THE INVESTMENT COMPANY OF AMERICA
333 South Hope Street, Los Angeles, California 90071
August 30, 1999
Dear Shareholder:
We are writing to inform you of the upcoming meeting of the shareholders of
The Investment Company of America (the "Company") to be held at Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware, on Tuesday, October 19,
1999 at 10:00 A.M., local time (the "Meeting"). At this meeting, you are being
asked to vote on important proposals affecting the Company. THE BOARD OF
DIRECTORS OF THE COMPANY BELIEVES THAT THESE PROPOSALS ARE IN THE BEST
INTERESTS OF THE COMPANY 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 14 Directors (Proposal 1).
2. A proposal to amend the Company's Certificate of Incorporation (i)
increasing the total number of authorized shares of capital stock, (ii)
establishing a new class of common stock and (iii) authorizing the Board of
Directors to create additional series of shares within the new class of common
stock from time to time (Proposal 2).
3. A proposal to amend the Company's Certificate of Incorporation reducing the
par value per share of the Company's capital stock from $1.00 to $0.001 in
order to reduce certain costs (Proposal 3).
4. The ratification of the selection, by the Board of Directors, of
PricewaterhouseCoopers llp as independent accountants for the Company for the
fiscal year 1999 (Proposal 4).
5. Any other business that may come before the Meeting, although we are not
currently aware of any other items to be considered.
Some key points about Proposals 2 and 3 are described below. Each of the
proposals is 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 amendments to the Company's
Certificate of Incorporation to increase the number of authorized shares, to
establish an additional class of shares and to authorize the Board of Directors
to create additional series of shares within the new class. The Board believes
that the additional class of shares will provide investors with greater choice
in distribution arrangements and maintain the Company's competitive position in
relation to other funds with similar arrangements. The new class of shares
would share pro rata (based on net asset value) in the Company's investment
portfolio and income and in the Company's expenses, except for differences in
expenses resulting from different distribution arrangements and possibly other
class- or series-specific expenses.
ABOUT PROPOSAL 3:
In Proposal 3, we are asking you to approve an amendment to the Company's
Certificate of Incorporation reducing the par value per share of the Company's
capital stock. When the Company increases its authorized capital stock, as is
proposed in Proposal 2, it must pay a fee to Delaware, 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 Company pays in fees
for the registration of its shares. The lower par value will have no effect on
the value of your shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO APPROVE THESE
PROPOSALS. NONE OF THE PROPOSALS WOULD CHANGE THE COMPANY'S INVESTMENT
OBJECTIVES OR POLICIES OR OTHERWISE AFFECT THE INVESTMENT OPERATIONS OF THE
COMPANY.
* * *
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. 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. Please be sure to
sign and return 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 [ ]. Thank you
for investing with us and for your continuing support.
<PAGE>
THE INVESTMENT COMPANY OF AMERICA
________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 19, 1999
________
TO THE SHAREHOLDERS OF
THE INVESTMENT COMPANY OF AMERICA:
The Annual Meeting of Shareholders of The Investment Company of America (the
"Company") will be held at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware, on Tuesday, October 19, 1999 at 10:00 A.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 14 Directors;
(2) approval of amendments to the Company=s Certificate of Incorporation (i)
increasing the total number of authorized shares of capital stock, (ii)
establishing a new class of common stock and (iii) authorizing the Board of
Directors to create additional series of shares within the new class of common
stock from time to time;
(3) approval of an amendment to the Company's Certificate of Incorporation
reducing the par value per share of the Company's capital stock from $1.00 to
$0.001 in order to reduce registration fees;
(4) ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountant for the Company for the year ending December 31, 1999;
and
(5) such other matters as may properly come before the meeting.
The Board of Directors has fixed August 23, 1999, at the close of business, as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE ANNUAL MEETING UNLESS THE
HOLDERS OF A MAJORITY OF THE SHARES OF THE COMPANY 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 WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
By order of the Board of Directors,
VINCENT P. CORTI
SECRETARY
August 30, 1999
IMPORTANT
SHAREHOLDERS CAN HELP THE COMPANY 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 IN ORDER THAT THE
NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE ENCLOSED ENVELOPE
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
THE INVESTMENT COMPANY OF AMERICA
333 SOUTH HOPE STREET, LOS ANGELES, CALIFORNIA 90071
________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 19, 1999
________
The enclosed Proxy is solicited by the Board of Directors of the Company in
connection with the Annual Meeting of Shareholders to be held at Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware, on Tuesday, October 19,
1999 at 10:00 A.M., local time. Every Proxy returned in time to be voted at
the meeting will be voted and, if a specification is made with respect to any
proposal, the Proxy will be voted accordingly. If no specification is made,
the Proxy will be voted in favor of the proposal. Anyone having submitted a
Proxy may revoke it prior to its exercise, either by filing with the Company a
written notice of revocation, by delivering a duly executed Proxy bearing a
later date, or by attending the meeting and voting in person.
At the close of business on August 23, 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
Common shares of capital stock, $1 par value per share, the
only authorized class of voting securities of the Company (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 Company to own beneficially 5% or
more of the outstanding Shares of the Company.
This Proxy Statement was first mailed to shareholders on or about August 30,
1999. The Company's Annual Report for the year ended December 31, 1998,
including financial statements, has been mailed to shareholders. The Annual
Report is not to be regarded as proxy solicitation material or as part of this
Proxy Statement.
With respect to the election of directors (Item 1), the 14 nominees receiving
the highest number of votes shall be deemed to 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.
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 a period or
periods of not more than 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
below nominated directors 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). Where brokers holding Company Shares for
their customers in so-called "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
Fourteen directors are to be elected at the meeting, each to hold office until
the next annual meeting and until a successor is elected and qualified. All of
the nominees for director except Louise H. Bryson were elected by shareholders
at their last Annual Meeting on April 28, 1998. Ms. Bryson was elected by
directors effective January 1, 1999. Each of the nominees has agreed to serve
as director if elected. If, due to presently unforeseen circumstances, any
nominee should not be 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.
(LIST OF CANDIDATES MAY CHANGE PRIOR TO PRINTING OF FINAL PROXY STATEMENT)
<TABLE>
<CAPTION>
SHARES
NAME OF CURRENT PRINCIPAL YEAR MEMBERSHIPS ON BENEFICIALLY
NOMINEE OCCUPATION AND FIRST BOARDS OF OTHER OWNED, DIRECTLY
(POSITION PRINCIPAL EMPLOYMENT ELECTED REGISTERED INVESTMENT OR INDIRECTLY,
WITH COMPANY) DURING PAST FIVE A COMPANIES AND PUBLICLY AT
AND AGE YEARS # DIRECTOR HELD COMPANIES AUGUST 23, 1999
<S> <C> <C> <C> <C>
Mr. Charles H. Private Investor and 1981 The American Funds Group
Black /1,3/ consultant; former (Trustee of 1 other
(Director) Executive Vice President fund)
72 and Director, KaiserSteel JMC Group, Inc.
Pacific Stock Exchange
(Public Governor)
Wilshire Technologies,
Inc.
Ms. Ann S. Senior Trustee, The Noyce 1991
Bowers /2,3/ Foundation; Trustee,
(Director) Cornell University
61
Ms. Louise H. Director and former 1999
Bryson /3/ Chairman of the Board,
(Director) KCET Public Television;
55 former Senior Vice
President, fx Networks,
Inc: Fox, Inc.
Dr. Malcolm R. Chairman Emeritus, Hughes 1992 LSI Logic Corporation
Currie /3/ Aircraft Company; Unocal Corporation
(Director) Chairman of the Board of SM&A (Steven Myers &
72 Trustees, University of Assoc.)
Southern California
Mr. William R. Senior Vice President 1998 The American Funds Group /+/
Grimsley * and Director, Capital (Director/Trustee of 4
(Senior Vice Research and Management other funds)
President and Company
Director)
60
Mr. Jon B. Chairman Emeritus, Capital 1959 The American Funds Group /+/
Lovelace, Jr.* Research and Management (Director of 3 other
(Chairman of Company funds)
the Board)
72
Prof. John G. IBJ Professor of Finance, 1976 The American Funds Group
McDonald Graduate School of (Director/Trustee of 7
/1,2,3/ Business, Stanford other funds)
(Director) University Emerging Markets Growth
61 Fund
Scholastic Corporation
Varian Associates, Inc.
Trinet Corp.
Ms. Bailey Senior Associate, Reuters 1993
Morris-Eck Foundation; Senior Fellow,
/1,3/ Institute for
(Director) International Economics;
Consultant, The
Independent of London;
former Vice President,
Brookings Institution
Mr. Richard G. Chairman of the Board, 1996 The American Funds Group
Newman /1,3/ President and CEO, AECOM (Director/Trustee of 12
(Director) Technology Corporation other funds)
64 (architectural engineering) Southwest Water Company
Mr. William C. Senior Partner, The Capital 1985 /+/
Newton* Group Partners, L.P.;
(Director) former Vice Chairman of
68 the Board, Capital
Research and Management
Company
Mr. James W. Senior Partner, The Capital 1991 The American Funds Group /+/
Ratzlaff* Group Parnters, L.P.; (Director of 6 other
(Vice former Vice Chairman funds)
Chairman) of the Board, Capital
62 Research and Management
Company
Dr. Olin President of the Salzburg 1987 The American Funds Group
Robison Seminar; President (Director of 2 other
/1,2,3/ Emeritus, Middlebury funds)
(Director) College
62
Mr. R. Chairman of the Board and 1998 The American Funds Group /+/
Michael Principal Executive (Director of 1 other
Shanahan* Officer, Capital Research fund)
(President and Management Company
and Director)
60
Dr. William J. Chairman and Chief 1997 Adobe Systems, Inc.
Spencer Executive Officer,
/1,3/ SEMATECH (research and
(Director) development consortium);
68 Trustee, William Jewell
College; Associated
Universities, Inc.
</TABLE>
__________
# Corporate positions, in some instances, may have changed during this period.
* Is considered an "interested person" of the Company within the meaning of the
Investment Company Act of 1940 (the "1940 Act"), on the basis of 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.
/1/ The Company has an Audit Committee composed of the above-designated
directors. The function of the Committee includes 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.
/2/ The Company has a Nominating Committee composed of the above-designated
directors. The Committee's functions include selecting and recommending to the
Board of Directors nominees for election as directors of the Company.
(Pursuant to rule 12b-1, the selection and nomination of directors who are not
"interested persons" of the Company must be committed to the discretion of the
non-interested directors then in office.) 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 Company, c/o the Company'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."
/3/ The Company has a Contracts Committee composed of all directors who are not
considered to be "interested persons" of the Company within the meaning of the
1940 Act. The Contracts Committee's function is 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 Company proposes to enter into, renew or
continue prior to voting thereon, and to make its recommendations to the full
Board of Directors on these matters.
Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, 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 Capital Research and Management
Company, Capital International, Inc., manages Emerging Markets Growth Fund,
Inc.
_____________
There were five Board of Directors, two Audit Committee, two Nominating
Committee and two Contracts Committee meetings during the year ended December
31, 1998. All incumbent directors attended at least 91% of all Board meetings
and meetings of the committees of which they were members.
The Company has an Advisory Board currently composed of six persons, all of
whom were appointed by the Board of Directors. These individuals are, in the
judgment of the Board of Directors, knowledgeable about political and economic
matters. In addition to holding meetings from time to time with the Board of
Directors, members of the Advisory Board, while not participating in specific
investment decisions, may consult from time to time with the Investment
Adviser. Members of the Advisory Board, however, possess no authority or
responsibility with respect to the Company's investments or management.
The Company 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>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED COMPENSATION /1/)
AGGREGATE COMPENSATION FROM ALL FUNDS MANAGED TOTAL NUMBER
(INCLUDING VOLUNTARILY BY CAPITAL RESEARCH AND OF FUND
DEFERRED COMPENSATION /1/) MANAGEMENT COMPANY BOARDS ON
FROM THE COMPANY DURING OR ITS AFFILIATES /2/ FOR WHICH DIRECTOR
DIRECTOR FISCAL YEAR ENDED 12/31/98 THE YEAR ENDED 12/31/98 SERVES /2/
<S> <C> <C> <C>
Mr. Charles H. $64,700 $114,900 2
Black
Ms. Ann S. Bowers 65,300 65,300 1
Ms. Louise H. 0 /3/ 0 /3/ 1
Bryson
Dr. Malcolm R. 49,600 (deferred) /4/ 49,600 (deferred) 1
Currie
Mr. William R. none /5/ none /5/ 5
Grimsley
Mr. Jon B. none /5/ none /5/ 4
Lovelace, Jr.
Prof. John G. 67,900 (deferred) /4/ 190,870 (deferred) 9
McDonald
Ms. Bailey 51,200 51,200 1
Morris-Eck
Mr. Richard G. 51,200 (deferred) /4/ 108,600 (deferred) 13
Newman
Mr. William C. none /5/ none /5/ 1
Newton
Mr. James W. none /5/ none /5/ 7
Ratzlaff
Dr. Olin C. 55,400 92,600 3
Robison
Mr. R. Michael none /5/ none /5/ 2
Shanahan
Dr. William J. 57,450 (deferred) /4/ 57,450 (deferred) 1
Spencer
</TABLE>
/1/ Amounts may be deferred by eligible directors under a non-qualified
deferred compensation plan adopted by the Company 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/ Louise H. Bryson was elected a Director effective January 1, 1999 and,
therefore, received no compensation from the fund in fiscal 1998.
/4/ Since the deferred compensation plan's adoption, the total amount of
deferred compensation accrued by the Company (plus earnings thereon) as of the
fiscal year ended December 31, 1998 for participating directors is as follows:
Malcolm R. Currie ($193,379), John G. McDonald ($366,724), Richard G. Newman
($174,083), Olin C. Robison ($10,738) and William J. Spencer ($136,866).
Amounts deferred and accumulated earnings thereon are not funded and are
general unsecured liabilities of the Company until paid to the director.
/5/ William R. Grimsley, Jon B. Lovelace, Jr., William C. Newton, James W.
Ratzlaff and R. Michael Shanahan are affiliated with the Company's Investment
Adviser and, accordingly, receive no remuneration from the Company.
OTHER OFFICERS
<TABLE>
<CAPTION>
NAME OFFICER
(POSITION WITH COMPANY) CONTINUOUSLY
AND AGE PRINCIPAL OCCUPATION /1/ SINCE /2/
<S> <C> <C>
Mr. Gregg E. Ireland Senior Vice President, 1994
(Senior Vice President) Capital Research and Management Company
49
Mr. James B. Lovelace Senior Vice President, 1994
(Senior Vice President) Capital Research and Management Company
43
Mr. Donald D. O'Neal Vice President, 1994
(Senior Vice President) Capital Research and Management Company
38
Ms. Joyce E. Gordon Senior Vice President and Director, 1998
(Vice President) Capital Research Company
42
Ms. Anne M. Llewellyn Associate, 1984
(Vice President) Capital Research and Management Company
51
Ms. Patricia L. Pinney Vice President, 1995
(Vice President) Capital Research Company
42
Mr. Vincent P. Corti Vice President - Fund Business 1994
(Secretary) Management Group, Capital Research
43 and Management Company
Mr. Thomas M. Rowland Senior Vice President - Fund Business 1998
(Treasurer) Management Group, Capital Research and
57 Management Company
R. Marcia Gould Vice President - Fund Business 1993
(Assistant Treasurer) Management Group, Capital Research and
44 Management Company
Anthony W. Hynes, Jr. Vice President - Fund Business 1998
(Assistant Treasurer) Management Group, Capital Research and
35 Management Company
</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 are elected to 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 Company. All directors and officers as a group owned
beneficially fewer than 1% of the Shares outstanding on August 23, 1999.
2. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION (SHARE
CLASSIFICATION)
On May 19, 1999, the Company's Board of Directors unanimously voted to approve
an amendment to the Company's Certificate of Incorporation to give the
Company's Board of Directors the power to classify the Company's shares. The
amendment would increase the total number of the Company's authorized shares of
capital stock from two billion to five billion. The amendment would also
establish a new class of common stock and give the Company's Board of Directors
the authority to further classify the Company's shares into different series
within the new class. At its meeting on May 19, the Board of Directors
unanimously voted to submit the amendment to the Company's shareholders with
the Board's recommendation that it be approved. The full text of the proposed
amendment is attached hereto 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 Company's Board of
Directors that in the future it may recommend that the Board authorize the
Company to issue one or more series of the new class of stock ("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 Shares except that they
would be subject to (i) a different level of fees payable to 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 prior to 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 dealer service fees to
eligible dealers of New Shares. IMPORTANTLY, THE DISTRIBUTION FEES FOR THE NEW
SHARES WOULD BE IMPOSED ONLY ON THOSE 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 Company's Certificate of Incorporation currently provides for only one
class of shares of capital stock, and does not authorize the Board of Directors
to create additional classes or series. The Board of Directors believes that
the Company's best interests would be served if the Certificate of
Incorporation were amended to establish an additional class of common stock and
if the Board were able to create series of shares within the new class. The
new class of common stock (including any series thereof) would share pro rata
(based on net asset value) in the Company's investment portfolio and income and
in the Company's expenses, except for differences in expenses resulting from
different distribution arrangements and possibly other class- or
series-specific expenses.
Shares of both classes of common stock would vote together on all matters
affecting the Company, except for matters, such as approval of a plan of
distribution or related service plan, affecting only a particular class or
series 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. Shares of both classes of common stock (including, if
issued, the New Shares) would have the same rights and be subject to the same
limitations set forth in the Certificate of Incorporation with respect to
dividends, redemptions and liquidation, except for differences resulting from
class- or series-specific distribution plans and related service plans and
certain other class- and series-specific expenses.
The proposed amendment also provides for an increase in the total number of
authorized shares of the Company's capital stock from two billion to five
billion. This increase is intended to permit the Company to issue additional
Shares and shares of the new class of common stock for several years without
requiring that shareholders approve an additional amendment of the Certificate
of Incorporation.
Approval of the proposed amendment to the Certificate of Incorporation
requires the affirmative vote of more than 50% of the outstanding shares of the
Company. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THIS PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PERMIT MULTIPLE CLASSES OF
SHARES AND TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES
3. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
(REDUCTION IN PAR VALUE)
On May 19, 1999, the Company's Board of Directors unanimously voted to approve
an amendment to the Company's Certificate of Incorporation to reduce the par
value of shares of capital stock of the Company from $1.00 to $0.001 per share,
and to submit such amendment to the Company's shareholders with the Board's
recommendation that it be approved. This proposed amendment is included in the
text of the amendment attached as Exhibit A.
Under Delaware law, the par value of shares determines the amount of a
corporation's stated capital. Stated capital has little meaning in the case of
an investment company like the Company. However, when the Company increases
its authorized capital stock, as is proposed in Proposal 2, it must pay a
registration fee to the State of Delaware 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 Company's
shares of capital stock be reduced in order to save the Company some expense in
connection with the proposed increase in authorized capital stock.
Approval of the proposed amendment to the Certificate of Incorporation
requires the affirmative vote of more than 50% of the outstanding shares of the
Company. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THIS PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO REDUCE THE PAR VALUE OF THE
COMPANY'S SHARES
4. RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANT FOR THE YEAR 1999
Shareholders are requested to ratify the selection by the Board of Directors
(including a majority of directors who are not "interested persons" of the
Company as that term is defined in the 1940 Act) of the firm of
PricewaterhouseCoopers LLP as independent public accountant for the Company for
the year 1999. In addition to normal audit services, PricewaterhouseCoopers
LLP provides services in connection with the preparation and review of federal
and state tax returns for the Company. PricewaterhouseCoopers LLP has served as
the Company's independent public accountant since the Company's inception.
PricewaterhouseCoopers LLP has advised the Company that it has no material
direct or indirect financial interest in the Company or its affiliates. The
Company's Audit Committee recommended that PricewaterhouseCoopers LLP be
selected as the Company's independent accountant for the current fiscal year.
The employment of the accountant is conditioned upon the right of the Company
to terminate such employment forthwith without any penalty. No representative
of the firm of PricewaterhouseCoopers LLP is expected to attend the Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF ITS
SELECTION OF PRICEWATERHOUSECOOPERS 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 matters set forth herein. Should any other matters properly requiring a
vote of shareholders arise, the Proxy in the accompanying form will confer upon
the person or persons entitled to vote the Shares represented by such Proxy
discretionary authority to vote the Shares in respect of any such matters in
accordance with their best judgment in the interest of the Company and its
shareholders.
SHAREHOLDER PROPOSALS
Notice is hereby given that any shareholder proposals for inclusion in proxy
solicitation material for the next annual meeting, must be received by the
Company at its principal executive offices, 333 South Hope Street, Los Angeles,
CA 90071, by January 31, 2000. Any proposal received after this date will be
considered untimely. Until further notice, a shareholder proposal (other than
in respect of a nominee for election to the Board of Directors) to be presented
at the next annual meeting of shareholders but not submitted for inclusion in
the proxy statement will be considerd untimely under the Securities and
Exchange Commission's proxy rules if received after January 31, 2000.
GENERAL INFORMATION
Capital Research and Management Company is the investment adviser to the
Company 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 Company'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 solicitation of the enclosed Proxy is made by and on behalf of the Board
of Directors of the Company. The cost of soliciting proxies, consisting of
printing, handling and mailing of the Proxies and related materials, will be
paid by the Company. In addition to solicitation by mail, certain officers and
directors of the Company, who will receive no extra compensation for their
services, may solicit by telephone, telegram or personally. ALL SHAREHOLDERS
ARE URGED TO MARK, DATE, SIGN, AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
A copy of the Company's most recent annual report may be obtained, without
charge, by writing to the Secretary of the Company at 333 South Hope Street,
55th Floor, Los Angeles, CA 90071, or by telephoning 800/421-0180. These
requests will be honored within three business days of receipt.
By Order of the Board of Directors,
Vincent P. Corti
Secretary
August 30, 1999
This Notice of Annual Meeting and Proxy
Statement has been printed on recycled
paper that meets the guidelines of the
United States Environmental Protection Agency.
<PAGE>
THE INVESTMENT COMPANY OF AMERICA
EXHIBIT A - PROXY STATEMENT
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION OF THE COMPANY
INCREASING THE TOTAL NUMBER OF AUTHORIZED SHARES,
AUTHORIZING CLASSES OF CAPITAL STOCK, AND REDUCING THE PAR VALUE
The following text shows those provisions of the Certificate of Incorporation
of the Company that are to be amended; the text that is lined through shows
deletions and the text that is double underlined indicates additions.
ARTICLE VI
The total number of shares of all classes of stock which the Corporation shall
have authority to issue is five billion (5,000,000,000) shares, of which two
billion five hundred million (2,500,000,000) shares shall be Common shares of
capital stock of the par value of $0.001 per share, (hereinafter, "Common
Stock"), and two billion five hundred million (2,500,000,000) shares shall be
Alternative Common shares of capital stock of the par value of $0.001 per share
(hereinafter, "Alternative Common Stock").
ARTICLE VII
1. The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each class of capital
stock shall be governed by the following provisions:
(a) All shares of Common Stock and Alternative Common Stock shall represent
the same interest in the Corporation and have the same voting powers,
preferences and relative, participating, optional, conversion or other special
rights, and qualifications, limitations or restrictions thereof, limitations as
to dividends, and terms and conditions of redemption, except to the extent
expressed otherwise in this Certificate of Incorporation, any amendment
thereof, or as provided for in a resolution or resolutions adopted by the Board
of Directors pursuant to authority vested in it by this Certificate, or as
otherwise provided by law.
(b) The Board of Directors is expressly authorized at any time, and from time
to time, to provide for the issuance of shares of Alternative Common Stock in
one or more series, with such voting powers, full or limited, and with such
designations, preferences and relative, participating, optional, conversion or
other special rights, and qualifications, limitations or restrictions thereof,
limitations as to dividends, or terms or conditions of redemption, as shall be
stated and expressed in any resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not stated and expressed
in this Certificate of Incorporation, including (but without limiting the
generality thereof) the following:
(i) The designation of such series.
(ii) The dividends payable on the shares of such series, the relation which
such dividends shall bear to the dividends payable on the shares of any other
class or classes of stock, or series thereof.
(iii) Whether the shares of such series shall be subject to redemption by
the Corporation (or at the option of the holder thereof), and, if made subject
to redemption by the Corporation (or at the option of the holder thereof), the
times, prices and other terms and conditions of such redemption (in either
case).
(iv) Whether or not the shares of such series shall be convertible into or
exchangeable for shares of any other class or classes (or series thereof) of
stock of the Corporation, and, if provision be made for conversion or exchange,
the times, prices, rates, adjustments, and other terms and conditions of such
conversion or exchange.
(v) Whether the shares of such series shall be subject to any
distribution-related fees or expenses chargeable against the income or
redemption price of shares of such series.
(c) Dividends. Dividends on shares of the Corporation's capital stock 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. Such
dividends may vary between or among classes of stock (or series thereof) to
reflect differing allocations of liabilities and expenses allocable to such
class (or series) to such extent as may be provided in or determined pursuant
to this Certificate, any amendment thereof, or in any resolution or resolutions
providing for the issue of such shares of capital stock adopted by the Board of
Directors. All dividends and distributions on shares of a particular class (or
series thereof) shall be distributed pro rata to the holders of that class (or
series thereof) in proportion to the number of shares of that class (or series
thereof) held by such holders at the date and time of record established for
the payment of such dividends or distributions.
Dividends 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 are to be paid. Any such dividend 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 class or series
thereof, and all shares of all classes and series 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 class or series is required by the
Investment Company Act or by the General Corporation Law of the State of
Delaware, such requirement as to a separate vote by that class or series 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) classes or series, then, subject to clause (iii) below, the
shares of all other classes and series shall vote as a single class; and (iii)
as to any matter which does not affect the interest of a particular class (or
series thereof), only the holders of shares of the one or more affected classes
(or series thereof) shall be entitled to vote.
(e) Redemption by Stockholders. Each holder of shares of Common Stock or
Alternative Common Stock (or series of such Alternative Common Stock) 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 or her shares of that class
and series, at a redemption price per share equal to the net asset value per
share of that class and 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, 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
class and series to require the Corporation to redeem shares of that class and
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 class (or
series 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 class (or series 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) Net Asset Value Per Share. For the purposes referred to in this
Certificate of Incorporation, the net asset value of shares of the capital
stock of the Corporation of each class (or series thereof) 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) The net asset value of each share of capital stock, as of a
determination time, shall be the quotient obtained by dividing the net value of
the assets of the Corporation (determined as hereinafter provided) as of such
determination time by the total number of shares of capital stock then
outstanding.
The net value of the assets of the Corporation shall be determined in
accordance with sound accounting practice by deducting from the gross value of
the assets of the Corporation (determined as hereinafter provided) the amount
of all liabilities as of such determination time.
The gross value of the assets of the Corporation 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 at such determination time, all determined
in accordance with sound accounting practice and giving effect to the
following:
(ii) At times when a class is classified into multiple series, the net asset
value of each share of stock of a series of such class shall be determined in
accordance with subsections (i) and (iii) of this Section (g) with appropriate
adjustments to reflect differing allocations of liabilities and expenses
between or among series of such class to such extent as may be provided in or
determined pursuant to this Certificate, any amendment thereof, or as stated
and expressed in any resolution or resolutions adopted by the Board of
Directors providing for the issue of such shares of such series.
(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 Corporation's assets, and the net asset value
per share of outstanding shares of the Corporation's capital stock, as the
Board of Directors deems necessary or desirable. The Board of Directors shall
have full discretion, to the extent not inconsistent with the General
Corporation Law of the State of Delaware 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.
(h) 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 series or class shall
have the right to exchange said shares into shares of one or more other series
or class 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 series of a class
may be automatically converted into another series of such class or other class
based on the relative net asset value of such shares at the time of conversion,
subject, however, to any conditions of the conversion that may be imposed by
the Board of Directors.
2. (a) Shares of the various series of each class of capital stock shall
represent the same interest in the Corporation and have, except as provided to
the contrary in any subsequently filed certificate of designations, identical
voting, dividend, liquidation, and other rights, terms and conditions with any
other shares of capital stock of that class; provided however, that
notwithstanding anything in this Certificate to the contrary, shares of the
various series of a class and various classes 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 series of a particular class 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 series
and shall be appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution, redemption and
liquidation rights of the shares of the series in question.
(b) As to any matter with respect to which a separate vote of any series of
a class is required by the Investment Company Act or by the General Corporation
Law of the State of Delaware (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 series shall apply in lieu of Single
Class Voting, and if permitted by the Investment Company Act or the General
Corporation Law of the State of Delaware, the series of more than one class
shall vote together as a single class on any such matter which shall have the
same effect on each such series. As to any matter which does not affect the
interest of a particular series of a class, only the holders of shares of the
affected series of that class shall be entitled to vote.
3. 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 Certificate of Incorporation 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.
<PAGE>
PROXY CARD THE INVESTMENT COMPANY OF AMERICA PROXY CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 19, 1999
The undersigned hereby appoints M.J. Barbera, Vincent P. Corti, C.D. Dunlop and
Gregg E. Ireland, and each of them, his/her true and lawful agents and proxies
with full power of substitution to represent the undersigned at the Annual
Meeting of Shareholders to be held at the Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware, on Tuesday, October 19, 1999 at 10:00 a.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 AND 4.
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 INVESTMENT COMPANY OF AMERICA PROXY
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: []
<TABLE>
<CAPTION>
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01 Charles H. Black 06 Jon B. Lovelace, Jr. 11 James W. Ratzlaff
02 Ann S. Bowers 07 John G. McDonald 12 Olin C. Robison [] [] []
03 Louise H. Bryson 08 Bailey Morris-Eck 13 R. Michael Shanahan
04 Malcolm R. Currie 09 Richard G. Newman 14 William J. Spencer
05 William R. Grimsley 10 William C. Newton
</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> <C>
2. Approval of amendments to Certificiate of Incorporation (i) increasing authorized
shares, (ii) establishing a new class of common stock, and (iii) authorizing the Board [] [] []
to create additional series of shares within the new class:
3. Approval of an amendment to the Certificate of Incorporation reducing the par value
per share: [] [] []
4. Ratification of selection of PricewaterhouseCoopers LLP as independent accountant: [] [] []
</TABLE>
In their discretion, upon other matters as may properly come before the
meeting.
IMPORTANT
SHAREHOLDERS CAN HELP THE COMPANY AVOID THE NECESSITY AND EXPENSE OF
SENDING FOLLOW-UP LETTERS BY PROMPTLY RETURNING THE ENCLOSED PROXY.
