Unassociated Document
SCHEDULE 14A
INFORMATION
Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.
)
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Proxy Statement
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[ ] Definitive
Proxy Statement
[X] Definitive
Additional Materials
[ ] Soliciting
Material Pursuant to Section 240.14a-12
AMCAP Fund,
Inc.
American Balanced
Fund, Inc.
The American Funds
Income Series
American Funds
Money Market Fund
American Funds
Short-Term Tax-Exempt Bond Fund
American Funds
Target Date Retirement Series, Inc.
The American Funds
Tax-Exempt Series I
The American Funds
Tax-Exempt Series II
American
High-Income Municipal Bond Fund, Inc.
American
High-Income Trust
American Mutual
Fund, Inc.
The Bond Fund of
America, Inc.
Capital Income
Builder, Inc.
Capital World Bond
Fund, Inc.
Capital World
Growth and Income Fund, Inc.
EuroPacific Growth
Fund
Fundamental
Investors, Inc.
The Growth Fund of
America, Inc.
The Income Fund of
America, Inc.
Intermediate Bond
Fund of America
International
Growth and Income Fund, Inc.
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.
Short-Term Bond
Fund of America, Inc.
SMALLCAP World
Fund, Inc.
The Tax-Exempt Bond
Fund of America, Inc.
Washington Mutual
Investors Fund, Inc.
______________________________________________
(Name of Registrant
as Specified In Its Charter)
__________________________________________________________
(Name of Person(s)
Filing Proxy Statement, other than the Registrant)
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Material
from the American Funds retail and retirement websites
Thoughts
from American Funds on this historic proxy vote
Tim Armour,
president of Capital Research and Management CompanySM, the
investment adviser to the American Funds, discusses the reasons behind the
current vote and the importance of casting your ballot.
[Video
Transcript]
Hello, I’m Tim
Armour, president of Capital Research and Management Company, the investment
adviser to the American Funds. I’d like to take a moment and talk with you about
the proxy materials that American Funds recently sent its
shareholders.
Let me start by
saying a little about why we’re holding this vote. I’ll also discuss the issues
and why they’re important and I’ll close by explaining how you can
vote.
We’re holding this
vote in large part because shareholders need to elect members of the funds’
boards. And since we’re asking you to elect board members, we thought it made
sense to ask you to approve some other proposals as well. We think the proposals
will make the funds more flexible and efficient and may reduce some fund
expenses in the future.
First, we’re asking
shareholders to approve organizing all of the American Funds as Delaware
statutory trusts. The funds currently are organized under various
state laws. We think that having them all organized in one state will be more
efficient and could reduce fund expenses over time.
We’re also asking
shareholders to approve changes that will modernize our funds’ fundamental
investment policies. Most of the American Funds were organized back when
individual states had rules about mutual funds’ investment policies. But now
that the U.S. Securities and Exchange Commission regulates these policies, these
state rules no longer apply. We can’t change our funds’ outdated state policies
without shareholder approval, so we’re asking you to approve streamlining and
modernizing the fundamental investment policies of the funds.
There are several
other issues on the ballot as well, including approval of the legal agreements
between the funds and Capital Research and Management Company.
I
urge you to learn more about all the proposals using the resources on this
website.
Your vote is very
important and we’ve tried to make voting easy. You can vote via the Web, by
phone or by mailing a paper ballot.
The most important
thing, though, is simply to vote. And please be sure to vote for each fund you
own. Remember, technically speaking, each fund is holding its own election. So,
if you own more than one fund, you may have received more than one
ballot.
And, if you have more than
one account — say, a taxable retail account and an IRA — you’ll receive a
ballot for each account. We realize this could mean you’ll be casting
a lot of votes. To simplify the process, you do have the option of
checking a single box on each ballot to vote consistent with the recommendation
of the fund board on every issue.
Finally, I want to
ask you to vote early. In fact, if you haven’t voted, you may get a call urging
you to cast your ballot. I apologize for any inconvenience, but we’re trying to
be as efficient as possible. The longer the voting takes, the more it costs the
funds — and the shareholders.
So, please remember
to vote — and vote early. And if you have any questions, refer to the frequently asked
questions on this website. Thank you for your time.
[End
Video Transcript]
[Tab 1]: How can I vote?
Vote
online now [links to www.proxy-direct.com/afs]
(be sure to have your proxy mailing in hand).
Misplaced your
proxy materials? Call 877/816-5331 to get a replacement ballot.
You can also vote
your proxies in a number of other ways:
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by calling 800/337-3503
(available 24 hours a day)
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by completing and mailing the
proxy ballots you received (please send in all the ballots included
in the mailing)
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by attending a shareholder
meeting on either October 27, 2009 (for The Investment Company of
America®), or November 24, 2009 (for all other funds, including funds in
the American Funds Insurance Series®), at 333 S. Hope St., Los Angeles, CA
90071
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Have questions
about your proxy materials? Get more information about how to vote.
[Tab 2]: What does the vote
cover?
The proposals
include:
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the
reorganization of the funds into Delaware statutory
trusts
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the election
of directors for the funds
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exemptive
relief from the Securities and Exchange Commission (SEC) and related
matters
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the creation
of a uniform set of fundamental investment
policies
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the expansion
of investment opportunities for The New Economy Fund® and the American
Funds Insurance Series Global Discovery
Fund
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shareholder
proposals regarding divestiture for 16 of our
funds
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Download the
complete proxy statement. Please note that the PDF is large, so you may
experience delays in downloading it.
[Tab 3]: Why should I
vote?
The proposals we’re
asking you to review and approve will help increase investment flexibility,
streamline the administration of the funds and, consequently, may reduce
expenses associated with managing the funds.
It
is very important that all shareholders cast their votes in order to have a
sufficient number of votes at the shareholder meetings. If there are not enough
votes for a quorum, the meetings will be adjourned and the solicitation of votes
will continue. This will increase expenses to the fund.
[Tab 4]: When should I
vote?
You will receive
proxy materials between late August and mid-September.
Some mailings will
include significant background on the proposals along with proxy ballots, while
others will provide summaries. The number of shares you own will help determine
the materials you receive.
We
encourage you to vote as soon as you receive the materials. By voting early, you
can help us avoid the expense of resending proxy materials.
In
mid-September, if you have not yet voted, you may receive follow-up phone calls
encouraging you to vote your proxies. You will be able to vote over the phone at
that time.
Please note that
these calls will come from a company helping to manage our proxy
vote.
If
there is not a quorum at the shareholder meetings on October 27, 2009 (for The
Investment Company of America®), or November 24, 2009 (for all other funds,
including the funds in the American Funds Insurance Series®), the meeting(s)
will be adjourned while the solicitation of votes continues.
[Tab 5]: FAQ
Voting
procedures
Ways
to vote
Q:
How do I vote?
A:
Make sure you have your proxy materials in hand before voting. The way you vote
depends on the type of account and funds you have.
If
you have investments in the American Funds (with account information held by
American Funds), you can vote:
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online
[links to: www.proxy-direct.com/afs]
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by calling 800/337-3503
(available 24 hours)
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by completing and mailing the
proxy ballots you received (please send in all the ballots included
in the mailing)
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by attending a shareholder
meeting on either October 27, 2009 (for The Investment Company of
America®), or November 24, 2009 (for all other funds), at 333 S. Hope St.,
Los Angeles, CA 90071
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If
you have investments in American Funds through a brokerage account, you can
vote:
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online
[links to: www.proxyvote.com]
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by calling 800/454-8683 (available 24
hours)
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by completing and mailing the
proxy ballots or voting instruction forms you received (please send
in all the ballots included in the
mailing)
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by attending a shareholder
meeting on either October 27, 2009 (for The Investment Company of
America), or November 24, 2009 (for all other funds), at 333 S. Hope St.,
Los Angeles, CA 90071
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If
you have investments in the American Funds Insurance Series (AFIS), you can
vote:
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online
[links to: www.proxyweb.com]
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by calling
888/221-0697 (available 24
hours)
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by completing and mailing the
proxy ballots or voting instruction forms you received (please send
in all the ballots included in the
mailing)
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by attending a shareholder
meeting on November 24, 2009, at 333 S. Hope St., Los Angeles, CA
90071
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Q:
If I have a joint tenant account, do both tenants need to vote?
A:
Only one joint tenant needs to vote.
Q:
Can I cast a vote for a family member who is not able to vote?
A:
We cannot advise you to vote for a family member.
Q:
Why is it important that I vote?
A:
It is very important that all shareholders cast their votes in order to have a
sufficient number of votes at the shareholder meetings. If there are not enough
votes for a quorum, the meetings will be adjourned and the solicitation of votes
will continue. This will increase expenses to the fund.
Proxy
materials
Q:
Why am I getting multiple envelopes in the mail?
A:
You will receive a mailing for each separate account you have with American
Funds. If you have an IRA and a retail account, for example, you will receive
two mailings. If you have a variable annuity that offers an American Funds
Insurance Series (AFIS) fund, you will receive a mailing for that contract as
well.
Q:
Why did I get a proxy statement and card from American Funds and another from my
adviser’s firm?
A: Some
shareholders have accounts held directly with American Funds, in addition to
accounts that may be held with your adviser’s firm. If American Funds has your
account information, such as your name and address, we’ll send you proxy
materials directly. If your adviser’s firm has the records, it will send you the
materials. If you have more than one account, you may receive proxy materials
from both American Funds and your adviser’s firm. Additionally, if you own a
variable annuity that offers AFIS, you’ll receive a ballot from your insurance
company. Please be sure to vote
all of the ballots you receive. The way you vote may vary based on the
type of account and funds you have.
Q:
Why are there multiple ballots in the envelopes?
A:
We can only fit four funds on a ballot. If you own more than four funds, you’ll
receive more than one ballot.
Q:
If I receive multiple ballots can I vote on just one?
A:
Each ballot is for different funds, so you need to vote each
ballot.
Q:
Can I just vote to accept the Board of Trustees’ recommendation?
A:
Yes. If you wish to accept the boards’ recommendations, you can check the box in
the middle of the ballot, or indicate your preference when voting online. That
one check is sufficient, so you do not need to check any other boxes. However,
if you received multiple ballots, you must indicate your vote on each ballot. If
you check the box in the middle of the page and another box, your vote will not
be counted and will be returned to you.
Q:
What happens if I lose my ballot?
A:
You can call 800/421-0180 to obtain another
ballot. You will have to provide your name, address and account number. If your
accounts are held through a brokerage account or you are an AFIS contractholder,
call 888/456-7152.
Q:
How much will this vote cost?
A:
We estimate the cost will be between $2.50 and $3.00 per account. The AFIS proxy
vote will cost less.
Q:
Why is the proxy statement so many pages?
A:
To fully explain the proposals requires many pages. In addition, Securities and
Exchange Commission (SEC) rules require that we include much of the information
in the back of the proxy statement.
Q:
Why did some shareholders get a full proxy statement and proxy ballot and others
only got a notice?
A:
In an effort to contain costs, we’re sending the full proxy statement and proxy
cards to some shareholders and a proxy notice to others. Download the full proxy
statement. All investors in AFIS funds, held in variable annuity contracts,
received a full proxy statement.
Q:
If I get one proxy statement and ballot from both American Funds and my
adviser’s firm, do I have to vote both ballots?
A:
Yes. Each proxy card is for a different account. If you received separate proxy
cards from American Funds and your adviser’s firm, you have more than one
account. You need to vote for each account.
Follow-up
phone calls
Q:
Why are you calling me at home?
A:
We are calling to facilitate your voting. To achieve a quorum, at least half of
the outstanding shares in a fund must vote. Thus, it is critical that as many
shareholders as possible vote. Currently, we do not expect investors in AFIS
funds, held in variable annuity contracts, to receive calls.
Q:
Why did you give my information to a third party?
A:
We hired two firms that specialize in helping shareholders vote proxies. We
provided them with only enough information to complete their work as efficiently
as possible. We limited the information we shared to protect your privacy. Our
confidentiality agreement with them provides that your information may not be
shared with any other third party.
Q:
Who are Computershare Fund Services and D.F. King & Co.?
A:
They are independent companies that specialize in assisting financial firms with
shareholder meetings. American Funds hired these firms to contact shareholders
and record their votes. Our confidentiality agreement with them provides that
your information may not be shared with any other third party.
Q:
Why have I received multiple phone calls?
A:
We are calling shareholders who have not yet submitted all their votes. If, for
example, you received two proxy cards and only voted one, you may get a call
about the second card. Currently, we do not expect investors in AFIS funds to
receive calls.
Voting
deadlines and results
Q:
When is the deadline for voting?
A:
It is important that you cast
your votes as early as possible. The sooner shareholders vote, the sooner we can
discontinue calling shareholders to cast their votes and the greater the cost
savings to the funds. The shareholder meetings will be October 27, 2009
(for The Investment Company of America), and November 24, 2009 (for all other
funds, including funds in the American Funds Insurance Series). Conducting the
proxy vote is an expense of the fund and the longer the voting takes, the more
expensive it is.
Q:
When will voting results be available?
A:
The Investment Company of America’s annual meeting is scheduled for October 27,
2009. All the other meetings (including the meeting for the AFIS funds) are
scheduled for November 24, 2009. If there is not a quorum, the meetings may be
adjourned while we continue soliciting votes. We will make the results available
as soon as possible after the outcomes are known.
Q:
How will I be notified?
A:
We will post the results of the votes on this website.
The
proposals
Board
recommendations
Q:
Do the boards of the funds have a recommendation?
A:
The board of each fund recommends that shareholders vote in favor of all
management-initiated proposals. However, certain funds have a proposal submitted
by some shareholders regarding investing in companies with ties to certain
countries (such as Sudan). Each board recommends that shareholders of applicable
funds vote “against” this proposal. The proxy statement contains more
information about all of the proposals. Shareholders have not added any
proposals to the AFIS ballot.
Q:
Why is American Funds asking shareholders of all funds to vote on all of the
proposals at the same time?
A:
We believe that presenting all of the proposals to all shareholders at one time
is the most cost-effective and least intrusive manner of addressing these issues
because many of the funds have similar matters that require shareholder
approval.
Q:
Will investors in the American Funds Insurance Series (AFIS) also have a proxy
vote?
A:
Yes. Investors in AFIS funds, held in variable annuity contracts, will receive a
proxy statement and voting instruction forms by mid-September from their
insurance company asking for their vote.
Election
of directors (proposal 1)
Shareholders are
being asked to elect directors for the funds.
Q:
What is the benefit of shareholders electing directors for the
funds?
A:
Electing members of the fund boards will result in more of the funds having
common board members. This will allow more funds to hold board meetings at the
same time, potentially reducing fund expenses.
Q:
Why do shareholders have to vote for directors?
A:
The law requires that two-thirds of a fund’s board be elected by shareholders.
Over the years, as shareholder-elected board members have retired, some boards
have declined to the two-thirds minimum. By electing all board members at this
time, we expect that the funds will avoid having to go through the expense of
holding shareholder elections for many years.
Delaware
statutory trust (proposal 2)
Currently the funds
are incorporated in three different states — Delaware, Massachusetts and
Maryland — as either business trusts or corporations. This change to reorganize
all the funds as Delaware statutory trusts means that all the funds will operate
under a single, uniform set of organizational rules.
Q:
How do shareholders benefit from the funds becoming Delaware statutory
trusts?
A:
We believe that this change will make the administration of the funds more
efficient, thereby reducing expenses. In some cases, the change will directly
save shareholders money. For example:
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If The
Investment Company of America becomes a Delaware statutory trust it will
no longer be required to hold an annual shareholder meeting. Over the past
two decades, fewer than 20 shareholders have ever attended any shareholder
meeting, yet notifying investors of the meeting costs the fund more than
$1 million annually.
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Some funds
must now seek shareholder approval for even minor changes to the funds’
charters. Changes that are in the shareholders’ best interest and could
make a fund more efficient would no longer require a shareholder vote,
which is very expensive.
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Q:
Does the change to a Delaware statutory trust reduce investors’ protection or
increase their liabilities in any way?
A:
No. Changing to a Delaware statutory trust does not lessen shareholder
protections or increase their liabilities.
Fundamental
investment policies (proposal 3)
Our goal is to have
a uniform set of fundamental investment policies across all funds and eliminate
overly restrictive policies that are no longer applicable. The SEC requires that
a fund states in writing what its “fundamental investment policies” are on
issues such as borrowing or purchasing real estate.
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In 1996, a
federal law gave the SEC exclusive authority to regulate mutual funds,
preempting state laws.
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Some of the
funds’ fundamental investment policies that were adopted when the funds
were established with the goal of meeting state laws are now outdated and
overly restrictive.
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A fund’s
fundamental investment policies can’t be changed without a shareholder
vote.
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Q:
How will shareholders benefit from changing the fundamental investment
policies?
A:
Eliminating some unnecessary and overly restrictive fundamental policies will
increase the flexibility of Capital Research and Management CompanySM (CRMC),
the funds’ investment adviser, to respond to market, industry, regulatory or
technical changes. Shareholders will also benefit from a simplified system of
compliance monitoring. It is more efficient and less time consuming, and thus
less costly, to ensure compliance with a single set of investment
policies.
Q:
The proxy statement mentions borrowing money, purchasing real estate and making
loans, among other fundamental policies. Will CRMC change its practices on any
of these or the other issues mentioned?
A:
No. We are proposing a standardized set of policies across all funds and the
elimination of some policies that were required when the fund was launched but
are now more restrictive than required by current regulations. CRMC does not
currently intend to change the way the funds are managed. Any material change in
the way a fund is managed would still need to be approved by the board of that
fund.
For additional
detail regarding the funds’ investment policies, please refer to the funds’
statement of additional information (i.e., Part B) available on the Prospectuses
and Reports page.
For more
information on the AFIS funds’ investment policies, please refer to the
prospectuses and reports for Class 1 and Class 2 shares.
Q:
Why is it important to standardize the fundamental investment
policies?
A:
We believe that adopting this slate of fundamental policies will give the funds
more flexibility to quickly adapt to changing circumstances and market
conditions and simplify compliance monitoring.
Exemptive
relief from the Securities and Exchange Commission (SEC) and incorporating
Capital World Investors (CWI) and Capital Research Global Investors (CRGI)
(proposals 4, 5 and 6)
CRMC and the funds
are seeking exemptive relief (i.e., special permission) from the SEC that will
allow CRMC to incorporate its two investment divisions — CWI and CRGI. CRMC will
remain the investment adviser to the funds. CWI and/or CRGI will be subsidiary
advisers and handle the day-to-day investment management responsibilities for
the funds, just as they do today.
Q:
How do shareholders benefit if CWI and CRGI are incorporated?
A:
Today, some regulators outside the United States do not recognize CWI and CRGI
as independent entities. If they are legal corporations and subsidiaries of
CRMC, regulators in certain countries may treat them as separate investment
entities, giving the funds more investment flexibility.
Q:
How do shareholders benefit if the exemptive relief from the SEC is
granted?
A:
While the fund’s board would have to approve CRMC changing a fund’s subsidiary
adviser, shareholders would avoid the cost of an expensive shareholder vote to
approve such an action.
Q:
Why are shareholders being asked to approve a new advisory
agreement?
A:
The new advisory agreement allows CRMC to engage CWI and CRGI as subsidiary
advisers to manage the funds. This approval will be necessary once CWI and CRGI
are incorporated. In addition, the current advisory agreements vary somewhat
from fund to fund. Adopting the new advisory agreement will create greater
standardization of agreements across the funds.
Q:
Can CRMC appoint any firm as a subsidiary adviser?
A:
If the exemptive order is granted, CRMC will only be able to appoint affiliates
that are wholly-owned or majority-owned by CRMC or its parent, The Capital Group
Companies.
The
New Economy Fund and American Funds Insurance Series Global Discovery Fund
(proposal 7)
The New Economy
Fund (NEF) was formed in 1983 to take advantage of opportunities presented by
the “new economy,” defined primarily as service and information industries.
(AFIS Global Discovery Fund was formed in 2001 and has substantially similar
investment policies as NEF.) The proposed change allows the funds’ managers to
invest in any company that participates in the “new economy” — companies that
can benefit from innovation, exploit new technologies or provide products and
services that meet the demands of an evolving global economy — regardless of
industry classification.
Q:
How do shareholders of the funds benefit from expanding the funds’ investment
universe?
A:
With a broader investment universe, the funds’ investment professionals will be
able to pursue investment opportunities in a wider range of
industries.
Q:
Will expanding the funds’ investment universe change the way they are
managed?
A:
No, this will not change the way NEF or AFIS Global Discovery Fund is managed.
It will give the funds’ investment professionals more flexibility by allowing
investments in a larger universe of companies.
Q:
Will the funds invest more outside the United States after this
change?
A:
No. NEF may continue to invest up to 45% of its assets outside the United
States. AFIS Global Discovery Fund may continue to invest a majority of its
assets in the U.S.
Q:
What types of companies will be eligible to be in included in the funds’
portfolios?
A:
Companies that introduce cutting-edge technology or embrace innovation now will
be eligible regardless of their industry classification. In the past, unless a
company was classified as being in the service or information industry, they
probably would not be eligible.
Q:
Are you seeking approval for this change to help improve the results of NEF or
Global Discovery Fund?
A:
No. The proposed change simply reflects changes in the global
economy.
Shareholder
proposal regarding divestiture (proposal 8)
Shareholders have
submitted a proposal requesting certain funds’ boards to consider instituting a
policy to prevent the fund from holding investments in companies that
“contribute to genocide or crimes against humanity.” This issue is not on the
AFIS ballots.
Q:
Why am I being asked to vote on a proposal submitted by a
shareholder?
A: We
are required to include requests from shareholders for a nonbinding
vote.
Q:
What is a “nonbinding” resolution?
A:
If the shareholder resolution passes, the board of the fund must consider, but
is not required to adopt, the proposal.
Q:
Do the Boards of Directors recommend shareholders support the
proposal?
A:
No. CRMC and the fund boards believe that CRMC's existing
policy is preferable to that recommended by the shareholder proposal. Any human
rights issues that may affect companies are considered by our investment
professionals as part of the investment management process. This approach is
consistent with the stated investment objectives and policies of the funds. We
believe considering these issues on a company-by-company basis and as part of
the investment management process is preferable to having the fund boards make
these decisions.