Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Italy Fund Inc.
(Name of Registrant as Specified in its Charter)
Robert Nelson
Name of Person Filing Proxy Statement
Payment of Filing Fee (Check 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 the
transaction applies:
(2) Aggregate number of securities to which transactions
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] 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:
THE ITALY FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-----------------------------
TO BE HELD ON MAY 19, 1999
-----------------------------
To the Shareholders of The Italy Fund Inc.:
The Annual Meeting of Shareholders of THE ITALY FUND INC. (the "Fund") will
be held at the Fund's offices at 388 Greenwich Street, New York, New York, 22nd
Floor, on May 19, 1999 at 10:00 a.m. (New York time) for the following purposes:
1. To elect two directors, each to hold office for the term indicated and
until his successor shall have been elected and qualified;
2. To consider and act upon the ratification of the selection of KPMG LLP
as the independent auditors of the Fund;
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Proposals 1 and 2 are discussed in greater detail in the attached Proxy
Statement. The Board of Directors has fixed the close of business on March 23,
1999 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the meeting and any adjournments thereof.
By Order of the Board of Directors
Christina T. Sydor
Secretary
New York, New York
April 9, 1999
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN PERSON OR BY
PROXY; IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY/VOTING INSTRUCTION CARD IN THE ACCOMPANYING
ENVELOPE PROVIDED FOR YOUR CONVENIENCE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
- ------------ ---------------
Corporate Accounts
(1) ABC Corp. .................................... ABC Corp.
(2) ABC Corp. .................................... John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer .................... John Doe
(4) ABC Corp. Profit Sharing Plan ................ John Doe, Trustee
Trust Accounts
(1) ABC Trust .................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 ............................. Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA .............. John B. Smith
(2) Estate of John B. Smith ...................... John B. Smith, Jr., Executor
<PAGE>
THE ITALY FUND INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
-----------------------------
PROXY STATEMENT
-----------------------------
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1999
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of The Italy Fund Inc. (the "Fund") of
proxies to be voted at the Annual Meeting of Shareholders (the "Meeting") of the
Fund to be held at the Fund's principal executive offices at 388 Greenwich
Street, 22nd Floor, New York, New York 10013, on May 19, 1999 at 10:00 a.m. (New
York time), and at any adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
The cost of soliciting proxies will be borne by the Fund. Proxy
solicitations will be made primarily by mail. In addition, certain officers,
directors and employees of the Fund; SSBC Fund Management Inc., formerly known
as Mutual Management Corp. ("SSBC" or the "Manager"), the Fund's investment
manager; Salomon Smith Barney Inc. ("Salomon Smith Barney"), an affiliate of
SSBC; and/or First Data Investor Services Group, Inc. ("First Data"), the Fund's
transfer agent, may solicit proxies in person or by telephone, or telegraph.
Such representatives and employees will not receive additional compensation for
solicitation activities. The fund will also reimburse brokerage firms and others
for their expenses in forwarding solicitation materials to the beneficial owners
of shares. Salomon Smith Barney and SSBC are each located at 388 Greenwich
Street, New York, New York 10013; First Data is located at 101 Federal Street,
Boston, Massachusetts 02110.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended January 31, 1999, has been furnished to all shareholders
of the Fund. This proxy statement and form of proxy are first being mailed to
shareholders on or about April 9, 1999. The Fund will provide, without charge,
additional copies of the annual report to any shareholder upon request by
calling the Fund at 1-800-331-1710.
<PAGE>
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, shares
represented by the proxies will be voted "FOR" all the proposals. For purposes
of determining the presence of a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (i.e. proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present but which have not been voted. For this
reason, abstentions and broker "non-votes" will have no impact on the requisite
approval of the Proposals. Proposal 1 requires for approval the affirmative vote
of a plurality of the votes cast at the Meeting with a quorum present, in person
or by proxy by the shareholders of the Fund voting on the matter. Proposal 2
requires for approval the affirmative vote of a majority of the votes cast at
the Meeting with a quorum present, in person or by proxy by the shareholders of
the Fund voting on the matter. Any proxy may be revoked at any time prior to the
exercise thereof by submitting another proxy bearing a later date or by giving
written notice to the Secretary of the Fund at the Fund's address indicated
above or by voting in person at the Meeting.
The Board knows of no business other than that specifically mentioned in
the Notice of Meeting which will be presented for consideration at the Meeting.
If any other matters are properly presented, it is the intention of the persons
named in the enclosed proxy to vote in accordance with their best judgment.
The Board of Directors of the Fund has fixed the close of business on March
23, 1999 as the record date (the "Record Date") for determination of
shareholders of the Fund entitled to notice of, and to vote at, the Meeting or
any adjournment. Shareholders of the Fund on that date will be entitled to one
vote on each matter for each share held and a fractional vote with respect to
fractional shares with no cumulative voting rights. At the close of business on
March 23, 1999, the Fund had outstanding 8,901,914 shares of Common Stock, par
value $0.01 per share, the only authorized class of stock, of which 8,761,579
(or 98.42%) were held in accounts of, but not beneficially owned by, Cede & Co.,
as nominee of The Depository Trust Company. As of the Record Date, the officers
and Board members of the Fund beneficially owned less than 1% of the outstanding
shares of the Fund.
2
<PAGE>
Owners of More Than Five Percent of the Outstanding Shares of the Fund
The following table shows, as of March 23, 1999, the beneficial owners of
more than 5% of the outstanding shares of the Fund. This information is based on
reports (Schedules 13 D & G) filed with the Securities and Exchange Commission
by each of the firms listed in the table below. Information as to beneficial
ownership is based upon reports filed with the Securities and Exchange
Commission ("SEC") on behalf of the holder.
Amount
and Nature
Name and Address of of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
-------------- -------------------- --------- -------
Common Stock Mira, L.P. 484,000 5.165%
One Chase Manhattan
Plaza, 42nd Floor
New York, New York 10005
Common Stock FMR Corp. 628,900 6.617%
82 Devonshire Street
Boston, Massachusetts 02109
Common Stock Lazard Freres & Co. LLC 1,241,200 13.06%
30 Rockefeller Plaza
New York, New York 10020
Common Stock Bankgesellschaft Berlin AG 540,100 5.7%
Alexanderplatz 2
D-10178 Berlin, Germany
Common Stock Tattersall Advisory Group, Inc. 526,200 5.5%
6620 W. Broad Street,
Suite 300
Richmond, Virginia 23230
3
<PAGE>
As of the Record Date, to the knowledge of the Fund, no shares of
securities issued by Salomon Smith Barney's ultimate parent corporation,
Citigroup Inc. ("Citigroup"), were held by Board members who are not "interested
persons" of the Fund (as that term is used in the Investment Company Act of
1940, as amended (the "1940 Act")).
In the event that a quorum is not present at the Meeting or if a quorum is
present, but sufficient votes in favor of the proposals set forth in the Notice
of Meeting and this Proxy Statement are not received by the time scheduled for
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies with respect to any
such proposals. In determining whether to adjourn the Meeting, the following
factors may be considered: the nature of the proposals that are the subject of
the Meeting, the percentage of votes actually cast, the percentage of negative
votes actually cast, the nature of any further solicitation and the information
to be provided to shareholders with respect to the reasons for the solicitation.
Any such adjournment will require the affirmative vote of a majority of the
shares present at the Meeting in person or by proxy. If a quorum is present, the
persons named as proxies will vote in favor of such adjournment those shares
which they are entitled to vote and which have voted in favor of such proposals.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Fund is divided into three classes. The
directors serving in Class I have terms expiring at the Meeting; each Class I
director currently serving on the Board has been nominated by the Board of
Directors for re-election at the Meeting to serve until the year 2002 Annual
Meeting of Shareholders or until his successor has been duly elected and
qualified.
The Board of Directors of the Fund knows of no reason why any of the Class
I nominees listed below will be unable to serve, but in the event of any such
unavailability, the proxies received will be voted for such substitute nominees
as the Board of Directors may recommend.
Certain information concerning the nominees is set forth below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Each Director affiliated with the Manager
and considered an "interested person" as defined in the 1940 Act is indicated by
an asterisk(*).
4
<PAGE>
Persons Nominated for Election as Directors
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned+ as of
Name Other Directorships, and Age March 23, 1999
---- ---------------------------- --------------
Dr. Paul Hardin Chancellor Emeritus and Professor 542.204
Director since 1986(I) of Law at the University of North (less than 1%)
Carolina at Chapel Hill; Director
of twelve investment companies
managed by affiliates of Salomon
Smith Barney and a Director of The
Summit Bancorporation. Formerly,
Chancellor of the University of
North Carolina at Chapel Hill; 67.
George M. Pavia Senior Partner, Pavia & Harcourt, --
Director since 1991(I) Attorneys; Director of two
investment companies managed by
affiliates of Salomon Smith Barney;
71.
The remainder of the Board constitutes the Class II and Class III directors (as
indicated by the Number II or III), none of whom will stand for election at the
Meeting, as their terms will expire in 2000 and 2001, respectively.
Directors Continuing in Office
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned+ as of
Name Other Directorships, and Age March 23, 1999
---- ---------------------------- --------------
Paolo M. Cucchi Dean of College of Liberal Arts at 500
Director since 1992(II) Drew University; Director of two (less than 1%)
investment companies managed by
affiliates of Salomon Smith Barney;
57.
Mario d'Urso Senator of the Republic of Italy; 1,000
Director since 1995(II) formerly Under Secretary of State (less than 1%)
of the Ministry of Commerce with
the Exterior for Italy; 58.
Alessandro C. Retired; Director of two investment --
di Montezemolo companies managed by affiliates of
Director since 1986(III) Salomon Smith Barney and a Director
of OffitBank; formerly Chairman of
the Board of Marsh & McLennan; 80.
+ For this purpose, "beneficial ownership" is defined under Section 13(d) of
the 1934 Act. The information as to beneficial ownership is based upon
information furnished to the Fund by the Directors.
5
<PAGE>
Directors Continuing in Office (cont'd)
Number of Shares
Principal Occupations and % Beneficially
During Past Five Years, owned+ as of
Name Other Directorships, and Age March 23, 1999
---- ---------------------------- --------------
*Heath B. McLendon Managing Director of Salomon Smith 8,722.57740
Director since 1986(III) Barney; Chairman or Co-Chairman of (less than 1%)
fifty-nine investment companies
managed by affiliates of Salomon
Smith Barney; President and
Director of SSBC and Travelers
Investment Adviser, Inc. ("TIA");
formerly Chairman of the Board of
Smith Barney Strategy Advisers
Inc.; 65.
+ For this purpose, "beneficial ownership" is defined under Section 13(d) of
the 1934 Act. The information as to beneficial ownership is based upon
information furnished to the Fund by the directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act requires the Fund's officers and directors,
and persons who beneficially own more than ten percent of a registered class of
the Fund's Common Stock, to file reports of ownership with the Securities and
Exchange Commission, the New York Stock Exchange, Inc. and the Fund. Based
solely upon its review of the copies of such forms received by it and written
representations from certain of such persons, the Fund believes that during its
fiscal year ended January 31, 1999, all filing requirements applicable to such
persons were complied with.
The names of the principal officers of the Fund, with the exception of Mr.
d'Urso and Mr. McLendon, are listed in the table below together with certain
additional information. Mr. d'Urso was elected President of the Fund in 1986.
Mr. McLendon was first elected Chairman of the Board and Investment Officer in
1986. Each officer of the Fund holds such office until a successor has been
elected by the Board of Directors.
Principal Occupations and Other
Position Affiliations During the
Name (year first elected) Past Five Years, and Age
- ---- -------------------- ------------------------
Lewis E. Daidone Senior Vice Managing Director of Salomon
President and Smith Barney Inc.; Chief
Treasurer (1994) Financial Officer of each of
the Smith Barney Mutual Funds;
Director and Senior Vice
President of SSBC and TIA; 41.
Rein van der Does Vice President Managing Director of Salomon
and Investment Smith Barney Inc.; 59.
Officer (1996)
Christina T. Sydor Secretary (1994) Managing Director of Salomon
Smith Barney Inc.; General
Counsel and Secretary of SSBC
and TIA; 48.
The principal business address of Messrs. McLendon, Daidone and van der
Does and Ms. Sydor is 388 Greenwich Street, New York, New York 10013. The
principal business address of Mr. d'Urso is 4/A Viale di Grazioli, Rome, Italy.
6
<PAGE>
No officer, director or employee of the Fund's investment adviser and
administrator receives any compensation from the Fund for serving as an officer
or director of the Fund. The Fund pays each director who is not a director,
officer or employee of the Fund's investment adviser and administrator a fee of
$7,500 per year plus $750 per in-person meeting and $100 per telephonic meeting.
All directors are reimbursed for actual out-of-pocket expenses relating to their
attendance at meetings. The aggregate fees (including reimbursement for travel
and out-of-pocket expenses) paid by the Fund to such directors and members of
the Advisory Board during the fiscal year ended January 31, 1999 amounted to
$2,515.18.
The following table shows the compensation paid by the Fund to each
director during the Fund's last fiscal year.
COMPENSATION TABLE
Total
Pension or Compensation Number of
Retirement from Fund Funds for
Aggregate Benefits Accrued and Fund Which Director
Compensation as part of Complex Serves Within
Name of Person from Fund* Fund Expenses Paid to Directors Fund Complex
- -------------- ---------- ------------- ----------------- ------------
Paolo M. Cucchi $10,600 $0 $17,700 2
Allesandro
di Montezemolo 10,700 0 17,900 2
Mario d'Urso 9,850 0 9,850 1
Dr. Paul Hardin 10,600 0 71,400 12
Heath B. McLendon** 0 0 0 59
George M. Pavia 10,700 0 17,900 2
* Upon attainment of age 80, Fund directors are required to change to emeritus
status. Directors Emeritus are entitled to serve in emeritus status for a
maximum of 10 years during which time they are paid 50% of the annual retainer
fee and meeting fees otherwise applicable to Fund directors, together with
reasonable out-of-pocket expenses for each meeting attended. During the Fund's
last fiscal year aggregate compensation paid by the Fund to directors achieving
emeritus status totaled $5,300.
** Designates an "interested director."
The Fund has no compensation or nominating committee of the Board,
or any committee performing similar functions. The Fund has an audit
committee comprised of those directors who are not "interested persons"
of the Fund as defined in the 1940 Act ("Independent Directors"). The
audit committee is responsible for recommending the selection of the Fund's
independent accountants and reviewing all audit as well as nonaudit
accounting services performed for the Fund. During the fiscal year ended
January 31, 1999, six meetings of the Board of directors of the Fund were held;
in addition two audit committee meetings were held. In the last fiscal year
Mr. d'Urso attended less than 75% of the meetings of the Board and audit
committee.
Required Vote
Election of each of the listed nominees for director requires the
affirmative vote of a plurality of the votes cast at the Meeting in person or by
proxy.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION OF ALL NOMINEES TO THE
BOARD.
7
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Fund, including all of the Independent
Directors, have selected KPMG LLP ("KPMG") as the independent auditors to audit
the accounts of the Fund for and during the fiscal year ending January 31, 2000,
subject to ratification by the shareholders at the Meeting. KPMG also serves as
the independent auditors for the Manager, other investment companies managed by
affiliates of Salomon Smith Barney and for the Manager's ultimate parent
corporation, Citigroup. KPMG has no direct or material indirect financial
interest in the Fund, the Manager, Citigroup or any other investment company
sponsored by Salomon Smith Barney or its affiliates.
If the Fund receives a written request from any shareholder at least five
days prior to the Meeting stating that the shareholder will be present in person
at the Meeting and desires to ask questions of the auditors concerning the
Fund's financial statements, the Fund will arrange to have a representative of
KPMG present at the Meeting who will respond to appropriate questions and have
an opportunity to make a statement.
Required Vote
The affirmative vote of a majority of the votes cast at the Meeting in
person or by proxy is required to ratify the selection of KPMG.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE SELECTION OF
KPMG.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2000 Annual Meeting
of the Shareholders of the Fund must be received by December 2, 1999 to be
included in the proxy statement and the form of proxy relating to that meeting
as the Fund expects that the 2000 Annual Meeting will be held in May of 2000.
The submission by a shareholder of a proposal for inclusion in the proxy
statement does not guarantee that it will be included. Shareholder proposals are
subject to certain regulations under the federal securities laws.
The persons named as proxies for the 2000 Annual Meeting will have
discretionary authority to vote on any matter presented by a shareholder for
action at that meeting unless the Fund receives notice of the matter by January
10, 2000, in which case these persons will not have discretionary voting
authority except as provided in the SEC's rules governing shareholder proposals.
8
<PAGE>
OTHER MATTERS
Management knows of no other matters which are to be brought before the
Meeting. However, if any other matters properly come before the Meeting, it is
the intention of the persons named in the enclosed form of proxy to vote such
proxy in accordance with their judgment on such matters.
All proxies received will be voted in favor of all the proposals, unless
otherwise directed therein.
By Order of the Board of Directors
Christina T. Sydor
Secretary
April 9, 1999
9
Please mark
votes as in
this example
This proxy, if properly executed, will be voted in the manner directed
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
1. To elect Paul Hardin and George M. * FOR * WITHHELD
Pavia as Class I Directors of the Fund.
*
______________________
For all nominees
except as noted above
2. To ratify the selection of KPMG LLP * FOR * AGAINST *
ABSTAIN
as the independent auditors of the Fund for the
fiscal year ending January 31, 2000.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer,
please give your full title.
Signature: ______________________________ Date
___________________________
Signature: ______________________________ Date
___________________________
PROXY
THE ITALY FUND INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting on May 19, 1999
The undersigned holder of shares of The Italy Fund Inc. (the
"Fund"), a Maryland corporation, hereby appoints Heath B. McLendon,
Christina T. Sydor and Robert M. Nelson as attorneys and proxies for the
undersigned, with full powers of substitution and revocation, to
represent the undersigned and to vote on behalf of the undersigned all
shares of the Fund that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Fund (the "Meeting") to be held at
the offices of the Fund, 388 Greenwich Street, 22nd Floor, New York, New
York on the date indicated above, and any adjournment or adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting and Proxy Statement dated April 9, 1999, and hereby
instructs said attorneys and proxies to vote said shares as indicated
hereon. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Meeting. A majority
of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall
have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.
CONTINUED AND TO BE SIGNED
ON REVERSE SIDE
SEE REVERSE SIDE
