii) any trust, the present or future
beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
formed for the primary purpose of benefiting a 501(c)(3) organization. An
affiliate of
The Growth Fund of America -- Page 10
<PAGE>
Capital Research and Management Company, Capital International, Inc., manages
Emerging Markets Growth Fund, Inc.
3 Includes funds managed by Capital Research and Management Company and
affiliates.
4 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) as of fiscal year
ended August 31, 1999 for participating Directors is as follows: Robert A. Fox
($237,205), Leonard D. Jones ($88,380), John G. McDonald ($132,051) and Henry
E. Riggs ($202,972). Amounts deferred and accumulated earnings thereon are not
funded and are general unsecured liabilities of the fund until paid to the
Directors.
5 James E. Drasdo, James W. Ratzlaff and James F. Rothenberg are affiliated with
the Investment Adviser and, accordingly, receive no compensation from the
fund.
The Growth Fund of America -- Page 11
<PAGE>
OFFICERS
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS AGE WITH REGISTRANT PAST 5 YEARS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Gordon Crawford 53 Senior Vice Senior Vice President and
333 South Hope Street President Director, Capital Research and
Los Angeles, CA 90071 Management Company
- -------------------------------------------------------------------------------
Paul G. Haaga, Jr. 51 Senior Vice Executive Vice President and
333 South Hope Street President Director,
Los Angeles, CA 90071 Capital Research and Management
Company
- -------------------------------------------------------------------------------
Donald D. O'Neal 39 Senior Vice Vice President, Capital Research
P.O. Box 7650 President and Management Company
San Francisco, CA
94120
- -------------------------------------------------------------------------------
Richard M. Beleson 46 Vice President Senior Vice President and
P.O. Box 7650 Director, Capital Research
San Francisco, CA Company
94120
- -------------------------------------------------------------------------------
Michael T. Kerr 40 Vice President Executive Vice President and
333 South Hope Street Research Director, Capital
Los Angeles, CA 90071 Research
and Management Company
- -------------------------------------------------------------------------------
Bradley J. Vogt 35 Vice President Vice President and Director,
333 South Hope Street Capital
Los Angeles, CA 90071 Research Company
- -------------------------------------------------------------------------------
Julie F. Williams 51 Secretary Vice President - Fund Business
333 South Hope Street Management Group, Capital
Los Angeles, CA 90071 Research and Management Company
- -------------------------------------------------------------------------------
Sheryl F. Johnson 31 Treasurer Vice President - Fund Business
5300 Robin Hood Road Management Group, Capital
Norfolk, VA 23513 Research and Management Company
- -------------------------------------------------------------------------------
David A. Pritchett 33 Assistant Vice President - Fund Business
5300 Robin Hood Road Treasurer Management Group, Capital
Norfolk, VA 23513 Research and Management Company
- -------------------------------------------------------------------------------
</TABLE>
All of the officers listed are officers, and/or directors/trustees of one or
more of the other funds for which Capital Research and Management Company serves
as Investment Adviser.
No compensation is paid by the fund to any officer or Director who is a
director, officer or employee of the Investment Adviser or affiliated companies.
The fund pays annual fees of $14,000 to Directors who are not affiliated with
the Investment Adviser, plus $1,000 for each Board of Directors meeting
attended, plus $500 for each meeting attended as a member of a committee of the
Board of Directors. In lieu of meeting attendance fees, members of the Proxy
Committee receive an annual retainer fee of $4,000 per annum from the fund if
they serve as a member of four proxy committees, or $5,500 if they serve as a
member of two proxy committees, meeting jointly.
The Growth Fund of America -- Page 12
<PAGE>
No pension or retirement benefits are accrued as part of fund expenses. The
Directors may elect, on a voluntary basis, to defer all or a portion of their
fees through a deferred compensation plan in effect for the fund. The fund also
reimburses certain expenses of the Directors who are not affiliated with the
Investment Adviser. As of January 1, 2000 the officers and Directors of the fund
and their families, as a group, owned beneficially or of record less than 1% of
the outstanding shares of the fund.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains research
facilities in the U.S. and abroad (Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Hong Kong, Singapore and Tokyo), with a staff
of professionals, many of whom have a number of years of investment experience.
The Investment Adviser is located at 333 South Hope Street, Los Angeles, CA
90071, and at 135 South State College Boulevard, Brea, CA 92821. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world. The
Investment Adviser believes that it is able to attract and retain quality
personnel. The Investment Adviser is a wholly owned subsidiary of The Capital
Group Companies, Inc.
The Investment Adviser is responsible for managing more than $200 billion of
stocks, bonds and money market instruments and serves over eight million
investors of all types throughout the world. These investors include privately
owned businesses and large corporations as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the Investment Adviser will
continue in effect until October 31, 2000, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (i) the Board of Directors, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (ii) the vote of a majority of Directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the Investment Adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the fund, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies, and postage used at
the offices of the fund. The fund pays all expenses not assumed by the
Investment Adviser, including, but not limited to, custodian, stock transfer and
dividend disbursing 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 and redemption of shares of the
fund (including stock certificates, registration and qualification fees and
expenses); expenses pursuant to the fund's Plan of Distribution (described
below); legal and auditing expenses; compensation, fees, and expenses paid to
directors
The Growth Fund of America -- Page 13
<PAGE>
unaffiliated with the Investment Adviser; association dues; costs of stationery
and forms prepared exclusively for the fund; and costs of assembling and storing
shareholder account data.
The management fee is based upon the annual rates of 0.50% on the first $1
billion of the fund's net assets, 0.40% on net assets in excess of $1 billion
but not exceeding $2 billion, 0.37% on net assets in excess of $2 billion but
not exceeding $3 billion, 0.35% on net assets in excess of $3 billion but not
exceeding $5 billion, 0.33% on net assets in excess of $5 billion but not
exceeding $8 billion, 0.315% on net assets in excess of $8 billion but not
exceeding $13 billion, 0.30% on net assets in excess of $13 billion but not
exceeding $21 billion and 0.29% on net assets in excess of $21 billion.
The Agreement provides for a management fee reduction to the extent that the
annual ordinary operating expenses of the fund's Class A shares exceed 1-1/2% of
the first $30 million of the net assets of the fund and 1% of the net assets in
excess thereof. Expenses which are not subject to this limitation are interest,
taxes, and extraordinary expenses. Expenditures, including costs incurred in
connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. To the extent the fund's management fee must be waived due to Class
A share expense ratios exceeding the above limit, management fees will be
reduced similarly for all classes of shares of the fund or other Class A fees
will be waived in lieu of management fees.
For the fiscal years ended August 31, 1999, 1998, and 1997, the Investment
Adviser received advisory fees of $57,694,000, $45,511,000, and $36,531,000,
respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The Principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513. The fund has adopted Plans of
Distribution (the Plans), pursuant to rule 12b-1 under the 1940 Act. The
Principal Underwriter receives amounts payable pursuant to the Plans (see below)
and commissions consisting of that portion of the sales charge remaining after
the discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of Class A shares during the fiscal year ended
August 31, 1999 amounted to $11,334,000 after allowance of $55,805,000 to
dealers.
During the fiscal years ended 1998 and 1997 the Principal Underwriter retained
$6,615,000 and $4,855,000, respectively after an allowance of $32,726,000 and
$24,257,000 to dealers, respectively.
As required by rule 12b-1 and the 1940 Act, the Plans (together with the
Principal Underwriting Agreement) have been approved by the full Board of
Directors and separately by a majority of the directors who are not "interested
persons" of the fund and who have no direct or indirect financial interest in
the operation of the Plans or the Principal Underwriting Agreement. The officers
and directors who are "interested persons" of the fund may be considered to have
a direct or indirect financial interest in the operation of the Plans due to
present or past affiliations with the Investment Adviser and related companies.
Potential benefits of the Plans to the fund include shareholder services,
savings to the fund in transfer agency costs, savings to the fund in advisory
fees and other expenses, benefits to the investment process from growth or
stability of
The Growth Fund of America -- Page 14
<PAGE>
assets and maintenance of a financially healthy management organization. The
selection and nomination of directors who are not "interested persons" of the
fund are committed to the discretion of the directors who are not "interested
persons" during the existence of the Plans. The Plans are reviewed quarterly and
must be renewed annually by the Board of Directors.
Under the Plans the fund may expend up to 0.25% of its net assets annually for
Class A shares and up to 1.00% of its net assets annually for Class B shares to
finance any activity which is primarily intended to result in the sale of fund
shares, provided the fund's Board of Directors has approved the category of
expenses for which payment is being made. For Class A shares these include up to
0.25% in service fees for qualified dealers and dealer commissions and
wholesaler compensation on sales of shares exceeding $1 million purchased
without a sales charge (including purchases by employer-sponsored defined
contribution-type retirement plans investing $1 million or more or with 100 or
more eligible employees, rollover IRA accounts as described in "Individual
Retirement Account (IRA) Rollovers" below, and retirement plans, endowments or
foundations with $50 million or more in assets). For Class B shares these
include 0.25% in service fees for qualified dealers and 0.75% in payments to the
Principal Underwriter for financing commissions paid to qualified dealers
selling Class B shares.
Commissions on sales of Class A shares exceeding $1 million (including purchases
by any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code, including any
"401(k)" plan with 100 or more eligible employees) in excess of the Class A Plan
limitation not reimbursed during the most recent fiscal quarter are recoverable
for five quarters, provided that such commissions do not exceed the annual
expense limit. After five quarters, commissions are not recoverable.
During the fiscal year ended August 31, 1999, the fund paid or accrued
$42,790,000 for compensation to dealers or the Principal Underwriter under the
Plan for Class A shares. As of August 31, 1999, accrued and unpaid distribution
expenses were $10,210,000.
OTHER COMPENSATION TO DEALERS - The Principal Underwriter, at its expense (from
a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. The Principal Underwriter will, on an annual basis,
determine the advisability of continuing these payments.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS - The fund intends to follow the practice of distributing
substantially all of its investment company taxable income which includes any
excess of net realized short-term gains over net realized long-term capital
losses. Additional distributions may be made, if necessary. The fund also
intends to follow the practice of distributing the entire excess of net realized
long-term capital gains over net realized short-term capital losses. However,
the fund may retain all or part of such gain for reinvestment, after paying the
related federal taxes for which shareholders may then be able to claim a credit
against their federal tax liability. If the fund does not distribute the amount
of capital gain and/or net investment income required to be distributed by an
excise tax provision of the Code, the fund may be subject to that excise tax. In
certain circumstances, the fund may determine that it is in the interest of
shareholders to distribute less than the required amount. In this case, the fund
will pay any income or excise taxes due.
The Growth Fund of America -- Page 15
<PAGE>
Dividends will be reinvested in shares of the fund unless shareholders indicate
in writing that they wish to receive them in cash or in shares of other American
Funds, as provided in the prospectus.
TAXES - The fund intends to elect to be treated as a regulated investment
company under Subchapter M of the Code. A regulated investment company
qualifying under Subchapter M of the Code is required to distribute to its
shareholders at least 90% of its investment company taxable income (including
the excess of net short-term capital gain over net long-term capital losses) and
generally is not subject to federal income tax to the extent that it distributes
annually 100% of its investment company taxable income and net realized capital
gains in the manner required under the Code. The fund intends to distribute
annually all of its investment company taxable income and net realized capital
gains and therefore does not expect to pay federal income tax, although in
certain circumstances the fund may determine that it is in the interest of
shareholders to distribute less than that amount.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gain (both long-term and short-term)
for the one-year period ending on October 31 (as though the one-year period
ending on October 31 were the regulated investment company's taxable year), and
(iii) the sum of any untaxed, undistributed net investment income and net
capital gains of the regulated investment company for prior periods. The term
"distributed amount" generally means the sum of (i) amounts actually distributed
by the fund from its current year's ordinary income and capital gain net income
and (ii) any amount on which the fund pays income tax during the periods
described above. The fund intends to distribute net investment income and net
capital gains so as to minimize or avoid the excise tax liability.
Investment company taxable income generally includes dividends, interest, net
short-term capital gains in excess of net long-term capital losses, and certain
foreign currency gains, if any, less expenses and certain foreign currency
losses, if any. Net capital gains for a fiscal year are computed by taking into
account any capital loss carry-forward of the fund.
If any net long-term capital gains in excess of net short-term capital losses
are retained by the fund for reinvestment, requiring federal income taxes to be
paid thereon by the fund, the fund intends to elect to treat such capital gains
as having been distributed to shareholders. As a result, each shareholder will
report such capital gains as long-term capital gains taxable to individual
shareholders at a maximum 20% capital gains rate, will be able to claim a pro
rata share of federal income taxes paid by the fund on such gains as a credit
against personal federal income tax liability, and will be entitled to increase
the adjusted tax basis on fund shares by the difference between a pro rata share
of the retained gains and their related tax credit.
Distributions of investment company taxable income are taxable to shareholders
as ordinary income.
Distributions of the excess of net long-term capital gains over net short-term
capital losses which the fund properly designates as "capital gain dividends"
generally will be taxable to individual shareholders at a maximum 20% capital
gains rate, regardless of the length of time the shares of the fund have been
held by such shareholders. Such distributions are not eligible for the
The Growth Fund of America -- Page 16
<PAGE>
dividends-received deduction. Any loss realized upon the redemption of shares
held at the time of redemption for six months or less from the date of their
purchase will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain during such six-month
period.
Distributions of investment company taxable income and net realized capital
gains to individual shareholders will be taxable as described above, whether
received in shares or in cash. Shareholders electing to receive distributions in
the form of additional shares will have a cost basis for federal income tax
purposes in each share so received equal to the net asset value of a share on
the reinvestment date.
All distributions of investment company taxable income and net realized capital
gain, whether received in shares or in cash, must be reported by each
shareholder subject to tax on his or her federal income tax return. Dividends
and capital gains distributions declared in October, November or December and
payable to shareholders of record in such a month will be deemed to have been
received by shareholders on December 31 if paid during January of the following
year. Redemptions of shares, including exchanges for shares of another American
Fund, may result in tax consequences (gain or loss) to the shareholder and must
also be reported on the shareholder's federal income tax return.
Dividends from domestic corporations are expected to comprise some portion of
the fund's gross income. To the extent that such dividends constitute any of the
fund's gross income, a portion of the income distributions of the fund will be
eligible for the deduction for dividends received by corporations. Shareholders
will be informed of the portion of dividends which so qualify. The
dividends-received deduction is reduced to the extent that either the fund
shares, or the underlying shares of stock held by the fund, with respect to
which dividends are received, are treated as debt-financed under federal income
tax law and is eliminated if the shares are deemed to have been held by the
shareholder or the fund, as the case may be, for less than 46 days.
Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of investment
capital. For this reason, investors should consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will then receive a partial return of investment
capital upon the distribution, which will nevertheless be taxable to them.
A portion of the difference between the issue price of zero coupon securities
and their face value ("original issue discount") is considered to be income to
the fund each year, even though the fund will not receive cash interest payments
from these securities. This original issue discount (imputed income) will
comprise a part of the investment company taxable income of the fund which must
be distributed to shareholders in order to maintain the qualification of the
fund as a regulated investment company and to avoid federal income tax at the
level of the fund. Shareholders will be subject to income tax on such original
issue discount, whether or not they elect to receive their distributions in
cash.
The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund
The Growth Fund of America -- Page 17
<PAGE>
shares, except in the case of certain exempt shareholders. Under the backup
withholding provisions of Section 3406 of the Code, distributions of investment
company taxable income and capital gains and proceeds from the redemption or
exchange of the shares of a regulated investment company may be subject to
withholding of federal income tax at the rate of 31% in the case of non-exempt
U.S. shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if the fund
is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.
Shareholders of the fund may be subject to state and local taxes on
distributions received from the fund and on redemptions of the fund's shares.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. In January of each year fund shareholders will
receive a statement of the federal income tax status of all distributions.
The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons, i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates. Each shareholder who is not
a U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or at a lower rate under an
applicable income tax treaty) on dividend income received by him or her.
Dividend and interest income received by the fund from sources outside the U.S.
may be subject to withholding and other taxes imposed by such foreign
jurisdictions. Tax conventions between certain countries and the U.S. may reduce
or eliminate these foreign taxes, however. Most foreign countries do not impose
taxes on capital gains in respect of investments by foreign investors.
The fund may make the election permitted under Section 853 of the Code so that
shareholders may (subject to limitations) be able to claim a credit or deduction
on their federal income tax returns for, and will be required to treat as part
of the amounts distributed to them, their pro rata portion of qualified taxes
paid by the Fund to foreign countries (which taxes relate primarily to
investment income). The fund may make an election under Section 853 of the Code,
provided that more than 50% of the value of the total assets of the fund at the
close of the taxable year consists of securities in foreign corporations. The
foreign tax credit available to shareholders is subject to certain limitations
imposed by the Code.
Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the fund accrues receivables or liabilities
denominated in a foreign currency and the time the fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain futures contracts, forward
contracts and options, gains or losses attributable to fluctuations in the value
of foreign currency between the date of acquisition of the security or contract
and the date of disposition are also treated as ordinary gain or loss. These
gains or losses, referred to under the Code as "Section
The Growth Fund of America -- Page 18
<PAGE>
988" gains or losses, may increase or decrease the amount of the fund's
investment company taxable income to be distributed to its shareholders as
ordinary income.
If the fund invests in stock of certain passive foreign investment companies,
the fund may be subject to U.S. federal income taxation on a portion of any
"excess distribution" with respect to, or gain from the disposition of, such
stock. The tax would be determined by allocating such distribution or gain
ratably to each day of the fund's holding period for the stock. The distribution
or gain so allocated to any taxable year of the fund, other than the taxable
year of the excess distribution or disposition, would be taxed to the fund at
the highest ordinary income rate in effect for such year, and the tax would be
further increased by an interest charge to reflect the value of the tax deferral
deemed to have resulted from the ownership of the foreign company's stock. Any
amount of distribution or gain allocated to the taxable year of the distribution
or disposition would be included in the fund's investment company taxable income
and, accordingly, would not be taxable to the fund to the extent distributed by
the fund as a dividend to its shareholders.
To avoid such tax and interest, the fund intends to elect to treat these
securities as sold on the last day of its fiscal year and recognize any gains
for tax purposes at that time. Under this election, deductions for losses are
allowable only to the extent of any prior recognized gains, and both gains and
losses will be treated as ordinary income or loss. The fund will be required to
distribute any resulting income, even though it has not sold the security and
received cash to pay such distributions.
Shareholders should consult their tax advisers about the application of the
provisions of tax law described in this statement of additional information in
light of their particular tax situations.
The Growth Fund of America -- Page 19
<PAGE>
PURCHASE OF SHARES
<TABLE>
<CAPTION>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
- -------------------------------------------------------------------------------
<S> <C> <C>
See "Investment $50 minimum (except where a
Purchase Minimums" for lower minimum is noted under
initial investment "Investment Purchase
minimums. Minimums").
- -------------------------------------------------------------------------------
By contacting Visit any investment Mail directly to your
your investment dealer dealer who is investment dealer's address
registered in the printed on your account
state where the statement.
purchase is made and
who has a sales
agreement with
American Funds
Distributors.
- -------------------------------------------------------------------------------
By mail Make your check Fill out the account additions
payable to the fund form at the bottom of a recent
and mail to the account statement, make your
address indicated on check payable to the fund,
the account write your account number on
application. Please your check, and mail the check
indicate an investment and form in the envelope
dealer on the account provided with your account
application. statement.
- -------------------------------------------------------------------------------
By telephone Please contact your Complete the "Investments by
investment dealer to Phone" section on the account
open account, then application or American
follow the procedures FundsLink Authorization Form.
for additional Once you establish the
investments. privilege, you, your financial
advisor or any person with your
account information can call
American FundsLine(R) and make
investments by telephone
(subject to conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
- -------------------------------------------------------------------------------
By computer Please contact your Complete the American FundsLink
investment dealer to Authorization Form. Once you
open account, then established the privilege, you,
follow the procedures your financial advisor or any
for additional person with your account
investments. information may access American
FundsLine OnLine(R) on the
Internet and make investments
by computer (subject to
conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
- -------------------------------------------------------------------------------
By wire Call 800/421-0180 to Your bank should wire your
obtain your account additional investments in the
number(s), if same manner as described under
necessary. Please "Initial Investment."
indicate an investment
dealer on the account.
Instruct your bank to
wire funds to:
Wells Fargo Bank
155 Fifth Street,
Sixth Floor
San Francisco, CA
94106
(ABA#121000248)
For credit to the
account of:
American Funds Service
Company a/c#
4600-076178
(fund name)
(your fund acct. no.)
- -------------------------------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY
PURCHASE ORDER.
- -------------------------------------------------------------------------------
</TABLE>
PURCHASE MINIMUMS - The minimum initial investment for all funds in The American
Funds Group, except the money market funds and the state tax-exempt funds, is
$250. The minimum initial investment for the money market funds (The Cash
Management Trust of America, The Tax--
The Growth Fund of America -- Page 20
<PAGE>
Exempt Money Fund of America, and The U.S. Treasury Money Fund of America) and
the state tax-exempt funds (The Tax-Exempt Fund of California, The Tax-Exempt
Fund of Maryland, and The Tax-Exempt Fund of Virginia) is $1,000. Minimums are
reduced to $50 for purchases through "Automatic Investment Plans" (except for
the money market funds) or to $25 for purchases by retirement plans through
payroll deductions and may be reduced or waived for shareholders of other funds
in The American Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS RETIREMENT
PLAN INVESTMENTS. The minimum is $50 for additional investments (except as noted
above).
PURCHASE MAXIMUM FOR CLASS B SHARES -- the maximum purchase order for Class B
shares for all American Funds is $100,000. For investments above $100,000 Class
A shares are generally a less expensive option over time due to sales charge
reductions or waivers.
FUND NUMBERS - Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/ (see description below):
<TABLE>
<CAPTION>
FUND FUND
NUMBER NUMBER
FUND CLASS A CLASS B
---- ------- -------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . 02 202
American Balanced Fund/(R)/ . . . . . . . . . . . . . . 11 211
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . 03 203
Capital Income Builder/(R)/ . . . . . . . . . . . . . . 12 212
Capital World Growth and Income Fund/SM/ . . . . . . . 33 233
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . 16 216
Fundamental Investors/SM/ . . . . . . . . . . . . . . . 10 210
The Growth Fund of America/(R)/ . . . . . . . . . . . . 05 205
The Income Fund of America/(R)/ . . . . . . . . . . . . 06 206
The Investment Company of America/(R)/ . . . . . . . . 04 204
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . 14 214
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . 07 207
New World Fund/SM/ . . . . . . . . . . . . . . . . . . 36 236
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . 35 235
Washington Mutual Investors Fund/SM/ . . . . . . . . . 01 201
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . 40 240
American High-Income Trust/SM/ . . . . . . . . . . . . 21 221
The Bond Fund of America/SM/ . . . . . . . . . . . . . 08 208
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . 31 231
Intermediate Bond Fund of America/SM/ . . . . . . . . . 23 223
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . 43 243
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . 19 219
The Tax-Exempt Fund of California/(R)/* . . . . . . . . 20 220
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . 24 224
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . 25 225
U.S. Government Securities Fund/SM/ . . . . . . . . . . 22 222
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . 09 209
The Tax-Exempt Money Fund of America/SM/ . . . . . . . 39 N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . 49 N/A
___________
*Available only in certain states.
</TABLE>
The Growth Fund of America -- Page 21
<PAGE>
SALES CHARGES
CLASS A SALES CHARGES -- The sales charges you pay when purchasing Class A
shares of stock, stock/bond, and bond funds of The American Funds Group are set
forth below. The money market funds of The American Funds Group are offered at
net asset value. (See "Fund Numbers" for a listing of the funds.)
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE
AT THE OFFERING PRICE NET AMOUNT OFFERING OFFERING
-INVESTED- PRICE PRICE
- ------------------------------------------ -------- ----- -----
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $25,000 . . . . . . . . . 6.10% 5.75% 5.00%
$25,000 but less than $50,000 . . . 5.26 5.00 4.25
$50,000 but less than $100,000. . 4.71 4.50 3.75
BOND FUNDS
Less than $100,000 . . . . . . . . 3.90 3.75 3.00
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000 . 3.63 3.50 2.75
$250,000 but less than $500,000 . 2.56 2.50 2.00
$500,000 but less than $750,000 . 2.04 2.00 1.60
$750,000 but less than $1 million 1.52 1.50 1.20
$1 million or more . . . . . . . . . . none none (see below)
- -----------------------------------------------------------------------------
</TABLE>
CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES - Investments of $1 million or
more are sold with no initial sales charge. HOWEVER, A 1% CONTINGENT DEFERRED
SALES CHARGE (CDSC) MAY BE IMPOSED IF REDEMPTIONS ARE MADE WITHIN ONE YEAR OF
PURCHASE. Employer-sponsored defined contribution-type plans investing $1
million or more, or with 100 or more eligible employees, and Individual
Retirement Account rollovers from retirement plan assets invested in the
American Funds (see "Individual Retirement Account (IRA) Rollovers" below) may
invest with no sales charge and are not subject to a contingent deferred sales
charge. Investments made by investors in certain qualified fee-based programs,
and retirement plans, endowments or foundations with $50 million or more in
assets may also be made with no sales charge and are
The Growth Fund of America -- Page 22
<PAGE>
not subject to a CDSC. A dealer concession of up to 1% may be paid by the fund
under its Plan of Distribution on investments made with no initial sales charge.
In addition, Class A shares of the stock, stock/bond and bond funds may be sold
at net asset value to:
(1) current or retired directors, trustees, officers and advisory board members
of, and certain lawyers who provide services to the funds managed by Capital
Research and Management Company, employees of Washington Management Corporation,
employees and partners of The Capital Group Companies, Inc. and its affiliated
companies, certain family members of the above persons, and trusts or plans
primarily for such persons;
(2) current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such dealers) and plans
for such persons or the dealers;
(3) companies exchanging securities with the fund through a merger, acquisition
or exchange offer;
(4) trustees or other fiduciaries purchasing shares for certain retirement
plans of organizations with retirement plan assets of $50 million or more;
(5) insurance company separate accounts;
(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.; and
(7) The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation. Shares are offered at net asset value to these persons
and organizations due to anticipated economies in sales effort and expense.
CONTINGENT DEFERRED SALES CHARGE ON CLASS A SHARES -- A contingent deferred
sales charge of 1% applies to redemptions made from funds, other than the money
market funds, within 12 months following Class A share purchases of $1 million
or more made without an initial sales charge. The charge is 1% of the lesser of
the value of the shares redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares. Shares held the longest
are assumed to be redeemed first for purposes of calculating this CDSC. The CDSC
may be waived in certain circumstances. See "CDSC Waivers for Class A Shares"
below.
DEALER COMMISSIONS ON CLASS A SHARES - The following commissions (up to 1%) will
be paid to dealers who initiate and are responsible for purchases of $1 million
or more, for purchases by any employer-sponsored defined contribution plan
investing $1 million or more, or with 100 or more eligible employees, IRA
rollover accounts (as described in "Individual Retirement Account (IRA)
Rollovers" below), and for purchases made at net asset value by certain
retirement plans, endowments and foundations with collective assets of $50
million or more: 1.00% on amounts of $1 million to $4 million, 0.50% on amounts
over $4 million to $10 million, and 0.25% on amounts over $10 million.
The Growth Fund of America -- Page 23
<PAGE>
CLASS B SHARES
Class B shares are sold without any initial sales charge. However, a CDSC may
be applied to shares you sell within six years of purchase, as shown in the
table below:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
ON SHARES SOLD WITHIN YEAR AS A % OF SHARES BEING SOLD
------------------------------------------------------------------------------
<S> <C>
1 5.00%
2 4.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
</TABLE>
There is no CDSC on appreciation in share value above the initial purchase price
or on shares acquired through reinvestment of dividends or capital gain
distributions. In addition, the CDSC may be waived in certain circumstances.
See "CDSC Waivers for Class B shares" below. The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less. In processing redemptions of Class B shares, shares that are not subject
to any CDSC will be redeemed first and then shares that you have owned the
longest during the six-year period. CLASS B SHARES ARE NOT AVAILABLE TO CERTAIN
RETIREMENT PLANS, INCLUDING GROUP RETIREMENT PLANS SUCH AS 401(K) PLANS,
EMPLOYER-SPONSORED 403(B) PLANS, AND MONEY PURCHASE PENSION AND PROFIT SHARING
PLANS.
CONVERSION OF CLASS B SHARES TO CLASS A SHARES -- Class B shares automatically
convert to Class A shares on the first Friday of the month of the eight-year
anniversary of the purchase date (if the first Friday is not a business day,
shares will automatically convert on the next Friday of the month). The
conversion of Class B shares to Class A shares after eight years is subject to
the continuing availability of a private letter ruling from the Internal Revenue
Service, or an opinion of counsel or tax adviser, to the effect that the
conversion of Class B shares is not subject to federal income tax. If such
private letter ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. At your
option, Class B shares may still be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee; HOWEVER, SUCH AN EXCHANGE COULD CONSTITUTE A TAXABLE EVENT FOR
YOU, AND ABSENT SUCH AN EXCHANGE, CLASS B SHARES WOULD CONTINUE TO BE SUBJECT TO
HIGHER EXPENSES FOR LONGER THAN EIGHT YEARS.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCING YOUR CLASS A SALES CHARGE - You and your "immediate family" (your
spouse and your children under age 21) may combine investments to reduce your
costs. You must let your investment dealer or American Funds Service Company
(the "Transfer Agent") know if you qualify for a reduction in your sales charge
using one or any combination of the methods described below.
The Growth Fund of America -- Page 24
<PAGE>
STATEMENT OF INTENTION - You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same
sales charge as if all shares had been purchased at once. This includes
purchases made during the previous 90 days, but does not include
appreciation of your investment or reinvested distributions. The reduced
sales charges and offering prices set forth in the Prospectus apply to
purchases of $25,000 or more made within a 13-month period subject to the
following statement of intention (the "Statement"). The Statement is not a
binding obligation to purchase the indicated amount. When a shareholder
elects to utilize a Statement in order to qualify for a reduced sales
charge, shares equal to 5% of the dollar amount specified in the Statement
will be held in escrow in the shareholder's account out of the initial
purchase (or subsequent purchases, if necessary) by the Transfer Agent. All
dividends and any capital gain distributions on shares held in escrow will
be credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the
specified 13-month period, the purchaser will remit to the Principal
Underwriter the difference between the sales charge actually paid and the
sales charge which would have been paid if the total of such purchases had
been made at a single time. If the difference is not paid by the close of
the period, the appropriate number of shares held in escrow will be
redeemed to pay such difference. If the proceeds from this redemption are
inadequate, the purchaser will be liable to the Principal Underwriter for
the balance still outstanding. The Statement may be revised upward at any
time during the 13-month period, and such a revision will be treated as a
new Statement, except that the 13-month period during which the purchase
must be made will remain unchanged. Existing holdings eligible for rights
of accumulation (see below), as well as purchases of Class B shares, and
any individual investments in American Legacy variable annuities and
variable life insurance policies (American Legacy, American Legacy II and
American Legacy III variable annuities, American Legacy Life, American
Legacy Variable Life, and American Legacy Estate Builder) may be credited
toward satisfying the Statement. During the Statement period reinvested
dividends and capital gain distributions, investments in money market
funds, and investments made under a right of reinstatement will not be
credited toward satisfying the Statement.
When the trustees of certain retirement plans purchase shares by payroll
deduction, the sales charge for the investments made during the 13-month
period will be handled as follows: The regular monthly payroll deduction
investment will be multiplied by 13 and then multiplied by 1.5. The current
value of existing American Funds investments (other than money market fund
investments) and any rollovers or transfers reasonably anticipated to be
invested in non-money market American Funds during the 13-month period, and
any individual investments in American Legacy variable annuities and
variable life insurance policies are added to the figure determined above.
The sum is the Statement amount and applicable breakpoint level. On the
first investment and all other investments made pursuant to the Statement,
a sales charge will be assessed according to the sales charge breakpoint
thus determined.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.
AGGREGATION - Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and
your children under the age of 21, if all parties are purchasing shares for
their own accounts and/or:
The Growth Fund of America -- Page 25
<PAGE>
. employee benefit plan(s), such as an IRA, individual-type 403(b) plan,
or single-participant Keogh-type plan;
. business accounts solely controlled by these individuals (for example,
the individuals own the entire business);
. trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, the trust account may
be aggregated with accounts of the person who is the primary
beneficiary of the trust.
Individual purchases by a trustee(s) or other fiduciary(ies) may also be
aggregated if the investments are:
. for a single trust estate or fiduciary account, including an employee
benefit plan other than those described above;
. made for two or more employee benefit plans of a single employer or of
affiliated employers as defined in the 1940 Act, again excluding
employee benefit plans described above; or
. for a diversified common trust fund or other diversified pooled
account not specifically formed for the purpose of accumulating fund
shares.
Purchases made for nominee or street name accounts (securities held in the
name of an investment dealer or another nominee such as a bank trust
department instead of the customer) may not be aggregated with those made
for other accounts and may not be aggregated with other nominee or street
name accounts unless otherwise qualified as described above.
CONCURRENT PURCHASES - You may combine purchases of Class A and/or B shares
of two or more funds in The American Funds Group, as well as individual
holdings in American Legacy variable annuities and variable life insurance
policies. Direct purchases of the money market funds are excluded. Shares
of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.
RIGHTS OF ACCUMULATION - You may take into account the current value of
your existing Class A and B holdings in The American Funds Group, as well
as your holdings in Endowments (shares of which may be owned only by
tax-exempt organizations), to determine your sales charge on investments in
accounts eligible to be aggregated, or when making a gift to an individual
or charity. When determining your sales charge, you may also take into
account the value of your individual holdings, as of the end of the week
prior to your investment, in various American Legacy variable annuities and
variable life insurance policies. Direct purchases of the money market
funds are excluded.
CDSC WAIVERS FOR CLASS A SHARES -- Any CDSC on Class A shares may be waived in
the following cases:
(1) Exchanges (except if shares acquired by exchange are then redeemed within
12 months of the initial purchase).
The Growth Fund of America -- Page 26
<PAGE>
(2) Distributions from 403(b) plans or IRAs due to death, post-purchase
disability or attainment of age 59-1/2.
(3) Tax-free returns of excess contributions to IRAs.
(4) Redemptions through systematic withdrawal plans (see "Automatic
Withdrawals" below), not exceeding 12% of the net asset value of the account
each year.
CDSC WAIVERS FOR CLASS B SHARES -- Any CDSC on Class B shares may be waived in
the following cases:
(1) Systematic withdrawal plans (SWPs) - investors who set up a SWP (see
"Automatic Withdrawals" below) may withdraw up to 12% of the net asset value of
their account each year without incurring any CDSC. Shares not subject to a
CDSC (such as shares representing reinvestment of distributions) will be
redeemed first and will count toward the 12% limitation. If there are
insufficient shares not subject to a CDSC, shares subject to the lowest CDSC
will be redeemed next until the 12% limit is reached.
The 12% limit is calculated on a pro rata basis at the time the first payment is
made and is recalculated thereafter on a pro rata basis at the time of each SWP
payment. Accordingly, shareholders who choose a SWP based on a percentage of
the net asset value of their account, may receive up to 12% without incurring a
CDSC. However, shareholders who choose a specific dollar amount (for example,
$100 per month from a fund that pays income distributions monthly) for their SWP
payment, should be aware that the amount of that payment not subject to a CDSC
may vary over time depending on the net asset value of their account. For
example, for a shareholder wishing to take a SWP of $100 per month, if the net
asset value of the account is $10,000 at the time of payment the shareholder
will receive $100 free of the CDSC (12% of $10,000 divided by 12 monthly
payments). However, if at the time of the next payment the net asset value of
the account has fallen to $9,400 the shareholder will receive $94 free of any
CDSC (12% of $9,400 divided by 12 monthly payments) and $6 subject to the lowest
applicable CDSC. This privilege may be revised or terminated at any time.
(2) Required minimum distributions taken from retirement accounts upon the
attainment of age 70-1/2.
(3) Distributions due to death or post-purchase disability of a shareholder.
INDIVIDUAL RETIREMENT ACCOUNT (IRA) ROLLOVERS
Assets from an employer-sponsored retirement plan (plan assets) may be invested
in any class of shares of the American Funds (except as described below) through
an IRA rollover plan. All such rollover investments shall be subject to the
terms and conditions for Class A and B shares contained in the fund's current
prospectus and statement of additional information. In the case of an IRA
rollover involving plan assets invested in the American Funds, the assets may
only be invested in Class A shares of the American Funds. Such investments shall
be at net asset value and will not be subject to a contingent deferred sales
charge. Dealers who initiate and are responsible for such investments will be
compensated pursuant to the schedule applicable to investments of $1 million or
more (see "Dealer Commissions on Class A Shares" above).
The Growth Fund of America -- Page 27
<PAGE>
PRICE OF SHARES
Shares are purchased at the offering price next determined after the purchase
order is received and accepted by the fund or the Transfer Agent; this offering
price is effective for orders received prior to the time of determination of the
net asset value and, in the case of orders placed with dealers, accepted by the
Principal Underwriter prior to its close of business. In the case of orders sent
directly to the fund or the Transfer Agent, an investment dealer MUST be
indicated. The dealer is responsible for promptly transmitting purchase orders
to the Principal Underwriter. Orders received by the investment dealer, the
Transfer Agent, or the fund after the time of the determination of the net asset
value will be entered at the next calculated offering price. Prices which appear
in the newspaper are not always indicative of prices at which you will be
purchasing and redeeming shares of the fund, since such prices generally reflect
the previous day's closing price whereas purchases and redemptions are made at
the next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily as of 4:00 p.m. New York time,
which is the normal close of trading on the New York Stock Exchange each day the
Exchange is open. If, for example, the Exchange closes at 1:00 p.m., the fund's
share price would still be determined as of 4:00 p.m. New York time. The New
York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas
Day.
All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:
1. Equity securities, including depositary receipts, are valued at the last
reported sale price on the exchange or market on which such securities are
traded, as of the close of business on the day the securities are being valued
or, lacking any sales, at the last available bid price. In cases where equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the Investment Adviser to be the broadest
and most representative market, which may be either a securities exchange or the
over-the-counter market. Fixed-income securities are valued at prices obtained
from a pricing service, when such prices are available; however, in
circumstances where the Investment Adviser deems it appropriate to do so, such
securities will be valued at the mean quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.
Short-term securities maturing within 60 days are valued at amortized cost which
approximates market value.
Assets or liabilities initially expressed in terms of non-U.S. currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.
Securities and assets for which representative market quotations are not readily
available are valued at fair value as determined in good faith under policies
approved by the fund's Board. The fair value of all other assets is added to the
value of securities to arrive at the total assets;
The Growth Fund of America -- Page 28
<PAGE>
2. Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and
3. Net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share
Any purchase order may be rejected by the Principal Underwriter or by the fund.
The Principal Underwriter will not knowingly sell shares of the fund directly or
indirectly to any person or entity, where, after the sale, such person or entity
would own beneficially directly or indirectly more than 4.5% of the outstanding
shares of the fund without the consent of a majority of the fund's Board of
Directors.
SELLING SHARES
Shares are sold at the net asset value next determined after your request is
received in good order by the Transfer Agent. Sales of certain Class A and B
shares may be subject to deferred sales charges. You may sell (redeem) shares
in your account in any of the following ways:
THROUGH YOUR DEALER (certain charges may apply)
. Shares held for you in your dealer's street name must be sold
through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
. Requests must be signed by the registered shareholder(s)
. A signature guarantee is required if the redemption is:
- Over $50,000;
- Made payable to someone other than the registered
shareholder(s); or
- Sent to an address other than the address of record, or an
address of record which has been changed within the last 10
days.
Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution.
. Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
. You must include any shares you wish to sell that are in
certificate form.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/
. Redemptions by telephone or fax (including American FundsLine/(R)/ and
American FundsLine OnLine/(R)/) are limited to $50,000 per shareholder each
day.
The Growth Fund of America -- Page 29
<PAGE>
. Checks must be made payable to the registered shareholder(s).
. Checks must be mailed to an address of record that has been used with
the account for at least 10 days.
MONEY MARKET FUNDS
. You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.
. You may establish check writing privileges (use the money market funds
application).
- If you request check writing privileges, you will be provided with
checks that you may use to draw against your account. These checks may
be made payable to anyone you designate and must be signed by the
authorized number or registered shareholders exactly as indicated on
your checking account signature card.
If you sell Class B shares and request a specific dollar amount to be sold, we
will sell sufficient shares so that the sale proceeds, after deducting any
contingent deferred sales charge, equals the dollar amount requested.
Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution of Class A or Class B shares without a sales charge in the Class A
shares of any fund in The American Funds Group within 90 days after the date of
the redemption or distribution (any contingent deferred sales charge or Class A
shares will be credited to your account). Redemption proceeds of shares
representing direct purchases in the money market funds are excluded. Proceeds
will be reinvested at the next calculated net asset value after your request is
received and accepted by the Transfer Agent.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - An automatic investment plan enables you to make
monthly or quarterly investments into The American Funds through automatic
debits from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will begin
within 30 days after your account application is received. Your bank account
will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified. For
example, if the date you specified falls on a weekend or holiday, your money
will be invested on the next business day. If your bank account
The Growth Fund of America -- Page 30
<PAGE>
cannot be debited due to insufficient funds, a stop-payment or the closing of
the account, the plan may be terminated and the related investment reversed. You
may change the amount of the investment or discontinue the plan at any time by
writing to the Transfer Agent.
AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are reinvested
in additional shares of the same class at no sales charge unless you indicate
otherwise on the account application. You also may elect to have dividends
and/or capital gain distributions paid in cash by informing the fund, the
Transfer Agent or your investment dealer.
If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option will automatically be converted to having all dividends and other
distributions reinvested in additional shares.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - You may cross-reinvest
dividends and capital gains ("distributions") of the same share class into any
other fund in The American Funds Group at net asset value, subject to the
following conditions:
(a) The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),
(b) If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,
(c) If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.
EXCHANGE PRIVILEGE - You may only exchange shares into other funds in The
American Funds Group within the same class. However, exchanges from Class A
shares of The Cash Management Trust of America may be made to Class B shares of
any other American Fund for dollar cost averaging purposes. Exchange purchases
are subject to the minimum investment requirements of the fund purchased and no
sales charge generally applies. However, exchanges of shares from the money
market funds are subject to applicable sales charges on the fund being
purchased, unless the money market fund shares were acquired by an exchange from
a fund having a sales charge, or by reinvestment or cross-reinvestment of
dividends or capital gain distributions.
You may exchange shares by writing to the Transfer Agent (see "Redeeming
Shares"), by contacting your investment dealer, by using American FundsLine and
American FundsLine OnLine (see "American FundsLine and American FundsLine
OnLine" below), or by telephoning 800/421-0180 toll-free, faxing (see "Principal
Underwriter and Transfer Agent" in the prospectus for the appropriate fax
numbers) or telegraphing the Transfer Agent. (See "Telephone and Computer
Purchases, Redemptions and Exchanges" below.) Shares held in corporate-type
retirement plans for which Capital Guardian Trust Company serves as trustee may
not be exchanged by telephone, computer, fax or telegraph. Exchange redemptions
and purchases are processed simultaneously at the share prices next determined
after the exchange order is
The Growth Fund of America -- Page 31
<PAGE>
received. (See "Purchase of Shares--Price of Shares.") THESE TRANSACTIONS HAVE
THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES - You may automatically exchange shares of the same class in
amounts of $50 or more among any of the funds in The American Funds Group on any
day (or preceding business day if the day falls on a non-business day of each
month you designate. You must either (a) meet the minimum initial investment
requirement for the receiving fund OR (b) the originating fund's balance must be
at least $5,000 and the receiving fund's minimum must be met within one year.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
ACCOUNT STATEMENTS - Your account is opened in accordance with your registration
instructions. Transactions in the account, such as additional investments will
be reflected on regular confirmation statements from the Transfer Agent.
Dividend and capital gain reinvestments and purchases through automatic
investment plans and certain retirement plans will be confirmed at least
quarterly.
AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE - You may check your share
balance, the price of your shares, or your most recent account transaction,
redeem shares (up to $50,000 per shareholder each day), or exchange shares
around the clock with American FundsLine and American FundsLine OnLine. To use
these services, call 800/325-3590 from a TouchTone(TM) telephone or access the
American Funds Web site on the Internet at www.americanfunds.com. Redemptions
and exchanges through American FundsLine and American FundsLine OnLine are
subject to the conditions noted above and in "Shareholder Account Services and
Privileges - Telephone and Computer Purchases, Redemptions and Exchanges" below.
You will need your fund number (see the list of funds in The American Funds
Group under "Purchase of Shares - Investment Purchase Minimums" and "Purchase of
Shares - Fund Numbers"), personal identification number (generally the last four
digits of your Social Security number or other tax identification number
associated with your account) and account number.
TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine) or computer (including American
FundsLine OnLine), fax or telegraph purchase, redemption and/or exchange
options, you agree to hold the fund, the Transfer Agent, any of its affiliates
or mutual funds managed by such affiliates, and each of their respective
directors, trustees, officers, employees and agents harmless from any losses,
expenses, costs or liability (including attorney fees) which may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these options. However, you may elect to opt
out of these options by writing the Transfer Agent (you may also reinstate them
at any time by writing the Transfer Agent). If the Transfer Agent does not
employ reasonable procedures to confirm that the instructions received from any
person with appropriate account information are genuine, the fund may be liable
for losses due to unauthorized or fraudulent instructions. In the event that
shareholders are unable to reach the
The Growth Fund of America -- Page 32
<PAGE>
fund by telephone because of technical difficulties, market conditions, or a
natural disaster, redemption and exchange requests may be made in writing only.
REDEMPTION OF SHARES - The fund's articles of incorporation permits the fund to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder owns of record
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the Board of Directors of the fund may from time to time
adopt.
While payment of redemptions normally will be in cash, the fund's articles of
incorporation permit payment of the redemption price wholly or partly in
securities or other property included in the assets belonging to the fund when
in the opinion of the fund's Board of Directors, which shall be conclusive,
conditions exist which make payment wholly in cash unwise or undesirable.
SHARE CERTIFICATES - Shares are credited to your account and certificates are
not issued unless you request them by writing to the Transfer Agent.
EXECUTION OF PORTFOLIO TRANSACTIONS
The Investment Adviser places orders for the fund's portfolio securities
transactions. The Investment Adviser strives to obtain the best available prices
in its portfolio transactions taking into account the costs and quality of
executions. When, in the opinion of the Investment Adviser, two or more brokers
(either directly or through their correspondent clearing agents) are in a
position to obtain the best price and execution, preference may be given to
brokers who have sold shares of the fund or who have provided investment
research, statistical, or other related services to the Investment Adviser. The
fund does not consider that it has an obligation to obtain the lowest available
commission rate to the exclusion of price, service and qualitative
considerations.
There are occasions on which portfolio transactions for the fund may be executed
as part of concurrent authorizations to purchase or sell the same security for
other funds served by the Investment Adviser, or for trusts or other accounts
served by affiliated companies of the Investment Adviser. Although such
concurrent authorizations potentially could be either advantageous or
disadvantageous to the fund, they are effected only when the Investment Adviser
believes that to do so is in the interest of the fund. When such concurrent
authorizations occur, the objective is to allocate the executions in an
equitable manner. The fund will not pay a mark-up for research in principal
transactions.
Brokerage commissions paid on portfolio transactions for the fiscal years ended
August 31, 1999, 1998 and 1997, amounted to $12,088,000, $7,217,000 and
$5,577,000, respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02101, as Custodian. If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to sub-custodial arrangements in non-U.S. banks
or foreign branches of U.S. banks.
The Growth Fund of America -- Page 33
<PAGE>
TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee of
$13,441,000 for the fiscal period ended August 31, 1999.
INDEPENDENT AUDITORS - Deloitte & Touche LLP, 1000 Wilshire Boulevard, 15th
Floor, Los Angeles, CA 90017, serves as the fund's independent accountants
providing audit services, preparation of tax returns and review of certain
documents to be filed with the Securities and Exchange Commission. The financial
statements included in this Statement of Additional Information from the Annual
Report have been so included in reliance on the report Deloitte & Touche LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing. The selection of the fund's independent accountants is
reviewed and determined annually by the Board of Directors.
PROSPECTUSES AND REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on August
31. Shareholders are provided updated prospectuses annually. In addition,
shareholders are provided at least semiannually with reports showing the
investment portfolio, financial statements and other information. The fund's
annual financial statements are audited by the fund's independent accountants,
Deloitte & Touche LLP. In an effort to reduce the volume of mail shareholders
receive from the fund when a household owns more than one account, the Transfer
Agent has taken steps to eliminate duplicate mailings of prospectuses and
shareholder reports. To receive additional copies of a prospectus or report,
shareholders should contact the Transfer Agent.
PERSONAL INVESTING POLICY - The fund, Capital Research and Management Company
and its affiliated companies, including the fund's principal underwriter, have
adopted codes of ethics which allow for personal investments. The personal
investing policy is consistent with Investment Company Institute guidelines.
This policy includes: a ban on acquisitions of securities pursuant to an initial
public offering; restrictions on acquisitions of private placement securities;
pre-clearance and reporting requirements; review of duplicate confirmation
statements; annual recertification of compliance with codes of ethics; blackout
periods on personal investing for certain investment personnel; ban on
short-term trading profits for investment personnel; limitations on service as a
director of publicly traded companies; and disclosure of personal securities
transactions.
OTHER INFORMATION - The financial statements including the investment portfolio
and the report of Independent Auditors contained in the Annual Report are
included in this Statement of Additional Information. The following information
is not included in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE -- AUGUST 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) . . . . . . . . . $26.20
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . . . . . . . . . $27.80
</TABLE>
The Growth Fund of America -- Page 34
<PAGE>
CLASS A SHARE INVESTMENT RESULTS AND RELATED STATISTICS
The fund's yield was 0.28% based on a 30-day (or one month) period ended August
31, 1999, computed by dividing the net investment income per share earned during
the period by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
The fund may also calculate a distribution rate on a taxable and tax equivalent
basis. The distribution rate is computed by dividing the dividends paid by the
fund over the last 12 months by the sum of the month-end net asset value or
maximum offering price and the capital gains paid over the last 12 months. The
distribution rate may differ from the yield.
The fund's one year total return and average annual total return for the five-
and ten-year periods ended August 31, 1999 were 51.95%, 21.62% and 15.82%,
respectively. The fund's average annual total return at net asset value for the
one-, five- and ten-year periods ended on August 31, 1999 were 61.26%, 23.07%
and 16.51, respectively.
The average total return ("T") is computed by equating the value at the end of
the period ("ERV") with a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the
Securities and Exchange Commission: P(1+T)/n/ = ERV.
In calculating average annual total return, the fund assumes: (1) deduction of
the maximum sales load of 5.75% from the $1,000 initial investment; (2)
reinvestment of dividends and distributions at net asset value on the
reinvestment date determined by the Board; and (3) a complete redemption at the
end of any period illustrated. In addition, the fund will provide lifetime
average total return figures.
The fund may also, at times, calculate total return based on net asset value per
share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.
The fund may include information on its investment results and/or comparisons of
its investment results to various unmanaged indices (such as the Dow Jones
Average of 30 Industrial Stocks
The Growth Fund of America -- Page 35
<PAGE>
and the Standard and Poor's 500 Composite Stock Index) or results of other
mutual funds or investment or savings vehicles in advertisements or in reports
furnished to present or prospective shareholders. The fund may also, from time
to time, combine its results with those of other funds in The American Funds
Group for purposes of illustrating investment strategies involving multiple
funds.
The fund may refer to results and surveys compiled by organizations such as CDA/
Wiesenberger, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc., and by the U.S. Department of Commerce. Additionally, the fund may refer
to results published in various newspapers and periodicals, including Barron's,
Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine,
Money, U.S. News and World Report and The Wall Street Journal.
The fund may illustrate the benefits of tax-deferral by comparing taxable
investments to investments made through tax-deferred retirement plans.
The fund may compare its investment results with the Consumer Price Index, which
is a measure of the average change in prices over time in a fixed market basket
of goods and services (e.g. food, clothing, and fuels, transportation, and other
goods and services that people buy for day-to-day living).
The investment results for the fund set forth below were calculated as described
in the fund's prospectus. The fund's results will vary from time to time
depending upon market conditions, the composition of the fund's portfolio and
operating expenses of the fund, so that any investment results reported by the
fund should not be considered representative of what an investment in the fund
may earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing the fund's investment
results with those published for other mutual funds, other investment vehicles
and unmanaged indices. The fund's results also should be considered relative to
the risks associated with the fund's investment objective and policies.
GFA VS. VARIOUS UNMANAGED INDICES
<TABLE>
<CAPTION>
10-YEAR AVERAGE
PERIODS SAVINGS
9/1 - 8/31 GFA DJIA (2) S&P 500 (3) ACCOUNT (4)
- ---------- --- -------- ----------- -----------
<S> <C> <C> <C> <C>
1989 - 1999 +334% +417% +384% + 61%
1988 - 1998 +275% +396% +382% + 65%
1987 - 1997 +236 +289 +266 + 67
1986 - 1996 +221 +308 +250 + 70
1985 - 1995 +309 +384 +311 + 75
1984 - 1994 +270 +358 +300 + 83
1983 - 1993 +251 +339 +302 + 93
1982 - 1992 +312 +439 +404 +105
1981 - 1991 +328 +434 +382 +115
1980 - 1990 +269 +343 +299 +122
1979 - 1989 +445 +399 +397 +124
1978 - 1988 +358 +282 +299 +124
1977 - 1987 +735 +422 +446 +124
1976 - 1986 +600 +233 +298 +124
1975 - 1985 +521 +173 +253 +121
1974 - 1984 +579 +211 +277 +116
1973/1/- 1983 +464 +151 +175 +106
</TABLE>
The Growth Fund of America -- Page 36
<PAGE>
_________________
1 From December 1, 1973
2 The Dow Jones Average of 30 Industrial Stocks is comprised of 30 industrial
companies such as General Motors and General Electric. This index is unmanaged
and does not reflect sales charges, commissions or expenses.
3 The Standard and Poor's 500 Stock Composite Index is a broad-based measurement
of changes in stock market conditions based on the average performance of 500
widely held common stocks. This index is unmanaged and does not reflect sales
charges, commissions or expenses.
4 Based on figures supplied by the U.S. League of Savings Institutions and the
Federal Reserve Board which reflect all kinds of savings deposits, including
longer-term certificates. Savings accounts offer a guaranteed return of
principal, but no opportunity for capital growth. During a portion of the
period, the maximum rates paid on some savings deposits were fixed by law.
IF YOU ARE CONSIDERING GFA FOR AN
INDIVIDUAL RETIREMENT ACCOUNT HERE ARE THE BENEFITS OF SYSTEMATIC INVESTING:
<TABLE>
<CAPTION>
Here's how much you would have if you had invested $2,000 a year on September 1
of each year in GFA over the past 3, 5 and 10 years:
3 years 5 years 10 years
(9/1/96-8/31/99) (9/1/94-8/31/99) (9/1/89-8/31/99)
- ------------------------------------------------------------------------------------
<S> <C> <C>
$10,272 $19,832 $58,196
- ------------------------------------------------------------------------------------
</TABLE>
The Growth Fund of America -- Page 37
<PAGE>
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
. . . AND HAD TAKEN
ALL DIVIDENDS AND
CAPITAL GAIN
DISTRIBUTIONS
IN SHARES, YOUR
IF YOU HAD INVESTMENT WOULD
INVESTED $10,000 HAVE BEEN WORTH
IN GFA THIS MANY THIS MUCH AT
YEARS AGO . . . AUGUST 31, 1999
NUMBER PERIODS
OF YEARS 9/1 - 8/31 VALUE
<S> <C> <C>
1
1998 - 1999 $ 15,195
2
1997 - 1999 15,161
3
1996 - 1999 21,003
4
1995 - 1999 21,193
5
1994 - 1999 26,606
6
1993 - 1999 28,200
7
1992 - 1999 35,159
8
1991 - 1999 36,873
9
1990 - 1999 48,152
10
1989 - 1999 43,437
11
1988 - 1999 60,546
12
1987 - 1999 54,053
13
1986 - 1999 71,467
14
1985 - 1999 91,976
15
1984 - 1999 104,431
16
1983 - 1999 105,164
17
1982 - 1999 153,694
18
1981 - 1999 167,641
19
1980 - 1999 188,274
20
1979 - 1999 251,386
21
1978 - 1999 294,489
22
1977 - 1999 479,036
23
1976 - 1999 531,127
24
1975 - 1999 606,137
25
1974 - 1999 752,231
26
1973#- 1999 629,203
</TABLE>
# From December 1, 1973
The Growth Fund of America -- Page 38
<PAGE>
Illustration of a $10,000 investment in GFA with
DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS TAKEN IN SHARES
(for the period December 1, 1973 through August 31, 1999)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES**
Year Annual Dividends Total From From From Total
Ended Dividends (cumulative) Investment Initial CapitalGains Dividends Value
Aug 31 --------- ------------ Cost Investment Reinvested Reinvested -----
- ------ ---- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1974# - - $10,000 $ 7,874 - - $ 7,874
1975 $ 362 $ 362 10,362 9,322 - $ 470 9,792
1976 283 645 10,645 10,327 - 838 11,165
1977 - 645 10,645 11,449 - 928 12,377
1978 254 899 10,899 18,364 - 1,772 20,136
1979 - 899 10,899 21,519 - 2,076 23,595
1980 307 1,206 11,206 28,318 - 3,178 31,496
1981 546 1,752 11,752 31,304 - 4,079 35,383
1982 1,673 3,425 13,425 32,507 - 6,088 38,595
1983 2,290 5,715 15,715 44,886 - 11,496 56,382
1984 1,643 7,358 17,358 43,120 $ 1,064 12,621 56,805
1985 1,249 8,607 18,607 47,370 1,744 15,379 64,493
1986 979 9,586 19,586 56,066 7,355 19,541 82,962
1987 1,354 10,940 20,940 69,339 14,360 26,031 109,730
1988 1,502 12,442 22,442 56,949 18,289 22,724 97,962
1989 1,743 14,185 24,185 75,387 28,688 32,432 136,507
1990 3,611 17,796 27,796 60,251 33,708 29,225 123,184
1991 3,208 21,004 31,004 73,295 47,920 39,600 160,815
1992 2,510 23,514 33,514 72,052 55,106 41,545 168,703
1993 1,454 24,968 34,968 88,758 68,670 52,840 210,268
1994 929 25,897 35,897 90,294 77,818 54,740 222,852
1995 1,372 27,269 37,269 108,176 104,252 67,383 279,811
1996 2,452 29,721 39,721 100,592 116,565 65,166 282,323
1997 2,019 31,740 41,740 131,682 171,693 87,748 391,123
1998 2,525 34,265 44,265 117,363 192,135 80,676 390,174
1999 1,956 36,221 46,221 171,304 337,808 120,091 629,203
</TABLE>
The Growth Fund of America -- Page 39
<PAGE>
The dollar amount of capital gain distributions during the period was $182,904.
# From December 1, 1973
The Growth Fund of America -- Page 40
<PAGE>
EXPERIENCE OF INVESTMENT ADVISER - The Investment Adviser manages nine growth
and growth-income funds that are at least 10 years old. In the rolling 10-year
periods since January 1, 1969 (138 in all), those funds have had better total
returns than their comparable Lipper indexes in 128 of 138 periods.
Note that past results are not an indication of future investment results. Also,
the fund has different investment policies than the funds mentioned above. These
results are included solely for the purpose of informing investors about the
experience and history of Capital Research and Management Company.
The Growth Fund of America -- Page 41
<PAGE>
APPENDIX
Description of Bond Ratings
BOND RATINGS -- The ratings of Moody's Investors Service, Inc. (Moody's) and
Standard & Poor's Corporation (S&P) represent their opinions as to the quality
of the municipal bonds which they undertake to rate. It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
Consequently, municipal bonds with the same maturity, coupon and rating may
have different yields, while municipal bonds of the same maturity and coupon
with different ratings may have the same yield.
Moody's rates the long-term debt securities issued by various entities from
- -------
"Aaa" to "C." Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category. Ratings are described as follows:
"Bonds which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as 'gilt edge.'
Interest payments are protected by a large or by an exceptionally stable
margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues."
"Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."
"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."
"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well."
"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class."
"Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small."
"Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."
The Growth Fund of America -- Page 42
<PAGE>
"Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings."
"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing."
S & P rates the long-term securities debt of various entities in categories
- -----
ranging from "AAA" to "D" according to quality. The ratings from "AA" to "CCC"
may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories. Ratings are described as follows:
"Debt rated 'AAA' has the highest rating assigned by S & P. Capacity to pay
interest and repay principal is extremely strong."
"Debt rated 'AA' has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."
"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."
"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories."
"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or impled 'BBB-' rating.
"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating."
"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."
"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating. The 'C' rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."
"The rating 'C1' is reserved for income bonds on which no interest is being
paid."
"Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The 'D' rating also will be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized."
The Growth Fund of America -- Page 43
<TABLE>
The Growth Fund of America, Inc.
Investment Portfolio, August 31, 1999
<S> <C> <C> <C>
Percent
of Net
Largest Industry Holdings Assets
- -------------------------
Broadcasting & Publishing 17.49
Electronic Components 17.15
Data Processing & Reproduction 8.22
Health & Personal Care 6.56
Business & Public Services 6.41
Other Industries 33.58
Cash & Equivalents 10.59
Largest Equity Holdings
- -----------------------
Time Warner 3.92
Viacom 3.06
AT&T -- Liberty Media Group 2.98
Texas Instruments 2.50
Fannie Mae 2.09
Philip Morris 1.78
Intel 1.75
Applied Materials 1.67
News Corp. 1.58
Microsoft 1.58
The Growth Fund of America, Inc.
Investment Portfolio, August 31, 1999
Market ValuPercent Of
Equity Securitites (Common & Preferred Stocks) Shares (000)Net Assets
- -------------------------------------------------- -----------------------
BROADCASTING & PUBLISHING - 17.49%
Time Warner Inc. 13,646,50 $809,407 3.92%
Viacom Inc., Class B (1) 13,400,00 563,638
Viacom Inc., Class A (1) 1,629,400 68,944 3.06
AT&T Corp. - Liberty Media Group, Class A 19,281,43 617,006 2.98
(formerly Tele-Communications, Liberty Media Group) (1)
News Corp. Ltd., preferred (ADR) (Australia) 6,353,750 167,977
News Corp. Ltd. (ADR) 5,450,000 159,753 1.58
Comcast Corp., Class A, special stock 8,521,218 278,005
Comcast Corp., Class A 300,000 8,831 1.39
AMFM Inc. (formerly Chancellor Media Corp.) (1) 3,950,000 194,538 .94
Cablevision Systems Corp., Class A (1) 2,653,800 185,766 .90
USA Networks, Inc., Class A (1) 3,520,000 157,960 .76
Fox Entertainment Group, Inc., Class A (1) 6,240,000 143,910 .70
Nippon Television Network Corp. (Japan) 177,760 97,510 .47
Chris-Craft Industries, Inc. (1) 1,254,540 63,511 .31
CBS Corp. (1) 1,000,000 47,000 .23
Sinclair Broadcast Group, Inc., Class A (1) 2,230,000 36,238 .18
BHC Communications, Inc., Class A (1) 62,840 8,263 .04
E.W. Scripps Co., Class A 150,000 7,200 .03
Knight-Ridder, Inc. 12,200 658 .00
ELECTRONIC COMPONENTS - 17.15%
Texas Instruments Inc. 6,300,000 516,993 2.50
Intel Corp. 4,400,000 361,625 1.75
PMC-Sierra, Inc. (1) 2,606,600 242,414 1.17
Solectron Corp. (1) 2,942,000 230,211 1.11
Micron Technology, Inc. (1) 3,005,000 224,060 1.08
Altera Corp. (1) 4,600,000 193,775 .94
Corning Inc. 2,627,900 174,755 .85
LSI Logic Corp. (1) 3,000,000 170,250 .82
Linear Technology Corp. 2,450,000 154,197 .75
Microchip Technology Inc. (1) (2) 2,675,000 146,456 .71
Sanmina Corp. (1) 1,950,000 146,250 .71
Adaptec, Inc. (1) 3,400,000 132,600 .64
Rohm Co., Ltd. (Japan) 600,000 119,583 .58
Quantum Corp. (1) 7,400,000 112,019 .54
Analog Devices, Inc. (1) 2,033,333 104,717 .51
Maxim Integrated Products, Inc. (1) 1,500,000 100,969 .49
Jabil Circuit, Inc. (1) 2,100,000 94,106 .46
Taiwan Semiconductor Manufacturing Co. Ltd. 20,910,00 89,049 .43
(Taiwan) (1)
Seagate Technology (1) 2,500,000 82,969 .40
Murata Manufacturing Co., Ltd. (Japan) 875,000 70,397 .34
SCI Systems, Inc. (1) 554,400 27,616 .13
Advanced Micro Devices, Inc. (1) 1,200,000 24,825 .12
Newbridge Networks Corp. (Canada) (1) 900,400 24,705 .12
DATA PROCESSING & REPRODUCTION - 8.22%
Microsoft Corp. (1) 3,540,000 327,671 1.58
Computer Associates International, Inc. 5,775,000 326,287 1.58
Oracle Corp. (1) 5,420,000 197,830 .96
Cisco Systems, Inc. (1) 2,600,000 176,313 .85
Gateway, Inc. (formerly Gateway 2000, Inc.) (1) 1,125,000 109,055 .53
Storage Technology Corp. (1) 4,400,000 92,400 .45
International Business Machines Corp. 600,000 74,737 .36
Lexmark International Group, Inc., Class A (1) 750,000 59,062 .28
Rambus Inc. (1) 581,100 56,367 .27
National Computer Systems, Inc. 1,215,000 47,385 .23
Intuit Inc. (1) 500,600 44,835 .22
Siebel Systems, Inc. (1) 600,000 41,213 .20
BMC Software, Inc. (1) 700,000 37,669 .18
Autodesk, Inc. 1,501,000 34,523 .17
PeopleSoft, Inc. (1) 1,500,000 21,188 .10
Silicon Graphics, Inc. (1) 1,440,000 16,470 .08
Compaq Computer Corp. 600,000 13,912 .07
Vantive Corp. (1) 1,305,000 10,848 .05
3Com Corp. (1) 400,000 9,925 .05
Momentum Business Applications, Inc., Class A (1) 146,000 1,122 .01
HEALTH & PERSONAL CARE - 6.56%
Guidant Corp. 2,750,000 161,391 .78
AstraZeneca PLC (United Kingdom) (formerly 3,250,000 129,384
Zeneca Group PLC)
AstraZeneca PLC (ADR) (formerly Astra AB) 380,000 14,963 .70
Gilead Sciences, Inc. (1) 1,504,300 117,241 .57
Forest Laboratories, Inc. (1) 2,400,000 116,400 .56
Amgen Inc. (1) 1,300,000 108,144 .52
Elan Corp., PLC (ADR) (Ireland) (1) 3,100,000 99,394 .48
Biogen, Inc. (1) 1,200,000 92,100 .45
Immunex Corp. (1) 1,240,000 83,467 .40
Sepracor Inc. (1) 1,064,500 79,704 .39
Cardinal Health, Inc. 1,210,950 77,198 .37
MedImmune, Inc. (1) 500,000 51,594 .25
BioChem Pharma Inc. (Canada) (1) 1,600,000 41,475 .20
Eli Lilly and Co. 500,000 37,312 .18
Warner-Lambert Co. 400,000 26,500 .13
Avon Products, Inc. 500,000 21,937 .10
Omnicare, Inc. 2,200,000 21,175 .10
IDEXX Laboratories, Inc. (1) 1,100,000 18,700 .09
Pharmacia & Upjohn, Inc. 290,000 15,152 .07
Medtronic, Inc. 180,000 14,085 .07
Guilford Pharmaceuticals, Inc. (1) 900,000 12,150 .06
Sicor Inc. (formerly Gensia Sicor Inc.) (1) 1,332,202 5,329
Sicor Inc. (1) (3) 1,125,000 4,500 .05
Sicor Inc., warrants expire 2002 (1) (3) 1,125,000 -----
Celera Genomics (formerly Perkin-Elmer Corp.) (1) 264,400 7,602 .04
BUSINESS & PUBLIC SERVICES - 6.41%
Cendant Corp. (1) 18,021,90 323,268 1.56
FDX Corp. (1) 4,200,000 178,238 .86
Juniper Networks, Inc. (1) 485,600 99,548 .48
Quintiles Transnational Corp. (1) 2,400,000 85,950 .42
Flextronics International Ltd. (Singapore) (1) 1,300,000 76,294 .37
Allied Waste Industries, Inc. (1) 5,500,000 70,125 .34
Snyder Communications, Inc. (1) 3,000,000 61,125 .30
Columbia/HCA Healthcare Corp. 2,200,000 54,175 .26
Robert Half International Inc. (1) 1,900,000 49,875 .24
Galileo International, Inc. 1,000,000 48,500 .23
Universal Health Services, Inc., Class B (1) 1,450,000 48,394 .23
Sabre Group Holdings, Inc., Class A (1) 750,000 42,000 .21
Waste Management, Inc. 1,550,000 33,809 .16
Modis Professional Services, Inc. (1) 2,000,000 31,625 .15
Apollo Group, Inc., Class A (1) 1,400,000 30,713 .15
Cintas Corp. 435,900 22,394 .11
Paychex, Inc. 690,000 20,312 .10
ServiceMaster Co. 1,000,000 16,500 .08
First Data Corp. 300,000 13,200 .06
Sapient Corp. (1) 137,500 10,038 .05
Concord EFS, Inc. (1) 250,000 9,280 .05
ELECTRONIC INSTRUMENTS - 4.26%
Applied Materials, Inc. (1) 4,850,000 344,653 1.67
KLA - Tencor Corp. (1) 4,350,000 273,234 1.32
Affymetrix, Inc. (1) (3) (4) 1,000,000 77,063 .37
PE Biosystems Group (formerly Perkin-Elmer Corp.) 1,057,600 72,776 .35
ADVANTEST CORP. (Japan) 500,000 67,883 .33
Teradyne, Inc. (1) 675,000 45,942 .22
FINANCIAL SERVICES - 3.26%
Fannie Mae 6,956,700 432,185 2.09
SLM Holding Corp. 1,880,000 83,072 .41
Capital One Financial Corp. 1,450,000 54,738 .26
Providian Financial Corp. 700,000 54,337 .26
Household International, Inc. 1,300,000 49,075 .24
LEISURE & TOURISM - 3.02%
Seagram Co. Ltd. (Canada) 3,010,000 159,718 .77
Starbucks Corp. (1) 6,100,000 139,537 .68
King World Productions, Inc. (1) 3,034,200 115,679 .56
Carnival Corp. 1,729,800 77,300 .37
MGM Grand, Inc. (1) 1,570,541 77,153 .37
Mirage Resorts, Inc. (1) 4,200,000 54,863 .27
TELECOMMUNICATIONS - 2.63%
Nextel Communications, Inc., Class A (1) 1,850,000 106,953 .52
MCI WorldCom, Inc. (1) 1,400,000 106,050 .51
NTT Mobile Communications Network, Inc. 4,000 66,191
(Japan) (1) (5)
NTT Mobile Communications Network, Inc. 1,000 16,639 .40
AT&T Corp. 1,700,000 76,500 .37
Teleglobe Inc. (Canada) 3,045,000 51,967 .25
Crown Castle International Corp. (1) 2,450,000 37,056 .18
American Tower Systems Corp., Class A (1) 1,300,000 29,575 .14
Sprint FON Group 500,000 22,188 .11
SkyTel Communications Inc. (1) 1,000,000 19,813 .10
Paging Network, Inc. (1) 3,500,000 10,828 .05
ENERGY SOURCES - 2.25%
Apache Corp. 2,157,100 98,148 .47
Burlington Resources Inc. 1,800,000 75,263 .36
Suncor Energy Inc. (Canada) 1,700,000 70,013 .34
TOTAL-FINA SA, Class B (ADR) (France) 750,000 48,797 .24
(formerly TOTAL)
Talisman Energy Inc. (Canada) (1) 1,567,700 45,946 .22
Union Pacific Resources Group Inc. 2,500,000 44,844 .22
Pogo Producing Co. 1,994,400 41,633 .20
Enterprise Oil PLC (United Kingdom) 3,950,000 28,504 .14
Petro-Canada (Canada) 600,000 9,013 .04
Devon Energy Corp. 94,200 3,638 .02
BEVERAGES & TOBACCO - 2.25%
Philip Morris Companies Inc. 9,850,000 368,759 1.78
Nabisco Group Holdings Corp. (formerly 2,650,000 47,038 .23
RJR Nabisco, Inc. Holdings Corp.)
PepsiCo, Inc. 1,250,000 42,656 .21
R.J. Reynolds Tobacco Holdings, Inc. 216,666 5,945 .03
ELECTRICAL & ELECTRONICS - 2.10%
Nortel Networks Corp.(Canada) (formerly 3,522,240 144,632 .70
Northern Telecom Ltd.)
NEC Corp. (Japan) 6,000,000 97,641 .47
General Instrument Corp. (1) 1,340,000 65,911 .32
Telefonaktiebolaget LM Ericsson, Class B (ADR) (Sweden) 2,000,000 65,125 .32
Nokia Corp., Class A (ADR) (Finland) 420,000 35,018 .16
Lucent Technologies Inc. 412,500 26,426 .13
TRANSPORTATION: AIRLINES - 1.76%
AMR Corp. (1) 2,860,000 167,667 .81
Southwest Airlines Co. 8,659,268 144,502 .70
Delta Air Lines, Inc. 1,030,000 52,337 .25
INSURANCE - 1.56%
XL Capital Ltd. (formerly EXEL Ltd.) (Incorporated 2,840,800 142,927 .68
in Bermuda)
Protective Life Corp. 1,860,000 55,335 .27
Mercury General Corp. 1,275,000 38,569 .19
American International Group, Inc. 375,000 34,758 .17
MGIC Investment Corp. 600,000 26,063 .13
Mutual Risk Management Ltd. (Incorporated in Bermuda) 900,000 24,750 .12
CHEMICALS - 1.36%
Monsanto Co. 4,625,000 189,914 .92
Air Products and Chemicals, Inc. 700,000 23,800 .12
Millennium Chemicals Inc. 1,000,000 23,000 .11
A. Schulman, Inc. 965,625 17,321 .08
Praxair, Inc. 300,000 14,100 .07
International Flavors & Fragrances Inc. 174,700 7,119 .04
Bayer AG (Germany) 110,000 4,790 .02
MERCHANDISING - 1.15%
Limited Inc. 2,900,000 109,838 .53
Lowe's Companies, Inc. 800,000 36,200 .18
Albertson's, Inc. 598,500 28,691 .14
Intimate Brands, Inc., Class A 525,000 20,245 .10
Lands' End , Inc. (1) 350,000 17,631 .09
PETsMART, Inc. (1) 2,100,000 10,106 .04
Circuit City Stores, Inc. - Circuit City Group 200,000 8,600 .04
Consolidated Stores Corp. (1) 400,000 6,450 .03
BANKING - 0.79%
Washington Mutual, Inc. 1,684,000 53,467 .26
Bank of America Corp. (formerly BankAmerica Corp.) 850,000 51,425 .25
Wells Fargo & Co. 779,100 31,018 .15
Charter One Financial, Inc. 850,000 19,895 .10
BankBoston Corp. 145,000 6,734 .03
RECREATION OTHER CONSUMER PRODUCTS - 0.54%
Hasbro, Inc. 3,550,000 86,753 .42
American Greetings Corp., Class A 875,000 24,227 .12
FOOD & HOUSEHOLD PRODUCTS - 0.43%
Keebler Foods Co. (1) 1,900,000 56,644 .27
Dole Food Co., Inc. 1,273,000 32,063 .16
TEXTILES & APPAREL - 0.43%
NIKE, Inc., Class B 1,900,000 87,875 .43
ENERGY EQUIPMENT - 0.38%
BJ Services Co. (1) 1,200,000 41,100 .20
Schlumberger Ltd. (Netherlands Antilles) 550,000 36,712 .18
MISCELLANEOUS MATERIALS & COMMODITIES - 0.37%
Sealed Air Corp. (1) 1,300,000 76,375 .37
METALS: NONFERROUS - 0.23%
Freeport-McMoRan Copper & Gold Inc., Class B 3,000,000 48,188 .23
UTILITIES: ELECTRIC & GAS - 0.20%
Questar Corp. 2,225,000 41,997 .20
AEROSPACE & MILITARY TECHNOLOGY - 0.18%
Bombardier Inc., Class B (Canada) 2,350,000 36,559 .18
TRANSPORTATION: RAIL & ROAD - 0.16%
Wisconsin Central Transportation Corp. (1) 2,094,300 33,378 .16
MACHINERY & ENGINEERING - 0.13%
Thermo Electron Corp. (1) 1,725,000 27,384 .13
INDUSTRIAL COMPONENTS - 0.11%
Danaher Corp. 400,000 23,500 .11
REAL ESTATE - 0.03%
Catellus Development Corp. (1) 500,000 6,844 .03
Miscellaneous - 4.00%
Other equity securities in initial period of 827,241 4.00
acquisition
-----------------------
TOTAL EQUITY SECURITIES (COST: $11,288,131,000) 18,483,738 89.41
-----------------------
Principal
Amount
Short Term Securities (000)
- -------------------------------------------------- --------------------------------
CORPORATE SHORT-TERM NOTES - 7.00%
Associates First Capital Corp. 4.96%-5.70% $124,500 123,401 .60
due 9/1/1999-2/7/2000
Bellsouth Capital Funding Corp. 5.09%-5.30% 85,000 83,889 .41
due 10/13/1999-1/27/2000 (3)
Ciesco LP 5.13%-5.25% due 10/7-10/18/1999 84,000 83,469 .40
General Electric Capital Corp. 5.41%-5.53% 75,550 74,709 .36
due 9/1/1999-1/25/2000
IBM Credit Corp. 5.55%-5.70% due 1/21-2/11/2000 75,000 73,215 .35
Merck & Co., Inc. 5.29%-5.30% due 2/2-2/4/2000 74,000 72,191 .35
Procter & Gamble Co. 5.10%-5.28% due 10/20-10/27/1999 70,000 69,468 .34
E.I. du Pont de Nemours and Co. 5.29%-5.60% 71,000 69,205 .33
due 2/2-2/11/2000
Lucent Technologies Inc. 5.08%-5.33% 69,900 68,992 .33
due 9/24/1999-2/1/2000
Ford Motor Credit Co. 5.13%-5.56% due 69,700 68,912 .33
10/7/1999-1/31/2000
National Rural Utilities Cooperative Finance Corp. 65,203 64,902 .31
4.92%-5.23% due 9/10-10/15/1999
CIT Group Holdings, Inc. 5.15%-5.25% due 61,700 61,220 .30
10/19-10/26/1999
Ameritech Capital Funding Corp. 5.10%-5.16% 60,000 59,820 .29
due 9/13-9/29/1999
Eastman Kodak Co. 4.82%-5.30% due 9/10-11/18/1999 60,000 59,573 .29
Coca-Cola Co. 4.88%-5.29% due 9/16/1999-1/25/2000 53,500 53,303 .26
American Express Credit Corp. 5.09%-5.62% 54,000 53,275 .26
due 9/28/1999-2/8/2000
PACCAR Financial Corp. 5.25% due 11/2-11/10/1999 45,811 45,352 .22
Archer Daniels Midland Co. 5.30%-5.33% due 44,046 43,328 .21
11/16/1999-1/24/2000
H.J. Heinz Co. 5.07%-5.34% due 9/9/1999-1/28/2000 40,916 40,460 .19
Emerson Electric Co. 5.31%-5.60% due 1/28-2/23/2000 40,500 39,487 .19
American Home Products Corp. 4.85%-5.09% 34,400 34,353 .17
due 9/3-9/15/1999 (3)
Equilon Enterprises, LLC 5.25% due 10/21/1999 30,000 29,777 .14
International Lease Finance Corp. 5.09%-5.22% 29,300 29,080 .14
due 10/14-10/25/1999
Monsanto Co. 4.80% due 9/9/1999 24,705 24,674 .12
Campbell Soup Co. 4.82% due 1/18/2000 22,514 22,018 .11
-----------------------
1,448,073 7.00
-----------------------
FEDERAL AGENCY DISCOUNT NOTES - 4.19%
Freddie Mac 4.90%-5.40% due 9/10/1999-2/28/2000 453,638 446,315 2.16
Fannie Mae 4.90%-5.21% due 9/3-11/8/1999 304,100 303,313 1.47
Federal Home Loan Banks 5.15%-5.45% due 119,000 116,330 .56
10/15/1999-2/25/2000
-----------------------
865,958 4.19
-----------------------
NON-U.S. CURRENCY - 0.02%
New Taiwanese Dollar NT $125,2 3,950 .02
-----------------------
TOTAL SHORT-TERM SECURITIES (cost: $ 2,318,825,000) 2,317,981 11.21
-----------------------
TOTAL INVESTMENT SECURITIES (cost: $13,606,956,000) 20,801,719 100.62
-----------------------
Excess of payables over cash and receivables 128,806 .62
-----------------------
NET ASSETS $20,672,913 100.00%
========================
(1)Non-income-producing security.
(2)The fund owns 5.26% of the outstanding voting
securities of Microchip Tech, and thus is considered
an affiliate as defined by the Investment
Company Act of 1940.
(3)Purchased in a private placement transaction;
resale to the public may require registration
or sale only to qualified institutional buyers.
(4) Valued under procedures established by the
Board of Directors.
(5) When-issued security.
The descriptions of the companies shown in the
portfolio, which were obtained from published
reports and other sources believed to be reliable,
are supplemenatal and are not covered by the
Independent Auditors' Report.
ADR = Amercian Depository Receipt
See Notes to Financial Statements
</TABLE>
<TABLE>
The Growth Fund of America
Financial Statements
<S> <C> <C>
Statement of Assets and Liabilities
- ---------------------------------------------- ---------------------------------
at August 31, 1999 (dollars in thousands)
Assets:
Investment securities at market
(cost: $13,606,956) $20,801,719
Cash 88
Receivables for-
Sales of investments $29,725
Sales of fund's shares 42,497
Dividends and interest 3,429 75,651
---------------------------------
20,877,458
Liabilities:
Payables for-
Purchases of investments 169,687
Repurchases of fund's shares 18,076
Management services 5,765
Other expenses 11,017 204,545
---------------------------------
Net Assets at August 31, 1999-
Equivalent to $26.20 per share on
789,022,681 shares of $0.10 par value
capital stock outstanding (authorized
capital stock--800,000,000 shares) $20,672,913
=====================
Statement of Operations
- ---------------------------------------------- --------------------------
for the year ended August 31, 1999 (dollars in thousands)
Investment Income:
Income:
Dividends $ 72,003
Interest 94,890 $ 166,893
--------------
Expenses:
Management services fee 57,694
Distribution expenses 42,790
Transfer agent fee 13,441
Reports to shareholders 412
Registration statement and prospectus 1,122
Postage, stationery and supplies 2,328
Directors' fees 187
Auditing and legal fees 61
Custodian fee 423
Taxes other than federal income tax 59
Other expenses 233 118,750
--------------------------
Net investment income 48,143
--------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 2,423,859
Net increase in unrealized appreciation
on investments:
Beginning of year 2,366,879
End of year 7,194,763 4,827,884
--------------------------
Net realized gain and unrealized appreciation
on investments 7,251,743
--------------
Net Increase in Net Assets Resulting
from Operations $ 7,299,886
==============
Statement of Changes in Net Assets
- ---------------------------------------------- --------------------------
(dollars in
thousands)
Year ended August 31
1999 1998
Operations:
Net investment income $ 48,14 $ 61,388
Net realized gain on investments 2,423,859 1,530,218
Net increase (decrease) in unrealized appreciation
on investments 4,827,884 (1,640,385)
--------------------------
Net increase (decrease) in net assets
resulting from operations 7,299,886 (48,779)
--------------------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (59,245) (75,837)
Distributions from net realized gain on
investments (1,454,805) (1,201,719)
---------------------------------
Total dividends and distributions (1,514,050) (1,277,556)
----------------------------------
Capital Share Transactions:
Proceeds from shares sold: 174,121,917
and 109,029,348 shares, respectively 4,179,298 2,241,289
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 66,551,910 and 66,729,473 shares,
respectively 1,460,168 1,225,124
Cost of shares repurchased: 109,023,256
and 96,539,758 shares, respectively (2,550,833) (1,987,987)
--------------------------
Net increase in net assets resulting from
capital share transactions 3,088,633 1,478,426
--------------------------
Total Increase in Net Assets 8,874,469 152,091
Net Assets:
Beginning of year 11,798,444 11,646,353
--------------------------
End of year (including distributions in excess of net
investment income and net investment income of $(660)
and $37,030, respectively $ 20,672,913 $ 11,798,444
==========================
See Notes to Financial Statements
</TABLE>
THE GROWTH FUND OF AMERICA, INC.
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - The Growth Fund of America, Inc. (the "fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund invests in a wide range of companies that appear
to offer superior opportunities for growth of capital.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates. The following is a summary of the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value. Securities and assets for which representative market quotations are
not readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Directors.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed
in terms of non-U.S. currencies are translated into U.S. dollars at the
prevailing market rates at the end of the reporting period. Purchases and
sales of securities and income and expenses are translated into U.S. dollars at
the prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INC - Security transactions
are accounted for as of the trade date. Realized gains and losses from
securities transactions are determined based on specific identified cost.
Dividend income is recognized on the ex-dividend date, and interest income is
recognized on an accrual basis. Market discounts and premiums on securities
purchased are amortized daily over the expected life of the security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
paid to shareholders are recorded on the ex-dividend date.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend income is recorded net of non-U.S. taxes paid. For
the year ended August 31, 1999, such non-U.S. taxes were $1,099,000.
CURRENCY GAINS AND LOSSES - Net realized currency gains on dividends,
interest, and other receivables and payables, on a book basis, were $43,000 for
the year ended August 31, 1999.
3. FEDERAL INCOME TAXATION - The fund complies with the requirements of the
Internal Revenue Code applicable to regulated investment companies and intends
to distribute all of its net taxable income and net capital gains for the
fiscal year. As a regulated investment company, the fund is not subject to
income taxes if such distributions are made. Required distributions are
determined on a tax basis and may differ from net investment income and net
realized gains for financial reporting purposes. In addition, the fiscal year
in which amounts are distributed may differ from the year in which the net
investment income and net realized gains are record by the fund.
As of August 31, 1999, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $7,194,763,000, of which
$7,812,622,000 related to appreciated securities and $617,859,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the year ended August 31, 1999.
Net gains related to non-U.S. currency transactions of $43,000 were treated
as an adjustment to ordinary income for federal income tax purposes. The cost
of portfolio securities for book and federal income tax purposes was
$13,606,956,000 at August 31, 1999.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $57,694,000 for management services
was incurred pursuant to an agreement with Capital Research and Management
Company (CRMC), with which certain officers and Directors of the fund are
affiliated. The Investment Advisory and Service Agreement provides for monthly
fees, accrued daily, based on an annual rate of 0.50% of the first $1.0 billion
of average net assets; 0.40% of such assets in excess of $1.0 billion but not
exceeding $2.0 billion; 0.37% of such assets in excess of $2.0 billion but not
exceeding $3.0 billion; 0.35% of such assets in excess of $3.0 billion but not
exceeding $5.0 billion; 0.33% of such assets in excess of $5.0 billion but not
exceeding $8.0 billion; 0.315% of such assets in excess of $8.0 billion but not
exceeding $13.0 billion; 0.30% of such assets in excess of $13.0 billion but
not exceeding $21.0 billion; and 0.29% of such assets in excess of $21.0
billion.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.25% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
Directors. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the year ended
August 31, 1999, distribution expenses under the Plan were $42,790,000. As of
August 31, 1999, accrued and unpaid distribution expenses were $10,210,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $11,344,000(after allowances to dealers) as its portion
of the sales charges paid by purchasers of the fund's shares. Such sales
charges are not an expense of the fund and, hence, are not reflected in the
accompanying statement of operations.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer
agent for the fund, was paid a fee of $13,441,000.
DEFERRED DIRECTORS' FEES - Directors who are unaffiliated with CRMC may
elect to defer part or all of the fees earned for services as members of the
Board. Amounts deferred are not funded and are general unsecured liabilities of
the fund. As of August 31, 1999, aggregate deferred amounts and earnings
thereon since the deferred compensation plan's adoption (1993) net of any
payments to Directors were $661,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $7,777,440,000 and $6,943,340,000, respectively,
during the year ended August 31, 1999.
As of August 31, 1999, accumulated undistributed net realized gain on
investments was $2,237,712,000 and additional paid-in capital was
$11,265,209,000. The fund reclassified $26,588,000 from undistributed net
investment income and $146,687,000 from undistributed net realized gains to
additional paid-in capital for the year ended August 31, 1999.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $423,000 includes $30,000 that was paid by these credits
rather than in cash.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Per-Share Data and Ratios /1/
Year EndAugust 31
1999 1998 1997 1996 1995 1994
-------------- --------------------------
Net Asset Value, Beginning of Year $17.95 $20.14 $15.39 $16.55$13.81$13.58
-------------- --------------------------
Income from Investment Operations:
Net investment income .07 .10 .13 .13 .13 .07
Net gains(losses) on securities (both
realized and unrealized) 10.48 (.10) 5.59 (.01) 3.21 .71
-------------- --------------------------
Total from investment operations 10.55 .00 5.72 .12 3.34 .78
-------------- --------------------------
Less Distributions:
Dividends (from net investment income) (.09) (.13) (.11) (.14) (.08) (.06)
Distributions (from captital gains) (2.21) (2.06) (.86)(1.14) (.52) (.49)
-------------- --------------------------
Total distributions (2.30) (2.19) (.97)(1.28) (.60) (.55)
-------------- --------------------------
Net Asset Value, End of Year $26.20 $17.95 $20.14 $15.39$16.55$13.81
============== ==========================
Total Return /2/ 61.26% (.24)% 38.54% .90%25.56% 5.98%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $20,673$11,798 $11,646$8,511$7,525$5,427
Ratio of expenses to average net
assets .70% .70% .72% .74% .75% .78%
Ratio of net income to average net
assets .28% .48% .73% .82% .90% .49%
Portfolio turnover rate 45.61% 38.84% 34.10% 27.95%26.90%24.77%
/1/ Adjusted to reflect the 100% share dividend
effective at the close of business on
December 12, 1996.
/2/ Excludes maximum sales charge of 5.75%
</TABLE>
Independent Auditors' Report
To the Board of Directors and Shareholders of
The Growth Fund of America, Inc.:
We have audited the accompanying statement of assets and liabilities of
The Growth Fund of America, Inc., including the investment portfolio, as of
August 31,1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the per-share data and ratios for each of the five years
in the period then ended. These financial statements and the per-share data and
ratios are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and the per-share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per-share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at August
31, 1999 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of The Growth Fund of America, Inc. at August 31, 1999, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the per-share data and ratios
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Los Angeles, California
September 30, 1999
Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
Dividends and Distributions per Share
<TABLE>
<CAPTION>
<S> <C> <C> <C>
To Shareholders Payment Date From Net From Net
of Record Investment Realized
Income Long-Term
Gains
December 23, 1998 December 24, 1998 $0.09 $2.21
</TABLE>
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 100% of the
dividends paid by the fund from net investment income represents qualifying
dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many plan retirement trusts may need this information for their annual
information reporting.
The fund also designates as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
Since the amounts above are reported for the fund's FISCAL YEAR and not the
CALENDAR YEAR, shareholders should refer to their Form 1099 DIV or other tax
information which will be mailed in January 2000 to determine the CALENDAR YEAR
amounts to be included on their 1999 tax returns. Shareholders should consult
their tax advisers.
PART C
OTHER INFORMATION
THE GROWTH FUND OF AMERICA, INC.
ITEM 23. EXHIBITS
(a) Articles of Amendment to Articles of Incorporation dated 12/17/99 and
Articles Supplementary dated 1/3/2000
(b) Previously filed (see Post-Effective Amendment No. 65 filed 10/31/97)
(c) Previously filed (see Post-Effective Amendment No. 65 filed 10/31/97)
(d) Form of Investment Advisory and Service Agreement
(e) Form of Amended and Restated Principal Underwriting Agreement
(f) None
(g) Previously filed (see Post-Effective Amendment No. 68 Filed 10/27/99)
(h) None
(i) Not applicable to this filing
(j) Previously filed (see Post-Effective Amendment No. 68 Filed 10/27/99)
(k) None
(l) None
(m) Form of Plan of Distribution relating to Class B Shares
(n) Form of Multiple Class Plan
(o) None
(p) Code of Ethics
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
ITEM 25. INDEMNIFICATION
Registrant is a joint-insured under Investment Advisor/Mutual Fund Errors and
Omissions Policies written by American International Surplus Lines Insurance
Company, Chubb Custom Insurance Company, and ICI Mutual which insures its
officers and directors against certain liabilities. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for
which Registrant itself if not permitted to indemnify the individual.
ITEM 25. INDEMNIFICATION (CONTINUED)
The Articles of Incorporation state:
The Corporation shall indemnify (a) its directors to the full extent provided
by the general laws of the State of Maryland now or hereafter in force,
including the advance of expenses under the procedures provided by such laws;
(b) its officers to the same extent it shall indemnify its directors; and (c)
its officers who are not directors to such further extent as shall be
authorized by the Board of Directors and be consistent with law. The foregoing
shall not limit the authority of the Corporation to indemnify other employees
and agents consistent with law.
The By-Laws of the Corporation state:
Section 5.01. Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified by the Corporation against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding in the manner and on the terms provided by, and to the fullest
extent authorized by, applicable state law, and shall be indemnified by the
Corporation against such expenses, judgments, fines, and amounts in the manner
and to the fullest extent required by applicable state law. However, no
indemnification may be made under this section in the absence of a judicial or
administrative determination absolving the prospective indemnitee of liability
to the Corporation or its security holders unless, based upon a review of all
material facts, (1) a majority of a quorum of directors who are neither
interested persons of the Corporation nor parties to the proceeding, or (2)
independent legal counsel in a written opinion, concludes that such person was
not guilty of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties initiated in the conduct of his office.
Section 5.02. No expenses incurred by a director, officer, employee, or
agent of the Corporation in defending a civil or criminal action, suit, or
proceeding to which he is a party may be paid or reimbursed by the Corporation
in advance of the final disposition of such action, suit, or proceeding
unless:
(1) One of the following determines, on the basis of the facts then known to
it, that there is reason to believe that indemnification would be permissible:
(a) a majority of a quorum of disinterested non-party directors, or, if such
a quorum cannot be obtained, a majority of a committee of two or more
disinterested non-party directors duly designated to act in the matter by a
majority vote of the full board;
(b) special legal counsel selected by such a committee or such a quorum of
disinterested non-party directors; or
(c) the stockholders; and
ITEM 25. INDEMNIFICATION (CONTINUED)
(2) the Corporation receives the following from the prospective recipient of
the advance:
(a) a written affirmation of his good faith belief that he met the standard
of conduct necessary for indemnification; and
(b) an undertaking to repay the advance if it is ultimately determined that
he is not entitled to indemnification under this Article.
Section 5.03. The Corporation is authorized to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
Anything in this Article V to the contrary notwithstanding, however, the
Corporation shall not pay for insurance which protects any director or officer
against liabilities arising from action involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office; provided, that any such insurance may cover any of such
categories if it provides only for payment to the Corporation and/or third
parties of any damages caused by a director or officer, and also provides that
the insurance company would be subrogated to the rights of the Corporation to
recover from the director or officer.
Registrant will comply with the indemnification requirements contained in the
Investment Company Act of 1940 (the "1940 Act") Releases No. 7221 (June 9,
1972) and No. 11330 (September 4, 1980). In addition, indemnification by the
Registrant shall be consistent with the requirements of rule 484 under the
Securities Act of 1933. Furthermore, Registrant undertakes to the staff of the
Securities and Exchange Commission that the Fund's indemnification provisions
quoted above prohibit indemnification for liabilities arising under the
Securities Act of 1933 and the 1940 Act.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
None
ITEM 27. PRINCIPAL UNDERWRITERS
(a) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds
Income Series, The American Funds Tax-Exempt Series I, The American Funds
Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American
High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc.,
Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World
Growth and Income Fund, Inc., The Cash Management Trust of America, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America,
Inc., The Investment Company of America, Intermediate Bond Fund of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., New World Fund, Inc., SMALLCAP World Fund, Inc., The
Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America,
U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.
<TABLE>
<CAPTION>
(B) (1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
David L. Abzug Regional Vice President None
27304 Park Vista Road
Agoura Hills, CA 91301
John A. Agar Vice President None
#61 Point West Circle
Little Rock, AR 72211
Robert B. Aprison Vice President None
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President None
Steven L. Barnes Senior Vice President None
5400 Mount Meeker Road
Suite 1
Boulder, CO 80301-3508
B Carl R. Bauer Assistant Vice President None
Michelle A. Bergeron Senior Vice President None
4160 Gateswalk Drive
Smyrna, GA 30080
J. Walter Best, Jr. Regional Vice President None
9013 Brentmeade Blvd.
Brentwood, TN 37027
Joseph T. Blair Senior Vice President None
148 E. Shore Ave.
Groton Long Point, CT 06340
John A. Blanchard Vice President None
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President None
P.O. Box 1665
Brentwood, TN 37024-1665
Mick L. Brethower Senior Vice President None
2320 North Austin Avenue
Georgetown, TX 78626
Alan Brown Regional Vice President None
4129 Laclede Avenue
St. Louis, MO 63108
B J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
8002 Greentree Road
Bethesda, MD 20817
Victor C. Cassato Senior Vice President None
609 W. Littleton Blvd., Suite 310
Greenwood Village, CO 80120
Christopher J. Cassin Senior Vice President None
19 North Grant Street
Hinsdale, IL 60521
Denise M. Cassin Vice President None
1301 Stoney Creek Drive
San Ramon, CA 94538
L Larry P. Clemmensen Director None
L Kevin G. Clifford Director, President and Co-Chief None
Executive Officer
Ruth M. Collier Senior Vice President None
29 Landsdowne Drive
Larchmont, NY 10538
S David Coolbaugh Assistant Vice President None
H Carlo Cordasco Assistant Vice President None
Thomas E. Cournoyer Vice President None
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President None
3521 Rittenhouse Street, N.W.
Washington, D.C. 20015
L Carl D. Cutting Vice President None
Daniel J. Delianedis Regional Vice President None
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President None
P. O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
505 E. Main Street
Jenks, OK 74037
Kirk D. Dodge Senior Vice President None
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Director, Senior Vice None
President
Suite 216W
100 Merrick Road
Rockville Centre, NY 11570
L Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President None
L Paul H. Fieberg Senior Vice President None
John Fodor Vice President None
15 Latisquama Road
Southborough, MA 01772
Daniel B. Frick Regional Vice President None
845 Western Avenue
Glen Ellyn, IL 60137
Clyde E. Gardner Senior Vice President None
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Vice President None
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director None
B Mariellen Hamann Assistant Vice President None
David E. Harper Senior Vice President None
150 Old Franklin School Road
Pittstown, NJ 08867
H Mary Pat Harris Assistant Vice President None
Ronald R. Hulsey Vice President None
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President None
1225 Vista Del Mar Drive
Delray Beach, FL 33483
Michael J. Johnston Director None
630 Fifth Avenue, 36th Floor
New York, NY 10111
B Damien M. Jordan Vice President None
Arthur J. Levine Senior Vice President None
12558 Highlands Place
Fishers, IN 46038
B Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
5506 East Mineral Lane
Littleton, CO 80122
Mark J. Lien Regional Vice President None
5570 Beechwood Terrace
West Des Moines, IA 50266
L Lorin E. Liesy Assistant Vice President None
L Susan G. Lindgren Vice President - None
Institutional
Investment Services
LW Robert W. Lovelace Director None
Stephen A. Malbasa Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 South Race Street
Littleton, CO 80121
L J. Clifton Massar Director, Senior Vice None
President
L E. Lee McClennahan Senior Vice President None
S John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President - None
Institutional
Investment Services
David R. Murray Vice President None
60 Briant Drive
Sudbury, MA 01776
Stephen S. Nelson Vice President None
P.O. Box 470528
Charlotte, NC 28247-0528
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President None
62 Park Drive
Glenview, IL 60025
Gary A. Peace Regional Vice President None
291 Kaanapali Drive
Napa, CA 94558
Samuel W. Perry Regional Vice President None
6133 Calle del Paisano
Scottsdale, AZ 85251
Fredric Phillips Senior Vice President None
175 Highland Avenue, 4th Floor
Needham, MA 02494
B Candance D. Pilgrim Assistant Vice President None
Carl S. Platou Vice President None
7455 80th Place, S.E.
Mercer Island, WA 98040
L John O. Post Senior Vice President None
S Richard P. Prior Vice President None
Steven J. Reitman Senior Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President None
P.O. Box 472245
Charlotte, NC 28247
George S. Ross Senior Vice President None
55 Madison Avenue
Morristown, NJ 07960
L Julie D. Roth Vice President None
L James F. Rothenberg Director None
Douglas F. Rowe Vice President None
414 Logan Ranch Road
Georgetown, TX 78628
Christopher S. Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President None
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joseph D. Scarpitti Vice President None
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director None
David W. Short Chairman of the Board and None
1000 RIDC Plaza, Suite 212 Co-Chief Executive Officer
Pittsburgh, PA 15238
William P. Simon Senior Vice President None
912 Castlehill Lane
Devon, PA 19333
L John C. Smith Assistant Vice President - None
Institutional Investment
Services
Rodney G. Smith Vice President None
100 N. Central Expressway
Suite 1214
Richardson, TX 75080
S Sherrie Snyder-Senft Assistant Vice President None
Anthony L. Soave Regional Vice President None
8831 Morning Mist Drive
Clarkston, MI 48348
Theresa Souiller Assistant Vice President None
2652 Excaliber Court
Virginia Beach, VA 23454
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President None
Daniel S. Spradling Senior Vice President None
181 Second Avenue
Suite 228
San Mateo, CA 94401
LW Eric H. Stern Director None
B Max D. Stites Vice President None
Thomas A. Stout Regional Vice President None
1004 Ditchley Road
Virginia Beach, VA 23451
Craig R. Strauser Vice President None
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
L Drew W. Taylor Assistant Vice President None
S James P. Toomey Vice President None
I Christopher E. Trede Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President None
60 Reedland Woods Way
Tiburon, CA 94920
J. David Viale Regional Vice President None
7 Gladstone Lane
Laguna Niguel, CA 92677
Thomas E. Warren Regional Vice President None
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Senior Vice President, None
Treasurer and Controller
Gregory J. Weimer Vice President None
206 Hardwood Drive
Venetia, PA 15367
B Timothy W. Weiss Director None
George Wenzel Regional Vice President None
3406 Shakespeare Drive
Troy, MI 48084
H J. D. Wiedmaier Assistant Vice President None
Timothy J. Wilson Vice President None
113 Farmview Place
Venetia, PA 15367
B Laura L. Wimberly Vice President None
H Marshall D. Wingo Director, Senior Vice None
President
L Robert L. Winston Director, Senior Vice None
President
William R. Yost Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President None
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President None
2887 Player Lane
Tustin Ranch, CA 92782
</TABLE>
__________
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles, CA
90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
(c) None
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other records required by Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended, are maintained and held in the
offices of its investment adviser, Capital Research and Management Company, 333
South Hope Street, Los Angeles, California 90071, and/or 135 South State
College Boulevard, Brea, California 92821.
Registrant's records covering shareholder accounts are maintained and kept by
its transfer agent, American Funds Service Company, 135 South State College
Boulevard, Brea, California 92821, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, 3500 Wiseman Boulevard, San Antonio, Texas 78251 and
5300 Robin Hood Road, Norfolk, VA 23513.
Registrant's records covering portfolio transactions are maintained and kept
by its custodian, The Chase Manhattan Bank, One Chase Manhattan Plaza, New
York, New York 10081.
ITEM 29. MANAGEMENT SERVICES
None
ITEM 30. UNDERTAKINGS
n/a
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this amended Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, and State of California, on the 4th day
of January, 2000.
THE GROWTH FUND OF AMERICA, INC.
By /s/ James F. Rothenberg
James F. Rothenberg, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this amendment to
its registration statement has been signed below on January 4, 2000, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C> <C>
(1) Principal Executive Officer: President and Director
/s/ James E. Drasdo
(James E. Drasdo)
(2) Principal Financial Officer Treasurer
and Principal Accounting
Officer:
/s/ Sheryl F. Johnson
(Sheryl F. Johnson)
(3) Directors:
Guilford C. Babcock* Director
/s/ James E. Drasdo President and Director
James E. Drasdo
Robert A. Fox* Director
Roberta L. Hazard* Director
Leonade D. Jones* Director
John G. McDonald* Director
Gail L. Neale* Director
James W. Ratzlaff* Director
Henry E. Riggs* Director
/s/ James R. Rothenberg Chairman of the Board
Patricia K. Woolf* Director
</TABLE>
*By /s/ Julie F. Williams
Julie F. Williams, Attorney-in-Fact
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
THE GROWTH FUND OF AMERICA, INC.
THE GROWTH FUND OF AMERICA, INC., a corporation organized and existing under
and by virtue of the laws of the State of Maryland and having its principal
office in the city of Baltimore in that State (the "Corporation"), does hereby
certify:
FIRST: The Articles of Incorporation of the Corporation are hereby amended in
the following respects:
1. Article V is amended in its entirety to read as follows:
V.
CAPITAL STOCK
(1) The total number of shares of stock of all classes and series which the
Corporation has authority to issue is two billion (2,000,000,000) shares of
capital stock (value $0.001 per share), amounting in aggregate par value to two
million dollars ($2,000,000).
(2) Unless otherwise prohibited by law, so long as the Corporation is
registered as an open-end company under the Investment Company Act, the Board
of Directors shall have full power and authority, without the approval of the
holders of any outstanding shares, to increase or decrease the number of shares
of capital stock or the number of shares of capital stock of any class or
series that the Corporation has authority to issue.
(3) As used in these Articles of Incorporation, a "series" of shares represents
interests in the same assets, liabilities, income, earnings and profits of the
Corporation; each "class" of shares of a series represents interests in the
same underlying assets, liabilities, income, earnings and profits, but may
differ from other classes of such series with respect to fees and expenses or
such other matters as shall be established by the Board of Directors. The
Board of Directors of the Corporation shall have full power and authority, from
time to time, to classify and reclassify any authorized but unissued shares of
stock of the Corporation, including, without limitation, the power to classify
or reclassify unissued shares into series, and to classify and reclassify a
series into one or more classes of stock that may be invested together in the
common investment portfolio in which the series is invested, by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock. All shares of stock of a
series shall represent the same interest in the Corporation and have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as the other shares of stock of that series, except to the extent
that the Board of Directors provides for differing preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of shares of stock of
classes of such series as determined pursuant to Articles Supplementary filed
for record with the State Department of Assessments and Taxation of Maryland,
as otherwise determined pursuant to these Articles or by the Board of Directors
in accordance with law.
(4) Initially, the shares of capital stock of the Corporation shall be all of
one class and series designated as "common stock." Notwithstanding any other
provision of these Articles, upon the first classification of unissued shares
of stock into additional series, the Board of Directors shall specify a legal
name for the outstanding series, as well as for the new series, in appropriate
charter documents filed for record with the State Department of Assessments and
Taxation of Maryland providing for such name change and classification, and
upon the first classification of a series into additional classes, the Board of
Directors shall specify a legal name for the outstanding class, as well as for
the new class or classes, in appropriate charter documents filed for record
with the State Department of Assessments and Taxation of Maryland providing for
such name change and classification.
(5) The following is a description of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of all series of capital
stock of the Corporation and classes of such series (unless provided otherwise
by the Board of Directors with respect to any such additional series (or class
thereof) at the time it is established and designated):
(a) Assets Belonging to Series. All consideration received by the Corporation
from the issue or sale of shares of a particular series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any investment or reinvestment of such proceeds in whatever form the same
may be, shall irrevocably belong to that series for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the books of account
of the Corporation. Such consideration, assets, income, earnings, profits and
proceeds, including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, together with any General Items (as
defined below) allocated to that series as provided in the following sentence,
are herein referred to collectively as "assets belonging to" that series. In
the event that there are any assets, income, earnings, profits or proceeds of
the Corporation which are not readily identifiable as belonging to any
particular series (collectively, "General Items"), such General Items shall be
allocated by or under the supervision of the Board of Directors to and among
any one or more of the series established and designated from time to time in
such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable; and any General Items so allocated to a
particular series shall belong to that series. Each such allocation by the
Board of Directors shall be conclusive and binding for all purposes.
(b) Liabilities of Series. The assets belonging to each particular series
shall be charged with the liabilities of the Corporation in respect of that
series, including any class thereof, and all expenses, costs, charges and
reserves attributable to that series, including any such class, and any general
liabilities, expenses, costs, charges or reserves of the Corporation which are
not readily identifiable as pertaining to any particular series, shall be
allocated and charged by or under the supervision of the Board of Directors to
and among any one or more of the series established and designated from time to
time in such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to a series are herein referred
to collectively as "liabilities of" that series. Each allocation of
liabilities, expenses, costs, charges and reserves by or under the supervision
of the Board of Directors shall be conclusive and binding for all purposes.
(c) Dividends and Distributions. Dividends and capital gains distributions on
shares of a particular series may be paid with such frequency, in such form and
in such amount as the Board of Directors may determine by resolution adopted
from time to time, or pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Board of Directors may determine, after
providing for actual and accrued liabilities of that series. All dividends on
shares of a particular series shall be paid only out of the income belonging to
that series and all capital gains distributions on shares of a particular
series shall be paid only out of the capital gains belonging to that series.
Such dividends and distributions may vary between or among classes of a series
to reflect differing allocations of liabilities and expenses of such series
between or among such classes to such extent as may be provided in or
determined pursuant to Articles Supplementary filed for record with the State
Department of Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors. All dividends and distributions on
shares of a particular series (or class thereof) shall be distributed pro rata
to the holders of that series (or class thereof) in proportion to the number of
shares of that series (or class thereof) held by such holders at the date and
time of record established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program or
procedure, the Board of Directors may determine that no dividend or
distribution shall be payable on shares as to which the stockholder's purchase
order and/or payment have not been received by the time or times established by
the Board of Directors under such program or procedure.
Dividends and distributions may be paid in cash, property or additional shares
of the same or another class or series or a combination thereof, as determined
by the Board of Directors or pursuant to any program that the Board of
Directors may have in effect at the time for the election by stockholders of
the form in which dividends or distributions are to be paid. Any such dividend
or distribution paid in shares shall be paid at the current net asset value
thereof.
(d) Voting. On each matter submitted to a vote of the stockholders, each
holder of shares shall be entitled to one vote for each share standing in his
name on the books of the Corporation, irrespective of the series or class
thereof, and all shares of all series and classes shall vote as a single class
("Single Class Voting"); provided, however, that (i) as to any matter with
respect to which a separate vote of any series or class is required by the
Investment Company Act or by the Maryland General Corporation Law, such
requirement as to a separate vote by that series or class shall apply in lieu
of Single Class Voting; (ii) in the event that the separate vote requirements
referred to in clause (i) above apply with respect to one or more (but less
than all) series or classes, then, subject to clause (iii) below, the shares of
all other series and classes shall vote as a single class; and (iii) as to any
matter which does not affect the interest of a particular series or class,
including liquidation of another series as described in subsection (g) below,
only the holders of shares of the one or more affected series shall be entitled
to vote.
Notwithstanding any provision of law requiring the authorization of any action
by a greater proportion than a majority of the total number of shares of all
classes and series of capital stock or of the total number of shares of any
class or series of capital stock entitled to vote as a separate class, such
action shall be valid and effective if authorized by the affirmative vote of
the holders of a majority of the total number of shares of all classes and
series outstanding and entitled to vote thereon, or of the class or series
entitled to vote thereon as a separate class, as the case may be, except as
otherwise provided in the charter of the Corporation.
(e) Redemption by Stockholders. Each holder of shares of a particular series
shall have the right at such times as may be permitted by the Corporation to
require the Corporation to redeem all or any part of his shares of that series,
at a redemption price per share equal to the net asset value per share of that
series next determined after the shares are properly tendered for redemption,
less such redemption fee or sales charge, if any, as may be established by the
Board of Directors in its sole discretion. Payment of the redemption price
shall be in cash; provided, however, that if the Board of Directors determines,
which determination shall be conclusive, that conditions exist which make
payment wholly in cash unwise or undesirable, the Corporation may, to the
extent and in the manner permitted by the Investment Company Act, make payment
wholly or partly in securities or other assets belonging to the series of which
the shares being redeemed are a part, at the value of such securities or assets
used in such determination of net asset value.
Notwithstanding the foregoing, the Corporation may postpone payment of the
redemption price and may suspend the right of the holders of shares of any
series to require the Corporation to redeem shares of that series during any
period or at any time when and to the extent permissible under the Investment
Company Act.
(f) Redemption by Corporation. The Board of Directors may cause the
Corporation to redeem at their net asset value the shares of any series (or
class thereof) held in an account having, because of redemptions or exchanges,
a net asset value on the date of the notice of redemption less than the minimum
initial investment in that series (or class thereof) specified by the Board of
Directors from time to time in its sole discretion, provided that at least 60
days prior written notice of the proposed redemption has been given to the
holder of any such account by mail, postage prepaid, at the address contained
in the books and records of the Corporation and such holder has been given an
opportunity to purchase the required value of additional shares.
(g) Liquidation. In the event of the liquidation of a particular series as
herein contemplated, the stockholders of the series that is being liquidated
shall be entitled to receive, as a class, when and as declared by the Board of
Directors, the excess of the assets belonging to that series over the
liabilities of that series. The holders of shares of any particular series
shall not be entitled thereby to any distribution upon liquidation of any other
series. The assets so distributable to the stockholders of any particular
series shall be distributed among such stockholders in proportion to the number
of shares of that series held by them and recorded on the books of the
Corporation. The liquidation of any particular series in which there are
shares then outstanding may be authorized by vote of a majority of the Board of
Directors then in office, without any action by the holders of the outstanding
voting securities of that series, as defined in the Investment Company Act, and
without the vote of the holders of shares of any other series. The liquidation
of a particular series may be accomplished, in whole or in part, by the
transfer of assets of such series to another series or by the exchange of
shares of such series for the shares of another series.
(h) Net Asset Value Per Share. For the purposes referred to in these Articles
of Incorporation, the net asset value of shares of the capital stock of the
Corporation of each series and class as of any particular time (a
"determination time") shall be determined by or pursuant to the direction of
the Board of Directors as follows:
(i) At times when a series is not classified into multiple classes, the net
asset value of each share of stock of a series, as of a determination time,
shall be the quotient obtained by dividing the net value of the assets of the
Corporation belonging to that series (determined as hereinafter provided) as of
such determination time by the total number of shares of that series then
outstanding, including all shares of that series which the Corporation has
agreed to sell for which the price has been determined, and excluding shares of
that series which the Corporation has agreed to purchase or which are subject
to redemption for which the price has been determined.
The net value of the assets of the Corporation belonging to a series shall be
determined in accordance with sound accounting practice by deducting from the
gross value of the assets of the Corporation belonging to that series
(determined as hereinafter provided), the amount of all liabilities of that
series, in each case as of such determination time.
The gross value of the assets of the Corporation belonging to a series as of
such determination time shall be an amount equal to all cash, receivables, the
market value of all securities for which market quotations are readily
available and the fair value of other assets of the Corporation belonging to
that series at such determination time, all determined in accordance with sound
accounting practice and giving effect to the following:
(ii) At times when a series is classified into multiple classes, the net asset
value of each share of stock of a class of such series shall be determined in
accordance with subsections (i) and (iii) of this Section (h) with appropriate
adjustments to reflect differing allocations of liabilities and expenses of
such series between or among classes to such extent as may be provided in or
determined pursuant to Articles Supplementary filed for record with the State
Department of Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors.
(iii) The Board of Directors is empowered, in its discretion, to establish
other methods for determining such net asset value whenever such other methods
are deemed by it to be necessary or desirable, including, without limiting the
generality of the foregoing, any method deemed necessary or desirable in order
to enable the Corporation to comply with any provision of the Investment
Company Act or any rule or regulation thereunder. Subject to the applicable
provisions of the Investment Company Act, the Board of Directors, in its sole
discretion, may prescribe and shall set forth in the By-Laws of the Corporation
or in a duly adopted resolution of the Board of Directors such bases and times
for determining the value of the assets belonging to, and the net asset value
per share of outstanding shares of, each series, or the net income attributable
to such shares, as the Board of Directors deems necessary or desirable. The
Board of Directors shall have full discretion, to the extent not inconsistent
with the Maryland General Corporation Law and the Investment Company Act, to
determine which items shall be treated as income and which items as capital and
whether any item of expense shall be charged to income or capital.
(i) Equality. All shares of each particular series shall represent an equal
proportionate interest in the assets belonging to that series (subject to the
liabilities of that series), and each share of any particular series shall be
equal to each other share of that series. The Board of Directors may from time
to time divide or combine the shares of any particular series into a greater or
lesser number of shares of that series without thereby changing the
proportionate interest in the assets belonging to that series or in any way
affecting the rights of holders of shares of any other series.
(j) Conversion or Exchange Rights. (i) Subject to compliance with the
requirements of the Investment Company Act, the Board of Directors shall have
the authority to provide that holders of shares of any class or series shall
have the right to exchange said shares into shares of one or more other class
or series of shares in accordance with such requirements and procedures as may
be established by the Board of Directors.
(ii) At such times (which may vary among shares of a class) as may be
determined by the Board of Directors, shares of a particular class of a series
may be automatically converted into another class of such series based on the
relative net asset value of such classes at the time of conversion, subject,
however, to any conditions of the conversion that may be imposed by the Board
of Directors.
(6) (a) Shares of the various classes of each series of capital stock shall
represent the same interest in the Corporation and have, except as provided to
the contrary in any subsequently filed charter document, identical voting,
dividend, liquidation, and other rights, terms and conditions with any other
shares of capital stock of that series; provided however, that notwithstanding
anything in the charter of the Corporation to the contrary, shares of the
various classes of a series shall be subject to such differing front-end sales
loads, contingent deferred sales charges, fees or expenses under a plan of
distribution or other arrangement related to distribution of shares issued by
the Corporation, and administrative, recordkeeping, or service fees, each as
may be established from time to time by the Board of Directors in accordance
with the Investment Company Act and any rules or regulations promulgated
thereunder and applicable rules and regulations of self-regulatory
organizations and as shall be set forth in the applicable prospectus for the
shares; and provided further that expenses related solely to a particular class
of a particular series of capital stock (including, without limitation, fees or
expenses under a plan of distribution and administrative expenses under an
administration or service agreement, plan or other arrangement, however
designated) shall be borne solely by such class and shall be appropriately
reflected (in the manner determined by the Board of Directors) in the net asset
value, dividends, distribution and liquidation rights of the shares of the
class in question.
(b) As to any matter with respect to which a separate vote of any class of a
series is required by the Investment Company Act or by the Maryland General
Corporation Law (including, without limitation, approval of any plan, agreement
or other arrangement referred to in subsection (a) above), such requirement as
to a separate vote by that class shall apply in lieu of Single Class Voting,
and if permitted by the Investment Company Act or the Maryland General
Corporation Law, the classes of more than one series shall vote together as a
single class on any such matter which shall have the same effect on each such
class. As to any matter which does not affect the interest of a particular
class of a series, only the holders of shares of the affected classes of that
series shall be entitled to vote.
(c) In furtherance but not in limitation of this Article V, and without
limiting the ability of the Corporation to effect a transaction contemplated by
this paragraph under authority of applicable law or any other independent
provision of the charter, the assets belonging to a particular class or series
of shares of capital stock may be invested partially or entirely in the shares
of a registered or unregistered investment company formed to implement a
"master-feeder" or similar structure operated in conformity with the Investment
Company Act and orders issued pursuant thereto, or in any similar structure
however designated. The Corporation shall also be authorized to exchange the
assets belonging to a class or series for shares in such a registered or
unregistered investment company formed to be a master portfolio upon the
approval of the Board of Directors and without further authorization by the
shareholders of the class or series in question or any other class or classes
or series of capital stock of the Corporation.
(7) The Corporation may issue and sell fractions of shares of capital stock
having pro rata all the rights of full shares, including, without limitation,
the right to vote and to receive dividends, and wherever the words "share" or
"shares" are used in the charter or By-Laws of the Corporation, they shall be
deemed to include fractions of shares where the context does not clearly
indicate that only full shares are intended.
(8) The Corporation shall not be obligated to issue certificates representing
shares of any class or series of capital stock. At the time of issue or
transfer of shares without certificates, the Corporation shall provide the
stockholder with such information as may be required under the Maryland General
Corporation Law.
(9) Any determination as to any of the following matters made by or pursuant
to the direction of the Board of Directors consistent with these Articles of
Incorporation and in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of capital
stock of the Corporation, of any series or class, namely, the amount of the
assets, obligations, liabilities and expenses of the Corporation or belonging
to any series or with respect to any class; the amount of the net income of the
Corporation from dividends and interest for any period and the amount of assets
at any time legally available for the payment of dividends with respect to any
series or class; the amount of paid-in surplus, annual or other net profits, or
net assets in excess of capital, undivided profits, or excess of profits over
losses on sales of securities belonging to the Corporation or any series or
class; the amount, purpose, time of creation, increase or decrease, alteration
or cancellation of any reserves or charges and the propriety thereof (whether
or not any obligation or liability for which such reserves or charges shall
have been created shall have been paid or discharged) with respect to the
Corporation or any series or class; the market value, or any sale, bid or asked
price to be applied in determining the market value, of any security owned or
held by the Corporation; the fair value of any other asset owned or held by the
Corporation; the number of shares of stock of any series or class issued or
issuable; the existence of conditions permitting the postponement of payment of
the repurchase price of shares of stock of any series or class or the
suspension of the right of redemption as provided by law; any matter relating
to the acquisition, holding and disposition of securities and other assets by
the Corporation; any question as to whether any transaction constitutes a
purchase of securities on margin, a short sale of securities, or an
underwriting of the sale of, or participation in any underwriting or selling
group in connection with the public distribution of any securities; and any
matter relating to the issue, sale, repurchase or other acquisition or
disposition of shares of stock of any series or class.
2. Articles VIII and IX are deleted in their entirety.
3. Articles X and XI are renumbered accordingly.
SECOND: (a) As of immediately before the increase the total number of shares
of stock of all classes which the Corporation has authority to issue is
1,000,000,000 shares of Common Stock (par value $0.10 per share).
(b) As increased the total number of shares of stock of all classes which
the Corporation has authority to issue is 2,000,000,000 shares of Common Stock
(par value $0.001 per share).
(c) The aggregate par value of all shares having a par value is
$100,000,000 before the increase and $2,000,000 as increased.
THIRD: The aforesaid amendments were declared advisable and approved by
resolution of a majority of the entire Board of Directors of the Corporation at
meetings duly held on August 12, 1999 and December 9, 1999.
FOURTH: That, pursuant to resolution of the Board of Directors, an annual
meeting of the shareholders of said Corporation was duly called and held on
October 27, 1999, as adjourned to November 22, 1999 and December 7, 1999, upon
notice, duly given at which meeting the necessary number of shares as required
by statute were voted in favor of the amendments.
FIFTH: The amendment of the Articles of Incorporation as hereinabove set forth
have been duly advised by the Board of Directors and approved by the
shareholders of the Corporation.
IN WITNESS WHEREOF, THE GROWTH FUND OF AMERICA, INC. has caused these Articles
of Amendment to be signed in its name and on its behalf by its Senior Vice
President and attested by its Secretary, and the said officers of the
Corporation further also acknowledge said instrument to be the corporate act of
the Corporation and state and certify under the penalty of perjury that to the
best of their knowledge, information and belief, the matters and facts therein
set forth with respect to authorization and approval thereof are true and
correct in all material respects, all on December 17, 1999.
THE GROWTH FUND OF AMERICA, INC.
By
Paul G. Haaga, Jr., Senior Vice President
ATTEST:
_________________________________
Julie F. Williams, Secretary
State of California
County of Los Angeles
On December 17, 1999 before me, , Notary Public
DATE NAME, TITLE OF OFFICER - E.G., "JANE DOE, NOTARY PUBLIC"
personally appeared Paul G. Haaga, Jr., and Julie F. Williams
NAME(S) OF SIGNER(S)
j personally known to me - OR - j proved to me on the basis of satisfactory
evidence to be the persons whose names are subscribed to the within instrument
and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the
entity upon behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
THE GROWTH FUND OF AMERICA, INC.
ARTICLES SUPPLEMENTARY
The Growth Fund of America, Inc., a Maryland corporation having its principal
office in Baltimore, Maryland (the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: (a) The Board of Directors of the Corporation has divided and further
classified the unissued shares of the authorized common stock of the
Corporation as a class, designated "Class B". The remaining shares of common
stock, including the shares currently issued and outstanding, shall be referred
to as "Class A" shares. The authorized shares of each such class of common
stock shall consist of the sum of (x) the outstanding shares of that class and
(y) one-half (1/2) of the authorized but unissued shares of all classes of
common stock; PROVIDED HOWEVER, that in the event application of the above
formula would result, at the time, in fractional shares of one or more classes,
the number of authorized shares of each such class shall be rounded down to the
nearest whole number of shares; and PROVIDED, FURTHER, that at all times the
aggregate number of authorized Class A and Class B shares of common stock shall
not exceed the authorized number of shares of common stock (I.E., 2,000,000,000
shares until changed by action of the Board of Directors in accordance with
Section 2-208.1 of the Maryland General Corporation Law).
(b) The preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the Class A shares of the Corporation are set forth
in the Charter of the Corporation. The preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the Class B shares of
the Corporation are set forth below.
SECOND: Except to the extent provided otherwise by the Charter of the
Corporation, the Class A shares and the Class B shares of the Corporation shall
represent an equal proportionate interest in the assets of the Corporation
(subject to the liabilities of the Corporation) and each share shall have
identical voting, dividend, liquidation and other rights; PROVIDED, HOWEVER,
that notwithstanding anything in the Charter of the Corporation to the
contrary:
(i) Class A shares and Class B shares may be issued and sold subject to
different sales loads or charges, whether initial, deferred or contingent, or
any combination thereof, as may be established from time to time by the Board
of Directors in accordance with the Investment Company Act of 1940 and
applicable rules and regulations of self-regulatory organizations and as shall
be set forth in the applicable prospectus for the shares;
(ii) Expenses, costs and charges which are determined by or under the
supervision of the Board of Directors to be attributable to the shares of a
particular class may be charged to that class and appropriately reflected in
the net asset value of, or dividends payable on, the shares of that class;
(iii) Except as otherwise provided hereinafter, on the first Friday of the
first calendar month following the expiration of a 96-month period commencing
on the first day of the calendar month during which Class B shares were
purchased by a holder thereof (if such Friday is not a business day, on the
next succeeding business day), such shares (as well as a pro rata portion of
any Class B shares purchased through the reinvestment of dividends or other
distributions paid on all Class B shares held by such holder) shall
automatically convert to Class A shares on the basis of the respective net
asset values of the Class B shares and the Class A shares on the conversion
date; PROVIDED, HOWEVER, that the Board of Directors, in its sole discretion,
may suspend the conversion of Class B shares if any conversion of such shares
would constitute a taxable event under federal income tax law (in which case
the holder of such Class B shares shall have the right to exchange from time to
time any or all of such Class B shares held by such holder for Class A shares
on the basis of the respective net asset values of the Class B shares and Class
A shares on the applicable exchange date and without the imposition of a sales
charge or fee); and PROVIDED, FURTHER, that conversion (or exchange) of Class B
shares represented by stock certificates shall be subject to tender of such
certificates; and
(iv) Subject to the foregoing paragraph, Class A shares and Class B shares may
have such different exchange rights as the Board of Directors shall provide in
compliance with the Investment Company Act of 1940.
THIRD: The foregoing amendment to the Charter of the Corporation does not
increase the authorized capital stock of the Corporation.
FOURTH: The aforesaid shares have been duly classified by the Board of
Directors pursuant to authority and power contained in the Charter of the
Corporation.
IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in
its name and on its behalf by its Senior Vice President and attested by its
Secretary on this 3rd day of January, 2000.
THE GROWTH FUND OF AMERICA, INC.
By: /s/ Paul G. Haaga, Jr.
Paul G. Haaga, Jr.
Senior Vice President
ATTEST:
/s/ Julie F. Williams
Julie F. Williams
Secretary
The undersigned, Paul G. Haaga, Jr., Senior Vice President of The Growth Fund
of America, Inc., who executed on behalf of said Corporation the foregoing
Articles Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing
Articles Supplementary to be the corporate act of the Corporation and hereby
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/ Paul G. Haaga, Jr.
Paul G. Haaga, Jr.
Senior Vice President
SIGNATURE OF NOTARY
FORM OF
INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 15th day of March, 2000, by and
between [NAME OF FUND], 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 [initial agreement date], and is currently providing such services under
a written agreement dated [current agreement date], as renewed.
NOW THEREFORE, in consideration of the premises and the mutual under takings 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:
[fee schedule]
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 ([first day of the month fiscal
year begins to last day of the month fiscal year ends]), 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: [fee
expense cap]
5. The expense limitation described in Section 4 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 4 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.
6. 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 [agreement expiration date]. 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.
7. 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.
8. 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 [date].
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.
[NAME OF FUND] CAPITAL RESEARCH AND MANAGEMENT COMPANY
By: By:
[ ] James F. Rothenberg
President President
By: By:
[ ] Michael J. Downer
Secretary Secretary
FORM OF
AMENDED AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL UNDERWRITING AGREEMENT, between [NAME OF FUND], a Maryland
corporation (the "Fund"), and AMERICAN FUNDS DISTRIBUTOR, INC., a California
corporation ("the Distributor").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end diversified investment company which
offers shares of common stock and it is a part of the business of the Fund, and
affirmatively in the interest of the Fund, to offer shares of the Fund either
from time to time or continuously as determined by the Fund's officers subject
to authorization by its Board of Directors; and
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of shares of investment companies through securities
broker-dealers; and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other to promote the distribution of the shares of the Fund and of all
series or classes of the Fund which may be established in the future;
NOW, THEREFORE, the parties agree as follows:
1. (a) The Distributor shall be the exclusive principal underwriter for the
sale of the shares of the Fund and of each series or class of the Fund which
may be established in the future, except as otherwise provided pursuant to the
following subsection (b). The terms "shares of Fund" or "shares" as used
herein shall mean shares of common stock of the Fund and each series or class
which may be established in the future and become covered by this Agreement in
accordance with Section 23 of this Agreement.
(b) The Fund may, upon 60 days' written notice to the Distributor, from time to
time designate other principal underwriters of its shares with respect to areas
other than the North American continent, Hawaii, Puerto Rico, and such
countries or other jurisdictions as to which the Fund may have expressly waived
in writing its right to make such designation. In the event of such
designation, the right of the Distributor under this Agreement to sell shares
in the areas so designated shall terminate, but this Agreement shall remain
otherwise in full force and effect until terminated in accordance with the
other provisions hereof.
2. In the sale of shares of the Fund, the Distributor shall act as agent of the
Fund except in any transaction in which the Distributor sells such shares as a
dealer to the public, in which event the Distributor shall act as principal for
its own account.
3. The Fund shall sell shares only through the Distributor, except that the
Fund may, to the extent permitted by the 1940 Act and the rules and regulations
promulgated thereunder or pursuant thereto, at any time:
(a) issue shares to any corporation, association, trust, partnership or other
organization, or its, or their, security holders, beneficiaries or members, in
connection with a merger, consolidation or reorganization to which the Fund is
a party, or in connection with the acquisition of all or substantially all the
property and assets of such corporation, association, Fund, partnership or
other organization;
(b) issue shares at net asset value to the holders of shares of capital stock
or beneficial interest of other investment companies served as investment
adviser by any affiliated company or companies of The Capital Group Companies,
Inc., to the extent of all or any portion of amounts received by such
shareholders upon redemption or repurchase of their shares by the other
investment companies;
(c) issue shares at net asset value to its shareholders in connection with the
reinvestment of dividends paid and other distributions made by the Fund;
(d) issue shares at net asset value to persons entitled to purchase shares at
net asset value without sales charge or contingent deferred sales charge as
described in the current prospectus which is part of the Fund's Registration
Statement in effect under the Securities Act of 1933, as amended, for each
series issued by the Fund at the time of such offer or sale (the "Prospectus").
4. The Distributor shall devote its best efforts to the sale of shares of the
Fund and shares of any other mutual funds served as investment adviser by
affiliated companies of The Capital Group Companies, Inc., and insurance
contracts funded by shares of such mutual funds, for which the Distributor has
been authorized to act as a principal underwriter for the sale of shares. The
Distributor shall maintain a sales organization suited to the sale of shares of
the Fund and shall use its best efforts to effect such sales in jurisdictions
as to which the Fund shall have expressly waived in writing its right to
designate another principal underwriter pursuant to subsection 1(b) hereof, and
shall effect and maintain appropriate qualification to do so in all those
jurisdictions in which it sells or offers shares for sale and in which
qualification is required.
5. Within the United States of America, all dealers to whom the Distributor
shall offer and sell shares must be duly licensed and qualified to sell shares
of the Fund. Shares sold to dealers shall be for resale by such dealers only
at the public offering price set forth in the current Prospectus. The
Distributor shall not, without the consent of the Fund, sell or offer for sale
any shares of a series or class issued by the Fund other than as principal
underwriter pursuant to this Agreement.
6. In its sales to dealers, it shall be the responsibility of the Distributor
to insure that such dealers are appropriately qualified to transact business in
the shares under applicable laws, rules and regulations promulgated by such
national, state, local or other governmental or quasi-governmental authorities
as may in a particular instance have jurisdiction.
7. The applicable public offering price of shares shall be the price which is
equal to the net asset value per share, as shall be determined by the Fund in
the manner and at the time or times set forth in and subject to the provisions
of the Prospectus of the Fund.
8. All orders for shares received by the Distributor shall, unless rejected by
the Distributor or the Fund, be accepted by the Distributor immediately upon
receipt and confirmed at an offering price determined in accordance with the
provisions of the Prospectus and the 1940 Act, and applicable rules in effect
thereunder. The Distributor shall not hold orders subject to acceptance nor
otherwise delay their execution. The provisions of this Section shall not be
construed to restrict the right of the Fund to withhold shares from sale under
Section 18 hereof.
9. The Fund or its transfer agent shall be promptly advised of all orders
received, and shall cause shares to be issued upon payment therefor in New York
or Los Angeles Clearing House Funds.
10. The Distributor shall adopt and follow procedures as approved by the
officers of the Fund for the confirmation of sales to dealers, the collection
of amounts payable by dealers on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
Securities and Exchange Commission or the National Association of Securities
Dealers, Inc. ("NASD"), as such requirements may from time to time exist.
11. The Distributor, as a principal underwriter under this Agreement for Class
A shares, shall receive (i) that part of the sales charge which is retained by
the Distributor after allowance of discounts to dealers, unless waived by the
Distributor for certain qualified fee-based programs, as set forth in the
Prospectus of the Fund, and (ii) amounts payable to the Distributor pursuant to
the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act.
12. The Distributor, as principal underwriter under this agreement for Class B
shares shall receive (i) distribution fees as commissions for the sale of Class
B shares and contingent deferred sales charges ("CDSC") (as defined below), as
set forth in the Fund's Prospectus, and (ii) shareholder service fees at the
rate of 0.25% per annum of the average daily net asset value of Class B shares
pursuant to the Fund's Class B Plan of Distribution under Rule 12b-1 under the
1940 Act.
13. (a) In accordance with the Plan of Distribution of the Fund in respect of
the Class B shares (the "Plan"), the Fund shall pay to the Distributor or, at
the Distributor's direction, to a third-party, monthly in arrears on or prior
to the 10th business day of the following calendar month, the Distributor's
Allocable Portion (as defined below) of a fee (the "Distribution Fee") which
shall accrue daily in an amount equal to the product of (A) the daily
equivalent of 0.75% per annum multiplied by (B) the net asset value of the
Class B shares of the Fund outstanding on such day. The Fund agrees to withhold
from redemption proceeds of the Class B shares, the Distributor's Allocable
Portion of any CDSCs payable with respect to the Class B shares, as provided in
the Fund's Prospectus, and to pay the same over to the Distributor or, at the
Distributor's direction to a third-party, at the time the redemption proceeds
are payable to the holder of such shares redeemed. Payment of these CDSC
amounts to the Distributor is not contingent upon the adoption or continuation
of any Plan.
(b) For purposes of this Agreement, the term "Allocable Portion" of
Distribution Fees and CDSCs payable with respect to Class B shares shall mean
the portion of such Distribution Fees and CDSC allocated to the Distributor in
accordance with the Allocation Schedule attached hereto as Schedule A.
(c) The Distributor shall be considered to have completely earned the right to
the payment of its Allocable Portion of the Distribution Fees and the right to
payment of its Allocable Portion of the CDSCs with respect to each "Commission
Share" (as defined in the Allocation Schedule attached hereto as Schedule A)
upon the settlement date of such Commission Share taken into account in
determining the Distributor's Allocable Portion of Distribution Fees.
(d) The provisions set forth in Section 1 of the Plan (in effect on the date
hereof) relating to Class B shares, together with the related definitions are
hereby incorporated into this Section 13 by reference with the same force and
effect as if set forth herein in their entirety.
14. The Fund agrees to use its best efforts to maintain its registration as a
diversified open-end management investment company under the 1940 Act.
15. The Fund agrees to use its best efforts to maintain an effective Prospectus
under the Securities Act of 1933, as amended, and warrants that such Prospectus
will contain all statements required by and will conform with the requirements
of such Securities Act of 1933 and the rules and regulations thereunder, and
that no part of any such Prospectus, at the time the Registration Statement of
which it is a part becomes effective, will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein,
or necessary to make the statements therein not misleading (excluding any
information provided by the Distributor in writing for inclusion in the
Prospectus). The Distributor agrees and warrants that it will not in the sale
of shares use any Prospectus, advertising or sales literature not approved by
the Fund or its officers nor make any untrue statement of a material fact nor
omit the stating of a material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made, not
misleading. The Distributor agrees to indemnify and hold the Fund harmless
from any and all loss, expense, damage and liability resulting from a breach of
the agreements and warranties contained in this Section, or from the use of any
sales literature, information, statistics or other aid or device employed in
connection with the sale of shares.
16. The expense of each printing of each Prospectus and each revision thereof
or addition thereto deemed necessary by the Fund's officers to meet the
requirements of applicable laws shall be divided between the Fund, the
Distributor and any other principal underwriter of the shares of the Fund as
follows:
(a) the Fund shall pay the typesetting and make-ready charges;
(b) the printing charges shall be prorated between the Fund, the Distributor,
and any other principal underwriter(s) in accordance with the number of copies
each receives; and
(c) expenses incurred in connection with the foregoing, other than to meet the
requirements of the Securities Act of 1933, as amended, or other applicable
laws, shall be borne by the Distributor, except in the event such incremental
expenses are incurred at the request of any other principal underwriter(s), in
which case such incremental expenses shall be borne by the principal
underwriter(s) making the request.
17. The Fund agrees to use its best efforts to qualify and maintain the
qualification of an appropriate number of the shares of each series or class it
offers for sale under the securities laws of such states as the Distributor and
the Fund may approve. Any such qualification for any series or class may be
withheld, terminated or withdrawn by the Fund at any time in its discretion.
The expense of qualification and maintenance of qualification shall be borne by
the Fund, but the Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund or its
counsel in connection with such qualifications.
18. The Fund may withhold shares of any series or class from sale to any person
or persons or in any jurisdiction temporarily or permanently if, in the opinion
of its counsel, such offer or sale would be contrary to law or if the Directors
or the President or any Vice President of the Fund determines that such offer
or sale is not in the best interest of the Fund. The Fund will give prompt
notice to the Distributor of any withholding and will indemnify it against any
loss suffered by the Distributor as a result of such withholding by reason of
nondelivery of shares of any series or class after a good faith confirmation by
the Distributor of sales thereof prior to receipt of notice of such
withholding.
19. (a) This Agreement may be terminated at any time, without payment of any
penalty, as to the Fund or any series on sixty (60) days' written notice by the
Distributor to the Fund.
1. This Agreement may be terminated as to the Fund or any series or class by
either party upon five (5) days' written notice to the other party in the event
that the Securities and Exchange Commission has issued an order or obtained an
injunction or other court order suspending effectiveness of the Registration
Statement covering the shares of the Fund or such series or class.
(c) This Agreement may be terminated as to the Fund or any series or class by
the Fund upon five (5) days' written notice to the Distributor provided either
of the following events has occurred:
(i) The NASD has expelled the Distributor or suspended its membership in that
organization; or
(ii) the qualification, registration, license or right of the Distributor to
sell shares of any series in a particular state has been suspended or canceled
by the State of California or any other state in which sales of the shares of
the Fund or such series during the most recent 12-month period exceeded 10% of
all shares of such series sold by the Distributor during such period.
(d) This Agreement may be terminated as to the Fund or any series or class at
any time on sixty (60) days' written notice to the Distributor without the
payment of any penalty, by vote of a majority of the Independent Directors or
by vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Fund or such series or class.
20. This Agreement shall not be assignable by either party hereto and in the
event of assignment shall automatically terminate forthwith. The term
"assignment" shall have the meaning set forth in the 1940 Act. Notwithstanding
this Section, this Agreement, with respect to the Fund's Class B shares, has
been approved in accordance with Section 22 in anticipation of the
Distributor's transfer of its Allocable Portion (but not its obligations under
this Agreement) to a third-party pursuant to a "Purchase and Sale Agreement" in
order to raise funds to cover distribution expenditures, and such transfer will
not cause of a termination of this Agreement.
21. No provision of this Agreement shall protect or purport to protect the
Distributor against any liability to the Fund or holders of its shares for
which the Distributor would otherwise be liable by reason of willful
misfeasance, bad faith, or gross negligence.
22. This Agreement shall become effective on March 15, 2000. Unless sooner
terminated in accordance with the other provisions hereof, this Agreement shall
continue in effect until [agreement expiration date], and shall continue in
effect from year to year thereafter but only so long as such continuance is
specifically approved at least annually by (i) the vote of a majority of the
Independent Directors of the Fund cast in person at a meeting called for the
purpose of voting on such approval, and (ii) the vote of either a majority of
the entire Board of Directors of the Fund or a majority (within the meaning of
the 1940 Act) of the outstanding voting securities of the Fund.
23. If the Fund shall at any time issue shares in more than one series or
class, this Agreement shall take effect with respect to such series or class of
the Fund which may be established in the future at such time as it has been
approved as to such series or class by vote of the Board of Directors and the
Independent Directors in accordance with Section 22. The Agreement as approved
with respect to any series or class shall specify the compensation payable to
the Distributor pursuant to Sections 11 and 12, as well as any provisions which
may differ from those herein with respect to such series, subject to approval
in writing by the Distributor. This Agreement may be approved, amended,
continued or renewed with respect to a series or class as provided herein
notwithstanding such approval, amendment, continuance or renewal has not been
effected with respect to any one or more other series or class of the Fund.
This Agreement shall be construed under and shall be governed by the laws of
the State of California, and the parties hereto agree that proper venue of any
action with respect hereto shall be Los Angeles County, California.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in duplicate original by their officers thereunto duly authorized, as
of [date].
AMERICAN FUNDS DISTRIBUTORS, INC. [NAME OF FUND]
By: By:
Kevin G. Clifford [ ]
President President
By: By:
Michael J. Downer [ ]
Secretary Secretary
SCHEDULE A
TO THE
AMENDED AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT
ALLOCATION PROCEDURES
The following relates solely to B shares.
The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect
of B shares shall be 100% until such time as the Distributor shall cease to
serve as exclusive distributor of B shares; thereafter, collections that
constitute CDSCs and Distribution Fees relating to B shares shall be allocated
among the Distributor and any successor distributor ("Successor Distributor")
in accordance with this Schedule.
Defined terms used in this Schedule and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Principal
Underwriting Agreement (the "Distribution Agreement"), of which this Schedule
is a part. As used herein the following terms shall have the meanings
indicated:
"Commission Share" means each B share issued under circumstances which would
normally give rise to an obligation of the holder of such share to pay a CDSC
upon redemption of such share (including, without limitation, any B share
issued in connection with a permitted free exchange), and any such share shall
continue to be a Commission Share of the applicable Fund prior to the
redemption (including a redemption in connection with a permitted free
exchange) or conversion of such share, even though the obligation to pay the
CDSC may have expired or conditions for waivers thereof may exist.
"Date of Original Issuance" means in respect of any Commission Share, the date
with reference to which the amount of the CDSC payable on redemption thereof,
if any, is computed.
"Free Share" means, in respect of a Fund, each B share of the Fund, other than
a Commission Share (including, without limitation, any B share issued in
connection with the reinvestment of dividends or capital gains).
"Inception Date" means in respect of a Fund, the first date on which the Fund
issued shares.
"Net Asset Value" means the net asset value determined as set forth in the
Prospectus of each Fund.
"Omnibus Share" means, in respect of a Fund, a Commission Share or Free Share
sold by one of the selling agents listed on Exhibit I. If, subsequent to the
Successor Distributor becoming exclusive distributor of the B shares, the
Distributor reasonably determines that the transfer agent is able to track all
Commission Shares and Free Shares sold by any of the selling agents listed on
Exhibit I in the same manner as Commission Shares and Free Shares are currently
tracked in respect of selling agents not listed on Exhibit I, then Exhibit I
shall be amended to delete such selling agent from Exhibit I so that Commission
Shares and Free Shares sold by such selling agent will no longer be treated as
Omnibus Shares.
PART I: ATTRIBUTION OF B SHARES
B shares that are outstanding from time to time, shall be attributed to the
Distributor and each Successor Distributor in accordance with the following
rules;
(1) Commission Shares other than Omnibus Shares:
(a) Commission Shares that are not Omnibus Shares ("Non-Omnibus Commission
Shares") attributed to the Distributor shall be those Non-Omnibus Commission
Shares the date of Original Issuance of which occurred on or after the
Inception Date of the applicable Fund and on or prior to the date the
Distributor ceased to be exclusive distributor of B shares of the Fund.
(b) Non-Omnibus Commission Shares attributable to each Successor Distributor
shall be those Non-Omnibus Commission Shares the Date of Original Issuance of
which occurs after the date such Successor Distributor became the exclusive
distributor of B shares of the Fund and on or prior to the date such Successor
Distributor ceased to be the exclusive distributor of B shares of the Fund.
(c) A Non-Omnibus Commission Share of a Fund issued in consideration of the
investment of proceeds of the redemption of a Non-Omnibus Commission Share of
another Fund (the "Redeeming Fund") in connection with a permitted free
exchange, is deemed to have a Date of Original Issuance identical to the Date
of Original Issuance of the Non-Omnibus Commission Share of the Redeeming Fund,
and any such Commission Share will be attributed to the Distributor or
Successor Distributor based upon such Date of Original Issuance in accordance
with rules (a) and (b) above.
(2) Free Shares:
Free Shares that are not Omnibus Shares ("Non-Omnibus Free Shares") of a Fund
outstanding on any date shall be attributed to the Distributor or a Successor
Distributor, as the case may be, in the same proportion that the Non-Omnibus
Commission Shares of a Fund outstanding on such date are attributed to each on
such date; provided that if the Distributor and its transferees reasonably
determines that the transfer agent is able to produce monthly reports that
track the Date of Original Issuance for such Non-Omnibus Free Shares, then such
Free Shares shall be allocated pursuant to clause 1(a), (b) and (c) above.
(3) Omnibus Shares:
Omnibus Shares of a Fund outstanding on any date shall be attributed to the the
Distributor or a Successor Distributor, as the case may be, in the same
proportion that the Non-Omnibus Commission Shares of the applicable Fund
outstanding on such date are attributed to it on such date; provided that if
the Distributor reasonably determines that the transfer agent is able to
produce monthly reports that track the Date of Original Issuance for the
Omnibus Shares, then the Omnibus Shares shall be allocated pursuant to clause
1(a), (b) and (c) above.
PART II: ALLOCATION OF CDSCs
(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:
CDSCs in respect of the redemption of Non-Omnibus Commission Shares shall be
allocated to the Distributor or a Successor Distributor depending upon whether
the related redeemed Commission Share is attributable to the Distributor or
such Successor Distributor, as the case may be, in accordance with Part I
above.
(2) CDSCs Related to the Redemption of Omnibus Shares:
CDSCs in respect of the redemption of Omnibus Shares shall be allocated to the
Distributor or a Successor Distributor in the same proportion that CDSCs
related to the redemption of Commission Shares are allocated to each thereof;
provided, that if the Distributor reasonably determines that the transfer agent
is able to produce monthly reports which track the Date of Original Issuance
for the Omnibus Shares, then the CDSCs in respect of the redemption of Omnibus
Shares shall be allocated among the Distributor and any Successor Distributor
depending on whether the related redeemed Omnibus Share is attributable to the
Distributor or a Successor Distributor, as the case may be, in accordance with
Part I above.
PART III: ALLOCATION OF DISTRIBUTION FEE
Assuming that the Distribution Fee remains constant over time so that Part IV
hereof does not become operative:
(1) The portion of the aggregate Distribution Fee accrued in respect of all B
shares of a Fund during any calendar month allocable to the Distributor or a
Successor Distributor is determined by multiplying the total of such
Distribution Fee by the following fraction:
(A + C)/2
(B + D)/2
where:
A= The aggregate Net Asset Value of all B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and outstanding
at the beginning of such calendar month
B= The aggregate Net Asset Value of all B shares of a Fund at the beginning of
such calendar month
C= The aggregate Net Asset Value of all B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and outstanding
at the end of such calendar month
D= The aggregate Net Asset Value of all B shares of a Fund at the end of such
calendar month
(2) If the Distributor reasonably determines that the transfer agent is able to
produce automated monthly reports that allocate the average Net Asset Value of
the Commission Shares (or all B shares if available) of a Fund among the
Distributor and any Successor Distributor in a manner consistent with the
methodology detailed in Part I and Part III(1) above, the portion of the
Distribution Fee accrued in respect of all such B shares of a Fund during a
particular calendar month will be allocated to the Distributor or a Successor
Distributor by multiplying the total of such Distribution Fee by the following
fraction:
(A)/(B)
where:
A= Average Net Asset Value of all such B shares of a Fund for such calendar
month attributed to the Distributor or a Successor Distributor, as the case may
be
B= Total average Net Asset Value of all such B shares of a Fund for such
calendar month
PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR
DISTRIBUTOR ALLOCABLE PORTION
The parties to the Distribution Agreement recognize that, if the terms of any
distributor's contract, any distribution plan, any prospectus, the Conduct
Rules or any other applicable law change so as to disproportionately reduce, in
a manner inconsistent with the intent of this Distribution Agreement, the
amount of the Distributor's Allocable Portion or any Successor Distributor's
Allocable Portion had no such change occurred, the definitions of the
Distributor's Allocable Portion and/or the Successor Distributor's Allocable
Portion in respect of the B shares relating to a Fund shall be adjusted by
agreement among the relevant parties; provided, however, if the Distributor,
the Successor Distributor and the Fund cannot agree within thirty (30) days
after the date of any such change in applicable laws or in any distributor's
contract, distribution plan, prospectus or the Conduct Rules, they shall submit
the question to arbitration in accordance with the commercial arbitration rules
of the American Arbitration Association and the decision reached by the
arbitrator shall be final and binding on each of them.
FORM OF
MULTIPLE CLASS PLAN
WHEREAS, [Name of Fund] (the "Fund"), a Maryland corporation, is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company that offers shares of common stock;
WHEREAS, American Funds Distributors, Inc. ("the Distributor") serves as the
principal underwriter for the Fund;
WHEREAS, the Fund has adopted a Plan of Distribution ("12b-1 Plan") under
which the Fund may bear expenses of distribution of its shares, including
payment and/or reimbursement to the Distributor for certain of its expenses
incurred in connection with the Fund;
WHEREAS, the Fund is authorized to divide, and has divided, the shares of the
Fund into two classes, designated as Class A shares and Class B shares;
WHEREAS, Rule 18f-3 under the 1940 Act permits open-end management investment
companies to issue multiple classes of voting stock representing interests in
the same portfolio if, among other things, an investment company adopts a
written Multiple Class Plan (the "Plan") setting forth the separate
arrangement and expense allocation of each class and any related conversion
features or exchange privileges; and
WHEREAS, the Board of Directors of the Fund has determined, that it is in the
best interest of each class of the Fund individually, and the Fund as a whole,
to adopt this Plan;
NOW THEREFORE, the Fund adopts this Plan as follows:
1. Each class of shares will represent interests in the same portfolio of
investments of the Fund, and be identical in all respects to each other class,
except as set forth below. The differences among the various classes of shares
of the Fund will relate to: (i) distribution, service and other charges and
expenses as provided for in paragraph 3 of this Plan; (ii) the exclusive right
of each class of shares to vote on matters submitted to shareholders that
relate solely to that class or the separate voting right of each class on
matters for which the interests of one class differ from the interests of
another class; (iii) such differences relating to eligible investors as may be
set forth in the Fund's prospectus and statement of additional information
("SAI"), as the same may be amended or supplemented from time to time; (iv) the
designation of each class of shares; (v) conversion features; and (vi) exchange
privileges.
2. (a) Certain expenses may be attributable to the Fund, but not a particular
class of shares thereof. All such expenses will be borne by each class on the
basis of the relative aggregate net assets of the classes. Notwithstanding the
foregoing, the Distributor, the investment adviser or other provider of
services to the Fund may waive or reimburse the expenses of a specific class or
classes to the extent permitted by Rule 18f-3 under the 1940 Act and any other
applicable law.
(b) A class of shares may be permitted to bear expenses that are directly
attributable to that class, including: (i) any distribution fees associated
with any rule 12b-1 Plan for a particular class and any other costs relating to
implementing or amending such rule 12b-1 Plan; (ii) any service fees associated
with any rule 12b-1 Plan attributable to such class; and (iii) any shareholder
servicing fees attributable to such class.
(c) Any additional incremental expenses not specifically identified above that
are subsequently identified and determined to be applied properly to one class
of shares of the Fund shall be so applied upon approval by votes of the
majority of both (i) the Board of Directors of the Fund; and (ii) those
Directors of the Fund who are not "interested persons" of the Fund (as defined
in the 1940 Act) ("Independent Directors").
3. Each class of the Fund shall differ in the amount of, and the manner in
which distribution costs are borne by shareholders and in the costs associated
with transfer agency services as follows:
(a) Class A shares
(i) Class A shares are sold at net asset value plus a front-end sales charge,
at net asset value without a front-end sales charge but subject to a contingent
deferred sales charge ("CDSC"), and at net asset value without any sales
charge, as set forth in the Fund's prospectus and SAI.
(ii) Class A shares are subject to an annual distribution expense under the
Fund's Class A Plan of Distribution of up to 0.25% of average net assets, as
set forth in the Fund's prospectus, SAI, and Plan of Distribution. This
expense consists of a service fee of up to 0.25% plus certain other
distribution costs.
(b) Class B shares
(i) Class B shares shall be sold at net asset value without a front-end sales
charge, but are subject to a CDSC and maximum purchase limits as set forth in
the Fund's prospectus and SAI.
(ii) Class B shares shall be subject to an annual distribution expense under
the Fund's Class B Plan of Distribution of up 1.00% of average net assets, as
set forth in the Fund's prospectus, SAI, and Class B Plan of Distribution.
This expense shall consist of a distribution fee of 0.75% and a service fee of
0.25%.
(iii) Class B shares will automatically convert to Class A shares of the Fund
approximately eight years after purchase, as set forth in the Fund's prospectus
and SAI. All conversions shall be effected on the basis of the relative net
asset values of the two Classes without the imposition of any sales load or
other charge.
(iv) Class B shares shall be subject to a fee included within the transfer
agency expense for additional costs associated with tracking the age of each
class B share.
All other rights and privileges of Fund shareholders are identical regardless
of which class shareholders hold.
4. This Plan shall not take effect until it has been approved by votes of the
majority of both (i) the Board of Directors of the Fund; and (ii) the
Independent Directors.
5. This Plan shall become effective with respect to any class of shares of the
Fund, other than Class A or Class B shares, upon the commencement of the
initial public offering thereof (provided that the Plan has previously been
approved with respect to such additional class by votes of the majority of both
(i) the Board of Directors of the Fund; and (ii) Independent Directors prior to
the offering of such additional class of shares), and shall continue in effect
with respect to such additional class or classes until terminated in accordance
with paragraph 7. An addendum setting forth such specific and different terms
of such additional class or classes shall be attached to and made part of this
Plan.
6. No material amendment to the Plan shall be effective unless it is approved
by the votes of the majority of both (i) the Board of Directors of the Fund;
and (ii) Independent Directors.
7. This Plan may be terminated at any time with respect to the Fund as a whole
or any class individually, by the votes of the majority of both (i) the Board
of Directors of the Fund; and (ii) Independent Directors. This Plan may remain
in effect with respect to a particular class or classes of the Fund even if it
has been terminated in accordance with this paragraph with respect to any other
class.
IN WITNESS WHEROF, the Fund has caused this Plan to be executed by its
officers thereunto duly authorized, as of [date].
[Name of Fund]
FORM OF
PLAN OF DISTRIBUTION
OF
[FUND]
RELATING TO ITS
CLASS B SHARES
WHEREAS, [Name of Fund] (the "Fund") is a Maryland Corporation that offers
shares of common stock;
WHEREAS, American Funds Distributors, Inc. ("AFD") or any successor entity
designated by the Fund (AFD and any successor collectively are referred to as
"Distributor") will serve as distributor of the shares of common stock of the
Fund, and the Fund and Distributor are parties to a principal underwriting
agreement (the "Agreement");
WHEREAS, the purpose of this Plan of Distribution (the "Plan") is to
authorize the Fund to bear expenses of distribution of its Class B shares; and
WHEREAS, the Board of Directors of the Fund has determined that there is a
reasonable likelihood that this Plan will benefit the Fund and its
shareholders;
NOW, THEREFORE, the Fund adopts this Plan as follows:
1. PAYMENTS TO DISTRIBUTOR. The Fund may expend pursuant to this Plan and as
set forth below an aggregate amount not to exceed 1.00% per annum of the
average net assets of the Fund's Class B shares.
2. SERVICE FEES. The Fund shall pay to the Distributor monthly in arrears a
shareholder servicing fee (the "Shareholder Servicing Fee") at the rate of
0.25% on the Fund's Class B shares outstanding for less than one year at the
end of the month for which such fee is computed. The Fund shall also pay to
the Distributor quarterly a Shareholder Servicing Fee at the rate of 0.25% per
annum on Class B shares that are outstanding for one year or more at the end of
the quarter for which such fee is computed. The Shareholder Servicing Fee is
designed to compensate Distributor for paying Service Fees to broker-dealers
with whom Distributor has an agreement.
3. DISTRIBUTION FEES. The Fund shall pay to the Distributor monthly in arrears
its "Allocable Portion" (as described in Schedule A to this Plan "Allocation
Schedule", and until such time as the Fund designates a successor to AFD as
distributor, the Allocable Portion shall equal 100%) of a fee (the
"Distribution Fee"), which shall accrue each day in an amount equal to the
product of (A) the daily equivalent of 0.75% per annum multiplied by (B) the
net asset value of the Fund's B shares outstanding on each day.
The Distributor may sell and assign its right to its Allocable Portion (but not
its obligations to the Fund under the Agreement) of the Distribution Fee to a
third party, and such transfer shall be free and clear of offsets or claims the
Fund may have against the Distributor, it being understood that the Fund is not
releasing the Distributor from any of its obligations to the Fund under the
Agreement or any of the assets the Distributor continues to own. The Fund may
agree, at the request of the Distributor, to pay the Allocable Portion of the
Distribution Fee directly to the third party transferee.
Any Agreement between the Fund and the Distributor relating to the Fund's B
shares shall provide that:
(i) the Distributor will be deemed to have performed all services required to
be performed in order to be entitled to receive its Allocable Portion of the
Distribution Fee payable in respect of each "Commission Share" (as defined in
the Allocation Schedule) upon the settlement date of each sale of such
Commission Share taken into account in determining such Distributor's Allocable
Portion of the Distribution Fee;
(ii) notwithstanding anything to the contrary in this Plan or the Agreement,
the Fund's obligation to pay the Distributor its Allocable Portion of the
Distribution Fee shall not be terminated or modified (including without
limitation, by change in the rules applicable to the conversion of the B shares
into shares of another class) for any reason (including a termination of this
Plan or the Agreement between such Distributor and the Fund) except:
(a) to the extent required by a change in the Investment Company Act of 1940
(the "1940 Act"), the rules and regulations under the 1940 Act, the Conduct
Rules of the National Association of Securities Dealers, Inc. (the "NASD"), or
any judicial decisions or interpretive pronouncements by the Securities and
Exchange Commission, which is either binding upon the Distributor or generally
complied with by similarly situated distributors of mutual fund shares, in each
case enacted, promulgated, or made after
March 15, 2000,
(b) on a basis which does not alter the Distributor's Allocable Portion of the
Distribution Fee computed with reference to Commission Shares of the Fund, the
Date of Original Issuance (as defined in the Allocation Schedule) of which
occurs on or prior to the adoption of such termination or modification and with
respect to Free Shares (as defined in the Allocation Schedule) which would be
attributed to the Distributor under the Allocation Schedule with reference to
such Commission Shares, or
(c) in connection with a Complete Termination (as defined below) of this Plan
by the Fund;
(iii) the Fund will not take any action to waive or change any contingent
deferred sales charge ("CDSC") in respect to the B shares, the Date of Original
Issuance of which occurs on or prior to the taking of such action except as
provided in the Fund's prospectus or statement of additional information on the
date such Commission Share was issued, without the consent of the Distributor
or its assigns;
(iv) notwithstanding anything to the contrary in this Plan or the Agreement,
none of the termination of the Distributor's role as principal underwriter of
the B shares of the Fund, the termination of the Agreement or the termination
of this Plan will terminate the Distributor's right to its Allocable Portion of
the CDSCs in respect of B shares of the Fund;
(v) except as provided in (ii) above and notwithstanding anything to the
contrary in this Plan or the Agreement, the Fund's obligation to pay the
Distributor's Allocable Portion of the Distribution Fees and CDSCs payable in
respect of the B shares of the Fund shall be absolute and unconditional and
shall not be subject to dispute, offset, counterclaim or any defense
whatsoever, at law or equity, including, without limitation, any of the
foregoing based on the insolvency or bankruptcy of the Distributor; and
(vi) until the Distributor has been paid its Allocable Portion of the
Distribution Fees in respect of the B shares of the Fund, the Fund will not
adopt a plan of liquidation in respect of the B shares without the consent of
the Distributor and its assigns. For purposes of this Plan, the term Allocable
Portion of the Distribution Fees or CDSCs payable in respect of the B shares as
applied to any Distributor shall mean the portion of such Distribution Fees or
CDSCs payable in respect of such B shares of the Fund allocated to the
Distributor in accordance with the Allocation Schedule as it relates to the B
shares of the Fund, and until such time as the Fund designates a successor to
AFD as distributor, the Allocable Portion shall equal 100% of the Distribution
Fees and CDSCs. For purposes of this Plan, the term "Complete Termination" in
respect of this Plan as it relates to the B shares means a termination of this
Plan involving the complete cessation of the payment of Distribution Fees in
respect of all B shares, the termination of the distribution plans and
principal underwriting agreements, and the complete cessation of the payment of
any asset based sales charge (within the meaning of the Conduct Rules of the
NASD) or similar fees in respect of the Fund and any successor mutual fund or
any mutual fund acquiring a substantial portion of the assets of the Fund (the
Fund and such other mutual funds hereinafter referred to as the "Affected
Funds") and in respect of the B shares and every future class of shares (other
than future classes of shares established more than eight years after the date
of such termination) which has substantially similar characteristics to the B
shares (all such classes of shares the "Affected Classes of Shares") of such
Affected Funds taking into account the manner of payment and amount of asset
based sales charge, CDSC or other similar charges borne directly or indirectly
by the holders of such shares; provided that
(a) the Board of Directors of such Affected Funds, including the Independent
Directors (as defined below) of the Affected Funds, shall have determined that
such termination is in the best interest of such Affected Funds and the
shareholders of such Affected Funds, and
(b) such termination does not alter the CDSC as in effect at the time of such
termination applicable to Commission Shares of the Fund, the Date of Original
Issuance of which occurs on or prior to such termination.
2. APPROVAL BY THE BOARD. This Plan shall not take effect until it has been
approved, together with any related agreement, by votes of the majority of both
(i) the Board of Directors of the Fund and (ii) those Directors of the Fund who
are not "interested persons" of the Fund (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of this Plan or any
agreement related to it (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on this Plan and/or such agreement.
3. REVIEW OF EXPENDITURES. At least quarterly, the Board of Directors shall
be provided by any person authorized to direct the disposition of monies paid
or payable by the Fund pursuant to this Plan or any related agreement, and the
Board shall review, a written report of the amounts expended pursuant to this
Plan and the purposes for which such expenditures were made.
4. TERMINATION OF PLAN. This Plan may be terminated as to the Fund's B-shares
at any time by vote of a majority of the Independent Directors, or by vote of a
majority of the outstanding B shares of the Fund. Unless sooner terminated in
accordance with this provision, this Plan shall continue in effect until March
31, 2000. It may thereafter be continued from year to year in the manner
provided for in paragraph 2 hereof.
Notwithstanding the foregoing or paragraph 6, below, any amendment or
termination of this Plan shall not affect the rights of the Distributor to
receive its Allocable Portion of the Distribution Fee, unless the termination
constitutes a Complete Termination of this Plan as described in paragraph 1
above.
5. REQUIREMENTS OF AGREEMENT. Any Agreement related to this Plan shall be in
writing, and shall provide:
a. that such agreement may be terminated as to the Fund at any time, without
payment of any penalty by the vote of a majority of the Independent Directors
or by a vote of a majority of the outstanding B shares of the Fund, on not more
than sixty (60) days' written notice to any other party to the agreement; and
b. that such agreement shall terminate automatically in the event of its
assignment.
6. AMENDMENT. This Plan may not be amended to increase materially the maximum
amount of fee or other distribution expenses provided for in paragraph 1 hereof
with respect to the Class B shares of the Fund unless such amendment is
approved by vote of a majority of the outstanding voting securities of the
Class B shares of the Fund as provided in paragraph 2 hereof, and no other
material amendment to this Plan shall be made unless approved in the manner
provided for in paragraph 2 hereof.
7. NOMINATION OF DIRECTORS. While this Plan is in effect, the selection and
nomination of Independent Directors shall be committed to the discretion of the
Independent Directors of the Fund.
8. ISSUANCE OF SERIES OF SHARES. If the Fund shall at any time issue shares
in more than one series, this Plan may be adopted, amended, continued or
renewed with respect to a series as provided herein, notwithstanding that such
adoption, amendment, continuance or renewal has not been effected with respect
to any one or more other series of the Fund.
9. RECORD RETENTION. The Fund shall preserve copies of this Plan and any
related agreement and all reports made pursuant to paragraph 3 hereof for not
less than six (6) years from the date of this Plan, or such agreement or
reports, as the case may be, the first two (2) years of which such records
shall be stored in an easily accessible place.
IN WITNESS WHEREOF, the Fund has caused this Plan to be executed by its
officers thereunto duly authorized, as of December __, 1999.
[Name of Fund]
By: ____________________________
Its: ____________________________
SCHEDULE A
TO THE
PLAN OF DISTRIBUTION OF
[NAME OF FUND]
RELATING TO ITS CLASS B SHARES
ALLOCATION SCHEDULE
The following relates solely to B shares.
The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect
of B shares shall be 100% until such time as the Distributor shall cease to
serve as exclusive distributor of B shares; thereafter, collections that
constitute CDSCs and Distribution Fees relating to B shares shall be allocated
among the Distributor and any successor distributor ("Successor Distributor")
in accordance with this Schedule.
Defined terms used in this Schedule and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Principal
Underwriting Agreement (the "Distribution Agreement"), of which this Schedule
is a part. As used herein the following terms shall have the meanings
indicated:
"Commission Share" means each B share issued under circumstances which would
normally give rise to an obligation of the holder of such share to pay a CDSC
upon redemption of such share (including, without limitation, any B share
issued in connection with a permitted free exchange), and any such share shall
continue to be a Commission Share of the applicable Fund prior to the
redemption (including a redemption in connection with a permitted free
exchange) or conversion of such share, even though the obligation to pay the
CDSC may have expired or conditions for waivers thereof may exist.
"Date of Original Issuance" means in respect of any Commission Share, the date
with reference to which the amount of the CDSC payable on redemption thereof,
if any, is computed.
"Free Share" means, in respect of a Fund, each B share of the Fund, other than
a Commission Share (including, without limitation, any B share issued in
connection with the reinvestment of dividends or capital gains).
"Inception Date" means in respect of a Fund, the first date on which the Fund
issued shares.
"Net Asset Value" means the net asset value determined as set forth in the
Prospectus of each Fund.
"Omnibus Share" means, in respect of a Fund, a Commission Share or Free Share
sold by one of the selling agents listed on [Exhibit I]. If, subsequent to the
Successor Distributor becoming exclusive distributor of the B shares, the
Distributor reasonably determines that the transfer agent is able to track all
Commission Shares and Free Shares sold by any of the selling agents listed on
Exhibit I in the same manner as Commission Shares and Free Shares are currently
tracked in respect of selling agents not listed on Exhibit I, then Exhibit I
shall be amended to delete such selling agent from Exhibit I so that Commission
Shares and Free Shares sold by such selling agent will no longer be treated as
Omnibus Shares.
PART I: ATTRIBUTION OF B SHARES
B shares that are outstanding from time to time, shall be attributed to the
Distributor and each Successor Distributor in accordance with the following
rules;
(1) Commission Shares other than Omnibus Shares:
(a) Commission Shares that are not Omnibus Shares ("Non-Omnibus Commission
Shares") attributed to the Distributor shall be those Non-Omnibus Commission
Shares the date of Original Issuance of which occurred on or after the
Inception Date of the applicable Fund and on or prior to the date the
Distributor ceased to be exclusive distributor of B shares of the Fund.
(b) Non-Omnibus Commission Shares attributable to each Successor Distributor
shall be those Non-Omnibus Commission Shares the Date of Original Issuance of
which occurs after the date such Successor Distributor became the exclusive
distributor of B shares of the Fund and on or prior to the date such Successor
Distributor ceased to be the exclusive distributor of B shares of the Fund.
(c) A Non-Omnibus Commission Share of a Fund issued in consideration of the
investment of proceeds of the redemption of a Non-Omnibus Commission Share of
another Fund (the "Redeeming Fund") in connection with a permitted free
exchange, is deemed to have a Date of Original Issuance identical to the Date
of Original Issuance of the Non-Omnibus Commission Share of the Redeeming Fund,
and any such Commission Share will be attributed to the Distributor or
Successor Distributor based upon such Date of Original Issuance in accordance
with rules (a) and (b) above.
(2) Free Shares:
Free Shares that are not Omnibus Shares ("Non-Omnibus Free Shares") of a Fund
outstanding on any date shall be attributed to the Distributor or a Successor
Distributor, as the case may be, in the same proportion that the Non-Omnibus
Commission Shares of a Fund outstanding on such date are attributed to each on
such date; provided that if the Distributor and its transferees reasonably
determines that the transfer agent is able to produce monthly reports that
track the Date of Original Issuance for such Non-Omnibus Free Shares, then such
Free Shares shall be allocated pursuant to clause 1(a), (b) and (c) above.
(3) Omnibus Shares:
Omnibus Shares of a Fund outstanding on any date shall be attributed to the
Distributor or a Successor Distributor, as the case may be, in the same
proportion that the Non-Omnibus Commission Shares of the applicable Fund
outstanding on such date are attributed to it on such date; provided that if
the Distributor reasonably determines that the transfer agent is able to
produce monthly reports that track the Date of Original Issuance for the
Omnibus Shares, then the Omnibus Shares shall be allocated pursuant to clause
1(a), (b) and (c) above.
PART II: ALLOCATION OF CDSCs
(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:
CDSCs in respect of the redemption of Non-Omnibus Commission Shares shall be
allocated to the Distributor or a Successor Distributor depending upon whether
the related redeemed Commission Share is attributable to the Distributor or
such Successor Distributor, as the case may be, in accordance with Part I
above.
(2) CDSCs Related to the Redemption of Omnibus Shares:
CDSCs in respect of the redemption of Omnibus Shares shall be allocated to the
Distributor or a Successor Distributor in the same proportion that CDSCs
related to the redemption of Commission Shares are allocated to each thereof;
provided, that if the Distributor reasonably determines that the transfer agent
is able to produce monthly reports which track the Date of Original Issuance
for the Omnibus Shares, then the CDSCs in respect of the redemption of Omnibus
Shares shall be allocated among the Distributor and any Successor Distributor
depending on whether the related redeemed Omnibus Share is attributable to the
Distributor or a Successor Distributor, as the case may be, in accordance with
Part I above.
PART III: ALLOCATION OF DISTRIBUTION FEE
Assuming that the Distribution Fee remains constant over time so that Part IV
hereof does not become operative:
(1) The portion of the aggregate Distribution Fee accrued in respect of all B
shares of a Fund during any calendar month allocable to the Distributor or a
Successor Distributor is determined by multiplying the total of such
Distribution Fee by the following fraction:
(A + C)/2
(B + D)/2
where:
A= The aggregate Net Asset Value of all B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and outstanding
at the beginning of such calendar month
B= The aggregate Net Asset Value of all B shares of a Fund at the beginning of
such calendar month
C= The aggregate Net Asset Value of all B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and outstanding
at the end of such calendar month
D= The aggregate Net Asset Value of all B shares of a Fund at the end of such
calendar month
(2) If the Distributor reasonably determines that the transfer agent is able to
produce automated monthly reports that allocate the average Net Asset Value of
the Commission Shares (or all B shares if available) of a Fund among the
Distributor and any Successor Distributor in a manner consistent with the
methodology detailed in Part I and Part III(1) above, the portion of the
Distribution Fee accrued in respect of all such B shares of a Fund during a
particular calendar month will be allocated to the Distributor or a Successor
Distributor by multiplying the total of such Distribution Fee by the following
fraction:
(A)/(B)
where:
A= Average Net Asset Value of all such B shares of a Fund for such calendar
month attributed to the Distributor or a Successor Distributor, as the case may
be
B= Total average Net Asset Value of all such B shares of a Fund for such
calendar month
PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR
DISTRIBUTOR'S ALLOCABLE PORTION
The parties to the Distribution Agreement recognize that, if the terms of any
distributor's contract, any distribution plan, any prospectus, the Conduct
Rules or any other applicable law change so as to disproportionately reduce, in
a manner inconsistent with the intent of this Distribution Agreement, the
amount of the Distributor's Allocable Portion or any Successor Distributor's
Allocable Portion had no such change occurred, the definitions of the
Distributor's Allocable Portion and/or the Successor Distributor's Allocable
Portion in respect of the B shares relating to a Fund shall be adjusted by
agreement among the relevant parties; provided, however, if the Distributor,
the Successor Distributor and the Fund cannot agree within thirty (30) days
after the date of any such change in applicable laws or in any distributor's
contract, distribution plan, prospectus or the Conduct Rules, they shall submit
the question to arbitration in accordance with the commercial arbitration rules
of the American Arbitration Association and the decision reached by the
arbitrator shall be final and binding on each of them.
FORM OF
MULTIPLE CLASS PLAN
WHEREAS, [Name of Fund] (the "Fund"), a Maryland corporation, is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company that offers shares of common stock;
WHEREAS, American Funds Distributors, Inc. ("the Distributor") serves as the
principal underwriter for the Fund;
WHEREAS, the Fund has adopted a Plan of Distribution ("12b-1 Plan") under
which the Fund may bear expenses of distribution of its shares, including
payment and/or reimbursement to the Distributor for certain of its expenses
incurred in connection with the Fund;
WHEREAS, the Fund is authorized to divide, and has divided, the shares of the
Fund into two classes, designated as Class A shares and Class B shares;
WHEREAS, Rule 18f-3 under the 1940 Act permits open-end management investment
companies to issue multiple classes of voting stock representing interests in
the same portfolio if, among other things, an investment company adopts a
written Multiple Class Plan (the "Plan") setting forth the separate
arrangement and expense allocation of each class and any related conversion
features or exchange privileges; and
WHEREAS, the Board of Directors of the Fund has determined, that it is in the
best interest of each class of the Fund individually, and the Fund as a whole,
to adopt this Plan;
NOW THEREFORE, the Fund adopts this Plan as follows:
1. Each class of shares will represent interests in the same portfolio of
investments of the Fund, and be identical in all respects to each other class,
except as set forth below. The differences among the various classes of shares
of the Fund will relate to: (i) distribution, service and other charges and
expenses as provided for in paragraph 3 of this Plan; (ii) the exclusive right
of each class of shares to vote on matters submitted to shareholders that
relate solely to that class or the separate voting right of each class on
matters for which the interests of one class differ from the interests of
another class; (iii) such differences relating to eligible investors as may be
set forth in the Fund's prospectus and statement of additional information
("SAI"), as the same may be amended or supplemented from time to time; (iv) the
designation of each class of shares; (v) conversion features; and (vi) exchange
privileges.
2. (a) Certain expenses may be attributable to the Fund, but not a particular
class of shares thereof. All such expenses will be borne by each class on the
basis of the relative aggregate net assets of the classes. Notwithstanding the
foregoing, the Distributor, the investment adviser or other provider of
services to the Fund may waive or reimburse the expenses of a specific class or
classes to the extent permitted by Rule 18f-3 under the 1940 Act and any other
applicable law.
(b) A class of shares may be permitted to bear expenses that are directly
attributable to that class, including: (i) any distribution fees associated
with any rule 12b-1 Plan for a particular class and any other costs relating to
implementing or amending such rule 12b-1 Plan; (ii) any service fees associated
with any rule 12b-1 Plan attributable to such class; and (iii) any shareholder
servicing fees attributable to such class.
(c) Any additional incremental expenses not specifically identified above that
are subsequently identified and determined to be applied properly to one class
of shares of the Fund shall be so applied upon approval by votes of the
majority of both (i) the Board of Directors of the Fund; and (ii) those
Directors of the Fund who are not "interested persons" of the Fund (as defined
in the 1940 Act) ("Independent Directors").
3. Each class of the Fund shall differ in the amount of, and the manner in
which distribution costs are borne by shareholders and in the costs associated
with transfer agency services as follows:
(a) Class A shares
(i) Class A shares are sold at net asset value plus a front-end sales charge,
at net asset value without a front-end sales charge but subject to a contingent
deferred sales charge ("CDSC"), and at net asset value without any sales
charge, as set forth in the Fund's prospectus and SAI.
(ii) Class A shares are subject to an annual distribution expense under the
Fund's Class A Plan of Distribution of up to 0.25% of average net assets, as
set forth in the Fund's prospectus, SAI, and Plan of Distribution. This
expense consists of a service fee of up to 0.25% plus certain other
distribution costs.
(b) Class B shares
(i) Class B shares shall be sold at net asset value without a front-end sales
charge, but are subject to a CDSC and maximum purchase limits as set forth in
the Fund's prospectus and SAI.
(ii) Class B shares shall be subject to an annual distribution expense under
the Fund's Class B Plan of Distribution of up 1.00% of average net assets, as
set forth in the Fund's prospectus, SAI, and Class B Plan of Distribution.
This expense shall consist of a distribution fee of 0.75% and a service fee of
0.25%.
(iii) Class B shares will automatically convert to Class A shares of the Fund
approximately eight years after purchase, as set forth in the Fund's prospectus
and SAI. All conversions shall be effected on the basis of the relative net
asset values of the two Classes without the imposition of any sales load or
other charge.
(iv) Class B shares shall be subject to a fee included within the transfer
agency expense for additional costs associated with tracking the age of each
class B share.
All other rights and privileges of Fund shareholders are identical regardless
of which class shareholders hold.
4. This Plan shall not take effect until it has been approved by votes of the
majority of both (i) the Board of Directors of the Fund; and (ii) the
Independent Directors.
5. This Plan shall become effective with respect to any class of shares of the
Fund, other than Class A or Class B shares, upon the commencement of the
initial public offering thereof (provided that the Plan has previously been
approved with respect to such additional class by votes of the majority of both
(i) the Board of Directors of the Fund; and (ii) Independent Directors prior to
the offering of such additional class of shares), and shall continue in effect
with respect to such additional class or classes until terminated in accordance
with paragraph 7. An addendum setting forth such specific and different terms
of such additional class or classes shall be attached to and made part of this
Plan.
6. No material amendment to the Plan shall be effective unless it is approved
by the votes of the majority of both (i) the Board of Directors of the Fund;
and (ii) Independent Directors.
7. This Plan may be terminated at any time with respect to the Fund as a whole
or any class individually, by the votes of the majority of both (i) the Board
of Directors of the Fund; and (ii) Independent Directors. This Plan may remain
in effect with respect to a particular class or classes of the Fund even if it
has been terminated in accordance with this paragraph with respect to any other
class.
IN WITNESS WHEROF, the Fund has caused this Plan to be executed by its
officers thereunto duly authorized, as of [date].
[Name of Fund]
THE CAPITAL GROUP COMPANIES
CODE OF CONDUCT
(as of October 1, 1999)
All of us within the Capital organization are responsible for maintaining the
very highest ethical standards when conducting business. In keeping with these
standards, we must never allow our own interests to be placed ahead of our
shareholders' and clients' interests.
Over the years we have earned a reputation for the highest integrity.
Regardless of lesser standards that may be followed through business or
community custom, we must observe exemplary standards of honesty and integrity.
REPORTING VIOLATIONS
If you know of any violation of our Code of Conduct, you have a responsibility
to report it. Deviations from controls or procedures that safeguard the
company, including the assets of shareholders and clients, should also be
reported.
You can report confidentially to:
- - Your manager or department head
- - CGC Audit Committee:
Donnalisa Barnum
Larry P. Clemmensen
Roberta Conroy
Bill Hurt
Sonny Kamm
Mike Kerr
John McLaughlin
Bob O'Donnell
Tom Rowland
John Smet
Mark Smith
Wally Stern
Antonio Vegezzi
Shaw Wagener
Kelly Webb
- - Mike Downer or any other lawyer in the CGC Legal Group
- - Don Wolfe of Deloitte & Touche LLP (CGC's auditors)
CONFLICTS OF INTEREST
A conflict of interest occurs when the private interests of associates
interfere or could potentially interfere with their responsibilities at work.
Associates must not place themselves or the company in a position of actual or
potential conflict. Associates may not accept gifts worth more than $100,
excessive business entertainment, loans, or anything else involving personal
gain from those who conduct business with the company. In addition, a business
entertainment event exceeding $200 in value should not be accepted unless the
associate receives permission from the Gifts Policy Committee.
REPORTING -- Although the limitations on accepting gifts applies to ALL
associates as described above, some associates will be asked to fill out
quarterly reports. If you receive a reporting form, you must report any gift
exceeding $50 (although it is recommended that you report ALL gifts received)
and business entertainment in which an event exceeds $75.
GIFTS POLICY COMMITTEE
The Gifts Policy Committee oversees administration of and compliance with the
Policy.
INSIDER TRADING
Antifraud provisions of the federal securities laws generally prohibit persons
while in possession of material nonpublic information from trading on or
communicating the information to others. Sanctions for violations can include
civil injunctions, permanent bars from the securities industry, civil penalties
up to three times the profits made or losses avoided, criminal fines and jail
sentences.
While investment research analysts are most likely to come in contact with
material nonpublic information, the rules (and sanctions) in this area apply to
all CGC associates and extend to activities both within and outside each
associate's duties. All associates must read the Insider Trading Policy in the
Appendix of the CGC Handbook for Associates.
PERSONAL INVESTING POLICY
As an associate of the Capital Group companies, you may have access to
confidential information. This places you in a position of special trust.
You are associated with a group of companies that is responsible for the
management of many billions of dollars belonging to mutual fund shareholders
and other clients. The law, ethics and our own policy place a heavy burden on
all of us to ensure that the highest standards of honesty and integrity are
maintained at all times.
There are several rules that must be followed to avoid possible conflicts of
interest in personal securities transactions.
ALL ASSOCIATES
Information regarding proposed or partially completed plans by CGC companies to
buy or sell specific securities must not be divulged to outsiders.
Favors or preferential treatment from stockbrokers may not be accepted.
Associates may not subscribe to any initial public offering or any other
securities offering that is subject to allocation (so-called "hot issues").
Generally, this prohibition applies to spouses of associates and any family
member residing in the same household. However, an associate may request that
the Personal Investing Policy Committee consider granting an exception.
COVERED PERSONS
Associates who have access to investment information in connection with their
regular duties are generally considered "covered persons." If you receive a
quarterly personal securities transactions report form, you are a covered
person. You should take the time to review this memo as ongoing interpretations
of the policy will be explained therein.
Covered persons must conduct their personal securities transactions in such a
way that they do not conflict with the interests of the funds and client
accounts. This policy also includes securities transactions of family members
living in the covered person's household and any trust or custodianship for
which the associate is trustee or custodian. A conflict may occur if you, a
family member in the same household, a trust or custodianship for which you are
trustee or custodian have a transaction in a security when the funds or client
accounts are considering or concluding a transaction in the same security.
Additional rules apply to "investment personnel" including portfolio
counselors/managers, research analysts, traders, and investment administration
personnel (see below).
PRE-CLEARANCE OF SECURITIES TRANSACTIONS
Before buying or selling securities, covered persons should find out if the
purchase or sale of a particular security would involve a conflict of interest.
This involves checking with the CGC Legal Group based in LAO by calling [phone
number]. (You will generally receive a response within one business day.)
Unless a shorter period is specified, clearance is good for two trading days
(including the day you check). If you have not executed your transaction
within this period, you must again pre-clear your transaction.
Covered persons must promptly submit quarterly reports of certain transactions.
Transactions of securities (including fixed-income securities) or options (see
below) must be pre-cleared as described above and reported except for: gifts
or bequests of securities (although pre-clearance and reporting are required if
these securities are later sold); open-end investment companies (mutual funds);
shares of CGC stock; money market instruments with maturities of one year or
less; direct obligations of the U.S. Government, bankers' acceptances, CDs or
other commercial paper; commodities; and options or futures on broad-based
indices. Covered persons must also report transactions made by family members
in their household and by those for which they are a trustee or custodian.
Reporting forms will be supplied at the appropriate times.
In addition, the following transactions must be reported but need not have been
pre-cleared: transactions in debt instruments rated "A" or above by at least
one national rating service; sales pursuant to tender offers; and dividend
reinvestment plan purchases (provided the purchase pursuant to such plan is
made with dividend proceeds only).
BROKERAGE ACCOUNTS
Covered persons should inform their stockbrokers that they are employed by an
investment adviser, trust company or affiliate of either. The broker is
subject to certain rules designed to prevent favoritism toward such accounts.
Associates may not accept negotiated commission rates which they believe may be
more favorable than the broker grants to accounts with similar characteristics.
In addition, covered persons must direct their brokers to send duplicate
confirmations and copies of all periodic statements on a timely basis to The
Legal Group of The Capital Group Companies, Inc., [P.O. Box address]. ALL
DOCUMENTS RECEIVED IN THIS POST OFFICE BOX ARE KEPT STRICTLY CONFIDENTIAL.
[If extraneous information is included on an associate's statements (E.G.,
checking account information or other information that is not subject to the
policy), the associate might want to establish a separate account solely for
transactions subject to the policy.]
ANNUAL RECERTIFICATION
All access persons will be required to certify annually that they have read and
understood the Personal Investing Policy and recognize that they are subject
thereto.
ADDITIONAL RULES FOR INVESTMENT PERSONNEL
DISCLOSURE OF OWNERSHIP OF RECOMMENDED SECURITIES -- Any associate who is in a
position to recommend the purchase or sale of securities by the fund or client
accounts must not recommend securities that s/he personally owns without FIRST
disclosing ownership. Typically, a complete disclosure of holdings (such as in
the annual disclosure of personal securities) satisfies this requirement.
BLACKOUT PERIOD -- Portfolio counselors/managers and research analysts may not
buy or sell a security within at least seven calendar days before and after A
FUND OR CLIENT ACCOUNT THAT HIS OR HER COMPANY MANAGES transacts in that
security. Profits resulting from transactions occurring within this time
period are subject to special review and may be subject to disgorgement.
BAN ON SHORT-TERM TRADING PROFITS -- Investment personnel are prohibited from
profiting from the purchase and sale or sale and purchase of the same (or
equivalent) securities within 60 days. THIS RESTRICTION APPLIES TO THE
PURCHASE OF AN OPTION AND THE EXERCISE OF THE OPTION WITHIN 60 DAYS.
ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS - Investment personnel will
be required to disclose all personal securities holdings upon commencement of
employment and thereafter on an annual basis. Reporting forms will be supplied
for this purpose.
SERVICE AS A DIRECTOR -- Investment personnel must obtain prior authorization
of the investment committee of the appropriate management company BEFORE
SERVING ON THE BOARD OF DIRECTORS OF PUBLICLY TRADED COMPANIES.
PERSONAL INVESTING POLICY COMMITTEE
Any questions or hardships that result from these policies or requests for
exceptions should be referred to CGC's Personal Investing Policy Committee.
