<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENTS
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 Rule 14a-11(c) or Rule 14a-12
The Thai 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> 2
THE THAI FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of The Thai
Fund, Inc. (the "Fund") will be held on Wednesday, April 30, 1997, at 8:00 a.m.
(New York time), in Conference Room 2 at 1221 Avenue of the Americas, 22nd
Floor, New York, New York 10020, for the following purposes:
1. To elect three Class II Directors for a term of three years.
2. To ratify or reject the selection by the Board of Directors of
Price Waterhouse LLP as independent accountants of the Fund for the fiscal
year ending December 31, 1997.
3. To approve or disapprove an Investment Contract between the Fund
and The Mutual Fund Public Company Limited and a Technical Assistance and
Seconding Agreement among the Fund, Morgan Stanley Asset Management Inc.
and The Mutual Fund Public Company Limited.
4. To approve or disapprove a Fund Investment Agreement between the
Fund and Morgan Stanley Asset Management Inc.
5. To consider and act upon any other business as may properly come
before the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 24, 1997 are
entitled to notice of, and to vote at, this Meeting or any adjournment thereof.
VALERIE Y. LEWIS
Secretary
Dated: March 27, 1997
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENCLOSED SELF-
ADDRESSED ENVELOPE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF
FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
<PAGE> 3
THE THAI FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
-------------------------------
PROXY STATEMENT
-------------------------------
This statement is furnished by the Board of Directors of The Thai Fund,
Inc. (the "Fund") in connection with the solicitation of Proxies for use at the
Annual Meeting of Stockholders (the "Meeting") to be held on Wednesday, April
30, 1997, at 8:00 a.m. (New York time), in Conference Room 2 at the principal
executive office of Morgan Stanley Asset Management Inc. (hereinafter "MSAM" or
the "Manager"), 1221 Avenue of the Americas, 22nd Floor, New York, New York
10020. It is expected that the Notice of Annual Meeting, Proxy Statement and
form of Proxy will first be mailed to stockholders on or about March 27, 1997.
The purpose of the Meeting and the matters to be acted upon are set forth
in the accompanying Notice of Annual Meeting of Stockholders. At the Meeting,
the Fund's stockholders will consider New Advisory Agreements (defined below) to
take effect following the consummation of the transactions contemplated by an
Agreement and Plan of Merger, dated as of February 4, 1997 (the "Merger
Agreement"), between Dean Witter, Discover & Co. ("Dean Witter Discover") and
Morgan Stanley Group Inc. ("MS Group"), the direct parent of MSAM, the Fund's
investment manager. Pursuant to the Merger Agreement, the Fund's investment
manager will become a direct subsidiary of the merged company, which will be
called Morgan Stanley, Dean Witter, Discover & Co. The Fund's New Advisory
Agreements are substantially identical to the Fund's Current Advisory Agreements
(defined below), except for the dates of execution.
If the accompanying form of Proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. A Proxy may be revoked at any time prior to the time
it is voted by written notice to the Secretary of the Fund or by attendance at
the Meeting. If no instructions are specified, shares will be voted FOR the
election of the nominees for Directors, FOR ratification of Price Waterhouse LLP
as independent accountants of the Fund for the fiscal year ending December 31,
1997, FOR the approval of the New Management Agreements (defined below) and FOR
the approval of the New Fund Investment Agreement (defined below). Abstentions
and broker non-votes are each included in the determination of the number of
shares present and voting at the Meeting.
The Board has fixed the close of business on March 24, 1997 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. On that date, the Fund had
13,101,845 shares of Common Stock outstanding and entitled to vote. Each share
will be entitled to one vote at the Meeting.
The expense of solicitation 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, without cost to the
<PAGE> 4
Fund, telephonic, telegraphic or oral communications by regular employees of the
Manager. The solicitation of Proxies is also expected to include communications
by employees of Shareholder Communications Corporation, a proxy solicitation
firm expected to be engaged by the Fund at a cost not expected to exceed $5,000
plus expenses. The Manager has agreed to reimburse the Fund for all incremental
expenses incurred by the Fund that would not have been incurred if the New
Advisory Agreements were not submitted to stockholders of the Fund for their
approval.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR ITS
FISCAL YEAR ENDED DECEMBER 31, 1996, TO ANY STOCKHOLDER REQUESTING SUCH REPORT.
REQUESTS FOR THE ANNUAL REPORT SHOULD BE MADE IN WRITING TO THE THAI FUND, INC.,
C/O CHASE GLOBAL FUNDS SERVICES COMPANY, P.O. BOX 2798, BOSTON, MASSACHUSETTS
02208-2798, OR BY CALLING 1-800-221-6726.
Chase Global Funds Services Company is an affiliate of the Fund's
administrator, The Chase Manhattan Bank ("Chase Bank"), and provides
administrative services to the Fund. The business address of Chase Bank and
Chase Global Funds Services Company is 73 Tremont Street, Boston, Massachusetts
02108.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF EACH OF THE
MATTERS MENTIONED IN ITEMS 1, 2, 3 AND 4 OF THE NOTICE OF ANNUAL MEETING.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, three Directors will be elected to hold office for a term
of three years and until their successors are duly elected and qualified. It is
the intention of the persons named in the accompanying form of Proxy to vote, on
behalf of the stockholders, for the election of John W. Croghan, Graham E. Jones
and Snoh Unakul as Class II Directors.
On or about the same date as the Meeting, each of the other closed-end,
U.S. registered investment companies advised by MSAM (except Morgan Stanley
India Investment Fund, Inc.) also is holding a meeting of stockholders at which,
among other things, such stockholders are considering a proposal to elect
Messrs. Croghan and Jones as directors of such other investment companies.
Accordingly, if elected, Messrs. Croghan and Jones will act as directors of The
Brazilian Investment Fund, Inc., The Latin American Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan Stanley Africa Investment Fund, Inc., Morgan Stanley
Asia-Pacific Fund, Inc., Morgan Stanley Emerging Markets Debt Fund, Inc., Morgan
Stanley Emerging Markets Fund, Inc., Morgan Stanley Global Opportunity Bond
Fund, Inc., The Morgan Stanley High Yield Fund, Inc., Morgan Stanley Russia &
New Europe Fund, Inc., The Pakistan Investment Fund, Inc. and The Turkish
Investment Fund, Inc. (collectively, with the Fund, the "MSAM closed-end
funds"). The Board believes that this arrangement enhances the ability of the
Directors to deal expeditiously with administrative matters common to the MSAM
closed-end funds, such as evaluating the performance of common service
providers, including MSAM and the administrators, transfer agents, custodians
and accountants of the MSAM closed-end funds.
Pursuant to the Fund's By-laws, the terms of office of the Directors are
staggered. The Board of Directors is divided into three classes, designated
Class I, Class II and Class III, with each class having a term of three years.
Each year the term of one class expires. Class I currently consists of
2
<PAGE> 5
Peter J. Chase, David B. Gill and Warren J. Olsen. Class II currently consists
of John W. Croghan, Graham E. Jones and Snoh Unakul. Class III currently
consists of Barton M. Biggs, Sukri Kaocharern, John A. Levin and William G.
Morton, Jr. Only the Directors in Class II are being considered for election at
this Meeting.
Pursuant to the Fund's By-Laws, each Director holds office until (i) the
expiration of his term and until his successor has been elected and qualified,
(ii) his death, (iii) his resignation, (iv) December 31 of the year in which he
reaches seventy-three years of age, or (v) his removal as provided by statute or
the Articles of Incorporation.
The Board of Directors has an Audit Committee. The Audit Committee makes
recommendations to the full Board of Directors with respect to the engagement of
independent accountants and reviews with the independent accountants the plan
and results of the audit engagement and matters having a material effect on the
Fund's financial operations. The members of the Audit Committee are currently
John W. Croghan, John A. Levin and William G. Morton, Jr., none of whom is an
"interested person," as defined under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Chairman of the Audit Committee is Mr. Levin.
After the Meeting, the Audit Committee will continue to consist of Directors of
the Fund who are not "interested persons." The Audit Committee met twice during
the fiscal year ended December 31, 1996. The Board of Directors does not have
nominating or compensation committees or other committees performing similar
functions.
There were four meetings of the Board of Directors held during the fiscal
year ended December 31, 1996. For the fiscal year ended December 31, 1996, each
current Director, during his tenure, attended at least seventy-five percent of
the aggregate number of meetings of the Board and of any committee on which he
served, except Mr. Biggs, who attended two of the four meetings of the Board.
Each of the nominees for Director has consented to be named in this Proxy
Statement and to serve as a director of the Fund if elected. The Board of
Directors has no reason to believe that any of the nominees named above will
become unavailable for election as a director, but if that should occur before
the Meeting, Proxies will be voted for such persons as the Board of Directors
may recommend.
3
<PAGE> 6
Certain information regarding the Directors and officers of the Fund is set
forth below:
<TABLE>
<CAPTION>
COMMON STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ---------------------------- --- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barton M. Biggs*............... Director and Chairman, Director and 64 10,000 -- ***
1221 Avenue of the Americas Chairman of Managing Director of
New York, New York 10020 the Board Morgan Stanley Asset
since 1995 Management Inc. and
Chairman and Director of
Morgan Stanley Asset
Management Limited;
Managing Director of
Morgan Stanley & Co.
Incorporated; Director of
Morgan Stanley Group Inc.;
Director of the Rand
McNally Company; Member of
the Yale Development
Board; Director and
Chairman of the Board of
seventeen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.
Peter J. Chase................. Director since Chairman and Chief Financial 66 537 -- ***
1441 Paseo De Peralta 1987 Officer, High Mesa
Santa Fe, New Mexico 87501 Technologies, LLC;
Chairman of CGL, Inc.;
Principal/Owner of
STATEMENTS; Director of
thirteen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.
John W. Croghan................ Nominee; President of Lincoln 66 1,000 419 ***
200 South Wacker Drive Director Partners, a partnership of
Chicago, Illinois 60606 since 1995 Lincoln Capital Management
Company; Director of St.
Paul Bancorp, Inc. and
Lindsay Manufacturing Co.;
Director of thirteen U.S.
registered investment
companies managed by
Morgan Stanley Asset
Management Inc.;
Previously Director of
Blockbuster Entertainment
Corporation.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
COMMON STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ---------------------------- --- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
David B. Gill.................. Director since Director of thirteen U.S. 70 1,161 338 ***
26210 Ingleton Circle 1987 registered investment
Easton, Maryland 21601 companies managed by
Morgan Stanley Asset
Management Inc.; Director
of the Mauritius Fund
Limited; Director of
Moneda Chile Fund Limited;
Director of First NIS
Regional Fund SIAC;
Director of Commonwealth
Africa Investment Fund
Ltd.; Chairman of the
Advisory Board of Advent
Latin American Private
Equity Fund; Chairman and
Director of Norinvest
Bank; Director of
Surinvest International
Limited; Director of
National Registry Company;
Previously Director of
Capital Markets Department
of the International
Finance Corporation;
Trustee, Batterymarch
Finance Management;
Chairman and Director of
Equity Fund of Latin
America S.A.; Director of
Commonwealth Equity Fund
Limited; and Director of
Global Securities, Inc.
Graham E. Jones................ Nominee; Senior Vice President of BGK 64 988 566 ***
330 Garfield Street Director Properties; Trustee of
Suite 200 since 1987 nine investment companies
Santa Fe, New Mexico 87501 managed by Weiss, Peck &
Greer, Trustee of eleven
investment companies
managed by Morgan Grenfell
Capital Management
Incorporated; Director of
thirteen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously Chief Financial
Officer of Practice
Management Systems, Inc.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS AGE MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS -- 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ---------------------------- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C>
Sukri Kaocharern............... Director Chairman of the Advisory 60 -- -- ***
39 Soi Sapanky, since 1988 Board, M.D.X. Co. Ltd.;
Rama IV Road Director of Premier Global
Thungmahamek, Yannawa, Corporation Co., Ltd.;
Bangkok 10120, Thailand Director of Jutha Maritime
Co., Ltd.; Director of
Institute for Management
Education for Thailand
Foundation (IMBT);
Director of the Advisory
Council, Graduate
Institute of Business
Administration (SASIN) of
Chulalongkorn University;
Director of Thai Farmers
Bank; and Chairman of
Tawana Co., Ltd. and Thai
Castor Oil Co., Ltd.
Previously Director of The
Federation of Thai
Industries; Director of
the Provincial Waterworks
Authority (PWA) and
Chairman of PWA's
Sub-Committee on
Administration
Development; and President
of Industrial Finance
Corporation of Thailand.
John A. Levin.................. Director since President of John A. Levin & 58 1,000 306 ***
One Rockefeller Plaza 1995 Co., Inc.; Director and
New York, New York 10020 President of Baker,
Fentress & Company;
Director of fourteen U.S.
registered investment
companies managed by
Morgan Stanley Asset
Management Inc.
William G. Morton, Jr.......... Director since Chairman and Chief Executive 60 537 -- ***
1 Boston Place 1995 Officer of Boston Stock
Boston, Massachusetts 02108 Exchange; Director of
Tandy Corporation;
Director of thirteen U.S.
registered investment
companies managed by
Morgan Stanley Asset
Management Inc.
Warren J. Olsen................ Director since Principal of Morgan Stanley 40 1,001 -- ***
1221 Avenue of the Americas 1995 and & Co. Incorporated and
New York, New York 10020 President Morgan Stanley Asset
since 1989 Management Inc.; Director
of sixteen and President
of seventeen U.S.
registered investment
companies managed by
Morgan Stanley Asset
Management Inc.
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
COMMON STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS AGE MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS -- 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ---------------------------- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C>
Snoh Unakul.................... Nominee; Chairman of Premier Group of 65 -- -- ***
1010 Sukhumvit Road Director Companies and Thailand
Bangkok 10110, Thailand since 1992 Development Research
Institute Foundation;
Director of Dole Thailand,
Ltd. and The Siam Cement
Group. Previously Deputy
Prime Minister of Thailand
and Secretary General of
Nation Economic and Social
Development Board.
James W. Grisham*.............. Vice President Principal of Morgan Stanley 55 -- -- ***
1221 Avenue of the Americas since 1992 & Co. Incorporated and
New York, New York 10020 Morgan Stanley Asset
Management Inc.; Officer
of various investment
companies managed by
Morgan Stanley Asset
Management Inc.
Michael F. Klein*.............. Vice President Principal of Morgan Stanley 37 -- -- ***
1221 Avenue of the Americas since 1996 & Co. Incorporated and
New York, New York 10020 Morgan Stanley Asset
Management Inc. and
previously a Vice
President thereof; Officer
of various investment
companies managed by
Morgan Stanley Asset
Management Inc.;
Previously practiced law
with the New York law firm
of Rogers & Wells.
Harold J. Schaaff, Jr.*........ Vice President Principal of Morgan Stanley 36 294 -- ***
1221 Avenue of the Americas since 1992 & Co. Incorporated and
New York, New York 10020 Morgan Stanley Asset
Management Inc.; General
Counsel and Secretary of
Morgan Stanley Asset
Management Inc.; Officer
of various investment
companies managed by
Morgan Stanley Asset
Management Inc.
Joseph P. Stadler*............. Vice President Vice President of Morgan 42 -- -- ***
1221 Avenue of the Americas since 1994 Stanley & Co. Incorporated
New York, New York 10020 and Morgan Stanley Asset
Management Inc.; Officer
of various investment
companies managed by
Morgan Stanley Asset
Management Inc.;
Previously with Price
Waterhouse LLP.
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
COMMON STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ---------------------------- --- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Valerie Y. Lewis*.............. Secretary since Vice President of Morgan 41 -- -- ***
1221 Avenue of the Americas 1990 Stanley & Co. Incorporated
New York, New York 10020 and Morgan Stanley Asset
Management Inc.; Officer
of various investment
companies managed by
Morgan Stanley Asset
Management Inc.;
Previously with Citicorp.
James M. Rooney................ Treasurer since Assistant Vice President and 38 -- -- ***
73 Tremont Street 1994 Manager of Fund
Boston, Massachusetts 02108 Administration, Chase
Global Funds Services
Company; Officer of
various investment
companies managed by
Morgan Stanley Asset
Management Inc.;
Previously Assistant Vice
President and Manager of
Fund Compliance and
Control, Scudder Stevens &
Clark Inc. and Audit
Manager, Ernst & Young
LLP.
Belinda Brady.................. Assistant Manager, Fund 28 -- -- ***
73 Tremont Street Treasurer Administration, Chase Global
Boston, Massachusetts 02108 since 1996 Funds Services Company;
Officer of various
investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously with Price
Waterhouse LLP.
------ -------- ---
All Directors and Officers as a Group........................................... 16,518 1,629 ***
====== ======== ===
</TABLE>
- ---------------
* "Interested person" within the meaning of the 1940 Act. Mr. Biggs is
chairman, director and managing director of the Manager, and Messrs. Olsen,
Grisham, Klein, Schaaff and Stadler and Ms. Lewis are officers of the
Manager.
** This information has been furnished by each nominee, director and officer.
*** Less than 1%.
+ Indicates share equivalents owned by the Directors and held in cash accounts
by the Fund on behalf of the Directors in connection with the deferred fee
arrangements described below.
Each officer of the Fund will hold such office until a successor has been
duly elected and qualified.
The Fund pays each of its Directors who is not a director, officer or
employee of MSAM or its affiliates, in addition to certain out-of-pocket
expenses, an annual fee of $6,000 plus certain out-of-pocket expenses. Each of
the members of the Fund's Audit Committee, which will consist of the Fund's
Directors who are not "interested persons" of the Fund as defined in the 1940
Act, as amended, will receive an additional fee of $1,100 for serving on such
committee. Aggregate fees and expenses paid or payable to the Board of Directors
for the fiscal year ended December 31, 1996 were approximately $60,251.
8
<PAGE> 11
Each of the Directors who is not an "affiliated person" of MSAM within the
meaning of the 1940 Act may enter into a deferred fee arrangement (the "Fee
Arrangement") with the Fund, pursuant to which such Director may defer to a
later date the receipt of his Director's fees. The deferred fees owed by the
Fund are credited to a bookkeeping account maintained by the Fund on behalf of
such Director and accrue income from and after the date of credit in an amount
equal to the amount that would have been earned had such fees (and all income
earned thereon) been invested and reinvested either (i) in shares of the Fund or
(ii) at a rate equal to the prevailing rate applicable to 90-day United States
Treasury Bills at the beginning of each calendar quarter for which this rate is
in effect, whichever method is elected by the Director.
Under the Fee Arrangement, deferred Director's fees (including the return
accrued thereon) will become payable in cash upon such Director's resignation
from the Board of Directors in generally equal annual installments over a period
of five years (unless the Fund has agreed to a longer or shorter payment period)
beginning on the first day of the year following the year in which such
Director's resignation occurred. In the event of a Director's death, remaining
amounts payable to him under the Fee Arrangement will thereafter be payable to
his designated beneficiary; in all other events, a Director's right to receive
payments is non-transferable. Under the Fee Arrangement, the Board of Directors
of the Fund, in its sole discretion, has reserved the right, at the request of a
Director or otherwise, to accelerate or extend the payment of amounts in the
deferred fee account at any time after the termination of such Director's
service as a director. In addition, in the event of liquidation, dissolution or
winding up of the Fund or the distribution of all or substantially all of the
Fund's assets and property to its stockholders (other than in connection with a
reorganization or merger into another fund advised by MSAM), all unpaid amounts
in the deferred fee account maintained by the Fund will be paid in a lump sum to
the Directors participating in the Fee Arrangement on the effective date
thereof.
Currently, Messrs. Croghan, Gill, Jones and Levin are the only Directors
who have entered into the Fee Arrangement with the Fund.
9
<PAGE> 12
Set forth below is a table showing the aggregate compensation paid by the
Fund to each of its Directors, as well as the total compensation paid to each
Director of the Fund by the Fund and by other U.S. registered investment
companies advised by MSAM or its affiliates (collectively, the "Fund Complex")
for their services as Directors of such investment companies for the fiscal year
ended December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION NUMBER OF FUNDS
COMPENSATION BENEFITS ACCRUED FROM FUND AND IN FUND COMPLEX
FROM FUND AS PART OF THE FUND COMPLEX PAID FOR WHICH
NAME OF DIRECTORS (2)(3) FUND'S EXPENSES TO DIRECTORS(2)(4) DIRECTOR SERVES(5)
- ------------------------- ------------ --------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Barton M. Biggs(1) $ 0 None $ 0 17
Peter J. Chase 6,000 None 57,691 13
John W. Croghan 7,185 None 73,925 13
David B. Gill 6,133 None 59,910 13
Graham E. Jones 6,193 None 60,546 13
Sukri Kaocharern 9,800 None 9,800 1
John A. Levin 7,140 None 77,539 14
William G. Morton, Jr. 7,100 None 67,893 13
Warren J. Olsen(1) 0 None 0 17
Snoh Unakul 10,700 None 10,700 1
Frederick B.
Whittemore(1)(6) 0 None 0 16
</TABLE>
- ---------------
(1) "Interested persons" of the Fund within the meaning of the 1940 Act. Messrs.
Biggs and Olsen do not receive any compensation from the Fund or any other
investment company in the Fund Complex for their services as a director of
such investment companies.
(2) The amounts reflected in this table include amounts payable by the Fund and
the Fund Complex for services rendered during the fiscal year ended December
31, 1996, regardless of whether such amounts were actually received by the
Directors during such fiscal year.
(3) Mr. Croghan earned $7,185, Mr. Gill earned $133, Mr. Jones earned $4,693 and
Mr. Levin earned $6,321 in deferred compensation from the Fund, pursuant to
the deferred fee arrangements described above, including any capital gains
or losses or interest associated therewith, during the fiscal year ended
December 31, 1996. Such amounts are included in these Directors' respective
aggregate compensation from the Fund reported in this table.
(4) Mr. Croghan earned $72,671, Mr. Gill earned $21,027, Mr. Jones earned
$21,605 and Mr. Levin earned $70,597 in deferred compensation from the Fund
and the Fund Complex, pursuant to the deferred fee arrangements described
above, including any capital gains or losses or interest associated
therewith, during the fiscal year ended December 31, 1996. Such amounts are
included in these Directors' respective compensations from the Fund and the
Fund Complex reported in this table.
(5) Indicates the total number of boards of directors of investment companies in
the Fund Complex, including the Fund, on which the Director served at any
time during the fiscal year ended December 31, 1996.
(6) Mr. Whittemore resigned as a Director of the Fund effective March 14, 1997.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Fund's officers and directors, and persons who own more than ten percent of
a registered class of the Fund's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"Commission") and the New York Stock Exchange, Inc. The Fund believes that its
officers and Directors complied with all applicable filing requirements for the
fiscal year ended December 31, 1996.
The election of Messrs. Croghan, Jones and Unakul requires the affirmative
vote of a majority of the votes cast at a meeting at which a quorum is present.
Under the Fund's By-laws, the presence in person or by proxy of stockholders
entitled to cast a majority of the votes entitled to be cast thereat shall
constitute a quorum. For this purpose, abstentions and broker non-votes will be
10
<PAGE> 13
counted in determining whether a quorum is present at the Meeting, but will not
be counted as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE THREE NOMINEES AS DIRECTORS.
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected Price Waterhouse LLP as
independent accountants for the Fund for the fiscal year ending December 31,
1997. The ratification of the selection of independent accountants is to be
voted on at the Meeting, and it is intended that the persons named in the
accompanying Proxy will vote for Price Waterhouse LLP. Price Waterhouse LLP acts
as the independent accountants for certain of the other investment companies
advised by MSAM. Although it is not expected that a representative of Price
Waterhouse LLP will attend the Meeting, a representative will be available by
telephone to respond to stockholder questions, if any.
The Board's policy regarding engaging independent accountants' services is
that management may engage the Fund's principal independent accountants to
perform any services normally provided by independent accounting firms, provided
that such services meet any and all of the independence requirements of the
American Institute of Certified Public Accountants and the Securities and
Exchange Commission. In accordance with this policy, the Audit Committee reviews
and approves all services provided by the independent accountants prior to their
being rendered. The Board of Directors also receives a report from its Audit
Committee relating to all services that have been performed by the Fund's
independent accountants.
The ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at a meeting at which a quorum
is present. For this purpose, abstentions and broker non-votes will be counted
in determining whether a quorum is present at the Meeting, but will not be
counted as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 2.
APPROVAL OF NEW ADVISORY CONTRACTS
(PROPOSALS NO. 3 AND NO. 4)
THE MANAGER
MSAM has acted as U.S. Adviser to the Fund since the Fund commenced its
investment operations. MSAM will be referred to herein as the "Manager" or,
alternatively, as the "U.S. Adviser."
The Manager currently is a wholly-owned subsidiary of MS Group and is
registered under the U.S. Investment Advisers Act of 1940, as amended. The
Manager provides portfolio management and named fiduciary services to various
closed-end and open-end investment companies, taxable and nontaxable
institutions, international organizations and individuals investing in United
States
11
<PAGE> 14
and international equities and fixed income securities. At December 31, 1996,
MSAM had, together with its affiliated investment management companies (which
include Van Kampen American Capital, Inc. and Miller Anderson & Sherrerd, LLP),
assets under management (including assets under fiduciary advisory control)
totaling approximately $162 billion.
As an investment adviser, MSAM emphasizes a global investment strategy and
benefits from research coverage of a broad spectrum of investment opportunities
worldwide. MSAM draws upon the capabilities of its asset management specialists
located in its various offices throughout the world. It also draws upon the
research capabilities of MS Group and its other affiliates, as well as the
research and investment ideas of other companies whose brokerage services MSAM
utilizes.
The address of the Manager is 1221 Avenue of the Americas, New York, New
York 10020. The principal address of MS Group is 1585 Broadway, New York, New
York 10036.
Certain information regarding the directors and the principal executive
officers of the Manager is set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AND ADDRESS POSITION WITH MSAM OTHER INFORMATION
- ------------------------- ----------------------- --------------------------------
<S> <C> <C>
Barton M. Biggs*......... Chairman, Director and Chairman and Director of Morgan
Managing Director Stanley Asset Management
Limited; Managing Director of
Morgan Stanley & Co.
Incorporated; Director of Morgan
Stanley Group Inc.
Peter A. Nadosy*......... Vice Chairman, Director Managing Director of Morgan
and Managing Director Stanley & Co. Incorporated;
Director of Morgan Stanley Asset
Management Limited
James M. Allwin*......... President, Director and Managing Director of Morgan
Managing Director Stanley & Co. Incorporated;
President of Morgan Stanley
Realty Inc.
Gordon S. Gray*.......... Director and Managing Managing Director of Morgan
Director Stanley & Co. Incorporated;
Director of Morgan Stanley Asset
Management Limited
Dennis G. Sherva*........ Director and Managing Managing Director of Morgan
Director Stanley & Co. Incorporated
</TABLE>
- ---------------
* Business Address: 1221 Avenue of the Americas, New York, New York 10020
THE THAI ADVISER
The Mutual Fund Public Company Limited ("MFC"), a Thai limited company
registered under the U.S. Investment Advisers Act of 1940, acts as Thai Adviser
to the Fund and as manager of an investment plan (the "Investment Plan")
pursuant to the Investment Contract (defined below) and subject to the
provisions of the Seconding Agreement (defined below). MFC was organized on
March 14, 1975 as a company with limited liability under the laws of Thailand to
12
<PAGE> 15
carry on investment management activities. Its principal address is 30th-32nd
Floor, Lake Rajada Building, 193-195 Ratchadaphisek Road, Khlong-Toey, Bangkok
10110, Thailand.
MFC has four shareholders that each beneficially own more than 10% of MFC's
outstanding shares. The names, percentages of ownership of MFC and addresses of
such shareholders, as of December 31, 1996, are as follows: The Industrial
Finance Corporation of Thailand (21.68%), 1770 New Petchburi Road, Bangkok
10310, Thailand; Ministry of Finance ("MoF") (16.67%), Rama VI Road, Bangkok
10400, Thailand; Government Savings Bank (13.33%), 470 Paholvotin Road, Bangkok
10400, Thailand; and SET for Securities Depositary Center (20.01%), 2nd Floor,
Sindhorn Tower 1, 132 Wireless Road, Bangkok 10330, Thailand. The Industrial
Finance Corporation of Thailand and Government Savings Bank are each controlled
by the government of Thailand through the MoF.
MFC was established to provide a means for small investors to invest in
securities through the creation of investment plans in Thailand. As of December
31, 1996, the assets of the investment plans managed by MFC totalled 56.7
billion Baht ($2.2 billion at the December 31, 1996 rate of exchange). MFC
manages such investment plans for fees in a range of 0.2% to 1.1% of the net
asset value thereof. MFC also manages provident funds (pension and similar
plans) since being granted a license therefor by the Thai Ministry of Finance in
December 1983. At December 31, 1996, the assets of the 105 provident funds
managed by MFC for the benefit of approximately 56,000 employees totalled 4.5
billion Baht ($174 million at the December 31, 1996 rate of exchange). MFC acts
as registrar for its investment funds, which have about 91,000 unitholders, and
also acts as registrar and transfer and paying agent with respect to bonds
issued by various Thai state enterprises.
Under its license and current Securities Exchange of Thailand regulations,
MFC is entitled to pay a brokerage commission with respect to its trades on the
Securities Exchange of Thailand at the concessionary rates of 0.3% and 0.06% for
equity and debt securities, respectively, applicable to nonmember brokers
(instead of the usual fixed rates of 0.5% and 0.1%, respectively) of the gross
consideration. The Investment Plan is entitled to the benefit of these
concessionary rates in executing its orders. Commissions payable by MFC in
connection with transactions executed other than on the Securities Exchange of
Thailand are at negotiated rates.
13
<PAGE> 16
Certain information regarding the directors and the principal executive
officers of the Thai Adviser is set forth below.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS MFC PRINCIPAL OCCUPATION
- ------------------------------ ---------------- -----------------------------------
<S> <C> <C>
Aran Thammano................. Chairman Chairman of The Industrial Finance
Corporation of Thailand
Capt. Charnchai Director Deputy Permanent-Secretary of
Charnchayasuk............... Ministry of Finance
Manimai Vudthitornetiraks..... Director Inspector-General of Ministry of
Finance
Sunai Saubhayana.............. Director Deputy Director-General of The
Government Savings Bank
Anothai Techamontrikul Director Senior Executive Vice President of
The Industrial Finance Corporation
of Thailand
Yada Prapinmongkolkarn........ Director Executive Vice President of The
Industrial Finance Corporation of
Thailand
Vongvuthi Vuthinantha......... Director Managing Director of Thai-German
Ceramic Industry Public Co., Ltd.
Tawee Butsuntorn.............. Director Executive Vice President Cement and
Trading of The Siam Cement Public
Co., Ltd.
Damrongsuk Amatyakul.......... President President of The Mutual Fund Public
Co., Ltd.
</TABLE>
INFORMATION CONCERNING MORGAN STANLEY GROUP INC.
MS Group and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and Morgan Stanley & Co.
International provide a wide range of financial services on a global basis.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring, real estate, project finance and
other corporate finance advisory activities; merchant banking and other
principal investment activities; stock brokerage and research services; asset
management; the trading of foreign exchange and commodities as well as
derivatives on a broad range or asset categories, rates and indices; real estate
advice, financing and investing; and global custody, securities clearance
services and securities lending.
INFORMATION CONCERNING DEAN WITTER, DISCOVER & CO.
Dean Witter Discover is a diversified financial services company offering a
broad range of nationally marketed credit and investment products with a primary
focus on individual customers. Dean Witter Discover has two principal lines of
business: credit services and securities. Its credit services business consists
primarily of the issuance, marketing and servicing of general purpose credit
cards and the provision of transaction processing services, privatelabel credit
cards services and real estate secured loans. It is the largest single issuer of
general purpose credit cards in the United States as measured by number of
accounts and cardmembers and the third largest originator and servicer of credit
card receivables, as measured by managed loans. Dean Witter
14
<PAGE> 17
Discover's securities business is conducted primarily through its wholly owned
subsidiaries, Dean Witter Reynolds Inc. ("DWR") and Dean Witter InterCapital
Inc. ("Intercapital"). DWR is a full-service securities firm offering a wide
variety of securities products, with a particular focus on serving the
investment needs of its individual clients through over 9,100 professional
account executives located in 371 branch offices. DWR is among the largest NYSE
members and is a member of other major securities, futures and options
exchanges. Intercapital is a registered investment adviser that, along with its
subsidiaries, services investment companies, individual accounts and
institutional portfolios.
THE MERGER
Pursuant to the Merger Agreement, MS Group will be merged (the "Merger")
with and into Dean Witter Discover and the surviving corporation will be named
Morgan Stanley, Dean Witter, Discover & Co. Following the Merger, the Manager
will be a direct subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Under the terms of the Merger Agreement, each of MS Group's common shares
will be converted into the right to receive 1.65 shares of Morgan Stanley, Dean
Witter, Discover & Co. common stock and each issued and outstanding share of
Dean Witter Discover common stock will remain outstanding and will thereafter
represent one share of Morgan Stanley, Dean Witter, Discover & Co. common stock.
Following the Merger, MS Group's former shareholders will own approximately 45%
and Dean Witter Discover's former shareholders will own approximately 55% of the
outstanding shares of common stock of Morgan Stanley, Dean Witter, Discover &
Co.
The Merger is expected to be consummated in mid-1997 and is subject to
certain closing conditions, including certain regulatory approvals and the
approval of shareholders of both MS Group and Dean Witter Discover.
The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co. will
initially consist of fourteen members, two of whom will be MS Group insiders and
two of whom will be Dean Witter Discover insiders. The remaining ten directors
will be independent directors, with MS Group and Dean Witter Discover each
nominating five of the ten. The Chairman and Chief Executive Officer of Morgan
Stanley, Dean Witter, Discover & Co. will be the current Chairman and Chief
Executive Officer of Dean Witter Discover, Phillip Purcell. The President and
Chief Operating Officer of Morgan Stanley, Dean Witter, Discover & Co. will be
the current President of MS Group, John Mack.
The Manager does not anticipate any reduction in the quality of services
now provided to the Fund and does not expect that the Merger will result in any
material changes in the business of the Manager or in the manner in which the
Manager renders services to the Fund. Nor does the Manager anticipate that the
Merger or any ancillary transactions will have any adverse effect on its ability
to fulfill its obligations under the New Advisory Agreements (defined below)
with the Fund or to operate its business in a manner consistent with past
business practice.
THE ADVISORY AGREEMENTS
In anticipation of the Merger, a majority of the Directors of the Fund who
are not parties to the New Advisory Agreements or interested persons of any such
party ("Disinterested Directors") approved a new investment contract between the
Fund and the Thai Adviser, a new technical
15
<PAGE> 18
assistance and seconding agreement among the Fund, the Manager and the Thai
Adviser (together, the "New Management Agreements") and a new fund investment
agreement between the Fund and the Manager (the "New Fund Investment
Agreement"). The New Management Agreements and the New Fund Investment Agreement
are herein referred to collectively as the "New Advisory Agreements." The forms
of the New Advisory Agreements are substantially identical to the Fund's Current
Advisory Agreements, except for their dates of execution. The holders of a
majority of the outstanding voting securities (within the meaning of the 1940
Act) of the Fund are being asked to approve the New Advisory Agreements. See
"The New Advisory Agreements" below.
The following is a summary of the Current Advisory Agreements and the New
Advisory Agreements. The description of the New Advisory Agreements is qualified
by reference to Annex A.
THE CURRENT ADVISORY AGREEMENTS. The current investment contract between
the Fund and the Thai Adviser, the current technical assistance and seconding
agreement among the Fund, the Manager and the Thai Adviser (together, the
"Current Management Agreements") and the current Fund investment agreement
between the Fund and the Manager (the "Current Fund Investment Agreement"), all
dated as of February 17, 1988, were last approved by stockholders of the Fund at
a meeting held on May 3, 1989. The Current Management Agreements and the Current
Fund Investment Agreement are herein referred to collectively as the "Current
Advisory Agreements."
Under the Investment Contract, the Thai Adviser manages the acquisition,
holding and disposition of the assets of the Investment Plan, in accordance with
the Fund's investment objective and policies and the supervision of the Fund's
Board of Directors. Under the related Technical Assistance and Seconding
Agreement (the "Seconding Agreement"), MSAM acts as U.S. Adviser to the Fund and
provides staff (the "Seconded Staff") to the Thai Adviser.
Under the Investment Contract together with the Seconding Agreement
(together, the "Current Management Agreements"), the Thai Adviser, through the
Seconded Staff, provides investment advice and, subject to the direction of the
Fund's Board of Directors, makes investment management decisions for the
Investment Plan. Under the Current Management Agreements, such Seconded Staff
receives research information from the Thai Adviser as well as research
information developed by such staff, and the U.S. Adviser provides investment
advice, and, subject to the direction of the Board of Directors, makes
investment management decisions with respect to assets of the Fund held outside
the Investment Plan.
Pursuant to the terms of the Current Management Agreements, the Advisers
supervise the acquisition and disposition of the investments of the Fund held
through the Investment Plan in accordance with the Fund's investment objective
and policies and guidelines and directions from the Fund's Board of Directors.
Under the Investment Contract, the Thai Adviser retains the legal title to all
assets held by the Investment Plan and must hold such assets separate from its
own assets, free and clear of all liens, claims and encumbrances; and the Thai
Adviser is also responsible for keeping all records in connection with the
Investment Plan required by Thai law. Under the Seconding Agreement, the U.S.
Adviser, in addition to providing management services as described above,
maintains or causes to be maintained all books and records required by the
16
<PAGE> 19
1940 Act to the extent such books and records are not maintained or furnished by
the Fund's custodians or other agents.
Upon termination of the Current Management Agreements, if no successor
management agreement is adopted, the Investment Plan will be liquidated in an
orderly manner. Securities held by the Investment Plan that, due to Thai foreign
ownership limitations, may not be held by a non-Thai national such as the Fund,
will be sold in an orderly manner and the proceeds distributed to the Fund;
securities not so subject may be transferred to the direct ownership of the Fund
or sold, all in accordance with the directions of the Board of Directors. Upon
such termination, liquidation and transfer, the assets of the Fund will be
managed pursuant to the Fund Investment Agreement.
For its services under the Current Management Agreements, the Thai Adviser
is entitled to be paid in Baht, from the assets of the Fund and the Investment
Plan, a monthly fee of 1/12 of 0.40% of the first $50 million of the Fund's
average weekly net assets, 1/12 of 0.25% of such assets in excess of $50 million
up to and including $100 million and 1/12 of 0.20% of the excess over $100
million of such assets. For its services under the Current Management
Agreements, the U.S. Adviser receives a monthly fee in U.S. Dollars of 1/12 of
0.90% of the first $50 million of the Fund's average weekly net assets, 1/12 of
0.70% of such assets in excess of $50 million up to and including $100 million
and 1/12 of 0.50% of the excess over $100 million. Fees for services provided
during less than a full month will be prorated. The total advisory fees to be
paid under the Current Management Agreements are higher than advisory fees paid
by most other U.S. investment companies, primarily because of the additional
time and expense required of the U.S. and Thai Advisers in pursuing the Fund's
objective of investing in Thai securities. The aggregate fee and any payments
for out-of-pocket expenses paid to the Thai Adviser in the fiscal year ended
December 31, 1996 was $748,502.
The net assets of the Fund as of February 28, 1997, as well as the net
assets of other U.S. registered investment companies advised by the Manager, and
the other U.S. registered investment companies for which the Manager acts as
sub-adviser, the rates of compensation to the Manager, the aggregate amount of
advisory fees paid by the Fund to the Manager and the aggregate amount of any
other material payments by the Fund to the Manager are set forth in Annex B
hereto.
Under the Current Management Agreements, the Advisers pay the salaries and
expenses of those of the Fund's officers and employees, as well as fees and
expenses of those of the Fund's directors, who are also their respective
directors, officers or employees, except that the Fund pays fees of the Fund's
Advisory Council and bears travel expenses of officers and directors of the Fund
who are managing directors, officers or employees of the U.S. or Thai Adviser to
the extent such expenses relate to attendance at meetings of the Fund's Board of
Directors or any Committee thereof.
The Fund pays all of its other expenses, including, among others, the
following expenses with respect to the Fund and the Investment Plan:
organization expenses of the Fund and the Investment Plan (including
out-of-pocket expenses); fees, dues and expenses incurred by the Fund and the
Investment Plan in connection with membership in investment company
organizations; fees and expenses of the Fund's and the Investment Plan's
administrators, custodians, transfer agents and registrars, payment for
portfolio pricing services to a pricing agent, if any; expenses of preparing
share certificates, Units and other expenses, including but not limited to stamp
duties in connection with the issuance, offering, distribution, sale or
underwriting of securities issued by the
17
<PAGE> 20
Fund or the Investment Plan; expenses of registering or qualifying securities of
the Fund for sale; expenses relating to investor and public relations; freight,
insurance and other charges in connection with the shipment of the Fund's and
the Investment Plan's portfolio securities; brokerage commissions, stamp duties
or other costs of acquiring or disposing of any portfolio securities of the Fund
and the Investment Plan; expenses of maintaining a register of holders of
interests in the Fund and the Investment Plan; expenses of preparing and
distributing reports and notices to the Fund, the Fund's Board of Directors, the
Advisory Council, the Fund's administrators, the U.S. Adviser, the Thai Adviser
and the Fund's stockholders and expenses of communications among such persons
(other than by the Fund's stockholders); expenses of dividends and distributions
to the Fund and the Fund's stockholders; costs of stationery; expenses incurred
in preparing and publishing notices; costs of stockholders' and other meetings;
litigation expenses; legal fees and expenses of U.S. and Thai counsel to the
Fund and the Investment Plan and, if such counsel are retained by the Fund's
directors who are not "interested persons" of the Investment Plan or the Fund,
of such counsel; fees and expenses of independent accountants of the Fund and
the Investment Plan; and expenses relating to the Fund's dividend reinvestment
and cash purchase plan.
The Advisory Sections of the Investment Contract (as defined therein) will
automatically terminate in the event of (a) its assignment (as defined under the
1940 Act), (b) termination of the Seconding Agreement or (c) suspension or
revocation of the Thai Adviser's license or status to act as adviser to the Fund
or the Unitholder (as defined in the Investment Contract) under U.S. or Thai
law. Upon termination of the Advisory Sections alone, the Fund, in accordance
with U.S. and Thai law, will, if possible, provide for a successor manager to
execute an agreement in substance similar to the Advisory Sections of the
Investment Contract and to the Seconding Agreement, with any changes that the
parties thereto agree upon.
The non-Advisory Sections of the Investment Contract (as defined therein)
continue until December 25, 2012 unless terminated earlier. The Investment
Contract, including both the Advisory and non-Advisory Sections thereof, will
terminate if (a) there is any transfer, assignment or other disposition of the
Fund's interest in the Investment Plan or the delivery of a Unit to any person
other than the Fund; (b) the Thai Adviser notifies the Fund and the Thai
custodian that due to a change in Thai law, further operation of the Investment
Plan in accordance with the Investment Contract is, in the opinion of the Thai
Adviser, illegal or infeasible having regard solely to the interest of the Fund;
(c) the occurrence of certain calamities; (d) termination of the Thai custodian
pursuant to the Thai Custody Agreement if no successor custodian is appointed;
(e) termination of the Advisory Sections if no successor manager is appointed;
and (f) in the event of bankruptcy of the Fund or the Thai Adviser. Upon
termination of the Investment Contract, the Investment Plan will be liquidated
by a liquidator appointed by the Thai Adviser acting upon the instructions of
the Board of Directors of the Fund, and the assets of the Fund will be managed
pursuant to the Fund Investment Agreement.
The Seconding Agreement continues in effect from year to year provided such
continuance is specifically approved at least annually by (a) a vote of a
majority of those members of the Board of Directors who are neither parties to
the Seconding Agreement nor interested persons of the U.S. Adviser, the Thai
Adviser or the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by vote of a majority of either the Fund's
Board of Directors or the Fund's outstanding voting securities. The Seconding
Agreement may be terminated at any time
18
<PAGE> 21
without payment of any penalty by the Fund or by the U.S. Adviser upon 60 days'
written notice. The Seconding Agreement will automatically terminate (a) in the
event of its assignment, as defined under the 1940 Act, or (b) upon termination
of the Investment Contract.
The Current Management Agreements provide that the U.S. and Thai Advisers
are not liable for any act or omission, error of judgment or mistake of law, or
for any loss suffered by the Fund in connection with matters to which the
Current Management Agreements relate, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of such Advisers in the
performance of their respective duties, or from reckless disregard by such
Advisers of their respective obligations or duties under the Current Management
Agreements. The Fund has been advised by Thai counsel that judgments rendered by
non-Thai courts are not enforceable per se in Thailand, but may be introduced as
evidence in a separate action in a Thai court.
Under the Current Management Agreements, the U.S. and Thai Advisers are
permitted to provide investment advisory services to other clients, including
clients who may invest in Thai securities, and, in providing such services, may
use non-confidential information furnished by the other Adviser. Conversely,
information furnished by others to the U.S. and Thai Advisers in the course of
providing services to clients other than the Fund may be useful to the U.S. and
Thai Advisers in providing services to the Fund.
Under the Current Fund Investment Agreement, the U.S. Adviser will manage
the assets of the Fund upon termination of the Current Management Agreements if
no successor agreements are entered into.
For its services under the Fund Investment Agreement, the U.S. Adviser will
be entitled to be paid, beginning on the date of termination of the Management
Agreements, from the assets of the Fund, a monthly fee of 1/12 of 0.90% of the
first $50 million of the Fund's average weekly net assets, 1/12 of 0.70% of such
assets in excess of $50 million up to and including $100 million and 1/12 of
0.50% of the excess over $100 million of such assets. Fees for services provided
during less than a full month will be prorated.
Under the Current Fund Investment Agreement, the Fund will pay all of its
other expenses, including the following expenses with respect to the Fund:
organization expenses of the Fund (including out-of-pocket expenses); fees, dues
and expenses incurred by the Fund in connection with membership in investment
company organizations; fees and expenses of the Fund's administrators,
custodians, transfer agents and registrars; payment for portfolio pricing
services to a pricing agent, if any; expenses of preparing share and other
certificates of the Fund, and other expenses, including but not limited to stamp
duties in connection with the issuance, offering, distribution, sale or
underwriting of securities issued by the Fund; expenses of registering or
qualifying securities of the fund for sale; expenses relating to investor and
public relations; freight, insurance and other charges in connection with the
shipment of the Fund's portfolio securities; brokerage commissions, stamp duties
or other costs of acquiring or disposing of any portfolio securities of the
Fund; expenses of preparing and distributing reports and notices to the Fund,
the Fund's Board of Directors, the Fund's administrators, the U.S. Adviser and
the Fund's stockholders and expenses of communications among such persons (other
than by the Fund's stockholders); expenses of dividends and distributions to the
Fund and the Fund's stockholders; costs of stationery; expenses incurred in
preparing and publishing notices; costs of stockholders' and other meetings;
litigation expenses; legal fees and expenses of U.S. and Thai counsel to the
Fund and, if such counsel are
19
<PAGE> 22
retained by the Fund's directors who are not "interested persons" of the Fund,
of such counsel; fees and expenses of independent accountants of the Fund; and
expenses relating to the Fund's dividend reinvestment and cash purchase plan.
Under the Current Advisory Agreements, the Thai Adviser places orders for
Thai securities to be held through the Investment Plan, and the U.S. Adviser
places orders for securities to be held directly by the Fund. Transactions
placed on the Securities Exchange of Thailand by the Thai Adviser are subject to
the commission rates of 0.3% and 0.06% for equity and debt securities,
respectively, available to the Thai Adviser.
The primary objective of the U.S. and Thai Advisers in choosing brokers for
the purchase and sale of securities for the portfolio is to obtain the most
favorable net results taking into account such factors as price, commission,
size of order, difficulty of execution and degree of skill required of the
broker/dealer. The capability and financial condition of the broker may also be
criteria for the choice of that broker. The placing and execution of orders for
the Fund is also subject to restrictions under U.S. securities laws, including
certain prohibitions against trading among the Fund and its affiliates
(including the U.S. and Thai Advisers and their affiliates).
The Fund may place brokerage transactions through brokers who provide
investment research services to the Thai or U.S. Adviser, including market and
statistical information and quotations for portfolio evaluation purposes. The
terms "investment research" and "market and statistical information and
quotations" include advice as to the value of securities, the advisability of
investing in, purchasing or selling securities and the availability of
securities and potential buyers or sellers of securities, as well as the
furnishing of analyses and reports concerning issuers, industries, securities,
economic factors and trends and portfolio strategy, each and all as consistent
with those services mentioned in Section 28(e) of the Securities Exchange Act of
1934.
Research provided to the U.S. or Thai Adviser in advising the Fund is in
addition to, and not in lieu of, the services required to be performed by such
Adviser itself, and neither Adviser's fee will be reduced as a result of the
receipt of such supplemental information. It is the opinion of the management of
the Fund that such information is only supplementary to each Adviser's own
research effort since the information must still be analyzed, weighed and
reviewed by such Adviser's staff. Such information may be useful to the U.S. or
Thai Adviser in providing services to clients other than the Fund, and not all
such information will necessarily be used by the U.S. or Thai Adviser in
connection with the Fund. Conversely, information provided to the U.S. or Thai
Adviser by brokers and dealers through whom other clients of such Adviser effect
securities transactions may prove useful to such Adviser in providing services
to the Fund.
When consistent with the policies of best execution, brokerage transactions
may be effected through the U.S. or Thai Adviser or affiliates thereof.
Brokerage commissions paid by the Fund in the fiscal year ended December
31, 1996 were approximately $522,000, of which none was paid to affiliates of
the U.S. or Thai Adviser.
THE NEW ADVISORY AGREEMENTS. The Board approved the proposed new advisory
agreements on March 13, 1997, the forms of which are attached as Annex A (the
"New Advisory Agreements"). The forms of the proposed New Advisory Agreements
are substantially identical to the Current Advisory Agreements, except for their
dates of execution.
20
<PAGE> 23
The investment advisory fee as a percentage of net assets payable by the
Fund to the U.S. and Thai Advisers will be the same under the New Advisory
Agreements as under the Current Advisory Agreements. If the investment advisory
fee under the New Advisory Agreements had been in effect for the Fund's most
recently completed fiscal year, advisory fees paid to the U.S. and Thai Advisers
by the Fund would have been identical to those paid under the Current Advisory
Agreements.
The Board of the Fund held a meeting on March 13, 1997, at which meeting
the Directors, including the Disinterested Directors, unanimously approved the
New Advisory Agreements for the Fund and recommended the Agreement for approval
by the stockholders of the Fund. The New Advisory Agreements would take effect
upon the later to occur of (i) the obtaining of stockholder approval or (ii) the
closing of the Merger. The New Advisory Agreements will continue in effect for
an initial two year term and thereafter for successive annual periods as long as
such continuance is approved in accordance with the 1940 Act.
In evaluating the New Advisory Agreements, the Board took into account that
the Fund's Current Advisory Agreements and its New Advisory Agreements,
including their terms relating to the services to be provided thereunder by the
U.S. and Thai Advisers and the fees and expenses payable by the Fund, are
identical, except for their dates of execution. The Board also considered other
possible benefits to the Manager and Morgan Stanley, Dean Witter, Discover & Co.
that may result from the Merger including the continued use of Morgan Stanley &
Co. and Dean Witter Discover brokers and its affiliates, to the extent permitted
by law, for brokerage services.
The Board also examined the terms of the Merger Agreement and the possible
effects of the Merger upon the Manager's organization and upon the ability of
the Manager to provide advisory services to the Fund. The Board also considered
the skills and capabilities of the Manager. In this regard, the Board was
informed of the resources of Morgan Stanley, Dean Witter, Discover & Co. to be
made available to the Manager.
The Board also weighed the effect on the Fund of the Manager becoming an
affiliated person of Morgan Stanley, Dean Witter, Discover & Co. Following the
Merger, the 1940 Act will prohibit or impose certain conditions on the ability
of the Fund to engage in certain transactions with Morgan Stanley, Dean Witter,
Discover & Co. and its affiliates. For example, absent exemptive relief the Fund
will be prohibited from purchasing securities from Morgan Stanley & Co. and DWR
in transactions in which Morgan Stanley & Co. and/or DWR act as principal.
Currently the Fund is prohibited from making such purchases in only those
transactions in which Morgan Stanley & Co. or an affiliate acts as principal.
The Fund will also have to satisfy certain conditions in order to engage in
securities transactions in which Morgan Stanley & Co. or DWR is acting as an
underwriter. The Fund is already required to satisfy such conditions when
engaging in transactions in which Morgan Stanley & Co. or an affiliate is acting
as an underwriter. In this connection, management of the Manager represented to
the Board that they do not believe these prohibitions or conditions will have a
material effect on the management or performance of the Fund.
After consideration of the above factors and such other factors and
information that the Board deemed relevant, the Directors, and the Disinterested
Directors voting separately, unanimously approved the New Advisory Agreements
and voted to recommend their approval to the stockholders of the Fund.
21
<PAGE> 24
In the event that stockholders of the Fund do not approve some or all of
the New Advisory Agreements, the respective current agreements will remain in
effect and the Board will take such action as it deems in the best interest of
the Fund and its stockholders, which may include proposing that stockholders
approve agreements in lieu of the New Advisory Agreements. In the event the
Merger is not consummated, the U.S. and Thai Advisers would continue to serve in
their respective capacities to the Fund pursuant to the terms of the Current
Advisory Agreements.
STOCKHOLDER APPROVAL
To become effective, the New Advisory Agreements must be approved by a vote
of a majority of the outstanding voting securities of the Fund. The "vote of a
majority of the outstanding voting securities" is defined under the 1940 Act as
the lesser of the vote of (i) 67% or more of the shares of the Fund entitled to
vote thereon present at the Meeting if the holders of more than 50% of such
outstanding shares of the Fund are present in person or represented by proxy, or
(ii) more than 50% of such outstanding shares of the Fund entitled to vote
thereon. The New Advisory Agreements were unanimously approved by the Board
after consideration of all factors which they determined to be relevant to their
deliberations, including those discussed above. The Board also unanimously
determined to submit the New Advisory Agreements for consideration by the
stockholders of the Fund.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" APPROVAL
OF THE NEW MANAGEMENT AGREEMENTS AND "FOR" THE APPROVAL OF THE NEW FUND
INVESTMENT AGREEMENT.
22
<PAGE> 25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Fund's management, the following person owned
beneficially more than 5% of the Fund's outstanding shares at March 24, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Franklin Resources, Inc.**....................... 776,141* 5.9%
777 Mariners Island Blvd.
San Mateo, California 94404
Charles B. Johnson**............................. 776,141* 5.9%
777 Mariners Island Blvd.
San Mateo, California 94404
Rupert H. Johnson, Jr.**......................... 776,141* 5.9%
777 Mariners Island Blvd.
San Mateo, California 94404
</TABLE>
- ---------------
* The Shares are beneficially owned by one or more open or closed-end
investment companies or other managed accounts which are advised by direct
and indirect investment advisory subsidiaries of Franklin Resources, Inc.
Such advisory contracts grant to such Adviser Subsidiaries all voting and
investment power over the securities owned by such advisory clients. These
subsidiaries are Templeton Investment Counsel, Inc. ("TICI")(571,888 shares);
accounts advised by TICI under sub-adviser agreements (165,722 shares); and
Templeton Global Advisors Limited (38,531 shares).
** Based on a Schedule 13G filed with the Commission on February 13, 1997. As
reported in such Schedule 13G, Messrs. Charles B. Johnson and Rupert H.
Johnson, Jr. are principal shareholders of Franklin Resources, Inc.
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders arise,
including any question as to an adjournment of the Meeting, the persons named in
the enclosed Proxy will vote thereon according to their best judgment in the
interests of the Fund.
23
<PAGE> 26
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A stockholders' proposal intended to be presented at the Fund's Annual
Meeting of Stockholders in 1998 must be received by the Fund on or before
November 27, 1997, in order to be included in the Fund's proxy statement and
form of proxy relating to that meeting.
VALERIE Y. LEWIS
Secretary
Dated: March 27, 1997
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
24
<PAGE> 27
ANNEX A
THE THAI FUND, INC.
INVESTMENT CONTRACT
<PAGE> 28
INDEX
<TABLE>
<CAPTION>
TITLE PAGE
- ---- -----
<C> <S> <C>
1. Definitions...........................................................
2. Establishment of the Fund.............................................
3. Basic Obligations and Rights of the Manager...........................
4. Enforcement by Unitholder.............................................
5. Units.................................................................
6. Calculation of Net Asset Value........................................
7. Investment Objectives, Policies and Limitations.......................
8. Duration, Changes in Manager and Custodian, and Termination...........
9. Accounts and Statements...............................................
10. Distributions.........................................................
11. Payments..............................................................
12. Currency..............................................................
13. Council...............................................................
14. Information and Notices...............................................
15. Amendments............................................................
16. Governing Law, Jurisdiction;
Language and Miscellaneous............................................
EXHIBITS
A Technical Assistance and Seconding Agreement
B Form of Certificate
C Form of Council Agreement
</TABLE>
2
<PAGE> 29
Investment Contract (the "Investment Contract") dated as of ,
1997 by and among THE MUTUAL FUND PUBLIC COMPANY LIMITED ("MFC"), a Thai limited
company, with its principal place of business located at 1770 IFCT Building, New
Petchburi Road, Bangkok 10310, Thailand, and THE THAI FUND, INC. (the
"Unitholder"), a Maryland corporation, with its principal place of business
located at 1221 Avenue of the Americas, New York, New York 10020.
1. DEFINITIONS
In this Investment Contract, the following terms have the following
meanings:
"Advisory Sections" means Sections 3.1; 3.3; 3.4; 3.8; Article 8
(other than Section 8.2(b)(Y) and Section 8.5, insofar as such Section
relates to appointment of liquidators under Thai law); and Article 15
(other than Section 15.1(b)(Y));
"Assets" means all assets held by the Fund, including but not limited
to Thai Securities;
"Auditors" has the meaning ascribed thereto in Section 9.4(a);
"Beneficial Certificate" has the meaning ascribed thereto in Section
5.2;
"Board of Directors" means the Board of Directors of the Unitholder;
"BOT" means the Bank of Thailand or any successor agency or
institution of the Royal Thai Government from time to time authorized by
law to supervise mutual funds in Thailand;
"Business Day" means a day on which the SET and the New York Stock
Exchange are both open for business;
"Council" has the meaning ascribed thereto in Section 13.A.1;
"Custodian" means The Thai Farmers Bank Limited or its successors or
permitted assigns under the Thai Custody Contract;
"District Court" has the meaning ascribed thereto in Section 16.3;
"Dollars" means U.S. dollars;
"Effective Date" means the date on which the Registration Statement is
first declared effective by the SEC under the United States Securities Act
of 1933, as amended;
"Financial Statements" has the meaning ascribed thereto in Section
9.2;
"Fund" means the project established by this Agreement;
"Funds" means the Fund and the Unitholder, jointly and severally, as
if such entities were one entity;
"Investment Company Act" means the United States Investment Company
Act of 1940, as amended;
"Manager" means MFC or any successor thereto permitted under U.S. Law;
"Registration Statement" means the Unitholder's registration statement
on Form N-2 filed with the SEC;
3
<PAGE> 30
"SEC" means the United States Securities and Exchange Commission;
"Securities" means all securities held by the Fund pursuant to this
Investment Contract;
"SET" has the meaning ascribed thereto in Section 6.2(a);
"Supreme Court" has the meaning ascribed thereto in Section 16.3;
"Technical Assistance and Seconding Agreement" has the meaning
ascribed thereto in Section 3.1;
"Thai Custody Contract" means the Custody Contract among the
Unitholder, the Manager and the Custodian in respect of the Fund;
"Thai NAV" has the meaning ascribed thereto in Section 6.1;
"Thai Securities" means all Securities of Thai companies held by the
Fund pursuant to this Agreement;
"Underwriting Agreement" means the Underwriting Agreement in respect
of the Unitholder's shares of common stock ($0.01 par value) executed on or
about the date hereof;
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction;
"Unitholder" means The Thai Fund, Inc., a Maryland corporation;
"U.S. GAAP" has the meaning ascribed thereto in Section 6.5;
"U.S. Law" means applicable United States federal law (including the
Internal Revenue Code, Securities Act of 1933, Securities Exchange Act of
1934, Investment Company Act and Investment Advisers Act of 1940, each as
from time to time amended) and New York law;
"U.S. Sections" shall mean the Advisory Sections and Sections 2.1
(with respect to U.S. Law); 2.2; 3.6 (except 3.6(b)); 3.7; Article 4 (with
respect to U.S. Law); Section 5.3; Article 6 (with respect to U.S. GAAP and
U.S. Law); Article 7 (except 7(2)); Article 9 (other than Sections
9.1(b)(ii) and 9.3); Section 11.1; Article 10; Article 12; Article 13 (with
respect to U.S. Law); Section 14.B; and Article 16;
"Valuation Date" has the meaning ascribed thereto in Section 6.1.
2. ESTABLISHMENT OF THE FUND
2.1 The Fund is hereby established as a securities investment fund with
effect on and from the Effective Date under the laws of the Kingdom of Thailand
for the exclusive benefit of the Unitholder. This Investment Contract, together
with the exhibits hereto and the relevant provisions of the laws and regulations
of the Kingdom of Thailand, and, with respect to the U.S. Sections, U.S. Law
alone, shall govern the relationships, which are contractual relationships,
between the Manager and the Unitholder.
2.2 The Unitholder shall be liable for all liabilities incurred by or on
behalf of the Fund in accordance with the terms of this Investment Contract and
the Technical Assistance and
4
<PAGE> 31
Seconding Agreement, provided, however, that this Section 2.2 shall not operate
to enlarge in any way any liabilities incurred by or on behalf of the Fund.
3. BASIC OBLIGATIONS AND RIGHTS OF THE MANAGER
3.1 (a) The Manager, as investment manager to the Fund, hereby undertakes
and agrees, upon the terms and conditions herein set forth in this Investment
Contract, to manage the acquisition, holding and disposition of Assets, in
accordance with the investment objectives and policies as set forth in or
contemplated by this Investment Contract and in accordance with supervision and
instructions of the Board of Directors and to prepare and make available to the
Unitholder research and statistical data in connection therewith; subject,
however, in all respects to the terms and conditions of the Technical Assistance
and Seconding Agreement attached hereto as Exhibit A, which agreement shall be
executed and delivered by the Manager simultaneously herewith.
(b) For purposes of this Investment Contract, "instructions from the Board
of Directors" shall include the right to request a power of attorney from the
Manager in order to enforce claims of, or to defend claims against, the Fund.
3.2 The Manager agrees to act hereunder in such capacity or capacities as
are necessary or appropriate under Thai law, including with respect to the
establishment of the Fund pursuant to Section 2.1 hereof. It is expressly agreed
that the Manager shall hold legal title to all Assets and that nothing herein
shall constitute the Manager, or require it to act as, agent, nominee or trustee
of the Unitholder with respect to legal title to Thai Securities. The Manager
shall hold legal, title to all Assets separate from its own assets, free and
clear of all liens, claims and encumbrances of any party except as provided by
this Investment Contract.
3.3 The Manager shall be entitled to be paid in Baht from the assets of
the Funds, as full compensation for the services rendered and expenses borne by
the Manager under the Advisory Sections hereunder and under the Technical
Assistance and Seconding Agreement, a monthly fee, payable, except as provided
below, within three Bangkok business days of the first day of each month
following the day on which such payment is computed, equal to 1/12 of 0.40% of
the value of the average weekly net assets of the Funds up to and including $50
million, plus 1/12 of 0.25% of the value of the next $50 million of the average
weekly net assets of the Funds, plus 1/12 of 0.20% of the value of the average
weekly net assets of the Funds over $100 million. The weekly net assets of the
Funds for a month shall be determined as of the close of business in New York on
the last New York Stock Exchange business day of each week where such last
business day falls within one month, and be averaged by dividing the total of
such weekly net assets by such number of such weeks in such month. Such fee
shall be payable from the Funds and shall be computed beginning on the "Closing
Date" (as defined in the Underwriting Agreement) until the termination of this
Investment Contract for whatever reason. The fee from the Closing Date to the
end of the month during which the Closing Date occurs shall be pro-rated
according to the proportion which such period bears to the full monthly period.
Upon the termination of the Advisory Sections before the end of any month, such
fee for such part of a month shall be pro-rated according to the proportion
which such period bears to the full monthly period, and shall be payable on the
date of termination of the Advisory Sections. For the purposes of this
Investment Contract, the net assets of the Funds shall be computed pursuant to
the directions of the Board of Directors.
5
<PAGE> 32
3.4 The Manager agrees to pay, for the benefit of the Funds, certain fees
and expenses with respect to the Funds, as further provided by the Technical
Assistance and Seconding Agreement.
3.5 The Manager's services hereunder are not to be deemed exclusive and
the Manager is free to render similar services to others.
3.6 The Manager represents and warrants that it is duly (a) registered and
authorized as an investment adviser under the U.S. Investment Advisers Act of
1940, as amended, and (b) licensed as an investment manager under the Operation
of Finance, Securities and Credit Foncier Companies of Thailand, B.E. 2522, and
it agrees to maintain effective registration, authorization and license, as the
case may be, thereunder until the termination of the Advisory Sections.
3.7 Neither the Manager nor any affiliate of the Manager shall receive any
compensation in connection with the placement or execution of any transaction
for the purchase or sale of securities or for the investment of funds on behalf
of the Fund, except that the Manager or the Manager's affiliates may receive a
commission, fee or other remuneration for acting as broker in connection with
the sale of securities to or by the Fund, but only to the extent permitted under
the Investment Company Act.
3.8 The Manager may rely on information reasonably believed by the Manager
to be accurate and reliable. Neither the Manager, the Manager's officers,
directors, employees, agents or any controlling persons as defined in the
Investment Company Act shall be subject to any liability for any act or
omission, error of judgment or mistake of law or for any loss suffered by the
Funds in the course of, connected with or arising out of any services to be
rendered hereunder except by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Manager's duties or by reason of reckless
disregard on the part of the Manager of the Manager's obligations and duties
under this Investment Contract.
4. ENFORCEMENT BY UNITHOLDER
The Unitholder shall have the right at all times to enforce against the
Manager the obligations of the Manager under this Investment Contract, and to
enforce the obligations of the Manager, as Thai Manager, under the Technical
Assistance and Seconding Agreement.
5. UNITS
5.1 Units shall be issued to the Unitholder against payment therefor with
respect to all transfers of any assets to the Fund. The value of Units shall,
upon the initial transfer of any assets to the Fund, be $10.00, provided,
however, that the value of Units shall thereafter be determined in accordance
with Article 6 of this Investment Contract. Units shall not represent any right
in respect of any particular Assets but shall represent undivided interests of
equal value as further determined pursuant to Article 6.
5.2 Beneficial certificates (the "Beneficial Certificates") representing
one or more Units, in substantially the form of Exhibit B attached hereto, shall
be issued to the Unitholder in respect of all Units issued to the Unitholder.
Each Beneficial Certificate shall be signed on behalf of the Manager.
6
<PAGE> 33
5.3 Units are not transferable. The Manager shall not issue or deliver a
Unit or a Beneficial Certificate to any person other than the Unitholder. The
Unitholder may not transfer or assign Units or Beneficial Certificates.
6. CALCULATION OF NET ASSET VALUE
6.1 The net asset value of the Assets (the "Thai NAV") at any time shall
be the value of the Assets less the liabilities of the Fund at such time. The
net asset value of Units at any time following the initial issuance thereof as
described in Section 5.1 shall be the Thai NAV divided by the number of Units
issued and outstanding as of such time. The Thai NAV shall be calculated by the
Unitholder's designee at the close of each week in Bangkok (a "Valuation Date")
as well as when required for the issue of Units pursuant to Article 5 hereof.
The Thai NAV shall be calculated by reference to the criteria set forth below
(and such other criteria as may be determined from time to time by the Board of
Directors).
6.2 The value of assets held in the Fund shall be determined as follows:
(a) where the assets are equity securities listed and traded on the
Stock Exchange of Thailand (the "SET") and SET market quotations are
readily available, at the last sales price on such exchange on the
applicable Valuation Date or, if there is no sale on such exchange on that
date, the mean between the highest current bid and the lowest current asked
prices;
(b) where the assets are unlisted equity securities, at the mean
between current bid and asked prices, if any, of two reputable dealers;
(c) short-term investments having a maturity of 60 days or less will
be valued at cost with accrued interest or discount earned included in
interest receivable;
(d) securities which are listed on exchanges other than the SET and
other securities as to which market quotations are readily available shall
be valued at their market values; and
(e) all other securities and assets will be taken at fair value in
accordance with procedures determined by the Board of Directors.
6.3 In instances where price cannot be determined in accordance with the
above procedures, or in instances in which the Board of Directors determines
that it is impracticable or inappropriate to determine price in accordance with
the above procedures, the price will be determined in such manner as the Board
of Directors may prescribe.
6.4 There shall be made such allowance (if any) as the Board of Directors
may consider appropriate in the case of any asset which the Board of Directors
considers may not be fully recoverable.
6.5 For purposes of determining the Thai NAV, liabilities shall include
the amount of any fee payable to the Manager hereunder or the Custodian under
the Thai Custody Contract and any fee payable pursuant to the Technical
Assistance and Seconding Agreement or other fees and expenses if, at the
direction of the Board of Directors, such fees and expenses are to be paid from
the assets of the Fund and accrued at or accruing to the applicable Valuation
Date but remaining unpaid. Other liabilities shall be determined in accordance
with United States generally accepted accounting principles ("U.S. GAAP").
7
<PAGE> 34
6.6 Notwithstanding anything in this Agreement, (a) for purposes of all
reporting required under U.S. Law, the "Unitholder's designee" as used in this
Article 6 shall be The Vanguard Group, Inc., which shall determine the Thai NAV
in Dollars based upon information supplied by the Manager and/or the Custodian,
and (b) for purposes of all reporting required under Thai law, the "Unitholder's
designee" as used in this Article 6 shall be the Manager, which shall determine
the Thai NAV in Baht based upon information from The Vanguard Group, Inc.
7. INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS
The investment objectives, policies and limitations of the Funds will be as
described in the Registration Statement on the Effective Date, subject to
revision in accordance with (1) U.S. Law and (2) Thai law.
8. DURATION, CHANGES IN MANAGER AND CUSTODIAN, AND TERMINATION
8.1 This Investment Contract shall become effective on the date hereof.
This Investment Contract, other than the Advisory Sections hereof, shall
continue in effect, if not continued in accordance with applicable U.S. Law and
Thai law, until December 25, 2012, or until terminated in accordance with
Section 8.4. The Advisory Sections shall continue in effect, if not continued in
accordance with applicable U.S. Law as further provided below, until two years
from the date hereof. If not sooner terminated, the Advisory Sections shall
continue in effect for successive periods of 12 months each thereafter; provided
that each such continuance shall be specifically approved annually by the vote
of a majority of the Board of Directors who are not parties to this Investment
Contract or interested persons (as such term is defined in the Investment
Company Act) of any such party, cast in person at a meeting called for the
purpose of voting on such approval and (a) either the vote of a majority of the
outstanding voting securities of the Unitholder, or (b) a majority of the Board
of Directors as a whole.
8.2 Notwithstanding anything in this Agreement to the contrary, the
Advisory Sections may be terminated at any time by the Unitholder, without the
payment of any penalty, upon a vote of a majority of the Board of Directors or a
majority of the outstanding voting securities of the Unitholder, or by the
Manager, on 60 days' written notice to the other parties. The Advisory Sections
shall automatically terminate (a) in the event of assignment of this Investment
Contract (as such term is defined in the Investment Company Act); (b)
termination of the Technical Assistance and Seconding Agreement; or (c) the
suspension or revocation of the Manager's license or status to act as manager to
the Fund or the Unitholder, under (X) U.S. Law, or (Y) Thai law, as the case may
be. Any notice shall be deemed given when received by the addressee.
8.3 Upon termination of the Advisory Sections, except as provided by
Section 8.4 hereof, the Unitholder shall, in accordance with (a) U.S. Law, and
(b) Thai law, provide for a successor manager to execute, as investment manager
under, an agreement in substance similar to the Advisory Sections of this
Investment Contract (which may be evidenced by an agreement to become party to
all provisions of this Investment Contract) and to the Technical Assistance and
Seconding Agreement, with all such changes, however, as the parties thereto
shall agree upon.
8
<PAGE> 35
8.4 This Investment Contract, including the Advisory Sections, shall
terminate if:
(a) There is any transfer, assignment or other disposition of any of
the Unitholder's interest in the Fund, or any delivery of a Unit or
Beneficial Certificate to any person other than the Unitholder;
(b) The Manager notifies the Unitholder in writing that due to a
change in Thai law, in its opinion further operation of the Fund in
accordance with this Investment Contract is illegal or infeasible having
regard solely to the interests of the Unitholder;
(c) There has been a suspension of trading for more than 1 day on the
Securities Exchange of Thailand; the declaration by Thailand authorities of
a banking moratorium; or any war, blockade, embargo, insurrection or armed
conflict or escalation of any thereof involving Thailand or the United
States, if in any such case the Board of Directors determines that
termination is in the best interests of Unitholder;
(d) Termination of the Custodian's appointment pursuant to the Thai
Custody Contract if no successor custodian is appointed thereunder or
otherwise;
(e) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Unitholder or the Manager in any
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Unitholder or the Manager, as the case may be or for any substantial part
of the property thereof, or order the winding-up or liquidation of the
affairs thereof;
(f) The Unitholder or the Manager shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Unitholder or
the Manager, as the case may be, or for any substantial part of the
property thereof, or shall make any general assignment for the benefit of
creditors thereof, or shall fail generally to pay its debts as they become
due; or
(g) Upon the termination of the Advisory Sections if no successor
investment manager is appointed pursuant to Section 8.3.
8.5 Upon termination of this Investment Contract pursuant to Section 8.4,
the Fund will be liquidated by a liquidator appointed by the Manager acting upon
the instructions and under the supervision of the Board of Directors. Such
liquidation will in an orderly manner dispose of Thai Securities which are
restricted as to foreign ownership and remit the proceeds thereof to the
Unitholder and, unless directed by the Board of Directors otherwise, cause all
other assets of the Fund to be registered in the name of Unitholder. To the
extent that the Unitholder does not take action in respect of Sections 5.3 and
8.4(a), (e) and (f) hereof, the Manager will take all actions necessary to
effectuate such sections and this Section 8.5.
8.6 This Investment Contract may not be transferred, assigned, sold or in
any matter hypothecated or pledged by any party hereto other than as permitted
by Article 8 hereof.
9
<PAGE> 36
8.7 As used in this Investment Contract, the phrase "majority of the
outstanding voting securities of the Unitholder" shall mean the affirmative vote
of the holders of a majority of the outstanding voting securities of the
Unitholder, cast in person at a meeting called for the purpose of voting on such
approval.
9. ACCOUNTS AND STATEMENTS
9.1 (a) The Manager shall maintain in its principal office in Bangkok
sufficient accounts and records to enable a complete and accurate view to be
formed by the Unitholder or its designee of the Assets and liabilities and the
income and expenditures of the Fund.
(b) Such accounts shall be kept in form necessary in order to prepare
financial statements (i) pursuant to U.S. GAAP and, (ii) in addition may be kept
in such form and language required by the BOT.
9.2 The Unitholder or its designee shall prepare financial statements of
the Funds for successive accounting periods, each accounting period commencing
immediately after the end of the last preceding such accounting period (or in
the case of the first such period from the date of establishment of the Funds)
and ending on December 31 in each year (the first such date being December 31,
1988) (the "Financial Statements") and shall also prepare such Financial
Statements as of and for the monthly periods ending on the last day of each
calendar month (which monthly reports shall be prepared within ten business days
after the end of each month), in each case in U.S. dollars on the basis of U.S.
GAAP on the respective forms and containing the information for the time being
required by the SEC and the New York Stock Exchange.
9.3 The Manager or its designee shall prepare financial statements of the
Fund in the manner required by Thai law and shall make or cause to be made all
reports, publications, notices and filings with respect to the Fund required by
Thai law.
9.4 Audit. The Manager and the Unitholder shall:
(a) cause the Financial Statements to be audited in accordance with
U.S. GAAP by an internationally recognized accountancy firm authorized
under the laws of the Kingdom of Thailand and the regulations of the BOT
(the "Auditors"). The initial Auditors shall be Price Waterhouse. The
Manager shall be entitled, with the prior written approval of the Board of
Directors, and the Board of Directors and the shareholders of the
Unitholder, to remove any person or firm of Auditors and appoint another
internationally recognized accountancy firm to be the Auditors. The Manager
and the Board of Directors shall ensure that at all times there are such
Auditors for the Fund;
(b) submit the Financial Statements together with the Auditors' report
and such report as the Manager may intend to make to the Unitholder thereon
to the Unitholder and the BOT; and
(c) comply with such requirements as the SEC may make with respect to
such statements and report.
9.5 Form of Auditor's Reports. The Auditors' report on the Financial
Statements of the Funds shall be in the form required by the SEC and the New
York Stock Exchange and prepared in accordance with U.S. GAAP. The Manager shall
sign all Financial Statements, if requested to
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do so by the Board of Directors. A manager of the Auditors shall sign all
Financial Statements of the Fund.
10. DISTRIBUTIONS
10.1 The Fund will distribute to the Unitholder, at least once each year
(on such dates as is determined by the Board of Directors), all or part of the
net profit of the Fund for such year. For this purpose, the net profit of the
Fund will be calculated in Dollars and will include dividends and interest paid
with respect to Securities, interest on bank deposits, net capital gains from
the sale of Securities and any other income arising from the Fund's operations,
less all expenses of the Investment Plan.
Except with respect to payment of expenses as may be further provided in
Section 10.2, the Fund shall not make any distribution to the Unitholder except
out of current net profits or accumulated prior years' net profits not
previously distributed, or otherwise as may be declared by the Board of
Directors and permitted by the BOT.
10.2 Costs and expenses are payable and distributable out of the assets of
the Fund when and as determined by the Board of Directors.
10.3 Each shareholder of the Unitholder, shall, unless he elects
otherwise, reinvest all distributions he receives from the Unitholder.
11. PAYMENTS
11.1 Any moneys payable to the Manager or others by the Fund shall be
paid, upon order of the Unitholder (or its authorized designee acting in
accordance with the Thai Custody Contract), in the manner and to a Baht (or
Dollar, subject to Section 11.2 hereof) account notified by the Unitholder (or
its authorized designee acting in accordance with the Thai Custody Contract).
11.2 All payments to be made in currencies other than Baht are subject to
Thai law including exchange control law and regulations thereunder.
12. CURRENCY
Except as otherwise provided in this Investment Contract, the accounts and
records of the Fund, payments into the Fund and payments out of the Fund shall
be made in Baht. Distributions from the Fund shall be calculated in Dollars. The
Financial Statements of the Funds shall be prepared in Dollars, provided,
however, that financial statements may also be prepared as provided in Section
9.3 hereof. Currency exchange rates between Baht and Dollars for purposes of the
Fund's accounts and records shall be determined by the Board of Directors.
13. COUNCIL
A. Duties of Council
13.A.1. Until the termination of the Fund, a Council (the "Council") shall
be constituted and organized as hereinafter provided.
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13.A.2. The functions of the Council, subject to the Thai law and U.S. Law
and this Investment Contract, and all other relevant legislation and regulation,
shall be to:
(a) consult with the Manager on Thailand economic and securities
market matters; and
(b) exercise such other powers and rights as are provided hereunder.
B. Agreements with Council Members
The Manager, subject to the oversight of the Board of Directors, shall be
authorized to enter into an agreement with each of the initial members of the
Council which shall be binding upon each of them and their successors, to
implement the terms and conditions contained herein in relation to the Council
and the members and for the exercise of the rights, powers and duties vested in
the Council and the members. Such agreement shall be executed on or before the
Effective Date, shall be in the form set out in Exhibit C and shall be capable
of variation only with the approval of the Board of Directors.
C. Meetings, Composition and Retirement
13.C.1. The members of the Council shall initially consist of the persons
listed below. The number of members of the Council shall be 5.
The members are initially expected to be:
Snoh Unakul
Sukri Kaocharern
Viroj Phutrakul
James P. Rooney
Udom Vichayabhai
13.C.2. The members of the Council may from time to time appoint any
person to be a member of the Council to replace a vacancy, provided that prior
thereto the Board of Directors and a majority of the members respectively shall
have given their respective approvals to such appointment. Such approvals shall
be appropriately reflected in the records of the Fund.
13.C.3. The office of a member of the Council shall be vacated in any of
the following events:
(a) if he shall resign upon giving notice in writing to the Council,
the Manager and the Unitholder;
(b) if an order shall be made by any court claiming jurisdiction on
the ground of mental disorder for his detention or for the appointment of a
guardian; or
(c) the Board of Directors shall terminate such member with or without
prior notice.
D. Remuneration
Members of the Council shall receive fees as set forth in Exhibit C hereto.
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E. Meetings
13.E.1. Subject to the provisions of this Article 13, the members of the
Council may meet together for the dispatch of business, adjourn, and otherwise
regulate their meetings as they think fit. The Council shall from time to time
appoint a Chairman thereof and, at any meeting at which such Chairman is not
present, appoint a Chairman of the meeting.
13.E.2. The continuing members of the Council may act notwithstanding any
vacancies.
13.E.3. The Council shall meet at such times and such places in Thailand
as the Council may determine; provided, however, that the Council shall meet at
least one time each year.
13.E.4. Upon direction of the Chairman of the Council, the Manager shall
give not less than 15 days' notice of the time and place of a meeting of the
Council to each member and to the Unitholder and such notice shall specify brief
details of the business of such meeting. Any member may waive notice of any
meeting and any such waiver may be retroactive.
F. Quorum
The quorum necessary for the transaction of the business of the Council
shall be 3 members present in person. If, after 15 minutes, the quorum shall not
be present, the meeting shall stand adjourned to a date being 7 days later at
the same time and place as the original meeting and the members then present in
person at the adjourned meeting shall be a sufficient quorum. Notice of such
adjourned meeting shall be given. A meeting of the Council at which a quorum is
present shall be competent to exercise all powers for the time being exercisable
by the members of the Council.
G. Decisions
13.G.1. Questions arising at any meeting of the Council shall be
determined by a majority of votes. In case of an equality of votes, the Chairman
of the Council (or if the Chairman is not present, the Chairman of the meeting)
shall have a second or casting vote.
13.G.2. A resolution in writing signed by all the members of the Council
shall be as effective as a resolution duly passed at a meeting of the Council
and may consist of several documents in the like form, each signed by one or
more members.
H. Information
The Manager shall supply to each member of the Council such information as
may reasonably be requested by the Council concerning the Kingdom of Thailand's
securities markets and details of any proposed investment in unlisted
securities.
I. Conflict of Interests
No member of the Council shall, as principal or agent, sell or deal in the
sale of, any asset of the Funds or purchase any asset from the Funds and each
member shall procure that none of his affiliates performs any such act except as
expressly authorized hereunder. Members of the Council shall be subject to
applicable provisions of U.S. Law.
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<PAGE> 40
J. Liability
Members of the Council may rely on information reasonably believed by them
to be accurate and reliable. Members of the Council shall not be subject to any
liability for any act or omission, error of judgment or mistake of law or for
any loss suffered by the Funds in the course of, connected with or arising out
of any services to be rendered hereunder except by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties or
by reason of reckless disregard by them of their obligations and duties under
this Agreement.
14. INFORMATION AND NOTICES
A. Documents To Be Made Available; Offices
14.A.1. There shall be held available by the Manager for inspection by any
person without charge at the principal office of the Manager in Bangkok at all
reasonable business hours copies of:
(a) this Investment Contract as from time to time amended;
(b) the most current sales prospectus related to shares of the
Unitholder; and
(c) all filings made by the Unitholder with the SEC (including
financial statements) for the two latest fiscal years of the Unitholder or
(if less) for all periods since the establishment of the Unitholder.
14.A.2. The Manager shall at all times maintain an office or offices in
Bangkok and shall notify the Unitholder in the manner prescribed by Section
14.A.2 above of any change in the address of its principal office in Bangkok.
B. Notices
Except as otherwise provided herein, all notices or other communications to
the respective parties hereto shall be deemed to have been duly made when
delivered by airmail, telex or personal delivery at its address specified below
or to such other address as any of the parties hereto may hereafter specify to
the other in writing.
For the Manager:
The Mutual Fund Public Company Limited
1770 IFCT Building
New Petchburi Road
Bangkok, Thailand
For the Unitholder:
The Thai Fund, Inc.
c/o Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
15. AMENDMENTS
15.1 This Investment Contract shall be capable of amendment only (a) with
the prior agreement of the Unitholder (which, in the case of the Advisory
Sections, shall be obtained in
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accordance with U.S. Law) and the Manager, and (b) subject to (X) applicable
U.S. Law and (Y) applicable Thai law, including approval of the BOT.
15.2 Sections 5.3 and 8.4(a), (e) and (f) hereof, in addition to the
requirements of Section 15.1, may not be amended without the consent of
two-thirds of the outstanding voting securities of the Unitholder.
16. GOVERNING LAW, JURISDICTION; LANGUAGE AND MISCELLANEOUS
16.1 This Investment Contract and Beneficial Certificates shall be
governed by and construed in accordance with the laws of the Kingdom of
Thailand, provided, however, that all U.S. Sections and all matters arising out
of or relating thereto, or as to whether a provision is part of a U.S. Section,
shall be governed by U.S. Law.
16.2 The parties irrevocably agree that any suit, action or proceeding
against the Unitholder arising out of or relating to this Investment Contract
shall be subject exclusively to the jurisdictions of the United States District
Court for the Southern District of New York and the Supreme Court of the State
of New York, New York County, and irrevocably submit to the jurisdiction of each
such Court in connection with any such suit, action or proceeding. The parties
waive any objection to the laying of venue of any such suit, action or
proceeding in either such Court, and waive any claim that such suit, action or
proceeding has been brought in an inconvenient forum. The parties irrevocably
consent to service of process in connection with any such suit, action or
proceeding by prepaid mail at their respective addresses as set forth in this
Investment Contract.
16.3 The parties further agree that any suit, action or proceeding against
the Manager arising out of or relating to this Investment Contract may, at the
sole and unreviewable option of the Unitholder, be commenced in the
jurisdictions either (i) of the courts of the Kingdom of Thailand or (ii) of the
United States District Court for the Southern District of New York (the
"District Court") or the Supreme Court of the State of New York, New York County
(the "Supreme Court"). In the event the Unitholder exercises its option to
commence a suit, action or proceeding in either the District Court or the
Supreme Court, the Manager irrevocably submits to the jurisdiction of each such
court in connection with any such suit, action or proceeding, and the Manager
further agrees that, in the event the District Court, for whatever reason,
declines to exercise or is determined not to have jurisdiction in connection
with any such suit, action or proceeding, the Unitholder may commence a
subsequent such suit, action or proceeding in the Supreme Court, and the Manager
irrevocably submits to the jurisdiction of the Supreme Court in connection with
any such subsequent suit, action or proceeding. The Manager waives any objection
to the laying of venue of any such suit, action or proceeding in the District
Court or the Supreme Court, and waives any claim that such suit, action or
proceeding has been brought in an inconvenient forum. The Manager irrevocably
consents to service of process in connection with any such suit, action or
proceeding by prepaid mail at its address as set forth in this Investment
Contract.
16.4 To the extent that the Manager or the Unitholder may now or hereafter
be entitled, in any jurisdiction in which judicial proceedings may at any time
be commenced with respect to this Investment Contract, to claim for itself or
its revenues or properties any immunity from suit, court jurisdiction,
attachment prior to judgment, attachment in aid of execution of a judgment,
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execution of a judgment or from set-off, banker's lien, counterclaim or any
other legal process or remedy with respect to its obligations under this
Investment Contract and/or to the extent that in such jurisdiction there may be
attributed to the Manager or the Unitholder such an immunity (whether or not
claimed), the Manager and the Custodian each hereby to the fullest extent
permitted by applicable law irrevocably agrees not to claim, and hereby to the
fullest extent permitted by applicable law expressly waives, any such immunity,
including, without limitation, a complete waiver of immunity pursuant to the
United States Foreign Sovereign Immunities Act.
16.5 The governing language of this Investment Contract shall be English.
16.6 The headings contained in this Investment Contract are for reference
only and shall not be deemed to limit or affect any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or representatives thereunto duly
authorized, all as of the date first above written.
THE MUTUAL FUND PUBLIC COMPANY LIMITED
By:
-------------------------------------------
Name:
Title:
THE THAI FUND, INC.
By:
-------------------------------------------
Name:
Title:
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EXHIBIT A
TECHNICAL ASSISTANCE AND SECONDING AGREEMENT
THIS AGREEMENT ("Agreement") is dated as of , 1997 by and
among THE MUTUAL FUND PUBLIC COMPANY LIMITED (the "Thai Manager"), a Thai
limited company, with its principal office located at 1770 New Petchburi Road,
Bangkok, Thailand; MORGAN STANLEY ASSET MANAGEMENT INC. (the "U.S. Manager"), a
Delaware corporation, with its principal office located at 1221 Avenue of the
Americas, New York, New York 10020; and THE THAI FUND, INC. (the "Company"), a
Maryland corporation, with its principal office located at c/o Morgan Stanley
Asset Management Inc., 1221 Avenue of the Americas, New York, New York 10020.
W I T N E S S E T H:
WHEREAS, the Thai Manager has entered into an Investment Contract (as
defined below) for the establishment of a Thai investment fund (the "Thai
Fund"), whereunder the Thai Manager has assumed the management of the said fund
on the terms and conditions specified in the said Investment Contract; and
WHEREAS, the U.S. Manager has experience and expertise in the management of
assets, securities trading and investment research; and
WHEREAS, the parties hereto desire to provide for management of the
acquisition and disposition of securities by the Thai Fund, on the terms and
conditions hereinafter set forth; and
WHEREAS, the U.S. Manager and the Company desire that the U.S. Manager
render investment management services to the Company, on the terms and
conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
1. Definitions
1.1 "Board of Directors" means the Board of Directors of the Company.
1.2 "Council" shall have the meaning ascribed thereto in the
Investment Contract.
1.3 "District Court" shall have the meaning ascribed thereto in
Section 7.2.
1.4 "Effective Date" means the date on which the Registration
Statement first is declared effective by the SEC under the United States
Securities Act of 1933, as amended.
1.5 The "Funds" means the Company and the Thai Fund, jointly and
severally, as if such entities were one entity.
1.6 "Investment Company Act" means the U.S. Investment Company Act of
1940, as amended.
1.7 "Investment Contract" means the agreement dated as of
, 1997 between the Company and the Thai Manager.
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1.8 "Registration Statement" means the Company's Registration
Statement on Form N-2 filed with the SEC.
1.9 "SEC" means the U.S. Securities and Exchange Commission.
1.10 "Seconded Staff" shall have the meaning ascribed thereto in
Section 2.1 hereof.
1.11 "Supreme Court" shall have the meaning ascribed thereto in
Section 7.2.
1.12 "Thai Custodian" means The Thai Farmers Bank or its successors or
permitted assigns.
1.13 "Thai Employees" shall have the meaning ascribed thereto in
Section 3.2.
1.14 The "Thai Fund" shall have the meaning ascribed thereto above.
1.15 "Underwriting Agreement" means the Underwriting Agreement in
respect of the Company's shares of common stock ($0.01 par value) executed
on or about the date hereof.
1.16 "U.S. Assets" shall have the meaning ascribed thereto in Section
2.2 hereof.
2. Services to be rendered by the U.S. Manager
2.1 (a) The U.S. Manager shall (X) make available to the Thai Manager
seconded staff ("Seconded Staff"), such Seconded Staff to provide to the Thai
Manager advice with respect to all investment decisions for the Thai Fund and
all acquisitions and dispositions of securities by the Thai Fund, and (Y)
prepare and make available to the Thai Fund research and statistical data in
connection therewith, all in accordance with the Company's investment objectives
and policies and in accordance with supervision and instructions of the Board of
Directors.
(b) For purposes of this Agreement, "instructions from the Board of
Directors" shall include the right to request a power of attorney from the Thai
Manager in order to enforce claims of, or to defend claims against, the Fund.
2.2 The U.S. Manager shall make investment decisions for the Company with
respect to any assets other than those held through the Thai Fund (the "U.S.
Assets"), prepare and make available to the Company research and statistical
data in connection therewith, supervise the acquisition and disposition of the
U.S. Assets and select and place orders with brokers and dealers for execution
of transactions for U.S. Assets, all in accordance with the Company's investment
objectives and policies and in accordance with guidelines and directions from
the Board of Directors.
2.3 The U.S. Manager shall (i) assist the Funds as they may reasonably
request in the conduct of the Funds' business, subject to the direction and
control of the Board of Directors; (ii) maintain or cause to be maintained for
the Funds all books and records required under the Investment Company Act to the
extent that such books and records are not maintained or furnished by the Funds,
custodians or other agents of the Funds; (iii) furnish at the U.S. Manager's
expense for the use of the Funds such office space and facilities as the Funds
may require for their reasonable needs in the City of New York, and to furnish
at the U.S. Manager's expense clerical services in the United States related to
research, statistical and investment work; and (iv) pay the reasonable salaries,
fees and expenses of such of the Funds' officers and employees (including the
Funds' share of U.S. payroll taxes) and any fees and expenses of such of
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the Funds' directors as are directors, officers or employees of the U.S.
Manager; provided, however, that the Funds, and not the U.S. Manager, shall pay
the fees of members of the Council and shall bear travel expenses of directors
and officers of the Funds who are managing directors, officers or employees of
the U.S. Manager to the extent that such expenses relate to attendance at
meetings of the Board of Directors or any committees thereof.
2.4 The U.S. Manager shall bear all expenses arising out of its duties
hereunder but shall not be responsible for any expenses of the Funds other than
those specifically allocated to the U.S. Manager in paragraphs 2.1, 2.2, 2.3,
2.4 and 2.5. In particular, but without limiting the generality of the
foregoing, the U.S. Manager shall not be responsible, except to the extent of
the compensation of such of the Funds' employees as are managing directors,
officers or employees of the U.S. Manager whose services may be involved, for
the following expenses with respect to the Funds: organization expenses of the
Funds (including out-of-pocket expenses); fees, dues and expenses, incurred by
the Funds in connection with membership in investment company organizations;
fees and expenses of the Funds' administrators, custodians, transfer agents and
registrars; payment for portfolio pricing services to a pricing agent, if any;
expenses of preparing share and other certificates of the Funds, and other
expenses, including but not limited to stamp duties, in connection with the
issuance, offering, distribution, sale or underwriting of securities issued by
the Company or the Thai Fund; expenses of registering or qualifying securities
of the Company for sale; expenses relating to investor and public relations;
freight, insurance and other charges in connection with the shipment of the
Funds' portfolio securities; brokerage commissions, stamp duties or other costs
of acquiring or disposing of any portfolio securities of the Funds; expenses of
maintaining a register of holders of interests in the Thai Fund; expenses of
preparing and distributing reports and notices to the Company, the Company's
Board of Directors, the Council, the Company's administrators, the U.S. Manager,
the Thai Manager and the Company's stockholders, and expenses of communications
among such persons (other than by the Company's stockholders); expenses of
dividends and distributions to the Company and the Company's stockholders; costs
of stationery; expenses incurred in preparing and publishing notices; costs of
stockholders' and other meetings; litigation expenses; legal fees and expenses
of counsel (United States and Thailand) to the Funds and if such counsel are
retained by the Company's directors who are not "interested persons" of the Thai
Fund or the Company, of such counsel; fees and expenses of independent
accountants of the Funds; or expenses relating to the Company's dividend
reinvestment and cash purchase plan.
2.5 In connection with the rendering of services required under paragraphs
2.1, 2.2, 2.3 and 2.4 above, Section 3.1 hereof provides that the Thai Manager
shall furnish certain services to the U.S. Manager, and the U.S. Manager may
contract with or consult with such banks, other securities firms or other
parties in Thailand or elsewhere as it may deem appropriate to obtain
information and advice, including investment recommendations, advice regarding
economic factors and trends, advice as to currency exchange matters, and
clerical and accounting services and other assistance, but any fee, compensation
or expenses to be paid to any such parties shall be paid by the U.S. Manager,
and no obligation shall be incurred on the Funds' behalf in any such respect
(except as to the Thai Manager for which the Funds shall pay the fees described
in Section 3.3 of the Investment Contract).
2.6 The Funds agree to pay in United States dollars to the U.S. Manager,
as full compensation for the services rendered and expenses borne by the U.S.
Manager hereunder, a
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monthly fee, payable, except as provided below, within three New York business
days of the first day of each month following the day on which such payment is
computed, equal to 1/12 of 0.90% of the value of the average weekly net assets
of the Funds up to and including $50 million, plus 1/12 of 0.70% of the value of
the next $50 million of the average weekly net assets of the Funds, plus 1/12 of
0.50% of the value of the average weekly net assets of the Funds over $100
million. The weekly net assets of the Funds for a month shall be determined as
of the close of business in New York on the last New York Stock Exchange
business day of each week where such business day falls within one month, and be
averaged by dividing the total of such weekly net assets by such numbers of
weeks in such month. Such fee shall be computed beginning on the "Closing Date"
(as defined in the Underwriting Agreement) until the termination of this
Agreement for whatever reason. The fee from the Closing Date to the end of the
month during which the Closing Date occurs shall be pro-rated according to the
proportion which such period bears to the full monthly period. Upon termination
of this Agreement before the end of any month, such fee for such part of a month
shall be pro-rated according to the proportion which such period bears to the
full monthly period and shall be payable on the date of termination of this
Agreement. The fees payable from the Funds to the U.S. Manager hereunder shall
be paid from the Thai Fund and/or the U.S. Assets as determined by the Board of
Directors. All such fees paid from the Thai Fund shall be paid subject to
applicable Thai withholding tax. For the purposes of this Agreement, the net
assets of the Funds shall be computed pursuant to the directions of the Board of
Directors.
2.7 Nothing herein shall be construed as prohibiting the U.S. Manager from
providing investment advisory services to, or entering into investment advisory
agreements with, other clients (including other registered investment
companies), including clients which may invest in securities of Thai issuers, or
from utilizing (in providing such services) information furnished to the U.S.
Manager by the Thai Manager or others.
2.8 The U.S. Manager may rely on information reasonably believed by it to
be accurate and reliable. Neither the U.S. Manager nor its officers, directors,
employees, agents or controlling persons as defined in the Investment Company
Act shall be subject to any liability for any act or omission, error of judgment
or mistake of law, or for any loss suffered by the Funds, in the course of,
connected with or arising out of any services to be rendered hereunder, except
by reason of willful misfeasance, bad faith or gross negligence on the part of
the U.S. Manager in the performance of its duties or by reason of reckless
disregard on the part of the U.S. Manager of its obligations and duties under
this Agreement. Any person, even though also employed by the U.S. Manager,
whether or not as part of the Seconded Staff, who may be or may become an
employee of the Funds and paid by the Funds shall be deemed, when acting within
the scope of his employment by the Funds, to be acting in such employment solely
for the Funds and not as an employee or agent of the U.S. Manager.
3. Services to be rendered by the Thai Manager
3.1 The Thai Manager shall (i) furnish to the U.S. Manager or its designee
(a) a daily bulletin concerning Thai stock market developments, (b) a weekly
bulletin concerning securities and other assets owned by the Thai Fund, (c) a
weekly and month-end list of securities values of all Thai assets of the Thai
Fund, and (d) bulletins, from time to time requested by the U.S. Manager,
concerning Thai economic developments, industries and securities; (ii) furnish
to the U.S. Manager such additional information, investment recommendations,
advice and assistance, as the U.S. Manager shall from time to time reasonably
request in order that the U.S. Manager may
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provide the services undertaken by it pursuant to Article 2 hereof; (iii) act in
accordance with the advice of the Seconded Staff in connection with all
investment decisions for the Thai Fund and all determinations as to acquisition
and disposition of securities held by the Thai Fund and with the selection and
placing of orders with brokers and dealers for execution for the Thai Fund; and
(iv) exercise all rights associated with such legal ownership of the assets of
the Thai Fund, subject to the Company's investment objectives and policies and
guidelines and directions of the Board of Directors as set forth in Section
3.A.1 of the Investment Contract.
3.2 The Thai Manager undertakes and agrees (i) to assist the Funds as they
may reasonably request in the conduct of the Funds' business subject to the
direction and control of the Board of Directors; (ii) to maintain or cause to be
maintained for the Funds all books and records required under Thai law and
regulations to the extent that such books and records are not maintained or
furnished by the Thai Custodian or other agents of the Funds; (iii) to furnish
at the Thai Manager's expense for the use of the Funds such office space and
facilities as the Funds may require for their reasonable needs in Thailand and
to furnish at the Thai Manager's expense clerical services in Thailand related
to research, statistical and investment work for the benefit of the Funds; and
(iv) to pay the reasonable salaries, fees and expenses of such of the Funds'
officers and employees (including the Funds' share of Thai payroll taxes) and
any fees and expenses of such of the Funds' directors as are directors, officers
or employees of the Thai Manager; provided, however, that the Funds, and not the
Thai Manager, shall pay the fees of members of the Council and shall bear travel
expenses of directors and officers of the Funds who are managing directors,
officers or employees of the Thai Manager ("Thai Employees") to the extent that
such expenses relate to attendance at meetings of the Board of Directors or any
committees thereof.
3.3 The Thai Manager shall bear all expenses arising out of its duties
hereunder but shall not be responsible for any expenses of the Funds other than
those specifically allocated to the Thai Manager in paragraphs 3.1, 3.2, 3.3 and
3.4. In particular, but without limiting the generality of the foregoing, the
Thai Manager shall not be responsible, except to the extent of the compensation
of such of the Funds' employees as are Thai Employees whose services may be
involved, for the following expenses with respect to the Funds: organization
expenses of the Funds (including out-of-pocket expenses); fees, dues and
expenses incurred by the Funds in connection with membership in investment
company organizations; fees and expenses of the Funds' administrators,
custodians, transfer agents and registrars; payment for portfolio pricing
services to a pricing agent, if any; expenses of preparing share and other
certificates of the Funds, and other expenses, including but not limited to
stamp duties in connection with the issuance, offering, distribution, sale or
underwriting of securities issued by the Company or the Thai Fund; expenses of
registering or qualifying securities of the Company for sale; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Funds' portfolio securities; brokerage
commissions, stamp duties or other costs of acquiring or disposing of any
portfolio securities of the Funds; expenses of maintaining a register of holders
of interests in the Thai Fund; expenses of preparing and distributing reports
and notices to the Company, the Company's Board of Directors, the Council, the
Company's administrators, the U.S. Manager, the Thai Manager and the Company's
stockholders, and expenses of communications among such persons (other than by
the Company's stockholders); expenses of dividends and distributions to the
Company and the Company's stockholders; costs of stationery; expenses incurred
in preparing and publishing notices; costs of stockholders' and other meetings;
litigation expenses; legal fees and expenses of counsel (United States and
Thailand) to the Funds and, if such counsel are retained
A-5
<PAGE> 48
by the Company's directors who are not "interested persons" of the Thai Fund or
the Company, of such counsel; fees and expenses of independent accountants of
the Funds; or expenses relating to the Company's dividend reinvestment and cash
purchase plan.
3.4 The U.S. Manager agrees to work with the Thai Manager, in order to
make their relationship as productive as possible for the benefit of the Funds,
and to further the development of the Thai Manager's ability to provide the
services contemplated by paragraphs 3.1, 3.2, 3.3 and 3.4 hereof. To this end
the U.S. Manager agrees to work closely with the Thai Manager's employees and to
work with the Thai Manager to assist it in developing its research techniques,
procedures and analysis. The U.S. Manager agrees not to furnish, without the
Thai Manager's consent, to any person other than the U.S. Manager's personnel
and directors and representatives of the Funds any tangible research material
that is prepared by the Thai Manager, that is not publicly available, and that
has been stamped or otherwise clearly indicated by the Thai Manager as being
confidential.
3.5 Nothing herein shall be construed as prohibiting the Thai Manager from
providing investment advisory services to, or entering into investment advisory
agreements with, other clients including other investment companies.
3.6 Neither the Thai Manager nor any affiliate of the Thai Manager shall
receive any compensation in connection with the placement or execution of any
transaction for the purchase or sale of securities or for the investment of
funds on behalf of the Funds, except that the Thai Manager or the Thai Manager's
affiliates may receive a commission, fee or other remuneration for acting as
broker in connection with the sale of securities to or by the Funds, if
permitted under the Investment Company Act, as amended.
3.7 The Thai Manager may rely on information reasonably believed by the
Thai Manager to be accurate and reliable. Neither the Thai Manager, the Thai
Manager's officers, directors, employees, agents nor any controlling persons as
defined in the Investment Company Act shall be subject to any liability for any
act or omission, error of judgment or mistake of law or for any loss suffered by
the Funds in the course of, connected with or arising out of any services to be
rendered hereunder except by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Thai Manager's duties or by reason of
reckless disregard by the Thai Manager of the Thai Manager's obligations and
duties under this Agreement. Any person even though also employed by the Thai
Manager, whether or not as part of the Seconded Staff, who may be or become an
employee of the Funds and paid by the Funds shall be deemed, when acting within
the scope of his employment by the Funds, to be acting in such employment solely
for the Funds, and not as employee or agent of the Thai Manager.
4. Effective Date and Termination
4.1 This Agreement shall become effective on the date hereof; shall remain
in effect for a period of two years from the date hereof and shall continue in
effect thereafter, but only so long as such continuance is specifically approved
at least annually by the affirmative vote of (i) a majority of the members of
the Board of Directors who are not parties to this Agreement or interested
persons of the Funds, the Thai Manager or the U.S. Manager, cast in person at a
meeting called for the purpose of voting on such approval, and (ii) a majority
of the Board of Directors or the holders of a majority of the outstanding voting
securities of the Company. This Agreement may nevertheless be terminated at any
time, without any penalty, by the Company's Board of Directors
A-6
<PAGE> 49
or by vote of holders of a majority of the outstanding voting securities of the
Company, or by the U.S. Manager, upon 60 days' written notice delivered or sent
by registered mail, postage prepaid, to the other parties hereto, at their
respective addresses given above or at any other address of which any shall have
notified the others in writing, and shall automatically be terminated in the
event of its assignment (as defined in the Investment Company Act) or
termination of the Advisory Sections of the Investment Contract as set forth in
Section 8.2 thereof or other termination pursuant to Section 8.4 thereof. Any
notice shall be deemed given when received by the addressee.
4.2 This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto other than as permitted pursuant
to Section 4.1 hereof. It may be amended by mutual agreement, but only after
authorization of such amendment (a) by the affirmative vote of (i) the holders
of a majority of the outstanding voting securities of the Company; and (ii) a
majority of the members of the Board of Directors who are not interested persons
of the Funds, the Thai Manager or the U.S Manager, cast in person at a meeting
called for the purpose of voting on such approval; and (b) in accordance with
applicable Thai law.
5. Governing Law
This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the United
States and New York law.
6. Notices
Except as otherwise provided herein, all notices or other communications to
the respective parties hereto shall be deemed to have been duly made when
delivered by airmail, telex or personal delivery at its address specified below
or to such other address as any of the parties hereto may hereafter specify to
the other in writing.
For the Thai Manager:
The Mutual Fund Public Company Limited
1770 IFCT Building
New Petchburi Road
Bangkok, Thailand
For the U.S. Manager:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
For the Company:
The Thai Fund, Inc.
c/o Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
7. Jurisdiction
A-7
<PAGE> 50
7.1 The parties irrevocably agree that any suit, action or proceeding
against the Company or the U.S. Manager arising out of or relating to this
Agreement shall be subject exclusively to the jurisdictions of the United States
District Court for the Southern District of New York and the Supreme Court of
the State of New York, New York County, and irrevocably submit to the
jurisdiction of each such Court in connection with any such suit, action or
proceeding. The parties waive any objection to the laying of venue of any such
suit, action or proceeding in either such Court, and waive any claim that such
suit, action or proceeding has been brought in an inconvenient forum. The
parties irrevocably consent to service of process in connection with any such
suit, action or proceeding by prepaid mail at their respective addresses as set
forth in this Agreement.
7.2 The parties further agree that any suit, action or proceeding against
the Thai Manager arising out of or relating to this Agreement may, at the sole
and unreviewable option of the Company (or the U.S. Manager, if the Company is
not a party), be commenced in the jurisdictions either (i) of the courts of the
Kingdom of Thailand or (ii) of the United States District Court for the Southern
District of New York (the "District Court") or the Supreme Court of the State of
New York, New York County (the "Supreme Court"). In the event the Company (or
the U.S. Manager, if the Company is not a party) exercises its option to
commence a suit, action or proceeding in either the District Court or the
Supreme Court, the Thai Manager irrevocably submits to the jurisdiction of each
such court in connection with any such suit, action or proceeding, and the Thai
Manager further agrees that, in the event the District Court, for whatever
reason, declines to exercise or is determined not to have jurisdiction in
connection with any such suit, action or proceeding, the Company (or the U.S.
Manager, if the Company is not a party) may commence a subsequent such suit,
action or proceeding in the Supreme Court, and the Thai Manager irrevocably
submits to the jurisdiction of the Supreme Court in connection with any such
subsequent suit, action or proceeding. The Thai Manager waives any objection to
the laying of venue of any such suit, action or proceeding in the District Court
or the Supreme Court, and waives any claim that such suit, action or proceeding
has been brought in an inconvenient forum. The Thai Manager irrevocably consents
to service of process in connection with any such suit, action or proceeding by
prepaid mail at its address as set forth in this Agreement.
7.3 To the extent that the Thai Manager or the Company may now or
hereafter be entitled, in any jurisdiction in which judicial proceedings may at
any time be commenced with respect to this Agreement, to claim for itself or its
revenues or properties any immunity from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment, execution of a
judgment or from set-off, banker's lien, counterclaim or any other legal process
or remedy with respect to its obligations under this Agreement and/or to the
extent that in such jurisdiction there may be attributed to the Thai Manager or
the Company such an immunity (whether or not claimed), the Thai Manager and the
Company each hereby to the fullest extent permitted by applicable law
irrevocably agrees not to claim, and hereby to the fullest extent permitted by
applicable law expressly waives, any such immunity, including, without
limitation, a complete waiver of immunity pursuant to the United States Foreign
Sovereign Immunities Act.
8. Language
The governing language of this Agreement shall be English.
9. Headings
A-8
<PAGE> 51
The headings contained in this Agreement are for reference only and shall
not be deemed to limit or affect any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or representatives thereunto duly
authorized, all as of the date first above written.
THE MUTUAL FUND PUBLIC COMPANY LIMITED
By
-------------------------------------------
Name:
Title:
MORGAN STANLEY ASSET MANAGEMENT INC.
By
-------------------------------------------
Name:
Title:
THE THAI FUND, INC.
By
-------------------------------------------
Name:
Title:
A-9
<PAGE> 52
EXHIBIT B
FORM OF CERTIFICATE
BENEFICIAL CERTIFICATE OF
THE THAI FUND PURSUANT TO
INVESTMENT CONTRACT
DATED AS OF , 1997
(THE "INVESTMENT CONTRACT")
Unitholder: The Thai Fund, Inc., a Maryland Corporation.
Issue Date of Units:
Issue Date of Certificate:
Total Number of Units represented hereby:
Per Unit Value:
Time and Place of Payment: As described in the Investment Contract.
Remuneration and other fees: As described in the Investment Contract.
Redemption: Only as specifically permitted in the Investment Contract.
Calculation of Net Asset Value: As described in the Investment
CONTRACT
Duration of the Fund: As described in the Investment Contract.
Notices: As described in the Investment Contract.
Pursuant to the Investment Contract which establishes a fund, The Mutual
Fund Public Company Limited, as Thai Manager, issues this Beneficial Certificate
subject to all of the terms of the Investment Contract.
THE MUTUAL FUND PUBLIC COMPANY LIMITED
By:
-------------------------------------------
Name:
Title:
Seal of The Mutual Fund Public Company Limited: [SEAL]
This Certificate and the interests represented hereby are non-transferable
and may not be held by persons other than The Thai Fund, Inc. This Certificate
and the interest represented hereby are in all respects governed by, and subject
to, the Investment Contract.
B-1
<PAGE> 53
EXHIBIT C
FORM OF COUNCIL AGREEMENT
, 1997
[Name and Address of Member]
Dear ,
We refer to our earlier discussion regarding your proposed appointment to
the Council pursuant to The Thai Fund, Inc. Investment Contract (the "Investment
Contract"). We are now formally inviting you to become a member of the Council
upon the terms and conditions of the Investment Contract, a copy of which is
enclosed for your information.
You will note from Section 13.A.2 of the Investment Contract that the
principal functions of the Council include the following:
(a) consult with The Mutual Fund Public Company Limited on Thailand
economic and securities market matters; and
(b) exercise such other powers and rights as are provided under the
Investment Contract.
Each member's liabilities are limited pursuant to the Investment Contract
as described in Section 13.J thereof. Each member of the Council who does not
receive fees in connection with membership in the Fund's Board of Directors will
be paid an annual fee of $5,000 plus $500 for each meeting of the Council
attended in person.
Formal meetings of the Council will be held at least one time a year in
Thailand.
If you would like to accept our offer to become a member of the Council,
please sign and return the duplicate of this letter by way of agreement.
Yours faithfully,
The Mutual Fund Public Company Limited
The undersigned hereby confirm your offer to become a member of the
Council, upon the terms and conditions of the Investment Contract enclosed with
your letter.
Sincerely,
C-1
<PAGE> 54
FUND INVESTMENT AGREEMENT
THIS FUND INVESTMENT AGREEMENT ("Agreement") is dated as of ,
1997 by and between MORGAN STANLEY ASSET MANAGEMENT INC. (the "Manager"), a
Delaware corporation, with its principal office located at 1221 Avenue of the
Americas, New York, New York 10020 and THE THAI FUND, INC. (the "Fund"), a
Maryland corporation, with its principal office located at c/o Morgan Stanley
Asset Management, Inc., 1221 Avenue of the Americas, New York, New York 10020.
W I T N E S S E T H:
WHEREAS, the Manager has experience and expertise in the management of
assets, securities trading and investment research; and
WHEREAS, the Manager and the Fund desire that the Manager render investment
management services to the Fund, on the terms and conditions hereinafter set
forth.
NOW THEREFORE, the parties hereto agree as follows:
1. Definitions
1.1 "Board of Directors" means the Board of Directors of the Fund.
1.2 "Initial Fund Investment Date" shall have the meaning ascribed thereto
in Section 2.5.
1.3 "Investment Company Act" means the U.S. Investment Company Act of
1940, as amended.
1.4 "Investment Contract" means the agreement dated as of February 17,
1988 between the Fund and the Thai Manager.
2. Services to be rendered by the Manager
2.1 The Manager hereby undertakes and agrees, upon the terms and
conditions herein set forth, to, make investment decisions for the Fund, to
prepare and make available to the Fund research and statistical data in
connection therewith, and to supervise the acquisition and disposition of
securities by the Fund, including the selection of brokers or dealers to carry
out the transactions, all in accordance with the Fund's investment objectives
and policies and in accordance with guidelines and directions from the Fund's
Board of Directors.
2.2 The Manager hereby further undertakes and agrees (i) to assist the
Fund as it may reasonably request in the conduct of its business, subject to the
direction and control of the Board of Directors; (ii) to maintain or cause to be
maintained for the Fund all books and records required under the Investment Fund
Act to the extent that such books and records are not maintained or furnished by
the administrator, custodian or other agents of the Fund; (iii) to furnish at
the Manager's expense for the use of the Fund such office space and facilities
as the Fund may require for its reasonable needs in the City of New York, and to
furnish at the Manager's expense clerical services in the United States related
to research, statistical and investment work; and (iv) to pay the reasonable
salaries, fees and expenses of such of the Fund's officers and employees
(including the Fund's share of U.S. payroll taxes) and any fees and expenses of
such of the Fund's directors as are directors, officers or employees of the
Manager; provided, however, that the Fund, and not
C-2
<PAGE> 55
the Manager, shall bear travel expenses of directors and officers of the Fund
who are managing directors, officers or employees of the Manager to the extent
that such expenses relate to attendance at meetings of the Board of Directors or
any committees thereof.
2.3 The Manager shall bear all expenses arising out of its duties
hereunder but shall not be responsible for any expenses of the Fund other than
those specifically allocated to the Manager in paragraphs 2.1, 2.2, 2.3 and 2.4.
In particular, but without limiting the generality of the foregoing, the Manager
shall not be responsible, except to the extent of the compensation of such of
the Fund's employees as are managing directors, officers or employees of the
Manager whose services may be involved, for the following expenses with respect
to the Fund: organization expenses of the Fund (including out-of-pocket
expenses); fees, dues and expenses incurred by the Fund in connection with
membership in investment company organizations; fees and expenses of the Fund's
custodians, transfer agents and registrars; payment for portfolio pricing
services to a pricing agent, if any; expenses of preparing share and other
certificates of the Fund, and other expenses, including but not limited to stamp
duties, in connection with the issuance, offering, distribution, sale or
underwriting of securities issued by the Fund; expenses of registering or
qualifying securities of the Fund for sale; expenses relating to investor and
public relations; freight, insurance and other charges in connection with the
shipment of the Fund's portfolio securities; brokerage commissions, stamp duties
or other costs of acquiring or disposing of any portfolio securities of the
Fund; expenses of preparing and distributing reports and notices to the Fund,
the Fund's Board of Directors, the Fund's Administrators, the Manager and the
Fund's stockholders, and expenses of communications among such persons (other
than by the Fund's stockholders); expenses of dividends and distributions to the
Fund and the Fund's stockholders; costs of stationery; expenses incurred in
preparing and publishing notices; costs of stockholders' and other meetings;
litigation expenses; legal fees and expenses of counsel (United States and
Thailand) to the Fund and, if such counsel are retained by the Fund's directors
who are not "interested persons" of the Fund, of such counsel; fees and expenses
of independent accountants of the Fund; or expenses relating to the Fund's
dividend reinvestment and cash purchase plan.
2.4 In connection with the rendering of services required under paragraphs
2.1, 2.2 and 2.3 above, the Manager may contract with or consult with such
banks, other securities firms or other parties in Thailand or elsewhere as it
may deem appropriate to obtain information and advice, including investment
recommendations, advice regarding economic factors and trends, advice as to
currency exchange matters, and clerical and accounting services and other
assistance, but any fee, compensation or expenses to be paid to any such parties
shall be paid by the Manager, and no obligation shall be incurred on the Fund's
behalf in any such respect.
2.5 The Fund agrees to pay in United States dollars to the Manager, as
full compensation for the services rendered and expenses borne by the Manager
hereunder, a monthly fee, payable, except as provided below, on the first New
York business day of each month following the day on which such payment is
computed, equal to 1/12 of 0.90% of the value of the average weekly net assets
of the Fund up to and including $50 million, plus 1/12 of 0.70% of the value of
the next $50 million of the average weekly net assets of the Fund, plus 1/12 of
0.50% of the value of the average weekly net assets of the Fund over $100
million. The weekly net assets of the Funds for a month shall be determined as
of the close of business in New York on the last New York Stock Exchange
business day of each week where such last business day falls within one month,
and be averaged by dividing the total of such weekly net assets by such number
of such weeks in such month. Such fee
C-3
<PAGE> 56
shall be payable and be computed beginning upon the termination of the
Investment Contract (the "Initial Fund Investment Date") until the termination
of this Agreement for whatever reason. The fee from the Initial Fund Investment
Date to the end of the month during which the Initial Fund Investment Date
occurs shall be prorated according to the proportion which such period bears to
the full monthly period. Upon termination of this Agreement before the end of
any month, such fee for such part of a month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable on the date of termination of this Agreement. For the purpose of this
Agreement, the net assets of the Fund shall be computed pursuant to the
applicable provisions of the Articles of Incorporation and By-laws of the Fund.
2.6 Nothing herein shall be construed as prohibiting the Manager from
providing investment advisory services to, or entering into investment advisory
agreements with, other clients (including other registered investment
companies), including clients which may invest in securities of Thai issuers, or
from utilizing (in providing such services) information furnished to the Manager
by others.
2.7 The Manager may rely on information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its officers, directors,
employees, agents or controlling persons as defined in the Investment Company
Act shall be subject to any liability for any act or omission, error of judgment
or mistake of law, or for any loss suffered by the Fund, in the course of,
connected with or arising out of any services to be rendered hereunder, except
by reason of willful misfeasance, bad faith or gross negligence on the part of
the Manager in the performance of its duties or by reason of reckless disregard
on the part of the Manager of its obligations and duties under this Agreement.
Any person, even though also employed by the Manager, who may be or may become
an employee of the Fund and paid by the Fund shall be deemed, when acting within
the scope of his employment by the Fund, to be acting in such employment solely
for the Fund and not as an employee or agent of the Manager.
3. Effective Date and Termination
3.1 This Agreement shall become effective on the date hereof; shall remain
in effect for a period of two years from the date hereof and shall continue in
effect thereafter, but only so long as such continuance is specifically approved
at least annually by the affirmative vote of (i) a majority of the members of
the Board of Directors who are not interested persons of the Fund or the
Manager, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) a majority of the Board of Directors or the holders of a
majority of the outstanding voting securities of the Fund. This Agreement may
nevertheless be terminated at any time, without any penalty, by the Fund's Board
of Directors or by vote of holders of a majority of the outstanding voting
securities of the Fund, or by the Manager, upon 60 days' written notice
delivered or sent by registered mail, postage prepaid, to the other parties
hereto, at their respective addresses given above or at any other address of
which any shall have notified the others in writing. This Agreement shall
automatically be terminated in the event of its assignment, provided that an
assignment to a corporate successor to all or substantially all of the Manager's
business or to a wholly-owned subsidiary of such corporate successor which does
not result in a change of actual control or management of the Manager's business
shall not be deemed to be an assignment for purposes of this Agreement. Any
notice shall be deemed given when received by the addressee.
C-4
<PAGE> 57
3.2 This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto other than as permitted pursuant
to Section 3.1 hereof. It may be amended by mutual agreement, but only after
authorization of such amendment by the affirmative vote of (i) the holders of a
majority of the outstanding voting securities of the Fund; and (ii) a majority
of the members of the Board of Directors who are not interested persons of the
Fund or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
4. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of New York, provided, however, that nothing herein shall be construed as being
inconsistent with the Investment Company Act. As used herein, the terms
"interested person", "assignment", and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the Investment Company
Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or representatives thereunto duly
authorized, all as of the date first above written.
MORGAN STANLEY ASSET MANAGEMENT INC.
By /s/
---------------------------------------------
Name:
Title:
THE THAI FUND, INC.
By /s/
---------------------------------------------
Name:
Title:
C-5
<PAGE> 58
ANNEX B
The following table indicates the size of each U.S. investment company
advised or sub-advised by the Manager, the amount of advisory fees or
sub-advisory fees paid to the Manager for the last fiscal year of such
investment company, the amount of other material fees paid to the Manager for
such fiscal year and the advisory fee rate. Average net assets are calculated on
a daily basis for open-end funds and on a weekly basis for closed-end funds.
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- -------------- ---------------------------------------
<S> <C> <C> <C> <C>
Morgan Stanley Institutional Fund, Inc.*(2)
- -- Active Country Allocation Portfolio $ 187,031,777 $ 1,168,571 $0 0.65% of average daily net assets
- -- Aggressive Equity Portfolio 121,791,751 400,006 0 0.80% of average daily net assets
- -- Asian Equity Portfolio 365,212,440 3,378,056 0 0.80% of average daily net assets
- -- Balanced Portfolio 7,573,877 74,832 0 0.50% of average daily net assets
- -- China Growth Portfolio(3) 0 0 0 1.25% of average daily net assets
- -- Emerging Growth Portfolio 82,677,378 1,024,956 0 1.00% of average daily net assets
- -- Emerging Markets Debt Portfolio 162,883,938 1,887,155 0 1.00% of average daily net assets
- -- Emerging Markets Portfolio 1,557,680,866 15,367,651 0 1.25% of average daily net assets
- -- Equity Growth Portfolio 467,132,622 1,192,888 0 0.60% of average daily net assets
- -- European Equity Portfolio 215,681,709 1,034,869 0 0.80% of average daily net assets
- -- Fixed Income Portfolio 122,195,042 559,304 0 0.35% of average daily net assets
- -- Global Equity Portfolio 87,115,900 630,346 0 0.80% of average daily net assets
- -- Global Fixed Income Portfolio 116,017,909 437,198 0 0.40% of average daily net assets
- -- Gold Portfolio(4) 38,303,227 274,000 0 1.00% of average daily net assets
- -- Growth and Income Fund(3) 0 0 0 0.75% of average daily net assets
- -- High Yield Portfolio 123,820,445 438,512 0 0.50% of average daily net assets
- -- International Equity Portfolio 2,412,774,091 15,860,657 0 0.80% of average daily net assets
- -- International Magnum Portfolio 124,710,803 381,756 0 0.80% of average daily net assets
- -- International Small Cap Portfolio 239,291,131 2,092,097 0 0.95% of average daily net assets
- -- Japanese Equity Portfolio 156,667,861 1,642,268 0 0.80% of average daily net assets
- -- Latin American Portfolio 55,950,497 287,055 0 1.10% of average daily net assets
- -- MicroCap Portfolio(3) 0 0 0 1.00% of average daily net assets
- -- Money Market Portfolio 1,278,773,524 3,343,176 0 0.30% of average daily net assets
- -- Mortgaged-Backed Securities 0 0 0 0.35% of average daily net assets
Portfolio(3)
- -- Municipal Bond Portfolio 43,819,386 134,963 0 0.35% of average daily net assets
- -- Municipal Money Market Portfolio 721,197,094 1,932,187 0 0.30% of average daily net assets
- -- Small Cap Value Equity Portfolio 29,921,023 345,122 0 0.85% of average daily net assets
- -- Technology Portfolio(5) 5,504,680 12,699 0 1.00% of average daily net assets
- -- U.S. Real Estate Portfolio 246,501,294 1,017,980 0 0.80% of average daily net assets
- -- Value Equity Portfolio 109,811,808 655,516 0 0.50% of average daily net assets
Morgan Stanley Fund, Inc.*(6)
- -- American Value Fund 54,190,478 363,998 0 0.85% of average daily net assets
- -- Aggressive Equity Fund 30,105,256 31,323 0 0.90% of average daily net assets
- -- Asian Growth Fund 394,810,098 3,762,252 0 1.00% of average daily net assets
- -- Emerging Markets Fund 174,767,303 1,081,943 0 1.25% of average daily net assets
- -- Emerging Markets Debt Fund(3) 0 0 0 1.25% of average daily net assets
- -- Equity Growth Fund(3) 0 0 0 0.70% of average daily net assets
- -- European Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- Global Equity Allocation Fund 161,349,524 1,047,751 0 1.00% of average daily net assets
- -- Global Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- Global Fixed Income Fund 9,525,078 121,568 0 0.75% of average daily net assets
- -- Government Obligations Money 122,965,353 0 0 0.45% of the first $250 million
Market(7) 0.40% of the next $250 million
0.35% of the excess over $500 million
</TABLE>
B-1
<PAGE> 59
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- ---------------------------------------
<S> <C> <C> <C> <C>
- -- Growth and Income Fund(3) $ 0 $ 0 $0 1.00% of average daily net assets
- -- High Yield Fund 16,444,430 12,710 0 0.75% of average daily net assets
- -- Japanese Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- International Magnum Fund 24,529,959 0 0 0.80% of average daily net assets
- -- Latin America Fund 53,413,053 218,502 0 1.25% of average daily net assets
- -- Money Market Fund(7) 153,358,157 0 0 0.45% of the first $250 million
0.40% of the next $250 million
0.35% of the excess over $500 million
- -- Tax Free Money Market Fund(3) 0 0 0 0.45% of the first $250 million
0.40% of the next $250 million
0.35% of the excess over $500 million
- -- U.S. Real Estate Fund 21,362,116 8,641 0 1.00% of average daily net assets
- -- Worldwide High Income Fund 164,403,651 527,214 0 0.75% of average daily net assets
Morgan Stanley Universal Funds, Inc.*
- -- Asian Equity(3) 0 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Emerging Markets Debt(3) 0 0 0 0.75% of the first $500 million
0.70% of the next $500 million
0.65% of the excess over $1 billion
- -- Emerging Markets Equity 15,607,752 32,000 0 1.25% of the first $500 million
1.20% of the next $500 million
1.15% of the excess over $1 billion
- -- Global Equity(8) 5,225,659 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Growth(8) 2,843,221 0 0 0.55% of the first $500 million
0.50% of the next $500 million
0.45% of the excess over $1 billion
- -- International Magnum(8) 10,283,605 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Money Market(3) $ 0 $ 0 $0 0.30% of the first $500 million
0.25% of the next $500 million
0.20% of the excess over $1 billion
- -- U.S. Real Estate(8) 0 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
The Brazilian Investment Fund, Inc. 58,816,028 425,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
The Latin American Discovery Fund, Inc. 204,346,643 1,899,000 0 1.15% of average weekly net assets
The Malaysia Fund, Inc. 192,501,967 1,330,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
Morgan Stanley Africa Investment Fund, 310,803,693 3,106,000 0 1.20% of average weekly net assets
Inc.
Morgan Stanley Asia-Pacific Fund, Inc. 854,649,586 8,796,000 0 1.00% of average weekly net assets
Morgan Stanley Emerging Markets Debt 321,966,172 3,125,000 0 1.00% of average weekly net assets
Fund, Inc.
Morgan Stanley Emerging Markets Fund, 407,981,941 4,713,000 0 1.25% of average weekly net assets
Inc.
</TABLE>
B-2
<PAGE> 60
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- -------------- ---------------------------------------
<S> <C> <C> <C> <C>
Morgan Stanley Global Opportunity Bond 65,384,292 585,000 0 1.00% of average weekly net assets
Fund, Inc.
Morgan Stanley High Yield Fund, Inc. 129,972,796 842,000 0 0.70% of average weekly net assets
Morgan Stanley India Investment Fund, 341,625,451 3,812,000 0 1.10% of average weekly net assets
Inc.
Morgan Stanley Russia & New Europe 142,333,723 400,000 0 1.60% of average weekly net assets
Fund, Inc.
The Pakistan Investment Fund, Inc. 67,931,758 743,000 0 1.00% of average weekly net assets
The Thai Fund, Inc. 183,531,329 1,812,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
The Turkish Investment Fund, Inc. 51,846,955 359,000 0 0.95% of the first $50 million
0.75% of the next $50 million
0.55% of the excess over $100 million
</TABLE>
- ---------------
* With respect to each of Morgan Stanley Institutional Fund, Inc., Morgan
Stanley Fund, Inc. and Morgan Stanley Universal Funds, Inc., MSAM has
voluntarily agreed to a reduction in the fees payable to it and to
reimburse each portfolio, if necessary, if payment of advisory fees would
cause the total annual operating expenses of such portfolio to exceed
certain minimums.
(1) Net of any fees waived by the Manager for the last fiscal year.
(2) Includes Class A and Class B shares.
(3) Currently Inactive.
(4) Management fee includes a 0.40% sub-advisory fee payable by the Manager.
(5) Commenced operations March 16, 1996.
(6) Includes Class A, Class B and Class C shares. Fiscal year end June 30, 1996.
(7) Formerly, a portfolio of PCS Cash Fund, which was merged with and into
Morgan Stanley Fund, Inc. on September 27, 1996.
(8) Portfolio had not commenced operations as of December 31, 1996.
B-3
<PAGE> 61
PROXY
THE THAI FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints WARREN J. OLSEN,
MICHAEL F. KLEIN, VALERIE Y. LEWIS and HAROLD J. SCHAAFF, JR., and each of
them, as proxies for the undersigned, with full power of substitution and
resubstitution, and hereby authorizes said proxies, and each of them, to
represent and vote, as designated on the reverse side, all stock of the
above Company held of record by the undersigned on March 24, 1997 at the
Annual Meeting of Stockholders to be held on April 30, 1997, and at any
adjournment thereof.
The undersigned hereby revokes any and all proxies with respect to such
stock heretofore given by the undersigned. The undersigned acknowledges receipt
of the Proxy Statement dated March 27, 1997.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE.)
SEE REVERSE SIDE
<PAGE> 62
[X] Please mark your votes as in this sample.
1. Election of the following nominees as Directors:
<TABLE>
<C> <C> <S>
FOR WITHHELD Class II Nominees:
[ ] [ ] John W. Croghan and Graham E. Jones and Snoh Unakul
---------------------------------------------------
For all nominees except as noted above
</TABLE>
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
2. Ratification of the selection of Price Waterhouse LLP as independent
accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of the Investment Contract between The Thai Fund Inc. and The Mutual
Fund Public Company Limited and the Technical Assistance and Seconding
Agreement among The Thai Fund Inc., Morgan Stanley Asset Management Inc. and
The Mutual Fund Public Company Limited.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Approval of the Fund Investment Agreement between The Thai Fund Inc. and
Morgan Stanley Asset Management Inc.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In the discretion of such proxies, upon any and all other business as may
properly come before the Meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE THREE CLASS II NOMINEES AND IN FAVOR OF PROPOSAL NO. 2,
PROPOSAL NO. 3 AND PROPOSAL NO. 4.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS. WHEN SHARES ARE HELD BY JOINT TENANTS,
EACH JOINT TENANT SHOULD SIGN.
SIGNATURES(S)
- --------------------------------------
DATE , 1997
----------------------
When signing as attorney, executor, administrator, trustee, guardian or
custodian, please sign full title as such. If a corporation, please sign full
corporate name by authorized officer and indicate the signer's office.
If a partnership, please sign in partnership name. PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
