1. 1 Taxation of Independent Director Compensation Jason Bortz Capital Research and Management Company

2. 2 Non-US Citizens or Residents Compensation paid to independent directors –Meeting fees, retainers –Unitary fee structures Treated as non-employee independent contractors Apportionment between US and non-US sources (1.861-4(b)(2)) –Facts and circumstances general rule –Time basis approach Director Compensation

3. 3 Non-US Citizens or Residents Federal income tax –SECA tax inapplicable (1402(b)) –Subject to 1441 withholding on gross amount paid, unless a treaty exception applies State tax –Potentially taxed on income sourced in state –States may not “mirror” income tax treaty relief Deferred compensation payable by funds –Sourced based on apportionment during years earned (864(c)(6)) Director Compensation

4. 4 US Citizens or Residents Federal income and SECA tax –Treated as independent contractors State tax –Similar to US taxation of NRA directors Deferred compensation payable by funds –SECA at time of payment Not subject to special timing rules of 3121(v) –Federal preemption of state source taxation generally inapplicable Director Compensation