<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FLAG INVESTORS INTERNATIONAL FUND, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
[GRAPHIC OMITTED]
FLAG INVESTORS
INTERNATIONAL FUND, INC.
December 31, 1998
Dear Shareholder:
We are writing to ask you to elect a Board of Directors.
We are asking you to vote to re-elect James J. Cunnane, Louis E. Levy,
Eugene J. McDonald, Carl W. Vogt and me, and to add Joseph R. Hardiman to the
Fund's Board. This election will place the Fund's Board of Directors in
alignment with other Boards in the Fund Complex and will provide flexibility to
fill vacancies in the future.
Mr. Hardiman served as President and Chief Executive Officer of the
National Association of Securities Dealers, Inc. (NASD) and its subsidiary, The
NASDAQ Stock Market, Inc., for nearly ten years. He is a Director of each of
the other funds in the Fund Complex. Mr. Hardiman brings excellent business and
investment experience as well as unquestioned integrity.
While we are enthusiastic that Mr. Hardiman will join the Board (with your
approval), we are sad that John F. Kroeger, one of the original Board members of
Flag Investors International Fund, Inc., passed away on November 26, 1998. Mr.
Kroeger provided sound advice and asked pointed questions since the Fund's
inception. We will miss him.
A proxy which explains this matter in detail is attached. We ask that you
read it and then vote. Your vote is important to us. Please take a moment now to
complete, sign and return your proxy card in the enclosed postage-paid envelope.
Thank you for your cooperation.
Sincerely yours,
/s/ Truman T. Semans
----------------------------
Truman T. Semans
Chairman
<PAGE>
FLAG INVESTORS INTERNATIONAL FUND, INC.
One South Street
Baltimore, Maryland 21202
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
January 22, 1999
TO THE SHAREHOLDERS OF FLAG INVESTORS INTERNATIONAL FUND, INC.:
You are cordially invited to a special meeting (the "Special Meeting") of
the shareholders of Flag Investors International Fund, Inc. (the "Fund") on
Friday, January 22, 1999, at 2:30 p.m. Eastern Time at the offices of Investment
Company Capital Corp., in the Conference Room on the 30th Floor of The Alex.
Brown Building, One South Street, Baltimore, Maryland 21202, for the purpose of
considering the proposal set forth below and for the transaction of such other
business as may be properly brought before the Special Meeting:
PROPOSAL: To consider and act upon a proposal to elect a Board of Directors
of the Fund.
Only shareholders of the Fund at the close of business on December 18, 1998
are entitled to notice of, and to vote at, this meeting or any adjournment
thereof.
Whether or not you expect to be present at the Special Meeting, please
complete and promptly return the enclosed proxy card. A postage-paid envelope is
enclosed for your convenience so that you may return your proxy card as soon as
possible. It is most important and in your interest for you to sign and date
your proxy card and return it so that a quorum will be present and a maximum
number of shares may be voted. The proxy is revocable at any time prior to its
use.
Amy M. Olmert
Secretary
Dated: December 31, 1998
<PAGE>
FLAG INVESTORS INTERNATIONAL FUND, INC.
One South Street
Baltimore, Maryland 21202
---------------------
PROXY STATEMENT
---------------------
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD
January 22, 1999
This Proxy Statement is furnished by the Board of Directors of Flag
Investors International Fund, Inc. (the "Fund") in connection with the
solicitation of proxies for use at the special meeting of shareholders of the
Fund to be held on Friday, January 22, 1999, at 2:30 p.m. Eastern Time, or at
any adjournment thereof (the "Special Meeting"), at the offices of Investment
Company Capital Corp., in the Conference Room on the 30th Floor of The Alex.
Brown Building, One South Street, Baltimore, Maryland 21202. It is expected that
the Notice of Special Meeting, the Proxy Statement and a Proxy Card will be
mailed to shareholders on or about December 31, 1998.
The primary purpose of the Special Meeting is to elect a Board of
Directors.
If you do not expect to be present at the Special Meeting and wish
your shares to be voted, please sign and date the enclosed Proxy Card ("Proxy")
and mail it in the enclosed reply envelope, allowing sufficient time for the
Proxy to be received on or before 2:30 p.m. Eastern Time on January 22, 1999. No
postage is required if the Proxy is mailed in the United States. If the
accompanying Proxy is executed properly and returned, shares represented by it
will be voted at the Special Meeting in accordance with the instructions on the
Proxy. However, if no instructions are specified, shares will be voted FOR the
election of the proposed Board of Directors of the Fund (the "Proposal"). All
shareholders of the Fund are entitled to vote on the Proposal. Shareholders may
revoke their Proxies at any time prior to the time they are voted by giving
written notice to the Secretary of the Fund, by delivering a subsequently dated
Proxy or by attending and voting at the Special Meeting.
The close of business on December 18, 1998, has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of, and to vote at, the Special Meeting and at any adjournment thereof.
On the Record Date, the Fund had 678,894.46 Flag Investors International Fund
Class A Shares outstanding. Each full share will be entitled to one vote at the
Special Meeting and each fraction of a share will be entitled to the fraction of
a vote equal to the proportion of a full share represented by the fractional
share.
The expenses of the Special Meeting will be borne by the Fund and will
include reimbursement to brokerage firms and others for expenses in forwarding
Proxy solicitation materials to beneficial owners. The solicitation of Proxies
will be largely by mail, but may include telephonic, telegraphic or oral
communication by employees and officers of Investment Company Capital Corp.
("ICC"), which serves as the Fund's investment advisor.
The Fund will furnish to shareholders, without charge, a copy of the Annual
Report for its fiscal year ended October 31, 1998, upon request. The Annual
Report of the Fund may be obtained by written request to Flag Investors
International Fund, Inc., One South Street, Baltimore, Maryland 21202 or by
calling (800) 767-FLAG.
The Fund is registered as an open-end, diversified management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended.
PROPOSAL: To consider and act upon a proposal to elect a Board of Directors of
the Fund.
At the Special Meeting, it is proposed that six Directors be elected to
hold office until their resignation or retirement or until their successors are
duly elected and qualified. The persons named in the accompanying Proxy intend,
in the absence of contrary instructions, to vote all Proxies on behalf of the
shareholders for the election
1
<PAGE>
of James J. Cunnane, Joseph R. Hardiman, Louis E. Levy, Eugene J. McDonald,
Truman T. Semans and Carl W. Vogt (each, a "Nominee" and collectively, the
"Nominees"). All of the Nominees are currently members of the Board of
Directors, except for Mr. Hardiman. Messrs. McDonald and Semans were elected by
a consent of the sole shareholder of the Fund on August 16, 1993. Messrs.
Cunnane, Levy and Vogt were appointed by the Board of Directors to fill
vacancies on the Board as they arose and have not previously been elected by
shareholders. John F. Kroeger, who served as a Director of the Fund since its
inception, passed away on November 26, 1998.
The Special Meeting is necessary because, under the 1940 Act, if at any
time less than a majority of the Directors have been elected by shareholders,
the Directors then holding office are required to hold a meeting of shareholders
within sixty (60) days for the purpose of electing Directors to fill any
existing vacancies on the Board of Directors. As a result of the death of Mr.
Kroeger, less than a majority of the Directors have been elected by shareholders
of the Fund and, accordingly, the Fund is required to hold a meeting of
shareholders for the purpose of electing Directors. In addition, the election of
Directors will assure future flexibility in complying with the 1940 Act and
Maryland law. In particular, Section 16 of the 1940 Act requires that in order
to fill vacancies on the Board, at least two-thirds of the Directors holding
office after such vacancies are filled must have been elected by shareholders.
Each of the Nominees has consented to being named in this Proxy Statement
and to serving as a Director if elected. The Fund knows of no reason why any
Nominee would be unable or unwilling to serve if elected.
The Fund is incorporated under the laws of the State of Maryland. Under
Maryland General Corporation Law, a corporation registered under the 1940 Act,
such as the Fund, is not required to hold an annual meeting in any year in which
the election of Directors is not required to be acted upon under the 1940 Act.
The Fund has availed itself of this provision and achieves cost savings by
eliminating printing costs, mailing charges and other expenses involved in
routine annual meetings. Because the Fund does not hold regular annual
shareholder meetings, each Nominee, if elected, may hold office until his
resignation or retirement or until his successor is elected and qualified.
Even with the elimination of routine annual meetings, the Board of
Directors may call special meetings of shareholders for action by shareholder
vote as may be required by the 1940 Act, or as required or permitted by the
Articles of Incorporation and By-Laws of the Fund. As described above,
shareholder meetings will be held, in compliance with the 1940 Act, to elect
Directors under certain circumstances. Shareholder meetings may also be held by
the Fund for other purposes, including to approve investment policy changes, a
new investment advisory or sub-advisory agreement or other matters requiring
shareholder action under the 1940 Act. In addition, Maryland General Corporation
Law provides for the calling of a special meeting by the written request of
shareholders holding at least 25% of the shares entitled to vote at the meeting.
Information Regarding Nominees
The following information is provided for each Nominee. As of November 30,
1998, the Nominees as a group and the Directors and officers of the Fund as a
group beneficially owned an aggregate of 11,445.03 shares, representing 1.64% of
the total outstanding shares of the Fund.
2
<PAGE>
<TABLE>
<CAPTION>
Shares
Business Experience during the Beneficially
Name and Position Past Five Years Owned as of
with the Fund Age (including all directorships) November 30, 1998** Percentage
------------- --- ------------------------------- --------------------- ----------
<S> <C> <C> <C> <C>
Truman T. Semans* 72 Vice Chairman, Alex. Brown Capital Advisory & Trust 6,069.46 ***
Chairman and Company (now Brown Investment Advisory & Trust shares
Company); Director, Investment Company Capital Corp.
Director since (registered investment advisor); and Director, Virginia Hot
1993 Springs Inc. (property management). Formerly, Vice
Chairman and Managing Director, Alex. Brown & Sons
Incorporated (now BT Alex. Brown Incorporated).
Director of 10 funds in the Fund Complex.****
James J. Cunnane 60 Managing Director, CBC Capital (merchant banking), None ***
Director since 1993-Present; and Director, Net.World
1994 (telecommunications), 1998-Present. Formerly, Senior
Vice President and Chief Financial Officer, General
Dynamics Corporation (defense), 1989-1993; and
Director, The Arch Fund (registered investment company).
Director of each fund in the Fund Complex.****
Joseph R. Hardiman 61 Private Equity Investor and Capital Markets Consultant; 3,311.05 ***
Nominee and Director, The Nevis Fund (registered investment shares
company) and Circon Corp. (medical instruments).
Formerly, President and Chief Executive Officer, The
National Association of Securities Dealers, Inc. and The
NASDAQ Stock Market, Inc., 1987-1997; Chief
Operating Officer of Alex. Brown & Sons Incorporated
(now BT Alex. Brown Incorporated), 1985-1987; and
General Partner, Alex. Brown & Sons Incorporated,
1976-1985. Director of 11 funds in the Fund
Complex.****
Louis E. Levy 66 Director, Kimberly-Clark Corporation (personal consumer 2,064.52 ***
Director since products); Director, Household International (finance and shares+
1994 banking); and Chairman of the Quality Control Inquiry
Committee, American Institute of Certified Public
Accountants. Formerly, Trustee, Merrill Lynch Funds for
Institutions, 1991-1993; Adjunct Professor, Columbia
University-Graduate School of Business, 1991-1992; and
Partner, KPMG Peat Marwick, retired 1990. Director of
each fund in the Fund Complex.****
Eugene J. McDonald 66 President, Duke Management Company (investments); None ***
Director since Executive Vice President, Duke University (education,
1993 research and health care); Executive Vice Chairman and
Director, Central Carolina Bank & Trust (banking);
and Director, Victory Funds (registered investment
companies). Formerly, Director, AMBAC Treasurers
Trust (registered investment company) and DP Mann
Holdings (insurance). Director of each fund in the
Fund Complex.****
Carl W. Vogt, Esq. 62 Senior Partner, Fulbright & Jaworski L.L.P. (law); None ***
Director since Director, Yellow Corporation (trucking); and Director,
1996 American Science & Engineering (x-ray detection
equipment). Formerly, Chairman and Member, National
Transportation Safety Board; Director, National Railroad
Passenger Corporation (Amtrak); and Director and
Member, Aviation System Capacity Advisory Committee
(Federal Aviation Administration). Director of each fund
in the Fund Complex.****
</TABLE>
- ------------
* Denotes an individual who is an "interested person" as defined in the 1940
Act.
** This information has been provided by each Nominee for Director of the
Fund.
*** As of November 30, 1998, the Nominees as a group beneficially owned an
aggregate of 11,445.03 shares representing 1.64% of the total outstanding
shares of the Fund.
**** The "Fund Complex" consists of 12 registered investment companies which
hold themselves out to investors as related companies for purposes of
investment and investor services for which ICC provides investment
advisory or administrative services.
+ Mr. Levy disclaims beneficial ownership of these shares, as they are held
by his wife in trust.
3
<PAGE>
Compensation of Directors
Each Director who is not an "interested person" within the meaning of the
1940 Act, and the Fund's President receives an aggregate annual fee (plus
reimbursement for reasonable out-of-pocket expenses incurred in connection with
his attendance at Board and committee meetings) from the Fund and all of the
funds in the Fund Complex for which he serves. Payment of such fees and expenses
is allocated among all such funds described above in proportion to their
relative net assets. For the fiscal year ended October 31, 1998, Independent
Directors' fees attributable to the assets of the Fund totaled $369. Officers of
the Fund, except the Fund's President, receive no direct remuneration in such
capacity from the Fund. Directors and officers of the Fund who are employees of
BT Alex. Brown Incorporated or its affiliates ("BT Alex. Brown") may be
considered to have received remuneration indirectly.
Any Director who receives fees from the Fund is permitted to defer a
minimum of 50%, and up to 100%, of his annual compensation pursuant to a
Deferred Compensation Plan. Messrs. Cunnane, Levy, McDonald and Vogt have each
executed a Deferred Compensation Agreement and may defer a portion of their
compensation from the Fund and the Fund Complex. Currently, the deferring
Directors may select from various funds in the Fund Complex and BT International
Equity Fund in which all or part of their deferral account shall be deemed to be
invested. Distributions from the deferring Directors' deferral accounts will be
paid in cash, in quarterly installments over a period of ten years.
The aggregate compensation payable by the Fund to each of the Fund's
Directors serving during the fiscal year ended October 31, 1998 is set forth in
the compensation table below. The aggregate compensation payable to such
Directors during the fiscal year ended October 31, 1998 by the Fund Complex is
also set forth in the compensation table below.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation Number of Funds
Compensation Benefits Accrued as from the Fund in Fund Complex
Payable Part of Fund and Fund Complex for which Director
Name and Position from the Fund Expenses Payable to Directors Serves
- ----------------------------------------- --------------- ----------------------- ---------------------- -------------------
<S> <C> <C> <C> <C>
Truman T. Semans, Chairman
and Director(1) ........................ $ 0 $ 0 $ 0 11(2)
Richard T. Hale, Director(1)(3) ......... $ 0 $ 0 $ 0 12(2)
James J. Cunnane, Director .............. $ 69(4) (5) $39,000 13(2)
John F. Kroeger, Director(6) ............ $ 87 (5) $49,000 13(2)
Louis E. Levy, Director ................. $ 73(4) (5) $44,000 13(2)
Eugene J. McDonald, Director ............ $ 69(4) (5) $39,000 13(2)
Carl W. Vogt, Esq., Director ............ $ 71(4) (5) $39,000 11(2)(7)
</TABLE>
- ------------
(1) Denotes an individual who is an "interested person" as defined in the 1940
Act.
(2) One of these funds ceased operations on July 29, 1998.
(3) Resigned from the Fund's Board on November 26, 1998.
(4) Of the amounts payable to Messrs. Cunnane, Levy, McDonald and Vogt, nothing
was deferred pursuant to the Fund Complex's Deferred Compensation Plan.
(5) The Fund Complex has adopted a retirement plan for eligible Directors, as
described below. The actuarially computed pension expense for the Fund for
the fiscal year ended October 31, 1998 was $982.
(6) Deceased, November 26, 1998.
(7) Prior to October 23, 1998, Mr. Vogt received proportionately higher
compensation for each fund for which he served. Mr. Vogt currently serves on
each fund in the Fund Complex.
The Fund Complex has adopted a retirement plan (the "Retirement Plan") for
Directors who are not employees of the Fund, the Fund's investment advisor or
their respective affiliates (each, a "Participant" and collectively, the
"Participants"). After completion of six years of service, each Participant will
be entitled to receive an annual retirement benefit equal to a percentage of the
fees earned by such Participant in his last year of service. Upon retirement,
each Participant will receive annually 10% of such fee for each year that he
served after completion of the first five years, up to a maximum annual benefit
of 50% of the fee earned by the Participant in his last year of service. The fee
will be paid quarterly, for life, by each fund for which he serves. The
4
<PAGE>
Retirement Plan is unfunded and unvested. The Fund has two Participants, a
Director who retired effective December 31, 1994 and Mr. Harry Woolf who retired
effective December 31, 1996, who have qualified for the Retirement Plan by
serving thirteen years and fourteen years respectively, as Directors in the Fund
Complex and each of whom will be paid a quarterly fee of $4,875 by the Fund
Complex for the rest of his life. Such fees are allocated to each fund in the
Fund Complex based upon the relative net assets of such fund to the Fund
Complex. Mr. Woolf currently serves as President of the Fund.
Set forth in the table below are the estimated annual benefits payable to a
Participant upon retirement assuming various years of service and payment of a
percentage of the fee earned by such Participant in his last year of service, as
described below. The approximate credited years of service, shown in
parentheses, for each Participant at December 31, 1998, are as follows: Messrs.
Cunnane (4), Levy (4), McDonald (6) and Vogt (3).
Estimated Annual Benefits Payable by Fund Complex Upon Retirement
Chairmen of Audit and
Years of Service Executive Committees Other Participants
---------------- ---------------------- -------------------
6 years $ 4,900 $ 3,900
7 years $ 9,800 $ 7,800
8 years $14,700 $11,700
9 years $19,600 $15,600
10 years or more $24,500 $19,500
Meetings and Committees of the Board of Directors
There were four regular meetings of the Board of Directors held during the
fiscal year ended October 31, 1998. In such fiscal year, all Directors attended
at least 75% of the meetings of the Board of Directors held during their
respective terms.
The Board of Directors has an Audit and Compliance Committee. The Audit and
Compliance Committee makes recommendations to the full Board of Directors with
respect to the engagement of independent accountants. The Committee reviews,
with the independent accountants, the results of the audit engagement and
matters having a material effect on the Fund's financial operations. The members
of the Audit and Compliance Committee during the fiscal year ended October 31,
1998, were Messrs. Levy (Chairman), Cunnane, McDonald and Vogt, each of whom is
not an "interested person" within the meaning of the 1940 Act. Mr. Kroeger was
Chairman of the Audit and Compliance Committee until his resignation. If
elected, Mr. Hardiman will become a member of the Audit and Compliance
Committee. The Audit and Compliance Committee met four times during the fiscal
year ended October 31, 1998. In such fiscal year, all current members attended
at least 75% of the meetings of the Audit and Compliance Committee held during
their respective terms. The Chairman of the Audit and Compliance Committee
receives an aggregate annual fee of $10,000 from the Fund Complex. Payment of
such fee is allocated among all funds in the Fund Complex in proportion to their
relative net assets.
The Board of Directors has a Nominating Committee. The Nominating Committee
makes recommendations to the full Board of Directors with respect to candidates
for the Board of Directors. The members of the Nominating Committee during the
fiscal year ended October 31, 1998, were Messrs. McDonald (Chairman), Cunnane,
Levy and Vogt, each of whom is not an "interested person" within the meaning of
the 1940 Act. Mr. Kroeger was a member of the Nominating Committee until his
resignation from the Committee on October 1, 1998. If elected, Mr. Hardiman will
become a member of the Nominating Committee. The Nominating Committee met once
during the fiscal year ended October 31, 1998 and all current members attended
the Meeting.
The Board of Directors has a Compensation Committee. The Compensation
Committee makes recommendations to the full Board of Directors with respect to
the compensation of Directors. The members of the Compensation Committee during
the fiscal year ended October 31, 1998, were Messrs. Cunnane (Chairman), Levy,
McDonald and Vogt, each of whom is not an "interested person" within the meaning
of the 1940 Act. Mr. Kroeger was a member of the Compensation Committee until
his resignation from the Committee on October 1, 1998. If elected, Mr. Hardiman
will become a member of the Compensation Committee. The Compensation Committee
did not meet during the fiscal year ended October 31, 1998.
5
<PAGE>
The Board of Directors has an Executive Committee. The Executive Committee
makes recommendations to the full Board of Directors with respect to the renewal
of the Fund's agreements with its service providers. The Executive Committee was
formed on September 28, 1998 and its members are Messrs. McDonald (Chairman),
Cunnane, Levy and Vogt, each of whom is not an "interested person" within the
meaning of the 1940 Act. If elected, Mr. Hardiman will become a member of the
Executive Committee. The Chairman of the Executive Committee receives an
aggregate annual fee of $10,000 from the Fund Complex. Payment of such fee is
allocated among all funds in the Fund Complex in proportion to their relative
net assets.
Board Approval of the Election of Directors
By Unanimous Consent dated December 10, 1998, the Board of Directors
recommended that shareholders vote FOR each of the Nominees for Director named
herein. In recommending that shareholders elect the Nominees as Directors of the
Fund, the Board of Directors considered the Nominees' experience and
qualifications.
Shareholder Approval of the Election of Directors and Required Vote
The election of the Directors requires the affirmative vote of a plurality
of all votes cast at the Special Meeting, provided that one-third of the shares
entitled to vote are present in person or by proxy at the Special Meeting. If
you give no voting instructions, your shares will be voted FOR all Nominees
named herein. If the Nominees are not approved by shareholders of the Fund, the
Board of Directors will consider alternative nominations.
Abstentions and "broker non-votes" will not be counted for or against the
Proposal but will be counted for purposes of determining whether a quorum is
present. The Fund believes that brokers who hold shares as record owners for
beneficial owners have the authority under the rules of the various stock
exchanges to vote those shares with respect to the Proposal when they have not
received instructions from beneficial owners.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND
VOTE FOR THE ELECTION OF THE DIRECTORS.
6
<PAGE>
ADDITIONAL INFORMATION
Directors and Executive Officers
Information about each of the Fund's current Directors and principal
executive officers is set forth below. Directors and officers of the Fund are
also directors and officers of some or all of the other investment companies
managed, administered or advised by BT Alex. Brown or its affiliates.
<TABLE>
<CAPTION>
Shares
Beneficially
Business Experience during Owned as of
Position the Past Five Years November 30,
Name with the Fund Age (including all directorships) 1998** Percentage
- ---- ------------- --- ----------------------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Truman T. Semans* Chairman and 72 See "Information Regarding Nominees." 6,069.46 shares ***
Director since
1993
James J. Cunnane Director since 60 See "Information Regarding Nominees." None ***
1994
Louis E. Levy Director since 66 See "Information Regarding Nominees." 2,064.52 shares+ ***
1994
Eugene J. McDonald Director since 66 See "Information Regarding Nominees." None ***
1993
Carl W. Vogt, Esq. Director since 62 See "Information Regarding Nominees." None ***
1996
Harry Woolf President since 75 Professor-at-Large Emeritus, Institute for None ***
December 18, Advanced Study; Director, ATL and
1998 Spacelabs Medical Corp. (medical equip-
ment), Family Health International (non-
profit research and education) and Research
America (non-profit medical research). For-
merly, Director, Merrill Lynch Cluster C
Funds and Flag Investors/ISI and BT Alex.
Brown Cash Reserve Family of Funds (reg-
istered investment companies); Trustee,
Reed College (education) and Rockefeller
Foundation.
Amy M. Olmert Secretary since 35 Vice President, BT Alex. Brown Incorpo- None ***
1997 rated, 1997-Present. Formerly, Senior Man-
ager, Coopers & Lybrand L.L.P. (now,
PricewaterhouseCoopers LLP), 1988-1997.
Joseph A. Finelli Treasurer since 41 Vice President, BT Alex. Brown Incorpo- None ***
1995 rated and Vice President, Investment Com-
pany Capital Corp. (registered investment
advisor), 1995-Present. Formerly, Vice
President and Treasurer, The Delaware
Group of Funds (registered investment
companies) and Vice President, Delaware
Management Company Inc. (investments),
1980-1995.
Scott J. Liotta Assistant Sec- 33 Assistant Vice President, BT Alex. Brown None ***
retary since Incorporated, 1996-Present. Formerly, Man-
1997 ager and Foreign Markets Specialist, Put-
nam Investments Inc. (registered invest-
ment companies), 1994-1996, and
Supervisor, Brown Brothers Harriman &
Co. (domestic and global custody), 1991-
1994.
</TABLE>
- ------------
* Denotes an individual who is an "interested person" as defined in the 1940
Act.
** This information has been provided by each Director and officer of the
Fund.
*** As of November 30, 1998, the Directors and officers of the Fund as a group
(9 persons) beneficially owned an aggregate of 8,133.98 shares representing
1.17% of the total outstanding shares of the Fund.
+ Mr. Levy disclaims beneficial ownership of these shares, as they are held by
his wife in trust.
7
<PAGE>
Investment Advisor and Sub-Advisor
Investment Company Capital Corp., located at One South Street, Baltimore,
Maryland 21202, serves as investment advisor to the Fund. ICC is an indirect
subsidiary of Bankers Trust Corporation. For the fiscal year ended October 31,
1998, ICC waived all advisory fees due from the Fund and reimbursed expenses of
$73,256.
On November 30, 1998, Deutsche Bank announced that it will pay $93 a share
to buy Bankers Trust Corporation in a $10.1 billion transaction that will create
the world's largest bank. The proposed transaction must still be approved by the
shareholders of Bankers Trust Corporation and regulators in Germany, Europe and
the United States. Mr. Truman T. Semans, a Director of the Fund and ICC,
currently owns 329 shares of Bankers Trust Corporation.
The Glenmede Trust Company, located at One Liberty Place, 1650 Market
Street, Philadelphia, Pennsylvania 19103, serves as sub-advisor to the Fund. For
the fiscal year ended October 31, 1998, ICC paid Glenmede sub-advisory fees of
$73,399.
Principal Underwriter
ICC Distributors, Inc., located at Two Portland Square, Portland, Maine
04101, acts as the Fund's principal underwriter.
Portfolio Transactions
For the fiscal year ended October 31, 1998, the Fund paid no brokerage
commissions to affiliated brokers.
Independent Auditors
A majority of the Fund's Board of Directors who are not "interested
persons" (within the meaning of the 1940 Act) of the Fund have selected Deloitte
& Touche LLP as the independent auditors of the Fund for the fiscal year ending
October 31, 1999. A representative of Deloitte & Touche LLP will be available by
telephone during the Special Meeting, if needed, to make a statement if desired
and to respond to appropriate questions from shareholders.
Beneficial Owners
To the knowledge of Fund Management, as of the Record Date, the following
were beneficial owners of 5% or more of the outstanding shares of the Fund.
<TABLE>
<CAPTION>
Name and Address Amount of Beneficial Ownership Percent of Total Shares Outstanding
- ---------------- ------------------------------ ------------------------------------
<S> <C> <C>
Timothy E. Toohig TR 36,065.17 shares 5.31%
U/A 06/24/96
Fairfield Jesuit Community Corp.
c/o Fairfield University
St. Ignatius Hall
Fairfield, CT 06430
BT Alex. Brown Incorporated 40,989.45 shares 6.04%
FBO 201-70188-19
P.O. Box 1346
Baltimore, MD 21203-1346
</TABLE>
Submission of Shareholder Proposals
As a Maryland corporation, the Fund is not required to hold annual
shareholder meetings, except in certain limited circumstances. Shareholders who
wish to present a proposal for action at the next meeting or suggestions as to
nominees for the Board of Directors should submit the proposal or suggestions to
be considered by the Fund sixty (60) days in advance of any such meeting for
inclusion in the Fund's proxy statement and form
8
<PAGE>
of proxy for such meeting as is held. The Nominating Committee of the Board of
Directors will give consideration to shareholder suggestions as to nominees for
the Board of Directors. Shareholders retain the right, under limited
circumstances, to request that a meeting of the shareholders be held for the
purpose of considering the removal of a Director from office, and, if such a
request is made, the Fund will assist with shareholder communications in
connection with the meeting.
Other Matters
No business other than the matter described above is expected to come
before the Special Meeting, but should any matter incident to the conduct of the
Special Meeting or any question as to an adjournment of the Special Meeting
arise, the persons named in the enclosed Proxy will vote thereon according to
their best judgment in the interest of the Fund.
Shareholders who do not expect to be present at the Special Meeting and who
wish to have their shares voted are requested to fill in, sign and date the
enclosed Proxy and return it in the enclosed envelope. No postage is required if
mailed in the United States.
By Order of the Directors,
Amy M. Olmert
Secretary
Dated: December 31, 1998
9
<PAGE>
FLAG INVESTORS
PROXY SERVICES
P.O. BOX 515
BALTIMORE, MD 21202
FLAG INVESTORS INTERNATIONAL FUND, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
January 22, 1999
--------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF FLAG INVESTORS
INTERNATIONAL FUND, INC.
This proxy is for your use in voting the matter relating to Flag Investors
International Fund, Inc. (the "Fund"). The undersigned shareholder(s) of the
Fund, revoking previous proxies, hereby appoint(s), Edward J. Veilleux, Amy M.
Olmert and Kathy L. Churko, and each of them (with full power of substitution)
the proxies of the undersigned to attend the Special Meeting of Shareholders of
the Fund to be held on January 22, 1999 (the "Special Meeting") and any
adjournments thereof, to vote all of the shares of the Fund that the signer
would be entitled to vote if personally present at the Special Meeting and on
any matter incident to the conduct of the Special Meeting, all as set forth in
the Notice of Special Meeting of Shareholders and Proxy Statement of the Board
of Directors. Said proxies are directed to vote or refrain from voting pursuant
to the Proxy Statement as indicated upon the matter set forth below.
This proxy will be voted as indicated below. If no indication is made, this
proxy will be voted FOR the proposal set forth below. The undersigned
acknowledges receipt with this proxy of a copy of the Notice of Special Meeting
of Shareholders and the Proxy Statement of the Board of Directors.
<TABLE>
<CAPTION>
<S> <C>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS.
- --------------------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY.
</TABLE>
FLAG INVESTORS INTERNATIONAL FUND, INC.
Vote on Directors
To consider and act upon a proposal to elect a Board of Directors.
(01)Truman T. Semans (04)James J. Cunnane
(02)Joseph R. Hardiman (05)Louis E. Levy
(03)Eugene J. McDonald (06)Carl W. Vogt
[ ] FOR ALL
[ ] WITHHOLD ALL
[ ] FOR ALL EXCEPT:
To withhold authority to vote mark "FOR ALL EXCEPT" and write the
nominee's name on the line below.
__________________________________________
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Please print and sign your
name in the space provided to
authorize the voting of your _____________________________________ ___________________________
shares as indicated and return Signature [PLEASE SIGN WITHIN BOX] Date
promptly. When signing on
behalf of a corporation,
partnership, estate, trust _____________________________________ ___________________________
or in any other Signature (Joint Owners) Date
representative capacity,
please sign your name and
title. For joint accounts,
each joint owner must sign.
</TABLE>
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
