File No. 333-02795
As filed with the Securities and Exchange Commission on May 30, 1996
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1 [ ] Post-Effective Amendment No.
EMERGING MARKETS GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (310) 996-6000 or 1-800-421-0180, ext. 6000
11100 Santa Monica Blvd., 15th Floor
Los Angeles, California 90025
(Address of Principal Executive Offices) (Zip Code)
Roberta A. Conroy
Vice President & Secretary
11100 Santa Monica Blvd., 15th Floor
Los Angeles, California 90025
(Name and Address of Agent for Service)
Copies To: Robert W. Helm, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of this Registration Statement.
-------------------------------------------------------------------
Calculation of Registration Fee under the Securities Act of 1933:
------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Title of Securities Being Registered Amount Being Registered(1) Proposed Maximum Offering Price per Unit (1) Proposed Maximum
Aggregate Offering Price(1) Amount of Registration Fee
- ------------- ------------ ---------- ------------ ------------
Common stock 165,000.000 $57.68 $9,517,200.00 $3,281.79
$.01 par value
</TABLE>
(1) Estimated soley for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
EMERGING MARKETS GROWTH FUND, INC.
CROSS REFERENCE SHEET
Parts A and B - Prospectus*
<TABLE>
<CAPTION>
Item in Parts A and B of Form N-14 Location in Prospectus
<S> <C> <C>
1. Outside Front Cover Cover Page
2. Inside Front and Outside Back Covering Page Cover Page
3. Fee Table, Synopsis and Risk Factors Synopsis; Risk Factors; Fee Table
4. Information about the Transaction Comparative Information on Shareholder Rights;
Information about the Reorganization
5. Information about the Registrant Incorporated by Reference
6. Information about the Company being Acquired Incorporated by Reference
7. Voting Information Consent Solicitation Information
8. Interest of Certain Persons and Experts Consent Solicitation Information
9. Additional Information Required for Reoffering Not Applicable
10. Cover Page Not Applicable
11. Table of Contents Table of Contents
12. Additional Information about the Registrant Additional Information about the Funds; Incorporated by Reference
13. Additional Information about the Company Additional Information about the Funds; Incorporated by Reference
being Acquired
14. Financial Statements Financial Statements
</TABLE>
All Items Required to be set forth in Part C are set forth in Part C
- ---------------------
*All information required to be set forth in Part B: Statement of Additional
Information has been included in Part A: The Prospectus
NEW WORLD INVESTMENT FUND
11100 SANTA MONICA BOULEVARD
LOS ANGELES, CALIFORNIA 90025
May 31,1996
Dear Shareholder:
The Board of Trustees of New World Investment Fund ("NWIF") has recently
reviewed and unanimously endorsed a proposal for reorganization of NWIF which
they judge to be in the best interests of its shareholders (the
"Reorganization"). This proposal calls for combining the assets of NWIF with
Emerging Markets Growth Fund, Inc. ("EMGF"), a closed-end investment company.
Capital International, Inc. is the investment adviser for both EMGF and NWIF.
We have therefore submitted the proposal for your consideration, and
request your written consent to approve the Reorganization. WE STRONGLY INVITE
YOUR PARTICIPATION BY ASKING YOU TO REVIEW, COMPLETE AND RETURN YOUR WRITTEN
CONSENT AS SOON AS POSSIBLE.
As a result of this Reorganization, NWIF would be combined with EMGF and
you would become a shareholder of EMGF, receiving shares having an aggregate
net asset value equal to the aggregate net asset value of your investment in
NWIF. No sales charge or other fees will be imposed in the Reorganization, and
the Closing of the transaction will be conditioned upon receiving an opinion of
counsel to the effect that the proposed Reorganization will qualify as a
tax-free reorganization for Federal income tax purposes.
Detailed information about the proposed Reorganization and the reasons for
it are contained in the enclosed materials. Please exercise your right to
authorize the transaction by completing, dating and signing the enclosed
written consent. A self-addressed, postage-paid envelope has been enclosed for
your convenience. IT IS VERY IMPORTANT THAT WE RECEIVE YOUR WRITTEN CONSENT NO
LATER THAN JUNE 20, 1996.
Should you decide to consent to the Reorganization, please complete and
return the EMGF Shareholders Agreement which is attached.
Sincerely,
Roberta A. Conroy
Vice President and Secretary
NEW WORLD INVESTMENT FUND
CONSENT SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST
WRITTEN CONSENT
AS OF MAY 31, 1996
Approval of an Agreement and Plan of Reorganization providing for the transfer
of the assets and certain liabilities of New World Investment Fund ("NWIF") in
exchange for shares of Emerging Markets Growth Fund, Inc. ("EMGF"), the
distribution of such shares to shareholders of NWIF in liquidation of NWIF and
the subsequent dissolution of NWIF.
_ _ _
// For // Against // Abstain
- - - -
Please sign exactly as your name or names appear hereon. Joint owners should
each sign individually. Corporate consents should be signed in full corporate
name by an authorized officer. Fiduciaries should give full titles as such.
By:
------------------------------
Authorized Person
[Name of Shareholder]
[Number of Shares as of March 31, 1996]
------------------------------
Authorized Person
PROSPECTUS / INFORMATION STATEMENT
ACQUISITION OF THE ASSETS
OF NEW WORLD INVESTMENT FUND
BY AND IN EXCHANGE FOR SHARES
OF EMERGING MARKETS GROWTH FUND, INC.
May 31, 1996
INTRODUCTION
This Prospectus/Information Statement relates to the solicitation of
shareholder approval for the proposed transfer of the assets and certain
liabilities of New World Investment Fund ("NWIF"), a non-diversified,
closed-end management investment company, to Emerging Markets Growth Fund, Inc.
("EMGF"), a diversified closed-end management investment company, in exchange
for shares of common stock of EMGF. The address of EMGF and NWIF is 11100
Santa Monica Boulevard, Los Angeles, California 90025, and the telephone number
of each Fund is (310) 996-6000. Following the exchange, shares of EMGF will be
distributed to the shareholders of NWIF in liquidation of NWIF. As a result of
the proposed transaction, each shareholder of NWIF will receive that number of
full and fractional shares of EMGF equal in net asset value at the close of
business on the date of the exchange to the net asset value of the
shareholder's shares of NWIF. Shareholders of NWIF will not be assessed any
sales charge or other fee in connection with the proposed transaction.
PROPOSAL
To approve an Agreement and Plan of Reorganization providing for the
transfer of the assets and certain liabilities of NWIF in exchange for shares
of EMGF, the distribution of such shares to shareholders of NWIF in liquidation
of NWIF and the subsequent dissolution of NWIF.
THE BOARD OF TRUSTEES RECOMMENDS APPROVAL OF THE PLAN.
This Prospectus/Information Statement, which should be retained for future
reference, sets forth concisely the information about EMGF that a prospective
investor should know before returning the enclosed written consent. For a more
detailed discussion of the investment objective, policies and restrictions of
EMGF, including the risks of investing in EMGF, see the Prospectus of EMGF
dated February 14, 1996 (the "EMGF Prospectus") which is included herewith.
The information in the EMGF Prospectus is incorporated herein by reference.
Information about NWIF is included in its Prospectus dated December 5, 1995
(the "NWIF Prospectus") and is incorporated herein by reference. The NWIF
Prospectus is available upon request and without charge by contacting NWIF at
the above address or telephone number. Additional information about EMGF and
NWIF has been filed with the Securities and Exchange Commission (the
"Commission") and may be obtained without charge. (See "Additional Information
About the Funds - Public Information").
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/INFORMATION STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------
T A B L E O F C O N T E N T S
----------------------------------------------------
Item Page No.
---- ----------
<TABLE>
<CAPTION>
<S> <C>
Introduction 1
Proposal 1
Synopsis 3
Risk Factors 5
Fee Table 6
Financial Highlights 7
Information about the Reorganization 8
Comparison of Investment Objectives and Policies 13
Comparison of Fundamental Investment Restrictions 14
Comparative Information on Shareholder Rights 14
Additional Information about the Funds 17
Consent Solicitation Information 19
Financial Statements 22
</TABLE>
SYNOPSIS
This synopsis is qualified by reference to the more complete information
contained elsewhere in this Prospectus/Information Statement, the EMGF
Prospectus, the NWIF Prospectus and the Agreement and Plan of Reorganization
attached hereto as Exhibit A. EMGF and NWIF are sometimes individually
referred to herein as a "Fund" and collectively as the "Funds."
PROPOSED TRANSACTION. At a meeting held on December 7, 1995, the Trustees
of NWIF, including the Trustees who are not "interested persons" of NWIF (the
"Independent Trustees") within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), unanimously approved an Agreement and Plan
of Reorganization (the "Plan") between NWIF and EMGF, providing for the
transfer of the assets of NWIF to EMGF in exchange for shares of EMGF, the
assumption by EMGF of certain liabilities of NWIF, and the distribution of the
shares of EMGF to shareholders of NWIF in liquidation of NWIF (the
"Reorganization"). The aggregate net asset value of the shares of EMGF issued
in the Reorganization will equal the aggregate net asset value of the shares of
NWIF then outstanding.
As a result of the Reorganization, each shareholder of NWIF will receive
that number of full and fractional shares of EMGF equal in net asset value,
determined as of the close of trading on the New York Stock Exchange next
preceding the closing of the Reorganization, to the net asset value, determined
as of the same time, of such shareholder's shares of NWIF. Shareholders of
NWIF will not be assessed any sales charge or other fee in connection with the
Reorganization. The Board of NWIF has determined that the interests of
existing shareholders of NWIF will not be diluted as a result of the
Reorganization, concluded that the Reorganization would be in the best
interests of NWIF and the shareholders of NWIF, and recommends approval of the
Reorganization. Approval of the Plan and Reorganization will require the
affirmative consent of a majority of the outstanding shares of NWIF. Pursuant
to the terms of the Plan, NWIF and EMGF will each pay one-half of the costs of
the Reorganization.
The Reorganization is expected to occur shortly following shareholder
approval thereof. However, the Plan may be terminated at any time prior to the
closing of the Reorganization by either Fund, whether or not shareholder
approval has been obtained, if the conditions precedent to that Fund's
obligations under the Plan have not been satisfied or if the Board of that Fund
determines that proceeding with the Plan would not be in the best interests of
the Fund's shareholders. See "Information About the Reorganization" below.
FORM OF ORGANIZATION. EMGF is a diversified closed-end management
investment company, organized under the laws of the State of Maryland, while
NWIF is a non-diversified, closed-end management investment company, organized
under the laws of the Commonwealth of Massachusetts. See "Comparative
Information on Shareholder Rights" below.
TAX CONSEQUENCES. As a condition to closing, NWIF and EMGF will obtain an
opinion of counsel, based on certain facts, assumptions and representations
made by the Funds, to the effect that the Reorganization will qualify as a
tax-free reorganization for Federal income tax purposes. See "Information
About the Reorganization."
INVESTMENT OBJECTIVES AND POLICIES. The investment objective of EMGF is
to seek long-term growth of capital through investment in developing country
equity securities. The investment objective of NWIF is to seek, over the
long-term, a high level of total return by investing primarily in securities of
Latin American issuers. See "Comparison of Investment Objectives and Policies"
below.
^
DIVIDENDS AND DISTRIBUTIONS. Each Fund's current policy is to make, from
time to time, distributions to shareholders consisting of dividends and net
realized capital gains. There is no fee or other charge imposed by either Fund
in connection with the reinvestment of dividends and capital gains
distributions. As permitted by its Board of Trustees/Directors, each Fund
permits its shareholders to make an election to receive dividends and
distributions in cash or in full or fractional shares of the Fund.
SUITABILITY AND TRANSFER RESTRICTIONS. Shares of each Fund are offered to
the public on a continuous basis to those investors meeting that Fund's
investor suitability and minimum purchase requirements, and who agree to enter
into the Fund's Shareholders Agreement. Each Fund's investor suitability
requirement provides that each prospective investor that is a "company" (as
defined in the 1940 Act), must have total assets in excess of US $5 million.
Each prospective investor that is a natural person must be an "accredited
investor" within the meaning of Regulation D under the Securities Act of 1933,
as amended (the "1933 Act"). NWIF's Shareholders Agreement restricts transfer
of the Fund's shares unless: 1) if the transfer is to a company, i) it has
total assets in excess of US $5 million; ii) the transfer is at least the
lesser of the total amount of shares held or the minimum purchase amount; iii)
written notice is provided to the Fund; and iv) the Board of Trustees has not
prohibited the transfer; or 2) if the transfer is to a natural person, i) the
prospective purchaser satisfies conditions (ii), (iii) and (iv) above, and ii)
has an individual net worth in excess of US $1 million or an individual income
in excess of US $200,000 during each of the two most recent years. EMGF's
Shareholders Agreement imposes similar restrictions on transfer, except that:
1) restrictions iii) and iv) are not applicable; and 2) no transferee may
acquire more than 15% of the Fund's shares. See "Additional Information About
the Funds - Shareholders Agreement" below.
RISK FACTORS
EMGF's investments in equity securities of issuers in a variety of
developing countries involves certain special considerations, which may include
(1) investment and repatriation restrictions, (2) currency fluctuations, (3)
potential unusual market volatility, (4) government involvement in the private
sector, (5) limited investor information, (6) shallow securities markets, (7)
certain local tax law considerations, (8) limited regulation of the securities
markets, (9) limitations on obtaining and enforcing judgment against non-U.S.
residents, (10) risks associated with investments in loan participations, (11)
settlement risks and 12) the risks associated with ownership of Russian
securities. Although some of the foregoing considerations also may be present
in the case of investments in securities of issuers located in the U.S. or
other developed countries, they are present to a greater degree in connection
with EMGF's investments in equity securities of issuers in developing
countries. See "Risk Factors and Other Considerations" in the EMGF Prospectus
for a description of these risk factors. Most of these risk factors are
generally also present in an investment in NWIF, though such risks are specific
to the Latin American countries in which NWIF invests, in contrast to the
broader range of countries in which EMGF invests.
FEE TABLE
The table below sets forth information with respect to shares of EMGF and
shares of NWIF as well as pro forma information for EMGF shares after giving
effect to the Reorganization. The table is based on the net asset, fee and
expense levels of the Funds for the 12-month period ended March 31, 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Shares of EMGF Shares of NWIF Pro forma
------- ------- combined Fund
(i.e., Shares of EMGF Following the Reorganization
------------------
Shareholder Transaction Expenses None None None
Sales Load (as a percentage of
offering price)...............
Dividend Reinvestment and Cash None None None
Purchase Plan Fees............
Annual Fund Operating Expenses .68%* .90%** .68%
(as a percentage of net assets) .19% .39% .19%
Management Fees ................ ---- ----- ----
Other Expenses***............... .87% 1.29% .87%
Total Fund Operating ==== ===== ====
Expenses..................
</TABLE>
__________
* Assessed at the annual rates of 0.90% of the first $400 million of
aggregate net assets; 0.80% of aggregate net assets from $400 million to $1
billion; 0.70% of aggregate net assets from $1 billion to $2 billion; 0.65% of
aggregate net assets from $2 billion to $4 billion; 0.625% of aggregate net
assets from $4 billion to $6 billion; 0.60% of aggregate net assets from $6
billion to $8 billion; 0.58% of aggregate net assets from $8 billion to $11
billion; and 0.56% of aggregate net assets in excess of $11 billion.
** Assessed at the annual rate of 0.90% of the first $400 million of
aggregate net assets and 0.80% of aggregate net assets in excess of $400
million.
*** "Other Expenses" ^ include non-U.S. taxes paid or accrued on net
investment income as a result of investing in certain foreign countries.
EXAMPLE
The Example below shows the cumulative expenses attributable to a $1,000
investment in shares of EMGF, shares of NWIF and shares of the pro forma
combined Fund for the periods specified.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
------ ------- ------- --------
EMGF...................... $ 9 $27 $48 $106
NWIF...................... $13 $39 $68 $149
Pro Forma Combined Fund (i.e., shares of EMGF received in the Reorganization)........... $ 9 $27 $48
$106
</TABLE>
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that an investor in a Fund will
bear directly or indirectly. The Example above assumes reinvestment of all
dividends and distributions and utilizes a 5% annual rate of return. THE
EXAMPLE IS NOT TO BE CONSIDERED REPRESENTATIVE OF PAST OR FUTURE EXPENSES;
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
The table below provides per share data and ratios for one share of EMGF
for each of the periods shown. This information is supplemented by the
financial statements and accompanying notes which appear elsewhere in this
Prospectus. The annual financial statements and notes and the financial
information in the table below have been audited by Price Waterhouse LLP,
independent accountants, whose report is included in the EMGF Prospectus. The
semi-annual financials for the period ended December 31, 1995 are unaudited.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Per-Share Data and Ratios
Six Months Ended 12/31/95/1/ Years Ended June 30
---------
1995 1994 1993 1992 1991
-------- -------- -------- -------- -------
Net Asset Value, Beginning $52.36 $58.75 $44.95 $38.64 $32.73 $32.81
of Period ------ ------ ------ ------ ------ ------
Income from Investment
Operations:
Net investment income... .43 .87 .53 .62 .55 .83
Net realized and (.87) (.79) 15.29 7.33 8.87 3.89
unrealized gain (loss)
on investments before
non-U.S. taxes........
Non-U.S. taxes --- (.03) (.39) (.06) (.28) (.38)
------ ------ ----- ----- ----- -----
Total income from (.44) .05 15.43 8.01 9.14 4.34
investment operations... ------ ------ ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net (.37) (.63) (.49) (.56) (.56) (.92)
investment income.......
Distributions from net (1.27) (5.81) (1.14) (1.14) (2.67) (3.50)
realized gain........... ------ ------ ------ ------ ------ ------
Total distributions... (1.64) (6.44) (1.63) (1.70) (3.23) 4.42
------ ------ ------ ------ ------ -----
Net Asset Value, End of $50.28 $52.36 $58.75 $44.95 $38.64 $32.73
Period................ ====== ====== ====== ====== ====== ======
Total Return............... (.75)% (1.22)% 34.33% 21.55% 29.73% 18.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year $5,771 $5,572 $4,170 $2,574 $1,561 $703
(in millions)............
Ratio of expenses to .44%/2/ .91% 1.00% 1.01% 1.11% 1.18%
average net assets........
Ratio of expenses and non-U.S. .44%/2/ .94% 1.04% 1.07% 1.18% 1.31%
taxes to average net assets..
Ratio of net income to average .84%/2/ 1.70% .91% 1.82% 1.84% 2.78%
net assets...................
Portfolio turnover rate... 9.31%/2/ 23.75% 18.13% 11.97% 16.03% 26.38%
</TABLE>
/1/ Unaudited.
/2/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
INFORMATION ABOUT THE REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of the
proposed Plan is qualified in its entirety by reference to the Plan attached to
this Prospectus/ Information Statement as Exhibit A. The Plan provides that
EMGF will acquire all or substantially all of the assets of NWIF in exchange
for shares of EMGF and the assumption by EMGF of certain identified liabilities
of NWIF on June 28, 1996 (the "Closing Date"), or such other date as provided
for pursuant to the Plan. EMGF will not assume any liabilities or obligations
of NWIF other than those reflected in an unaudited statement of assets and
liabilities of NWIF as of the normal close of business of the New York Stock
Exchange (currently 4:30 p.m., New York City time) on the Closing Date. The
number of full and fractional shares of EMGF to be issued to shareholders of
NWIF will be determined on the basis of the relative net asset values per share
and aggregate net assets of EMGF and NWIF computed as of the close of business
on the New York Stock Exchange on the Closing Date. The net asset value per
share for both EMGF and NWIF will be determined by dividing their respective
assets, less liabilities, by the total number of their respective outstanding
shares. Portfolio securities of both EMGF and NWIF will be valued in
accordance with the valuation practices of EMGF as described under "Valuation"
in its current prospectus.
The Board of Directors of EMGF and the Board of Trustees of NWIF have each
determined that the interests of existing shareholders will not be diluted as a
result of the transactions contemplated by the Reorganization, and that
participation in the Reorganization is in the best interests of shareholders of
EMGF and NWIF, respectively.
Prior to the Closing Date, NWIF will endeavor to discharge all of its
known liabilities and obligations. The liabilities assumed are expected to
relate generally to expenses incurred in the ordinary course of NWIF's
operations, such as accounts payable relating to custodian and transfer agency
fees, legal and accounting fees. EMGF will assume all liabilities, expenses,
costs, charges and reserves reflected on an unaudited statement of assets and
liabilities of NWIF as of the close of the New York Stock Exchange on the
Closing Date prepared by the Adviser in accordance with generally accepted
accounting principles consistently applied from the prior audited period. EMGF
will assume only those liabilities of NWIF reflected in that unaudited
statement of assets and liabilities and will not assume any other liabilities.
As of or prior to the Closing Date, NWIF contemplates declaring and paying
a dividend or dividends which are intended to have the effect of distributing
to NWIF's shareholders all of NWIF's net income and net realized gains which
has not been distributed previously.
Immediately after the Closing, NWIF will distribute pro rata to its
shareholders of record as of the close of business on the Closing Date the full
and fractional shares of EMGF received by NWIF, and NWIF will then terminate.
Such distribution will be accomplished by the establishment of accounts on the
share records of EMGF in the name of NWIF shareholders, each representing the
respective pro rata number of full and fractional shares of EMGF due such
shareholders. After the Closing Date, any outstanding certificates
representing shares of NWIF will represent shares of EMGF distributed to the
record holders of NWIF. Share certificates of NWIF will, upon presentation to
Capital International, Inc., be exchanged for shares of EMGF. Certificates for
EMGF shares will be issued only upon written request.
The consummation of the Plan is subject to the conditions set forth
therein. The Plan may be terminated at any time prior to the Closing Date,
before or after approval by shareholders of NWIF, by resolution of the Board of
Directors of EMGF or the Board of Trustees of NWIF, if circumstances should
develop that, in the opinion of either Board, make proceeding with the
Reorganization inadvisable. Approval of the Plan will require the affirmative
consent of the holders of a majority of the outstanding voting securities of
NWIF. Consummation of the Reorganization is also conditioned upon receipt of
an Order of the Securities and Exchange Commission pursuant to Section 17(b)
under the 1940 Act exempting the transaction from Section 17(a) of the 1940 Act
and permitting the transaction pursuant to Section 17(d) of the Act and Rule
17d-1 thereunder (the "Order"). EMGF, NWIF and certain of their affiliates
filed an application for the Order on March 28, 1996, and anticipate its
receipt prior to the Closing Date, however, there can be no assurance that such
Order will be granted.
DESCRIPTION OF SHARES OF EMGF. Full and fractional shares of EMGF will be
issued without the imposition of a sales charge or other fee to the
shareholders of NWIF in accordance with the procedures described above. Each
share of EMGF to be issued in the Reorganization will be fully paid and
non-assessable when issued and will have no preference, preemptive, conversion,
exchange, or similar rights.
FEDERAL INCOME TAX CONSEQUENCES. The Reorganization is intended to
qualify for Federal income tax purposes as a tax-free reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), with no gain or loss recognized by EMGF, NWIF, or the shareholders of
either Fund. As a condition to the closing of the Reorganization, NWIF and
EMGF will have received an opinion from the law firm of Dechert Price & Rhoads
to that effect. That opinion will be based in part upon representations made
by NWIF and EMGF and certain facts and assumptions.
Shareholders of NWIF should consult their tax advisers regarding the
effect, if any, of the proposed Reorganization in light of their individual
circumstances. SINCE THE FOREGOING DISCUSSION ONLY RELATES TO THE FEDERAL
INCOME TAX CONSEQUENCES OF THE REORGANIZATION, SHAREHOLDERS OF NWIF SHOULD ALSO
CONSULT THEIR TAX ADVISERS AS TO STATE, LOCAL, AND OTHER TAX CONSEQUENCES, IF
ANY, OF THE REORGANIZATION.
CAPITALIZATION. The following table shows the capitalization and net
asset values per share of the common stock of EMGF and shares of beneficial
interest of NWIF as of March 31, 1996 and on a pro forma basis as of that date
after giving effect to the proposed Reorganization.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EMGF NWIF Pro Forma
Combined
Net assets.................. $7,310,689,000 $255,608,000 $7,566,297,000
Net asset value per share... $54.24 $20.94 $54.24
Shares outstanding......... 134,773,805 12,205,648 139,486,342
</TABLE>
REASONS FOR THE REORGANIZATION. At a December 7, 1995 meeting of the Board
of Trustees of NWIF the Trustees unanimously approved the Reorganization and
recommended submission of the Plan to the shareholders of NWIF for their
approval. The Trustees concluded that the Reorganization and the Plan would be
in the best interests of NWIF and its shareholders, and recommended that the
shareholders approve the proposed Reorganization.
If effected according to the Plan, the proposed Reorganization should
result in an increase in the asset size of EMGF. The larger aggregate net
assets of EMGF should enable the shareholders of NWIF to realize significant
benefits associated with economies of scale. Shareholders of NWIF should enjoy
increased investment opportunities, enhanced portfolio diversification
opportunities, and enhanced liquidity. Shareholders of EMGF may also realize
these benefits, though to a lesser extent.
EMGF, with its much larger asset base and resulting economies of scale,
has a significantly lower expense ratio than does the smaller NWIF, and it is
expected that the shareholders of NWIF will benefit from this lower expense
ratio following the consummation of the Reorganization. The proposed
combination of Funds would eliminate the need for separate outside audits of
the respective Funds and the relatively fixed cost of auditing the surviving
EMGF would be spread across the larger asset base of the combined Funds,
resulting in lower auditing expenses per dollar of assets. Legal and other
costs would be subject to similar consolidation and cost-spreading, to the
benefit of shareholders of NWIF, and to a lesser extent, the shareholders EMGF.
As of June 30, 1994, June 30, 1995, and December 31, 1995, EMGF had net
assets of approximately $4,170,316,000, $5,571,810,000, and $5,770,962,336,
respectively. As of June 30, 1994, June 30, 1995, and December 31, 1995, NWIF
had net assets of approximately $305,426,000, $242,444,000, and $232,831,000,
respectively. NWIF faces the potential of a lack of growth and continued
diminution of asset size, which may increase the expense ratio of NWIF and may
render it more difficult to achieve its investment objective.
The shareholders of NWIF are primarily large pension plans and other
institutional investors. At the time when NWIF was established, these
investors generally desired to allocate the portion of their assets devoted to
emerging market investments to specific geographic regions, including Latin
America. Recently however, these types of investors have desired to allocate
the portion of their investments in emerging markets not by region, but on a
global scale. The Adviser believes that this is a factor which has led to the
lack of growth and diminution of asset size of NWIF. In contrast, over roughly
the same period of time, the asset size of EMGF has grown substantially. The
Adviser and Board of Trustees believe that shareholders of NWIF may benefit
from the Reorganization in being able to participate in an emerging markets
fund with a global focus, that more closely follows shareholders' investment
objectives.
In reaching its decision to recommend shareholder approval of the
Reorganization, the Board of Trustees considered the foregoing and a number of
other factors. The Board of Trustees reviewed summaries of operating expenses
of NWIF and of EMGF. It was noted that NWIF had an expense ratio of 1.27% for
its fiscal year ended June 30, 1995, compared to EMGF's expense ratio of .91%
for its fiscal year ended June 30, 1995. The Board also considered the fact
that the Reorganization would permit the shareholders of NWIF to pursue their
emerging market investment goals in a larger fund. The higher aggregate net
assets of EMGF may enable shareholders of NWIF to obtain the benefits of
economies of scale, permitting the reduction of certain duplicative costs and
expenses which may result in lower overall expense ratios through the spreading
of both fixed and variable costs of fund operations over a larger asset base.
The Board of Trustees also considered, among other things: (i) the terms
and conditions of the Reorganization; (ii) whether the Reorganization would
result in the dilution of shareholders' interests; (iii) the fact that the
investment policies and restrictions of the Funds are similar; and (iv) the
expected Federal income tax consequences of the Reorganization. Based on the
factors described above, the Board of Trustees unanimously determined that the
Reorganization would be in the best interests of NWIF and its shareholders and
would not result in dilution of shareholders' interests, and unanimously
recommended that the shareholders of NWIF approve the proposed Reorganization.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
GENERAL. The investment policies and restrictions of the Funds are
substantially similar. No significant differences exist regarding the
borrowing and lending limitations or quality of investments permitted for
either Fund. The primary difference between the Funds is that NWIF
concentrates its investments in Latin American countries, and is permitted to
invest a greater percentage of its assets in debt securities, while EMGF
invests in a broader range of emerging market countries, with a greater
percentage of its assets invested in equity securities. The investment
objective of EMGF is to seek long-term growth of capital through investment in
developing country equity securities. EMGF considers a developing country
security to be the security of an issuer domiciled and having its principal
place of business in a country which in the opinion of the Board of Directors
is considered to be a developing country by the international financial
community, including the International Bank for Reconstruction and Development
and the International Monetary Fund, and determined by the Board to be
qualified markets for the Fund. The countries currently considered qualified
markets are: Argentina, Brazil, Chile, China, Colombia, Greece, Hungary, India,
Indonesia, Jordan, Malaysia, Mexico, Pakistan, Peru, the Philippines, Poland,
Portugal, Russia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand,
Turkey and Venezuela. EMGF may invest up to 35% of its assets in a single
country. In addition, EMGF may, for liquidity, or for temporary defensive
purposes, invest 100% of its assets in highly liquid debt instruments or freely
convertible currencies. EMGF may also invest up to 10% of its total assets in
debt instruments for other than these purposes, where the investment is
consistent with the Fund's objective of long-term capital growth.
The investment objective of NWIF is to seek, over the long-term, a high
level of total return by investing primarily in securities of Latin American
issuers. NWIF currently concentrates its investments in Latin American
securities to securities issued or traded in the markets of Argentina, Brazil,
Chile, Colombia, Mexico, Peru or Venezuela, although it may invest in
additional Latin American markets. Under normal market conditions, NWIF
invests between 60% and 90% of its total assets in equity securities of Latin
American issuers. EMGF may invest up to 10% of its assets in securities of
issuers that are not domiciled and/or do not have their principal places of
business in developing countries, but that have or will have substantial assets
in developing countries; and/or derive or expect to derive a substantial
proportion of their total revenues from total revenues from either goods and
services produced in, or sales made in, developing countries. NWIF may also
invest up to 10% of its assets outside of Latin American.
TYPES OF INVESTMENTS. Both EMGF and NWIF may invest in options on
securities and securities indexes; foreign currency exchange contracts,
including forward and futures contracts; other financial futures and options
thereon, such as those based on an index or other basket of securities;
interest rate, equity and currency exchange rate swap agreements; equity linked
notes; short sales "against the box;" and repurchase agreements. Both EMGF and
NWIF may purchase securities offered by private placement; loan participation
interests; and in other investment companies. For a description of the
characteristics, risks, and limitations on these investments see the EMGF
Prospectus.
COMPARISON OF FUNDAMENTAL INVESTMENT RESTRICTIONS
Except as set forth below, the fundamental investment restrictions of both
Funds are substantially identical. Fundamental restrictions are those that may
not be changed unless authorized by a vote of a majority of a Fund's
outstanding shares.
SENIOR SECURITIES. Each Fund's restriction on the issuance of "senior
securities" under the 1940 Act is identical, except that EMGF is permitted to
issue warrants to its shareholders.
COUNTRY, INDUSTRY AND ISSUER CONCENTRATION. EMGF does not invest more
than 35% of its assets in the securities of companies domiciled in any one
country. NWIF does not invest more than 50% of its assets in the securities
of companies domiciled in any one country. Neither Fund invests more than 25%
of its assets in issuers whose primary business is in a single industry. EMGF
does not invest more than 5% of its total assets in the securities of a single
issuer. NWIF also does not invest more than 5% of its total assets in the
securities of a single issuer, but this restriction is non-fundamental. These
restrictions are not applicable to marketable obligations of a national
government or its agencies or instrumentalities.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
GENERAL. As a Massachusetts business trust, NWIF is governed by its
Declaration of Trust dated September 8, 1989, as amended (the "NWIF
Declaration"), its By-laws (the "NWIF By-laws"), and applicable Massachusetts
law. In some respects, its operations differ from those of EMGF, which is
organized as a Maryland corporation, and is governed by its Articles of
Incorporation, dated March 9, 1986 as amended (the "EMGF Articles"), its
By-laws (the "EMGF By-laws"), and applicable Maryland law. Shareholders of
NWIF entitled to authorize the Reorganization may obtain a copy of the EMGF
Articles and EMGF By-laws, without charge, upon written request to NWIF or
EMGF.
SHARES OF THE FUNDS. NWIF has authorized an unlimited number of shares of
beneficial interest, with a par value of $.001 per share. EMGF has authorized
capital of 200,000,000 million shares of common stock, each having a par value
of $.01 per share. The shares of each of the Funds have no preemptive or
conversion rights.
VOTING REQUIREMENTS. The NWIF By-laws provide that special meetings of
shareholders shall be called upon the written request of holders of not less
than 10% of the then outstanding shares of the Fund. The EMGF By-laws and the
Maryland General Corporation Law (the "Maryland Code") provide that a special
meeting of shareholders shall be called upon the written request of
shareholders representing not less than 25% of the outstanding shares of EMGF.
Each fund is required to hold a meeting for the purpose of voting upon removal
of a Director/Trustee if requested by the holders of at least 10% of that
fund's outstanding shares.
Under the EMGF Articles, EMGF reserves the right to make any amendment to
the Articles, as authorized by the Maryland Code. Any amendment to the NWIF
Declaration may be adopted by a majority of the Trustees when authorized to do
so by the vote of shareholders holding a majority of the shares of the Fund
entitled to vote. Certain amendments to the NWIF Declaration that do not
adversely affect the rights of shareholders may be approved by a majority of
the Trustees.
SHAREHOLDER MEETINGS. EMGF is required under its By-laws and the Maryland
Code to hold an annual meeting of shareholders in any year in which EMGF must
hold a meeting for purposes of electing Directors as required by the 1940 Act.
NWIF is not required to hold annual meetings of shareholders, but is required
to hold meetings of its shareholders for purposes of voting on certain matters
as required under the 1940 Act.
DIRECTORS AND TRUSTEES. Directors of EMGF serve for the duration of the
existence of EMGF, unless they resign or are removed. The EMGF By-laws permit
removal of a Director by the holders of 75% of the outstanding shares of EMGF.
With respect to NWIF, each Trustee's term of office is unlimited as to duration
unless the Trustee resigns, dies or is removed by a written instrument signed
by at least 3/4 of the Trustees, by vote of the shareholders of the Fund
holding not less than 3/4 of the shares then outstanding cast in person or by
proxy at any meeting called for that purpose, or by a written declaration
signed by shareholders holding not less than 3/4 of the shares then
outstanding. Trustee vacancies may be filled by the Trustees remaining in
office. A meeting of shareholders of NWIF or EMGF could be required for the
purpose of electing additional Trustees or Directors whenever fewer than a
majority of the Trustees or Directors then in office were elected by
shareholders.
SHAREHOLDER LIABILITY. Under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain circumstances, be held
personally liable for the obligations of the trust. However, the NWIF
Declaration disclaims shareholder liability for acts or obligations of NWIF and
requires that notice of such disclaimer be given in each agreement, obligation,
or instrument entered into or executed by NWIF or the Trustees. The NWIF
Declaration provides for indemnification out of Fund property for all losses
and expenses of any shareholder held personally liable for the obligations of
NWIF. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered remote since it is limited to circumstances
in which a disclaimer is inoperative and NWIF itself would be unable to meet
its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES. Under the NWIF Declaration, a
Trustee or Officer will be personally liable only for his own willful
misfeasance, criminal acts, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office. Under the NWIF
Declaration, Trustees and officers will be indemnified for the expenses of
litigation against them unless it is determined that the person did not act in
good faith in the reasonable belief that the person's action was in the best
interests of NWIF or if his conduct is determined to constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
NWIF may also advance money for these expenses provided that the Trustee or
officer undertakes to repay NWIF if his conduct is later determined to preclude
indemnification.
The EMGF Articles provide that the Directors and officers shall be
indemnified to the fullest extent provide by Maryland law. Maryland law
provides that, in addition to any other liability imposed by law, the Directors
of EMGF may be liable to EMGF: (1) for voting or assenting to the declaration
of any dividend or other distribution of assets to shareholders which is
contrary to Maryland law, (2) for voting or assenting to certain distributions
of assets to shareholders of EMGF, and (3) for voting or assenting to a
repurchase of the shares of EMGF in violation of Maryland law.
In the event of any litigation against the directors or officers of EMGF,
Maryland law permits EMGF to indemnify a Director or officer unless it is
proved that (i) the act or omission of the Director or officer was material to
the cause of action adjudicated in the proceeding and was committed in bad
faith or with active and deliberate dishonesty, (ii) the Director or officer
actually received an improper personal benefit in money, property or services,
or (iii) in the case of a criminal proceeding, the Director or officer had
reasonable cause to believe that the act or omission was unlawful.
RIGHT OF INSPECTION. NWIF shareholders have the same rights to inspect
the records, accounts and books of NWIF as are permitted shareholders of a
Massachusetts corporation under the Massachusetts corporation law. Currently,
each shareholder of a Massachusetts corporation is permitted to inspect the
records, accounts and books of a corporation for any legitimate business
purpose. The EMGF By-laws provide that any shareholder may inspect the Fund's
By-laws, minutes of shareholder meetings, annual statement of its affairs,
shareholders agreement and any voting trust agreement on file at its principal
office.
The foregoing is only a summary of certain characteristics of the
operations of EMGF, its Articles of Incorporation and By-laws, and Maryland
law, and the operations of NWIF, its Declaration of Trust and By-laws, and
Massachusetts law. The foregoing is not a complete description of the
documents cited. Shareholders should refer to the provisions of the EMGF
Articles, EMGF By-laws, and Maryland law, and the NWIF Declaration, NWIF
By-laws and Massachusetts law directly for a more thorough description.
BOARD OF DIRECTORS. The business of EMGF, and the business of NWIF, is
managed under the direction of its Board of Directors and Board of Trustees,
respectively, which formulate the general policies of the Fund and meets
periodically to review the investment performance of the Fund, monitor
investment activities and practices and discuss other matters affecting the
Fund. In addition, each Board, in its discretion, declares what, if any,
dividends are to be paid by the Fund and when they are to be paid.
ADDITIONAL INFORMATION ABOUT THE FUNDS
SHAREHOLDERS AGREEMENT. Shareholders of EMGF and NWIF are each subject to
a Shareholders Agreement. In effecting the Reorganization, shareholders of
NWIF who are not currently shareholders of EMGF will be required to enter into
and sign the EMGF Shareholders Agreement, a form of which is attached as
Exhibit B. The Agreements are substantially similar, with a few exceptions, as
follows.
Transfer Restrictions. The EMGF Agreement imposes a minimum transfer
requirement of $100,000. The EMGF Agreement prohibits any transferee from
acquiring more than 15% of EMGF's shares (excluding shares acquired through
reinvestment of dividends and distributions, or through purchases of its pro
rata share of shares issued by EMGF). The NWIF Agreement provides that the
minimum amount of shares that may be transferred by a shareholder is: i) the
minimum investment amount set forth in the NWIF Prospectus (currently
$100,000); or ii) the shareholder's entire holdings, if less. In addition,
shareholders of NWIF desiring to transfer shares must notify and provide
information to the Fund regarding the transfer. The Board of Trustees of NWIF
has 30 days from receipt of the information to prohibit the transfer if they
find it likely to have a materially adverse effect on the Fund or any
shareholders.
Agreement Term. Among other provisions for termination, the EMGF
Agreement provides that it may be terminated by the affirmative consent of
66-2/3% of the outstanding shares of the Fund. The NWIF agreement may
similarly be terminated, but upon the affirmative consent of 75% of the
outstanding shares of the Fund.
Governing Law. The EMGF Agreement is governed under the laws of the
United States and the State of Maryland. The NWIF Agreement is construed under
the laws of the United States and the Commonwealth of Massachusetts.
INVESTMENT ADVISER AND MANAGER. Capital International, Inc., a California
corporation with offices at Los Angeles, California, serves as investment
adviser of both Funds (the "Adviser"). The EMGF Advisory Agreement dated June
21, 1994 was last approved by the Board of Directors, including the Directors
who are not parties to the Agreement or interested persons of any such party,
on January 25, 1996 to continue through January, 1997, unless sooner
terminated. The EMGF Advisory Agreement and NWIF Advisory Agreement are
substantially identical, except for the compensation to be paid, and the
differences set forth below.
Investment Advisory Services. The EMGF Advisory Agreement provides that
the Adviser shall consult with and provide information to the Board of
Directors in order to help select "qualified markets" in which the Fund may
invest. NWIF does not formally select qualified markets and thus has no
comparable provision.
Administrative Services. The EMGF Advisory Agreement provides that the
Adviser shall perform such administrative and clerical functions as are
necessary in order to provide effective operation of the Fund, including the
preparation and maintenance of required reports, books and record of the Fund.
The NWIF Advisory Agreement does not list these services specifically, although
such services are arguably required under the Agreement.
Compensation. The EMGF Advisory Agreement specifically states that no
compensation other than as provided in the Agreement shall be paid to the
Adviser by EMGF without Board approval. The NWIF Advisory Agreement has no
comparable provision.
Expenses. The EMGF Advisory Agreement provides that the Adviser shall be
responsible for the costs of allocable personnel and telephone expenses in
connection with investor services. The NWIF Advisory Agreement has no
comparable provision.
Portfolio Transactions and Brokerage. The EMGF Advisory Agreement
provides that, in placing orders for the purchase and sale of securities for
the Fund, the Adviser will use its best efforts to obtain the most favorable
net results and execution of the Fund's order, taking into account all
appropriate factors, including price, dealer spread or commission, if any, size
of the transaction, and difficulty of the transaction. The Adviser is
authorized to pay spreads or commissions to brokers or dealers furnishing
brokerage and research services in excess of spreads or commissions which
another broker or dealer may charge for the same transaction. The expenses of
the Adviser may not necessarily be reduced as a result of receipt of such
research services. The Adviser may select brokers or dealers with which it or
the Fund are affiliated, subject to the Agreement or applicable law.
CUSTODIAN AND TRANSFER AGENT. The Chase Manhattan Bank, N.A., 1211 Avenue
of the Americas, New York, New York 10036, acts as custodian for each Fund
pursuant to a custodian agreement. The custodian employs sub-custodians
located in countries where each Fund's portfolio securities are traded.
American Funds Service Company, 135 South State College Boulevard, Brea,
California 92621, acts as each Fund's dividend paying agent, transfer agent and
registrar for its shares. EMGF's Luxembourg transfer agent is Banque
Internationale a Luxembourg, S.A.
PUBLIC INFORMATION. Information about EMGF is included in the EMGF
Prospectus dated February 14, 1996, a copy of which is included herewith, and
is incorporated herein by reference. A copy of the NWIF Prospectus can be
obtained without charge by writing to Capital International, Inc., at 11100
Santa Monica Boulevard, Los Angeles, California 90025. Shares of EMGF are
listed on the Luxembourg Stock Exchange and reports, and other information
concerning EMGF can be inspected at the offices of its transfer agent in
Luxembourg. EMGF and NWIF both file reports, and other information with the
Commission. These documents and other information can be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New
York, NY 10048; and 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such material can also be obtained from the Public Reference Branch,
Office of Filings and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates.
THE BOARD OF TRUSTEES
UNANIMOUSLY RECOMMENDS APPROVAL OF THE PLAN.
CONSENT SOLICITATION INFORMATION
Written consents of the shareholders of NWIF are being solicited by the
Board of Trustees of NWIF. Approval of the Plan and the Reorganization, will
require the affirmative consent of the holders of a majority of NWIF's
outstanding voting securities. Abstentions will have the effect of "no" votes
for purposes of the Proposal. Written consents are to be solicited by mail.
Additional solicitation may be made by telephone, telegraph or personal contact
by officers, employees or agents of Capital International, Inc. and its
affiliates.
Shareholders of NWIF of record at the close of business on March 31, 1996
("Record Date") will be entitled to authorize approval of the Plan and
Reorganization. Shareholders are entitled to one vote for each share held and
fractional votes for fractional shares held. As of March 31, 1996, as shown on
the books of NWIF, there were issued and outstanding 12,205,648 shares of
beneficial interest. As of March 31, 1996, as shown on the books of EMGF,
there were issued and outstanding 134,773,805 shares of common stock. The
approval of the shareholders of EMGF are not being solicited, since their
approval or consent is not necessary for the Reorganization to take place.
As of March 31, 1996, the officers and Directors of EMGF or Trustees of
NWIF as a group beneficially owned less than 1% of the outstanding shares of
EMGF or NWIF, respectively. The following tables below show those persons who
owned of record or beneficially 5% or more of EMGF and NWIF outstanding shares,
as of March 31, 1996, and show the number of shares of EMGF each person would
own upon consummation of the Reorganization, based upon net asset values of
each Fund as of March 31, 1996.
EMGF Beneficial Ownership
-------------------------
<TABLE>
<CAPTION>
Name & Address Number Percentage Number of Shares of EMGF following Reorganization Percentage of
Outstanding Shares of EMGF following Reorgani-zation
of Shares of Outstanding
Common Stock or Shares of
Beneficial Interest
<S> <C> <C> <C> <C>
The Chase Manhattan Bank, N.A. as Trustee for the 13,848,091 10.3% 15,909,313 11.4%
General Motors Employes Global Group Pension Trust
General Motors Corporation
767 Fifth Avenue
New York, NY 10153
The Chase Manhattan Bank, N.A. as Trustee for the 9,664,915 7.2% 10,559,765 7.6%
IBM Retirement Plan Trust
262 Harbor Drive
Stamford, CT 06904
Pensioenfonds PGGM 8,050,665 6.0% 8,050,665 5.8%
Kroostweg-Noord 149
P.O. Box 117, 3700
AC Zeist
The Netherlands
</TABLE>
<TABLE>
<CAPTION>
NWIF Beneficial Ownership
-------------------------
<S> <C> <C> <C> <C>
Name & Address Number Percentage Number of Shares of Percentage of Outstanding Shares of EMGF
following Reorgani-zation
of Shares of Outstanding EMGF
Common Stock or Shares of following Reorgani-zation
Beneficial Interest
The Chase Manhattan Bank, 3,203,458 26.2% 1,236,733 .89%
N.A. as Trustee for the
AT&T Master Pension Trust
One Oak Way - Room 4EC 117
Berkeley Heights, NJ 07922
The Chase Manhattan Bank, N.A.as Trustee for the 5,339,097 43.7% 15,909,313 11.4%
General Motors Employes Global Group Pension Trust
General Motors Corporation
767 Fifth Avenue
New York, NY 10153
The Chase Manhattan Bank, N.A. as Trustee for the 2,317,891 18.9% 10,559,765 7.6%
IBM Retirement Plan Trust
262 Harbor Drive
Stamford, CT 06904
</TABLE>
Two of the "control persons" (as defined in the 1940 Act) of NWIF, the
General Motors Employes Global Group Pension Trust and the IBM Retirement Plan
Trust have joined EMGF and NWIF in applying for an SEC exemptive order
regarding the Reorganization. Both of these entities, as well as the AT&T
Master Pension Trust, also have representatives serving on the Board of
Trustees, who have previously voted to approve the Reorganization. If these
entities continue to support the transaction, they will have enough sufficient
votes in the aggregate to authorize the Reorganization.
YOU ARE URGED TO COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED WRITTEN CONSENT PROMPTLY
By Order of the Board of Trustees,
Roberta A. Conroy
Vice President and Secretary
May 31, 1996
FINANCIAL STATEMENTS
--------------------
EMERGING MARKETS GROWTH FUND, INC.
- ----------------------------------
Unaudited Financial Statements for the six-months ended December 31, 1995:
Statement of Assets and Liabilities at December 31, 1995 (including investment
portfolio at December 31, 1995) (Unaudited).
Statement of Operations for the six-months ended December 31, 1995 (Unaudited).
Statement of Changes in Net assets for the six-months ended December 31, 1995
(Unaudited) and for the fiscal year ended June 30, 1995.
Per Share Data and Ratios for the six-months ended December 31, 1995
(Unaudited), and for the fiscal years ended June 30, 1991 through June 30,
1995.
Notes to Financial Statements for the six-months ended December 31, 1995.
NEW WORLD INVESTMENT FUND
- -------------------------
Unaudited Financial Statements for the six-months ended December 31, 1995:
Statement of Assets and Liabilities at December 31, 1995 (including investment
portfolio at December 31, 1995) (Unaudited).
Statement of Operations for the six-months ended December 31, 1995 (Unaudited).
Statement of Changes in Net assets for the six-months ended December 31, 1995
(Unaudited) and for the fiscal year ended June 30, 1995.
Per Share Data and Ratios for the six-months ended December 31, 1995
(Unaudited), and for the fiscal years ended June 30, 1992 through June 30,
1995.
Notes to Financial Statements for the six-months ended December 31, 1995.
PART C - OTHER INFORMATION
Item 15. Indemnification
Section 2-418 of the General Corporation Law of the State of Maryland, the
State in which the Fund was organized, empowers a corporation, subject to
certain limitations, to indemnify its directors and officers against expenses
(including attorneys' fees, judgments, fines, and certain settlements) actually
and reasonably incurred by them in connection with any suit or proceeding to
which they are a party so long as they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct to have been unlawful.
Article 6 of the Fund's By-Laws provides:
(a) "Each director and each officer of the Corporation shall be
indemnified by the Corporation to the fullest extent and in the manner provided
by Maryland law and the Investment Company Act of 1940 (if applicable), as they
may be amended. Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director or
officer in connection with any proceeding. However, if the proceeding was one
by or in the right of the Corporation, indemnification may not be made in
respect of any proceeding in which the director or officer shall have been
adjudged to be liable to the Corporation.
In the event of a settlement, the indemnification shall be made only upon
approval by the court having jurisdiction or upon determination by the Board of
Directors that such settlement was or, if still to be made, is in the best
interests of the Corporation. If the determination is to be made by the Board
of Directors, it may rely as to all questions of law on the advice of general
counsel of the Corporation, if such counsel is not involved therein or, if
involved, then on the advice of independent counsel. The right of
indemnification hereby provided shall be in addition to any other rights to
which any director or officer may be entitled.
(b) The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director or officer of the Corporation or who, while a
director or officer of the corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee, or another foreign or
domestic corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan, against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's position;
provided, that no insurance may be purchased which would indemnify any director
or officer of the Corporation against any liability to the Corporation or to
its stockholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office."
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to thte foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 16. Exhibits
(1) Articles of Incorporation Emerging Markets Growth Fund, Inc.(1)
(2) By-Laws of Emerging Markets Growth Fund, Inc.(1)
(3) Not Applicable.
(4) Agreement and Plan of Reorganization.(2)
(5) Shareholders Agreement.(2)
(6) Investment Advisory and Service Agreement.(1)
(7) Not Applicable.
(8) Not Applicable.
(9) (1) Form of Custodian Contract.(1)
(2) Form of Sub-Custody Agreement.(1)
(10) Not Applicable.
(11) Opinion and Consent of Dechert Price & Rhoads as to the legality of the
securities registered.
(12) Opinion and Consent of Dechert Price & Rhoads supporting the tax matters
and consequences to shareholders.(3)
(13) Not Applicable.
(14) Consent of Price Waterhouse LLP.
(15) Not Applicable.
(16) Powers of Attorney.(2)
(17) (1) Emerging Markets Growth Fund, Inc. Prospectus dated February 14,
1996.(2)
(2) New World Investment Fund Prospectus dated December 1, 1995.(2)
- ---------
(1) Previously filed and incorporated by reference herein. See SEC file 811-
4692.
(2) Previously filed and incorporated by reference herein. See SEC file 333-
02795
(3) To be filed by Post-Effective Amendment pursuant to "Dear Registrant"
letter dated February 15, 1996.
Item 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act [17 CFR
230.145c], the reoffering prospectus will contain the information called for by
the applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
(3) The undersigned registrant agrees to file by Post-Effective Amendment the
opinion of counsel regarding the tax consequences of the proposed
reorganization required by Item 16(12) of Form N-14 within a reasonable time
after receipt of such opinion.
(4) The undersigned registrant undertakes to hold a meeting for the purpose of
voting upon removal of a Director if requested by the holders of at least 10%
of the outstanding shares.
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Los
Angeles and State of California, as of the 30th day of May, 1996.
EMERGING MARKETS GROWTH FUND, INC.
By:/s/Roberta A. Conroy
-------------------------------
Roberta A. Conroy
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons as of the 30th
day of May, 1996, in the capacities indicated.
Signature Title
- --------- -----
(1) Principal Executive Officer:
/s/Nancy Englander President
----------------------------
(Nancy Englander)
(2) Principal Financial Officer and
Principal Accounting Officer:
/s/Steven N. Kearsley Treasurer
-----------------------------
(Steven N. Kearsley)
(3) Directors:
Issa Al-Sowaidi* Director
Robert B. Egelston* Director
Nancy Englander* Director
David I. Fisher* Director
Beverly L. Hamilton* Director
Marinus W. Keijzer* Director
Hugh G. Lynch* Director
Helmut Mader* Director
Teresa E. Martini* Director
John G. McDonald* Director
James K. Peterson* Director
William Robinson* Director
Patricia A. Small* Director
Walter P. Stern* Director
*By /s/Roberta A. Conroy
-----------------------------------
Roberta A. Conroy, Attorney-in-Fact
DECHERT PRICE & RHOADS
1500 K STREET, N.W.
WASHINGTON, D.C. 20005-1208
May 29, 1996
Emerging Markets Growth Fund, Inc.
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Dear Sirs:
We have acted as counsel to Emerging Markets Growth Fund, Inc., a Maryland
corporation (the "Fund"), and we have a general familiarity with the Fund's
business operations, practices and procedures. You have asked for our opinion
regarding the issuance of additional shares of common stock by the Fund in
connection with the acquisition by the Fund of the assets of New World
Investment Fund which will be registered on Pre-Effective Amendment No. 1 to a
Form N-14 Registration Statement (the "Registration Statement") to be filed by
the Fund with the Securities and Exchange Commission.
We have examined originals or certified copies, or copies otherwise
identified to our satisfaction as being true copies, of various corporate
records of the Fund and such other instruments, documents and records as we
have deemed necessary in order to render this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents examined by us
and the correctness of all statements of fact contained in those documents.
On the basis of the foregoing, we are of the opinion that the shares of
common stock of the Fund being registered under the Securities Act of 1933 in
the Registration Statement will be legally and validly issued, fully paid and
non-assessable, upon transfer of the assets of New World Investment Fund
pursuant to the terms of the Agreement and Plan or Reorganization included in
the Registration Statement.
We hereby consent to the filing of this opinion with and as part of the
Registration Statement.
Very truly yours,
\s\ DECHERT PRICE & RHOADS
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in the Prospectus constituting part of this
Pre-Effective Amendment No. 1 to the registration statement on Form N-14 (the
"Registration Statement") of our report dated August 10, 1995, relating to the
June 30, 1995 financial statements and per share data and ratios of Emerging
Markets Growth Fund, Inc.,(the "Fund") and to the reference to us under the
heading "Financial Highlights" in such Prospectus. We also consent to the
references to us under the headings "Financial Highlights" and "Independent
Accountants and Legal Counsel" in the Fund's Prospectus dated February 14,
1996, which Prospectus has been included in the Registration Statement. We
also consent to the use of our report dated August 10, 1995, relating to the
financial statements and per share data and ratios of New World Investment Fund
and to the references to us under the headings "Financial Highlights" and
"Independent Accountants and Legal Counsel" in New World Investment Fund's
Prospectus dated December 1, 1995, which Prospectus has been included in the
Registration Statement.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Los Angeles, California
May 29, 1996
