<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No.___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
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 (S)240.14a-11(c) or (S)240.14a-12
THE FIRST AUSTRALIA FUND INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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 applies:
------------------------------------------------------------------------
(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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_] 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 its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF FIRST
AUSTRALIA FUND
INC.]
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
(800) 451-6788
December 23, 1999
Dear Shareholder:
The Annual Meeting of Shareholders is to be held at 1:00 p.m. (Eastern
time), on Wednesday, March 22, 2000 at the offices of Prudential Securities
Incorporated, One Seaport Plaza, 35th Floor, New York, New York. A Proxy
Statement regarding the meeting, a proxy card for your vote at the meeting and
an envelope postage prepaid in which to return your proxy card are enclosed.
At the Annual Meeting, the holders of the Fund's common stock will elect
the Fund's Class III Directors for a three-year term, elect a Class I Director
for a term expiring in 2001 and consider the ratification of the selection of
PricewaterhouseCoopers LLP as independent public accountants. In addition, the
shareholders present will hear a report on the Fund. There will be an
opportunity to discuss matters of interest to you as a shareholder.
Your Directors recommend that you vote in favor of each of the foregoing
matters.
/s/ Laurence S. Freedman /s/ Brian M. Sherman
- ------------------------- ------------------------
Laurence S. Freedman Brian M. Sherman
Chairman President
YOU ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE TO ASSURE A QUORUM AT THE MEETING. THIS IS IMPORTANT REGARDLESS OF
THE SIZE OF YOUR SHAREHOLDING.
<PAGE>
THE FIRST AUSTRALIA FUND, INC.
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 22, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The First
Australia Fund, Inc. (the "Fund") will be held at the offices of Prudential
Securities Incorporated, One Seaport Plaza, 35th Floor, New York, New York, on
Wednesday, March 22, 2000, at 1:00 p.m. (Eastern time), for the following
purposes:
(1)(A) To elect five Directors to serve as Class III Directors for a three-
year term;
(1)(B) To elect one Director to serve as a Class I Director for a term to
expire in 2001;
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants of the Fund for the fiscal year ending October 31,
2000; and
(3) To transact any other business as may properly come before the meeting
or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on December 29, 1999
as the record date for the determination of shareholders entitled to vote at
the meeting or any adjournment or postponement thereof.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the meeting, the
persons named as proxies may propose one or more adjournments of the meeting,
in accordance with applicable law, to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of the holders of a
majority of the Fund's shares present in person or by proxy at the meeting.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of any proposal and will vote
against any such adjournment those proxies to be voted against that proposal.
By Order of the Board of Directors,
Roy M. Randall, Secretary
Newark, New Jersey
December 23, 1999
IMPORTANT: You are cordially invited to attend the meeting. Shareholders
who do not expect to attend the meeting in person are requested to complete,
date and sign the enclosed proxy card and return it promptly in the addressed
envelope which requires no postage and is intended for your convenience. Your
prompt return of the enclosed proxy card may save the Fund the necessity and
expense of further solicitations to assure a quorum at the meeting. The
enclosed proxy is being solicited on behalf of the Board of Directors of the
Fund.
<PAGE>
PROXY STATEMENT
THE FIRST AUSTRALIA FUND, INC.
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
-------------------
Annual Meeting of Shareholders
March 22, 2000
-------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The First Australia Fund, Inc.,
a Maryland corporation (the "Fund"), to be voted at the Annual Meeting of
Shareholders of the Fund (the "Meeting") to be held at the offices of
Prudential Securities Incorporated, One Seaport Plaza, 35th Floor, New York,
New York, on Wednesday, March 22 , 2000, at 1:00 p.m. (Eastern time). The
approximate mailing date for this Proxy Statement is December 30, 1999 or as
soon as practicable thereafter.
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked on the proxy card.
Unless instructions to the contrary are marked, proxies received will be voted
FOR Proposals 1(A), 1(B), 2 and 3. Any proxy may be revoked at any time prior
to its exercise by giving written notice to the Secretary of the Fund
(addressed to the Secretary at the principal executive office of the Fund,
Gateway Center 3, 100 Mulberry Street, Newark, New Jersey 07102).
The Board of Directors has fixed the close of business on December 29, 1999
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting and at any adjournment or postponement thereof. The
Fund has 17,189,998 shares of common stock outstanding, par value $0.01 per
share, and shareholders on the record date will be entitled to one vote for
each share held.
The Board of Directors of the Fund knows of no business other than that
mentioned in the Notice of the Meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named on the enclosed proxy card to vote in
accordance with their best judgment.
The Fund will furnish, without charge, a copy of the Fund's annual report
for its fiscal year ended October 31, 1999, and any more recent reports, to
any Fund shareholder upon request. To request a copy, please call or write to
the Fund's Administrator, Prudential Investments Fund Management LLC, Gateway
Center 3, 100 Mulberry Street, Newark, NJ 07102, Telephone: 1 800-451-6788.
PROPOSAL 1: ELECTION OF DIRECTORS
The Fund's By-laws provide that the Board of Directors will be divided into
three classes, as nearly equal in number as possible, each of which, after a
transition period, will serve for three years with one class being elected
each year. Each year the term of office of one class will expire.
PROPOSAL 1(A): ELECTION OF CLASS III DIRECTORS
David Lindsay Elsum, Laurence S. Freedman, Michael R. Horsburgh and William
J. Potter, Directors who were elected to serve until the Meeting, and Peter J.
O'Connell, who was appointed to the Board in December 1999, have been
nominated
1
<PAGE>
by the Board of Directors of the Fund, including the Directors who are not
interested persons of the Fund, to serve as Class III Directors for a three-
year term to expire at the Annual Meeting of Shareholders to be held in 2003
and until their successors are duly elected and qualified. Mr. O'Connell was
appointed to the Board by the Board of Directors, including the Directors who
are not interested persons of the Fund, to replace Sir Roden Cutler, a Class
III Director who resigned from the Board in December 1999. The nominees have
indicated an intention to serve if elected and have consented to be named in
this Proxy Statement.
It is the intention of the persons named on the enclosed proxy card to vote
for the election of the persons listed below under Class III for a three-year
term. The Board of Directors of the Fund knows of no reason why any of these
nominees will be unable to serve, but in the event of any such inability, the
proxies received will be voted for such substituted nominees as the Board of
Directors may recommend.
The following table sets forth certain information concerning each of the
Fund's nominees for election as a Director and each Director of the Fund. Each
of the Fund's nominees is currently a Director of the Fund.
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ ------------------------------------------ --- -------- ---------------
Class III (Current Directors and Nominees for a Term
Expiring at the Annual Meeting to be held in 2003)
<S> <C> <C> <C> <C>
David Lindsay Elsum, A.M.+ Mr. Elsum has over 20 years' experience in 62 1985 2,000
9 May Grove investment and insurance markets. He is
South Yarra, Victoria a member of the Australian Securities
3141 and Investment Commission Takeover
Australia Panel and a member of the Australian
Government Administrative Appeals
Tribunal. Previously he was founding
Managing Director of Capel Court
Investment Bank and subsequently Chief
Executive of major public companies
including The MLC Limited (insurance)
and President of the State of Victoria
Superannuation Fund (pension fund
management).
Director, The First Australia Prime
Income Fund, Inc. (since 1986), The First
Commonwealth Fund, Inc. (since 1992) and
First Australia Prime Income Investment
Company Limited (since 1986); Director,
MaxiLink Limited (investment company);
Chairman, Audit Victoria; Chairman,
Melbourne Wholesale Fish Market Ltd.;
Chairman, Queen Victoria Market;
Chairman, Stodart Investment Pty. Ltd.;
Director, EquitiLink eLink Limited
(investment company); Director, Financial
Planning Association Limited.
Laurence S. Freedman* Mr. Freedman has over 35 years of experience 56 1985 2,383,612
Level 3 in funds management, with a focus on global
190 George Street investment analysis. Prior to founding
Sydney, N.S.W. 2000 EquitiLink in 1981, he was Director of
Australia Investments at BT Australia Limited. Mr.
Freedman's areas of fund management
specialization include investment in
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ ------------------------ --- -------- ---------------
<S> <C> <C> <C> <C>
resource and development companies,
international economies and the geo-
political impact on investment
markets.
Chairman of the Fund (since 1995) and
Vice President of the Fund (since 1985);
Vice President and Director (since 1986)
and Chairman (since 1995), The First
Australia Prime Income Fund, Inc.;
President and Director (since 1992),
The First Commonwealth Fund, Inc.; Joint
Managing Director, First Australia Prime
Income Investment Company Limited (since
1986); Founder and Joint Managing
Director, EquitiLink Australia Limited
(since 1981); Director, EquitiLink Limited
(holding company) (since 1986); Director,
EquitiLink Holdings Limited (holding
company) (since 1998); Director, EquitiLink
International Management Limited (since
1985); Chairman and Joint Managing
Director, MaxiLink Limited (investment
company) (since 1987); Chairman and Joint
Managing Director, EquitiLink eLink
Limited (investment company) (since 1994);
Managing Director, Link Enterprises
(International) Pty. Limited (investment
management company) (since 1980); Director,
Ten Group Pty. Limited (since 1994);
Director, Ten Network Holdings Limited
(commercial television operator)
(since 1998).
Michael R. Horsburgh Mr. Horsburgh has over 30 years' experience 54 1985 2,000
Suite 2213, Kyobo in investment banking and management. He
Building is currently a consultant for Durham Asset
1, 1-ka, Chongro, Management--Malaysia, a financial industry
Chongro-ku consulting firm. In that position, he
Seoul 110-714 provides consulting services to ABN AMRO
South Korea Asia Ltd., a Hong Kong registered securities
company.
Director, The First Australia Prime Income
Fund, Inc. (since 1986); Director, The
First Commonwealth Fund, Inc. (since
1994); Executive Vice President, Hannuri
Securities & Investment (October 1997-
September 1999); Director, The First
Hungary Fund (Jersey investment
company); Director, Luxonen (Luxemborg
investment company); Director and Managing
Director, Carlson Investment Management,
Inc. (1991-October 1997); Director and
Chief Executive Officer, Horsburgh
Carlson Investment Management, Inc. (1991-
1996).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ -------------------------------------------- --- -------- ---------------
<S> <C> <C> <C> <C>
Peter J. O'Connell Mr. O'Connell has acted as an international 46 1999 0
G.P.O. Box 10 mergers and acquisitions lawyer
Sydney, NSW 2001 practicing principally in the Asian
Australia region and in recent years has been
actively involved in developing key
businesses in telecommunications, IT and
on-line businesses. He is currently the
Chief Executive Officer of Ten Ventures Pty.
Ltd., a wholly-owned subsidiary of Network
Ten which has been charged with
commercializing digital broadcasting for the
network, acts as a venture capitalist
investing in technology and holds Network
Ten's 50% interest in the on-line joint venture
with Village Roadshow. Mr. O'Connell is a
barrister and solicitor and has practiced for
15 years in Australia.
Director, The First Australia Prime Income Fund,
Inc. (since December 1999); Chief Executive
Officer, Ten Ventures Pty. Ltd. (since October
1999); Director of Operations, Consolidated Press
Holdings Limited (1997-1999); Chief Executive
Officer, Hargrave Consultants Pty. Ltd.
(1994-1997).
William J. Potter+ Mr. Potter has extensive experience in 51 1985 1,000
236 West 27th Street investment banking and fund management,
New York, NY 10001 including senior positions with Toronto
Dominion Bank, Barclays Bank PLC and
Prudential Securities, Inc. and board of
director positions with investment funds
involving over $20 billion in assets
beginning in 1983. Mr. Potter has been
involved in the Australian capital
markets since 1974 including management
and board of director positions with a noted
Australian brokerage house. Mr. Potter is
President of a U.S. investment bank and has
securities licenses in the U.S. and Canada.
Mr. Potter also has extensive securities
underwriting experience in various capital
markets with an emphasis on natural
resources.
Director, The First Australia Prime Income
Fund, Inc. (since 1986), First Australia
Prime Income Investment Company Limited
(since 1986) and The First Commonwealth
Fund, Inc. (since 1992); President, Ridgewood
Group International Ltd. (international
consulting/investment banking) (since 1989);
President, Ridgewood Capital Funding, Inc.
(NASD) (private placement securities)
(since 1989); Director, Impulsora del Fondo
Mexico; Director, International Panorama
Inc.; Director, National Foreign Trade
Counsel; Director, Longevity International
Ltd.; Director, Alexandria Bancorp
(banking group in Cayman Islands);
Partner, Sphere Capital Partners (corporate
consulting) (1989-1997).
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ --------------------------------------------- --- -------- ---------------
Class I (Term Expiring at the Annual Meeting to be held in 2001)
<S> <C> <C> <C> <C>
Anthony E. Aaronson++ Mr. Aaronson has extensive experience in 62 1985 1,500
116 South Anita Avenue the management of private investments.
Los Angeles, CA 90049 He is Chairman of the Audit Committee of
the Fund.
Director, The First Australia Prime Income
Fund, Inc. (since 1986); Anthony Aaronson
(textile agent) (since 1993); Vice President,
Textile Association of Los Angeles (1996-
1998).
Neville J. Miles+ Mr. Miles has over 20 years of international 53 1996 2,000
23 Regent Street investment banking experience. He was
Paddington, N.S.W. 2021 formerly head of Corporate Treasury at
Australia Westpac Banking Corporation and Chairman
of Ord Minnett Limited (stockbrokers).
Mr. Miles has extensive experience in the
areas of corporate acquisitions and equity
offerings.
Director, The First Australia Prime Income
Fund, Inc. (since 1996); Director, The
First Commonwealth Fund, Inc. (since
December 1999); Chairman and Director,
MTM Funds Management Limited (since 1997);
Director, MaxiLink Limited (investment
company); Director, EquitiLink eLink
Limited (investment company); Executive
Director, EL&C Ballieu Limited (stockbroker)
(1994-1997); Executive Director, Ord Minnett
Securities Limited (stockbroker) (1988-
1994).
John T. Sheehy++ Mr. Sheehy has over 30 years' experience 57 1985 5,000
235 Montgomery Street in investment banking, including with J.P.
Suite 300 Morgan & Company and Bear, Stearns & Co.
San Francisco, CA 94104 Inc. His specialty areas include
securities valuation, public offerings and
private placements of debt and equity
securities, mergers and acquisitions and
management buyout transactions.
Director, The First Australia Prime Income
Fund, Inc. (since 1986), The First
Commonwealth Fund, Inc. (since 1992) and
First Australia Prime Income Investment
Company Limited (since 1986); Managing
Director, The Value Group LLC (investment
banking) (since 1997); Director, Video City,
Inc. (video retail merchandising) (since 1997);
Managing Director, Black & Company (investment
banking) (1996-1997); Managing Director,
Sphere Capital Partners (investment banking)
(1987-1996); Director, Sandy Corporation
(corporate consulting, communication and
training) (1986-January 1996).
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ ----------------------------------------------- --- -------- ---------------
Class II (Term Expiring at the Annual Meeting to be held in 2002)
<S> <C> <C> <C> <C>
Rt. Hon. Malcolm Fraser, Former Prime Minister of Australia. Mr. Fraser 69 1985 2,000
A.C., C.H.+ has over 20 years of experience in
44/55 Collins Street economics, global financial markets and
Melbourne, Victoria 3000 management of private investments. He has
Australia been a member of the Advisory Board of the
Investment Company of America, a company in
the Capital Group of funds, a consultant to
the Prudential Insurance Company of
America, a member of the Consultative Board
of Directors for ANZ Bank and a consultant
to Nomura Securities. Mr. Fraser is a
specialist in world economic relationships,
geo-political affairs and government and
private sector interrelationships and
is an international consultant on
political, economic and strategic affairs.
Director, The First Australia Prime Income
Fund, Inc. (since 1986), The First
Commonwealth Fund, Inc. (since 1992) and
First Australia Prime Income Investment Company
Limited (since 1986); Partner, Nareen
Pastoral Company (agriculture) (until 1998);
President, CARE International (1990-1995).
Harry A. Jacobs, Jr.* Former Chairman of the Board of Prudential 78 1985 3,979
One New York Plaza Securities. Mr. Jacobs has over 40 years of
New York, NY 10292 experience in fund management, investment
markets and closed-end funds, with extensive
knowledge of international equity, fixed income
and commodity markets.
Director, The First Australia Prime Income
Fund, Inc. (since 1986); Senior Director,
Prudential Securities Incorporated (since
1986); Trustee, The Trudeau Institute
(eleemosynary); Director of eleven
investment companies affiliated with
Prudential Securities Incorporated (until
November 1998).
Howard A. Knight Mr. Knight has over 30 years of experience in 57 1993 2,500
36 Ives Street financial markets and has been actively
London SW3 2ND involved in the Australian financial
United Kingdom markets for more than 25 years. From 1991 to
1994, he served as President of Investment
Banking, Equity Transactions and Corporate
Strategy at Prudential Securities. Since
1996, Mr. Knight has served as Vice
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience, Beneficially
Present Office Owned and
Name and Address with the Fund, Principal % of Total
of Each Director or Occupation or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ ----------------------------------------------- --- -------- ---------------
<S> <C> <C> <C> <C>
Chairman, Director and Chief Operating Officer
of SBS Broadcasting SA (television and radio
broadcasting), where he has been actively
involved in investment management and capital
markets.
Director, The First Australia Prime Income
Fund, Inc. (since 1993).
Richard H. McCoy++* Mr. McCoy has over 30 years of experience in 57 1993 1,000
P.O. Box 1 the securities industry and investment
Toronto Dominion Centre markets. Since May 1997, he has been Vice
Toronto, Ontario Chairman of TD Securities, Inc. Before that,
M5K 1A2 Canada he was Deputy Chairman of CIBC Wood Gundy
Securities Inc. and was primarily involved in
the firm's investment banking bactivities. Mr.
McCoy has extensive experience in managing
a wide range of debt and equity financings.
Director, The First Australia Prime Income
Investment Company Limited (since 1993);
Director, ID Biomedical Corporation
(biotechnology).
Brian M. Sherman* Mr. Sherman is President of The First Australia 56 1985 2,383,612
Level 3 Fund and Chairman of EquitiLink Australia
190 George Street Limited, the Fund's Investment Adviser. He
Sydney, N.S.W. 2000 has 35 years experience in international funds
Australia management, stockbroking and in particular 23
years in the funds management industry in
Australia, managing money in equities and
bonds.
President of the Fund (since 1985); Vice President
and Director (since 1992) and Chairman (since 1995),
The First Commonwealth Fund, Inc.; President and
Director, The First Australia Prime Income Fund, Inc.
(since 1986); Joint Managing Director (since 1986)
and Chairman (since 1995), First Australia Prime
Income Investment Company Limited; Chairman,
EquitiLink Limited (holding company) (since 1986);
Chairman and Joint Managing Director, EquitiLink
Australia Limited (since 1981); Chairman and Director,
EquitiLink Holdings Limited (holding company) (since
1998); Director, EquitiLink International Management
Limited (since 1985); Joint Managing Director,
MaxiLink Limited (investment company) (since 1987);
Joint Managing Director, EquitiLink eLink Limited
(investment company) (since 1994); Director, Ten
Group Pty. Limited (since 1994); Director, Ten
Network Holdings
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Business Experience,
Present Office Shares
with the Fund, Beneficially
Principal Owned and
Name and Address Occupation or % of Total
of Each Director or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
------------------------ ------------------------------------------ --- -------- ---------------
<S> <C> <C> <C> <C>
Limited (commercial television operator)
(since 1998); Director, Sydney Organizing
Committee for the Olympic Games.
</TABLE>
- -------------------
* Directors considered by the Fund and its counsel to be persons who are
"interested persons" (which as used in this Proxy Statement is as defined
in the Investment Company Act of 1940, as amended (the "1940 Act")) of the
Fund or of the Fund's investment manager or investment adviser. Mr. Jacobs
is deemed to be an interested person because of his affiliation with
Prudential Securities Incorporated, a broker-dealer registered under the
Securities Exchange Act of 1934 (the "1934 Act"). Mr. McCoy is deemed to be
an interested person because of his affiliation with TD Securities, Inc.,
which has an affiliate that is a broker-dealer registered under the 1934
Act. Messrs. Freedman and Sherman are deemed to be interested persons
because of their affiliation with the Fund's investment manager and
investment adviser, or because they are officers of the Fund or both.
+ Messrs. Elsum, Fraser, Miles and Potter are members of the Contract Review
Committee.
++ Messrs. Aaronson, McCoy and Sheehy are members of the Audit Committee.
(1) The information as to beneficial ownership as of October 31, 1999 is based
on statements furnished to the Fund by the Directors and nominees. As
controlling shareholders of the Investment Manager, Messrs. Freedman and
Sherman share voting and investment power for 2,379,612 shares of the Fund
owned by the EquitiLink International Management Limited, EquitiLink
Limited and EquitiLink USA. With the exception of those 2,379,612 shares,
which constitute approximately 13.84% of the outstanding shares of the
Fund as of October 31, 1999, all shares listed in this table are owned
with sole voting and investment power. In the aggregate, all of the shares
in the table represent approximately 14.02% of the total shares
outstanding as of October 31, 1999. Excluding the shares owned by Messrs.
Freedman and Sherman, the Directors of the Fund, as a group, including Mr.
Sacks (see Proposal 1(B)), own approximately 0.13% of the total shares
outstanding as of October 31, 1999.
In addition to Messrs. Sherman and Freedman, Mr. David Manor, Ms. Ouma
Sananikone-Fletcher and Mr. Barry Sechos, as set forth below, serve as
executive officers of the Fund. As of October 31, 1999, the executive officers
of the Fund owned no shares of the Fund.
<TABLE>
<CAPTION>
Name and Principal Present Office Present Principal
Business Address with the Fund Occupation
- -------------------------------------------- --------------------------- --------------------------------------
<S> <C> <C>
David Manor Treasurer Managing Director, EquitiLink
EquitiLink International Management Limited International Management Limited
P.O. Box 578
St. Helier, Jersey
Channel Islands JE4 5XB
Ouma Sananikone-Fletcher Assistant Vice President -- Chief Executive Officer, EquitiLink
EquitiLink Australia Limited Chief Investment Officer Australia Limited
Level 3, 190 George Street
Sydney, NSW 2000 Australia
Barry G. Sechos Assistant Treasurer Director, EquitiLink Australia Limited
EquitiLink Australia Limited
Level 3, 190 George Street
Sydney, NSW 2000 Australia
</TABLE>
8
<PAGE>
Please also see the information contained below under the heading "Further
Information Regarding Directors and Officers."
The Board of Directors recommends that shareholders vote FOR the election
of the Fund's five nominees to the Fund's Board of Directors.
PROPOSAL 1(B): ELECTION OF A CLASS I DIRECTOR
In June 1999, the Board of Directors, including the Directors who are not
interested persons of the Fund, appointed Peter D. Sacks as a Class I Director
to fill a vacancy on the Board. If elected, Mr. Sacks will serve as a Class I
Director for a term which expires at the Annual Meeting of Shareholders to be
held in 2001 and until his successor is duly elected and qualified. He has
indicated an intention to serve if elected and has consented to be named in
this Proxy Statement.
It is the intention of the persons named on the enclosed proxy card to vote
in favor of the election of Mr. Sacks. The Board of Directors of the Fund
knows of no reason why Mr. Sacks would be unable to serve, but in the event of
any such inability, the proxies received will be voted for such substituted
nominee as the Board of Directors may recommend.
The following table sets forth certain biographical information concerning
Mr. Sacks.
<TABLE>
<CAPTION>
Shares
Present Office with Beneficially
the Fund, Principal Owned and
Name and Address Occupation or % of Total
of Each Director or Employment Director Outstanding
Nominee and Directorships Age Since on 10/31/99 (1)
-------------------------- ---------------------------------------------- --- -------- ---------------
<S> <C> <C> <C> <C>
Peter D. Sacks Mr. Sacks' career has spanned 20 years in 54 1999 250
33 Yonge Street, Suite 706 executive positions in treasury management
Toronto, Ontario M5E 1G4 with CIBC, Chase Manhattan Bank and
Canada Midland Bank. He is currently president
and director of Toron Capital Markets, Inc.,
a company which he established in 1988 to
design and manage customized hedging
solutions for institutional clients
with commodity risks and currency and
interest rate exposures.
Director, The First Australia Prime Income
Fund, Inc. (since 1993); Director, The
First Commonwealth Fund, Inc. (since
1992); Director, First Australia Prime
Income Investment Company Limited (since
December 1998); President, Toron Capital
Management Inc. (investment management)
(since 1997); President, Toron Capital Markets,
Inc. (currency and interest rate risk
advice and management) (since 1988);
President and Director, First Horizons
Holdings Limited (Canadian mutual fund
distributor).
</TABLE>
The Board of Directors recommends that holders of common stock vote FOR the
election of the nominee to the Fund's Board of Directors
9
<PAGE>
PROPOSAL 2: RATIFICATION OF SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected
PricewaterhouseCoopers LLP ("PwC"), independent public accountants, to examine
the financial statements of the Fund for the fiscal year ending October 31,
2000. This appointment is subject to ratification or rejection by the
shareholders of the Fund.
Audit services performed by PwC during the most recent fiscal year included
examination of the financial statements of the Fund, services related to
filings with the Securities and Exchange Commission and consultation on
matters performed by the firm related to the preparation and filing of tax
returns. During the Fund's fiscal year ended October 31, 1999, PwC also
provided consulting services to the Fund. The Fund knows of no direct or
indirect financial interest of PwC in the Fund.
Representatives of PwC are expected to be present at the Meeting and will
have the opportunity to respond to questions from shareholders and to make a
statement if they so desire.
The Board of Directors recommends that shareholders vote FOR ratification
of the selection of PwC as independent public accountants for the fiscal year
ending October 31, 2000.
PROPOSAL 3: OTHER BUSINESS
The Board of Directors knows of no business to be brought before the
Meeting other than as set forth above. If, however, any other matters properly
come before the Meeting, it is the intention of the persons named on the
enclosed proxy card to vote such proxies on such matters in accordance with
their best judgment.
FURTHER INFORMATION REGARDING DIRECTORS AND OFFICERS
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act of 1934 (the "Exchange Act") and Section 30(h) of
the 1940 Act, as applied to the Fund, require the Fund's officers, Directors,
investment manager or adviser, affiliates of the investment manager or
adviser, and persons who beneficially own more than 10% of a registered class
of the Fund's outstanding securities ("Reporting Persons") to file reports of
ownership of the Fund's securities and changes in such ownership with the
Securities and Exchange Commission and the American Stock Exchange. Such
persons are required by Securities and Exchange Commission regulations to
furnish the Fund with copies of all such filings.
Based solely on its review of the copies of such forms received by it and
written representations from certain Reporting Persons that no year-end
reports were required for those persons, the Fund believes that during the
fiscal year ended October 31, 1999, its Reporting Persons complied with all
applicable filing requirements with the exceptions that one report on Form 4
for each of Messrs. Freedman and Sherman and EquitiLink Limited and EquitiLink
USA, affiliates of the Fund's Investment Adviser and Investment Manager,
respectively, which reports covered nine transactions, were not filed on a
timely basis and a Form 3 for Mr. Sacks was not filed on a timely basis.
Committees and Board of Directors Meetings. The Board of Directors has a
standing Audit Committee, which consists of certain Directors who are not
interested persons of the Fund as defined in the 1940 Act. The principal
purpose of the Audit Committee is to review the scope and results of the
annual audit conducted by the Fund's independent public accountants and the
evaluation by such accountants of the accounting procedures followed by the
Fund. The Board of Directors also has a standing Contract Review Committee,
comprised of independent members of the Board only, that reviews and makes
recommendations to the Board with respect to entering into, renewal or
amendment of the Management Agreement, the Advisory Agreement and the
Administration Agreement. The Board of Directors does not have a standing
nominating or compensation committee.
10
<PAGE>
During the Fund's fiscal year ended October 31, 1999, the Board of
Directors held four regularly scheduled meetings and four special meetings,
the Audit Committee held two meetings, the Contract Review Committee held one
meeting, and a special committee of the Independent Directors held three
meetings. Each of the Directors then in office (except Mr. Fraser) attended at
least 75% of the aggregate number of meetings of the Board of Directors and
all of the Committees of the Board on which he served.
Officers of the Fund. The officers of the Fund, all of whom serve at the
pleasure of the Board of Directors, and, with the exception of Messrs. Bieber,
Fortner, Manor and Sechos and Mesdames Bancroft and Sananikone-Fletcher, all
of whom have served since the Fund was organized in 1985, are as follows:
Brian M. Sherman, President (age 56); Laurence S. Freedman, Vice President
(age 56); David Manor (age 59), Treasurer; Ouma Sananikone-Fletcher (age 41),
Assistant Vice President-Chief Investment Officer; Barry G. Sechos (age 38),
Assistant Treasurer; Peter W. Fortner (age 41), Assistant Treasurer; Roy M.
Randall (age 63), Secretary; Allan S. Mostoff (age 67), Assistant Secretary;
Sander M. Bieber (age 49), Assistant Secretary; and Margaret A. Bancroft (age
61), Assistant Secretary.
The respective principal occupations during the past five years of the
Fund's officers are as follows: Messrs. Sherman and Freedman, shown above in
the table of nominees and Directors under "Proposal 1(A): Election of Class
III Directors"; David Manor, Director, EquitiLink International Management
Limited; Executive Director, EquitiLink Australia Limited and EquitiLink
Limited (1986-1998); Ouma Sananikone-Fletcher, Investment Director, EquitiLink
Australia Limited (since 1994), Chief Executive Officer, EquitiLink Australia
Limited (since 1997), Director, EquitiLink Holdings Limited (since 1998) and
Executive Director, Banque Nationale de Paris (1986-1994); Barry G. Sechos,
General Counsel, EquitiLink Australia Limited (since 1993), Director,
EquitiLink Australia Limited (since 1994) and Director, EquitiLink Holdings
Limited (since 1998); Peter W. Fortner, Director, Prudential Investments Fund
Management LLC (since December 1996), Vice President, Prudential Securities
Inc. (since 1992) and Vice President, Prudential Mutual Funds (1991-September
1996); Roy M. Randall, Partner of Stikeman, Elliott (Australian office of
Canadian law firm) (since 1997) and Partner, Freehill Hollingdale & Page
(1981-1996); Allan S. Mostoff, Sander M. Bieber and Margaret A. Bancroft,
Partners of Dechert Price & Rhoads (U.S. law firm).
Relationship of Directors or Nominees with the Investment Adviser and the
Investment Manager. EquitiLink International Management Limited (the
"Investment Manager") serves as investment manager to the Fund and EquitiLink
Australia Limited (the "Investment Adviser") serves as investment adviser to
the Fund pursuant to a management agreement dated February 1, 1990 and an
advisory agreement dated February 1, 1990.
The Investment Manager is a Jersey, Channel Islands corporation organized
in October 1985 with its registered office located at 17 Bond Street, St.
Helier, Jersey, Channel Islands. The Investment Adviser is an indirect wholly
owned subsidiary of EquitiLink Holdings Limited, an Australian corporation.
The registered offices of the Investment Adviser and EquitiLink Holdings
Limited are located at Level 3, 190 George Street, Sydney, N.S.W., Australia.
Messrs. Freedman and Sherman, both Directors of the Fund, serve as
directors of the Investment Manager. In addition, Messrs. Freedman and Sherman
are the principal shareholders of the Investment Manager. Messrs. Freedman and
Sherman also serve as, respectively, Joint Managing Director, and Joint
Managing Director and Chairman, of the Investment Adviser, and are the
principal shareholders of EquitiLink Holdings Limited.
Compensation of Directors and Certain Officers. The following table sets
forth information regarding compensation of Directors by the Fund and by the
fund complex of which the Fund is a part for the fiscal year ended October 31,
1999. Officers of the Fund and Directors who are interested persons of the
Fund do not receive any compensation from the Fund or any other fund in the
fund complex. In the column headed "Total Compensation From Fund and
Associated Funds Paid to Directors," the number in parentheses indicates the
total number of boards in the fund complex on which the Director serves.
11
<PAGE>
Compensation Table
Fiscal Year Ended 10/31/99
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Benefits Estimated From Fund and
Accrued Annual Associated
Aggregate As Part of Benefits Funds
Compensation Fund Upon Paid to
Name of Director From Fund Expenses Retirement Directors
- ---------------- ------------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
Anthony E. Aaronson........... $13,500 N/A N/A $33,250(2)
Sir Roden Cutler*............. 12,500 N/A N/A 41,850(3)
David Lindsay Elsum........... 12,000 N/A N/A 42,200(3)
Rt. Hon. Malcolm Fraser....... 12,000 N/A N/A 40,550(3)
Laurence S. Freedman.......... 0 N/A N/A 0(3)
Michael R. Horsburgh.......... 11,500 N/A N/A 40,750(3)
Harry A. Jacobs, Jr........... 0 N/A N/A 0(2)
Howard A. Knight.............. 11,500 N/A N/A 29,250(2)
Richard H. McCoy.............. 32,500 N/A N/A 32,500(1)
Neville J. Miles.............. 31,500 N/A N/A 49,250(2)
William J. Potter............. 32,000 N/A N/A 64,250(3)
Peter D. Sacks................ 11,500 N/A N/A 43,250(3)
John T. Sheehy................ 12,500 N/A N/A 44,750(3)
Brian M. Sherman.............. 0 N/A N/A 0(3)
</TABLE>
- -------
* Sir Roden Cutler retired from the Board of Directors effective December,
1999.
ADDITIONAL INFORMATION
Expenses. The expense of preparation, printing and mailing of the enclosed
proxy card and accompanying Notice and Proxy Statement will be borne by the
Fund. The Fund will reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Fund. In order to obtain the necessary quorum at the
Meeting, supplementary solicitation may be made by mail, telephone, telegraph
or personal interview. Such solicitation may be conducted by, among others,
officers, Directors and employees of the Fund, the Investment Manager, the
Investment Adviser or State Street Bank and Trust Company, the Transfer Agent
of the Fund. Innisfree M&A ("Innisfree") may be retained to assist in the
solicitation of proxies. If retained, Innisfree will be paid approximately
$8,500 by the Fund and the Fund will reimburse Innisfree for its related
expenses.
Solicitation and Voting of Proxies. Solicitation of proxies is being made
primarily by the mailing of this Proxy Statement with its enclosures on or
about December 30, 1999. As mentioned above, Innisfree may be engaged to
assist in the solicitation of proxies. As the meeting date approaches, certain
shareholders of the Fund may receive a call from a representative of Innisfree
if the Fund has not yet received their vote. Authorization to permit Innisfree
to execute proxies may be obtained by telephonic or electronically transmitted
instructions from shareholders of the Fund. Proxies that are obtained
telephonically will be recorded in accordance with the procedures set forth
below. Management of the Fund believes that these procedures are reasonably
designed to ensure that the identity of the shareholder casting the vote is
accurately determined and that the voting instructions of the shareholder are
accurately determined.
12
<PAGE>
In all cases where a telephonic proxy is solicited, the Innisfree
representative is required to ask the shareholder for such shareholder's full
name, address, social security or employer identification number, title (if
the person giving the proxy is authorized to act on behalf of an entity, such
as a corporation), the number of shares owned and to confirm that the
shareholder has received the Proxy Statement in the mail. If the information
solicited agrees with the information provided to Innisfree by the Fund, then
the Innisfree representative has the responsibility to explain the process,
read the proposals listed on the proxy card, and ask for the shareholder's
instructions on each proposal. The Innisfree representative, although he or
she is permitted to answer questions about the process, is not permitted to
recommend to the shareholder how to vote, other than to read any
recommendation set forth in the Proxy Statement. Innisfree will record the
shareholder's instructions on the card. Within 72 hours, Innisfree will send
the shareholder a letter or mailgram to confirm the shareholder's vote and
asking the shareholder to call Innisfree immediately if the shareholder's
instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting of shareholders, but
does not wish to give a proxy by telephone, such shareholder may still submit
the proxy card originally sent with the Proxy Statement or attend in person.
Any proxy given by a shareholder, whether in writing or by telephone, is
revocable. A shareholder may revoke the accompanying proxy or a proxy given
telephonically at any time prior to its use by filing with the Fund a written
revocation or duly executed proxy bearing a later date. In addition, any
shareholder who attends the Meeting in person may vote by ballot at the
Meeting, thereby canceling any proxy previously given.
Vote Required. The presence at any shareholders' meeting, in person or by
proxy, of shareholders entitled to cast a majority of the votes entitled to be
cast shall be necessary and sufficient to constitute a quorum for the
transaction of business. In the event that the necessary quorum to transact
business or the vote required to approve or reject any proposal is not
obtained at the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting in accordance with applicable law, to permit
further solicitation of proxies with respect to any proposal which did not
receive the vote necessary for its passage or to obtain a quorum. With respect
to those proposals for which there is represented a sufficient number of votes
in favor, actions taken at the Meeting will be effective irrespective of any
adjournments with respect to any other proposals. Any such adjournment will
require the affirmative vote of the holders of a majority of the Fund's shares
present in person or by proxy at the Meeting. The persons named as proxies
will vote in favor of such adjournment those proxies which they are entitled
to vote in favor of any proposal and will vote against any such adjournment
those proxies to be voted against that proposal. For purposes of determining
the presence of a quorum for transacting business at the Meeting, abstentions
and broker "non-votes" will be treated as shares that are present but which
have not been voted. Broker non-votes are proxies received by the Fund from
brokers or nominees when the broker or nominee has neither received
instructions from the beneficial owner or other persons entitled to vote nor
has discretionary power to vote on a particular matter. Accordingly,
shareholders are urged to forward their voting instructions promptly.
Approval of the election of Class III Directors to the Board of Directors
(Proposal 1(A)) and approval of the election of a Class I Director to the
Board of Directors (Proposal 1(B)) will require the affirmative vote of a
majority of the shares present in person or by proxy at the Meeting.
Abstentions and broker non-votes will have the effect of a "no" vote for these
proposals.
Ratification of the selection of independent accountants (Proposal 2) and
approval to transact any other business as may properly come before the
Meeting (Proposal 3) will require the affirmative vote of a majority of the
votes validly cast at a meeting at which a quorum is present. Abstentions and
broker non-votes will have no effect on the vote on these proposals since they
are not considered votes cast.
Beneficial Ownership. The only persons known by the Fund to be the
beneficial owners of 5% or more of the Fund's shares are
(1) Mira, L.P. and its General Partner, Zurich Capital Markets, Inc.,
each located at One Chase Manhattan Plaza, 42nd Floor, New York, NY
10005, which on December 7, 1999 filed a Schedule 13D indicating that as
of
13
<PAGE>
such date Mira was the beneficial owner of 2,714,500 shares of the Fund,
representing approximately 15.8% of the total shares outstanding on that
date; and
(2) EquitiLink International Management Limited, EquitiLink Limited,
EquitiLink USA, Laurence Freedman and Brian Sherman, which as a group on
December 9, 1999 filed a Schedule 13D indicating that as of such date
they were the beneficial owners of an aggregate of 2,579,962 shares of
the Fund, representing approximately 15.008% of the total outstanding
shares on that date. Messrs. Freedman and Sherman each own 4,000 (0.023%)
shares individually with sole voting and dispositive power for all such
shares. Messrs. Freedman and Sherman each share voting and dispositive
power with each of EquitiLink International Management Limited,
EquitiLink Limited and EquitiLink USA with respect to 48,885 (0.284%),
898,450 (5.227%) and 1,624,627 (9.451%) shares, respectively.
Shareholder Proposals. If a shareholder intends to present a proposal at
the Annual Meeting of Shareholders of the Fund to be held in 2001 and desires
to have the proposal included in the Fund's proxy statement and form of proxy
for that meeting, the shareholder must deliver the proposal to the offices of
the Fund by August 25, 2000.
Shareholders wishing to present proposals at the Annual Meeting of
Shareholders of the Fund to be held in 2001 which they do not wish to be
included in the Fund's proxy materials should send written notice to the
Secretary of the Fund of such proposals no sooner than November 22, 2000 and
no later than December 22, 2000 in the form prescribed in the Fund's By-Laws.
By Order of the Board of Directors,
Roy M. Randall, Secretary
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
December 23, 1999
14
<PAGE>
PROXY THE FIRST AUSTRALIA FUND, INC. PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders - March 22, 2000
The undersigned hereby appoints Laurence S. Freedman, William J. Potter, and
Brian M. Sherman, and each of them, the proxies of the undersigned, with power
of substitution to each of them, to vote all shares of the common stock of The
First Australia Fund, Inc. which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of The First Australia Fund, Inc. to be held at
One Seaport Plaza, New York, New York on March 22, 2000 at 1:00 p.m. (Eastern
time) and at any adjournment or postponement thereof. By signing this proxy card
on the reverse side, the undersigned authorizes the appointed proxies to vote in
their discretion on any other business which may properly come before the
meeting or any adjournments or postponements thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------- -------------------------
- ------------------------- -------------------------
- ------------------------- -------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
The proxy, when properly executed, will be voted in the manner directed. If no
direction is made, this proxy will be voted FOR Items 1a, 1b and 2.
<TABLE>
<S> <C>
- ------------------------------------------- 1a. To elect five Directors to serve as Class III
THE FIRST AUSTRALIA FUND, INC. Directors for a three-year term:
- ------------------------------------------- For All With- For All
(01) David Lindsay Elsum Nominees hold Except
(02) Laurence S. Freedman [ ] [ ] [ ]
(03) Michael R. Horsburgh
(04) William J. Potter
(05) Peter J. O'Connell
Mark box at right if address change or comment NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE,
has been noted on the reverse side of this card. [ ] 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
CONTROL NUMBER: NOMINEE(S).
With-
1b. To elect one Director to serve as For hold
Class I Director for a term to [ ] [ ]
expire in 2001:
(06) Peter D. Sacks
For Against Abstain
2. To ratify the selection of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as
independent public accountants of
the Fund for the fiscal year ending
October 31, 2000.
3. In their discretion on any other business which may properly come before the
meeting or any adjournment or postponement thereof.
Please be sure to sign and date this Voting Instruction Card. [Date ]
- ---------------------------------------------------------------------------------
- --------Shareholder sign here-----------------------------Co-owner sign here----- RECORD DATE SHARES:
</TABLE>
