FIRST AUSTRALIA FUND INC DFRN 14A
Filing Date: 3/24/99
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TYPE: DFRN 14A
SEQUENCE: 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[...] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as
permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
FIRST AUSTRALIA FUND, INC.
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(Name of Registrant as Specified in its Charter)
Deep Discount Advisors, Inc.
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(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies: _____________________________________________
(2) Aggregate number of securities to which transaction
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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Deep Discount Advisors, Inc.
One West Pack Square, Suite 777, Asheville, NC 28801
828-274-1863 Fax: 828-255-4834 E-mail: [email protected]
Dear Fellow Stockholders:
I am President of Deep Discount Advisors, Inc., and General Partner of Ron Olin
Investment Management Company, both registered investment advisors, which are
the Soliciting Shareholders ("Soliciting Shareholder") for this Proxy.
As long-term stockholders of The First Australia Fund, Inc. (the "Fund"), we are
concerned about the persistent discount from net asset value per share ("NAV")
at which shares of the Fund have traded. We are not professional arbitrageurs,
"fund-busters," or raiders. We are fellow shareholders who believe in good
corporate governance and in maximizing shareholder value.
To help give stockholders a stronger voice on matters affecting the value of
their investments in the Fund at the 1999 Meeting of Stockholders, we intend to
nominate five persons for election as directors of the Fund. The Fund will be
nominating its own candidates for Directors as noted in the Fund's proxy. We
also intend to introduce four proposals for action by stockholders. The meeting
will be held on April 23, 1999.
The persons we intend to nominate for election as directors are: Ronald G. Olin,
Ralph W. Bradshaw, Gary A. Bentz, William A. Clark, and Gerald Hellerman. Each
is committed to exploring fully and implementing measures intended to increase
the market price of your shares and to provide you the option of receiving full
NAV for all your shares without discount. If elected, Messrs. Olin, Bradshaw,
Bentz, Clark, and Hellerman would encourage the Board of Directors to consider
and to implement a variety of actions designed to enhance stockholder value.
Some of these might include, but are not limited to:
- Significant perpetual repurchases of shares in the market, which would have
the effect of increasing NAV and the likely effect of reducing the discount;
- Delivering NAV to those shareholders who want it as soon as is practical
while minimizing the impact on those investors who may want to remain in a
closed-end fund structure;
At the meeting, we will introduce for approval by stockholders
the following proposals:
- A resolution recommending that the Board provide shareholders the option of
receiving full NAV for all their shares within two months;
- A resolution stating that it would be in the best interests of the Fund and
its stockholders for members of the Board not standing for election this year
who oppose a commitment to deliver NAV within two months to resign;
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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- A resolution terminating the management agreement between the Fund and
EquitiLink International Management Limited ("EquitiLink"), the Fund's manager;
- A resolution recommending that the Board of Directors reimburse the
Soliciting Shareholder for initial proxy communication costs limited to
printing, mailing, distribution, and tabulation of this opposing proxy but not
reimburse legal or solicitor costs.
A discussion of various issues, pro and con, related to the possible
implementation of some of these resolutions is included in the proxy under the
respective sections dealing with each proposal.
We believe that both the manager of the Fund, EquitiLink, and the Fund's Board
of Directors have been unresponsive to the legitimate concerns of long-term
stockholders about the discount. The distribution policy adopted by the Fund
has not been adequate in dealing with the discount problem. Consequently, we
believe that the only way to assure that stockholder interests are given primary
consideration is through significant stockholder representation on the Board of
Directors. We are not interested in competing for the Fund's management
contract and would not agree to be the replacement for EquitiLink as manager if
the Termination Proposal were passed.
Don't let the Fund's proxy confuse the issues for you. At the end of the Fund's
fiscal year on 10/31/98, when the market price of the shares was $6.56, the
shareholders had collectively made only about $19 million on their total
investment of almost $166 million over thirteen years while paying out almost
$35 million in advisory fees, director fees, underwriting fees and other
expenses. As of 10/31/98 the net asset value of the shares was $8.25 and the
market price was $6.56 per share, representing a discount of $1.69 per share or
a +26% immediate gain to the shareholders if the discount were eliminated. The
discounts continue to persist and to fluctuate. As recently as January 29,
1999, the discount was $2.11 per share, equivalent to a +31% gain if
eliminated. On February 26, 1999, the discount of $1.61 represented a potential
+22% gain. We believe that if we lose this proxy contest, the discounts may
well return to the higher levels experienced earlier this year and last year.
We believe EquitiLink and the current Board are standing in the way of giving
shareholders the option of realizing full value for all their shares. In our
opinion, claims of recent improvement in the dismal long-term performance record
and discussions of extensive credentials for Australian Directors are irrelevant
if the shareholders have not made a decent return on their investment based on
the market price of the shares.
Worse, this manager and these Directors conducted two rights offerings in the
past that diluted net asset value, increased the supply of shares available for
sale at a discount, and approximately doubled the fees paid to EquitiLink.
Furthermore, last year these same people attempted to get the shareholders to
amend the Articles of Incorporation of the Fund to add supermajority 75% vote
requirements to approve certain business combinations, open-ending and
shareholder investment proposals. Fortunately, shareholder opposition and
uproar forced them to withdraw this egregious affront to shareholder rights.
As a further example of what the shareholders can expect, the Fund's proxy
indicates that its expenses in excess of those normally expended in an election
of Directors, including fees for attorneys, accountants, public relations,
solicitors, advertising, printing, etc. are expected to aggregate approximately
$775,000 of shareholders' money. In contrast, we intend to request shareholder
approval for reimbursement of about $19,000 in costs to provide shareholders our
proxy and give them a choice.
Please read between the lines before you vote on all the issues presented to
you. By almost any objective standard, this has not been a good investment for
shareholders but has been a great investment for EquitiLink. Effective methods
of delivering net asset value to shareholders and enhancing the market value of
the shares are likely to reduce the size of the fund and the corresponding
management
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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fees. EquitiLink has made a business decision concerning the balance
between their well being and the well being of the shareholders. Shareholders
need to do the same for themselves.
Our proposals are designed to deliver a wake-up call from the shareholders to
the Board and EquitiLink. Our director nominees, if elected, will be relentless
in working with the rest of the Board to implement the recommendations of the
shareholders. Tell the Board you want the option to receive full net asset
value for your shares within two months. Tell the Board you don't want
Directors to remain who oppose the wishes of the shareholders. Tell EquitiLink
that you don't want them to remain as your Advisor/Manager if the Directors
won't give you an option to receive full value for your shares.
We do not intend to spend a lot of money on expensive lawyers, multiple
mailings, and proxy solicitors who will call you on the telephone and try to
influence or record your vote. Indeed, the Fund has indicated that they will
spend our money, and yours, to do exactly that. They will make it as easy as
possible for you to record your vote for management and the status quo. We
believe the status quo is your enemy here. You have a chance to vote your own
pocketbook. We represent substantial shareholder interests and, if you elect
us, we will represent your interests as shareholders. Please vote and return
the green proxy card.
Please read the attached Proxy Statement carefully. It contains additional
information about the persons we plan to nominate for election as directors and
the proposals we plan to introduce.
To enable us to vote your shares on these issues, PLEASE MARK, SIGN, DATE,
AND RETURN THE ENCLOSED [GREEN] PROXY CARD IN THE POSTAGE PRE-PAID ENVELOPE THAT
HAS BEEN PROVIDED. You may vote on all proposals contained in the Fund's
[WHITE] proxy card by using the enclosed [GREEN] proxy card. Instructions for
executing the [GREEN] proxy card are on the next page.
If you have already returned the [WHITE] proxy card sent to you by the Fund, you
may revoke that proxy and vote for our nominees and proposals by marking,
signing, dating, and mailing a later dated [GREEN] proxy card.
AFTER SUBMITTING A [GREEN] PROXY CARD, PLEASE DO NOT RETURN A [WHITE] PROXY CARD
OR GIVE TELEPHONE AUTHORIZATION TO ANYONE (EVEN IF YOU ARE VOTING AGAINST THE
NOMINEES NAMED IN THE FUND'S PROXY STATEMENT). DOING SO WILL REVOKE YOUR [GREEN]
PROXY CARD.
If you have any questions, please call me at (828) 274-1863
Sincerely yours,
Ronald G. Olin
TO SUPPORT OUR EFFORTS TO ENHANCE STOCKHOLDER VALUE, PLEASE MARK, DATE, SIGN,
AND RETURN THE ENCLOSED [GREEN] PROXY CARD USING THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE.
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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VOTING INFORMATION
The Fund's proxy materials also include proposals relating to the election of
Directors and the ratification of the selection of the Fund's independent
accountants. You may vote on all of the matters contained in the Fund's proxy
statement by completing and returning the enclosed [GREEN] proxy card.
The Soliciting Shareholder is not making any recommendation as to how you should
vote on ratification of the selection of the Fund's independent accountants.
A [GREEN] proxy card which is returned to the Soliciting Shareholder or its
agent will be voted as you indicate on the card. If a [GREEN] proxy card is
returned without indicating how to vote on a matter, your shares will be voted
FOR the election of our nominees, FOR the proposal recommending that the Board
provide shareholders the option of receiving full NAV for all their shares
within two months, FOR the proposal recommending that members of the Board not
standing for election this year who oppose a commitment to deliver NAV within
two months resign, FOR the proposal recommending that the Board of Directors
reimburse the Soliciting Shareholder for initial proxy communication costs
limited to printing, mailing, distribution, and tabulation of this opposing
proxy, and will ABSTAIN on the proposal to ratify the selection of the Fund's
independent accountants. All other stockholder proposals contained in this
proxy or introduced at the meeting for which you have not indicated your
preference will be voted at the time of the meeting by the Soliciting
Shareholder in accordance with the best interests of the stockholders in the
sole judgement and opinion of the Soliciting Shareholder.
If you have already returned the [WHITE] proxy card that was sent to you by the
Fund, you may revoke that proxy and vote for the Soliciting Shareholder's
nominees and proposals by marking, signing, dating, and mailing a later dated
[GREEN] proxy card.
Completing and returning a [WHITE] proxy card or giving telephone authorization
to anyone, even to vote against the nominees named in the Fund's proxy
statement, after you return the enclosed [GREEN] proxy card will revoke the
proxy given in the [GREEN] card.
Therefore, DO NOT return a [WHITE] proxy card or give telephone authorization to
anyone after returning the [GREEN] card, unless you wish to completely cancel
ALL of your choices on the [GREEN] proxy card.
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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PROXY STATEMENT IN OPPOSITION
TO SOLICITATION BY THE BOARD OF DIRECTORS OF THE FIRST AUSTRALIA FUND, INC.
ANNUAL MEETING OF STOCKHOLDERS
To be held on April 23, 1999
This proxy statement and the enclosed [GREEN] proxy card are being furnished to
holders of record on January 26, 1999 (the "Record Date") of shares of common
stock, par value $.01 per share (the "Common Stock"), of The First Australia
Fund, Inc., a Maryland corporation (the "Fund"), by Deep Discount Advisors, Inc.
and Ron Olin Investment Management Company, both registered investment advisors,
(the "Soliciting Shareholder"), in connection with the solicitation of proxies
by the Soliciting Shareholder for use at the 1999 Annual Meeting of the Fund to
be held on April 23, 1999, at the offices of Prudential Securities incorporated,
One Seaport Plaza, 35th Floor, New York, New York, at 10:00 a.m., New York time.
The Soliciting Shareholder is soliciting a proxy to vote your shares at the 1999
Annual Meeting of Stockholders of the Fund and at any and all adjournments or
postponements of the meeting. The Fund has been properly notified of the
Soliciting Shareholder's intent to solicit proxies on its own behalf, and the
Soliciting Shareholder intends to send its opposing proxy to a sufficient number
of the Fund's shareholders to pass all proposals.
This proxy statement and the enclosed [GREEN] proxy card are first being sent to
stockholders of the Fund on or about April 5, 1999.
INTRODUCTION
There are two routine matters that the Fund has scheduled to be voted on at the
meeting:
1. The election of five persons to serve as directors of the Fund;
2. The ratification of the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the independent public accountants of the Fund for
the fiscal year ending October 31, 1999.
With respect to these matters, the Soliciting Shareholder is soliciting a proxy
to vote your shares:
- IN FAVOR of the election of five persons whom the Soliciting Shareholder
intends to nominate for election as directors of the Fund; and
the Soliciting Shareholder is making no recommendation on how shares should be
voted on the ratification of the selection of the Fund's independent accountants
and will ABSTAIN if no preference is indicated.
The Soliciting Shareholder is also soliciting your proxy to vote your shares on
the following proposals, which it intends to introduce at the meeting:
3. A stockholder proposal terminating the management contract between the Fund
and EquitiLink International Management Limited ("EquitiLink"), the Fund's
manager;
4. A stockholder proposal recommending that the Board provide shareholders the
option of receiving full NAV for all their shares within two months;
5. A stockholder proposal recommending that members of the Board not standing
for election this year who oppose a commitment to deliver NAV within two months
should resign; and
6. A stockholder proposal recommending that the Board of Directors reimburse
the Soliciting Shareholder for initial proxy communication costs limited to
printing, mailing, distribution, and tabulation of this opposing proxy.
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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How Proxies Will Be Voted
All of the proposals scheduled by the Fund to be voted on at the meeting are
included in the enclosed [GREEN] proxy card. If you wish to vote IN FAVOR of
our nominees, and FOR any of the other proposals, you may do so by completing
and returning a [GREEN] proxy card.
If you return a [GREEN] proxy card to the Soliciting Shareholder or its agent,
your shares will be voted on each matter as you indicate. If you do not
indicate how your shares are to be voted on a matter, they will be voted FOR the
election of our nominees, FOR the proposal recommending that the Board provide
shareholders the option of receiving full NAV for all their shares within two
months, FOR the proposal recommending that members of the Board not standing for
election this year who oppose a commitment to deliver NAV within two months
resign, and FOR the proposal recommending that the Board of Directors reimburse
the Soliciting Shareholder for initial proxy communication costs limited to
printing, mailing, distribution, and tabulation of this opposing proxy. If you
do not indicate how to vote on the ratification of the selection of the Fund's
independent auditors, your shares will be voted TO ABSTAIN on that matter. All
other stockholder proposals contained in this proxy or introduced at the
meeting, including the proposal to terminate the management contract, will be
voted at the time of the meeting by the Soliciting Shareholder in accordance
with the best interests of the stockholders, in the sole judgement and opinion
of the Soliciting Shareholder. If you return a [GREEN] proxy card, you will be
granting the persons named as proxies discretionary authority to vote on any
other matters of which they are not now aware that may come before the meeting.
These may include, among other things, matters relating to the conduct of the
meeting and proposals of other stockholders.
Voting Requirements
Only stockholders of record on the Record Date are entitled to vote at the
meeting. According to the Fund's proxy statement, there were 17,189,998 shares
of Common Stock issued and outstanding on the Record Date. Holders of record on
the Record Date will be entitled to cast one vote on each matter for each share
of Common Stock held. Directors of the Fund are elected by a majority of the
votes cast. Ratification of the selection of the Fund's independent auditors
and approval of stockholder proposals numbered 4, 5, and 6 described in this
proxy statement each require the affirmative vote of a majority of the shares
voting on the matter. The Contract Termination Proposal, Proposal 3, requires
the vote of a majority of the outstanding voting securities of the Fund, as
defined by the Investment Company Act of 1940 (the "1940 Act"). This majority
means the lesser of: (1) 67% or more of the Common Stock of the Fund present at
the meeting, if the holders of more than 50% of the outstanding Common Stock are
present or represented by proxy; or (2) more than 50% of the outstanding Common
Stock.
In tallying stockholder votes, abstentions and "broker non-votes" (i.e., shares
held by brokers or nominees as to which (a) instructions have not been received
from the beneficial owners or persons entitled to vote and (b) 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. Abstentions and broker non-votes will have the effect of
a vote against the election of directors. The five nominees receiving the
largest number of votes will be elected to serve as directors of the Fund. In
addition, abstentions and broker non-votes are not considered votes "cast" and
thus, will have no effect on any proposal other than the Contract Termination
Proposal, Proposal 5, in which case they will have the same effect as "no"
votes.
The presence, in person or by proxy, of the holders of more than 50% of the
shares of Common Stock of the Fund entitled to vote at the meeting will
constitute a quorum for the transaction of business. If a quorum is not present
at the meeting, or if a quorum is present but sufficient votes to approve any of
the stockholder proposals are not received, the persons named as proxies may
propose one or more adjournments of the meeting to permit further solicitation
of proxies. The proxies may also propose an adjournment for other
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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reasons. Any
adjournment will require the affirmative vote of a majority of those shares
present at the meeting in person or by proxy. If an adjournment of the meeting
is proposed, the persons named as proxies on the [GREEN] proxy card will vote
for or against such adjournment in their discretion.
Revocation of Proxies
You may revoke any proxy you give to management or the Soliciting Shareholder at
any time prior to its exercise in the following ways:
Deliver a written revocation of your proxy to the Secretary of the Fund;
Execute and deliver a later dated proxy to the Soliciting Shareholder or to the
Fund or our respective agents; or
Vote in person at the meeting. (Attendance at the meeting will not in and of
itself revoke a proxy.)
There is no limit on the number of times you may revoke your proxy prior to the
meeting. Only the latest dated, properly signed proxy card will be counted.
INFORMATION CONCERNING THE SOLICITING SHAREHOLDER
The beneficial shareholders making this solicitation are Deep Discount Advisors,
Inc. and Ron Olin Investment Management Company, both registered investment
advisors. These companies presently manage investment portfolios having assets
in excess of $180 million.
The address of the Soliciting Shareholder is One West Pack Square, Suite 777,
Asheville, NC 28801.
As of the Record Date, the Soliciting Shareholder has the beneficial ownership
of 839,489 shares of Common Stock of the Fund, held by principals and clients of
the companies and representing approximately 4.9% of the issued and outstanding
shares of Common Stock of the Fund.
Exhibit 1 to this proxy statement contains a schedule showing the purchases and
sales of Common Stock of the Fund by the Soliciting Shareholder within the past
two years.
The Soliciting Shareholder has made the decision to seek Board representation
after an extended period of unsatisfactory shareholder results. Moreover, it
believes effective measures have not been taken by EquitiLink nor has there been
effective direction by the current Board to deal with the persistent discount to
NAV at which the Fund's shares trade on the open market.
REASONS FOR THE SOLICITATION
In our view, management has not taken meaningful steps to enhance stockholder
value. For this reason, the Soliciting Shareholder is soliciting your vote to
elect Messrs. Olin, Bradshaw, Bentz, Clark, and Hellerman to the Board of
Directors and to approve various stockholder proposals, which it believes will
enhance stockholder value.
The election of Messrs. Olin, Bradshaw, Bentz, Clark, and Hellerman as directors
will provide stockholders with an independent voice on important matters
affecting the Fund. Their election will give the Board a new perspective and
will help assure that measures intended to benefit stockholders are more
actively considered. The approval of various proposals will also further these
goals to the extent that they may result in:
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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- Delivering an option to shareholders to receive full net asset value for
their shares;
- Enhancing both net asset value and market value of the Fund's shares through
aggressive, perpetual buybacks of shares in the market;
- Implementation of new investment advisory arrangements with an investment
advisor that is committed to enhancing value for stockholders; and
- Greater stockholder guidance to the Board, enhancing its ability to act in
the best interests of stockholders.
If you share these goals, we urge you to vote for our nominees and proposals,
using the enclosed [GREEN] proxy card.
CERTAIN CONSIDERATIONS
In deciding whether to give the Soliciting Shareholder your proxy, you should
consider the following information.
Even if its nominees are elected and its proposals are approved by stockholders,
there can be no assurance that the full Board of Directors will take any actions
that it may advocate or that such actions, if taken, will achieve their intended
goals. Its nominees will, if elected, represent only five of the Fund's
fourteen directors, absent the resignation of any Class I or Class III
directors.
Implementation of certain Board actions may require stockholder approval, and no
assurance can be given that such approval will be obtained. In addition,
various costs, which would be borne indirectly by stockholders, may be
associated with certain actions, including but not limited to those associated
with holding a special meeting of stockholders.
The Soliciting Shareholder believes that all stockholders of the Fund will
benefit if any actions taken to improve stockholder value or to reduce or
eliminate the discount from NAV are successful. However, the Soliciting
Shareholder is paid fees by its clients who hold shares of the Fund. These fees
will be greater if the value of the Fund's shares increase and, in some cases,
are based upon the performance of the client's account.
If the Contract Termination Proposal is approved, it will be necessary for the
Fund to retain a new investment manager and obtain approval of an investment
management agreement with the new manager by the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund as defined by the 1940 Act, and by stockholders of the
Fund. No assurance can be given that a new manager will be identified or
approved prior to the date as of which the management contract with EquitiLink
International Management Limited terminates. In such event, the Fund might have
to implement interim arrangements to assure continued management of the Fund's
assets, which might require the issuance of an order by the Securities and
Exchange Commission (and of which there can be no assurance). Alternatively,
the Board of Directors or officers of the Fund would have to manage the Fund's
investment portfolio.
Ron Olin and Deep Discount Advisors, Inc. are parties to a pending legal action
involving a closed-end fund. These actions are described in Exhibit 2. In that
action, the closed-end fund has alleged that the Soliciting Shareholder has
violated certain provisions of the Federal securities laws in connection with
the solicitation of proxies. Both Ron Olin and Deep Discount Advisors, Inc.
vigorously denied the allegation and moved for dismissal. A dismissal has
subsequently been agreed to by the parties and final details are in preparation.
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
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ELECTION OF DIRECTORS
At the meeting, stockholders will have the opportunity to elect five persons as
directors of the Fund. The Fund currently has a total of fourteen directors,
divided into three classes. There are presently five Class II directors, whose
terms expire in 1999, five Class III directors, whose terms expire in 2000, and
four Class I directors, whose terms expire in 2001. Each person elected as a
director at the meeting will be a Class II director whose term will expire in
2002. The Fund will be nominating its own candidates for Directors as noted in
the Fund's proxy.
The Soliciting Shareholder will nominate Messrs. Olin, Bradshaw, Bentz, Clark,
and Hellerman for election as Class II directors of the Fund. Information about
the nominees is as follows:
Name, Business Address Age Principal Business Occupations
Ronald G. Olin 53
One West Pack Square
Suite 777
Asheville, NC 28801 Mr. Olin is President and Chief Executive
Officer of Deep Discount Advisors, Inc.and
General Partner of Ron Olin Investment
Management Co. Both firms are registered
investment advisors specializing in
investments in closed-end funds. Prior
to founding these investment management
firms, Mr. Olin was a senior manager with
IBM supporting government software
contracts with the N.A.S.A. and D.O.D. He
currently serves as Chairman of the Board
of Clemente Global Growth Fund, a NYSE
Traded closed-end fund with an
internationally diversified portfolio, and
as a Director on the Board of The Austria
Fund, Inc., a NYSE-traded closed-end fund
managed by Alliance Capital.
Number of Shares Owned Directly or
Indirectly As of January 26, 1999 300
Ralph W. Bradshaw 48
One West Pack Square
Suite 777
Asheville, NC 28801 Mr. Bradshaw has served as Vice President
and Secretary of Deep Discount Advisors,
Inc., a registered investment advisor
specializing in closed-end fund
investments, for over five years. During
that period he has also provided financial
consulting services in the area of closed-
end funds. In previous years, he has held
various managerial positions.
Mr. Bradshaw currently serves as a
Director on the Boards of Clemente Global
Growth Fund and The Austria Fund, both
NYSE-traded closed-end funds.
Number of Shares Owned Directly or
Indirectly As of January 26, 1999 500
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Gary A. Bentz 42
One West Pack Square
Suite 777
Asheville, NC 28801 Mr. Bentz has served as Vice President and
Chief Financial Officer of Deep Discount
Advisors, Inc., a registered investment
advisor specializing in closed-end fund
investments, for over five years. He has
also provided financial accounting,
investment analysis and consulting services
to companies and private investors for the
last 13 years. After commencing his career
with Arthur Andersen & Co., Mr. Bentz held
various financial managerial positions in
industry. He currently serves as a
Director on the Boards of Clemente Global
Growth Fund and The Austria Fund, both
NYSE-traded closed-end funds.
Number of Shares Owned Directly or
Indirectly As of January 26, 1999 615
William A. Clark 53
One West Pack Square
Suite 777
Asheville, NC 28801 Since 1995 Mr. Clark has served as Director
of Research for Deep Discount Advisors, a
registered investment advisor specializing
in closed-end fund investment, in addition
to providing consulting services in closed
-end fund portfolio management. Mr. Clark
has served as an investment analyst and
advisor to private clients for over 17
years. Before joining Deep Discount
Advisors, Mr. Clark served in various
managerial positions, and provided
financial services to banks,
telecommunications/software companies,
private investors, and regional developers.
During this period, he also served as CFO
of a company in the energy related
business. Mr. Clark currently serves as a
Director on the Board of The Austria Fund,
Inc., a NYSE-traded closed-end fund.
Number of Shares Owned Directly or
Indirectly As of January 26, 1999 1,231
Gerald Hellerman 61
10965 Eight Bells Lane
Columbia, Maryland 21044 Since 1993, Mr. Hellerman has served as the
managing director of Hellerman Associates,
which provides financial consulting and
litigation support services primarily in
government related matters. From 1976 to
1993, Mr. Hellerman was the Chief Financial
Analyst for the Antitrust Division of the
United States Department of Justice. He is
a Trustee of Third Trust, Third Avenue
Value Fund, Third Avenue Small Cap Value
Fund, Third Avenue High Yield Fund, and
Third Avenue Real Estate Value Fund which
are registered open-end investment
companies. Mr. Hellerman currently serves
as a Director on the Board of Clemente
Global Growth Fund, a NYSE-traded closed
-end fund with an internationally
diversified portfolio.
Number of Shares Owned Directly or
Indirectly As of January 26, 1999 0
10
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
Messrs. Olin, Bradshaw, Bentz, and Clark are affiliated with the company Deep
Discount Advisors, Inc. and several of them serve on the Boards of Directors of
other closed-end funds as noted in their biographical information.
As previously noted, Deep Discount Advisors and Ron Olin Investment Management
Company are deemed to own beneficially 839,489 shares of Common Stock,
representing approximately 4.9% of the shares outstanding on the Record Date,
January 26, 1999.
Directors of the Fund who are not affiliated with EquitiLink International
Management Limited receive an annual stipend for serving on the Board and its
committees, an additional sum for each Board meeting which they attend, and
reimbursement for out-of-pocket expenses in connection with their attendance at
directors' meetings. According to the Fund's Proxy statement, Directors not
affiliated with EquitiLink each received total compensation between $10,500 and
$13,500 for the fiscal year ending October 31, 1998. The Fund does not pay any
pension or other benefits to its directors.
Other than fees that may be payable by the Fund to its directors, none of the
nominees named above has any arrangement or understanding with any person with
respect to any future employment by the Fund or by any affiliate of the Fund.
The persons named as proxies in the enclosed [GREEN] proxy card intend, in the
absence of contrary instructions, to vote all proxies they are entitled to vote
IN FAVOR of the election of the five nominees named above. Each nominee has
consented to stand for election and to serve if elected. If any nominee is
unable to serve, an event not now anticipated, the proxies will be voted for
such other person, if any, as is designated by the persons named as proxies.
Information regarding the persons now serving as directors and officers of the
Fund, and additional information regarding the Fund, is contained in the Fund's
proxy statement.
11
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OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
The Soliciting Shareholder intends to introduce the following four proposals at
the meeting:
PROPOSAL 3 - CONTRACT TERMINATION PROPOSAL
At the meeting, the Soliciting Shareholder intends to introduce the following
resolution for consideration by the stockholders:
- RESOLVED: That the management contract between the Fund and EquitiLink
International Management Limited be terminated within sixty (60) days as
provided for in the Investment Company Act of 1940.
The Fund's reports indicate that through 10/31/98, when the market price of the
shares was $6.56, the shareholders had collectively made only about $19 million
on their investment over thirteen years while paying out almost $35 million in
advisory fees, director fees, underwriting fees and other expenses. The
shareholders paid in a total of about $166 million through the Fund's initial
underwriting, subsequent rights offerings, and dividend reinvestment. They
received $72 million in distributions and had an investment with a market value
of only $113 million on 10/31/98. While it is not directly comparable to the
Fund's shareholder results, the Morgan Stanley Total Return Index of Australian
Securities increased from 227.2 in December 1985, shortly after the Fund's
inception, to 1005.4 on at the end of October 1998. As of 10/31/98 the net
asset value of the shares was $8.25, representing a discount of $1.69 per share
or a +26% immediate gain to the shareholders if the discount were eliminated.
The discounts continue to persist and to fluctuate. As recently as January 29,
1999, the discount was $2.11 per share, equivalent to a +31% gain if eliminated.
On February 26, 1999, the discount of $1.61 represented a potential +22% gain.
We believe that if we lose this proxy contest, the discounts may well return to
the higher levels experienced earlier this year and last year. The Soliciting
Shareholder believes that claims of recent improvement in the dismal long-term
performance record and all the Australian investment experience in the world are
irrelevant if the shareholders have not made a decent return on their investment
based on the market price of the shares.
Shareholders who believe that EquitiLink, its management fees, and its influence
on the Board are a large part of the problem in getting the Board to give
shareholders the option of receiving full net asset value for their shares
should consider voting in favor of this proposal. Moreover, if the Soliciting
Shareholder is given sufficient discretionary voting authority on this proposal
by virtue of shareholders returning the [GREEN] proxy with this proposal
unmarked, it will determine at the time of the meeting whether or not
termination of the EquitiLink contract, or the threat of it, combined with other
actions taken or promised by EquitiLink and the Board, will be in the best
interests of shareholders. The Soliciting Shareholder believes that a large
discretionary vote on the [GREEN] proxy may give it the leverage to overcome a
possible unwillingness of EquitiLink and the other Directors to follow
shareholder direction on the other proposals.
If this proposal is approved by stockholders, the Fund's investment management
agreement with EquitiLink International Management Limited will be required to
be terminated. The Soliciting Shareholder believes that EquitiLink may be the
primary impediment to allowing shareholders the option to receive full Net Asset
Value (NAV) for their shares. Although passage of this proposal would not
directly result in achieving this goal, it will encourage the Board of Directors
to seek a new investment manager who is committed to enhancing stockholder
value.
In the event this proposal is approved by stockholders, it will be necessary for
the Board of Directors, including a majority of the directors who are not
"interested persons" (as defined by the 1940 Act) of the Fund, to approve a
management contract with a new investment manager to assure continuity of
services to the Fund. This new management contract will also have to be
approved by stockholders of the Fund prior to its effectiveness. If a new
management contract is not approved by stockholders and directors and
12
<PAGE>
OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
implemented prior to the effective date of the termination of the present
management contract, it is possible that there will be a period of time during
which the Fund will not have an independent manager responsible for the
management and supervision of its investment portfolio.
PROPOSAL 4 - SHAREHOLDER OPTION TO RECEIVE FULL NET ASSET VALUE
At the meeting, the Soliciting Shareholder intends to introduce the following
resolution for approval by the stockholders:
- RESOLVED: That the stockholders hereby recommend that the Board of
Directors take whatever steps necessary to provide all shareholders the option
of receiving full Net Asset Value (NAV) for their shares within two months (60
days) of the date of the 1999 Annual meeting.
Existing shareholders have endured a long-lasting and persistent discount in the
market value of their shares. The Board has it within its power to provide
shareholders the option of receiving full net asset value for their shares, less
any associated costs, in a timely manner, without any further shareholder
approvals. Open-ending the Fund is not required. Examples of how this
recommendation could be implemented include having the Fund do a full tender
offer for all its shares at NAV for cash or offering shareholders the option of
receiving an in-kind, proportionate distribution of their share of the Fund's
portfolio. Both techniques have been done successfully in the past by other
closed-end funds. Any such undertaking could be designed to minimize the impact
and costs to those shareholders wishing to retain the Fund's current structure.
A decision to make an in-kind, proportionate distribution of the Fund's
securities to shareholders who desire it could be accompanied by a facility to
have those securities transferred into a liquidating trust so that they could be
disposed of in an economical manner. This technique was used recently by
another closed-end fund to avoid the inconveniences associated with disposing of
small lots of foreign securities.
Such actions would likely require exemptive relief from the SEC to permit
participation by those shareholders who own more than 5% of the Fund. A tender
offer, which would require the liquidation of some portion of the Fund's
portfolio could create tax liabilities for those remaining in the Fund. An in-
kind distribution would not have tax consequences for those remaining in the
Fund; those electing to take an in-kind distribution could have tax liabilities
from the distribution. If the Fund becomes significantly smaller through one of
these actions, it is possible that certain fixed expenses of the Fund would
increase the expense ratio for remaining shareholders, although within certain
limits we believe that much can be done to adjust fixed expenses to match the
size of the Fund. Also, it is possible that if most of the shareholders elect
to participate, the Fund may become so small that it is impractical to operate.
As would be the case with massive redemptions after an open-ending or
alternative measure, a merger or liquidation of the Fund might then become
necessary. Finally, any measure designed to provide full NAV to shareholders,
net of associated expenses, would be subject to the prevailing market conditions
at the time the measure is implemented, consequently, actual NAV will be
dependent on prevailing market conditions. If there are any securities held by
the Fund which are highly illiquid, these may require a longer time to liquidate
without adversely affecting the related market price of the security. It is
also possible that certain strategies which might be adopted by the Fund to
provide NAV to shareholders might require longer than sixty days in order to
assure prudent financial management of the liquidation.
PROPOSAL 5 - RESIGNATION OF DIRECTORS OPPOSING SHAREHOLDER OPTION TO RECEIVE NET
ASSET VALUE
At the meeting, the Soliciting Shareholder intends to introduce the following
resolution for approval by the stockholders:
- RESOLVED: That it would be in the best interests of the Fund and its
stockholders for all Directors not standing for election at the 1999 Annual
Meeting who oppose the resolution to deliver full Net Asset Value (NAV) to all
shareholders within 60 days of the date of the 1999 Annual Meeting to
13
<PAGE>
OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
resign,
and that the stockholders hereby recommend that such Directors resign their
positions as Directors of the Fund.
Directors, no matter how long their list of credentials, need to be responsive
to the wishes of the shareholders, even if it conflicts with the financial
interests of the Fund manager and reduces the manager's
fees. Directors who
oppose an approved resolution of the shareholders and refuse to act on such a
resolution should be held accountable to those shareholders and, in our opinion,
should resign their position. Staggered Board terms make it possible for a
majority of directors to ignore the shareholders for a period of time. Just
because it is possible does not make it right, and the Soliciting Shareholder
believes that those shareholders who desire the option of receiving full net
asset value for their shares should speak out by voting for the above
resolution.
PROPOSAL 6 - LIMITED REIMBURSEMENT OF CERTAIN EXPENSES OF THE SOLICITING
SHAREHOLDER
At the meeting, the Soliciting Shareholder intends to introduce the following
resolution for approval by the stockholders:
- RESOLVED: That the stockholders hereby recommend that the Board of
Directors authorize and direct the officers of the Fund to reimburse the
Soliciting Shareholder for such reasonable fees and expenses associated with the
initial proxy communication, including only printing, mailing, distribution, and
tabulating costs, but not including attorneys fees, legal fees, or other
solicitation fees.
The Soliciting Shareholder believes that the election of its nominees as
directors of the Fund and the approval of the stockholder proposals it intends
to introduce will benefit the Fund and its stockholders. For this reason, it
intends to seek reimbursement to the maximum extent permitted by law of the
reasonable fees and expenses incurred in connection with providing these choices
to shareholders and believes that reimbursement by the Fund would be
appropriate. However, the Soliciting Shareholder does not believe that outside
lawyer costs, hired solicitor costs, telephone solicitations, special overnight
mailing costs, and various other expensive techniques often used in proxy
contests should be paid for by shareholders. It is not right to charge the
shareholders these costs whether they are incurred by the Soliciting Shareholder
or whether they are incurred by the Fund in an attempt to entrench the incumbent
manager or Board. The Soliciting Shareholder is also taking the position that
it is possible that authorization of extraordinary solicitation expenses by an
existing Board to entrench itself and the manager may be a violation of federal
securities law.
The Fund opposes this limited reimbursement to the Soliciting Shareholder yet
has indicated that "expenses related to the solicitation of security holders, in
excess of those normally expended in an election of Directors, including fees
for attorneys, accountants, public relations, solicitors, advertising, printing,
transportation and other related expenses, are expected to aggregate
approximately $775,000," and that these amounts will be paid by the
shareholders. In contrast, the Soliciting Shareholder intends to bear its own
attorney fees, legal fees, and extraordinary solicitation fees and is only
requesting reimbursement of $19,000 or so for the costs of simply communicating
these choices to shareholders. Shareholders should look closely at who is
delivering value for their money and who has their best interests in mind.
PRINCIPAL HOLDERS OF VOTING SECURITIES
According to the Fund's proxy statement, the only person known by the Fund to be
the beneficial owner of 5% or more of the Fund's shares is Mira, L.P., located
at One Chase Manhattan Plaza, 42nd Floor, New York, NY 10005, which on February
26, 1999 filed a Schedule 13G indicating that as of such date it was the
beneficial owner of 871,800 shares of the Fund, representing approximately
5.072% of the total shares outstanding.
14
<PAGE>
OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
THE SOLICITATION
Deep Discount Advisors, Inc. and Ron Olin Investment Management Company
(Soliciting Shareholder) are making this solicitation.
Banks, brokerage houses and other custodians, nominees, and fiduciaries will be
requested to forward this proxy statement and the enclosed [GREEN] proxy card to
the beneficial owners of shares of Common Stock for whom they hold shares of
record. The Soliciting Shareholder will reimburse these organizations for their
reasonable out-of-pocket expenses.
The Soliciting Shareholder will bear all of the fees and expenses related to
this proxy solicitation except to the extent that it seeks and obtains
reimbursement. It intends to seek reimbursement of certain reasonable printing,
mailing, distribution, and tabulating costs from the Fund and will propose at
the meeting that stockholders authorize and direct such reimbursement. It is
estimated that the total amount of fees and expenses, including lawyers and
proxy advisors, will not exceed $70,000, of which none has been disbursed to
date. However, it is estimated that the amount of limited reimbursement sought
from the Fund will likely not exceed $19,000.
The Soliciting Shareholder is not and, within the past year, has not been a
party to any contract, arrangement or understanding with any person with respect
to any securities of the Fund. In addition, there is no arrangement or
understanding involving either the Soliciting Shareholder, or any associate
which relates to future employment by the Fund or any future transaction with
the Fund.
If you have any questions concerning this proxy solicitation or the procedures
to be followed to execute and deliver a proxy, please contact the Soliciting
Shareholder at 828-274-1863.
ADDITIONAL PROPOSALS
The Soliciting Shareholder knows of no business that will be presented for
consideration at the meeting other than that set forth in this proxy statement
and in the Fund's proxy statement. If any other matters are properly presented
for consideration at the meeting, it is the intention of the persons named as
proxies on the enclosed [GREEN] proxy card to vote in accordance with their own
best judgment on such matters.
The date by which a stockholder must submit a proposal to be presented at the
2000 Annual Meeting of Stockholders is set forth in the Fund's proxy statement.
Dated: March 24, 1999
EXHIBIT 1 Purchases and Sales of First Australia Fund Shares
SECURITIES OF THE FUND PURCHASED OR SOLD
WITHIN THE PAST TWO YEARS BY THE SOLICITING SHAREHOLDER
Except as disclosed in this proxy statement, neither Ronald G. Olin nor Deep
Discount Advisors, Inc. nor Ron Olin Investment Management Company has, or had,
any interest, direct or indirect, by security holdings or otherwise, in the
Fund. The following table sets forth certain information with respect to
purchases and sales of shares of Common Stock of the Fund by Deep Discount
Advisors, Inc. and Ron Olin Investment Management Company for accounts holding
shares as to which they are deemed to be the beneficial owners (the "Accounts").
Some of the shares are held in margin accounts. Therefore, a portion of the
purchase price and market value of the shares may from time to time be
represented by margin borrowings, depending upon the net debit balances, if any,
of the margin accounts, which fluctuate daily.
15
<PAGE>
OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
Date Shares Purchased
3/24/97 -2359
3/27/97 -1059
4/22/97 -1000
4/29/97 300
5/14/97 -1589
6/11/97 -1165
6/30/97 500
9/30/97 -731
10/1/97 1231
10/9/97 -1589
10/14/97 -3076
10/24/97 -4600
10/29/97 -2200
11/11/97 7576
12/2/97 -6471
12/3/97 -4500
12/4/97 -4500
12/14/97 800
12/17/97 7000
12/18/97 10000
1/7/98 1059
1/8/98 36
1/15/98 -1400
1/20/98 20000
1/21/98 9900
1/22/98 8100
1/27/98 4000
1/29/98 500
2/6/98 6894
2/9/98 2000
2/10/98 233
2/17/98 6500
2/18/98 2100
2/19/98 9100
2/20/98 7100
2/24/98 4500
3/4/98 2400
3/16/98 7000
3/19/98 7000
4/14/98 -1589
5/5/98 -1900
6/16/98 -700
6/25/98 -1000
6/26/98 -1300
7/28/98 1059
7/29/98 -3180
7/30/98 -14509
7/31/98 -5000
8/5/98 -3600
8/6/98 -2712
8/10/98 -6360
8/12/98 -7206
8/14/98 -676
8/18/98 -17000
8/19/98 -13604
8/25/98 -1400
8/28/98 -1900
8/31/98 -8420
9/1/98 -105000
9/2/98 -8500
9/3/98 -5000
9/4/98 -16000
9/8/98 -12800
9/10/98 -3000
9/11/98 -9000
9/24/98 -1100
10/6/98 -2600
10/7/98 -2000
10/9/98 -4424
10/21/98 -1400
10/23/98 -2000
10/27/98 -1700
12/1/98 -2000
1/25/99 5000
EXHIBIT 2
PENDING LITIGATION INVOLVING THE SOLICITING SHAREHOLDER
The soliciting shareholder, and entities affiliated with it, are involved in the
following pending litigation relating to closed-end funds. The litigation is
pending in U.S. District Court for the Southern District of New York.
The Emerging Germany Fund Litigation
Ronald Olin and Deep Discount Advisors, Inc., of which Ronald Olin is President
and Chief Executive Officer, are named defendants in a federal court action for
injunctive relief filed on April 8, 1998 by The Emerging Germany Fund, Inc.
("FRG"). FRG filed this action immediately after canceling its 1998 annual
meeting scheduled for April 27, 1998, and stated that it would not schedule an
annual meeting until the litigation has been resolved.
Subsequently, a class action lawsuit was filed by a stockholder who demanded
that FRG reschedule its 1998 Annual Meeting. Recently, FRG rescheduled and
held its 1998 Annual Meeting on January 26, 1999 and the shareholders approved a
proposal initiated by the Fund to open-end. In its action, FRG alleges that the
defendants solicited proxies in violation of Section 14(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") in connection with certain postings by
Mr. Olin on an Internet bulletin board and engaged in a alleged scheme to force
FRG to open-end. FRG also alleges that Mr.Olin, Deep Discount Advisors, Inc.
and the three other defendants, Mr.Goldstein, and Opportunity Partners L.P., and
Kimball & Winthrop, were a "group" within the meaning of Section 13(d) of the
Williams Act, and had failed to file a Schedule 13D.
All defendants have moved to dismiss FRG's complaint. A dismissal has
subsequently been agreed to by FRG with regard to the Soliciting Shareholder and
final details are in preparation.
All of the above actions were filed in the Federal District Court , S.D.N.Y.
Copies of all pleadings in the above actions are available upon request.
16
<PAGE>
OPPOSING PROXY 1999 THE FIRST AUSTRALIA FUND,INC.
- -------------------------------------------------------------------------------
PROXY CARD
PROXY SOLICITED IN OPPOSITION
TO THE BOARD OF DIRECTORS OF THE FIRST AUSTRALIA FUND, INC.
BY DEEP DISCOUNT ADVISORS, INC. AND RON OLIN INVESTMENT MANAGEMENT COMPANY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 1999
The undersigned hereby appoints Ronald G. Olin, Ralph W. Bradshaw, Gary A.
Bentz, and William A. Clark, and each of them, as the undersigned's proxies,
with full power of substitution, to attend the Annual Meeting of Stockholders of
The First Australia Fund, Inc. (the "Fund") to be held on April 23, 1999, at the
offices of the Prudential Securities Incorporated, One Seaport Plaza, 35th
Floor, New York, New York , at 10:00 a.m., New York time, (the "Meeting"), and
any adjournment(s) or postponement(s) thereof, and to vote on all matters that
may come before the Meeting and any such adjournment or postponement the number
of shares that the undersigned would be entitled to vote, with all the power the
undersigned would possess if present in person, as specified below. The proxies
may vote in their discretion with respect to such other matter or matters as may
come before the Meeting and with respect to all matters incident to the conduct
of the Meeting.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [ ].)
1. ELECTION OF DIRECTORS.
Class Two Directors (term expires in 2002)
RONALD G. OLIN
RALPH W. BRADSHAW
GARY A. BENTZ
WILLIAM A. CLARK
GERALD HELLERMAN
FOR ALL NOMINEES [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" ANY PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S) OF THE
NOMINEE(S). YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE(S).
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" THE ELECTION OF ALL NOMINEES
2. To ratify the selection by the Board of Directors of PricewaterhouseCoopers
LLP as the Fund's independent public accountants for the year ending October 31,
1999:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER HAS NO RECOMMENDATION FOR PROPOSAL TWO (2), IF
PROPOSAL TWO (2) IS LEFT BLANK, THE SOLICITING SHAREHOLDER WILL VOTE TO ABSTAIN.
3. Stockholder proposal providing that the advisory contract between the Fund
and EquitiLink International Management Limited be terminated within sixty (60)
days as provided for in the Investment Company Act of 1940:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
IF PROPOSAL THREE (3) IS LEFT BLANK FOR ALL BOXES, THE SOLICITING SHAREHOLDER
WILL VOTE ON THIS PROPOSAL IN THE BEST INTERESTS OF THE STOCKHOLDERS AT THE TIME
OF THE ANNUAL MEETING, BASED ON THE SOLE JUDGEMENT OF THE SOLICITING SHAREHOLDER
4. Stockholder proposal recommending that the Board of Directors take whatever
steps necessary to provide all shareholders the option of receiving full Net
Asset Value (NAV) for their shares within two months (60 days) of the date of
the 1999 Annual meeting:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" PROPOSAL FOUR
5. Stockholder proposal recommending that it would be in the best interests of
the Fund and its stockholders for all Directors not standing for election at the
1999 Annual Meeting who oppose the resolution to deliver full Net Asset Value
(NAV) to all shareholders within 60 days of the date of the 1999 Annual Meeting
to resign, and that the stockholders hereby recommend that such Directors resign
their positions as Directors of the Fund:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" PROPOSAL FIVE
6. Stockholder proposal recommending that the Board of Directors authorize and
direct the officers of the Fund to reimburse the Soliciting Shareholder for such
reasonable fees and expenses associated with the initial proxy communication,
including only printing, mailing, distribution, and tabulating costs, but not
including attorneys fees, legal fees, or other solicitation fees:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" PROPOSAL SIX
IMPORTANT - - PLEASE SIGN AND DATE BELOW
SHARES WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN FAVOR OF THE ELECTION OF ALL NOMINEES NAMED ABOVE IN ITEM 1 AND "FOR"
PROPOSALS 4, 5, AND 6 AND WILL ABSTAIN FROM VOTING ON PROPOSAL 2. ALL OTHER
PROPOSALS, INCLUDING PROPOSAL 3, WILL BE VOTED BY THE SOLICITING SHAREHOLDER IN
THE BEST INTERESTS OF STOCKHOLDERS AS DETERMINED BY THE SOLE JUDGEMENT OF THE
SOLICITING SHAREHOLDER AT THE TIME OF THE MEETING. THE UNDERSIGNED HEREBY
ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT DATED MARCH 24, 1999, OF DEEP
DISCOUNT ADVISORS, INC. THE UNDERSIGNED HEREBY REVOKES ANY PROXY HERETOFORE
EXECUTED BY THE UNDERSIGNED RELATING TO THE SUBJECT MATTER HEREOF AND CONFIRMS
ALL THAT THE PROXIES MAY LAWFULLY DO BY VIRTUE HEREOF.
(IMPORTANT - PLEASE FILL IN DATE)
This proxy card is provided by Deep Discount Advisors, Inc. and Ron Olin
Investment Management Company, both beneficial shareholders of the Fund.
Please sign exactly as your name appears hereon or on proxy cards previously
sent to you. When shares are held by joint tenants, both should sign. When
signing as an attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by the President or other duly authorized officer.
If a partnership, please sign in partnership name by authorized person.
SIGNATURE(S)_____________________________________________Dated:_______________
Please sign as registered and return promptly in the enclosed envelope.
Executors, trustees and other signing in a representative capacity should
include their names and the capacity in which they sign.
[SEPARATE CARD INSERT]
VOTE YOUR POCKETBOOK !
- DEMAND THE OPTION TO RECEIVE FULL NET ASSET VALUE FOR YOUR 1st AUSTRALIA
SHARES !
- ELECT DIRECTORS COMMITTED TO ELIMINATING THE DISCOUNT !
TO DO SO, YOU MUST RETURN THE [ GREEN ] PROXY CARD !
