NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Transamerica Income Shares, Inc. (the “Fund”) is a diversified closed-end management investment company registered under the Investment Company Act of 1940, as
amended (the “1940 Act”).
The Fund’s primary investment objective is to seek as high a level of current income as is consistent with prudent
investment, with capital appreciation as only a secondary objective.
In the normal course of business, the Fund enters into contracts that contain a variety of
representations that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund and/or its affiliates that have not yet occurred.
However, based on experience, the Fund expects the risk of loss to be remote.
In preparing the Fund’s financial statements in accordance with accounting
principles generally accepted in the United States of America (“GAAP”), estimates or assumptions (which could differ from actual results) may be used that affect reported amounts and disclosures. The following is a summary of significant
accounting policies followed by the Fund.
Securities lending:
Securities are lent to qualified financial institutions and brokers. The lending of securities
exposes the Fund to risks such as the following: (i) the borrowers may fail to return the loaned securities; (ii) the borrowers may not be able to provide additional collateral; (iii) the Fund may experience delays in recovery of
the loaned securities or delays in access to collateral; or (iv) the Fund may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge cash collateral equal to at least the market value of
the securities loaned.
Cash collateral received is invested in the State Street Navigator Securities Lending Trust-Prime Portfolio (“Navigator”), a money
market mutual fund registered under the 1940 Act. The Transamerica Asset Management family of mutual funds is a significant shareholder of the Navigator as of March 31, 2013. The Fund does not have a significant holding in the Navigator.
By lending such securities, the Fund seeks to increase its net investment income through the receipt of interest and fees.
Such income is reflected separately in the Statement of Operations. The value of loaned securities and related collateral outstanding at March 31, 2013 are shown in
the Schedule of Investments and Statement of Assets and Liabilities.
Income from loaned securities in the Statement of Operations is net of fees earned by the
lending agent for its services.
Repurchase agreements:
Securities purchased subject to a repurchase agreement are held at the Fund’s custodian, or
designated sub-custodian related to tri-party repurchase agreements, and, pursuant to the terms of the repurchase agreement, must be collateralized by securities with an aggregate market value greater than or equal to 100% of the resale price. The
Fund will bear the risk of value fluctuations until the securities can be sold and may encounter delays and incur costs in liquidating the securities. In the event of bankruptcy or insolvency of the seller, delays and costs may be incurred.
Foreign currency denominated investments:
The accounting records of the Fund are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the closing exchange rate each day. The cost of foreign securities is translated at the exchange rates in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when computing net realized and unrealized gains or losses from investments.
Net foreign
currency gains and losses resulting from changes in exchange rates include: 1) foreign currency fluctuations between trade date and settlement date of investment security transactions; 2) gains and losses on forward foreign currency contracts; and
3) the difference between the receivable amounts of interest and dividends recorded in the accounting records in U.S. dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated with domestic transactions. These risks include revaluation of currencies, adverse
fluctuations in foreign currency values, and possible adverse political, social, and economic developments, including those particular to a specific industry, country or region.
Foreign taxes:
The Fund may be subjected to taxes imposed by the countries in which they invest, with respect to its investments in issuers existing or operating
in such countries. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund accrues such taxes and recoveries as applicable when the related income or capital
gains are earned, and based upon the current interpretation of tax rules and regulations that exist in the markets in which the Fund invests. Some countries require governmental approval for the repatriation of investment income, capital, or the
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Transamerica Income Shares, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 2013
NOTE 1. (continued)
proceeds of sales earned by foreign investors. In addition, if there is deterioration in a country’s balance of payments or for other reasons, a country may impose temporary restrictions of
foreign capital remittances abroad.
When-Issued, forward delivery securities and Delayed Delivery Settlements:
The Fund may purchase or sell securities on a
when-issued, forward (delayed) delivery basis or delayed settlement. When-issued and forward delivery transactions are made conditionally because a security, although authorized, has not yet been issued in the market. Settlement of such transactions
normally occurs within a month or more after the purchase or sale commitment is made. The Fund engages in when-issued transactions to obtain an advantageous price and yield at the time of the transaction. The Fund engages in when-issued and forward
delivery transactions for the purpose of acquiring securities, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Fund may be
required to pay more at settlement than the security is worth. In addition, the Fund is not entitled to any of the interest earned prior to settlement.
Delayed
Delivery transactions involve a commitment by the Fund to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery transactions are
outstanding, the Fund will segregate with its custodian cash, U.S. Government securities or other liquid assets at least equal to the value or purchase commitments until payment is made. When purchasing a security on a delayed delivery basis, the
Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. These transactions also involve a risk to the Fund if the other party to the transaction defaults on its obligation to make payment
or delivery, and the Fund is delayed or prevented from completing the transaction. The Fund may dispose of or renegotiate a delayed delivery transaction after it is entered into which may result in a realized gain or loss. When the Fund sells a
security on a delayed delivery basis, the Fund does not participate in future gains and losses on the security.
Treasury inflation-protected securities
(“TIPS”):
The Fund invests in TIPS, specially structured bonds in which the principal amount is adjusted daily to keep pace with inflation. The adjustments to principal due to inflation/deflation are reflected as increases/decreases to
interest income in the Statement of Operations with a corresponding adjustment to cost.
Payment in-kind securities (“PIKs”):
PIKs give the issuer
the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the
original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a “dirty price”) and require a pro-rata adjustment from unrealized appreciation or depreciation on investments to interest
receivable in the Statement of Assets and Liabilities.
The PIKs at March 31, 2013 are listed in the Schedule of Investments.
Restricted and illiquid securities
: The Fund may invest in unregulated or otherwise restricted securities. Restricted and illiquid securities are subject to legal
or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. A security may be considered illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.
The restricted and illiquid securities at March 31, 2013 are listed in the Schedule of Investments.
Security transactions and investment income
: Security transactions are recorded on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income, if any, is recorded on the ex-dividend date or, in the case of foreign securities, as soon as the Fund is informed of the ex-dividend date, net of foreign taxes. Interest income, including accretion of
discounts and amortization of premiums, is recorded on the accrual basis commencing on the settlement date.
Dividend distributions:
Dividend distributions are
declared monthly. Capital gains distributions are declared annually. Distributions are generally paid in the month following the ex-date, on or about the fifteenth calendar day. Distributions to shareholders are determined in accordance with federal
income tax regulations, which may differ from GAAP. See “Automatic Reinvestment Plan” on page 19 for an opportunity to reinvest distributions in shares of the Fund’s common stock.
NOTE 2. SECURITY VALUATIONS
All investments in securities are recorded at
their estimated fair value. The Fund values its investments at the close of the New York Stock Exchange (“NYSE”), normally 4 p.m. Eastern Time, each day the NYSE is open for business. The Fund utilizes various methods to measure the fair
value of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation
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Annual Report 2013
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Transamerica Income Shares, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 2013
NOTE 2. (continued)
methods. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three Levels of inputs of the fair
value hierarchy are defined as follows:
Level 1—Unadjusted quoted prices in active markets for identical securities.
Level 2—Inputs, other than quoted prices included in Level 1, that are observable, either directly or indirectly. These inputs may include quoted prices for the
identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
Level 3—Unobservable inputs, which may include Transamerica Asset Management, Inc.‘s (“TAM”) internal valuation committe’s (the “Valuation
Committee”) own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the sub-adviser, issuer, analysts, or the
appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
The Fund’s Board of Directors has delegated the valuation functions on a day-to-day basis to TAM, subject to board oversight. TAM formed the Valuation Committee to
monitor and implement the fair valuation policies and procedures as approved by the Board of Directors. These policies and procedures are reviewed at least annually by the Board of Directors. The Valuation Committee, among other tasks, monitors for
when market quotations are not readily available or are unreliable and determines in good faith the fair value of portfolio investments. For instances in which daily market quotes are not readily available, securities may be valued, pursuant to
procedures adopted by the Board of Directors, with reference to other instruments or indices. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the security to determine the fair value of
the security. An income-based valuation approach may also be used in which the anticipated future cash flows of the security are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on
the disposition of securities. When the Portfolio uses fair value methods that rely on significant unobservable inputs to determine a security’s value, the Valuation Committee will choose the method that is believed to accurately reflect fair
market value. These securities are categorized as Level 3 of the fair value hierarchy. The Valuation Committee reviews fair value measurements on a regular and ad hoc basis and may, as deemed appropriate, update the security valuations as well as
the fair valuation guidelines.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, but
not limited to, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is generally greatest for instruments categorized in Level 3. Due
to the inherent uncertainty of valuation, TAM’s Valuation Committee’s determination of values may differ significantly from values that would have been realized had a ready market for investments existed, and the differences could be
material. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing and reviews of any market related
activity.
The inputs used to measure fair value may fall into different Levels of the fair value hierarchy. In such cases, for disclosure purposes, the Level in the
fair value hierarchy that is assigned to the fair value measurement of a security is determined based on the lowest Level input that is significant to the fair value measurement in its entirety.
Fair value measurements:
Descriptions of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on
a recurring basis are as follows:
Equity securities (common and preferred stocks):
Securities are stated at the last reported sales price or closing price on
the day of valuation taken from the primary exchange where the security is principally traded. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Foreign securities, in which the primary trading market closes at the same time or after the NYSE, are valued based on quotations from the primary market in which
they are traded and are categorized in Level 1. Because many foreign securities markets and exchanges close prior to the close of the NYSE, closing prices for foreign securities in those markets or on those exchanges do not reflect the events that
occur after that close. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American
Depositary
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Transamerica Income Shares, Inc.
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Annual Report 2013
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Page 13
Transamerica Income Shares, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 2013
NOTE 2. (continued)
Receipts, financial futures, Exchange Traded Funds, and the movement of the certain indices of securities based on a statistical analysis of their historical relationship; such valuations
generally are categorized in Level 2.
Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are also generally
categorized in Level 2 or Level 3 if inputs are unobservable.
Securities lending collateral:
Securities lending collateral is invested in a money market fund
which is valued at the net asset value of the underlying securities and no valuation adjustments are applied. It is categorized in Level 1 of the fair value hierarchy.
Repurchase Agreements:
Repurchase agreements are traded on inactive markets or valued by reference to similar instruments and are generally categorized as Level
2.
Corporate bonds:
The fair value of corporate bonds is estimated using various techniques, which consider recently executed transactions in securities of
the issuer or comparable issuers, market price quotations (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While
most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3.
Asset backed securities:
The fair value of asset backed securities is estimated based on models that consider the estimated cash flows of each tranche of the
entity, establish a benchmark yield, and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. To the extent the inputs are observable and timely, the values would generally be categorized
in Level 2 of the fair value hierarchy; otherwise they would be categorized as Level 3.
Short-term notes:
Short-term notes are valued using amortized cost,
which approximates fair value. To the extent the inputs are observable and timely, the values would be generally categorized in Level 2 of the fair value hierarchy; otherwise they would be categorized in Level 3.
Government securities:
Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar
securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued by principally using dealer quotations. Government securities generally are categorized in Level 2 of the fair value hierarchy or Level 3 if inputs
are unobservable.
U.S. government agency securities:
U.S. government agency securities are comprised of two main categories consisting of agency issued debt
and mortgage pass-throughs. Generally, agency issued debt securities are valued in a manner similar to U.S. government securities. Mortgage pass-throughs include to be announced (“TBA”) securities and mortgage pass-through certificates.
Generally, TBA securities and mortgage pass-throughs are valued using dealer quotations. Depending on market activity levels and whether quotations or other observable data are used, these securities are typically categorized in Level 2 of the fair
value hierarchy; otherwise they would be categorized in Level 3.
Restricted securities (equity and debt):
Restricted securities for which quotations are not
readily available are valued at fair value as determined in good faith by TAM’s Valuation Committee under the supervision of the Fund’s Board of Directors. Restricted securities issued by publicly traded companies are generally valued at a
discount to similar publicly traded securities. Restricted securities issued by nonpublic entities may be valued by reference to comparable public entities and/or fundamental data relating to the issuer. Depending on the relative significance of
valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The hierarchy classification of inputs used to value
the Fund’s investments at March 31, 2013, is disclosed in the Valuation Summary of the Schedule of Investments.
NOTE 3. RELATED PARTY TRANSACTIONS
TAM, the Fund’s investment adviser, is directly owned by Western Reserve Life Assurance Co. of Ohio and AUSA Holding Company (“AUSA”), both of
which are indirect, wholly owned subsidiaries of AEGON NV. AUSA is wholly owned by AEGON USA, LLC (“AEGON USA”), a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment
products. AEGON USA is owned by AEGON US Holding Corporation, which is owned by Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The AEGON Trust, which is owned by AEGON International B.V., which is owned by AEGON NV, a
Netherlands corporation, and a publicly traded international insurance group.
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Transamerica Income Shares, Inc.
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Page 14
Transamerica Income Shares, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 2013
NOTE 3. (continued)
AEGON USA Investment Management, LLC (“AUIM”) is both an affiliate and sub-adviser of the Fund.
Transamerica Fund Services, Inc. (“TFS”) is the Fund’s administrator. TAM, AUIM, and TFS are affiliates of AEGON, NV.
Certain officers and directors of the Fund are also officers and/or directors of TAM, AUIM, and TFS. No interested director receives compensation from the Fund.
Investment advisory fees:
The Fund pays management fees to TAM based on average daily net assets (“ANA”) at the following rate:
0.50% of ANA
TAM has agreed to voluntarily waive its advisory fee and
will reimburse the Fund to the extent that operating expenses exceed the following stated limits of ANA:
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First $30 million
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1.50
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%
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Over $30 million
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1.00
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%
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There were no fees waived during the year ended March 31, 2013.
Administrative Services:
The Fund has entered into an agreement with TFS for financial and legal fund administration services. The Fund pays TFS an annual fee of
0.025% of ANA. The Legal fees on the Statement of Operations are fees paid to external legal counsel.
NOTE 4. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding short-term securities) for the year ended March 31, 2013 were as follows:
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Purchases of securities:
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Long-term
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$
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37,216,737
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U.S. Goverment
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5,740,808
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Proceeds from maturities and sales of securities:
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Long-term
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36,134,844
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U.S. Government
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5,630,872
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NOTE 5. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to its policy to distribute all of its taxable income and capital gains to its shareholders
and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained
assuming examination by tax authorities. Management has evaluated the Fund’s tax provisions taken for all open tax years 2008—2011, and has concluded that no provision for income tax is required in the Fund’s financial statements. If
applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest and penalties expense in Other on the Statement of Operations. The Fund identifies its major tax jurisdictions as U.S. Federal, the state of Florida,
and foreign jurisdictions where the Fund makes significant investments; however, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next
twelve months. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatment for items including, but not limited to, foreign
bonds, foreign currency transactions, capital loss carryforwards, dividends payable, paydowns, and bond premium amortization.
Therefore, distributions determined in
accordance with tax regulations may differ significantly in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect
tax character. These reclassifications have no impact on net assets or results of operations. Financial records are not adjusted for temporary differences. These reclassifications are as follows:
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Additional paid-in capital
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$
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(327,618
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)
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Undistributed (accumulated) net
investment income (loss)
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486,669
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Undistributed (accumulated) net
realized gain (loss) from investment securities
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(159,051
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)
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Transamerica Income Shares, Inc.
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Annual Report 2013
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Page 15
Transamerica Income Shares, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 2013
NOTE 5. (continued)
At March 31, 2013, the Fund had capital loss carryforwards available to offset future realized gains through the periods listed below:
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Capital Loss Carryforwards
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Available Through
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$6,222,509
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March 31, 2017
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|
The capital loss carryforwards utilized or expired during the year ended March 31, 2013 were $714,449.
The tax character of distributions paid may differ from the character of distributions shown in the Statement of Changes in Net Assets due to short-term gains being
treated as ordinary income for tax purposes. The tax character of distributions paid during 2013 and 2012 was as follows:
The tax basis components of distributable earnings as of March 31, 2013 are as follows:
Management has
evaluated subsequent events through the date of issuance of the financial statements, and determined that no other material events or transactions would require recognition or disclosure in the Fund’s financial statements.
Report of Independent Registered Public Accounting Firm
To
the Board of Directors and Shareholders of Transamerica Income Shares, Inc.:
We have audited the accompanying statement of assets and liabilities including the
schedule of investments, of Transamerica Income Shares, Inc. (the “Fund”) as of March 31, 2013, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our audits. The financial highlights for periods ended prior to April 1, 2010 were audited by another independent registered public accounting firm whose report, dated
May 24, 2010, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not
engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of March 31, 2013, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material
respects, the financial position of Transamerica Income Shares, Inc. at March 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial
highlights for each of the three years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
May 29, 2013
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Page 17
SUPPLEMENTAL TAX INFORMATION (unaudited)
For corporate
shareholders, 1.14% of investment income (divided income plus short-term gains, if any) qualifies for the dividends received deduction.
The Fund designates a
maximum amount of $91,626 as qualified dividend income, which is 1.13% of what was distributed.
The information and distributions reported herein may differ from
the information and distributions taxable to the shareholders for the calendar year ended December 31, 2012. Complete information was computed and reported in conjunction with year 2012 Form 1099-DIV.
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Page 18
Transamerica Income Shares, Inc.
AUTOMATIC REINVESTMENT PLAN
Holders of 50 shares or more of the
Fund’s common stock are offered the opportunity to reinvest dividends and other distributions in shares of the common stock of the Fund through participation in the Automatic Reinvestment Plan (the “Plan”). Under the Plan,
Computershare, as Transfer Agent, automatically invests dividends and other distributions in shares of the Fund’s common stock by making purchases in the open market. Plan participants may also deposit cash in amounts between $25 and $2,500
with Computershare for the purchase of additional shares. Dividends, distributions and cash deposits are invested in, and each participant’s account credited with, full and fractional shares.
The price at which Computershare is deemed to have acquired shares for a participant’s account is the average price (including brokerage commissions and any other
costs of purchase) of all shares purchased by it for all participants in the Plan.
Your dividends and distributions, even though automatically reinvested, continue
to be taxable as though received in cash.
Another feature of the Plan is the “Optional Cash Only” feature. You can make additional investments only,
without reinvesting your monthly dividend. If you own 50 shares or more, registered in your name and currently in your Plan account, and desire to periodically send additional contributions between $25 and $2,500 for investment, you may do so. The
shares you own and the new shares acquired through this feature will not participate in automatic reinvestment of dividends and distributions. Rather, the shares you acquire if you participate in the “Optional Cash Only” feature of the
Plan will be held for safekeeping in your Plan account. Each investment will be made on or near the next dividend payment date. All other procedures for the purchase and sale of shares described above will apply.
Computershare charges a service fee of $1.75 for each investment, including both dividend reinvestment and optional cash investment.
Shareholders interested in obtaining a copy of the Plan should contact Computershare:
Computershare
P.O. Box 43006
Providence, RI 02940-3006
Telephone: 800-454-9575
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Page 19