SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
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:
X Preliminary proxy statement
___ Definitive proxy statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The First Australia Prime Income Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
The First Australia Prime Income Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
___ $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-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:
_________________________________________________________________________
__ 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:
_________________________________________________________________________
<PAGE>
One Seaport Plaza
New York, New York 10292
(212) 214-3334
January 10, 1996
Dear Shareholder:
The Annual Meeting of Shareholders is to be held at 3:00 p.m. on Thursday,
March 14, 1996, at the offices of Prudential Securities Incorporated, 28th
Floor, One Seaport Plaza, New York, New York. A Proxy Statement regarding the
meeting, proxy card for your vote at the meeting and an envelope postage prepaid
- - in which to return your proxy are enclosed.
At the Annual Meeting, the holders of the Fund's common stock will elect
the Fund's Class II Directors for a three-year term, the holders of the Fund's
preferred stock will vote separately as a single class to elect two additional
Directors, and the holders of both common and preferred stock will consider the
ratification of the selection of Price Waterhouse LLP as independent public
accountants, and a proposal to amend the Fund's charter documents to decrease
the liquidation value of the shares of preferred stock, Series A-F, in order to
effect a stock split, and a proposal to amend the Fund's charter documents to
eliminate the limitation on the aggregate liquidation value of the Fund's
preferred stock. 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 the shareholders vote in favor of each of
the foregoing matters.
SIR RODEN CUTLER Brian M. Sherman
CHAIRMAN President
SHAREHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE SO AS TO ASSURE A QUORUM AT THE MEETING. THIS IS IMPORTANT REGARDLESS
OF THE SIZE OF YOUR SHAREHOLDING.
- 1 -
<PAGE>
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
One Seaport Plaza
New York, New York 10292
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 14, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
First Australia Prime Income Fund, Inc. (the "Fund") will be held at the offices
of Prudential Securities Incorporated, 28th Floor, One Seaport Plaza, New York,
New York on March 14, 1996, at 3:00 p.m., for the following purposes:
(1) To elect five Directors to serve as Class II Directors for a
three-year term;
(2) To elect two Directors to represent the interests of the holders
of preferred stock for the ensuing year;
(3) To ratify the selection of Price Waterhouse LLP as independent public
accountants of the Fund for the fiscal year ending October 31, 1996;
(4) To amend the Fund's charter documents to decrease the liquidation
value of the shares of preferred stock, Series A-F, in order to effect a stock
split of the Fund's outstanding shares of preferred stock, Series A-F;
(5) To amend the Fund's charter documents to eliminate the limitation on
the aggregate liquidation value of the Fund's preferred stock; and
(6) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 2, 1996
as the record date for the determination of shareholders entitled to vote at the
meeting or any adjournment thereof.
By Order of the Board of Directors,
Roy M. Randall, Secretary
New York, New York
January 10, 1996
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 form of proxy 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 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.
- 2 -
<PAGE>
PROXY STATEMENT
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
One Seaport Plaza
New York, New York 10292
-----------
Annual Meeting of Shareholders
March 14, 1996
-----------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The First Australia Prime Income
Fund, Inc. (the "Fund"), a Maryland corporation, to be voted at the Annual
Meeting of Shareholders of the Fund (the "Meeting") to be held at the offices of
Prudential Securities Incorporated, 28th Floor, One Seaport Plaza, New York, New
York, on March 14, 1996, at 3:00 p.m. The approximate mailing date for this
Proxy Statement is January 10, 1996.
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, proxies
submitted by holders of the Fund's common stock will be voted in favor of
Proposals 1, 3, 4 and 5 and proxies submitted by holders of the Fund's preferred
stock will be voted in favor of Proposals 2, 3, 4 and 5. Any proxy may be
revoked at any time prior to the exercise thereof by giving written notice to
the Secretary of the Fund (addressed to the Secretary at the principal executive
office of the Fund, One Seaport Plaza, New York, New York 10292).
The following table indicates which class of the Fund's shareholders is
being solicited with respect to each Proposal to be considered at the Meeting.
<TABLE>
<CAPTION>
Solicitation of Solicitation of
Vote of Common Vote of Preferred
Stockholders Stockholders (Series A-F)
------------ -------------------------
<S> <C> <C>
Proposal 1:
Election of Class II Directors................. Yes No
Proposal 2:
Election of Preferred Directors................ No Yes
Proposal 3:
Selection of Independent Public Accountants.... Yes Yes
Proposal 4:
Amendment to Charter to Decrease the Liquidation
Value of the Fund's Preferred Stock.......... Yes Yes
Proposal 5:
Amendment to charter to eliminate the limitation
on the aggregate liquidation value of
the Fund's preferred stock; ................ Yes Yes
</TABLE>
- 3 -
<PAGE>
The Board of Directors has fixed the close of business on January 2, 1996
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting and at any adjournment thereof. Shareholders on the
record date will be entitled to one vote for each share held. As of January 2,
1996, the Fund had outstanding [__________] shares of common stock, par value
$.01 per share; 750 shares of Auction Market Preferred Stock, Series A, par
value $.01 per share; 750 shares of Auction Market Preferred Stock, Series B,
par value $.01 per share; 500 shares of Auction Market Preferred Stock, Series
C, par value $.01 per share; 1,000 shares of Auction Market Preferred Stock,
Series D, par value $.01 per share; 500 shares of Auction Market Preferred
Stock, Series E, par value $.01 per share; 500 shares of Auction Market
Preferred Stock, Series F, par value $.01 per share; and 3,000 shares of Auction
Market Preferred Stock, Series G, par value $.01 per share. To the best
knowledge of management of the Fund, as of the record date no persons or group
beneficially own more than five percent of the outstanding shares of common or
preferred stock of the Fund.
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 in the enclosed proxy 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, 1995 to any Fund shareholder upon request.
To request a copy please call or write to the Fund's Administrator, Prudential
Mutual Fund Management, Inc., One Seaport Plaza, New York, New York 10292,
Telephone: 1-800-451-6788.
PROPOSAL 1: ELECTION OF CLASS II DIRECTORS
The Fund's By-laws provide that the Board of Directors to be elected by
holders of the Fund's common stock 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. Harry A. Jacobs, Jr., Rt. Hon. Malcolm
Fraser, Brian M. Sherman, Howard A. Knight, Peter D. Sacks, Directors who were
elected to serve until the Meeting, have been nominated for a three-year term to
expire at the Annual Meeting of Shareholders to be held in 1999 and until their
successors are duly elected and qualified. 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 in the enclosed proxy to vote in
favor of the election of the persons listed below under Class II 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 nominee
for election as a Director and each Director of the Fund. Each of the nominees
is currently a Director of the Fund.
- 4 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
Class I (Term Expiring at the Annual Meeting to be held in 1998)
<S> <C> <C> <C> <C>
Anthony E. Aaronson (+) Director, The First Australia 59 1986 -
116 South Anita Avenue Fund, Inc. (since 1985); Tony
Los Angeles, CA 90015 Aaronson (textile agent) (since
1993); Vice President, Fortune
Fashions (1992-1993); President,
Fashion Fabric Division, Forrest
Fabrics (textiles) (August
1991-1992); Director, PKE
Incorporated (consulting
company) (1988- 1990);
Director, Textile Association of
Los Angeles (1990-1993);
Director, O.T.C. Sales, Emday
Fabrics Co. (textiles) (1986-91);
Executive Vice-President and
Secretary-Treasurer, J&J
Textiles Inc. (1982-1986).
Roger C. Maddock* Director, The First Australia 45 1992 -
Union House, Union Street Fund, Inc. (since 1992) and The
St. Helier, Jersey First Commonwealth Fund, Inc.
Channel Islands (since 1992); Chairman and
United Kingdom Managing Director, EquitiLink
International Management Limited
(since 1985); Partner, Jackson Fox,
Chartered Accountants (since 1981);
Director, Worthy Trust Company
Limited (since 1981); Director,
Professional Consultancy Services
Limited (since 1983); Director,
Hollywell Spring, Limited (since
1987); Director, The EquitiLink
Private Gold Investment Fund
Limited (Since 1992); Director,
CentraLink-EquitiLink Investment
Company Limited (since September 1994).
</TABLE>
- 5 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
John A. Calvert-Jones Director, The First Australia 59 1986 -
Level 31 Fund, Inc. (since 1985);
101 Collins Street Chairman of the Board (1984-
Melbourne, Victoria 3000 1994) and Chief Executive
Australia Officer (1984-1991), Prudential
Securities (Australia) Limited;
Partner, Cortis & Carr
(stockbrokers) (1970-1984);
Director, Slough Estates
Australia Pty. Limited
(property), Sedgwick Pty.
Limited (insurance) and Crown
Limited.
John T. Sheehy (+) Director, The First Australia 53 1986 -
6920 Koll Center Parkway Fund, Inc. (since 1985), First
Suite 225 Australia Prime Income
Pleasanton, CA 94566 Investment Company Limited
(since 1986) and The First
Commonwealth Fund, Inc.
(since 1992); Director, Greater
Pacific Food Holdings, Inc.
(food industry investment
company) (since 1993); Partner,
Sphere Capital Partners
(corporate consulting) (since
1987); Director, Sphere Capital
Advisors (investment adviser);
Director, Sandy Corporation
(corporate consulting,
communication and training)
(since 1986); Associate Director,
Bear, Stearns & Co. Inc.
(1985-1987); previously, Limited
Partner, Bear, Stearns & Co.
Inc.
</TABLE>
- 6 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
Class II (Current Directors and Nominees for a Term Expiring
at the Annual Meeting to be held in 1999)
<S> <C> <C> <C> <C>
Harry A. Jacobs, Jr.* Director, The First Australia 74 1986 6,960
One New York Plaza Fund, Inc. (since 1985);
New York, NY 10292 Chairman and Chief Executive
Officer, Prudential Mutual Fund
Management, Inc. (June-September
1993); Senior Director, Prudential
Securities Incorporated (since
1986); previously, Chairman of
the Board, Prudential Securities
Incorporated (1982-1985); Chairman
of the Board and Chief Executive
Officer, Bache Group, Inc.
(1977-1982); Director, Center for
National Policy; Trustee, The
Trudeau Institute (eleemosynary);
Director of 26 investment companies
affiliated with Prudential
Securities Incorporated.
</TABLE>
- 7 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
Rt. Hon. Malcolm Fraser, Director, The First Australia 65 1986 -
A.C., C.H. (++) Fund, Inc. (since 1985), First
55 Collins Street Australia Prime Income
Melbourne, Victoria 3000 Investment Company Limited
Australia (since 1986) and The First
Commonwealth Fund, Inc. (since
1992); Partner, Nareen Pastoral
Company (agriculture); Fellow,
Center for International Affairs,
Harvard University; International
Council of Associates, Claremont
University; Chairman, CARE
Australia (since 1987); President,
CARE International (1990-1995);
Member, Byrnes International
Advisory Board, University of
South Carolina (1985-1990); ANZ
International Board of Advice
(1987-1993); InterAction Council
for Former Heads of Government;
Co-Chairman, Commonwealth Eminent
Persons Group on Southern Africa
(1985-1986); Chairman, United
Nations Committee on African
Commodity Problems (1989-1990);
Consultant, The Prudential
Insurance Company of America;
International Consultant on
Political, Economic and Strategic
Affairs (since March 1983);
Parliamentarian-Prime Minister of
Australia (1975-1983).
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
Brian M. Sherman* President and Director, The 52 1986 -
Level 3 First Australia Fund, Inc. (since
190 George Street 1985); Joint Managing Director
Sydney, N.S.W. 2000 (since 1986) and Chairman
Australia (since 1985), First Australia
Prime Income Investment Company
Limited; Sole Vice President and
Director (since 1992) and Chairman
(since 1995), The First Commonwealth
Fund, Inc.; President of the Fund
(since 1986); Chairman and Joint
Managing Director, EquitiLink
Limited (since 1986); Chairman and
Joint Managing Director, EquitiLink
Australia Limited (since 1981);
Director, EquitiLink International
Management Limited (since 1985);
Joint Managing Director, MaxiLink
Limited (since 1987); Executive
Director, MaxiLink Securities
Limited (since 1987); Director,
First Resources Development Fund
Limited (since 1994); Director,
Ten Group Limited (since 1994);
Director, Telecasters North
Queensland Limited (since 1993);
Fund and Portfolio Manager, Westpac
Banking Corporation (1976-1981);
Manager - Investments, Outwich
Limited (an affiliate of Baring
Brothers & Co. Ltd.) (merchant bank)
(1972-1976).
</TABLE>
- 9 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
Howard A. Knight Director, The First Australia 53 1993 -
300 Park Avenue Fund, Inc.; Private Investor
New York, NY 10022 Consultant; and President of
Investment Banking, Equity
Transactions and Corporate
Strategy, Prudential Securities
Incorporated (1991-June 1994);
formerly Chairman and Chief
Executive Officer, Avalon
Corporation (1984-1990); Managing
Director, President and Chief
Executive Officer, Weeks
Petroleum Limited (1982-1984);
General Counsel, member of the
Executive Committee and Director,
Farrell Lines Incorporated
(1976-1982); Partner, Cummings &
Lockwood (1963-1976); Director,
Scandinavian Broadcasting System,
S.A.
Peter D. Sacks (+) Director, The First 50 1993 -
33 Yonge Street Commonwealth Fund, Inc.
Suite 706 (since 1992); President and
Toronto, Ontario M5E 1G4 Director, Toron Capital
Canada Markets, Inc. (currency,
interest rate and commodity
risk management) (since 1988);
Director, Toron Capital Management
Ltd. (commodity trading adviser)
(since 1994); Vice President and
Treasurer, Midland Bank Canada
(1987-1988); Vice President and
Treasurer, Chase Manhattan Bank of
Canada (1985-1987).
</TABLE>
- 10 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
Class III (Term Expiring at the Annual Meeting to be held in 1997)
<S> <C> <C> <C> <C>
Sir Roden Cutler, V.C., Director, The First Australia 79 1986 -
A.K., K.C.M.G., K.C.V.O., Fund, Inc. (since 1985), First
C.B.E., K.St.J. (++) Australia Prime Income
22 Ginahgulla Road Investment Company Limited
Bellevue Hill, N.S.W. 2023 (since 1986) and The First
Australia Commonwealth Fund, Inc.
(since 1992); Australia Director,
Rothmans Holding Ltd.
(formerly Rothmans Pall Mall)
(tobacco) (1981-1994);
Chairman, State Bank of New
South Wales (1981-1986);
Governor of New South Wales,
Australia (1966-1981).
David Lindsay Elsum (++) Director, The First Australia 58 1986 -
9 May Grove Fund, Inc. (since 1985), First
South Yarra, Victoria 3141 Australia Prime Income
Australia Investment Company Limited
(since 1986) and The First
Commonwealth Fund, Inc.
(since 1992); Director, MaxiLink
Ltd.; President, State
Superannuation Fund of Victoria
(1986-1993); Managing Director,
The MLC Limited (insurance)
(1984-1985); Managing Director,
Renison Goldfields Consolidated
Limited (mining) (1983-1984);
Member, Administrative Appeals
Tribunal; Member, Corporations
and Securities Panel of the
Australian States and Territories;
Chairman, Queen Victoria Market;
Director, First Resources
Development Fund and Statewide
Friendly Society.
</TABLE>
- 11 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
Laurence S. Freedman* Sole Vice President (since 1986) 52 1986 -
Level 3 and Chairman (since 1995) of
190 George Street the Fund; Sole Vice President
Sydney, N.S.W. 2000 and Director (since 1985) and
Australia Chairman (since 1995), The
First Australia Fund, Inc.; Joint
Managing Director, First
Australia Prime Income
Investment Company Limited
(since 1986); President and
Director, The First
Commonwealth Fund, Inc.
(since 1992); Founder and Joint
Managing Director, EquitiLink
Limited (since 1986); Joint
Managing Director, EquitiLink
Australia Limited (since 1981);
Director, EquitiLink
International Management
Limited (since 1985); Chairman
and Joint Managing Director,
MaxiLink Limited (since 1987);
Executive Director, MaxiLink
Securities Limited (since 1987);
Chairman and Director, First
Resources Development Fund
Limited (since 1994); Director,
Ten Group Limited (since
1994); Director, Telecasters
North Queensland Limited
(since 1993); Managing
Director, Link Enterprises
(International) Pty. Limited (an
investment management
company) (since 1980); Manager
of Investments, Bankers Trust
Australia Limited (1978-1980);
Investment Manager,
Consolidated Goldfields
(Australia) Limited (natural
resources investments)
(1975-1978).
</TABLE>
- 12 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
Michael R. Horsburgh Director, The First Australia 50 1986 -
675 Third Avenue Fund, Inc. (since 1985);
22nd Floor Director and Chief Executive
New York, NY 10017 Officer, Horsburgh Carlson
Investment Management, Inc.
(since 1991); Director, The First
Hungary Fund; Managing
Director, Barclays de Zoete
Wedd Investment Management
(U.S.A) (1990-1991); Special
Associate Director, Bear,
Stearns & Co. Inc. (1989-1990);
Senior Managing Director, Bear,
Stearns & Co. Inc. (1985-1989);
General Partner, Bear,
Stearns & Co. Inc. (1981-1985);
previously, Limited Partner,
Bear, Stearns & Co. Inc.
</TABLE>
- 13 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
William J. Potter (++) Director, The First Australia 47 1986 -
156 W. 56th Street Fund, Inc. (since 1985), First
17th Floor Australia Prime Income
New York, NY 10019 Investment Company Limited
(since 1986) and The First
Commonwealth Fund, Inc. (since
1992); Partner, Sphere Capital
Partners (corporate consulting)
(since 1989); President, Ridgewood
Partners, Ltd. (investment banking)
(since 1989); Managing Director,
Prudential-Bache Securities Inc.
(1984-1989); Director, National
Foreign Trade Association; Director,
Alexandria Bancorp Limited;
Director, Battery Technologies,
Inc.; Director, Compuflex Inc.;
Director, Impulsora del Fondo
Mexico; Director, Canadian Health
Foundation; First Vice President,
Barclays Bank, plc (1982-1984);
previously, various positions with
Toronto Dominion Bank.
</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. Messrs. Freedman, Sherman and Maddock 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. Aaronson, Sacks and Sheehy are members of the Audit Committee.
++ Messrs. Cutler, Elsum, Fraser and Potter are members of the Contract
Review Committee.
- 14 -
<PAGE>
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by the Directors and nominees. All shares listed in this table are
owned with sole voting and investment power, and in the aggregate represent less
than [1/4 of 1%] of the total shares outstanding of common stock as of October
31, 1995. No shares of the Fund's preferred stock are owned by the Directors.
Please also see the information contained below under the heading "Further
Information Regarding Directors and Officers."
The Board of Directors recommends that holders of common stock vote FOR
the election of the four nominees to the Fund's Board of Directors.
PROPOSAL 2: ELECTION OF PREFERRED DIRECTORS
The Fund has outstanding 750 shares of Auction Market Preferred Stock,
Series A, par value $.01 per share; 750 shares of Auction Market Preferred
Stock, Series B, par value $.01 per share; 500 shares of Auction Market
Preferred Stock, Series C, par value $.01 per share; 1,000 shares of Auction
Market Preferred Stock, Series D, par value $.01 per share; 500 shares of
Auction Market Preferred Stock, Series E, par value $.01 per share; 500 shares
of Auction Market Preferred Stock, Series F, par value $.01 per share; and 3,000
shares of Auction Market Preferred Stock, Series G, par value $.01 per share.
Section 18 of the 1940 Act requires that the holders of any preferred
shares, voting separately as a single class without regard to series, have the
right to elect at least two Directors at all times. David Manor and Marvin
Yontef, who were elected to fill the two preferred stock Board seats and to
represent exclusively the holders of all series of the Fund's preferred stock
(the "Preferred Directors") at the Annual Meeting of Shareholders held on March
16, 1995, have been nominated to serve as Preferred Directors until the Annual
Meeting of Shareholders to be held in 1997. The nominees have indicated an
intention to continue to serve if elected and have consented to be named in this
Proxy Statement.
It is the intention of the persons named in the enclosed proxy to vote in
favor of the election of the persons listed below. The Board of Directors of the
Fund knows of no reason why either 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 holders of preferred stock shall recommend, and
if no such recommendations are made, such substituted nominees as the Board of
Directors may recommend.
The following table sets forth certain information concerning each of the
nominees as a Preferred Director of the Fund.
- 15 -
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Present Office with Owned and
the Fund, Principal % of Total
Name and Address Occupation or Employment Director Outstanding
of each Director or Nominee and Directorships Age Since on 10/31/95(1)
- --------------------------- ----------------- --- ----- --------------
<S> <C> <C> <C> <C>
David Manor** Treasurer of the Fund, The 55 1988 -
Level 3 First Australia Fund, Inc. and
190 George Street First Australia Prime Income
Sydney, N.S.W. 2000 Investment Company Limited;
Australia Director and Treasurer, The
First Commonwealth Fund, Inc.;
Executive Director, EquitiLink
Australia Limited and EquitiLink
Limited (since 1986); Director,
EquitiLink International
Management Limited (since 1987)
and EquitiLink U.S.A., Inc.
Marvin Yontef** Director of and counsel to 49 1988 -
P.O. Box 85 First Australia Prime Income
5500 Commerce Court Investment Company Limited;
Toronto, Ontario M5L 1B9 Partner, Stikeman, Elliott
Canada (Canadian law firm).
</TABLE>
- -----------
** Directors considered by the Fund and its counsel to be "interested persons"
(which as used in this Proxy Statement is as defined in the 1940 Act) of the
Fund or of the Fund's investment advisers. Mr. Manor is deemed to be an
interested person because of his affiliation with the Investment Manager and
Investment Adviser and because he is an officer of the Fund. Mr. Yontef is
deemed to be an interested person because the law firm of which he is a Partner
acts as legal counsel for the Investment Adviser and its parent.
(1) As of October 31, 1995, the Preferred Directors of the Fund owned no shares
of the Fund's common or preferred stock.
Please also see the information contained below under the heading "Further
Information Regarding Directors and Officers."
The Board of Directors recommends that the holders of preferred stock vote
FOR the election of the two nominees as Preferred Directors to the Fund's Board
of Directors.
- 16 -
<PAGE>
PROPOSAL 3: 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 the firm of Price
Waterhouse LLP, independent public accountants, to examine the financial
statements of the Fund for the fiscal year ending October 31, 1996. Such
appointment is now subject to ratification or rejection by the shareholders of
the Fund.
Audit services performed by Price Waterhouse LLP 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. The Fund knows of no direct or indirect financial
interest of the firm in the Fund.
Representatives of Price Waterhouse LLP 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 Price Waterhouse LLP as independent public accountants for
the fiscal year ending October 31, 1996.
PROPOSAL 4: AMENDMENT OF THE FUND'S CHARTER DOCUMENTS TO
DECREASE THE LIQUIDATION VALUE OF THE FUND'S SHARES OF PREFERRED
STOCK, SERIES A-F, IN ORDER TO EFFECT A STOCK SPLIT
The Fund's Board of Directors has determined that it would be in the
Fund's best interest to amend the Fund's charter documents to reduce the
liquidation value of each share of preferred stock, Series A-F, from $100,000 to
$25,000 in order to effect a four for one stock split. If the proposal is
approved, it is the intention of the Board of Directors to declare a split of
each share of the Fund's preferred stock in each of Series A-F, liquidation
value $100,000 per share into four shares of preferred stock of the same series,
liquidation value $25,000 per share.
The Fund's Board of Directors has proposed this reduction in liquidation
value and accompanying stock split in order to increase the potential universe
of preferred stock investors, and to give these investors greater flexibility to
tailor the size of their investment. If an increased number of potential
investors is bidding at the auctions at which the dividend rate paid by the Fund
with respect to the preferred stock is determined, the dividend rates paid by
the Fund to the preferred stockholders may be lower than they would be if a
smaller pool of investors is bidding at the auctions.
If the proposed stock split is effected, the Fund's common stockholders
should not be affected, except to the extent that the Fund may benefit from a
reduction in the dividends paid with respect to its preferred stock. Preferred
stockholders would have the option of investing in increments of $25,000 rather
than $100,000, and thus would have greater flexibility and liquidity with
respect to their investment.
The proposed modifications to the Fund's charter documents are attached
hereto as Appendix A. In addition to reducing the liquidation value, the
proposed modifications also increase, where necessary, the authorized number of
shares of preferred stock, Series A-F.
The Board of Directors recommends that shareholders vote FOR the amendment
to the Fund's charter documents as described above and as set forth in Appendix
A to decrease the liquidation value of the Fund's preferred stock, series A-F,
in order to effect a stock split.
- 17 -
<PAGE>
PROPOSAL 5: AMENDMENT OF THE FUND'S CHARTER DOCUMENTS
TO ELIMINATE THE LIMITATION ON THE AGGREGATE
LIQUIDATION VALUE OF THE FUND'S PREFERRED STOCK
At a special meeting of shareholders held in December, 1988, the Fund's
holders of common stock authorized the creation of a class of 100 million shares
of preferred with an aggregate liquidation value of $500 million, such shares to
be issued in series from time to time as authorized by the Fund's Board of
Directors. Since that date, the Fund has issued seven series of preferred stock
with an aggregate liquidation value of $475 million.
In order to give the Fund the flexibility to issue additional preferred
stock, the Board of Directors has determined that it would be in the best
interest of the Fund to amend the Fund's charter documents to eliminate the
limitation on aggregate liquidation value. This would permit the Fund's Board of
Directors to issue additional series of preferred stock on a timely basis,
should the Board believe that the issuance of additional series would benefit
holders of the Fund's common stock.
In determining to recommend this action, the Fund's Board of Directors
took into account the fact that since inception of the preferred stock in
January 1989, holders of the Fund's common stock have benefited from the
issuance of the outstanding series of preferred shares in terms of a positive
impact of net asset value. However, in determining whether to eliminate the
limitation on aggregate liquidation value, holders of the Fund's common stock
should consider, as they did when authorizing the creation of the class of
preferred stock in 1988, certain factors which are inherent in the issuance of
any series of preferred stock. These include:
1. Effect on Yield: As is presently the case, the Board of Directors of
the Fund has full discretion, in the exercise of its business judgment, as to
the terms upon which each series of preferred stock may be issued and as to the
exercise of any redemption rights the Fund may have with respect to such stock.
It is the Board's practice and present intention to issue preferred stock only
under circumstances where it believes that such issuance will result in yield
enhancement to the holders of common stock, but there can be no assurance that
the actual terms of any preferred stock issuances will ensure this result. The
yield to holders of common stock would be negatively impacted by outstanding
preferred stock with a dividend rate in excess of the yield on the Fund's
investments made with the proceeds from issuance of preferred stock. Under
certain circumstances, the Fund may be required to redeem outstanding preferred
stock. In addition, the Fund may have the option to redeem preferred stock at
any time or from time to time. However, the Fund may in fact determine not to
redeem preferred stock during periods when the dividend rate on preferred stock
exceeds the yield on the Fund's portfolio. Any decisions with respect to
redemption will be taken by the Board or a committee of the Board based upon
recommendations by the Investment Manager. The Investment Manager has advised
the Board that it would not anticipate recommending redemption except to the
extent that the Investment Manger believes the existence of outstanding
preferred stock is having or likely to have a materially adverse effect on the
net investment income of the Fund. Even in such event, the Investment Manager
may not recommend redemption if, in its judgment, it would be necessary to
liquidate portfolio securities, in order to make redemption payments, in a
manner that would disrupt the Fund's long-term investment program, result in the
realization of foreign currency gains or losses that would materially increase
or decrease the amount of net investment income distributable to holders of
common stock or jeopardize the Fund's status as a regulated investment company
under the Internal Revenue Code.
2. Effect on Currency Risks. The Fund invests predominantly in debt
securities denominated in Australian dollars. Accordingly, the net asset value
of and yield to the Fund are affected by changes in the exchange rate between
the U.S. dollar and the Australian dollar and, to a lesser extent, by changes in
- 18 -
<PAGE>
the value of the New Zealand dollar in which a relatively small part of the
Fund's assets may be invested from time to time. Unless the designation of a
particular series of preferred stock otherwise provide, holders of preferred
stock are not subject to any significant foreign currency exchange risks as the
dividends payable to and amounts payable in respect of redemption or liquidation
to the holders of preferred stock will be determined solely in U.S. dollar terms
and without reference to any changes in the underlying net asset value of or
yield to the Fund. Accordingly, the entire risk of any adverse changes in
currency exchange rates, which would be applicable to all of the Fund's assets
and income (including assets acquired with the proceeds of preferred share
issuances), is borne solely by the holders of common stock. Although the
underlying purpose of issuing preferred stock is to enhance the yield to common
stockholders, adverse currency movements can reduce or eliminate any such yield
enhancement and can result in a reduction of net asset value and distributable
net investment income.
3. Effect on Net Asset Value. Upon the issuance of any series of preferred
stock, all issuance costs, including underwriting discounts and commissions and
other offering costs, are charged to the paid-in capital of the Fund, thereby
resulting in an immediate reduction of net asset value applicable to common
stock. Accordingly, assuming that the relationship between the Fund's net asset
value and the market price at which its shares trade remains the same, holders
of shares of common stock disposing of such shares after a preferred stock
issuance might realize a lower price for their shares as any anticipated yield
enhancement and the increase, if any, in net asset value could be expected to
occur only over a period of time sufficient to invest the proceeds of preferred
stock issuances and realize the benefits, if any, from such investments in
amounts adequate to recover the costs of issuance.
The proposed modification to the Fund's charter documents are attached
hereto as Appendix B.
The Board of Directors recommends that shareholders vote FOR the amendment
to the Fund's charter documents as described above and as set forth in Appendix
A to eliminate the limitation on the aggregate liquidation value of the Fund's
preferred stock.
PROPOSAL 6: OTHER MATTERS
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 in the
enclosed proxy form to vote such proxies on such matters in accordance with
their best judgment.
FURTHER INFORMATION ABOUT DIRECTORS AND OFFICERS
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 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 that reviews and makes recommendations
to the Board with respect to entering into, renewal or amendment of the
Management Agreement, the Advisory Agreement, the Consultant Agreement and the
Administration Agreement. The Board of Directors does not have a standing
nominating committee.
During the Fund's fiscal year ended October 31, 1995, the Board of
Directors held five meetings, the Audit Committee held one meeting and the
Contract Review Committee held one meeting. Each of
- 19 -
<PAGE>
the Directors then in office attended at least 75% of the total number of the
meetings of the Board of Directors and all the Committees of the Board on which
he served, except Mr. Calvert-Jones, who attended three of the five meetings
held by the Board of Directors.
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. Manor,
Sechos, Stark and Kozlowski, and Ms. Bancroft and Ms. Sananikome-Fletcher, all
of whom have served since the Fund was organized in 1986, are as follows: Brian
M. Sherman, President; Laurence S. Freedman, Vice President; David Manor (age
55), Treasurer; Ouma Sananikome-Fletcher (37), Assistant Vice President-Chief
Investment Officer; Barry G. Sechos (34), Assistant Treasurer; Eugene S. Stark
(age 38), Chief Financial Officer & Assistant Treasurer; Kenneth T. Kozlowski
(age 34), Assistant Treasurer; Roy M. Randall (age 59), Secretary; Allan S.
Mostoff (age 63), Assistant Secretary; and Margaret A. Bancroft (age 57),
Assistant Secretary.
The respective principal occupations of the Fund's officers are as
follows: Messrs. Sherman and Freedman, shown above in the table of nominees and
Directors under "Proposal 1: Election of Class II Directors"; David Manor,
shown in the table of nominees as Preferred Directors; Barry G. Sechos, General
Counsel to the EquitiLink Group (since 1993) and Solicitor, Allen, Allen &
Hemsley (1986-1993); Eugene S. Stark, First Vice President, Prudential Mutual
Fund Management, Inc. (since January 1990); Kenneth T. Kozlowski, Vice
President, Prudential Mutual Fund Management, Inc. (since 1992) and Fund
Accounting Manager, Pruco-Life Insurance Company (1990-1992); Roy M. Randall,
Partner of Freehill, Hollingdale & Page (Australian law firm); Allan S. Mostoff
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 December 15, 1992.
The Investment Manager is a Jersey, Channel Islands corporation organized
in October 1985 with its registered office located at Union House, Union Street,
St. Helier, Jersey, Channel Islands. The Investment Adviser is a wholly owned
subsidiary of EquitiLink Limited, an Australian corporation. The registered
offices of both the Investment Adviser and EquitiLink Limited are located at 44
Pitt Street, Sydney, N.S.W., Australia. EquitiLink Limited is a public company
whose ordinary shares are listed on the Australian Stock Exchange Limited.
Messrs. Freedman, Sherman and Manor, all Directors of the Fund, also serve
as directors of the Investment Manager. Mr. Maddock, a Director of the Fund, is
also chairman and managing director of the Investment Manager. In addition,
Messrs. Freedman and Sherman are the principal shareholders of the Investment
Manager, of which Mr. Manor is also a shareholder. Messrs. Freedman, Sherman and
Manor also serve as, respectively, joint managing director, joint managing
director and chairman, and executive director of the Investment Adviser. Messrs.
Freedman and Sherman are the principal shareholders of EquitiLink Limited, of
which Messrs. Maddock and Manor are also shareholders.
In a transaction effected on March 10, 1995, Transek Trust sold 13,689,944
shares of EquitiLink Limited to Transek Pty Limited, a wholly-owned subsidiary
of the Investment Manager, at a price of $0.69 per share, as determined by an
independent valuation, which price was paid in three installments. Messrs.
Freedman and Sherman are the principal beneficiaries of Transek Trust, and as
mentioned above, are also the principal shareholders of the Investment Manager,
the parent of Transek Pty Limited.
- 20 -
<PAGE>
During the fiscal year ended October 31, 1995, Professional Consultancy
Services Limited, a limited company organized under the laws of Jersey, Channel
Islands, provided administrative services to the Investment Manager in
connection with its activities on behalf of the Fund and other U.S. and foreign
investment companies and entities in return for a fee in the amount of $930,000.
Mr. Maddock is a director and a principal shareholder of Professional
Consultancy Services Limited.
Compensation of Directors and Certain Officers. The following table sets forth
information regarding compensation of Directors by the Fund and by the Fund and
by the fund complex of which the Fund is a part for the fiscal year ended
October 31, 1995. 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 Registrant and
Fund Complex Paid to Directors," the number in parentheses indicates the total
number of boards of funds in the fund complex on which the Director serves.
- 21 -
<PAGE>
<TABLE>
<CAPTION>
Compensation Table
Fiscal Year Ended 10/31/95
Total
Pension or Estimated Compensation
Aggregate Retirement Annual From Registrant
Compensation Benefits Accrued Benefits and Fund
From As Part of Upon Complex Paid
Name of Person, Position Registrant Fund Expenses Retirement to Directors
- ------------------------ ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Anthony E. Aaronson.......... $ N/A N/A $ (2)
John A. Calvert-Jones........ N/A N/A (2)
Sir Roden Cutler............. N/A N/A (3)
David Lindsay Elsum.......... N/A N/A (3)
Rt. Hon. Malcolm Fraser...... N/A N/A (3)
Laurence S. Freedman......... N/A N/A (3)
Michael R. Horsburgh......... N/A N/A (2)
Harry A. Jacobs, Jr.......... N/A N/A (2)
Howard A. Knight............. N/A N/A (2)
Roger C. Maddock............. N/A N/A (3)
William J. Potter............ N/A N/A (3)
Peter D. Sacks............... N/A N/A (2)
John T. Sheehy............... N/A N/A (3)
Brian M. Sherman............. N/A N/A (3)
Preferred Directors:
David Manor.................. N/A N/A (2)
Marvin Yontef................ N/A N/A (1)
</TABLE>
- -----------
ADDITIONAL INFORMATION
Expenses. The expense of preparation, printing and mailing of the enclosed form
of proxy 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 and
employees of the Fund, the Investment Manager, the Investment Adviser or State
Street Bank and Trust Company, the Transfer Agent of the Fund. It is anticipated
that the cost of such supplementary solicitation, if any, will be nominal.
Shareholder Communications Corporation ("SCC") may be retained to assist in the
solicitation of proxies. If retained, SCC will be paid approximately $5,000 by
the Fund and the Fund will reimburse SCC for its related expenses.
Vote Required. The presence in person or by proxy of the holders of a majority
of the outstanding voting shares of the Fund is required to constitute a quorum
at the Meeting. Approval of the election of Class II Directors of the Board of
Directors (Proposal 1) will require the affirmative vote of the holders of a
majority of the outstanding shares of common stock present or represented by
proxy at the Meeting. Approval of the election of Preferred Directors of the
Board of Directors (Proposal 2) will require the affirmative vote of the holders
of a majority of the outstanding shares of preferred stock present or
represented by proxy at the Meeting. Ratification of the selection of
independent public accountants
- 22 -
<PAGE>
(Proposal 3) will require the affirmative vote of the holders of a majority of
the outstanding shares of both the common and preferred stock present or
represented by proxy at the Meeting, voting together as a single class. Approval
of the proposed amendment to the Fund's charter documents to decrease the
liquidation value of the Fund's shares of preferred stock, Series A-F (Proposal
4) and approval of the purposed amendment to the Fund's charter documents to
eliminate the limitation on the aggregate liquidation value of the Fund's
preferred stock (Proposal 5) will each require the affirmative vote of the
holders of a majority of the outstanding shares of both the common and preferred
stock, voting together as a single class. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions and
broker "non-votes" (that is, 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 the effect on a "no" vote for purposes of obtaining
the requisite approval of each proposal.
Shareholder Proposals. If a shareholder intends to present a proposal at the
Annual Meeting of Shareholders of the Fund to be held in 1997 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 September ____, 1996.
By Order of the Board of Directors,
Roy M. Randall, Secretary
One Seaport Plaza
New York, NY 10292
January 10, 1996
- 23 -
<PAGE>
COMMON STOCK
PROXY THE FIRST AUSTRALIA PRIME INCOME FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders - March 14, 1996
The undersigned hereby appoints Sir Roden Cutler, Brian M. Sherman and
Laurence S. Freedman, 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 Prime Income Fund, Inc. which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of The First Australia Prime Income
Fund, Inc. to be held at One Seaport Plaza, 28th Floor, New York, New York, on
March 14, 1996, at 3:00 p.m., New York City time, and any adjournment thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR items (1), (3), (4) and (5). 1. The election of five Directors
to serve as Class II Directors for a three-year term:
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary below /_/ below /_/
Nominees: Harry A. Jacobs, Jr., Rt. Hon. Malcolm Fraser, Brian M.
Sherman, Howard A. Knight and Peter D. Sacks.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below.)
-------------------------------
3. Ratification of the selection of Price Waterhouse LLP as independent
public accountants.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Approval of the proposed amendment to the Fund's charter documents to
decrease the liquidation value of the Fund's shares of preferred stock
Series A-F, in order to effect a stock split.
|_| FOR |_| AGAINST |_| ABSTAIN
5. Approval of the proposed amendment to the Fund's charter documents to
eliminate the limitation ont he aggregate liquidation value of the Fund's
preferred stock.
|_| FOR |_| AGAINST |_| ABSTAIN
6. In their discretion on any other business which may properly come before
the meeting or any adjournment thereof.
Please sign exactly as your name or
names appear hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title or status.
_____________________________________
(Signature of Shareholder)
_____________________________________
(Signature of Joint Tenant, if any)
Date _______, 1996
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
<PAGE>
AUCTION MARKET PREFERRED
STOCK, SERIES A-G
PROXY THE FIRST AUSTRALIA PRIME INCOME FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders - March 14, 1996
The undersigned hereby appoints Sir Roden Cutler, Brian M. Sherman and
Laurence S. Freedman, and each of them, the proxies of the undersigned, with
power of substitution to each of them, to vote all shares of the Auction Market
Preferred Stock, Series A-G, of The First Australia Prime Income Fund, Inc.
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of The First Australia Prime Income Fund, Inc. to be held at One Seaport Plaza,
28th Floor, New York, New York, on March 14, 1996, at 3:00 p.m., New York City
time, and any adjournment thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR items (2), (3), (4) and (5).
2. The election of two Directors to represent the interests of Preferred
Stock for the ensuing year:
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary below /_/ below /_/
Nominees: David Manor and Marvin Yontef.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below.)
------------------------------------
3. Ratification of the selection of Price Waterhouse LLP as independent
public accountants.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Approval of the proposed amendment to the Fund's charter documents to
decrease the liquidation value of the Fund's shares of preferred stock,
Series A-F, in order to effect a stock split.
|_| FOR |_| AGAINST |_| ABSTAIN
5. Approval of the proposed amendment to the Fund's charter documents to
eliminate the limitation ont he aggregate liquidation value of the Fund's
preferred stock.
|_| FOR |_| AGAINST |_| ABSTAIN
6. In their discretion on any other business which may properly come before
the meeting or any adjournment thereof.
Please sign exactly as your name or
names appear hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title or status.
____________________________________
(Signature of Shareholder)
____________________________________
(Signature of Joint Tenant, if any)
Date _____, 1996
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
<PAGE>
