AMERICAN BALANCED FUND, INC.
One Market, Steuart Tower, San Francisco, California 94105
FELLOW SHAREHOLDERS:
We are writing to inform you of the upcoming meeting of the shareholders of
American Balanced Fund, Inc. (the "Fund") to be held at the offices of the
Corporation, One Market, Steuart Tower (Suite 1800), San Francisco, California,
on Wednesday, December 1, 1999 at 1:00 p.m., local time (the "Meeting"). At
this meeting, you are being asked to vote on important proposals affecting the
Fund. THE BOARD OF DIRECTORS OF THE FUND BELIEVES THAT THESE PROPOSALS ARE IN
THE BEST INTERESTS OF THE FUND AND ITS SHAREHOLDERS, AND RECOMMENDS THAT YOU
APPROVE ALL PROPOSALS PRESENTED FOR YOUR CONSIDERATION.
At the Meeting, you will be asked to vote on:
1. The election of a Board of 10 Directors (Proposal 1).
2. A proposal to amend the Fund's Articles of Incorporation reducing the par
value per share of the Fund's capital stock from $1.00 to $0.001 in order to
reduce certain costs (Proposal 2).
3. A proposal to eliminate or revise certain of the Fund's investment
restrictions (Proposal 3).
4. The ratification of the selection, by the Board of Directors, of Deloitte &
Touche llp as independent accountant for the Fund for the fiscal year 1999
(Proposal 4).
5. Any other business that may come before the Meeting (we are not currently
aware of any other items to be considered).
Some key points about Proposals 2, 3 and 4 are described below. The proposals
are described in more detail in the full text of the Proxy Statement which you
should read before you vote.
ABOUT PROPOSAL 2:
In Proposal 2, we are asking you to approve an amendment to the Fund's
Articles of Incorporation reducing the par value per share of the Fund's
capital stock. When the Fund increases its authorized capital stock, it must
pay a fee to Maryland, its state of incorporation, based on the aggregate par
value of the new shares. Therefore, a reduced par value per share will reduce
the amount the Fund pays in fees for the registration of its shares. THE LOWER
PAR VALUE WILL HAVE NO EFFECT ON THE VALUE OF YOUR SHARES.
ABOUT PROPOSAL 3:
Because the Fund was formed many years ago, it is subject to a number of
investment restrictions that do not reflect current conditions, practices or
legal requirements. In some cases restrictions, although described as
"fundamental" because they require shareholder approval to modify, were
originally adopted in response to state regulation that no longer applies to
the Fund. In other cases, we believe the language of the restrictions should
be modified to reflect current standards. We are also requesting a restriction
be reclassified as non-fundamental, requiring only Board approval to change.
You may vote for any or all of the changes that are the subject of Proposal 3
by so indicating on your Proxy card. THIS PROPOSAL WILL NOT AFFECT THE FUND'S
INVESTMENT OBJECTIVE, WHICH REMAINS UNCHANGED. MOREOVER, THE BOARD DOES NOT
ANTICIPATE THAT THE CHANGES, INDIVIDUALLY OR IN THE AGGREGATE, WILL INCREASE TO
A MATERIAL DEGREE THE LEVEL OF INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN
THE FUND.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO APPROVE THESE PROPOSALS.
* * *
We are sure that you, like most people, lead a busy life and are tempted to
put this Proxy aside for another day. Please don't delay. When shareholders
do not return their Proxies, additional expenses are incurred to pay for
follow-up mailings and telephone calls.
PLEASE TAKE A FEW MINUTES TO REVIEW THIS PROXY STATEMENT AND SIGN AND RETURN
THE ENCLOSED PROXY CARD TODAY. YOU MAY ALSO VOTE YOUR PROXY BY TELEPHONE OR
THE INTERNET BY FOLLOWING INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY
INSERT. Please be sure to vote each Proxy card regardless of how many you
receive.
If you have any questions regarding the issues to be voted on or need
assistance in completing your Proxy card, please contact at (800) 421-0180.
Thank you for investing with us and for your continuing support.
Walter P. Stern
Chairman of the Board
<PAGE>
THE INCOME FUND OF AMERICA, INC.
________
NOTICE OF MEETING OF SHAREHOLDERS
December 1, 1999
________
To the Shareholders of
The Income Fund of America, Inc.:
A Meeting of Shareholders of The Income Fund of America, Inc. (the "Fund")
will be held at the offices of the Fund, One Market, Steuart Tower (Suite
1800), San Francisco, California, on Wednesday, December 1, 1999 at 3:00 p.m.,
local time, to consider and vote on the following matters described under the
corresponding numbers in the accompanying Proxy Statement:
(1) election of a Board of 10 Directors;
(2) approval of amendment to the Fund's Articles of Incorporation authorizing
the Board of Directors to create new classes and series of shares of capital
stock;
(3) approval of amendment to the Fund's Articles of Incorporation reducing the
par value per share of the Fund's capital stock from $1.00 to $0.001;
(4) approval of the elimination or revision of certain of the Fund's
fundamental investment policies;
(5) ratification of the selection of Deloitte & Touche LLP as independent
accountant for the Fund for the fiscal year 2000;
(6) such other matters as may properly come before the meeting.
You are entitled to vote if you held shares of the Fund at the close of
business on September 15, 1999.
THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE MEETING UNLESS THE HOLDERS OF
A MAJORITY OF THE SHARES OF THE FUND OUTSTANDING ON THE RECORD DATE ARE PRESENT
IN PERSON OR BY PROXY. THEREFORE, PLEASE MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS. THE PROXY IS
REVOCABLE, AND YOUR SIGNING WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
By Order of the Board of Directors,
Patrick F. Quan
Secretary
October 11, 1999
IMPORTANT
You can help the Fund avoid the necessity and expense of sending follow-up
letters to ensure a quorum by promptly returning the enclosed Proxy. Please
mark, date, sign and return the enclosed Proxy so that the necessary quorum may
be represented at the meeting. The enclosed envelope requires no postage if
mailed in the United States. You may also vote by telephone or the Internet by
following instructions that appear on the enclosed Proxy insert.
<PAGE>
THE INCOME FUND OF AMERICA, INC.
ONE MARKET, STEUART TOWER, SAN FRANCISCO, CALIFORNIA
----------------
PROXY STATEMENT
MEETING OF SHAREHOLDERS
DECEMBER 1, 1999
----------------
The enclosed Proxy is solicited by the Board of Directors of the Fund in
connection with the Meeting of Shareholders to be held on Wednesday, December
1, 1999. Every Proxy returned in time to be voted at the meeting will be voted
and, if you specify how to vote with respect to any proposal, the Proxy will be
voted accordingly. Unless you specify otherwise, the Proxy will be voted in
favor of the proposal. You can revoke a Proxy prior to its exercise, either by
filing with the Fund a written notice of revocation, by delivering a duly
executed Proxy bearing a later date, or by attending the meeting and voting in
person. This Proxy was first mailed to shareholders on or about October 11,
1999.
At the close of business on September 15, 1999, the record date fixed by the
Board of Directors for the determination of shareholders entitled to notice of
and to vote at the meeting, there were outstanding
shares of capital stock, $1.00 par value per share, the only authorized class
of voting securities of the Fund (the "Shares"). Each Share is entitled to one
vote. There is no provision for cumulative voting. No person owned of record or
was known by the Fund to own beneficially 5% or more of the outstanding Shares
of the Fund.
With respect to the election of directors (Item 1), the 10 nominees receiving
the highest number of votes will be elected. The vote required to approve Items
2 and 3 is the affirmative vote of more than 50% of all outstanding voting
Shares on the record date. The vote required to approve Item 4 is the
affirmative vote of the lesser of (a) 67% or more of all Shares present in
person or by proxy, provided the holders of more than 50% of all outstanding
voting Shares are present or represented by proxy, or (b) more than 50% of all
outstanding voting Shares on the record date. The vote required to approve
Item 5 is the affirmative vote of a majority of Shares present or represented
by proxy.
If sufficient votes are not received by the meeting date, a person named as
proxy may propose one or more adjournments of the meeting for up to 120 days in
the aggregate to permit further solicitation of Proxies. The persons named as
proxies may vote all Proxies in favor of such adjournment. Signed but unmarked
Proxies will be voted for the directors nominated below and in favor of all
proposals. Shareholders who return Proxies marked as abstaining from voting on
one or more proposals are treated as being present at the meeting for purposes
of obtaining the quorum necessary to hold the meeting, but are not counted as
part of the vote necessary to approve the proposal(s). If brokers holding
Shares for their customers in Street Name have not received instructions and
are not authorized to vote without instruction, those Shares also will be
treated as abstentions.
1. ELECTION OF DIRECTORS
Ten directors are to be elected at the meeting, each to hold office until the
next meeting of shareholders at which directors are to be elected and until a
successor is elected and qualified. Because we do not expect meetings of
shareholders to be held each year, the directors' terms will be indefinite in
length. All of the nominees for director except Janet A. McKinley and James K.
Peterson were elected by shareholders at the last shareholders meeting on
December 14, 1993. Ms. McKinley was elected by the directors effective
December 12, 1997. The Board of Directors nominated Mr. Peterson on August 12,
1999 for election by the shareholders at this meeting.
Each of the nominees has agreed to serve as director if elected. If, due to
presently unforeseen circumstances, any nominee is not available for election,
the persons named as proxies will vote the signed but unmarked Proxies and
those marked for the nominated directors for such other nominee as the present
directors may recommend. The table below sets forth certain information
regarding the nominees.
<TABLE>
<CAPTION>
NAME OF NOMINEE CURRENT PRINCIPAL YEAR MEMBERSHIPS ON BOARD SHARES
(POSITION WITH OCCUPATION AND FIRST OF OTHER REGISTERED BENEFICIALLY
FUND) PRINCIPAL ELECTED INVESTMENT COMPANIES AND OWNED,
AND AGE EMPLOYMENT DURING A PUBLICLY HELD COMPANIES DIRECTLY OR
PAST FIVE YEARS # DIRECTOR INDIRECTLY,
AT SEPTEMBER
15, 1999
<S> <C> <C> <C> <C>
Robert A. Fox President and 1972 The American Funds Group:
(Director) Chief Executive
62 Officer, Foster (Director/Trustee - 6
Farms, Inc. other funds)
Crompton & Knowles
Corporation
Roberta L. Hazard Consultant; Rear 1993 The American Funds Group:
(Director) Admiral, United
64 States Navy (Director - 3 other
(Retired) funds)
Leonade D. Jones Management 1993 The American Funds Group:
(Director) consultant;
51 former Treasurer, (Director/Trustee - 5
The Washington other funds)
Post Company
John G. McDonald The IBJ Professor 1976 The American Funds Group:
(Director) of Finance,
62 Graduate School (Director/Trustee - 7
of Business, other funds)
Stanford Emerging Markets Growth
University Fund
Plum Creek Timber Co.
Scholastic Corporation
TriNet Corp.
Varian, Inc.
Janet A. Director, Capital 1997 None
McKinley* Research and
(President and Management
Director) Company; Senior
44 Vice President,
Capital Research
Company
James K. Peterson Managing Nominee The American Funds Group:
58 Director, Oak
Glen Consultancy, (Nominee for Director -
LLC 1 other
fund)
RS Funds
James W. Senior Partner, 1982 The American Funds Group:
Ratzlaff* The Capital Group
(Director) Partners, L.P.; (Director - 6 other
63 former Vice funds)
Chairman of the
Board, Capital
Research and
Management
Company
Henry E. Riggs President, Keck 1989 The American Funds Group:
(Director) Graduate
64 Institute of (Director - 3 other
Applied Life funds)
Sciences at
Claremont; former
President and
Professor of
Engineering,
Harvey Mudd
College
Walter P. Stern* Vice Chairman, 1974 The American Funds Group:
(Chairman of the Capital Group
Board) International, (Director - 2 other
71 Inc.; Chairman, funds)
Capital
International,
Inc.; Director,
Temple-Inland
Inc.
(forest
products).
Patricia K. Woolf Private investor; 1985 The American Funds Group:
(Director) lecturer,
65 Department of (Director/Trustee - 5
Molecular other funds)
Biology, Crompton & Knowles
Princeton Corporation General
University; Public Utilities
Corporate Corporation
Director National Life Holding Co.
</TABLE>
__________
# Corporate positions, in some instances, may have changed during this period.
* Is considered an interested person of the Fund within the meaning of the
Investment Company Act of 1940 (the "1940 Act"), on the basis of his
affiliation with Capital Research and Management Company (the "Investment
Adviser"). The Investment Adviser is a wholly owned subsidiary of The Capital
Group Companies, Inc.
+ Includes Shares beneficially held under a master retirement plan.
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 vehicles 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 Capital Research and Management
Company, Capital International, Inc., manages Emerging Markets Growth Fund,
Inc.
The Board has an Audit Committee composed of Robert A. Fox, Roberta L. Hazard,
Leonade D. Jones and John G. McDonald. The Committee's functions include such
specific matters as recommending the independent accountant to the Board of
Directors, reviewing the audit plan and results of the audits and considering
other matters deemed appropriate for consideration by the Board of Directors
and/or the Committee.
The Board has a Nominating Committee composed of Robert A. Fox, Leonade D.
Jones, John G. McDonald and Patricia K. Woolf. The Committee's functions
include selecting and recommending to the Board of Directors nominees for
election as directors of the Fund. While the Committee normally is able to
identify from its own resources an ample number of qualified candidates, it
will consider shareholder suggestions of persons to be considered as nominees
to fill future vacancies on the board. Such suggestions must be sent in
writing to the Nominating Committee of the Fund, c/o the Fund's Secretary, and
must be accompanied by complete biographical and occupational data on the
prospective nominee, along with a written consent of the prospective nominee to
consideration of his or her name by the Committee. See also "Shareholder
Proposals."
The Board has a Contracts Committee composed of all directors who are not
considered to be "interested persons" of the Fund within the meaning of the
1940 Act. The Contracts Committee's functions are to request, review and
consider the information deemed necessary to evaluate the terms of the
investment advisory and principal underwriting agreements and the Plan of
Distribution under rule 12b-1 that the Fund proposes to enter into, renew or
continue and to make its recommendations to the full Board of Directors on
these matters.
The Board has a Proxy Committee composed of Leonade D. Jones, John G.
McDonald, Henry E. Riggs and Patricia K. Woolf. The Committee's functions
include reviewing and voting portfolio proxies of the Fund and discussing
related current issues.
Each director is paid a fee of $18,000 per annum plus $1,000 for each Board of
Directors meeting attended and $500 for each meeting attended as a member of a
committee of the Board of Directors. Members of the Proxy Committee receive an
annual retainer fee of $4,000 from the Fund if they serve as a member of three
other proxy committees, or $5,500 if they serve as a member of one other proxy
committee, meeting jointly.
There were four Board of Directors, two Audit Committee, three Nominating
Committee, two Contracts Committee, and four Proxy Committee meetings during
the year ended July 31, 1999. All incumbent directors attended at least 90% of
all Board meetings and meetings of the committees of which they were members.
The Fund pays no salaries or other compensation to its directors other than
directors fees, which are paid to those directors who are unaffiliated with the
Investment Adviser as described below.
DIRECTOR COMPENSATION
<TABLE>
<CAPTION>
Director or Nominee Aggregate Compensation Total Compensation Total Number
(including Voluntarily (including of Fund
Deferred Compensation /1/) Voluntarily Boards on
from the Fund during Deferred which
Fiscal Year ended 7/31/99 Compensation) Director
from all Funds Serves /2/
Managed by Capital
Research and
Management Company
during the Fiscal
Year ended 7/31/99
<S> <C> <C> <C>
Robert A. Fox $25,500 (deferred)/4/ $125,500 7
Roberta L. Hazard $24,000 $78,000 4
Leonade D. Jones $34,583/4/ $138,000 6
John G. McDonald $32,900 (deferred)/4/ $261,250 9
Janet A. McKinley none/5/ none /5/ 1
James K. Peterson /3/ none none none
James W. Ratzlaff none/5/ none /5/ 7
Henry E. Riggs $29,400 (deferred)/4/ $104,450 4
Walter P. Stern none/5/ none /5/ 3
Patricia K. Woolf $31,900 $139,950 6
</TABLE>
/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 director.
/2/ Includes funds managed by Capital Research and Management Company and
affiliates.
/3/ James K. Peterson has been nominated as a director of the Fund and had not
received any remuneration from the Fund as of its 7/31/99 fiscal year end.
/4/ Since the deferred compensation plan's adoption in 1993, the total amount
of deferred compensation accrued by the Fund (plus earnings thereon) as of the
fiscal year ended July 31, 1999 for participating directors is as follows:
Robert A. Fox ($259,212), Leonade D. Jones ($82,532), John G. McDonald
($149,715) and Henry E. Riggs ($171,571). Amounts deferred and accumulated
earnings thereon are not funded and are general unsecured liabilities of the
Fund until paid to the director.
/5/ Janet A. McKinley, James W. Ratzlaff and Walter P. Stern are affiliated
with the Fund's Investment Adviser and, therefore, receive no remuneration from
the Fund.
OTHER EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME OFFICER
(POSITION WITH FUND) CONTINUOUSLY
AND AGE PRINCIPAL OCCUPATION /1/ SINCE /2/
<S> <C> <C>
Stephen E. Bepler Senior Vice President, 1993
(Senior Vice President) Capital Research and Management Company
57
Abner D. Goldstine Senior Vice President and Director, 1993
(Senior Vice President) Capital Research and Management Company
69
Paul G. Haaga, Jr. Executive Vice President and Director, 1994
(Senior Vice President) Capital Research and Management Company;
50 Director, American Funds Service Company;
Director, American Funds Distributors, Inc.
Dina N. Perry Senior Vice President, 1994
(Senior Vice President) Capital Research and Management Company
53
Hilda L. Applbaum Vice President, 1998
(Vice President) Capital Research Company
38
David C. Barclay Senior Vice President, 1998
(Vice President) Capital Research Company
43
Darcy B. Kopcho Executive Vice President, 1997
(Vice President) Capital Research Company
45
John H. Smet Director, Capital Research Company; 1994
(Vice President) Vice President, Capital Research and
43 Management Company
Patrick F. Quan Vice President - Fund Business Management 1986
(Secretary) Group, Capital Research and Management Company
41
Anthony W. Hynes, Jr. Vice President - Fund Business Management 1998
(Treasurer) Group, Capital Research and Management Company
36
</TABLE>
________________________
/1/ The occupations shown reflect the principal employment of each individual
during the past five years. Corporate positions, in some instances, may have
changed during this period.
/2/ Officers hold office until their respective successors are elected, or
until they resign or are removed.
No officer, director or employee of the Investment Adviser receives any
remuneration from the Fund. All directors and officers as a group owned
beneficially fewer than 1% of the Shares outstanding on September 15, 1999.
2. APPROVAL OF AMENDMENT TO THE FUND'S ARTICLES OF INCORPORATION (SHARE
CLASSIFICATION)
On August 12, 1999, the Fund's Board of Directors approved an amendment to
the Fund's Articles of Incorporation to give the Fund's Board of Directors the
power to classify the Fund's shares into classes and series. The Board of
Directors voted to submit the amendment to the Fund's shareholders with the
Board's recommendation that it be approved. The full text of the proposed
amendment is attached to the Proxy Statement as Exhibit A.
* * *
Until the 1990's, mutual funds with front-end sales charges dominated the
market for dealer-distributed funds. Over time, competition grew from funds
with alternative sales charge structures which are now widely accepted by
investors and broker-dealers. Although the front-end sales charge structure is
appealing due to its simplicity, the combination of significantly increased
competition and pricing experimentation has led a large number of fund
complexes to consider alternative distribution arrangements.
Capital Research and Management Company has advised the Fund's Board of
Directors that in the future it may recommend that the Board authorize the Fund
to issue an additional class of shares ("New Shares"). If authorized, the New
Shares are expected to be sold without any front-end sales charge and otherwise
would be similar to the existing Shares, except that they would be subject to
(i) a different level of fees payable to the Fund's distributor, American Funds
Distributors, Inc. ("AFD"), a wholly-owned subsidiary of Capital Research and
Management Company, under a separate plan of distribution, and (ii) a
contingent deferred sales charge ("CDSC") payable to AFD if such shares are
redeemed before the expiration of a specified holding period. A portion of the
distribution fees and CDSC received by AFD would be available to finance the
payment of commissions on initial sales and ongoing service fees to eligible
dealers of New Shares.
IMPORTANTLY, THE DISTRIBUTION FEES FOR THE NEW SHARES WOULD BE IMPOSED ONLY ON
NEW SHARES AND WOULD NOT AFFECT THE EXPENSE LEVEL OF THE EXISTING SHARES.
MOREOVER, ANY OTHER EXPENSES UNIQUE TO THE NEW SHARES (E.G. ADDITIONAL TRANSFER
AGENT OR SHAREHOLDER ACCOUNT MAINTENANCE COSTS) ALSO WOULD BE BORNE ONLY BY THE
NEW SHARES. AS A RESULT, NEW SHARES WOULD HAVE A DIFFERENT (GENERALLY HIGHER)
LEVEL OF EXPENSES THAN THE EXISTING SHARES AND WOULD NOT RESULT IN ADDITIONAL
COSTS FOR THE EXISTING SHARES.
* * *
The Fund's Articles of Incorporation currently provide for only one class of
shares of capital stock, and do not authorize the Board of Directors to create
additional classes or series. The Board of Directors believes that the Fund's
best interests would be served if the Articles of Incorporation were amended to
enable the Board to create new series of shares and classes of shares within a
series. Each share of a series, regardless of class, would share pro rata
(based on net asset value) in the investment portfolio and income of the series
and in the series' expenses, except for differences in expenses resulting from
different class-specific distribution arrangements and possibly other
class-specific expenses. Although the proposed Articles would permit the Board
to create additional series of shares (representing interests in separate
investment portfolios), there is no current intention to do so.
Shares of all classes would vote together on all matters affecting the Fund,
except for matters, such as approval of a plan of distribution or related
service plan, affecting only a particular series or class thereof. All shares
voting on a matter would have identical voting rights. All issued shares would
be fully paid and non-assessable, and shareholders would have no pre-emptive or
other right to subscribe for any additional shares. All shares within a series
(including, if issued, the New Shares) would have the same rights and be
subject to the same limitations set forth in the Articles of Incorporation with
respect to dividends, redemptions and liquidation, except for differences
resulting from class-specific distribution plans and related service plans and
certain other class-specific expenses.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THIS PROPOSAL.
3. APPROVAL OF AMENDMENT TO THE FUND'S ARTICLES OF INCORPORATION (REDUCTION IN
PAR VALUE)
On August 12, 1999, the Fund's Board of Directors voted to approve an
amendment to the Fund's Articles of Incorporation to reduce the par value of
shares of capital stock of the Fund from $1.00 to $0.001 per share, and to
submit the amendment to the Fund's shareholders with the Board's recommendation
that it be approved. This proposed amendment is included as part of Exhibit A.
Under Maryland law, the par value of shares determines the amount of a
corporation's stated capital. Stated capital has little meaning for an
investment company like the Fund. However, when the Fund increases its
authorized capital stock, it must pay a registration fee to the State of
Maryland based on the aggregate par value of the new shares. This change will
have no effect on the value of your shares. The Board of Directors therefore
recommends that the par value of the Fund's shares of capital stock be reduced
in order to save the Fund some expense in connection with any increase in
authorized capital stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THIS PROPOSAL.
4. APPROVAL OF THE ELIMINATION OR REVISION OF CERTAIN OF THE FUND'S FUNDAMENTAL
INVESTMENT POLICIES
INTRODUCTION AND SUMMARY
The Fund is subject to investment restrictions which establish percentage and
other limits that govern its investment activities. Under the 1940 Act,
investment restrictions relating to certain activities are required to be
"fundamental," which means that any changes require shareholder approval.
Investment companies, including the Fund, are permitted to designate additional
restrictions as fundamental. They may also adopt "non-fundamental" investment
restrictions, which may be changed by the Fund's Board of Directors without
shareholder approval.
Some of the Fund's existing fundamental investment restrictions reflect
regulatory, business or industry conditions, practices or requirements that
have changed or no longer exist. With the passage of time, the development of
new practices, and changes in regulatory standards, management believes certain
fundamental restrictions should be revised, eliminated or reclassified as
non-fundamental.
The Board of Directors, together with the Fund's senior officers, have
analyzed the current fundamental investment restrictions, and have concluded
that five restrictions should be amended. Three restrictions would be revised
but remain fundamental, one restriction would be eliminated and one restriction
would be revised and reclassified as non-fundamental.
The proposed investment restrictions have been drafted to maintain important
investor protections while providing flexibility to respond to future legal,
regulatory and market changes. By reducing the number of policies that can be
changed only by shareholder vote, the Board of Directors and the Fund will have
greater flexibility to modify Fund policies, as appropriate, in response to
changing markets and in light of new investment opportunities and instruments.
The Fund will then be able to avoid the costs and delays associated with a
shareholder meeting when making changes to the non-fundamental investment
policies that the Board may consider desirable.
IMPORTANTLY, THE PROPOSED AMENDMENTS DO NOT AFFECT THE INVESTMENT OBJECTIVES
OF YOUR FUND, WHICH REMAIN UNCHANGED. MOREOVER, THE BOARD DOES NOT ANTICIPATE
THAT THE CHANGES, INDIVIDUALLY OR IN THE AGGREGATE, WILL CHANGE TO A MATERIAL
DEGREE THE LEVEL OF INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN THE FUND.
The text of each proposed change to the Fund's fundamental restrictions is set
forth below. Shareholders may vote for any or all of the changes that are the
subject of Proposal 4.
RESTRICTIONS PROPOSED TO BE REVISED BUT REMAIN FUNDAMENTAL
4A. BORROWING
The 1940 Act permits mutual funds generally to borrow up to 33 1/3% of the
value of their total assets from banks, and up to 5% of the value of their
total assets from any lender for temporary or emergency purposes. Under the
Fund's current policy, it may borrow up to 5% of total assets, taken at lower
of cost or market, for extraordinary or emergency purposes, and may pledge only
15% of total assets as security for any such borrowing. It is proposed that
the restriction be modified to permit the Fund to grant a lender an unlimited
security interest in its assets, since mutual fund borrowings are often
undertaken on those terms. It is also proposed that the maximum borrowing level
be calculated using current market values. This will facilitate the mechanics
of borrowing in an emergency situation. The Fund would continue to have
authority to borrow only temporarily for extraordinary or emergency purposes.
CURRENT TEXT
[The Fund may not...] borrow amounts in excess of 5% of its gross assets taken
at cost or market value, whichever is lower, determined at the time of
borrowing, and then only from banks as a temporary measure for extraordinary or
emergency purposes; or pledge, mortgage, or hypothecate its assets taken at
market value to any extent greater than 15% of its gross assets taken at cost
or market value, whichever is lower, at the time of such action.
PROPOSED TEXT
[The Fund may not...] borrow money, except temporarily for extraordinary or
emergency purposes, in an amount not exceeding 5% of the value of the Fund's
total assets at the time of such borrowing.
4B. INVESTMENTS IN REAL ESTATE; MINERAL LEASES
The Fund is currently prohibited from investing in real estate except in
certain limited circumstances. Under the revised restriction, the Fund would
still be prohibited from investing directly in real estate, although the change
would clarify that the Fund may invest in the securities of issuers in the real
estate business, or securities (such as mortgage-backed securities) that may
evidence an interest in underlying real estate. The revised restriction would
be consistent with that of nearly all the other funds in The American Funds
Group.
The current restriction also prohibits investments in mineral leases. This
prohibition is not required by the 1940 Act and is proposed to be eliminated.
It was originally adopted in response to state law restrictions or
interpretations that no longer apply. At one time, certain state regulators
felt it appropriate to prohibit investments in mineral leases to protect
investors from speculative investments and to reduce overall portfolio risk.
Industry practice has been to manage these risks through prudent investment
practices and explicit diversification and concentration policies.
CURRENT TEXT
[The Fund may not...] purchase real estate (including limited partnership
interests but excluding securities of companies, such as real estate investment
trusts, which deal in real estate or interests therein) or purchase oil, gas,
or other mineral leases.
PROPOSED TEXT
[The Fund may not...] purchase or sell 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).
4C. LENDING ACTIVITIES
Under the 1940 Act, the Fund is required to have a fundamental restriction
addressing its lending activities. These activities are also subject to
certain restrictions. Under the 1940 Act, loans of securities and other assets
are generally permitted up to 33-/1//3% of a fund's total assets. The Fund's
current fundamental policy states that the Fund may not make loans, except by
making time or demand deposits with banks or by purchasing a portion of an
issue of bonds, debentures, commercial paper or other debt securities at
original issue or otherwise.
Under revised fundamental and non-fundamental policies, the Fund would be
permitted to lend securities or other assets up to 15% of total assets. The
Fund would also have the flexibility to invest, consistent with its investment
objectives, in loans, loan participations, and other forms of direct debt
instruments. Direct debt instruments are interests in amounts owed to lenders
or lending syndicates or other parties. As the beneficial owner of a direct
debt instrument, the Fund would be entitled to receive payments of principal,
interest and any fees to which it is entitled. If the Fund acquires an
indirect interest in a loan (E.G., a loan participation), the Fund would be
entitled to receive these payments only from the lender selling the
participation. The Fund generally would have no right to enforce compliance by
the borrower with the terms of the loan agreement relating to the loan. It
would be subject to the credit risk of both the borrower and the lender selling
the participation.
CURRENT TEXT
[The Fund may not . . . ] make loans to other persons, except by making time or
demand deposits with banks or by purchasing a portion of an issue (not
prohibited by any investment restriction set forth herein) of bonds,
debentures, commercial paper or other debt securities at original issue or
otherwise.
PROPOSED TEXT [FUNDAMENTAL POLICY]
[The Fund may not . . . ] lend any security or make any other loan if, as a
result, more than 15% of its total assets would be lent to third parties, but
this limitation does not apply to purchases of debt securities or to repurchase
agreements.
PROPOSED TEXT [NON-FUNDAMENTAL POLICY]
The Fund does not currently intend to lend portfolio securities.
RESTRICTION PROPOSED TO BE ELIMINATED
The following investment restriction is not required by the 1940 Act. It was
originally adopted in response to state law restrictions or interpretations
that no longer apply.
4D. UNSEASONED ISSUERS
This restriction was adopted in response to state regulation that no longer
applies. Because newly formed companies have no proven track record in
business, their prospects may be uncertain. Their securities may fluctuate in
price more widely than securities of established companies. Elimination of
this restriction will provide the Fund with greater investment flexibility,
subject to its investment objectives and policies. Retaining such a restriction
could, among other things, preclude the Fund from making otherwise attractive
investments in newly-formed companies issuing asset-backed securities.
CURRENT TEXT
[The Fund may not...] purchase securities of companies (other than real estate
investment trusts) which, with their predecessors, have a record of less than
three years' continuous operations, if such purchase would cause more than 5%
of the Fund's total assets to be invested in the securities of such companies.
RESTRICTION PROPOSED TO BE REVISED AND RECLASSIFIED AS NON-FUNDAMENTAL
The following investment restriction is not required by current law to be
"fundamental" (I.E, subject to amendment only with shareholder approval).
Changing it from fundamental to non-fundamental will provide the Board with the
ability to revise the restriction in the future should conditions warrant and
will enable the Fund to avoid the additional expense of a shareholder
solicitation in connection with future revisions.
4E. PURCHASING SECURITIES OF OTHER INVESTMENT COMPANIES
This restriction deals with certain anti-pyramiding concerns addressed by the
1940 Act. The proposed revision would allow the Fund to invest to a limited
degree in entities falling within the technical definition of an investment
company. On occasion, certain issuers in various lines of business, primarily
financial, fall within this definition but otherwise represent attractive
investment opportunities, consistent with the Fund's investment objective.
Current industry practice is to rely on the 1940 Act for investor protection.
CURRENT TEXT
[The Fund may not...] purchase securities of any other managed investment
company.
PROPOSED TEXT
[The Fund may not...] invest in securities of other investment companies,
except as permitted by the Investment Company Act of 1940, as amended.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THESE PROPOSED
CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS.
5. RATIFICATION OF THE SELECTION BY THE BOARD OF DIRECTORS OF DELOITTE & TOUCHE
LLP AS INDEPENDENT PUBLIC ACCOUNTANT
Shareholders are requested to ratify the selection by the Board of Directors
(including a majority of the directors who are not "interested persons" of the
Fund as that term is defined in the 1940 Act) of Deloitte & Touche LLP as
independent accountant for the Fund for the fiscal year 2000. In addition to
the normal audit services, Deloitte & Touche LLP provides services in
connection with the preparation and review of federal and state tax returns for
the Fund. Deloitte & Touche LLP has served as the Fund's independent
accountant since 1973 and has advised the Fund that it has no material direct
or indirect financial interest in the Fund or its affiliates. The Fund's Audit
Committee recommended that Deloitte & Touche LLP be selected as the Fund's
independent accountant for the current fiscal year. The employment of the
accountant is conditioned upon the right of the Fund to terminate such
employment at any time without any penalty. No representative of Deloitte &
Touche LLP is expected to attend the Meeting of Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF ITS
SELECTION OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
Neither the persons named in the enclosed Proxy nor the Board of Directors are
aware of any matters that will be presented for action at the meeting other
than the matters described above. If any other matters requiring a vote of
shareholders arise, the Proxies will confer upon the person or persons entitled
to vote the Shares they represent a discretionary authority to vote the Shares
in respect to any such other matters in accordance with their best judgment in
the interest of the Fund and its shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposals for inclusion in proxy solicitation material for a
shareholders meeting should be submitted to the Secretary of the Fund, at the
Fund's principal executive offices, One Market, Steuart Tower, Suite 1800, San
Francisco, CA 94105. Any such proposals must comply with the requirements of
federal and state laws and regulations including rule 14a-8 under the
Securities Exchange Act of 1934.
Under the laws of Maryland, where the Fund is incorporated, and the Fund's
Articles of Incorporation and By-Laws, the Fund is not required to hold regular
meetings of shareholders. Under the 1940 Act, a vote of shareholders is
required from time to time for particular matters but not necessarily on an
annual basis. As a result, the Fund does not expect to hold shareholders
meetings on a regular basis, and any shareholder proposal received may not be
considered until such a meeting is held.
GENERAL INFORMATION
Capital Research and Management Company is the investment adviser to the Fund
and is located at 333 South Hope Street, Los Angeles, CA 90071 and 135 South
State College Boulevard, Brea, CA 92821. American Funds Distributors, Inc. is
the principal underwriter of the Fund's shares and is located at the Los
Angeles and Brea addresses above and also at 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513.
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
the Fund. The Fund will pay the cost of soliciting proxies, consisting of
printing, handling and mailing of the Proxies and related materials. In
addition to solicitation by mail, certain officers and directors of the Fund,
who will receive no extra compensation for their services, may solicit by
telephone, telegram or personally. WE URGE ALL SHAREHOLDERS TO MARK, DATE,
SIGN, AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE YOUR PROXY BY
TELEPHONE OR THE INTERNET BY FOLLOWING INSTRUCTIONS THAT APPEAR ON THE ENCLOSED
PROXY INSERT.
YOU MAY OBTAIN A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT, WITHOUT CHARGE,
BY WRITING TO THE SECRETARY OF THE FUND AT ONE MARKET, STEUART TOWER, SUITE
1800, SAN FRANCISCO, CA 94105 OR BY TELEPHONING 800/421-0180. THESE REQUESTS
WILL BE HONORED WITHIN THREE BUSINESS DAYS OF RECEIPT.
By Order of the Board of Directors
PATRICK F. QUAN
Secretary
October 11, 1999
<page?
EXHIBIT A
THE INCOME FUND OF AMERICA, INC.
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND
AUTHORIZING THE BOARD OF DIRECTORS TO CREATE NEW CLASSES AND SERIES
OF CAPITAL STOCK, AND REDUCING THE PAR VALUE
The following text shows the provision of the Articles of Incorporation of the
Fund that is to be amended; the text that is lined through shows deletions and
the text that is underlined indicates additions.
V.
CAPITAL STOCK
(1) The total number of shares of stock of all classes and series which the
Corporation has authority to issue is one billion, six hundred million
(1,600,000,000) shares of capital stock (par value $0.001 per share), amounting
in aggregate par value of to one billion million, six hundred thousand dollars
($1,600,000).
(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 or
under the direction of 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.
THIS NOTICE OF MEETING OF SHAREHOLDERS AND PROXY STATEMENT
HAS BEEN PRINTED ON RECYCLED PAPER THAT MEETS THE
GUIDELINES OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.
<PAGE>
PROXY CARD THE INCOME FUND OF AMERICA, INC. PROXY CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE FUND
FOR THE MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 1, 1999
The undersigned hereby appoints Janet A. McKinley, Patrick F. Quan and Walter
P. Stern, and each of them, his/her true and lawful agents and proxies with
full power of substitution to represent the undersigned at the Meeting of
Shareholders to be held at the offices of the Fund, One Market, Steuart Tower
(Suite 1800), San Francisco, California, on Wednesday, December 1, 1999, at
3:00 P.M., on all matters coming before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER YOU DIRECTED. IF
NO DIRECTION IS GIVEN, WITH RESPECT TO ANY PARTICULAR ITEM, THIS PROXY WILL BE
VOTED FOR THE NOMINEES IN ITEM 1 AND FOR ITEMS 2, 3, 4 AND 5.
CONTROL NUMBER:
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. JOINT OWNERS
SHOULD EACH SIGN INDIVIDUALLY. CORPORATE PROXIES SHOULD BE SIGNED IN FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. FIDUCIARIES SHOULD GIVE FULL TITLES.
Signature
Signature of joint owner, if any
Date
THE INCOME FUND OF AMERICA, INC.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: []
<TABLE>
<CAPTION>
1. Election of FOR ALL WITHHOLD EXCEPT
Directors: ALL
<S> <C> <C> <C> <C> <C>
01 Robert A. Fox 05 Janet A. 08 Henry E.
McKinley Riggs
02 Roberta L. 06 James K. 09 Walter P. [] [] []
Hazard Peterson Stern
03 Leonade D. 07 James W. 10 Patricia K.
Jones Ratzlaff Woolf
04 John G.
McDonald
</TABLE>
To withhold your vote for any individual nominee, mark the "For All Except" box
and write the nominee's number on the line provided below.
_____________________________________________________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Approval of amendments to Articles of Incorporation [] [] []
authorizing the Board to create new classes and series of
capital stock:
3. Approval of an amendment to the Articles of [] [] []
Incorporation reducing the par value per share:
4. Approval of the proposed changes to the Fund's
investment restrictions.
4A. Amend restriction regarding borrowing [] [] []
4B. Amend restriction regarding investments in real [] [] []
estate; mineral leases
4C. Amend restriction regarding lending activities [] [] []
4D. Eliminate restriction on unseasoned issuers [] [] []
4E. Amend and reclassify as non-fundamental restriction [] [] []
regarding purchasing securities of other investment
companies
5. Ratification of selection of Deloitte & Touche LLP as [] [] []
independent accountant:
</TABLE>
In their discretion, upon other matters as may properly come before the
meeting.
IMPORTANT
SHAREHOLDERS CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF
SENDING FOLLOW-UP LETTERS BY PROMPTLY RETURNING THIS PROXY.
