Emerging Markets Growth Fund, Inc.
11100 Santa Monica Boulevard, 15th Floor
Los Angeles, California 90025
December 11, 2002
Dear Shareholder:
Enclosed is a Proxy Statement, in connection with the upcoming Meeting of
Shareholders of Emerging Markets Growth Fund, Inc. to be held February 28, 2003,
in Los Angeles. It is very important that you read this material, cast your vote
on the enclosed Proxy, and return it to us in the enclosed envelope as soon as
possible.
It would help us greatly in planning this meeting if you could give us an
indication of whether you plan to attend the meeting in person. The
Shareholders' meeting is expected to be very brief because there will be no
planned investment discussion. Regardless of your decision to attend at this
time, please sign and return your voted Proxy as soon as possible. In the event
you decide to attend the meeting, you may revoke the Proxy you mailed and vote
in person instead. Please call Valerie Y. Lewis at (213) 615-0419 if you plan to
attend.
Thank you.
Sincerely,
VINCENT P. CORTI
Secretary
EMERGING MARKETS GROWTH FUND, INC.
11100 Santa Monica Boulevard
Los Angeles, California, USA 90025
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
February 28, 2003
---------------------
To the Shareholders of EMERGING MARKETS GROWTH FUND, INC.:
Notice is hereby given that a Special Meeting of Shareholders ("Meeting") of the
Emerging Markets Growth Fund, Inc. ("Fund"), a Maryland corporation, will be
held at 8:30 a.m., Pacific Time, on February 28, 2003, in the Verandah Room, The
Peninsula Hotel, 9882 Little Santa Monica Boulevard, Beverly Hills, CA 90212.
The purpose of the meeting is to consider and act upon the following proposals,
and to transact such other business as may properly come before the Meeting or
any adjournment thereof:
1. to elect a Board of 16 Directors;
2. to ratify the selection by the Board of Directors of the Fund
of PricewaterhouseCoopers LLP as independent public
accountants of the Fund for the fiscal year ending June 30,
2003.
The Board of Directors has fixed the close of business on December 2, 2002 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting.
By Order of the Board of Directors of the Fund,
VINCENT P. CORTI
Secretary
Los Angeles, California
December 11, 2002
The proposed business cannot be conducted at the Meeting unless the holders of
the majority of the shares of the Fund outstanding on the record date are
present in person or by proxy. Therefore, please mark, sign, date and return the
enclosed proxy card, which is solicited by the Fund's Board of Directors. You
may revoke it at any time before its use. If you sign it you will be able to
vote in person if you attend the meeting.
-11-
===============================================================================
IMPORTANT
Shareholders can help the Fund avoid the necessity and expense of sending
follow-up letters to ensure a quorum by promptly voting your shares by mail,
telephone or the Internet. 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.
===============================================================================
EMERGING MARKETS GROWTH FUND, INC.
11100 Santa Monica Boulevard
Los Angeles, California 90025
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
February 28, 2003
The enclosed Proxy is solicited by the Board of Directors ("Board") of the
Emerging Markets Growth Fund, Inc. ("Fund") in connection with the Special
Meeting of Shareholders ("Meeting") to be held on February 28, 2003, at 8:30
a.m. local time.
The Fund is a fully managed, diversified open-end interval investment company
("open-end interval fund") which is designed for institutional investors and
other "qualified purchasers" desiring to achieve international diversification
by participating in the economies of various countries with developing
securities markets. As an open-end interval fund, the Fund offers its
shareholders, on a monthly basis, the opportunity to request the redemption of
their shares at net asset value. At the close of business on December 2, 2002,
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 346,534,539 shares of capital stock, the only authorized class of
securities of the Fund. As of that record date, no shareholders beneficially
owned more than 5% of the outstanding shares of the Fund. Each share is entitled
to one vote. There is no provision for cumulative voting.
If you complete and sign the enclosed proxy card, your shares will be voted
exactly as you instruct. If you simply sign the proxy card without otherwise
completing it, your shares will be voted FOR the Directors nominated and FOR
Proposal 2. You may revoke your proxy vote at any time prior to its exercise,
either by filing with the Fund a written notice to the Fund's transfer agent,
American Funds Service Company, 135 South State College Boulevard, Brea, CA
92821, or by delivering another duly executed proxy card bearing a later date,
or by attending the Meeting and voting in person. The Fund expects that, before
the Meeting, broker-dealer firms holding shares of the Fund in "street name" for
their customers will request voting instructions from their customers and
beneficial owners. If these instructions are not received by the date specified
in the broker-dealer firms' proxy solicitation materials, the Fund understands
that the broker-dealers that are members of the New York Stock Exchange may vote
on the items to be considered at the Meeting on behalf of their customers and
beneficial owners under the rules of the New York Stock Exchange.
If a shareholder abstains from voting as to any matter, or if a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on a matter, then the
shares represented by such abstention or non-vote will be considered to be
present at the Meeting for purposes of determining the existence of a quorum.
However, abstentions and broker non-votes will be disregarded in determining the
"votes cast" on an issue. For this reason, with respect to matters requiring the
affirmative vote of a majority of the total shares outstanding, an abstention or
broker non-vote will have the effect of a vote against such matters. This Notice
of Meeting, Proxy Statement and Proxy are being mailed to shareholders on or
about December 11, 2002.
With respect to the election of Directors (Proposal 1), the 16 nominees
receiving the highest number of votes will be elected. The vote required to
approve Proposal 2 is the affirmative vote of a majority of all shares present
in person or represented by proxy.
The presence in person or by proxy of the holders of record of a majority of the
shares of the Fund entitled to vote shall constitute a quorum at the Meeting for
the Fund. If, however, such quorum shall not be present or represented at the
Meeting or if fewer shares are present in person or by proxy than the minimum
required to take action with respect to any proposal presented at the Meeting,
the holders of a majority of the shares of the Fund present in person or by
proxy shall have the power to adjourn the Meeting with respect to the Fund, from
time to time, without notice other than announcement at the Meeting, until the
requisite number of shares shall be present at the Meeting. At any such
adjourned Meeting, if the relevant quorum is subsequently constituted, any
business may be transacted which might have been transacted at the Meeting as
originally called. In the event that sufficient votes are not received by the
Meeting date, a person named as proxy may propose one or more adjournments of
the Meeting. The persons named as proxies will vote all Proxies in favor of such
adjournment.
To obtain the necessary representation at the Meeting, supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or personal
contact by officers of the Fund, employees of the Fund, or its affiliates, or
proxy solicitation firms. The Fund has retained Alamo Direct, 280 Oser Avenue,
Hauppauge, NY 11788, to solicit proxies by mail at an anticipated cost of $3,000
plus postage expenses.
PROPOSAL ONE
ELECTION OF DIRECTORS
Sixteen directors are to be elected at the Meeting, each to hold office until
his or her successor is elected and qualified. The sixteen nominees receiving
the highest number of votes shall be deemed to be elected. Because it is not
anticipated that meetings of shareholders will be held each year, the directors'
terms will be indefinite in length. Directors who resign or retire may be
replaced by the Fund's Board of Directors so long as after making the
appointment two-thirds of the Directors have been elected by shareholders. All
of the nominees for director except David F. Holstein, Victor D. Kohn, Gerrit
Russelman, Robert Ronus and Nestor V. Santiago were elected by the shareholders
at their last meeting on October 30, 2000. Mr. Holstein was elected by the Board
of Directors effective March 30, 2001; Messrs. Russelman and Santiago were
elected by the Board of Directors effective July 10, 2001; Mr. Kohn was elected
by the Board of Directors effective November 7, 2002; and Mr. Ronus has been
nominated by the Board of Directors.
Walter P. Stern, Chairman of the Board of Directors of the Fund since 1991, will
retire from the Board at the conclusion of the shareholder meeting, but, upon
nomination and election by the Board of Directors, has agreed to serve as
Chairman Emeritus. At such time, Mr. Ronus will be elected Chairman, assuming he
has been elected by shareholders.
Each of the nominees has agreed to serve as a director if elected. If any
unforeseen event prevents one or more of the nominees from serving as director,
your votes will be cast (unless you have elected to withhold authority as to the
election of any nominee) for the election of such person or persons, as the
Board of Directors shall recommend. The table below sets forth certain
information regarding the nominees.
====================================================================================================================================
Name and Age Position Year First Principal Occupation(s) During Number of Boards Other Directorships2 Held
with the Elected Past 5 Years Within the Fund by Director
Fund a Director Complex1 on Which
of the Fund Director Serves
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
"Non-interested" Directors
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
R. Michael Barth Director 1988 CEO, F.M.O., The 1 None
53 Netherlands Development
Finance Company
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Collette D. Chilton Director 1999 President and Chief 1 None
44 Investment Officer, Lucent
Asset Management Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Khalil Foulathi Director 1996 Executive Director, Abu 1 Thuraya
51 Dhabi Investment Authority Telecommunications
Company
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Beverly L. Hamilton Director 1991 Investment Management 1 MassMutual Series and
56 Adviser; retired President, Institutional Funds;
ARCO Investment Management Oppenheimer Funds
Company
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
David F. Holstein Director 2001 Managing Director, Global 1 None
47 Equities, General Motors
Investment Management
Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Raymond Kanner Director 1997 Director, Global Equity 1 None
49 Investments, IBM Retirement
Funds
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Helmut Mader Director 1986 Former Director, Deutsche 1 None
60 Bank AG
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
William Robinson Director 1986 Director, Deutsche Asset 1 Southern Mining
64 Management (Australia) Corporation, Ltd.
Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Gerrit Russelman Director 2001 Director, Equities, 1 Industri Kapital Ltd.
57 Pensioenfonds PGGM
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Aje K. Saigal Director 2000 Chief Investment Officer, 1 None
46 Global Equities, Government
of Singapore Investment
Corporation Pte Ltd.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Nestor V. Santiago Director 2001 Vice President and Chief 1 TIAA-CREF College
53 Investment Officer, Howard Retirement Equities
Hughes Medical Institute Fund, TIAA-CREF
Mutual Funds,
TIAA-CREF
Institutional Mutual
Funds, TIAA-CREF Life
Funds, TIAA Separate
Account VA-1
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
"Interested" Directors3
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
David I. Fisher Vice Chairman 1986 Chairman of the Board, 1 None
63 of the Board Capital Group
International, Inc.4
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Nancy Englander President 1991 Senior Vice President, 1 None
58 Capital International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Victor D. Kohn Senior Vice 2002 President and Director, 1 None
45 President Capital International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Robert Ronus Director Vice Chairman, Capital 1 None
60 Nominee - - Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shaw B. Wagener Executive Vice 1997 Chairman and Director, 1 None
43 President Capital International, Inc.
====================================================================================================================================
1 Capital International, Inc. manages Emerging Markets Growth Fund, Inc. and does not act as investment manager
for other registered investment companies.
2 These include all directorships (other than those in EMGF) that are held by each Director as a director of
public company or a registered investment company.
3 "Interested persons" within the meaning of the Investment Company Act of 1940
on the basis of their affiliation with the Fund's investment manager, Capital
International, Inc. (the "Manager") or affiliated entities.
4 Company affiliated with Capital International, Inc.
COMPENSATION AND FUND OWNERSHIP
=========================================================================================================================
Name Aggregate Compensation1 Including Dollar Range3 of Fund Shares Owned As
Voluntarily Deferred Compensation2
From the Fund During Fiscal Year
ended June 30, 2002 of October 31, 2002
- -------------------------------------------------------------------------------------------------------------------------
"Non-Interested" Directors
- -------------------------------------------------------------------------------------------------------------------------
R. Michael Barth $19,000 4 None
- -------------------------------------------------------------------------------------------------------------------------
Collette D. Chilton None None
- -------------------------------------------------------------------------------------------------------------------------
Khalil Foulathi $11,000 None
- -------------------------------------------------------------------------------------------------------------------------
Beverly L. Hamilton $19,000 4 Over $100,000
- -------------------------------------------------------------------------------------------------------------------------
David F. Holstein $11,000 5 None
- -------------------------------------------------------------------------------------------------------------------------
Raymond Kanner None $10,001 - $50,000
- -------------------------------------------------------------------------------------------------------------------------
Helmut Mader $19,000 4 None
- -------------------------------------------------------------------------------------------------------------------------
William Robinson $19,000 4 None
- -------------------------------------------------------------------------------------------------------------------------
Gerrit Russelman $19,000 4, 5 None
- -------------------------------------------------------------------------------------------------------------------------
Aje K. Saigal $8,900 None
- -------------------------------------------------------------------------------------------------------------------------
Nestor V. Santiago None None
- -------------------------------------------------------------------------------------------------------------------------
"Interested Directors"6
- -------------------------------------------------------------------------------------------------------------------------
David I. Fisher None7 Over $100,000
- -------------------------------------------------------------------------------------------------------------------------
Nancy Englander None7 Over $100,000
- -------------------------------------------------------------------------------------------------------------------------
Victor D. Kohn None7 Over $100,000
- -------------------------------------------------------------------------------------------------------------------------
Robert Ronus None7 Over $100,000
- -------------------------------------------------------------------------------------------------------------------------
Shaw B. Wagener None7 Over $100,000
=========================================================================================================================
1In 1998, the Fund began compensating Directors who are not affiliated with the Manager. Effective July 1, 2002,
the Fund pays fees of $20,000 per
annum plus $3,000 for each Board of Directors meeting attended and $500 for
each meeting attended as a member of a committee. Certain Directors are
prohibited from receiving fees based on their employers' policies.
2Amounts may be deferred by eligible Directors under a non-qualified deferred compensation plan adopted by the
Fund in 1998. Any such
compensation deferred under the Plan is credited to an account established in
the name of each Director on the books of the Fund, to which deferred
compensation is credited. Any such deferred compensation so credited will be deemed to be invested for purposes
of future earnings in one or more
investment options, but the deferred compensation amount payable to the
director, as adjusted for any earnings, remains an obligation of the Fund.
Deferred amounts accumulate at an earnings rate determined by the total return
of the Fund or funds in the American Funds as designated by the
Directors. The American Funds consist of 29 funds managed by Capital Research
and Management Company, the Manager's affiliate. 3Ownership disclosure is made
using the following ranges: None; $1-$10,000; $10,001-$50,000; $50,001-$100,00;
and over $100,000.
4Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the Fund (plus earnings thereon through the
2002 fiscal year for participating Directors is as follows: R. Michael Barth ($55,474), Beverly I. Hamilton
($39,268), Helmut Mader ($67,097), and
William Robinson ($55,699).
5Compensation was paid to the Director's employer.
6"Interested persons" within the meaning of the Investment Company Act of 1940
on the basis of their affiliation with the Fund's Manager, Capital
International, Inc. or affiliated entities.
7No compensation is paid by the Fund to any Director who is affiliated with the Manager.
The Fund has an Audit Committee comprised of Khalil Foulathi, David F. Holstein,
Raymond Kanner, William Robinson, Gerrit Russelman, Aje K. Saigal and Nestor V.
Santiago, none of whom is considered an "interested person" of the Fund within
the meaning of the 1940 Act. The Committee oversees the Fund's accounting and
financial reporting policies and practices, its internal controls and the
internal controls of the fund's principal service providers. The Committee acts
as a liaison between the Fund's independent accountants and the full Board of
Directors.
The Fund has a Committee on Directors comprised of R. Michael Barth, Collette D.
Chilton, Beverly L. Hamilton and Helmut Mader, none of whom is considered an
"interested person" of the Fund within the meaning of the 1940 Act. The
Committee periodically reviews such issues as the Board's composition,
responsibilities, committees, compensation and other relevant issues, and
recommends any appropriate changes to the full Board of Directors. The Committee
also evaluates, selects and nominates candidates for independent directors to
the full Board of Directors. 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 of Directors. Such suggestions must be sent in writing to
the 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 for consideration of his or
her name by the Committee. See also "Shareholder Proposals."
The Fund has a Contracts Committee comprised of R. Michael Barth, Collette D.
Chilton, Khalil Foulathi, Beverly L. Hamilton, David F. Holstein, Raymond
Kanner, Helmut Mader, William Robinson, Gerrit Russelman, Aje K. Saigal and
Nestor V. Santaigo, none of whom is considered an "interested person" of the
Fund within the meaning of the 1940 Act. The Committee's function is to request,
review and consider the information deemed necessary to evaluate the terms of
certain agreements between the Fund and its Manager or the Manager's affiliates,
such as the investment advisory and service agreement, and shareholder services
agreement that the Fund may enter into, renew or continue, and to make its
recommendations to the full Board of Directors on these matters.
There were three Board of Directors, three Audit Committee and one Committee on
Directors meetings during the fiscal year ended June 30, 2002. All incumbent
Directors attended all Board meetings and meetings of the committees of which
they were members, except Mr. Saigal, who attended 71% of all meetings for which
he is a member.
Other Officers
- ----------------------------------------------------------------------------------------------------------------------------
Name Principal Occupation1 Year First Elected
(Position with Fund) An Officer of the
And Age Fund2
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Other Officers
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Roberta A. Conroy Senior Vice President and Senior Counsel, 1991
(Senior Vice President) Capital Guardian Trust Company3
48
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Hartmut Giesecke Chairman of the Board and Director, Capital 1993
(Senior Vice President) International K.K. 3, Senior Vice President
64 and Director, Capital International, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Nancy J. Kyle Senior Vice President and Director, Capital 1996
(Senior Vice President) Guardian Trust Company3
52
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Michael A. Felix Senior Vice President and Director, Capital 1993
(Vice President and Treasurer) International, Inc.
41
- ----------------------------------------------------------------------------------------------------------------------------
Peter C. Kelly Senior Vice President, Senior Counsel and 1996
(Vice President) Director, Capital International, Inc.
43
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Robert H. Neithart Executive Vice President and Research 2000
(Vice President) Director of Emerging Markets, and Director,
37 Capital International Research, Inc.3
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Abbe G. Shapiro Vice President, Capital International, Inc. 1997
(Vice President)
42
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Walter P. Stern Vice Chairman of the Board, Capital 2003
(Chairman Emeritus) International, Inc.
73
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Lisa B. Thompson Vice President and Research Director of 2000
(Vice President of the Fund) Emerging Markets, and Director, Capital
36 International Research, Inc.3
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Vincent P. Corti Vice President, Fund Business Management 1986
(Secretary) Group, Capital Research and Management
46 Company3
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Valerie Y. Lewis Fund Compliance Specialist, Capital Research 1999
(Assistant Secretary) and Management Company3
46
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Jeanne M. Nakagama Vice President, Capital International, Inc. 2000
(Assistant Treasurer)
44
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Lee K. Yamauchi Vice President, Capital International, Inc. 2000
(Assistant Treasurer)
40
- ----------------------------------------------------------------------------------------------------------------------------
1 The occupations shown reflect the principal employment of each individual
during the past five years. Corporate position, 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. 3 Company
affiliated with Capital International, Inc.
No officer, Director or employee of the Manager or its affiliates receives any
renumeration from the Fund. All Directors and officers as a group (29) owned
beneficially less than 1% of the Fund's outstanding shares on November 30, 2002.
PROPOSAL TWO
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2003
Shareholders are requested to ratify the selection by the Board, including a
majority of Directors who are not "interested persons" of the Fund, as that term
is defined in the 1940 Act, of the firm of PricewaterhouseCoopers LLP as
independent public accountants for the Fund for the fiscal year ended June 30,
2003. In addition to the normal audit services, PricewaterhouseCoopers LLP
provides services in connection with the preparation and review of federal and
state tax returns for the Fund. PricewaterhouseCoopers LLP has served as the
Fund's independent public accountants since the Fund's inception in 1986, and
has advised the Fund that it has no material direct or indirect financial
interest in the Fund or its affiliates. No representative of the firm of
PricewaterhouseCoopers LLP ("PwC") is expected to attend the Meeting of
shareholders.
The Audit Committee of the Board of Directors of the Fund has discussed with PwC
representatives the independence of PwC from the Fund and its management,
including the matters disclosed in the letter from PwC required by Independence
Standards Board Standard No. 1, and also considered whether the provision of
non-audit services described below is compatible with maintaining their
independence.
Securities and Exchange Commission rules require the disclosure of professional
fees for audit and non-audit services billed to the Fund, the Manager and
affiliates of the Manager providing services to the Fund (together, "Covered
Entities"), during the Fund's fiscal year ended June 30, 2002, as follows:
Audit fees: Aggregate fees billed by PwC for professional services rendered for
the audit of the Fund's annual financial statements during the period were
$92,000.
Financial information systems design and implementation fees: PwC did not render
any professional services relating to financial information systems design and
implementation to Covered Entities during the period.
All other fees: PwC's billings for tax services and review of the annual
registration statement for the Fund were $135,000. Aggregate fees billed by PwC
for all other professional services rendered to Covered Entities during the
period were $6,722,000. These fees relate to assistance with two ongoing
information technology projects (managed by an affiliate of the investment
adviser) supporting human resource administration and customer relations for
entities other than the Fund. These services were provided by PwC's consulting
group, which was sold to IBM Corporation in October 2002.
The amounts shown above do not include amounts paid for audit and audit related
services (including tax services) rendered to mutual funds managed by Capital
Research and Management Company, the Manager's affiliate. Billings for these
services during the Fund's fiscal year ended June 30, 2002 totaled $1,092,000.
PwC renders audit and audit related services (including tax services) on a
global basis to certain affiliates of the investment adviser's parent company.
Aggregate billings for these services totaled $702,000 during the Fund's fiscal
year ended June 30, 2002.
Approval of Proposal Two requires the affirmative vote of a majority of the
Fund's shares present or represented at the Meeting, provided at least a quorum
(a majority of the Fund's outstanding shares) is represented in person or by
proxy.
THE BOARD OF DIRECTORS OF THE FUND 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 described above. If any other matters properly requiring a vote of
shareholders arise, the proxies will confer upon the person or persons entitled
to vote the shares in respect of any such matters in accordance with their best
judgment in the interests of the Fund and its shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposals for inclusion in proxy solicitation material for a
subsequent shareholders' meeting should be submitted to the Secretary of the
Fund, at the Fund's principal executive offices, 11100 Santa Monica Boulevard,
15th Floor, Los Angeles, California 90025. Any such proposals must comply with
the requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
Under the laws of the State of Maryland where the Fund is incorporated, 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, it is not anticipated that the
Fund will hold shareholders' meetings on a regular basis and any shareholder
proposal received may not be considered until such a meeting is held.
MISCELLANEOUS
The solicitation of the enclosed Proxy is made by and on behalf of the Fund's
Board of Directors. The cost of soliciting proxies, consisting of printing,
handling and mailing of the Proxies and related materials, will be paid by the
Fund. 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. All shareholders are urged to mark, date,
sign, and return the Proxy 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.
The Manager of the Fund is located at 11100 Santa Monica Boulevard, Los Angeles,
California 90025 and 135 South State College Boulevard, Brea, California 92621.
The most recent annual report of the Fund, including financial statements, has
been mailed previously to shareholders. If you have not received these reports
or would like to receive additional copies free of charge, please contact the
Fund c/o American Funds Service Company, 135 South State College Boulevard,
Brea, CA 92821 and they will be sent promptly by first class mail.
Alternatively, you may request a copy of these reports by calling
1-800-421-0180.
If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy.
By the Order of the Board of Directors of the Fund,
VINCENT P. CORTI
Secretary
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to you
and may help avoid the time and expense involved in validating your vote if you
fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: either party may sign, but the name of the party
signing should conform exactly to a name shown in the
registration on the proxy card.
3. ALL OTHER ACCOUNTS: the capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
Registration Valid Signature
CORPORATE ACCOUNTS
(1) ABC Corp............................................ ABC Corp. John Doe, Treasurer
(2) ABC Corp............................................ John Doe, Treasurer
(3) ABC Corp. c/o John Doe.............................. John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan....................... John Doe, Trustee
PARTNERSHIP ACCOUNTS
(1) The XYZ Partnership................................. Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership................ Jane B. Smith, General Partner
TRUST ACCOUNTS
(1) ABC Trust........................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78................. Jane B. Doe, Trustee
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA........................................ John B. Smith
(2) Estate of John B. Smith............................. John B. Smith, Jr., Executor