SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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ASA Limitied
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(Name of Registrant as Specified In Its Charter)
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<PAGE>
ASA LIMITED
PADDOCK VIEW
36 WIERDA ROAD WEST
SANDTON 2196, SOUTH AFRICA
January 10, 2001
Dear ASA Shareholder:
At the Annual Meeting of Shareholders to be held on February 15, 2001,
your Board of Directors is asking you to vote on revisions to ASA's investment
policies and conforming changes to ASA's corporate documents, its Articles of
Association and By-Laws. These revisions are designed to respond to
consolidation taking place in the gold mining industry. Your participation in
the voting process is important no matter how many shares you hold.
Gold producers are becoming fewer, larger and more internationally
focused. This has been particularly true with respect to South African
companies. This new focus reflects the end of South Africa's economic isolation
and the desire of its gold mining companies to expand exploration and production
globally.
We intend to continue our emphasis on companies involved in the mining of
gold and other precious metals and minerals, such as diamonds and platinum.
Although we continue to invest in South Africa, exploration and development
today is occurring primarily in other countries throughout the world. The
ability to globalize our Company's investment portfolio provides us with the
opportunity to extend the life of our underlying gold investments and enhance
our long term viability and growth.
Your Board believes that it is in the best interest of your Company for
you to approve the proposals described in detail in the enclosed proxy
statement. I urge you to consider and vote on these very important matters. The
Board of Directors unanimously recommends that you vote "FOR" all the proposals.
In order to make sure that your vote is represented, please indicate your
vote on the enclosed proxy card, date and sign it, and return it in the enclosed
postage-paid envelope regardless of whether or not you plan to attend the
meeting. If you do attend the meeting, you may revoke your proxy at the meeting
and vote in person.
If you have any questions about the documents mailed to you or need
assistance in voting your shares, please call our proxy solicitor, D.F. King &
Co., Inc. toll free at 1-800-347-4750.
Sincerely,
ROBERT J.A. IRWIN
Chairman of the Board
<PAGE>
ASA LIMITED
PADDOCK VIEW
36 WIERDA ROAD WEST
SANDTON 2196, SOUTH AFRICA
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Notice of Annual Meeting of Shareholders
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NOTICE IS HEREBY GIVEN that the Annual Meeting (the Meeting) of
Shareholders of ASA LIMITED (the Company) will be held on February 15, 2001, at
10:00 a.m., New York City time, at the Park Lane Hotel, New York, NY, USA, for
the purpose of considering and acting upon the following business:
1. To elect the Company's Board of Directors.
2. To adopt a Special Resolution amending and restating the
Company's Articles of Association, which resolution is required by law to
be stated in full and which is as follows:
RESOLVED, as a Special Resolution, that the Articles of
Association be amended and restated as indicated in Exhibit C
to this Notice of Annual Meeting of Shareholders.
The reasons for, and the effect of, the Special Resolution are
set out in the attached Proxy Statement, which statement shall be
deemed to form part of this notice.
3. To change the Company's subclassification under the Investment
Company Act of 1940 from a diversified to a non-diversified company and
eliminate fundamental investment restrictions related thereto.
4. To eliminate one of the Company's fundamental investment
restrictions concerning the concentration of its investments and amend
another.
5. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending November 30,
2001.
6. Such other business as may properly come before the Meeting or
any adjournment thereof.
ROBERT J.A. IRWIN
Chairman of the Board and Treasurer
January 10, 2001
Each shareholder entitled to vote at the Meeting is entitled to appoint
one or more proxies, who need not be shareholders, to attend the Meeting and to
vote and speak on his or her behalf. It is important that your shares be
represented at the Meeting in person or by proxy; whether or not you expect to
attend the Meeting, please date, sign and indicate voting instructions on the
accompanying proxy and mail it promptly in the enclosed addressed envelope. Any
shareholder who submits a completed proxy form is entitled to attend the Meeting
and to vote in person, should that shareholder decide to do so.
<PAGE>
Proxy Statement
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Solicitation and Revocation of Proxies
The enclosed proxy is solicited by the Board of Directors of ASA LIMITED
(the Company) for use at an Annual Meeting of the Company's shareholders (the
Meeting) to be held on February 15, 2001. The proxy may be revoked by the
shareholder at any time prior to its use at the Meeting by an instrument in
writing delivered to the United States Secretary, c/o LGN Associates, P.O. Box
269, 140 Columbia Turnpike, Florham Park, N.J. 07932 or delivered to him at the
Meeting.
The expense of preparing, assembling, printing and mailing the form of
proxy and the material used for the solicitation of proxies will be paid by the
Company. In addition to the solicitation of proxies by use of the mails, the
Company will retain D.F. King & Co., Inc., New York, NY, to aid in the
solicitation of proxies. Such solicitation will be by mail and telephone. For
these services the Company will pay D.F. King & Co., Inc. a fee, plus
reimbursement of its out-of-pocket expenses and disbursements, estimated in the
aggregate at approximately $35,000. The Company will also reimburse brokers,
nominees and fiduciaries who are record owners of shares of the Company for the
out-of-pocket and clerical expenses of transmitting copies of the proxy material
to the beneficial owners of such shares. The approximate mailing date of the
proxy statement and form of the proxy will be January 12, 2001.
Voting at the Meeting
Only shareholders of record at the close of business on February 8, 2001
will be entitled to vote except that a person who at least 48 hours before the
meeting satisfies the directors that he has the right to transfer shares into
his name in consequence of the death or bankruptcy of any shareholder of record
shall be entitled to vote such shares. Proof of any such right should be
presented to the United States Secretary, c/o LGN Associates, P.O. Box 269, 140
Columbia Turnpike, Florham Park, NJ 07932. There are 9,600,000 shares of the
Company outstanding, each of which is entitled to one vote. Each valid proxy
received in time will be voted at the Meeting in favor of each proposal except
as contrary instructions are indicated, in which event such instructions will be
followed.
The Company knows of one beneficial owner who owns more than five percent
of the Company's outstanding shares.
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Name and address of Amount and nature Percent
beneficial owner(s) of beneficial ownership(1)(2) of class
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President and Fellows of Harvard College 505,404 5.3%
c/o Harvard Management Co., Inc.
600 Atlantic Avenue
Boston, MA 02110
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(1) Number of shares beneficially owned as of November 30, 2000.
(2) The President and Fellows of Harvard College have sole voting and
dispositive power with respect to the shares.
The Company's Annual Report for the fiscal year ended November 30, 2000,
including financial statements, accompanies this proxy statement and will also
be mailed to each person who becomes a registered shareholder of the Company on
or before February 8, 2001.
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<PAGE>
Quorum
The Company's organizational documents provide that the presence at a
shareholder meeting, in person or by proxy of holders of a majority of the
shares of the Company then issued and outstanding and entitled to vote
constitutes a quorum at all general meetings. In addition, the South African
Companies Act No. 61 of 1973 (the Companies Act) requires that three
shareholders entitled to vote at the meeting be present personally to constitute
a quorum. Thus, the Meeting cannot take place on its scheduled date if less than
a majority of the outstanding shares entitled to vote are represented or if
three such shareholders are not present personally. If, within half an hour from
the time scheduled for the Meeting, a quorum of shareholders is not present, the
meeting shall stand adjourned to the same day the next week at the same time and
place, or to such other day, time and place as the directors may by notice to
the shareholders appoint. If a quorum is present but sufficient votes in favor
of any of the items are not received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further soliciting of proxies
from the Company's shareholders. Any such adjournment will require the
affirmative vote of the holders of a majority of the shares that are represented
(in person or by proxy) at the Meeting to be adjourned. The persons named as
proxies will vote in favor of any such adjournment if they determine that such
adjournment and additional solicitation are reasonable and in the interest of
the shareholders.
In tallying shareholder votes, abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter) will be counted for purposes of determining whether a quorum is present
for purposes of convening the Meeting, and will be counted as "votes cast", for
purposes of Proposals No. 2, No. 3, and No. 4.
Currency Exchange Rates
The Company is a South African company and its only office is located in
South Africa. Its accounts are maintained and most of its transactions are
effected in rand, the currency of the Republic of South Africa. Rand amounts
are, therefore, used in this proxy statement except for payments made in United
States dollars. Dollar figures in parentheses are dollar equivalents of rand
amounts at the exchange rates in effect at the time of the transactions. The
official exchange rate floats under supervision of the South African Reserve
Bank. On November 30, 2000 the official exchange rate was R7.71 to the dollar
($0.13 to the rand). For a fuller discussion of the effect of fluctuations in
the currency exchange rate, see the Company's Annual Report for 2000 enclosed
with this proxy statement.
Proposal 1: Election of Directors
Unless contrary instructions are given, the persons named in the enclosed
proxy will vote such proxy for the election of the nominees listed below to
serve as directors of the Company until the next Annual Meeting of Shareholders.
Each nominee was elected to serve as a director of the Company at the Annual
Meeting of Shareholders held on February 4, 2000. Each nominee has consented to
serve if elected. In the event that any of the nominees is unable or declines to
serve as a director, an event which the management of the Company does not
anticipate, proxies may be voted at the meeting for the election of another
person in his stead. Each director's age is indicated in parentheses after his
name. Except as otherwise indicated, each nominee's principal occupation has
been his principal occupation for at least the last five years and share
ownership is his beneficial ownership of the Company's shares as of November 30,
2000.
Robert J. A. Irwin* (73) ......... Mr. Irwin has served as Chairman of
the Board since 1993 and Treasurer
since February 1999 and as a director
since February 1987. He served as
Deputy Chairman of the Company from
February 1989 to February 1993. He is
a former director of Niagara Share
Corporation (1972-1995), St. Joe Paper
Co. (1990-1994) and former Advisory
Director of M&T Bank Corporation and
Manufacturers and Traders Trust
Company (1983-April 1999). He is also
a member of the board of a number of
non-profit organizations, including
the University of Cape Town Fund, Inc.
and the St. Barnabas (Johannesburg)
College Fund, Inc. He owned 2,200
shares of the Company, including 142
shares owned by his wife.
3
<PAGE>
Henry R. Breck (63) .............. Mr. Breck has served as a director of
the Company since February 1996 and
Assistant Treasurer from February 1999
to February 2000 and United States
Secretary from August 1997 to February
1999. He served previously as a
director from February 1981 to August
1989. He is Chairman and a director of
Ark Asset Management Co., Inc., a
registered investment adviser, and a
director of Butler Capital Corp. He
owned 1,000 shares of the Company.
Harry M. Conger (70) ............. Mr. Conger has served as a director of
the Company since January 1984. He is
Chairman and CEO Emeritus of Homestake
Mining Company. He is also a director
of Apex Silver Mines, a silver mining
company, and Pacific Gas & Electric
Company, a utility company, and a
Trustee of the California Institute of
Technology. Until 1998 he was a
director of Baker, Hughes and CalMat
Company. He owned 1,100 shares of the
Company.
Chester A. Crocker* (59) ......... Mr. Crocker has served as a director
of the Company since February 1996 and
United States Secretary since February
1999. He is a James R. Schlesinger
Professor of Strategic Studies, School
of Foreign Service, Georgetown
University and Chairman of United
States Institute of Peace; President,
Crocker Group (consultants). He is
also a director of Ashanti Goldfields,
Ltd. He owned 400 shares of the
Company.
Joseph C. Farrell (65) ........... Mr. Farrell has served as a director
of the Company since February 1999. He
was Chairman, President and CEO of The
Pittston Company from September 1991
until his retirement in February 1998.
He is a director of Universal
Corporation and various non-profit
organizations. He owned 1,000 shares
of the Company.
James G. Inglis (56) ............. Mr. Inglis has served as a director of
the Company since May 1998. He has
been the Executive Director of
Melville Douglas Investment Management
(Pty) Ltd. since 1997, and prior
thereto he was the Managing Director
of Liberty Asset Management Limited,
an investment manager. He also serves
on the Investment Committees of a
number of charitable funds and is a
Trustee of the Independent Schools
Pension Fund. As a resident of South
Africa he is prevented by the
Company's Articles of Association from
owning any shares of the Company.
Ronald L. McCarthy* (67) ......... Mr. McCarthy has served as a director
of the Company since February 1988 and
as a Managing Director of the Company
since that date. As a resident of
South Africa he is prevented by the
Company's Articles of Association from
owning any shares of the Company.
Malcolm W. MacNaught (63) ........ Mr. MacNaught has served as a director
of the Company since February 1998. He
is a director of Lion Selection Group
Ltd, a Pooled Development Fund for the
benefit of Australian mining companies
and Meridian Gold Corporation. He was
a Vice President and Portfolio Manager
at Fidelity Investments and retired in
October 1996. He owned 1,500 shares of
the Company.
4
<PAGE>
Robert A. Pilkington (55) ........ Mr. Pilkington has served as a
director of the Company since 1979. He
is an investment banker and since 1985
a Managing Director of UBS Warburg LLC
or predecessor companies. He is a
director of Avocet Mining PLC. He
owned 3,000 shares of the Company.
A. Michael Rosholt (80) .......... Mr. Rosholt has served as a director
of the Company since 1982. He was
Chairman of Barlow Rand Limited
(financial, industrial and mining
corporation) through 1990. He is
Chairman of the National Business
Initiative (South Africa), a
non-profit organization. As a resident
of South Africa he is prevented by the
Company's Articles of Association from
owning any shares of the Company.
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*An "interested person" of the Company, as such term is defined in the
Investment Company Act of 1940, by reason of being an officer of the Company.
The total number of shares of the Company owned by officers and directors
of the Company on November 30, 2000 was 10,200, which constituted less than 1%
of the Company's outstanding shares.
Required Vote: The election of Directors requires the affirmative vote of
a majority of the shares represented at the meeting.
The Directors unanimously recommend that you vote FOR Proposal No. 1.
The Board has an Audit Committee, a Compensation Committee and an Ethics
Committee, but does not have a Nominating Committee. The Audit Committee acts
pursuant to a written charter and is responsible for overseeing the Company's
accounting and financial reporting policies, practices and internal controls.
The Board has adopted a written charter for the Audit Committee that is attached
as Exhibit A. The Audit Committee currently consists of Messrs. MacNaught
(Chairman), Conger and Farrell. Messrs. MacNaught, Conger and Farrell are all
independent as defined in Section 303.01 of the NYSE's listing standards. The
Audit Committee's duties are, (a) to review the financial and accounting
policies of the Company, including internal accounting control procedures, and
to review reports prepared by the Company's independent accountants; (b) to
review and recommend approval or disapproval of audit services and the fees
charged for the services; (c) to evaluate the independence of the independent
accountants and to recommend whether to retain the independent accountants for
the next fiscal year; and (d) to report to the Board and make such
recommendations as it deems necessary. The Audit Committee met between the
Company's fiscal year end and the record date to review the audited financial
statements of the Company. Attached as Exhibit B is a copy of the Audit
Committee's Report with respect to the audited financial statements. All members
of the Audit Committee attended that meeting.
The current members of the Compensation Committee are Messrs. Conger
(Chairman), Inglis, Pilkington and Rosholt. The function of the Compensation
Committee is to make recommendations regarding the salaries of officers of the
Company. The current members of the Ethics Committee are Farrell (Chairman),
Crocker and Pilkington. The function of the Ethics Committee is to ensure
compliance by the directors and access persons with the Company's Code of Ethics
and Rule 17j-l under the Investment Company Act of 1940 (the 1940 Act).
During the fiscal year ended November 30, 2000 there were five meetings of
the Board of Directors, three meetings of the Audit Committee, one meeting of
the Compensation Committee and four meetings of the Ethics Committee. All the
directors attended more than 75% of the meetings.
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<PAGE>
Executive Officers
The current executive officers of the Company are Mr. Irwin, who has been
Chairman of the Board since February 1993 and Treasurer since February 1999, Mr.
McCarthy, who has been Managing Director since November 1988, Mr. Crocker who
has been United States Secretary since February 1999 and Dana L. Platt who has
been Vice President since December 2000 and Assistant Secretary since February
2000. Executive Officers are elected at the first Board of Directors' meeting
after each annual meeting of shareholders to serve for the ensuing year.
Compliance with Section 16(a) of the Exchange Act
The Company does not know of any person who was a director, officer or
beneficial owner of more than 10 percent of the Company's shares who failed to
file on a timely basis, during the fiscal year ended November 30, 2000, reports
required by Section 16(a) of the Securities Exchange Act of 1934.
South African Secretary
The South African Secretary of the Company is Ranquin Associates, Paddock
View, 36 Wierda Road West, Sandton 2196, South Africa, which has served in such
capacity since February 1990. The principal of Ranquin Associates is Mr.
McCarthy's son, an independent Certified Financial Accountant engaged in public
practice. Ranquin Associates received a fee from the Company of R582 825
($86,653) in the fiscal year ended November 30, 2000. In addition, Ranquin
Associates and an affiliated entity paid the Company R95 908 ($14,102) for
rental of office space. Ranquin Associates received reimbursement from the
Company of R50 286 ($7,468) for shared expenses (including salaries) of
operating the office.
ASA Educational Trust
The ASA Educational Trust (the Trust) was formed by a Deed of Trust
between the Company and the Trust in February 1988. The purpose of the Trust is
to assist in the education and training of students in South Africa through the
granting of scholarships, bursaries and/or stipends for use at institutions for
secondary and tertiary education.
During the fiscal year ended November 30, 2000, the Company contributed
R400 000 ($51,680) to the Trust.
Director/Officer Compensation
Each non-South African director receives an annual fee of $15,000 for his
services as a director and a fee of $1,000 for each Board meeting that he
attends. Each South African director receives the rand equivalent of $15,000
(approximately R115 650 based upon the current exchange rate of R7.71 to the
dollar as of November 30, 2000) as an annual fee for his services as a director
and the rand equivalent of $2,000 (R15 420 based on the same exchange rate) for
each Board meeting that he attends. In addition, directors receive a committee
meeting fee of $1,000 for each meeting attended during the year. The Company
pays to any retired director who served as a director for at least twelve years
an annual retainer equal to 75% of the annual directors' fee from time to time
in effect. Directors retiring after attaining the age of 70 are entitled to such
retainer for life; directors retiring prior to attaining such age for the lesser
of life or the number of years they served as a director.
A summary of the compensation and benefits for the directors, and for each
of the officers having aggregate compensation from the Company for the fiscal
year ended November 30, 2000 in excess of $60,000, is shown below. Compensation
and benefits payable in rand are shown with United State dollar equivalents.
Reference is made to the information under "Currency Exchange Rates" on page 3
of this proxy statement for information concerning currency exchange rates
between the South African rand and the United States dollar.
6
<PAGE>
<TABLE>
<CAPTION>
Pension or
Retirement
Benefits Estimated Total
Aggregate Accrued As Annual Compensation
Compensation Part of Benefits From Company
Name of Person from Company Upon Paid for
& Position Company Expenses(1) Retirement(2) Directors
-------------- ------------ ----------- ------------- ------------
<S> <C> <C> <C> <C>
Robert J. A. Irwin, $154,000 $26,125 $39,375 $19,000
Chairman, Chief Executive
Officer, Treasurer and Director
Wesley A. Stanger, Jr., -- -- $43,754 --
Director Emeritus
Ronald L. McCarthy, R561,143 -- R86,750 R176,645
Managing Director and ($81,413) ($11,250) ($25,000)
Director
Chester A. Crocker, $23,000 -- $11,250 $23,000
United States Secretary
and Director
Henry R. Breck, $20,000 -- $11,250 $20,000
Director
Harry M. Conger, $23,000 -- $11,250 $23,000
Director
Joseph C. Farrell, $26,000 -- $11,250 $26,000
Director
James G. Inglis, R185,003 -- R86,750 R185,003
Director ($26,000) ($11,250) ($26,000)
Malcolm W. MacNaught, $22,000 -- $11,250 $22,000
Director
Robert A. Pilkington, $26,000 -- $11,250 $26,000
Director
A. Michael Rosholt, R184,485 -- R86,750 R184,485
Director ($26,000) ($11,250) ($26,000)
</TABLE>
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(1) The amount shown is the amount payable under an annuity policy for the
benefit of Mr. Irwin purchased by the Company in fiscal 1993 at an annual
cost to the Company of $25,000 per year for five years. Effective May 1,
1999 the annual cost to the Company was increased to $28,125 year.
(2) All directors qualify to receive retirement benefits if they have served
the Company for at least twelve years prior to retirement. The amount
shown for each director is the total benefits which are or would be
payable to such person assuming such director had served twelve years as
of November 30, 2000. The amounts shown for Messrs. Irwin and Stanger
include the retirement benefits payable to them as directors and the
amounts paid or payable to them under the annuity contracts purchased for
their benefit by the Company (see (1) above).
Proposal 2: To adopt a Special Resolution Amending and Restating the Company's
Articles of Association.
As discussed below, certain provisions of the Company's Articles of
Association (the Articles) are inconsistent with other provisions of the
Articles or are now inconsistent with or are no longer required by the 1940 Act
or the Companies Act. This causes undue confusion and uncertainty in corporate
governance and may delay or prevent the Company from taking necessary corporate
actions in a timely manner.
The Board has approved, subject to shareholder approval, amending and
restating the Articles as shown in the attached Exhibit C. The Board believes
that the proposed Amended and Restated Articles will allow the Company to
respond more efficiently to legal, regulatory and economic changes in countries
in which the Company invests and will increase shareholder participation in
corporate governance of the Company.
7
<PAGE>
Material changes to the Articles are discussed below.
A. To Amend the Company's Voting Requirement for a Special Resolution.
The Articles provide that the Company may not create new shares, reduce
its capital, voluntarily dissolve, reorganize or merge with another company, or
amend the Articles except by Special Resolution. Section 62(1) of the Companies
Act provides that a company may by "special resolution" amend its articles of
association, provided such special resolution is passed in accordance with the
requirements of the Companies Act.
Pursuant to Section 199(1) of the Companies Act a resolution shall be a
special resolution if at a general meeting of which not less than twenty-one
clear days' notice has been given specifying the intention to propose the
resolution as a special resolution, the terms and effects of the resolution and
the reasons for it, and at which (1) members holding in the aggregate not less
than one fourth of the total votes of all members entitled to vote thereat, are
present in person or by proxy; or (2) in the case of a company limited by
guarantee, not less than one fourth of the members entitled to vote thereat are
present in person or by proxy, the resolution has been passed, on a show of
hands, by not less than three-fourths of the number of members of the company
entitled to vote on a show of hands at the meeting who are present in person or
by proxy or, where a poll has been demanded, by not less than three-fourths of
the total votes to which members present in person or by proxy are entitled.
The Board has approved, subject to shareholder approval, amending the last
sentence of Article 18 as follows:
A Special Resolution for the purposes of these Articles is a Special
Resolution as defined in the Companies Act.
B. To Amend the Articles to Permit Electronic Appointment of Proxies.
Article 39 provides that shareholder proxies must be "in writing under the
hand of the person granting such proxy." Methods of proxy solicitation have
changed a great deal in recent years. As a result, proxies now often are
solicited and appointed via telephone, facsimile, computer and other electronic
methods (Electronic Appointment). Electronic Appointment saves an investment
company time and money because the company may use less expensive and
time-consuming methods to solicit and count proxies. In addition, a company is
more likely to obtain a quorum with the initial proxy solicitation because
shareholders find it easier to respond electronically. This saves the company
the cost of subsequent solicitations.
South African corporate law is silent on the issue of whether Electronic
Appointment is permissible. However, South African courts frequently rely on
English law and there is English precedent for the proposition that a
shareholders meeting conducted using modern technology will not be invalidated
merely because such technology was not foreseen at the time the statutory
requirements for meetings were laid down.
The Board has approved, subject to shareholder approval, amending Article
39 as follows:
Members may vote in person or by proxy. An instrument appointing a
proxy need not bear a handwritten signature of the member, but may
be an instrument created by electronic or other means, including,
but not limited to, electronic mail or facsimile. A member may also,
by means of an instrument created in any manner aforesaid, authorise
a proxy appointed by that member to substitute or authorise another
person to attend, speak and vote at a meeting in that member's stead
and the exercise of such authority may be evidenced by any
instrument created in any of the ways in which the instrument
whereby a member appoints a proxy may be created. If the member is a
company or corporation, the instrument appointing the proxy may be
in the form of a resolution of the board of that company or
corporation, certified by the chairman or secretary thereof. The
holder of a power of attorney from a member may, if so authorized by
the power of attorney, attend, speak and vote at any meeting of the
Company in that member's stead, or may appoint a proxy to do so.
While these Articles confer the right to attend, speak and vote at a
meeting only upon a member, a proxy appointed by such member, such
member's duly authorized representative or a proxy authorized or
substituted by the member's proxy or duly authorized representative
as aforesaid, nothing in these Articles shall be construed as
precluding such persons from carrying out the instructions,
communicated telephonically or in any other way whatsoever, of a
beneficial owner of the shares in the Company.
8
<PAGE>
C. To Delete Provisions Applicable to the Company prior to March 31, 1959.
The last paragraph of Sub-Article 10.1 provides that the Company may
operate as a non-diversified management company within the meaning of the 1940
Act during any period before the close of business on March 31, 1959. This
provision in the Articles is no longer relevant and accordingly the Board has
approved, subject to shareholder approval, amending Sub-Article 10.1 by deleting
the last paragraph of such Article, as indicated in Exhibit C.
D. To Amend Provisions Concerning Amendments to Fundamental Investment Policies.
Sub-Article 10.2 provides that the Company cannot change from a
diversified to a non-diversified company or deviate from any fundamental
investment policy "unless authorized by a vote of a majority of its members." A
"member" essentially is a record holder, which includes nominee holders
representing the interests of numerous beneficial owners. Historically, South
African law required a majority vote of members in order to amend a fundamental
policy. This is no longer required. Accordingly, the proposed amendment to
Sub-Article 10.2 would clarify the appropriate vote under the 1940 Act that is
currently applicable to approve changes in fundamental policies.
Under the 1940 Act a fundamental investment policy may be changed upon
approval of the lesser of (1) more than 50% of the outstanding voting securities
of the Company; or (2) 67% or more of the outstanding voting securities of the
Company at a shareholders meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or by proxy. In each case
the 1940 Act measures the number of shares held by a shareholder, rather than
the number of shareholders in the Company. Further, the 1940 Act provides record
owners with one vote for each share held. Under Sub-Article 10.2, each member
would get one vote regardless of how many or how few shares they represented.
Sub-Article 10.2 would also raise practical difficulties because U.S. proxy
services would need to employ special procedures to count a vote by member.
The Board has approved, subject to shareholder approval, amending the
first paragraph of Sub-Article 10.2 as follows:
When and so long as the Company shall be registered under the
Investment Company Act, unless authorized by a vote of the lesser of
(1) more than 50% of the outstanding voting securities of the
Company; or (2) 67% or more of the outstanding voting securities of
the Company at a shareholders meeting, if the holders of more than
50% of the outstanding voting securities are present in person or by
proxy, the Company shall not:
E. To Change Certain Corporate Operating Policies and Procedures to Conform with
the 1940 Act and the Companies Act.
Several Articles refer generally to the Companies Act Number 46 of 1926
(the 1926 Act) or to specific sections of the 1926 Act. The 1926 Act has been
replaced by the Companies Act No. 61 of 1973 (the Companies Act). The references
to the 1926 Act now are incorrect. The Board has approved, subject to
shareholder approval, amending Articles which refer to the 1926 Act or specific
parts of the 1926 Act to refer generally to the Companies Act, as amended or
substituted from time to time. Such amendments are indicated in Exhibit C.
Certain other Articles stipulate procedures required by the Companies Act
or the 1940 Act. However, these Articles do not conform to the current
requirements of the Companies Act or the 1940 Act. The Board has approved,
subject to shareholder approval, amending the following Articles to conform to
the current requirements of the Companies Act and the 1940 Act.
Article 28 provides that the quorum for a general shareholders meeting of
the Company is "a majority of the shares then issued and outstanding and
entitled to vote, present in person or represented by proxy." Section 190 of the
Companies Act requires that the minimum quorum for a shareholders meeting is
three members entitled to vote present in person. A corporation which is a
member may be present by a representative. The Board has approved, subject to
shareholder approval, amending Article 28 to conform to the current Companies
Act requirement, as indicated in Exhibit C.
Sub-Article 6.2(b)(1) provides that the Board must select the independent
accountant thirty days before or after the beginning of the fiscal year.
However, the 1940 Act provides additional flexibility by allowing the Board to
select the accountant "before the annual meeting of stockholders in that year."
Sub-Article 6.2(b)(2) provides that the Board may fill a vacancy of the
independent accountant. The 1940 Act requires that this vacancy be filled
subject to vote of a majority of the disinterested directors, cast in person at
a meeting called for the purpose. The Board has approved, subject to shareholder
approval, amending Sub-Article 6.2(b) to conform to 1940 Act requirements, as
indicated in Exhibit C.
9
<PAGE>
Sub-Article 7.1 sets forth certain requirements regarding custody of the
Company's assets. These requirements reflect certain requirements of the 1940
Act, as well as certain requirements under an exemptive order issued by the
Securities and Exchange Commission (the SEC) to the Company. In 2000, the SEC
issued an amended order allowing the Company greater flexibility in using
foreign subcustodians. The Board has approved, subject to shareholder approval,
amending Sub-Article 7.1, as indicated in Exhibit C, to reflect the terms of the
2000 order and to provide for flexibility in custody arrangements to the extent
that the SEC amends the 2000 order, as indicated in Exhibit C.
Sub-Article 11.1(4) provides that an investment advisory agreement will
automatically terminate upon assignment by the investment adviser. The 1940 Act
stipulates that an investment advisory agreement must provide for its automatic
termination in the event of its assignment. The 1940 Act does not specify
assignment by the investment adviser. The Board has approved, subject to
shareholder approval, amending Sub-Article 11.1(4) to conform to 1940 Act
requirement.
Required Vote: Approval of Proposal No. 2 requires the affirmative vote of (1)
not less than three-fourths of the number of members of the company entitled to
vote on a show of hands at the meeting who are present in person or by proxy or
(2) where a poll has been demanded, not less than three-fourths of the total
votes to which members present in person or by proxy are entitled.
The Directors unanimously recommend that you vote FOR Proposal No. 2. If
shareholders pass the Special Resolution required to implement Proposal No. 2
(Special Resolution), the amendments to the Articles will become effective upon
the registration by the Company Registrar in South Africa of the Special
Resolution. If Proposal No. 2 is not approved, the Company's current Articles
will remain unchanged.
General Information About Proposals 3 and 4
The Company is subject to two types of investment policies. The first type
of investment policy is called a "fundamental" policy, which can only be changed
by a vote of shareholders. The second type of investment policy is called a
non-fundamental policy, which can be changed by a vote of a majority of the
Board of Directors. In other words, the changing of a non-fundamental investment
policy does not require a shareholder vote.
Currently, the Company is subject to a number of fundamental policies
relating to the diversification of its portfolio and its concentration of
investments in certain issuers. These existing policies are described in
Proposals 3 and 4 below. As discussed in greater detail below, to enable the
Company to more effectively respond to consolidation in the gold mining
industry, the Board of Directors has recommended that shareholders approve the
amendment or elimination of these policies. If shareholders approve all of the
proposed changes to the fundamental policies, the changes would become "new
fundamental policies" and would not be able to be changed in the future without
shareholder approval.
As described in Proposal 3, the proposed changes to the Company's existing
fundamental policies on the amount the Company may invest in the securities of a
single issuer will give the Company greater investment flexibility. However, if
Sub-Proposals 3A, 3B and 3C are approved by shareholders, the Board will adopt a
non-fundamental investment restriction requiring the Company's portfolio to
maintain a certain level of diversification. This non-fundamental investment
restriction is described at the beginning of Proposal 3. Because it is
non-fundamental, it may be changed by a vote of the Board of Directors (i.e.,
without shareholder approval).
Proposal 3: To Change the Company's Subclassification under the Investment
Company Act of 1940 from a Diversified to a Non-diversified Company and
Eliminate Fundamental Investment Restrictions Related Thereto.
(This Proposal involves separate votes on Sub-Proposals 3A, 3B and 3C.)
The Company is currently subject to a number of restrictions concerning
the amount in which it may invest in the securities of a single issuer. These
restrictions are described in the Sub-Proposals set forth below. Recent
consolidation in the gold mining industry, however, has reduced the number of
issuers in which the Company may invest. Given this reduction in issuers, the
Board believes the Company should have greater flexibility to invest a greater
percentage of its assets in more than one issuer.
Provided that shareholders approve all of the proposed changes in
Sub-Proposals 3A, 3B and 3C, the Board has approved that the Company operate
under the following non-fundamental investment restriction:
The Company shall not purchase a security if, at the time of
purchase, more than 20% of the value of its total assets would be
invested in securities of that issuer.
10
<PAGE>
If the Sub-Proposals are adopted, this non-fundamental investment
restriction could be changed only by a vote of a majority of the Company's Board
of Directors, i.e. shareholder approval is not required to change a
non-fundamental investment restriction. As a result, the Board could permit the
Company to invest a higher percentage of its assets in the securities of a
single issuer.
Sub-Proposal 3A: To Change the Company's Subclassification under the
Investment Company Act of 1940 from a Diversified to a
Non-diversified Company.
The Company currently operates as a diversified fund for purposes of the
1940 Act. Pursuant to the 1940 Act, a diversified fund may not purchase
securities of any one issuer, if as a result, more than 5% of the fund's total
assets would be invested in securities of that issuer or the fund would own or
hold more than 10% of the outstanding voting securities of that issuer, except
that up to 25% of the fund's total assets may be invested without regard to
these limitations (the 25% Exception).
Pursuant to the 1940 Act, a non-diversified fund is any fund other than a
diversified fund. The Board has approved, subject to shareholder approval,
changing the Company from a diversified to a non-diversified fund for purposes
of the 1940 Act. The proposed change would provide the Company with greater
flexibility to invest more than 5% of its assets in issuers without being
limited by the 25% Exception. Although the 1940 Act does not place any
investment limits on a non-diversified fund, the Board has approved the
non-fundamental 20% restriction set forth above which would become effective if
this proposal is approved.
Sub-Proposal 3B: To Eliminate the Fundamental Investment Restriction
Concerning the Percentage of Assets which the Company May Invest in the
Securities of any One Issuer.
The Company is currently subject to the following fundamental investment
restriction:
(9) The Percentage of its Assets which Registrant may Invest in
the Securities of any one Issuer. It is the policy of
Registrant not to purchase the securities of any issuer if
immediately after and as a result of such purchase the market
value of such securities, and all other securities of the same
issuer owned by Registrant, shall exceed 20% of the value of
Registrant's total assets, determined in such manner as may be
approved by the Board of Directors of Registrant and applied
on a consistent basis (subject to the limitations of Section
2(a)(41) of the Investment Company Act of 1940), except
securities issued or guaranteed by the Government of the
Republic of South Africa or any instrumentality thereof;
provided, however, that Registrant may not purchase the
securities of any issuer if immediately after and as a result
of such purchase the market value of such securities, and all
other securities of the same issuer owned by Registrant, shall
exceed 10% of the value of Registrant's total assets, so
determined, if either (a) such purchase will result in more
than 40% of the value of Registrant's total assets consisting
of investments in companies each of which investments exceeds
10% of the value of Registrant's total assets or (b) such 40%
limitation is already exceeded.
For the reasons discussed above, the Board has approved, subject to
shareholder approval, the elimination of the foregoing restriction.
Sub-Proposal 3C: To Eliminate the Fundamental Investment Restriction
Concerning the Percentage of Voting Securities of any one Issuer which the
Company May Acquire.
The Company is currently subject to the following fundamental investment
restriction:
(10) The Percentage of Voting Securities of any one Issuer which
Registrant May Acquire. It is the policy of Registrant not to
purchase securities of any issuer if immediately after and as
a result of such purchase Registrant shall own more than 10%
of any class of outstanding securities of such issuer, except
securities issued or guaranteed by the Government of the
Republic of South Africa or any instrumentality thereof.
For the reasons discussed above, the Board has approved, subject to
shareholder approval, the elimination of the foregoing restriction.
11
<PAGE>
Required Vote: Approval of each Sub-Proposal requires the affirmative vote of
holders of a majority of the Company's outstanding voting securities, which
under the 1940 Act means the vote of: (1) more than 50% of the outstanding
voting securities of the Company; or (2) 67% or more of the voting securities of
the Company present at the Meeting, if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy at the
Meeting, whichever is less. In addition, approval of each Sub-Proposal requires
the affirmative vote of holders of a majority of shares represented at the
Meeting.
The Directors unanimously recommend that you vote FOR Sub-Proposals 3A, 3B and
3C. If the shareholders approve the sub-proposals, they will become effective
immediately. Approval of one Sub-Proposal is not contingent on the approval of
any other Sub-Proposal. If any Sub-Proposal is not approved, that policy or
restriction will remain unchanged.
Proposal 4: To Eliminate One of the Company's Fundamental Investment
Restrictions Concerning the Concentration of its Investments and
Amend Another.
The Company currently is subject to the following two fundamental
investment restrictions relating to the concentration of its investments
(Concentration Restrictions):
(a) General. It is the policy of Registrant to invest over 50% of
the value of its total assets in the common shares or
securities convertible into common shares of companies
conducting, as the major portion of their business, gold
mining and related activities in the Republic of South Africa.
It is expected that most of such companies will have reached
the production stage. The balance of Registrant's total
assets, other than minor amounts which may be held in cash,
may (i) be invested in common shares or securities convertible
into common shares of companies engaged in other business of
varied types in the Republic of South Africa, (ii) be held in
the form of gold bullion or certificates of deposit therefor
to be purchased, directly or indirectly, with South African
rand (provided that Registrant's holdings in the form of gold
bullion or certificates of deposit therefor may not exceed 25%
of the value of Registrant's total assets) and/or (iii) be
invested in common shares or securities convertible into
common shares convertible into common shares of companies
primarily engaged outside of South Africa in extractive or
related industries or in the holding or development of real
estate (provided that Registrant's investment in such
companies may not exceed 20% of the value of Registrant's
total assets).
(b)(5) The Concentration of Investments in a Particular Industry or
Group of Industries. It is the policy of Registrant to invest
over 50% of the value of its total assets in the common shares
or securities convertible to common shares of companies
conducting, as the major portion of their business, gold
mining and related activities in the Republic of South Africa.
It is expected that most of such companies will have reached
the production stage.
Gold producers are becoming fewer, larger and more internationally
focused. This has been particularly true with respect to South African
companies. This new focus reflects the end of South Africa's economic isolation
and the desire of its gold mining companies to expand exploration and production
globally. Their implication for the Company is the need to adapt to the times
and not to adhere to a rigid percentage of investment in issuers by place of
domicile. Accordingly, the Board has approved, subject to shareholder approval,
eliminating Concentration Restriction (a) above and amending Concentration
Restriction (b)(5) as follows:
The Concentration of Investments in a Particular Industry or Group
of Industries. It is the policy of Registrant to invest at least 75%
of the value of its total assets at the time of purchase in the
common shares or securities convertible to common shares of
companies conducting, as the major portion of their business, the
mining of gold, platinum and other precious metals and minerals, and
related activities.
The 1940 Act requires that an investment company which has a policy of
concentrating in a particular industry maintain at least 25% of its total assets
in that industry. Nothing in the 1940 Act requires concentration in South
African issuers, whether they be involved in the gold mining business as
currently required under (a) and (b)(5) above, or in South African issuers
involved in the extractive industries or real estate as currently is required by
(a) above. The Board believes that eliminating Concentration Restriction (a) and
amending Concentration Restriction (b)(5) in the manner proposed will provide
the Company additional investment flexibility. At times, the price of gold and
other extractive commodities, including diamonds and platinum, fluctuate in
opposite directions.
12
<PAGE>
Adopting the amended (b)(5) will provide the Board with greater flexibility by
ceasing to require the Company to invest a specified percentage in the
securities of companies domiciled in South Africa that conduct, as a major
portion of their business, gold mining and related activities. However, as a
non-fundamental operating policy, the Company currently intends to maintain its
primary focus on investing in securities of companies which derive a major
portion of their business from the mining of gold and related activities.
Non-fundamental operating policies may be changed by a vote of a majority of the
Company's Board of Directors. No shareholder approval is required.
Required Vote: Approval of Proposal No. 4 requires the affirmative vote of a
majority of the Company's outstanding voting securities, which means the vote
of: (1) more than 50% of the outstanding voting securities of the Company; or
(2) 67% or more of the voting securities of the Company present at the Meeting,
if the holders of more than 50% of the outstanding voting securities are present
or represented by proxy at the Meeting, whichever is less. In addition, approval
of Proposal No. 4 requires the affirmative vote of holders of the majority of
shares represented at the Meeting.
The Directors unanimously recommend that you vote FOR Proposal No. 4. If the
shareholders approve Proposal No. 4, the amended fundamental concentration
restriction will become effective immediately. If Proposal No. 4 is not
approved, the Company's current fundamental concentration restriction will
remain unchanged.
Proposal 5: Ratification of the Selection of Independent Public Accountants
The Company's Board of Directors has selected Arthur Andersen LLP as the
Company's independent public accountants to audit the accounts of the Company
for the fiscal year ending November 30, 2001. The Board has directed the
submission of this selection to shareholders for ratification. Arthur Andersen
has offices in Johannesburg, South Africa and in New York, N.Y., in the United
States. Arthur Andersen has no direct or indirect interest in the Company,
except in its capacity as the Company's independent public accountants.
A representative of Arthur Andersen is expected to be present at the
meeting with the opportunity to make a statement if he or she desires to do so
and is expected to be available to respond to appropriate questions.
Required Vote: The ratification of the selection of Arthur Andersen requires the
affirmative vote of a majority of the shares represented at the meeting.
The Directors unanimously recommend that you vote FOR Proposal No. 5.
Shareholder Proposals
In order for a shareholder proposal to be included in the Proxy Statement
and Proxy for the 2002 Annual Meeting, the proposal must be received by the
Company no later than September 14, 2001.
Other Matters
The management of the Company knows of no other business which will be
presented for consideration at the Meeting, but should any other matters
requiring a vote of shareholders arise, the persons named in the enclosed proxy
will vote thereon in accordance with their best judgment.
ASA LIMITED
ROBERT J.A. IRWIN
Chairman of the Board and Treasurer
January 10, 2001
13
<PAGE>
Exhibit A
ASA LIMITED
AUDIT COMMITTEE CHARTER
I. Composition of the Audit Committee: The Audit Committee shall be comprised
of at least three directors, each of whom shall have no relationship to
the Fund that may interfere with the exercise of their independence from
management and the Fund and shall otherwise satisfy the applicable
membership requirements under the rules of the New York Stock Exchange,
Inc.
II. Purposes of the Audit Committee: The purposes of the Audit Committee are
to assist the Board of Directors:
1. in its oversight of the Fund's accounting and financial reporting
policies and practices, its internal audit controls and procedures,
and, as appropriate, the internal controls of certain service
providers;
2. in its oversight of the quality and objectivity of the Fund's
financial statements and the independent audit thereof;
3. in evaluating the independent auditors (including the independence
of the independent auditors);
4. in selecting and nominating the independent auditors to be proposed
for shareholder approval; and
5. where deemed appropriate, in replacing the independent auditors.
The function of the Audit Committee is oversight. Management for the Fund
is responsible for the preparation, presentation and integrity of the
Fund's financial statements. Management is responsible for maintaining
appropriate accounting and financial reporting principles and policies and
internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. The independent
auditors are responsible for planning and carrying out a proper audit and
reviews. The independent auditors for the Fund are ultimately accountable
to the Board of Directors and Audit Committee of the Fund. The Board of
Directors and the Audit Committee have the ultimate authority and
responsibility to evaluate, select and nominate for shareholder approval
and, where appropriate, replace the independent auditors of the Fund.
III. Meetings of the Audit Committee: The Audit Committee shall meet at least
once annually, or more frequently if circumstances dictate. The Audit
Committee shall set its agenda and the places and times of its meetings.
The Audit Committee may meet alone and outside the presence of management
personnel with any certified public accountant and auditor firm rendering
reports to the Audit Committee or the Board of Directors and with outside
legal counsel.
IV. Duties and Powers of the Audit Committee: To carry out its purposes, the
Audit Committee shall have the following duties and powers:
1. The Audit Committee shall review and discuss the audited financial
statements and other financial information with management and the
independent auditors for the Fund.
2. The Audit Committee shall review and discuss with the independent
auditors:
a. the scope of audits and audit reports;
b. the personnel, staffing, qualifications and experience of the
independent auditors;
c. the compensation of the independent auditors; and
d. the independence of the independent auditors, regarding which
the Audit Committee shall secure from the auditor the
information required by Independent Standards Board Standard
No. 1. The Audit Committee shall actively engage in a dialogue
with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the independent auditors. The Audit Committee
also shall be responsible for recommending that the Board of
Directors take appropriate action in response to the
independent auditors' report to satisfy itself of the
independent auditors' independence.
3. The Audit Committee also shall review and discuss with the
independent auditors the matters required to be discussed pursuant
to SAS 61, including the following:
A-1
<PAGE>
a. the quality, not just the acceptability under generally
accepted accounting principals, of the accounting principles
applied by the Fund in its financial reporting;
b. the level of responsibility assumed by the auditors in the
preparation of the audit;
c. the initial selection of and changes in significant accounting
policies or their application, and the effect of significant
accounting policies in controversial or emerging areas for
which there is a lack of authoritative consensus or guidance;
d. the process used by management for the Fund in formulating
particularly sensitive accounting estimates and the basis for
the auditors' conclusions regarding the reasonableness of
those estimates;
e. the auditors' responsibility for other information in
documents containing audited financial statements, any
procedures performed, and the results;
f. any disagreements with management, whether or not
satisfactorily resolved, about matters that individually or in
the aggregate could be significant to the entity's financial
statements or the auditors' report;
g. any consultations with other accountants and significant
matters that were the subject of such consultations;
h. any major issues discussed with management in connection with
the initial or recurring retention of the auditors, including
the application of accounting principles and auditing
standards; and
i. any serious difficulties relating to the performance of the
audit that the auditors encountered with management.
4. The Audit Committee shall provide a recommendation to the Board of
Directors regarding whether the audited financial statements of the
Fund should be included in the annual report to shareholders of the
Fund.
5. The Audit Committee shall prepare the report, including any
recommendation of the Audit Committee, required by the rules of the
Securities and Exchange Commission to be included in the Fund's
annual proxy statement.
6. The Audit Committee shall review this charter at least annually and
recommend any changes to the full Board of Directors; and
7. The Audit Committee shall report its activities to the full Board of
Directors on a regular basis and to make such recommendations with
respect to the above and other matters as the Audit Committee may
deem necessary or appropriate.
V. Resources and Authority of the Audit Committee: The Audit Committee shall
have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage independent auditors
for special audits, reviews and other procedures and to retain special
counsel and other experts or consultants at the expense of the Fund.
A-2
<PAGE>
Exhibit B
Audit Committee Report
ASA Limited
The Audit Committee of the Board of Directors of ASA Limited (the Company)
has reviewed the Company's audited financial statements for the fiscal year
ended November 30, 2000. In conjunction with its review, the Audit Committee has
met with the management of the Company to discuss the audited financial
statements. In addition, the Audit Committee has discussed with the Company's
independent auditors, Arthur Andersen LLP, the matters required pursuant to SAS
61 and has received the written disclosures and the letter from Arthur Andersen
required by Independence Standards Board Standard No. 1. The Audit Committee has
also discussed with Arthur Andersen the independence of Arthur Andersen.
Based on this review and discussion, the Audit Committee recommended to
the Company's Board of Directors that the audited financial statements be
included in the Company's Annual Report for the fiscal year ended November 30,
2000 for filing with the Securities and Exchange Commission.
This report has been approved by all of the of the members of the Audit
Committee (whose names are listed below), each of whom has been determined to be
independent pursuant to the New York Stock Exchange Rule 303.01.
Malcolm W. MacNaught (Chairman)
Harry M. Conger
Joseph C. Farrell
B-1
<PAGE>
Exhibit C
THE COMPANIES ACT NUMBER {46} [61] OF {1926} [1973]
(A COMPANY LIMITED BY SHARES)
- - - - - - - - -
ARTICLES OF ASSOCIATION
OF
ASA LIMITED
<PAGE>
ARTICLES OF ASSOCIATION
ASA LIMITED
INDEX
Caption Section
Preliminary 1
Certificates 8
Transfer of Shares 12
Amendments to Memorandum and Articles of Association 18
Reduction, Consolidation and Sub-Division of Shares 22
Borrowing Powers 23
General Meetings 24
Proceedings at General Meetings 27
Votes of Members 36
Directors 43
Rotation of Directors 50
Proceedings of Directors 57
Seal 66
Powers of Directors 67
Transfer Offices 69
Dividend 70
Capitalization 74
Reserve Fund 76
Accounts 78
Audit 83
Notices 89
Indemnity 98
United States Requirements 101
By-Law
Definitions, Interpretations and References One
Situation of Offices Two
Board of Directors Three
Officers Four
Capital Stock Certificates and Transfers Five
Accounts, Audit and Reports Six
Custodian Seven
Ineligibility of Certain Persons Eight
Transactions with Affiliates Nine
Investment Policy Ten
Investment Advisers and Principal Underwriters Eleven
Proxies, Voting Trusts, Circular Ownership Twelve
Reorganizations and Exchanges Thirteen
Liquidation upon Certain Contingencies Fourteen
Changes in By-Laws and Memorandum of Association Fifteen
Responsibility of Directors Sixteen
C-1
<PAGE>
P R E L I M I N A R Y
1.
In these Articles, unless the context otherwise requires, expressions
defined in the Companies Act, {1926 (as amended)} [1973 (as amended or
substituted from time to time)] shall have the meanings so defined; words
importing the singular shall include the plural and vice-versa, and words
importing persons shall include bodies corporate; the words and expressions
following shall have the following meanings, namely:-
"THE COMPANIES ACT" means the Companies Act, {1926}
[1973] {(as amended).} [(as amended
or substituted from time to time).]
"THE OFFICE" means the Registered Office for the
time being of the Company.
"THE REGISTER" means the Register of Members to be
kept pursuant to {Section 25 of} the
Companies Act[.] {1926 (as}
{amended).
"YEAR" means calendar year.
"MONTH" means calendar month.
"IN WRITING" or "WRITTEN" means and includes words printed,
autographed, represented or produced
in any mode in a visible form.
"SECRETARY" includes any person appointed to
perform the duties of Secretary
temporarily.
"SIGN" and "SIGNATURE" include lithography, printing and
names impressed with an india-rubber
or other kind of stamp.
"GAZETTE" means the Government Gazette of the
Republic of South Africa.
2.
The Regulations contained in Table "A" to the Companies Act {1926 (as
amended)} shall not apply to this company.
3.
None of the funds of the Company shall be employed in the purchase of, or
lent on the security of the shares of the Company, or of any company to which it
is subsidiary, and the Company shall not give any financial assistance for the
purpose of or connected with any purchase of shares in the Company, except as
authorized by {SECTION 86 (bis) of} the Companies Act {1926 (as amended)}.
4.
C-2
<PAGE>
The shares shall be under the control of the Company in General Meeting
which may, by a Resolution, direct that the Directors allot or otherwise dispose
of the same to such persons, on such terms and conditions and either at a
premium or otherwise, and at such times as the Directors think fit. The
Directors shall not allot any shares to, nor shall any member be entitled to
transfer any shares to, any person who is ordinarily resident in the Republic of
South Africa, nor to a company incorporated in the Republic of South Africa.
5.
As regards all allotments of shares from time to time made, the Directors
shall comply with the Companies Act. {1926 (as amended)}
6.
The Company may at any time pay a commission to any person for subscribing
or agreeing to subscribe (whether absolutely or conditionally) for any shares of
the Company, or procuring or agreeing to procure subscriptions (whether absolute
or conditional) for any shares, but so that if the commission in respect of
shares shall be paid or payable out of capital, the statutory conditions and
requirements shall be observed and complied with, and the amount or rate of
commission, whether payable out of profits or capital, or both, shall not exceed
9% (nine per centum) of the price at which the shares are issued.
7.
Save as herein otherwise provided, the Company shall be entitled to treat
the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by the Companies Act {1926 (as amended)} required, be bound to recognize
any trust, charge, encumbrance, lien or other claim to, or interest in, such
share on the part of any other person.
Notwithstanding anything provided in this Article or Articles 11, 16 and
17 the Directors may specially authorize any person including a transfer agent
(a) to record for the benefit of interested parties and to give effect thereto
on the Company's register any trust or fiduciary interest or like interest, any
ownership in common or joint ownership, or any ownership in consequence of
death, or (b) to deliver any Certificate of Shares registered in the name of two
or more persons to any person authorized to receive the same.
CERTIFICATES
8.
The Certificates of title to shares shall be issued under the authority of
the Directors in such manner, and form, as the Directors may from time to time
prescribe, and shall, if under the Seal of the Company, bear the autographic
signature of one or more Directors and of the Secretary, and, if not under the
seal of the Company, shall bear the autographic signatures of two or more
Directors and of the Secretary, and/or the Transfer Secretary, provided, that
where any such Certificate is signed by a Transfer Agent and a Registrar, the
signature of any such Director and of the Secretary and the Seal may be a
facsimile.
9.
Every member shall without payment, subject to ARTICLE 11, be entitled to
receive within two months after allotment of shares to him or lodgment of a
transfer of shares to or by him (or within such other period as the conditions
of issue shall provide) one certificate (or if the Directors so approve and upon
payment of a fee not exceeding ten cents, several certificates each for one or
more than one shares) for all the shares registered or remaining registered in
his name. Every certificate shall denote the numbers of shares to which it
relates.
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10.
If any certificate be worn out or defaced, then upon production thereof to
the Directors, they may order the same to be cancelled, and may issue a new
certificate in lieu thereof, and if any certificate be lost or destroyed, then
upon proof thereof to the satisfaction of the Directors, and on such indemnity
as the Directors deem adequate being given, and after such advertisement as the
Directors may approve, a new certificate in lieu thereof shall be given to the
person entitled to such lost or destroyed certificate. In the case of loss or
destruction, that member to whom the new certificate is given shall repay to the
Company all expenses incidental to the investigation by the Company of the
evidence of such destruction or loss, and of the indemnity. The Directors may
make a charge not exceeding 10 (ten) cents as they may from time to time think
fit for any certificate issued under this Article.
11.
The Certificate of Shares registered in the names of two or more persons
shall be delivered to the person first named on the register in respect thereof.
TRANSFER OF SHARES
12.
The instrument of transfer of any share shall be signed by the transferor,
and the transferor shall be deemed to remain the holder of such share until the
name of the transferee is entered in the Register in respect thereof[.] Transfer
of shares shall be made by the person named in the certificate representing such
shares or by his attorney lawfully constituted, and upon surrender of such
certificate properly endorsed. Transfers of shares shall only be made at the
transfer office of the Company designated for such purposes by the Directors.
13.
The instrument of transfer of any share shall be in writing in the usual
common form, or as near thereto as circumstances will permit.
14.
The Directors may decline to register any transfer or transmission of
shares to any person or company giving an address in the Republic of South
Africa or to any person who is ordinarily resident in the Republic of South
Africa or to a company incorporated in the Republic of South Africa.
15.
The transfer books and registers of members may, upon notice being given
by advertisement in the {Government} Gazette and a newspaper circulating in the
City of New York, State of New York, United States of America, be closed during
such time as the Directors think fit, not exceeding in the whole 60 (sixty) days
in each year.
16.
The Executors or Administrators of a deceased member (not being one of
several joint holders) shall be the only persons recognized by the Company as
having any title to the shares registered in the name of such member, and in
case of the death of any one or more of the joint holders of any registered
shares, the survivor shall be the only person recognized by the Company as
having any title to, or interest in, such shares.
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17.
Any person becoming entitled to shares in consequence of the death or
bankruptcy of any member, upon producing proper evidence of the grant of Probate
or Letters of Administration or such other evidence that he sustains the
character in respect of which he proposed to act under this Article, or of his
title, as the Directors think sufficient, may be registered as a member in
respect of such shares, or may, subject to the regulations as to transfer
hereinbefore contained, transfer such shares.
This Article is hereinafter referred to as "TRANSMISSION ARTICLE."
AMENDMENTS TO MEMORANDUM AND
ARTICLES Of ASSOCIATION
18.
The Company may not, except by a Special Resolution, amend its Memorandum
of Association or these Articles of Association, increase its capital by the
creation of new shares, authorize or issue any securities senior in preference
to its ordinary shares, reduce its capital or voluntarily dissolve, nor may it
reorganize or merge with or into another company except by a Special Resolution
or upon the approval of a majority in number representing 75% (seventy-five per
centum) in value of the Company's creditors or of its shareholders present at
meetings called for that purpose and the approval of the {Supreme} [High] Court
of the Republic of South Africa. A Special Resolution for the purposes of these
Articles is a {resolution adopted at a meeting duly called for the purpose on at
least 21 (twenty-one) days' notice, at which a majority of the shares entitled
to vote are present, in person or by proxy, and adopted by the vote of the
greater of (i) a majority of all the outstanding shares, or (ii) at least 75% of
the shares present in person or by proxy.} [Special Resolution as defined in the
Companies Act.]
19.
The new shares created by such a Special Resolution shall be issued upon
such terms and conditions as the Special Resolution shall direct, or if the
Special Resolution so directs, as the Directors may determine.
20.
The SPECIAL RESOLUTION may direct that the new shares, or any of them,
shall be offered in the first instance and either at par or at a premium, to all
the then holders of shares, in proportion to the amount of capital held by them,
or make other provisions as to the issue and allotment of the new shares; BUT
the SPECIAL RESOLUTION may authorize the Directors to issue and allot the new
shares on such terms and conditions as they think fit.
21.
Except so far as otherwise provided by the conditions of issue, or by
these presents, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to transfer and transmission, and otherwise.
REDUCTION, CONSOLIDATION AND
SUB-DIVISION OF SHARES
22.
The Company may from time to time by SPECIAL RESOLUTION reduce its capital
and any capital reserve fund, in any manner and with and subject to any incident
authorized and consent required by law, subdivide or consolidate its shares or
any of them, or cancel shares which have not been taken up or agreed to be taken
up by any person.
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BORROWING POWERS
23.
The Directors may from time to time (subject as hereinafter in these
Articles of Association provided) exercise all the powers of the Company to
borrow or raise money and in such manner and on such terms as they may think
fit.
GENERAL MEETINGS
24.
GENERAL MEETINGS referred to in these Articles shall be called either
"ANNUAL MEETINGS" or "EXTRAORDINARY MEETINGS". All such meetings shall be held
at any place in the United States of America as the Board of Directors shall
determine. An Annual Meeting of the Company shall be held at least once in every
calendar year, and not more than thirteen months after the holding of the last
preceding Annual Meeting.
25.
The Chairman of the Board of Directors, the Treasurer or the Directors
may, whenever he or they think fit, convene an Extraordinary Meeting and they
shall, on the requisition of one hundred members of the Company or of members of
the Company holding at the date of the deposit of the requisition not less than
one-twentieth of the issued shares of the Company, within fourteen days of the
deposit of the requisition, issue a notice to members convening an Extraordinary
Meeting of the Company for a date not less than twenty-one and not more than
thirty-five days from the date of the notice.
26.
An Annual Meeting and a meeting called for the passing of a Special
Resolution shall be called by twenty-one days' notice in writing at the least,
and a meeting of the Company, other than an Annual Meeting or a meeting for the
passing of a Special Resolution, shall be called by fourteen days' notice in
writing at the least. The notice shall be exclusive of the day on which it is
served or deemed to be served and of the day for which it is given, and shall
specify the place, the day and the hour of meeting, and, in the case of special
business, the general nature of that business, and shall be given in manner
hereinafter mentioned or in such other manner, if any, as may be prescribed by
the Company in General meeting, to such persons as are, under the regulations of
the Company, entitled to receive such notices from the Company and to the New
York Stock Exchange.
PROCEEDINGS AT GENERAL MEETINGS
27.
The business of an Annual Meeting shall be to receive and consider the
Balance Sheets and Accounts, the reports of the Directors and Auditors, the
election of Directors and the appointment of Auditors of the Company, in the
place of those retiring by rotation or otherwise, and the transaction of any
other business which, under these presents, ought to be transacted at an Annual
Meeting, and any business which is brought under consideration by the Report of
the Directors laid before such meeting. All other business transacted at an
ANNUAL MEETING and all business transacted at an EXTRAORDINARY MEETING shall be
deemed special.
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28.
{The presence of the holders of a majority of the shares then issued and
outstanding and entitled to vote, present in person or represented by proxy,
shall be requisite and}
[Three members entitled to vote, personally present, or if a member is a
body corporate, represented,] shall constitute a quorum at all general meetings,
and no business shall be transacted at any general meeting unless the requisite
quorum be present. {A company, being a member of this Company and present by a
representative duly appointed in pursuance of Section 63 of the Companies Act
1926 (as amended) or by proxy shall be deemed to be a member present for the
purposes of this Article.}
29.
The Chairman of Directors, or in his absence the Deputy Chairman (if any)
shall be entitled to take the chair at every General Meeting. If there be no
Chairman or Deputy Chairman, or, if at any meeting he shall not be present
within ten minutes after the time appointed for holding the meeting, or is
unwilling to act, the Directors may choose a Chairman, and in default of their
doing so, the members present shall choose one of the Directors to be Chairman,
and if no Director present be willing to take the Chair, shall choose one of
their number to be Chairman.
30.
If within half-an-hour from the time appointed for the meeting a quorum is
not present, the meeting, if convened upon such requisition as aforesaid, shall
be dissolved; but in any other case it shall stand adjourned to the same day in
the next week at the same time and place, or to such other day, time and place
as the Directors may by notice to the shareholders appoint.
31.
Every question submitted to a meeting shall be decided by the vote of a
majority of the shares represented at the meeting, whether in person or by
proxy.
32.
At any General Meeting, unless a poll is duly demanded in terms of
{Section 61 quat of} the Companies Act {1926 (as amended)} a declaration by the
Chairman that a resolution has been carried, or carried by a particular
majority, shall be final, and an entry to that effect in the book of proceedings
of the Company shall be conclusive evidence of the fact, without proof of the
number or proportion of the votes recorded in favor of or against such
Resolution.
33.
If a poll is demanded as aforesaid, it shall be taken in such manner and
at such time and Place as the Chairman of the meeting directs, and either at
once or after an interval or adjournment, and the result of the poll shall be
deemed to be the Resolution of the meeting at which the poll was demanded. The
demand of a poll may be withdrawn. In case of any dispute as to the admission or
rejection of a vote, the Chairman shall determine the same and such
determination made in good faith shall be final and conclusive.
34.
The Chairman of a General Meeting may, with the consent of the Meeting,
adjourn the same from time to time and from place to place, but no business
shall be transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place, and the
Chairman shall adjourn a general meeting as required by {SECTION 62 (bis) of}
the Companies Act. {1926 (as amended)}
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35.
The demand of a poll shall not prevent the continuance of a meeting for
the transaction of any business other than the question on which a poll has been
demanded. A poll demanded on a question of adjournment shall be taken at the
meeting without adjournment.
VOTES OF MEMBERS
36.
Every holder of Shares present in person or represented by proxy at a
general meeting of the Company shall be entitled to one vote for each share held
by him on a show of hands and at a poll every holder of shares present in person
or represented by proxy shall be entitled to one vote for every share held by
him.
37.
Any person entitled under the Transmission Article to transfer any share
may vote at any General Meeting in respect thereof in the same manner as if he
were the registered holder of such shares, provided that 48 hours at least
before the time of holding the meeting, or adjourned meeting, as the case may
be, at which the person proposes to vote, he shall satisfy the Directors of his
right to transfer such shares, unless the Directors shall have previously
admitted his right to vote at such meeting in respect thereof.
38.
Where there are joint registered holders of any share, any one of such
persons may vote at any meeting, either personally or by proxy, in respect of
such share as if he were solely entitled thereto; and if more than one of such
joint holders be present at any meeting, personally or by proxy, that one of the
said persons so present whose name stands first on the register in respect of
such shares shall alone be entitled to vote in respect thereof. Where there are
several executors or administrators of a deceased member in whose sole names any
shares stand, any of such Executors or Administrators may vote in respect of
such share, unless any other of such Executors or Administrators is present at
the meeting at which such a vote is tendered, and objects to the vote.
39.
{Votes may be given either personally or by proxy. The instrument of proxy
shall be in writing under the hand of the person granting such proxy or of his
duly authorized Attorney, or, if the appointer}
[Members may vote in person or by proxy. An instrument appointing a proxy
need not bear a handwritten signature of the member, but may be an instrument
created by electronic or other means, including, but not limited to, electronic
mail or facsimile. A member may also, by means of an instrument created in any
manner aforesaid, authorise a proxy appointed by that member to substitute or
authorise another person to attend, speak and vote at a meeting in that member's
stead and the exercise of such authority may be evidenced by any instrument
created in any of the ways in which the instrument whereby a member appoints a
proxy may be created. If the member] is a company or corporation, {shall be
executed or signed in such form as under the Constitution of such company or
corporation shall be binding upon it, or shall} [the instrument appointing the
proxy may] be in the form of a resolution of the board of {such} [that] company
or corporation, certified {under the hand of the Chairman or Secretary} [by the
chairman or secretary] thereof. The holder of a power of attorney from a member
may, if so authorized by the power of attorney, [attend, speak and] vote {for
and represent such member} at any meeting of the Company [in that member's
stead, or may appoint a proxy to do so. While these Articles confer the right to
attend, speak and vote at a meeting only upon a member, a proxy appointed by
such member, such member's duly authorized representative or a proxy authorized
or substituted by the member's proxy or duly authorized representative as
aforesaid, nothing in these Articles shall be construed as precluding such
persons from carrying out the instructions, communicated telephonically or in
any other way whatsoever, of a beneficial owner of the shares in the Company.
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40.
No instrument appointing a proxy shall be valid after the expiration of
eleven months from the date of its execution.
41.
A vote in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death of the principal, or revocation of the
power, or transfer of the share in respect of which the vote is given, provided
no intimation in writing of the death, revocation or transfer shall have been
received at the office or by the Chairman of the meeting before the vote is
given.
42.
Every instrument of proxy whether for a specified meeting or otherwise
shall, as nearly as circumstances will admit, be in such form as the Directors
may approve.
DIRECTORS
43.
Subject to the provisions of the Companies Act, unless otherwise
determined by the Company by special resolution at a general meeting, the number
of Directors shall not be less than five (5) nor more than fifteen (15). At
least a majority of the Directors of the Company shall at all times be citizens
and residents of the United States of America.
44.
A Director shall not, until otherwise determined by a General Meeting, be
required to hold any shares in the capital of the Company as a qualification for
office.
45.
Unless otherwise determined by the Company in General Meeting, the
Directors shall be paid out of the funds of the Company by way of remuneration
for their services at the rate determined by them from time to time.
46.
The Directors shall be paid all their traveling and other expenses
properly and necessarily expended by them in and about the business of the
Company, including their attendance at meetings of the Board of Directors of the
Company wherever held, and if any Director shall be required to perform extra
services, or to go or reside abroad, or shall be otherwise specially occupied
about the Company's business, he shall be entitled to receive a remuneration to
be fixed by the Directors, and such remuneration may be either in addition to or
in substitution for his remuneration provided for in the last preceding Article.
47.
The continuing Directors may act notwithstanding any vacancy in their
body; but so that if the number falls below the minimum above fixed the
Directors shall not, except for the purpose of filling up vacancies, set so long
as the number is below the minimum.
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48.
The office of a Director shall ipso facto be vacated:
(a) If he becomes insolvent or suspends payment or compounds with
his creditors;
(b) If he becomes lunatic or of unsound mind;
(c) If he ceases to hold the number of shares, if any, required to
qualify him for office, or fails to acquire the same within
two months after his election or appointment;
(d) if he absents himself from the meetings of the Directors for a
period of six months without special leave of absence from the
Board, and the Board resolves that his office be vacated;
(e) if by notice in writing to the Company he resigns office;
(f) if he be removed from office by an Ordinary Resolution of the
Company;
(g) If he becomes prohibited from being a Director by reason of
any Order made under {SECTION 185 ter of} the Companies
Act[.]{, 1926 (as amended)}
49.
No Director shall be disqualified by his office from holding an office or
place of profit under the Company, or under any company in which this Company
shall be a shareholder or otherwise interested, or from contracting with the
Company either as vendor, purchaser or otherwise, nor shall any such contract,
or arrangement entered into by or on behalf of the Company in which any Director
shall be in any way interested be avoided, nor shall any Director be liable to
account to the Company for any profit arising from any such office or place of
profit, or realized by any such contract or arrangement, by reason only of such
Director holding that office, or the fiduciary relation thereby established, but
it is declared that the nature of his interest must be disclosed by him at the
meeting of the Directors at which the contract or arrangement is first taken
into consideration, if his interest then exists, or in any other case at the
first meeting of the Directors after the acquisition of his interest. If a
Director becomes interested in a contract or arrangement after it is made or
entered into, the disclosure of his interest shall be made at the first meeting
of the Directors after he becomes so interested. No Director shall, as a
Director, vote in respect of any contract or arrangement in which he is so
interested as aforesaid, nor shall he be counted in determining whether a quorum
is present for the purpose of voting on such contract or arrangement, and if he
does so vote, his vote shall not be counted but this prohibition shall not apply
to any contract by or on behalf of the Company to give to the Directors, or any
of them, any security for advances, or by way of indemnity, or to contract or
deal with a corporation of which the Directors of this Company or any of them
may be directors or members or employees. No Director shall be appointed to any
office or place of profit in this Company or to any office or place of profit or
a Director under a company subsidiary to this Company, unless the appointment
and the remuneration be determined by a disinterested quorum of Directors.
A General Notice that a Director is a member of any specified firm or
company, and is to be regarded as interested in all transactions with that firm
or company, shall be a sufficient disclosure under this clause as regards such
Director and the said transactions, and after such general notice, it shall not
be necessary for such Director to give a special notice relating to any
particular transaction with that firm or Company. Nothing herein contained shall
be taken or construed to prevent or debar any Director as a shareholder from
taking part in and voting upon all questions submitted to a shareholders'
meeting, whether such Director shall be personally interested or concerned in
such question or not, subject to the provisions of {Section 70 quin 4 of} the
Companies Act. {1926 (as amended)}
The foregoing provisions of this Article are subject to the restrictions
imposed by Article 101.
ELECTION OF DIRECTORS
50.
At each Annual Meeting of shareholders all of the Directors shall retire
and their successors shall be elected by the shareholders. A retiring Director
shall act as a Director throughout the meeting at which he retires.
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51.
Retiring Directors shall be eligible for re-election. The power to elect
Directors at meetings other than Annual Meetings shall be exercisable only by
Special Resolution.
52.
Subject to the preceding clause, the Company in general meeting at which
any Directors retire in manner aforesaid, may fill up the vacated offices by
electing a like number of persons to be Directors, and may fill up any other
vacancies.
53.
If at any general meeting at which an election of Directors ought to take
place, the place of any retiring Director is not filled up he shall, if willing,
continue in office until the Annual Meeting in the next year, and so on from
year to year until his place is filled up, unless it shall be determined at such
meeting on due notice, to reduce the number of Directors in office.
54.
[Pursuant to a special resolution adopted at the Annual Meeting of
Shareholders held February 8, 1991, Article 54 has been deleted in its entirety]
55.
The Company may by Ordinary Resolution remove any Director before the
expiration of his period of office and may by Ordinary Resolution appoint
another qualified person in his stead.
56.
The Directors shall comply with the provisions of {SECTION 70(l) of} the
Companies Act {1926 (as amended)} in regard to keeping a register of Directors
or Managers, and notify changes to the Registrar of Companies.
PROCEEDINGS OF DIRECTORS
57.
The Directors may meet together at any place, either within the United
States of America or elsewhere, for the dispatch of business, adjourn and
otherwise regulate their meetings as they think fit, and may determine the
quorum necessary for the transaction of business, provided, however, that in no
event shall the quorum be less than one-third of the Directors in office or less
than five Directors, and no business shall be transacted at any meeting unless
Directors who are citizens and residents of the United States are present in a
number constituting at least 50% of the quorum.
58.
A Director may at any time, and the Secretary upon the requisition of a
Director shall, convene a meeting of the Directors. A Director shall be entitled
to reasonable notice of all meetings of Directors. The Directors shall convene
an Extraordinary Meeting of the Company as required by {Section 61 of} the
Companies Act.{, 1926 (as amended)}
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59.
A Director shall not have the power to appoint an alternate to act in his
stead.
60.
Questions arising at any meeting shall be decided by a majority of votes,
and in case of an equality of votes, the Chairman shall have a second or casting
vote.
61.
If at any meeting the Chairman of the Board is not present within
half-an-hour of the time appointed for holding the same, the Directors present
shall choose some one of their number to be Chairman of such meeting.
62.
A meeting of the Directors at which a quorum is present shall be competent
to exercise all or any of the authorities, powers and discretions by or under
the Articles of the Company for the time being vested in or exercisable by the
Directors generally.
63.
All acts done at any meeting of the Directors, or by any person acting as
a Director shall, notwithstanding that it shall afterwards be discovered that
there was some defect in the appointment of such Directors or persons acting as
aforesaid, or that they or any of them were disqualified, be as valid as if
every such person had been duly appointed and was qualified to be a Director.
64.
A Resolution in writing signed by all the Directors shall be as valid and
effectual as if it had been passed at a meeting of the Directors duly called and
constituted.
65.
A Director may be employed by or hold any office of profit under the
Company in conjunction with the office of Director other than that of Auditor of
the Company, and on such terms as to remuneration and otherwise {is} [as] a
disinterested quorum of Directors may arrange.
SEAL
66.
The Company may be provided with a Common Seal on which its name shall be
engraved in legible characters, and the Company may from time to time exercise
the powers given by the Companies Act {1926 (as amended)} with respect to
official seals in foreign countries, and such powers shall be vested in the
Directors. The Common Seal of the Company shall not be affixed to any instrument
except by the authority of a Resolution of the Directors and in the presence of
at least one Director and of the Secretary, or such other person as the
Directors may appoint for the purpose, and that Director and the Secretary or
other person as aforesaid, shall sign every instrument to which the Seal of the
Company is so affixed in their presence. Every instrument to which the Seal is
so affixed and which is so signed, shall be binding on the Company.
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POWERS OF DIRECTORS
67.
The management of the business of the Company shall be vested in the
Directors, and the Directors, in addition to the powers and authorities by these
presents expressly conferred upon them may, subject to the second proviso
hereinafter mentioned, exercise all such powers and do all such acts and things
as may be exercised or done by the Company, and are not hereby or by the
Companies Act {1926 (as amended)} directed or required to be exercised or done
by the Company in general meeting, but subject, nevertheless, to the provisions
of the Companies Act {1926 (as amended)} and of these presents; and provided
further that although the Directors shall have power to enter into a provisional
contract for the sale or abandonment of all, or the major portion of the
property or assets of the Company or the absolute alienation of the whole or the
major portion of the movable and immovable property of the Company and the
rights belonging thereto or connected therewith, such provisional contract shall
only become binding on the Company in the event of the same being ratified and
confirmed by a Resolution passed by a majority of the votes of the Members
present in person or by proxy at an Extraordinary Meeting convened for that
purpose. All the provisions of these presents as to general meetings shall apply
mutatis mutandis to meetings convened under this Article.
67 BIS.
(a) The Directors may delegate any of their powers to a committee
or committees consisting of such members of their body as they
think fit. Any committee so formed shall, in the exercise of
the powers so delegated, conform to any rules issued by the
Directors from time to time. At least a majority of the
members of each such committee shall at all times be citizens
and residents of the United States of America.
(b) Any Director who serves on any {-}committee may be paid such
extra remuneration, in addition to any other remuneration to
which he may be entitled as a Director, as the Directors may
determine.
68.
The Directors may take all steps which may be necessary or expedient in
order to enable the shares of the Company to be introduced into and dealt in
{in} any country, dominion, colony or state, and to procure the same to be
listed on or recognized by and specially quoted upon any Stock Exchange in any
country, and may accept responsibility for and pay and discharge all taxes,
duties, fees, expenses or other sums which may be payable in relation to any of
the matters aforesaid, and may subscribe and comply with the laws and
regulations of any such country and the rules and regulations of any such
exchange.
TRANSFER OFFICES
69.
Without prejudice to the general powers conferred by these presents, it is
hereby expressly declared that the Directors shall be entrusted with the power
to open transfer offices of the Company and to cause a register of the members
of the Company to be kept in New York and elsewhere, and to close the same at
discretion, and to appoint and remove agents to represent the Company for the
issue, sub-division and transmission of shares, subject to the provisions of
these presents, and for such other purposes of the Directors may (subject to
these Articles) determine.
DIVIDEND
70.
The Directors may declare dividends to be paid to the members in
proportion to the number of their shares.
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71.
{No dividend shall be payable except out of the profits of the Company,
and no dividend shall carry interest as against the Company. Any dividend
remaining unclaimed for a space of 12 (twelve) years from the declaration
thereof may be forfeited by Resolution of the Directors for the benefit of the
Company. The Directors may at any time annul such forfeiture upon such
conditions (if any) as they think fit. All unclaimed dividends may be invested
or otherwise made use of by the Directors for the benefit of the Company.}
72.
In case several persons are registered as the joint holders of any share,
any one of such persons may give effectual receipts for all dividends and
payments on account of dividends in respect of such shares. Each dividend may be
paid by check or otherwise, as the Directors may from time to time determine and
may be sent by post to the last registered address of the member entitled
thereto or any other address requested by him, or in the case of joint
registered holders, to that one of them first named in the register in respect
of such joint holding.
73.
The Directors declaring a dividend may resolve that such dividend be paid
wholly or in part by the distribution of specific assets, and in particular, of
{paid-up} shares of the Company, or paid-up shares of any other company, or {in
any or more of such ways} [any combination thereof].
CAPITALIZATION
74.
Any general meeting may resolve that any moneys, investments or other
assets forming part of the undivided profits of the Company standing to the
credit of the Reserve Fund, or any capital reserve fund, or in the hands of the
Company and available for dividend (or representing premiums received on the
issue of shares and standing to the credit of the share premium account) be
capitalized and distributed amongst such of the shareholders as would be
entitled to receive the same if distributed by way of dividend.
75.
For the purpose of giving effect to any resolution under the three last
preceding Articles, the Directors may settle any difficulty which may arise in
regard to the distribution as they think expedient, and in particular, may issue
fractional certificates, and may fix the value for distribution of any specific
assets, and may determine that cash payments shall be made to any members upon
the footing of the value so fixed, or that fractions of less value than one Rand
may be disregarded in order to adjust the rights of all parties, and may vest
any such cash or specific assets in trustees upon such trusts for the persons
entitled to the dividend or capitalized fund as may seem expedient to the
Directors. Where requisite a proper contract shall be delivered to the Registrar
for registration in accordance with {Section 85 of} the Companies Act {1926 (as
amended)} and the Directors may appoint any person to sign such contract on
behalf of the persons entitled to the dividend or capitalized fund, and such
appointment shall be effective.
RESERVE FUND
76.
The Directors may, before declaring any dividend, set aside out of the
amount available for dividend, such sum as they think proper as a Reserve Fund
or an addition thereto. The Directors may employ the Reserve Fund in the
business of the Company.
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77.
The Reserve Fund shall at the discretion of the Directors be applicable
for the equalization of dividends, or for making provision for exceptional
losses, expenses or contingencies, or the extension or development of the
Company's business, or for writing down the value of any of the assets of the
Company, or for repairing, improving and maintaining any buildings, plant,
machinery or works connected with the business of the Company, or to cover the
loss in wear and tear or other depreciation in value of any property of the
Company, or for any of the objects of the Company as defined by the Company's
Memorandum of Association, or for any other purpose to which the profits of the
Company may at any time be properly applied, and the Directors may at any time
divide among the members by way of bonus or special dividends any part of the
Reserve Fund which they in their discretion may determine not to be required for
the purposes aforesaid.
ACCOUNTS
78.
The Directors shall cause true accounts to be kept of the sums of money
received and expended by the Company, and the matters in respect of which such
receipts and expenditure takes place, and of the assets, credits and liabilities
of the Company. The books of account shall be kept at the office of the Company,
or at such place or places as the Directors think fit.
79.
The Directors shall from time to time determine whether and to what extent
and at what times and places, and under what conditions or regulations, the
accounts and books of the Company, or any of them, shall be open to the
inspection of members, and no member (not being a Director) shall have any right
of inspecting any account or book or document of the Company except as conferred
by the Companies Act {1926 (as amended)} or authorized by the Directors.
80.
At the Annual Meeting to be held in every year, the Directors shall lay
before the Company a Profit and Loss Account and a Balance Sheet, containing a
summary of the property and liabilities of the Company, made up to a date not
more than six months before the meeting.
81.
Every such Profit and Loss Account and Balance Sheet shall be accompanied
by a Report of the Directors as to the state and condition of the Company; and
the Profit and Loss Account, Report and Balance Sheet shall be signed by two
Directors and countersigned by the Secretary.
82.
A copy of every such Profit and Loss Account, Balance Sheet and Report
shall be sent at least 21 (twenty-one) days previously to the meeting to each of
the registered holders of shares whose address is given in the Register of
Members.
AUDIT
83.
Once at least in every year the Accounts of the Company shall be examined,
and the correctness of the Profit and Loss Account and Balance Sheet ascertained
by one or more Auditor or Auditors.
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84.
The duly appointed Auditors of the Company shall, subject to the
provisions of the Companies Act {1926 (as amended)} hold office until another
appointment or other appointments to the office shall be made at the Annual
Meeting of the Company, and the provisions of {SECTION 98 of} the Companies Act
{1926 (as amended)} shall apply to and be complied with in connection with any
appointment proposed to be made, or made, of an Auditor or Auditors of the
Company. The remuneration of the Auditor or Auditors shall be fixed by the
Company at the Annual Meeting.
85.
An Auditor may not be a member of the Company. No Director, Manager,
Secretary, or other officer of the Company shall be eligible for the post of
Auditor during his continuance in office.
86.
The appointment, powers, rights, remunerations and duties of the Auditors
shall be regulated by the provisions of the Companies Act. {1926} Any casual
vacancy occurring in the office of an Auditor may be filled up by the Directors,
and any person so appointed shall, subject to the provisions of {Section 98 of}
the Companies Act {1926 (as amended)}[,] continue in office until the Annual
Meeting next after his appointment but while any such vacancy continues the
surviving and continuing Auditor or Auditors (if any) may continue to act.
87.
The Auditors shall be supplied with copies of the Balance Sheet and Profit
and Loss Account to be laid before the Company in general meeting. The Auditors
shall make a report to the members upon the Balance Sheet and Profit and Loss
Account in terms of the Companies Act {1926 (as amended)} and such report shall
be read to the members at such meeting. The Auditors shall at all reasonable
times have access to the books and accounts of the Company, and they may, in
relation thereto, examine the Directors or other officers of the Company.
88.
Every account of the Directors, when audited and approved by a general
meeting shall be conclusive, except as regards any error discovered therein
within three months next after the approval thereof, subject to any requirements
of the Companies Act {1926 (as amended)} or Section 17(h) of the Investment
Company Act of 1940 of the United States of America.
NOTICES
89.
A notice shall be given or served by the Company upon any member either
personally or by sending it through the post in a prepaid letter, envelope or
wrapper addressed to such member at his registered address.
90.
Each holder of registered shares shall notify in writing to the Company an
address, which address shall be his registered address within the meaning of the
last preceding Article.
91.
All notices may, with respect to any registered shares to which persons
are jointly entitled, be given to whichever of such persons is named first on
the register and notice so given shall be sufficient notice to all the holders
of such shares.
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92.
Any notice sent by post shall be deemed to have been served on the day on
which the letter, envelope or wrapper containing the same is posted, and in
proving such service it shall be sufficient to prove that the letter, envelope
or wrapper containing the notice was properly addressed and put in the Post
Office.
93.
Every person who by operation of law, transfer or other means whatsoever
shall become entitled to any shares, shall be bound by every notice in respect
of such shares which, previously to his name and address being entered in the
Register, shall have been given to the person from whom he derives his title to
such shares.
94.
Any notice or document delivered or sent by post to, or left at the
registered address of any member in pursuance of these presents, shall,
notwithstanding that such member was then deceased, and whether or not the
Company have notice of his decease, be deemed to have been duly served in
respect of any registered shares, whether held solely or jointly with other
persons by such member until some other person be registered in his stead, as
the Joint holder thereof, and such service shall, for all purposes or these
presents, be deemed a sufficient service of such notice or document on his or
her heirs, executors or administrators, and all persons (if any) jointly
interested with him or her in any such shares.
95.
Where a given number of days notice, or notice extending over any other
period is required to be given, the day of service shall not, except if it be
otherwise provided, be counted in such number of days or other period.
96.
The signature to any notice given by the Company may be written or
printed.
97.
Any notice required to be given by the Company to the members, or any of
them, and not expressly provided for by these presents, shall be sufficiently
given if given by advertisement. Any notice required to be, or which may be
given by advertisement shall, subject to the provisions of the Companies Act
{1926 (as amended)} [,] be advertised in a leading New York newspaper and in a
newspaper circulating in the town or district where the office of the Company is
situated. Any notice given by advertisement shall be deemed to have been served
on the first day when the newspaper containing such advertisement shall be
published.
INDEMNITY
98.
Every Director, Manager or Officer of the Company, or any person, whether
an Officer of the Company or not, employed by the Company as Auditor, shall be
indemnified out of the funds of the Company against all liability incurred by
him as such Director, Manager, Officer or Auditor, in defending any proceedings,
whether civil or criminal, or in which judgment is given in his favor, or in
which he is acquitted, {or in connection with any application {under Section
217} of the Companies Act 1926 (as amended)} subject to any requirements of the
Companies Act {1926 (as amended)} or Section 17(h) of the Investment Company Act
of 1940 of the United States of America.
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99.
Subject to any requirements of the Companies Act {1926 (as amended)} or
Section 17(h) of the Investment Company Act of 1940 of the United States of
America, no Director, Manager, Secretary or other officer or servant of the
Company shall be liable for the acts, receipts, neglects or defaults of any
other Director or officer or servant, or for joining in any receipt or other act
for conformity, or for loss or expense happening to the Company through the
insufficiency or deficiency of any security in or upon which any of the moneys
of the Company shall be invested, or for any loss or damage arising from the
bankruptcy, insolvency or tortious acts of any person with whom any moneys,
securities or effects shall be deposited, or for any loss or damage occasioned
by any error of judgment or oversight an his part, or for any other loss, damage
or misfortune whatever which shall happen in the execution of the duties of his
office, or in relation thereto, unless the same happen through his own
negligence or dishonesty.
100.
If the Company is a Holding Company as defined in the {Section 90 (nov)
of} Companies Act {1926 (as amended)}, the Directors' Report attached to each
Annual Balance Sheet issued by the Company pursuant to the Statutes shall
disclose full details of all Special Resolutions and of Resolutions passed at
Extraordinary Meetings of the Company's subsidiary companies since the date of
the Directors' Report attached to the previous annual Balance Sheet of the
Company.
UNITED STATES REQUIREMENTS
101.
Notwithstanding anything elsewhere provided the following Articles shall
be deemed to apply and shall be given effect to, whether or not inconsistent
with the provisions of any other Articles; and the Articles of the Company and
the provisions of the Memorandum of Association of the Company shall be
enforceable at the instance of a member and/or the United States Securities and
Exchange Commission to the extent and for the purposes determined by agreement
between the Board of Directors of the Company and the said Commission from time
to time; and the Board of Directors are hereby empowered especially to agree to
such conditions and to enter into such undertakings and contracts with the said
Commission as it may require to secure registration of the Company under Section
7(d) of the Investment Company Act of 1940 of the United States of America and
to comply with the requirements of the said Act and any rules, regulations or
orders of the said Commission, and in particular to consent to the jurisdiction
of the said Commission or any relevant or appropriate Courts of Law in the
United States of America on all matters required by the said Commission.
For the purposes hereof the By-Laws shall be deemed to be Articles of
Association of the Company or sub-articles thereof and shall be construed
accordingly and given effect to as such.
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BY-LAW ONE: DEFINITIONS, INTERPRETATIONS AND REFERENCES.
Article 1.1 Definitions Incorporated by Reference
Wherever used in the Memorandum of Association of the Company or in these
By-Laws, the following terms, which are defined in the Investment Company Act of
1940 of the United States of America, shall have the meanings assigned to them
by said Act except as otherwise provided in Article 1.2 hereof:
Advisory board
Affiliated company
Affiliated person
Assignment
Bank
Broker
Closed-end company
Company (other than "the Company")
Control
Convicted
Dealer
Director
Diversified company
Exchange
Interstate commerce
Investment adviser
Investment banker
Investment company
Issuer
Lend
Borrow
Majority-owned subsidiary
Management company
Means or instrumentalities of Interstate Commerce
National securities exchange
Non-diversified company
Open-end company
Periodic payment plan
Person
Principal underwriter
Promoter
Prospectus
Redeemable security
Reorganization
Sale
Sell
Sales load
Security
Short term paper
State
Underwriter
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Unit investment trust
Value
Vote of a majority of the outstanding voting
Securities
Voting security
Wholly-owned subsidiary.
Article 1.2 Other Definitions
(a) All references in these By-Laws to the "Companies Act" shall
mean the Companies Act[,] {1926} [1973] (as amended [or
substituted from time to time]) of the Republic of South
Africa.
(b) The term "Investment Company Act," as used in these By-Laws
shall mean the Investment Company Act of 1940 of the United
States of America and any amendments thereof that may
hereafter be adopted.
(c) The term "Commission," as used in these By-Laws, shall mean
the Securities and Exchange Commission of the United States of
America or any official or agency of the United States of
America succeeding to the functions thereof.
(d) The term "governmental body having jurisdiction over the
Company," as used in the Memorandum of Association of the
Company, shall include the Commission.
(e) The term "Government securities," as used in these By-Laws
shall mean securities issued or guaranteed as to principal or
interest by the United States of America, the Republic of
South Africa, or by a person controlled or supervised by and
acting as an instrumentality of the Government of the United
States of America, or the Government of the Republic of South
Africa pursuant to authority granted by the Congress of the
United States of America or by the Parliament of the Republic
of South Africa, as the case may be, or any certificate of
deposit of the foregoing.
(f) The term "Insurance company," as used in these By-Laws, shall
mean a company which is organized as an insurance company,
those primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies, and which is subject to the supervision
of the Insurance Commissioner or a similar official or agency
of a nation, state or province; or any receiver or similar
official or any liquidating agent for such a company, in his
capacity as such.
(g) The term "Investment adviser," as used in the Memorandum of
Association of the Company and Article 8.1 of these By-Laws
shall include an investment adviser as defined in Section
202(11) of the Investment Advisers Act of 1940 of the United
States of America.
(h) The term "established securities exchange" as used in these
By-Laws shall mean [a national securities exchange as defined
in section 2(a)(26) of the Investment Company Act, the
Johannesburg Stock Exchange, the London Stock Exchange, the
Tokyo Stock Exchange, the Toronto Stock Exchange, the Stock
Exchange of Melbourne, Ltd., and the Effektenborsenverein
Zurich Exchange (collectively the "Established Exchanges").]
{any national securities exchange and The Johannesburg Stock
Exchange and the London Stock Exchange.}
(i) The term "banking institution," as used in Article 3.1 and
Article 8.1 of these By-Laws shall mean a bank and any
institution wherever organized performing functions similar to
those performed by a bank.
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Article 1.3 Reference to Investment Company Act
Any question of interpretation of any term or provision of the Company's
Memorandum of Association or of these By-laws having a counterpart in or
otherwise derived from a term or provision of the Investment Company Act shall
be resolved by reference to interpretations, if any, of the corresponding term
or provision of the Investment Company Act by the courts of the United States of
America or, in the absence of any controlling decision of any such court, by
rules, regulations, orders or interpretations of the Commission validly issued
pursuant to said Act.
Article 1.4 Reference to Commission Rules
To the extent that the express provisions of the Memorandum of Association
of the Company do not require the contrary, the activities and relations of the
Company and of its officers, directors and security holders as such, the
provisions of these By-Laws and the application hereof and of the Memorandum of
Association shall, when and so long as the Company shall be registered under the
Investment Company Act, be governed by and subject to such rules, regulations
and orders as the Commission shall, in the valid exercise of its authority under
said Act, make, issue, amend, or rescind as necessary or appropriate to the
exercise of the powers conferred upon the Commission by said Act and as shall be
applicable to the Company or to any of its officers, directors or security
holders as such or to investment companies of the closed-end management type
organized under the laws of the United States of America or of any State,
territory or possession thereof and registered under said Act, including (but
not limited to) rules, regulations and orders furnishing conditional or
unconditional exemptions from any provision of said Act or of any rule or
regulation thereunder, defining accounting, technical and trade terms used in
said Act, prescribing the form or forms in which information required in
registration statements, applications and reports to the Commission shall be set
forth, or authorizing the filing of any information or documents required to be
filed with the Commission by the incorporation by reference of information or
documents theretofore or concurrently filed with said Commission. (Investment
Company Act, S.6(c) S.38(a) and S.38(b).)
Article 1.5 Protection of Action in Reliance on Commission Rules
Irrespective of any provision of these By-Laws, no director, officer or
other employee of the Company shall be liable to the Company or to any holder of
its securities, for any act done or omitted in good faith in conformity with any
rule, {regulations} [regulation] or order of the Commission, notwithstanding
that such rule, {regulations} [regulation], or order may, after such act or
omission, be amended or rescinded or be determined by judicial or other
authority to be invalid for any reason. The aforegoing is subject, however, to
the requirements of {Section 70 sext of} the {South African} Companies Act. {of
1926}(Investment Company Act, S.38(c).)
BY-LAW TWO: SITUATION OF OFFICES
Article 2.1 Situation of Offices
(a) The head office of the Company shall be in Johannesburg, the
Republic of South Africa, and the registered office shall as
required by law be situated in the Republic of South Africa.
(b) The Company, in addition to its head office, may establish and
maintain such offices and places of business within the
Republic of South Africa and agencies within or without the
said Republic as the Board of Directors may, from time to
time, determine.
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BY-LAW THREE: BOARD OF DIRECTORS
Article 3.1 Number and Qualifications of Directors
Advisory Board
(a) The Board of Directors of the Company shall consist of not
less than five nor more than fifteen Directors and the total
number of Directors to hold office at any time shall be fixed
from time to time by the Board of Directors. Not less than a
majority of the Directors in office at any time must be
citizens and residents of the United States of America. When
and so long as the Company shall be registered under the
Investment Company Act, not more than sixty percent (60%) of
the members of the Board of Directors shall be persons who are
Investment Advisors of, affiliated persons of an Investment
Advisor, or Officers or employees, of the Company, nor shall a
majority of the Board of Directors consist of Persons who are
officers or Directors of any one banking institution. If the
Company shall at any time have an advisory board, such board,
as a distinct entity, shall be subject to the same
restrictions as to its membership as are imposed upon the
Board of Directors by this paragraph (a). (Investment Company
Act, S.10(a), S.10(c) and S.10(g).)
(b) If by reason of the death, disqualification or bona fide
resignation of any Director or Directors, the requirements of
paragraph (a) of this Article 3.1 shall not be met, the
operation of such requirements shall be suspended for a period
of 30 (thirty) days if the vacancy or vacancies may be filled
by action of the Board of Directors, and for a period of 60
(sixty) days if a vote of Shareholders is required to fill the
vacancy or vacancies, or for such longer period as the
Commission may prescribe, by rules and regulations upon its
own motion or by order upon application, as not inconsistent
with the protection of investors. (Investment Company Act,
S.10(e).)
Article 3.2 Power to Allot and Sell Stock
When and so long as the Company shall be registered under the Investment
Company Act, it shall not issue any warrant or right to subscribe to or purchase
a security of which the Company is the issuer, except in the form of warrants or
rights to subscribe expiring not later than 120 (one hundred and twenty) days
after their issuance and issued exclusively and ratably to a class or classes of
the Company's security holders; except that any warrant may be issued in
exchange for outstanding warrants in connection with a plan of reorganization.
(Investment Company Act, S.18(d).)
Article 3.3 Power to Declare Dividends
(a) In the event that the Company shall, at any time while it is
registered under the Investment Company Act, pay any dividend,
or make any distribution in the nature of a dividend payment,
wholly or partly from any source other than
(1) the Company's accumulated undistributed net income,
determined in accordance with good accounting practice
and not including profits or losses realized upon the
sale of securities or other properties, or
(2) the Company's net income so determined for the current
or preceding financial year, {(}such payment shall be
accompanied by a written statement which adequately
discloses the source or sources of such payment, such
statement to be in such form as the Commission may
prescribe by rules and regulations in the public
interest and for the protection of investors.
(Investment Company Act, S.19.){)}
Article 3.4 Power to Borrow and Hypothecate
(a) When authorized by resolution of the Board of Directors, the
Company may borrow money upon the credit of the Company, may
issue bills of exchange, promissory notes or other instruments
as evidence of the indebtedness contracted, and may mortgage,
hypothecate, charge or secure any such indebtedness, provided,
that when and so long as the Company shall be registered under
the Investment Company Act, it shall not borrow any money
except as follows:
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(1) The Company may borrow money of any currency, in any
amount and on any terms that the Board of Directors may
deem advisable, provided that no such borrowing shall
(a) result in the Company's total indebtedness for
borrowed money immediately after such borrowing having
an asset coverage of less than 300 per centum
(securities listed on The Johannesburg Stock Exchange to
be valued for this purpose at their then current market
value on such exchange), or (b) be secured by the
pledge, mortgage or hypothecation of any of the
Company's assets.
(2) The Board of Directors by resolution may delegate to any
of its members or to any of the executive officers of
the Company the powers described in paragraph (a) of
this Article 3.4 either with respect to a particular
transaction or in general.
Article 3.5 Time, Place and Notice of Meeting
(a) Immediately after the Annual Meeting of Shareholders in each
year there shall be held a meeting of such of the Directors as
are then present (provided they shall constitute a quorum)
without further notice, for the election and/or appointment of
officers of the Company, and the transaction of such other
business as may come before {then.} [them.]
{(b) Regular meetings of the Board of}
[(b) The] Directors may {be held} [meet together] at {such} [any]
place[,] within the United States of America {or the Republic
of South Africa}[, South Africa or any other jurisdiction in
the world] at such time and upon notice, if any, as the Board
of Directors may by resolution, from time to time, determine.
(c) Any meeting of the Board of Directors convened otherwise than
in conformity with the foregoing provisions of this Article
3.5 shall be a Special Meeting.
(d) Special Meetings of the Board may be called at any time by the
Chairman or the Deputy Chairman or any two Directors and
notice specifying the place, day and hour of each such meeting
shall be served upon each of the Directors or left at his
usual residence or place of business, or shall be mailed,
postage prepaid, or sent by telegram or cable, addressed to
each of the Directors at his address as it appears on the
books of the Company, at least 2 (two) days prior to the date
fixed for such meeting. If the address of any Director does
not appear in the books of the Company then such notice shall
be mailed to such Director at such address as the person
sending the notice may consider to be the most likely to
result in such notice promptly reaching such Director. Any
Special meeting so called may be held at the head office of
the Company or any other place, within or without the Republic
of South Africa, which shall have been approved by resolution
of the Directors.
(e) Special Meetings of the Board of Directors may be held at any
time and place and for any purpose without notice when all of
the Directors are present or when all Directors not present
shall have, in writing, waived notice of the holding of such
meeting. All or any of the Directors may waive notice of any
meeting either before or after the meeting is held.
Article 3.6 Resignations, Vacancies, Additional Directors
Any Director may at any meeting of the Directors tender his resignation
and the remaining Directors may at such meeting accept the same and forthwith
fill the vacancy thereby created. In case of a vacancy occurring in the Board of
Directors between Annual Meetings of Shareholders called for the purpose of
electing a Director or Directors, as a result of death, resignation,
disqualification, an increase in the total number of Directors holding office at
any time or other cause, the Directors then in office by the affirmative vote of
a majority of such said remaining Directors shall have power to fill such
vacancy, provided that immediately after filling such vacancy at least
two-thirds of the Directors then holding office shall have been elected to such
office by the Shareholders. In the event that at any time less than a majority
of the Directors of the Company holding office at that time were so elected by
the Shareholders a meeting of the Shareholders shall be held promptly as
possible and in any event within 60 (sixty) days for the purpose of electing
Directors to fill any existing vacancies in the Board of Directors unless the
Commission shall by order extend such period. (Investment Company Act, S.16(a).)
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BY-LAW FOUR: OFFICERS
Article 4.1 Executive Officers
The Executive Officers of the Company shall be the Chairman of the Board,
the Deputy Chairman, a Treasurer and a Secretary and such other officers as the
Board of Directors may approve, including one or more Vice-Presidents. There may
also be appointed as Executive Officers one or more Assistant Secretaries and/or
Assistant Treasurers. Such Officers shall be elected or appointed by the Board
of Directors at its first meeting after the First General Meeting of
Shareholders and thereafter at the First Meeting of the Board of Directors after
each Annual Meeting of Shareholders and such Officers of the Company shall hold
office until their successors are chosen and qualified in their stead. There may
also be appointed such other officers as the Board of Directors may, from time
to time, deem necessary. Such officers shall respectively perform such duties,
in addition to those specified in the By-Laws of the Company as shall, from time
to time, be prescribed by the Board of Directors. A majority of the officers,
including the Chairman of the Board, shall at all times be citizens and
residents of the United States of America.
Article 4.2 Chairman of the Board
The Chairman of the Board shall be chosen from among the Directors. He
shall preside at all meetings of the Shareholders and at all meetings of the
Board of Directors at which he shall be present and shall be ex officio a member
of all committees of the Board of Directors. He shall be the chief executive
officer of the Company and have the direction and control of the general
policies of the Company and may require all officers, whether elected or
appointed, to report to him, in writing or otherwise, either generally or in
respect to any particular matter or matters relating to the affairs of the
Company. He shall have such other powers and perform such other duties as may be
assigned to him from time to time by the Board of Directors. In the performance
of all his duties and the exercise of all his powers, he shall be responsible
solely to the Board of Directors.
Article 4.3 Deputy Chairman
The Deputy Chairman shall be chosen from among the Directors. In the
{-}absence of the Chairman of the Board, he shall preside at all meetings of the
Shareholders and at all meetings of the Board of Directors and shall exercise
the powers and perform the duties of the Chairman of the Board. Subject to such
direction and control as the Chairman of the Board may exercise, the Deputy
Chairman shall exercise a general control of and supervision over the Company's
affairs. He shall have such other powers and duties as the Board of Directors
may, from time to time, determine.
Article 4.4 Treasurer and Assistant Treasurers
(a) The Treasurer shall have general-charge of the finances of the
Company. He shall render to the Board of Directors, whenever directed by the
Board, an account of the financial condition of the Company and of all his
transactions as Treasurer, and as soon as possible after the close of each
financial year he shall make and submit to the Board of Directors a like report
for such financial year. He shall have charge and custody of and be responsible
for the keeping of the books of account required under the Companies Act. He
shall perform all the acts incidental to the office of Treasurer, subject to the
control of the Board of Directors.
(b) Assistant Treasurers may perform any of the duties of the Treasurer.
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Article 4.5 Secretary and Assistant Secretaries
(a) The Secretary shall attend to the giving and service of all
notices of the Company and shall keep the minutes of all
meetings of the Shareholders and of the Board of Directors in
a book or books to be kept for that purpose. He shall keep in
safe custody the seal of the Company. He shall have charge of
the records of the Company including books containing the
names and addresses of the Shareholders and members of the
Board of Directors of the Company, together with copies of all
reports made by the Company, and such other books and papers
as the Board of Directors may direct. He shall be responsible
for the keeping and filing of all books, reports, certificates
and other documents required by law to be kept and filed by
the Company. He shall perform such other duties as appertain
to his office or as may be required by the Board of Directors.
Whenever the Secretary shall also be the Treasurer he may at
the option of the Board be designated the
"Secretary-Treasurer". [The Company may engage a service
provider to assist the Secretary in performing the services
described herein.]
(b) Assistant Secretaries may perform the duties of the Secretary.
Article 4.6 Removal
The Board of Directors, by an affirmative vote of the majority of the
Board, may remove any or all of the Executive Officers or other officers or
employees, either with or without cause, at any meeting called for that purpose
and may elect or appoint others in their place or places.
{Any officer or employee of the Company not being an Executive Officer or
a member of the Board may also be discharged, either with or without cause, by
the Chairman or Deputy Chairman or Managing Director. If, however, there be no
cause for such removal or discharge and there be a special contract derogating
from the provisions of this Article 4.6 such removal or discharge shall be
subject to the provisions of such contract.
Article 4.7 Remuneration
The remuneration of all Executive Officers of the Company shall be fixed
from time to time by resolution of the Board of Directors.
Article 4.8 Employees to be Bonded
When and so long as the Company shall be registered under the Investment
Company Act, any officer or employee of the Company who may singly, or jointly
with others, have access to securities or funds of the Company, either directly
or through authority to draw upon such funds or to direct generally the
disposition of such securities, shall be bonded by a reputable fidelity
insurance company against larceny and embezzlement in such reasonable minimum
amounts as may be prescribed by the Board of Directors in accordance with the
Investment Company Act and the rules and regulations thereunder.
Article 4.9 Duties and Liabilities of Certain Stockholders, Officers, Directors,
etc.
Every shareholder who is directly or indirectly the beneficial owner of
more than ten per centum of any class of outstanding securities (other than
short term paper) of which the Company is the issuer or who is an officer,
director, member of an advisory board, investment adviser or affiliated person
of an investment adviser of the Company, shall in respect of his transactions in
any such securities be subject to the same duties and liabilities as those
imposed by Section 16 of the Securities Exchange Act of 1934 of the Untied
States of America upon certain beneficial owners, directors and officers in
respect of their transactions in certain equity securities. (Investment Company
Act, S.30(f).)}
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BY-LAW FIVE: CAPITAL STOCK CERTIFICATES AND TRANSFERS
Article 5.1 Transfer Regulations and Restrictions
The Board of Directors may make regulations generally, from time to time,
with reference to the transfer and transmission of the shares in the capital
stock of the Company, provided, that when and so long as the Company shall be
registered under the Investment Company Act, it shall not restrict the
transferability or negotiability of any shares of its capital stock except in
conformity with the statements with respect thereto contained in its
registration statement under said Act or in contravention of such rules and
regulations as the Commission may prescribe in the interests of the holders of
all of the outstanding securities of the Company. (Investment Company Act,
S.22(f).)
BY-LAW SIX[:] ACCOUNTS, AUDIT AND REPORTS
Article 6.1 Accounts
(a) The Directors shall cause to be kept proper books of account
with respect to all sums of money received and expended by the
Company and the matters in respect of which such receipts and
expenditures take place, all sales and purchases of goods by
the Company, the assets and liabilities of the Company and all
other financial transactions affecting the financial position
of the Company.
(b) The books of account shall be kept at the head office of the
Company or at such other place in the Republic of South Africa
as the Directors think fit, and shall at all times be open to
inspection by the Directors.
(c) In case the operating accounts of the Company are kept at some
place outside the Republic of South Africa, there shall be
kept at the head office of the Company such comprehensive
records as shall enable the Directors to ascertain with
reasonable accuracy the financial position of the Company at
the end of each three months period.
Article 6.2 Audit
(a) At least once in every financial period the accounts of the
Company shall be examined and the correctness of the Statement
of Income and Expenditures and of the Balance Sheet
ascertained by its Auditor or Auditors.
(b) The appointment, rights and duties of the Auditor or Auditors
of the Company shall be regulated by the Companies Act,
provided, that, when and so long as the Company shall be
registered under the Investment Company Act, it shall have as
one of its Auditors an independent public accountant or a firm
of independent public accountants qualified to act as an
independent public accountant for the Company under the said
Act and the rules thereunder and regularly doing all or a
substantial portion of their business in the United States of
America and having a permanent office and place of business
therein, who shall sign and certify financial statements filed
by the Company with the Commission, whose certificates or
reports of such financial statements shall be addressed both
to the Board of Directors and to the security holders and
whose selection and employment shall be subject to the
following conditions:
(1) Such accountant or accountants shall have been
{approved} [selected], at a meeting held within 30
(thirty) days before or after the beginning of the
financial year of the Company {, by }[or before the
Annual Meeting of Shareholders in that calendar year, by
the vote, cast in person, of] a majority of those
members of the Board of Directors who are not investment
advisers of, {or} affiliated persons of an investment
adviser of, {or} officers[,] or employees of {,} the
Company.
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(2) The selection of {such} [the independent] accountant {or
accountants} shall have been {made or ratified at
the}[submitted for ratification or rejection at the next
succeeding] Annual Meeting of Shareholders {held in such
financial year, if such meeting be held, except that
any} [in that fiscal year. Any] vacancy occurring
between Annual Meetings, due to the death or resignation
of {such} [the] accountant {or accountants}, may be
filled by the {Board of Directors.} [vote, cast in
person at a meeting called for the purpose of voting on
such action, of a majority of those members of the Board
of Directors who are not investment advisers of,
affiliated persons of an investment adviser of,
officers, or employees of the Company.]
(3) The employment of such accountant or accountants shall
have been conditioned upon the right of the Company by
vote of a majority of the outstanding voting securities
at any meeting called for the purpose to terminate such
employment forthwith without any penalty, provided, that
if the employment of such accountant or accountants be
so terminated, the vacancy so occurring may be filled by
a vote of a majority of the outstanding voting
securities, either at the meeting at which the
termination occurred or if not so filled then at a
subsequent meeting which shall be called for the
purpose. (Investment Company Act, S-32(a).)
Article 6.3 Reports to Shareholders
When and so long as the Company shall be registered under the Investment
Company Act, it shall transmit to its Shareholders, at least semi-annually,
reports containing such of the following information and financial statements or
their equivalent, as of a reasonably current date, as the Commission may
prescribe by rules and regulations for the protection of investors, which
reports shall not be misleading in any material respect in the light of the
reports required to be filed pursuant to Article 6.4 hereof:
(1) a balance sheet accompanied by a statement of the
aggregate value of investments on the date of such
balance sheet;
(2) a list showing the amounts and values of securities
owned on the date of such balance sheet;
(3) a statement of income, for the period covered by the
report, which shall be itemized at least with respect to
each category of income and expense representing more
than 5% (five per centum) of the total income or
expense;
(4) a statement of surplus, which shall be itemized at least
with respect to each charge or credit to the surplus
account which represents more than 5% (five per centum)
of the total charges or credits during the period
covered by the report;
(5) a statement of the aggregate remuneration paid by the
Company during the period covered by the report (A) to
all directors and to all members of any advisory board
for regular compensation; (B) to each director and to
each member of an advisory board for special
compensation; (C) to all officers; and (D) to each
person of any officer or director of the Company is an
affiliated person; and
(6) a statement of the aggregate dollar amounts of purchases
and sales of investment securities, other than
Government securities, made during the period covered by
the report;
Provided, that if in the judgment of the Commission any items required
under this Article 6.3 is inapplicable or inappropriate, the Commission may by
rules and regulations permit in lieu thereof the inclusion of such item of a
comparable character as it may deem applicable or appropriate. (Investment
Company Act, S.30(d).)
Article 6.4 Reports to Commission
(a) When and so long as the Company shall be registered under the
Investment Company Act, it shall file annually with the
Commission such information, documents and reports as
investment companies having securities registered on a
national securities exchange are required to file annually
pursuant to Section 13(a) of the Securities Exchange Act of
1934 of the United States of America and the rules and
regulations issued thereunder. (Investment Company Act,
S.30(a).)
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(b) When and so long as the Company shall be registered under the
Investment Company Act, it shall file with the Commission
(1) such information and documents (other than financial
statements) as the Commission may require, on a
semi-annual or quarterly basis, to keep reasonably
current the information and documents contained in the
registration statement of the Company under the
Investment Company Act, and
(2) copies of every periodic or interim report or similar
communication containing financial statements and
transmitted to any class of the Company's security
holders such copies to be filed not later than 10 (ten)
days after such transmission;
provided, that any information or documents contained in a report or other
communication to security holders filed pursuant to sub-paragraph (2) of this
paragraph (b) may be incorporated by reference in any report subsequently or
concurrently filed pursuant to sub-paragraph (1) of this paragraph (b).
(Investment Company Act, S.30(b).)
Article 6.5 Auditors' Certificate
Financial statements contained in annual reports required by Articles 6.3
and 6.4 hereof shall, if required by the rules and regulations of the
Commission, be accompanied by a certificate of independent public accountants.
The certificate of such independent public accountants shall be based upon an
audit not less in scope or procedures followed than that which independent
public accountants would ordinarily make for the purpose of presenting
comprehensive and dependable financial statements, and shall contain such
information as the Commission may prescribe, by rules and regulations in the
public interest or for the protection of investors, as to the nature and scope
of the audit and the findings and opinion of the accountants. Each such report
shall state that such independent public accountants have verified securities
owned, either by actual examination, or by receipt of a certificate from the
Custodian of the Company's assets, as the Commission may prescribe by rules and
regulations. (Investment Company Act, {S.30(e).)} [S.30(g).)]
Article 6.6 Maintenance of Records
When and so long as the Company shall be registered under the Investment
Company Act, it shall maintain and preserve for such period or periods as the
Commission may prescribe by rules and regulations, such accounts, books, and
other documents as constitute the record forming the basis for financial
statements required to be filed by Article 6.3 and 6.4 hereof, and of the
auditors' certificates relating thereto. All such accounts, books and other
records shall be subject at any time and from time to time to such reasonable
periodic, special, and other examinations by the Commission, or any member or
representative thereof, as the Commission may prescribe. The Company shall
furnish to the Commission, within such reasonable time as the Commission may
prescribe, copies of or extracts from such records as may be prepared without
undue effort, expense, or delay, as the Commission may by order require.
(Investment Company Act, S.31(a) and S.31(b).)
Article 6.7 Commission Rules as to Uniformity
Unless exempted by order of the Commission, the Company shall, when and so
long as it shall be registered under the Investment Company Act, maintain its
accounting[,] records and prepare the financial statements required by Articles
6.3 and 6.4 hereof in accordance with such rules and regulations as may be
issued by the Commission, in the public interest or for the protection of
investors, providing for a reasonable degree of uniformity in the accounting
policies and principles to be followed by registered investment companies in the
maintenance and preparation of such records and statements. (Investment Company
Act, S-31(c) and S-31(d).)
Article 6.8 Participation by Officers and Employees
The officers and employees of the Company, if any, who may participate in
the preparation of any financial statement of the Company to be filed with the
Commission shall be selected by the Board of Directors. Any such selection may
be general or confined to specific instances or individuals. (Investment Company
Act, S.32(b).)
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BY-LAW SEVEN: CUSTODIAN
Article 7.1 Maintenance of Funds, Duplicate Records etc., in United States
The Company shall place and at all times maintain {its funds, all
securities and similar investments owned by it and} a duplicate set of all its
books and records (including account books reflecting all portfolio
transactions, minute books, stock ledger books, and corporate proceedings) in
the United States of America in the custody of a Custodian. {Notwithstanding the
forgoing, the Company may maintain (i) with an Eligible Foreign Custodian or an
overseas branch of a Qualified U.S. Bank located in the Republic of South
Africa, cash in an amount not to exceed $200,000 as the appropriate officers of
the Company may consider necessary for immediate cash requirements, (ii) with an
Eligible Foreign Custodian or an overseas branch of a Qualified U.S. Bank
located in the Republic of South Africa, and denominated investment} [The
Company shall place and at all times maintain at least 5% of its assets in the
U.S. in the custody of a U.S. Bank ("5% Requirement"). The Company's remaining
assets (which may include U.S. dollars invested in time deposits and bank
certificates of deposit) will be kept in the custody of a U.S. custodian,
except:
(a) subject to the 5% Requirement, up to 100% of securities
eligible to be held in a South African Central Securities
Depository ("CSD") may be kept in the CSD through its
Custodian and subcustodian;
(b) $200,000 may be kept in cash to cover administrative expenses,
to be kept in a checking account with a South African bank;
(c) up to 3% of its assets may be kept in South Africa in
short-term rand-denominated investments] issued or guaranteed
by the Republic of South Africa; {having a value not exceeding
three percent of the value of the Company's total assets,
(iii) with an Eligible Foreign Custodian or an overseas branch
of a Qualified U.S. Bank located in the Republic of South
Africa, funds deposited in rand denominated accounts, which
may bear interest, having an aggregate value not exceeding
five percent of the value of the Company's total assets, and
(iv) with a Custodian or subcustodian located in any country
in which an established securities exchange is located,} [;and
(d) up to 5% of its assets may be kept in rand-denominated
interest bearing bank accounts with "eligible foreign
custodians" or "overseas branches of qualified United States
banks," as those terms are defined in Rule 17f-5 under the
Investment Company Act (as it may be amended).
The Company will settle its purchases and sales of portfolio securities in
the U.S. by use of the mails or means of interstate commerce, except for: (a)
purchases and sales on an "established securities exchange" and (b) purchases
and sales, through the Company's Custodian or Custodian's agent, in South Africa
of South African Treasury Bills from or to the South African Treasury, South
African Reserve Bank securities, or CSD-eligible securities. Assets purchased on
an Established Exchange will be maintained in the U.S. with the Custodian,
unless prohibited by law or regulation or financially impracticable. If removal
of] securities purchased on {such exchange having a value not exceeding five
percent of the value of the Company's total assets} [the Established Exchanges
becomes either prohibited by law or regulation or financially impracticable, up
to 5% of the Company's assets may be held by an eligible foreign custodian or
overseas branch of the custodian in each of London, Japan, Australia,
Switzerland, and Canada. The Company will withdraw its assets from the care of a
subcustodian as soon as practicable, and in any event within 180 days of the
date when a majority of the Board of Directors makes the determination that a
particular subcustodian may no longer be considered eligible under Rule 17f-5 of
the Investment Company Act, as it may be amended, or may no longer be considered
an overseas branch of the Custodian, or that continuance of the subcustodian
arrangement would not be consistent with the best interests of the Company and
its shareholders]. (Investment Company Act, S.17(f)).
[Notwithstanding anything to the contrary in this Section 7.1, the Company
shall at all times maintain its assets in conformity with any order issued by
the Commission.]
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Article 7.2 Qualifications, Appointements, etc.
The Custodian shall be a bank, as defined in paragraph (5) of Section 2(a)
of the Investment Company Act, having the qualifications prescribed in paragraph
(1) of Section 26(a) of the Investment Company Act. The Custodian shall be
appointed from time to time by the Board of Directors which shall fix its
remuneration and the conditions under which it shall act which shall be set
forth in a contract which shall provide, amongst other things, that the
Custodian will (i) consummate all purchases and sales of securities by the
Company (other than (a) purchases and sales on an established securities
exchange, (b) purchases and sales of {rend} [rand] denominated investments
issued or guaranteed by the Republic of South Africa, and (c) the exercise, if
the {United States Securities and Exchange} Commission so permits, of rights
issued to the Company as a shareholder or other companies for the purchase of
securities) through the delivery of securities and receipt of cash, or vice
versa as the case may be, within the United States, and (ii) consummate all
purchases and sales of gold or certificates of deposit for gold by the Company
through the delivery of such certificates and receipt of cash, or vice versa as
the case may be within the United States, and (iii) distribute the Company's
assets, or the proceeds thereof, to the Company's creditors and shareholders,
upon service upon the Custodian of an order of the Commission or a court of
competent jurisdiction directing such distribution as provided in the
Undertakings and Agreements of the Company in paragraphs (3) and (5) of Section
V of the Company's Application for order Permitting Registration under the
Investment Company Act. The Custodian may appoint one or more subcustodians
located outside the United States of America to hold assets which, pursuant to
Article 7.1 of these By-Laws, may be maintained by the Company outside of the
United States of America. Any such subcustodian shall either be an eligible
foreign custodian, as such term is defined in the rules and regulations of the
United States Securities and Exchange Commission, an overseas branch of the
Custodian or a subcustodian otherwise approved by the {United States Securities
and Exchange} Commission. The Custodian and any such subcustodians shall act as
trustees of, and maintain in their sole custody in the United States or in such
other jurisdiction as may be permitted by Article 7.1 of these By-Laws, all the
Company's securities and cash. No conditions under which the Custodian under
which the Custodian shall act fixed by the Board of Directors shall authorize or
permit the directors, officers, employees or agents of the Company to withdraw
any of the securities or similar investments of the Company upon the mere
receipt of such directors, officers, employees or agents. (Investment Company
Act, S.11(f).)
BY-LAW EIGHT: INELIGIBILITY OF CERTAIN PERSONS
Article 8.1 Ineligibility {or}[of] Officer, Director, etc.
Except to the extent permitted by an order of exemption of the Commission,
the following persons shall not be eligible to serve or act in the capacity of
officer, director, member of an advisory board, investment adviser, depositor or
principal underwriter of the Company at any time while the Company shall be
registered under the Investment Company Act:
(1) any person who at any time has been convicted of any
felony or misdemeanor involving the purchase or sale of
any security or arising out of such person's conduct as
an underwriter, broker, dealer, or investment adviser,
or as an affiliated person, salesman, or employee of any
investment company, banking institution or insurance
company;
(2) any person who, by reason of any misconduct, is
permanently or temporarily enjoined by order, judgment
or decree of any court of competent jurisdiction from
acting as an underwriter, broker, dealer, or investment
adviser, or as an affiliated person, salesman, or
employee of any investment company, banking institution,
or insurance company, or from engaging in or continuing
any conduct or practice in connection with any such
activity or in connection with the purchase or sale of
any security; or
(3) subject however to the provisions of {Section 68 (bis)
of} the Companies Act {1926 (as amended)} a company any
affiliated person of which is ineligible, by reason of
paragraph (1) or (2) of this Article 8.1, to serve or
act in the foregoing capacities. (Investment Company
Act, S.9(a).)
For the purposes of paragraphs (1), (2) and (3) of this Article 8.1 the
term "investment adviser" shall include an investment adviser as defined in
Section 202(11) of the Investment Advisers Act of 1940 of the United States of
America.
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Article 8.2 Ineligibility as Broker, Underwriter, etc.
(a) When and so long as the Company shall be registered under the
Investment Company Act, it shall not
(1) employ as a regular broker any director, officer, or
employee of the Company, or any person of which any such
director, officer, or employee is an affiliated person,
unless a majority of the Board of Directors of the
Company shall be persons who are not such brokers or
affiliated persons of any of such brokers;
(2) use as a principal underwriter of securities issued by
it any director, officer, or employee of the Company or
any person of which any such director, officer, or
employee is an affiliated person, unless a majority of
the Board of Directors of the Company shall be persons
who are not such principal underwriters or affiliated
persons of any of such principal underwriters; or
(3) have as director, officer, or employee any investment
banker, or any affiliated person of an investment
banker, unless a majority of the Board of Directors of
the Company shall be persons who are not investment
bankers or affiliated persons of any investment banker.
(Investment Company Act, S.10(b).)
(b) If by reason of the death, disqualification, or bona fide
resignation of any Director or Directors, the requirements of
paragraph (a) of this Article 8.2 shall not be met, the
operation of such requirements shall be suspended for a period
of 30 (thirty) days if the vacancy or vacancies may be filled
by action of the Board of Directors, and for a period of 60
(sixty) days if a vote of Shareholders is required to fill the
vacancy or vacancies, or for such longer period as the
Commission may prescribe, by rules and regulations upon its
motion or by order upon application, as not inconsistent with
the protection of investors. (Investment Company, Act,
S.10(e).)
BY-LAW NINE: TRANSACTIONS WITH AFFILIATES
Article 9.1 Restrictions on Purchases{.}[,] Sales{.}[,] Loans, etc.
(a) Except to the extent that the Commission may, by rules and
regulations upon its motion or by order upon application, have
exempted a transaction or classes of transactions from any of
the provisions of {subsection (f) of} Section 10 of the
Investment Company Act or may otherwise permit, the Company
shall not, when and so long as it shall be registered under
the Investment Company Act, knowingly purchase or otherwise
acquire, during the existence of any underwriting or selling
syndicate, any security (except a security of which the
Company is the issuer) a principal underwriter of which is an
officer, director, member of an advisory board, investment
adviser, or employee of the Company, or is a person of which
any such officer, director, member of an advisory board,
investment adviser, or employee is an affiliated person.
(Investment Company Act, S.10(f).)
(b) Except to the extent permitted by an order of exemption issued
by the Commission, the Company, when and so long as it shall
be registered under the Investment Company Act, shall not
itself, nor shall it permit any company controlled by it, to
(1) knowingly purchase any security or other property from
any affiliated person or promoter of or principal
underwriter for the Company, or any affiliated person of
such a person, promoter, or principal underwriter,
acting as principal, unless such purchase involves
solely
(i) securities of which the buyer is the issuer, or
(ii) securities of which the seller is the issuer and
which are part of a general offering to the
holders of a class of its securities; or
(2) knowingly sell any security or other property (except
securities of which the seller is the issuer) to any
affiliated person or promoter of or principal
underwriter for the Company or any affiliated person of
such a person, promoter, or principal underwriter,
acting as principal; or
(3) lend money or other property (unless the borrower is
controlled by the lender) to any affiliated person or
promoter of or principal underwriter for the Company, or
any affiliated person of such a person, promoter, or
principal underwriter, acting as principal, except to a
company which owns all of the outstanding securities of
the Company other than directors' qualifying shares; or
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(4) make any purchase or sale of any property if, to the
knowledge of the Company, any affiliated person of the
Company, or any affiliated person of such person, acting
as agent, is to accept from any source any compensation
(other than a regular salary or wages from the Company)
for such purchase or sale, unless such purchase or sale
is in the course of such person's business as an
underwriter or broker; or
(5) make any purchase or sale of securities if, to the
knowledge of the Company, any affiliated person of the
Company, or any affiliated person of such person, acting
as broker, is to receive from any source a commission,
fee, or other remuneration for effecting such
transaction which exceeds (i) the usual and customary
broker's commission if the sale is effected on a
securities exchange, or (ii) two per cent (2%) of the
sales price if the sale is effected in connection with a
secondary distribution of such securities, or (iii) one
per cent (1%) of the purchase or sale price of such
securities if the sale is otherwise effected unless the
Commission shall, by rules and regulations or order in
the public interest and consistent with the protection
of investors, permit a larger commission.
Nothing in this Article 9.1 shall, however, prevent the Company from
purchasing from any person merchandise sold in the ordinary course of such
person's business or from entering into a lessor-lessee relationship with any
person and receiving or furnishing the services incidental thereto, (Investment
Company Act, S.17(a), S.17(b), S.17(c) and S.17(e) and S.21(b).)
Article 9.2 Participation with Affiliates
When and so long as the Company any shall be registered under the
Investment Company Act; the Company shall not itself, nor shall it permit any
company controlled by it, to be a joint or a joint and several participant with
any affiliated person of or principal underwriter for the Company or any
affiliated person of such person or principal underwriter in any transaction
effected by such person, principal underwriter or affiliated person as
principal, in contravention of such rules and regulations as the Commission may
prescribe for the purpose of limiting or preventing participation by the Company
or such controlled company on a basis different from or less advantageous than
that of such other participant. Nothing contained in this Article 9.2 shall be
deemed to preclude any such controlled company from participating in any
underwriting syndicate or other group of which any affiliated person is acting
as manager, merely because such person is receiving compensation for so acting.
(Investment Company Act, S.17(d).)
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BY-LAW TEN: INVESTMENT POLICY
Article 10.1 Diversity--Acquisition of Affiliates
When and so long as the Company shall be registered under the Investment
Company Act, it shall not knowingly acquire or continue directly or indirectly
to own, control or hold with power to vote, any security in contravention of any
rules or orders of the Commission or any security in contravention of the
following restrictions:
So long as the Company shall be registered under the
Investment Company Act, neither it nor any company or
companies controlled by it will purchase or otherwise
acquire any security issued by or any other interest in
the business of (1) any other investment company of
which the Company or any company or companies controlled
by the Company shall not at the time of such purchase or
acquisition own in the aggregate at least 25%
(twenty-five per centum) of the total outstanding voting
stock, if the Company and any company or companies
controlled by it own in the aggregate or as a result of
such purchase or acquisition will own in the aggregate
more than 5% (five per centum) of the total outstanding
voting stock of such other investment company if the
policy of such other investment company is the
concentration of investments in a particular industry or
group of industries, or more than 3% (three per centum)
of the total outstanding voting stock of such other
investment company if the policy of such other
investment company is not the concentration of
investments in a particular industry or group of
industries, except a security received as a dividend or
as a result of an offer of exchange approved pursuant to
Section 11 of the Investment Company Act or of a plan of
reorganization of any company (other than a plan devised
for the purpose of evading the foregoing provisions) or
(2) any insurance company of which the Company or any
company or companies controlled by it shall not at the
time of such purchase or acquisition own in the
aggregate at least 25% (twenty-five per centum) of the
total outstanding voting stock, if the Company and any
company or companies controlled by it own in the
aggregate or as a result of such purchase or acquisition
will own in the aggregate more than 10% (ten per centum)
of the total outstanding voting stock of such insurance
company, except a security received as a dividend or as
a result of a plan of reorganization of any company
(other than a plan devised for the purpose of evading
the foregoing provisions). (Investment Company Act
S.12(d)(1) and S.12(d)(2).) {Anything to the contrary in
this Article notwithstanding, the Company may operate as
a non-diversified management company within the meaning
of the Investment Company Act during any period before
the close of business on March 31, 1959 and during any
such period when it is operating as a non-diversified
management company, the restrictions contained in clause
(a) above shall not be applicable to the Company.}
Article 10.2 Changes in Investment Policy
When and so long as the Company shall be registered under the Investment
Company Act, {it shall not,} unless authorized by a vote of {a majority of its
members} [the lesser of (1) more than 50% of the outstanding voting securities
of the Company; or (2) 67% or more of the outstanding voting securities of the
Company at a shareholders meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or by proxy, the Company
shall not:]
(1) change the nature of its business so as to cease to be
an investment company;
(2) change from a closed-end company to an open-end company;
(3) change from {a diversified company to} a non-diversified
company [to a diversified company];
(4) borrow money, issue senior securities, underwrite
securities issued by other persons, purchase or sell
real estate or commodities or make loans to other
persons, except that in each case in accordance with the
recitals of policy contained in its registration
statement under the Investment Company Act in respect
thereto; {or}
(5) deviate from its policy in respect of concentration of
investments in any particular industry or group of
industries {(}as recited in its registration statement
{)} under the Investment Company Act{,}[;] or
[(6)] deviate from any [of the] fundamental {policy}
[policies] recited in its registration statement.
(Investment Company Act, S.5, and S.13(a).)
C-33
<PAGE>
BY-LAW ELEVEN: INVESTMENT ADVISERS AND PRINCIPAL UNDERWRITERS
Article 11.1 Investment Advisers
The Company, upon a resolution of the Board of Directors, may from time to
time enter into one or more investment advisory contracts, provided, that, so
long as the Company shall be registered under the Investment Company Act, it
shall not engage any person to serve or act as investment adviser of the
Company, except pursuant to a written contract which has been approved by the
vote of a majority of the outstanding voting securities of the Company and which
(1) precisely describes all compensation to be paid
thereunder;
(2) shall continue in effect for a period more than two
years from the date of its execution, only so long as
such continuance is specifically approved at least
annually by the Board of Directors or by vote of a
majority of the outstanding voting securities of the
Company;
(3) provides, in substance, that it may be terminated at any
time, without the payment of any penalty, by the Board
of Directors of the Company or by vote of a majority of
the outstanding voting securities of the Company on not
more than 60 (sixty) days' written notice to the
investment adviser;
(4) provides, in substance[,] for [its] automatic
termination in the event of its assignment {by the
investment adviser};
(5) provides that
(i) the investment adviser shall maintain in the
United States and preserve therein for such period
or periods as the Commission shall prescribe by
rules and regulations applicable to the investment
advisers of investment companies registered under
the Investment Company Act, such accounts, books,
and other documents as are necessary or
appropriate to record the transactions of the
investment adviser with the Company;
(ii) such amounts, books and other records shall be
subject at any time and from time to time to such
reasonable periodic, special, and other
examinations by the Commission, or any member or
representative thereof, as the Commission may
prescribe;
(iii) the investment adviser shall furnish to the
Commission, within such reasonable time as the
Commission may prescribe, copies of or extracts
from such records which may be prepared without
undue effort, expense, or delay, as the Commission
may by order require; and
(6) contains no provision which protects or purports to
protect the investment adviser against any liability to
the Company or its security holders to which such
investment adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence,
in the performance of its duties, or by reason of the
reckless disregard by such investment adviser of its
obligations and duties under such contract. (Investment
Company Act S.15(a), S.17(i), S.31(a) and S.31(b).)
Article 11.2 Principal Underwriters
(a) The Company, upon a resolution of the Board of Directors, may
employ one or more principal underwriters to offer for sale,
sell, or deliver after sale any security of which the Company
is the issuer, provided, that each such principal underwriter
is a citizen and resident of the United States of America or a
corporation, partnership or association which is organized
under the laws of one of the United States of America and is
resident and having its principal place of business in the
United States of America and is a member in good standing of a
securities association registered under Section 15A of the
Securities Exchange Act of 1934 of the United States of
America.
(b) The contract or agreement under which such principal
underwriter undertakes to act for the Company shall contain no
provision which protects or purports to protect the principal
underwriter against any liability to the Company or its
security holders to which such principal underwriter would
otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence, in the performance of its duties,
or by reason of the reckless disregard by such principal
underwriter of its obligations and duties under such contract
or agreement. (Investment Company Act, S.17(i).)
C-34
<PAGE>
Article 11.3 Approval by Independent Directors or by Stockholders
In addition to the requirements of Article 11.1 and 11.2 hereof the
Company shall not enter into, renew, or perform any contract or agreement,
written, or oral, whereby a person undertakes regularly to serve or act as
investment adviser of the Company, unless the terms of such contract or
agreement, and any renewal thereof have been approved (1) by a majority of the
Directors who are not parties to such contract or agreement or affiliated
persons of any such party, or (2) by the vote of a majority of the outstanding
voting securities of the Company. (Investment Company Act, S.15(c).)
Article 11.4 Exclusions of Advisory Board
Nothing contained in this By-Law Eleven shall be deemed to require or
contemplate any action by an advisory board, if any, of the Company or by any of
the members of such a board. (Investment Company Act, S.15(f).)
BY-LAW TWELVE: PROXIES, VOTING TRUSTS, CIRCULAR OWNERSHIP
Article 12.1 Solicitation of Proxies
When and so long as the Company is registered under the Investment Company
Act, neither the Company nor any of its officers, directors, employees or
investment advisers shall, by use of the United States mails or any means or
instrumentality of interstate commerce, or otherwise, solicit or permit the use
of its or his name to solicit any proxy or consent or authorization in respect
of any security of which the Company is the issuer in contravention of such
rules and regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of investors.
(Investment Company Act, S.20(a).)
Article 12.2 Voting Trust Certificates
When and so long as the Company is registered under the Investment Company
Act, neither the Company nor any of its officers, directors, employees or
investment advisers shall, by use of the United States mails or any means or
instrumentality of interstate commerce, or otherwise, offer for sale, sell, or
deliver after sale, in connection with a public offering, any voting trust
certificate relating to any security of the Company. (Investment Company Act,
S.20(b).)
Article 12.3 Cross-Ownership and Circular Ownership
(a) The Company shall not purchase any voting security if, to the
knowledge of the Company, cross-ownership or circular
ownership exists, or after such acquisition will exist,
between the Company and the issuer of such security.
Cross-ownership shall be deemed to exist between two companies
when each of such companies beneficially owns more than 3%
(three per centum) of the outstanding voting securities of the
other company. Circular ownership shall be deemed to exist
between two companies if such companies are included within a
group of three or more companies, each of which
(1) beneficially owns more than 3% (three per centum) of the
outstanding voting securities of one or more other
companies of the group; and
(2) has more than 3% (three per centum) of its own
outstanding voting securities beneficially owned by
another company, or by each of two or more other
companies, of the group. (Investment Company Act,
S.20(c).)
(b) If such cross-ownership or circular ownership between the
Company and any other company or companies shall come into
existence (without the Company's knowledge) upon the purchase
by the Company of the securities of another company, the
Company shall, within one year, after it first knows of the
existence of such cross-ownership or circular ownership,
eliminate the same. (Investment Company Act, S.20(d).)
C-35
<PAGE>
BY-LAW THIRTEEN: REORGANIZATIONS AND EXCHANGES
Article 13.1 Reorganizations
When and so long as the Company is registered under the Investment Company
Act, neither the Company nor any of its officers, directors, employees or
investment advisers shall, by use of the United States mails or any means or
instrumentality of interstate commerce, or otherwise, solicit or permit the use
of its or his name to solicit any proxy, consent, authorization, power of
attorney, ratification, deposit, or dissent in respect of any plan of
reorganization of the Company unless a copy of such plan and any deposit
agreement relating thereto and of any proxy, consent, authorization, power of
attorney, ratification, instrument of deposit, or instrument of dissent in
respect thereto is filed with, or mailed to, the Commission for its information
within twenty-four hours after the commencement of any such solicitation. The
Company may, and if so requested by the holders of 25% (twenty-five per centum)
of any class of its outstanding securities, shall prior to any solicitation of
security holders with respect to such plan of reorganization, request the
Commission to render an advisory report in respect of the fairness of such plan
and its effect upon any classes of security holders of the Company. The Company
shall mail promptly a copy of such advisory report, if any is so rendered, to
all its security holders affected by such plan, provided, that such advisory
report shall have been received by the Company at least 48 (forty-eight) hours
(not including Sundays and holidays) before final action is taken in relation to
such plan at any meeting of security holders called to act in relation thereto,
or any adjournment of any such meeting, or if no meeting be called, then prior
to the final date of acceptance of such plan by security holders. (Investment
Company Act, S.25.)
BY-LAW FOURTEEN: LIQUIDATION UPON CERTAIN CONTINGENCIES
Article 14.1 Liquidation Upon Certain Contingencies
Any shareholder of the Company acting in good faith or the Commission
shall have the right to initiate a proper proceeding before the Commission or a
court of competent jurisdiction for the liquidation of the Company or the sale
of its assets and the distribution of such assets or the proceeds thereof to
shareholders and creditors in the event that the Commission or such court finds,
after notice and opportunity for hearing, that the Company has ceased to be
registered under the Investment Company Act, or has violated any provision of
said Act, or has violated any provision of the order granted to the Company
under Section 7(d) of said Act; {provided, that such ceasing to be registered,
violation,} or other defect shall not have been cured by the Company within
such period of time as shall be granted by the Commission or such courts for the
protection of the best interest of the Company's shareholders.
BY-LAW FIFTEEN: CHANGES IN BY-LAWS AND MEMORANDUM OF ASSOCIATION
Article 15.1 Changes in By-Laws and Memorandum of Association
When and so long as the Company shall be registered under the Investment
Company Act, neither these By-Laws nor the Memorandum of Association of the
Company may be changed in any manner inconsistent with the Investment Company
Act and the rules and regulations thereunder and the undertakings and
arrangements entered into with the Commission unless authorized by the
Commission.
C-36
<PAGE>
BY-LAW SIXTEEN: RESPONSIBILITY OF DIRECTORS
Article 16.1 Responsibility of Directors
The Company shall indemnify each present and future director and officer
of the Company against any costs, expenses and liabilities which may be imposed
on or reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he may be involved by reason of his being or having been a
director or officer of the Company (whether or not he continues to be a director
or officer at the time of imposition of such costs or incurring of such expenses
or liabilities), such costs, expenses and liabilities to include the cost to
each director or officer of reasonable settlements. The foregoing right of
indemnification shall not be exclusive of other rights to which any director or
officer may be entitled as a matter of law, and shall enure to the benefit of
the heirs, executors and administrators of any such director or officers,
provided, however that nothing herein, nor any provision of the Memorandum of
Association or Articles of the Company shall be deemed to protect or indemnify
any director, officer or auditor of the Company against any liability to the
Company or to its security holders to which he would otherwise be subject by
reason of (i) the Investment Company Act and the Rules and Regulations of the
Commission promulgated thereunder, including liability for the failure to enter
into, or for the breach of, any agreement or undertaking entered into with, or
pursuant to the direction of, the Commission or (ii) the Securities Act of 1933
and the Securities Exchange Act of 1934 of the United States of America or the
Rules and Regulations of the Commission promulgated under both such Acts; or by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office, subject however
to the requirements {of Section 70(sext)} of the {South African} Companies Act
{of 1926.} (Investment Company Act, S.17(h).)
C-37
<PAGE>
ASA LIMITED
This Proxy is Solicited on Behalf of the Board of Directors
P The signer on the reverse side of this proxy, a shareholder of ASA
R Limited, hereby appoints Henry R. Breck and Lawrence G. Nardolillo, and
O each of them, proxies with power of substitution, to vote at the Annual
X Meeting of Shareholders of the Company to be held on February 15, 2001,
Y and all adjournments thereof, all shares of the company standing in his
name.
The shareholder may here write the name of a proxy of his own choice to
vote his shares __________________________________________________________
__________________________________________________________________________
The shareholder may here write the name of an alternate proxy ____________
__________________________________________________________________________
A majority of said proxies, or their substitutes, who shall be present and
acting at said meeting (or in case but one shall be present and acting,
then that one) shall have and may exercise all the powers of said proxies
hereunder.
Each shareholder entitled to vote at the meeting is entitled to appoint
one or more proxies, who need not be shareholders, to attend the meeting
and to vote and speak on his behalf.
-----------
Whether or not you expect to attend the meeting you are SEE REVERSE
requested to date and sign this proxy and mail it SIDE
promptly in the enclosed envelope. -----------
^ FOLD AND DETACH HERE ^
Annual
Meeting of
Shareholders
ASA LIMITED
February 15, 2001, 10:00 am
Park Lane Hotel
36 Central Park South
New York, NY 10019
<PAGE>
- Please mark your
X votes as in this
- example. 0224
This proxy when properly executed will be voted in the manner directed. In case
no instructions are given as to any items set forth in this proxy, this proxy
shall be deemed to grant authority to vote in favor of such items, and in the
discretion of the proxies named herein, upon other matters that may properly
come before the meeting.
---------------------------------------------------------------------
The Board of Directors recommends voting "FOR" Proposals 1 through 5.
---------------------------------------------------------------------
INSTRUCTIONS
To vote against any FOR AGAINST ABSTAIN
individual cross his 1. To elect the --- ------- -------
name with an X; to Company's
abstain strike a Board of --- ------- --------
line through his Directors
name.
<TABLE>
<S> <C> <C> <C> <C>
Nominees for Director FOR AGAINST ABSTAIN
R.J.A. Irwin, H.R. Breck, 2. To adopt a Special Resolution --- ------- -------
H.M. Conger, C.A. Crocker, amending and restating the
J.C. Farrell, J.G. Inglis, Company's Articles of --- ------- -------
R.L. McCarthy, M.W. MacNaught, Association.
R.A. Pilkington, A.M. Rosholt
3. To change the Company's
subclassification under the
Investment Company Act of 1940
from a diversified to a
non-diversified company and
eliminate fundamental
investment restrictions related
thereto.
3A. To change the Company's --- ------- -------
subclassification under the
Investment Company Act of --- ------- -------
1940 from a diversified to
a non-diversified company.
3B. To eliminate the --- ------- -------
fundamental investment
restriction concerning the --- ------- -------
percentage of assets which
the Company may invest in
the securities of any one
issuer.
3C. To eliminate the --- ------- -------
fundamental investment
restriction concerning the --- ------- -------
percentage of voting
securities of any one
issuer which the Company
may acquire.
4. To eliminate one of the --- ------- -------
Company's fundamental
investment restrictions --- ------- -------
concerning the concentration of
its investments and amend
another.
5. To ratify the selection of --- ------- -------
Arthur Andersen LLP as the
Company's independent public --- ------- -------
accountants.
</TABLE>
SIGNATURE(S) _______________________________________________ DATE ______________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as Executor, Administrator, Trustee or Guardian, please give
full title as such.
^ FOLD AND DETACH HERE ^
IMPORTANT: PLEASE VOTE, DATE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
