<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
INFORMATION REQUIRED IN PROXY STATEMENTS
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CS FIRST BOSTON INVESTMENT FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 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:
------------------------------------------------------------------------
/X/ 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
CS FIRST BOSTON INVESTMENT FUNDS, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
------------------------
To our Stockholders:
Notice is hereby given that a Special Meeting of Stockholders (the
"Meeting") of the Institutional Government Fund (the "Fund") of CS First Boston
Investment Funds, Inc. (the "Company") will be held on Tuesday, June 13, 1995,
at 2:00 P.M., New York City time, at One Citicorp Center, 153 East 53rd Street,
New York, New York 10022, for the following purposes:
1. To elect Directors for the ensuing year.
2. To ratify the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the year 1995.
3. To approve a new Investment Advisory Agreement for the Fund between
the Company and BEA Associates containing substantially the same terms,
conditions and fees as the Fund's previous investment advisory agreement
with CS First Boston Investment Management Corporation.
4. To approve an amendment to the Articles of Incorporation of the
Company to change its name to "BEA Investment Funds, Inc."
5. To consider and act upon any other business as may properly come
before the Meeting or any adjournments thereof.
HAL LIEBES
Secretary
Dated: June 1, 1995
WHETHER OR NOT YOU 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 OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY PROMPTLY.
<PAGE> 3
CS FIRST BOSTON INVESTMENT FUNDS, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
------------------------
PROXY STATEMENT
------------------------
This statement is furnished by the Board of Directors (the "Directors") of
CS First Boston Investment Funds, Inc. (the "Company") in connection with the
solicitation by it of proxies for use at a Special Meeting of Stockholders (the
"Meeting") of the Institutional Government Fund (the "Fund") to be held on
Tuesday, June 13, 1995 at 2:00 P.M., New York City time, at One Citicorp Center,
153 East 53rd Street, New York, New York 10022, the principal executive office
of BEA Associates ("BEA" or the "New Adviser"). The purpose of the Meeting and
the matters to be acted upon are set forth in the accompanying Notice of Special
Meeting of Stockholders.
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. However, if no instructions are specified and the
proxy is signed, shares will be voted FOR the election of each nominee for
director and FOR the other proposals. 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
requesting such action at the Meeting.
The close of business on May 30, 1995 has been fixed as the record date for
the determination of stockholders entitled to notice of, and to vote at, the
Meeting. On that date, the Fund had 4,856,980 shares of Common Stock outstanding
and entitled to vote. Each share will be entitled to one vote at the Meeting. It
is expected that the Notice of Special Meeting, Proxy Statement and form of
Proxy will first be mailed to stockholders on or about June 1, 1995. The Company
will furnish, without charge, a copy of its Annual Report for the fiscal year
which ended December 31, 1994, upon written or oral request to the Company c/o
BEA Associates, One Citicorp Center, 153 East 53rd Street, New York, New York
10022, telephone (800) 852-4750.
The holders of one-third of the shares of the Fund outstanding at the close
of business on the record date, present in person or by proxy, will constitute a
quorum for the Meeting. Properly executed proxies that are marked "ABSTAIN" and
broker non-votes will be treated as present for determining whether a quorum has
been achieved at the Meeting. In the event that a quorum is not present or
represented, the holders of a majority of the shares present in person or by
proxy may adjourn the Meeting, without notice other than announcement at the
meeting, until the requisite number of shares entitled to vote at the Meeting
shall be present. If a quorum is present, but sufficient votes to approve one or
more of the proposed items are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitations
of proxies. Any such adjournment will require the affirmative vote of a majority
of those shares present at the Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxies will vote for the proposed
adjournment all shares that they are entitled to vote with respect to each item,
unless directed to disapprove the item, in which case such shares will be voted
against the proposed adjournments.
The election of Directors requires for approval the affirmative vote of a
plurality of the shares represented at the meeting (Proposal No. 1). The
affirmative vote of the holders of a simple majority of the shares represented
at the meeting is required for the ratification of the selection of Price
Waterhouse LLP ("Price Waterhouse") as independent accountants for the Fund
(Proposal No. 2). The approval of the new Investment Advisory Agreement with BEA
(Proposal No. 3) requires the affirmative vote of a "majority of the outstanding
voting securities" of the Fund which, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), means the lesser of (1) 67% of the Fund's
shares present at a meeting of its shareholders if the owners of more than 50%
of the shares of the Fund then outstanding are present in person or by proxy or
(2) more than 50% of the Fund's outstanding shares. The affirmative vote of a
majority of the outstanding shares of the Company is required for passage of the
change of the Company's name (Proposal No. 4). The only class of outstanding
shares of the Company are shares in the Fund.
The expense of solicitation will be borne by the Company and by CS First
Boston Investment Management Corporation ("CSFBIM") and will include
reimbursement to brokerage firms and others for expenses in forwarding proxy
solicitation material to beneficial owners. The solicitation of proxies will be
largely by mail, but may include, without cost to the Company, telephonic,
telegraphic or oral communications by employees of CSFBIM or BEA.
<PAGE> 4
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, four Directors will be elected to hold office until the
next annual meeting following their election and until their respective
successors are elected and qualify. It is the intention of the persons named in
the accompanying form of Proxy to vote for the election of Desmond G.
FitzGerald, Bruce N. Lehmann, Robert G. Stone, Jr. and Richard H. Francis. All
of the nominees except for Richard H. Francis are currently members of the Board
of Directors. Each of the nominees has consented to be named in this Proxy
Statement and to serve as a Director 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.
INFORMATION REGARDING NOMINEES AND OFFICERS
DIRECTORS
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION POSITION WITH COMPANY
- ------------------------------ --- -------------------------------------------- -----------------------------
<S> <C> <C> <C>
Desmond G. FitzGerald......... 51 Chairman of the Board of North American Director since 1988
25 Carrington Drive Properties Group (including various
Greenwich, CT 06831 predecessor and affiliated entities) since
1987 and Chairman of the Board of U.S.
Guaranteed Finance Corporation since 1994.
Director of Hilliard Farber & Co., Inc. and
Putnam Trust Company. Formerly Director of
Langdon P. Cook & Co., Inc. from 1974 to
1986, and Discount Corporation of New York.
Trustee of the Childrens' Aid Society.
Bruce N. Lehmann.............. 39 Professor of Economics and Finance, Graduate Director since 1988
8419 Prestwick Drive School of International Relations and
La Jolla, CA 92037 Pacific Studies, University of California at
San Diego since 1992. Associate Professor of
Economics and Finance, Graduate School of
Business, Columbia University from 1986 to
1991 and Assistant Professor of Economics
and Finance, Graduate School of Business and
Department of Economics, Columbia University
from 1983 to 1986. Faculty Research
Associate of the National Bureau of Economic
Research since 1989 and Faculty Research
Fellow from 1983 to 1989. Associate Editor,
The Review of Financial Studies since 1991.
Associate Editor, Review of Financial and
Quantitative Analysis since 1992. Member,
Investment Committee, UC San Diego
Foundation since 1992.
Robert G. Stone, Jr........... 72 Chairman of the Board and Director of Kirby Director since 1988
405 Lexington Avenue Corporation (formerly Kirby Exploration
New York, NY 10174 Company) since 1971. Director of BHP
Petroleum, The Chubb Corporation, Core
Industries, Inc., Corning Incorporated, The
Japan Fund, Inc., The Pittston Company,
Russell Reynolds Associates, Inc., various
funds managed by Scudder, Stevens & Clark,
Inc., Tandem Computers Incorporated, Novacor
Inc. and Tejas Gas Corporation.
Richard H. Francis............ 62 Currently retired; Executive Vice President Director-nominee and
c/o BEA Associates and Chief Financial Officer of Pan Am President and Chief Executive
153 E. 53rd Street Corporation and Pan America World Airways, Officer since April 1995***
New York, NY 10022 Inc. (1988 through 1991).
</TABLE>
2
<PAGE> 5
CURRENT OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION POSITION WITH COMPANY
- ------------------------------ --- -------------------------------------------- -----------------------------
<S> <C> <C> <C>
Mark Silverstein.............. 32 Vice President of BEA Associates from 1991 Vice President since April
153 East 53rd Street through present. Prior to joining BEA, he 1995***
New York, NY 10022 worked in Fixed Income Research at CS First
Boston from 1985 to 1991.
Harvey M. Rosen............... 38 Senior Vice President and Director of Fund Treasurer since 1993***
73 Tremont St. Accounting and Fund Administration of Mutual
Boston, MA 02108 Funds Service Company. Previously, Fund
Accounting Department Manager, Fidelity
Investments, from April 1987 to April 1988,
and Assistant Vice President -- Fund
Accounting Group Manager, The Boston Company
Advisors, Inc. prior to April 1987.
Paul P. Stamler**............. 34 Vice President of BEA Associates (since June Assistant Treasurer since
153 East 53rd Street 1993). From April 1992 to May 1993, Mr. April 1995***
New York, NY 10022 Stamler was self-employed as a certified
public accountant. From June 1988 to March
1992, Mr. Stamler was a Vice President at
Bear, Stearns & Co. Inc. Mr. Stamler is
currently also the Senior Vice President of
The Latin America Equity Fund, Inc., The
Latin America Investment Fund, Inc., The
Portugal Fund, Inc., The Indonesia Fund,
Inc., The Chile Fund, Inc., The Brazilian
Equity Fund, Inc., The Emerging Markets
Infrastructure Fund, Inc., and The Emerging
Markets Telecommunications Fund, Inc.
John M. Corcoran.............. 30 Assistant Vice President, Manager of Assistant Treasurer since
73 Tremont Street Administration of Mutual Funds Service 1994
Boston, MA 02108 Company since October 1993. Prior to that,
was Audit Manager at Ernst & Young from
August 1987 to September 1993.
Michael A. Pignataro**........ 35 Assistant Vice President and Chief Assistant Vice President and
153 East 53rd Street Administrative Officer for Investment Assistant Secretary since
New York, NY 10022 Companies of BEA (December 1990 through April 1995***
Present); Assistant Vice President and Chief
Administrative Officer for Investment
Companies of Basic Appraisals, Inc.
(formerly BEA Associates, Inc.) (August 1984
through December 1990); Chief Financial
Officer and Secretary of The Portugal Fund,
Inc., The Latin America Investment Fund,
Inc., The Latin America Equity Fund, Inc.,
The Brazilian Equity Fund, Inc., The
Emerging Markets Infrastructure Fund, Inc.,
The Emerging Markets Telecommunications
Fund, Inc. and The Chile Fund, Inc.; Chief
Financial Officer and Assistant Secretary of
The Indonesia Fund, Inc.
Hal Liebes*................... 30 Chief Compliance Officer of CS First Boston Secretary since 1994***
599 Lexington Avenue Investment Management Corporation and
New York, NY 10022 Assistant Vice President of CS First Boston
Corporation since 1994. Prior to that, he
was a staff attorney in the Enforcement
Division of the U.S. Securities and Exchange
Commission from March 1991 to March 1994 and
Corporate Associate at Morgan Lewis &
Bockius from September 1989 to March 1991.
It is anticipated that upon consummation of
the Transaction, he will become Vice
President -- Legal Counsel of BEA.
</TABLE>
- ---------------
* An "interested person" of the Company as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), due to his affiliation with
CSFBIM.
** An "interested person" of the Company as defined in the 1940 Act, due to his
affiliation with BEA.
*** Each officer of the Company (the "Officers") will hold such office until a
successor has been elected by the Board of Directors.
3
<PAGE> 6
As of May 30, 1995, none of the Officers, Directors or Director-nominees of
the Company beneficially owned any shares of Common Stock of the Fund.
The Company pays annual compensation of $10,000, plus $500 for attendance
per meeting of the Board of Directors or Committees thereof, plus certain
out-of-pocket expenses, to each Director that is not affiliated with its
investment adviser (all of the director nominees are not affiliated with CSFBIM
or BEA).
The following table sets forth the aggregate compensation from the Company
for the fiscal year ended December 31, 1994, for each Director who is not
affiliated with the Company's investment adviser, and for such Directors as a
group:
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
NAME OF DIRECTOR FROM COMPANY
--------------------------------------------------------- ----------------------
<S> <C>
Desmond G. FitzGerald.................................... $ 13,000
Bruce N. Lehmann......................................... $ 13,000
Robert G. Stone, Jr...................................... $ 13,000
----------
Total.................................................. $ 39,000
=================
</TABLE>
By virtue of the responsibilities assumed by its investment adviser, the
Company itself requires no employees other than its Officers, and none of its
Officers devotes full time responsibilities to the affairs of the Company or
receives any compensation from the Company.
The Board of Directors has an Audit Committee. The Audit Committee makes
recommendations to the full Board of Directors with respect to the management of
the Company's independent accountants and reviews with the independent
accountants the plan and results of the audit engagement and matters having a
material effect upon the Company's financial operations. As of the date hereof,
the members of the Audit Committee are Messrs. FitzGerald, Lehmann and Stone.
The Board of Directors does not have a Nominating Committee.
During 1994, there were four meetings of the Board of Directors and two
meetings of the Audit Committee. Each Director attended 75% or more of the
aggregate number of the meetings of the Board of Directors and committees on
which he served during the period for which he was a Director.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR
THE ELECTION OF THE DIRECTORS NOMINATED IN PROPOSAL NO. 1.
4
<PAGE> 7
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Directors, a majority of whom are not "interested persons" of the
Company (as defined in the 1940 Act), have selected and unanimously approved
Price Waterhouse LLP as independent accountants for the Company for the year
ending December 31, 1995. Price Waterhouse LLP have been the independent
accountants of the Company since its organization. The ratification of the
selection of independent accountants is to be voted upon at the Meeting and it
is intended that the persons named in the accompanying proxy vote for Price
Waterhouse LLP. A representative of Price Waterhouse LLP is expected to be
present at the Meeting, will have the opportunity to make a statement and is
expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR
PROPOSAL NO. 2.
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
(PROPOSAL NO. 3)
It is proposed that the Company enter into a new investment advisory
agreement for the Fund (the "New Advisory Agreement") with BEA, a New York
investment manager owned by CS Holding through its indirect subsidiary, Credit
Suisse Capital Corporation ("CS Capital"), in connection with the transfer by
CSFBIM of substantially all of its investment management personnel and
operations to BEA. The transfer of the investment management personnel and
operations is in connection with the sale of CSFBIM's assets and the transfer of
certain of its liabilities to CS Capital (the "Transaction"). CSFBIM is also
principally owned indirectly by CS Holding. At a meeting held on April 19, 1995,
the Board of Directors, a majority of whom were not "interested persons" of the
Company (as defined in the 1940 Act), unanimously approved an interim advisory
agreement for the Fund between the Company and BEA (the "Interim Advisory
Agreement") containing the same terms as the previous advisory agreement of the
Fund between the Company and CSFBIM (the "Previous Advisory Agreement"), except
for the identity of the parties, commencement dates and the payment of fees,
which have been waived by BEA under the Interim Advisory Agreement. On April 19,
1995, BEA became the Fund's new investment adviser under the Interim Advisory
Agreement. The Interim Advisory Agreement shall terminate, pursuant to its
terms, upon approval by the stockholders of the New Advisory Agreement, which,
except for the identity of the parties and commencement dates, contains the same
terms as the Previous Advisory Agreement, including fee rate. The New Advisory
Agreement was approved by the Company's directors at their April 19, 1995
meeting. See "The Previous and Interim Advisory Agreements" and "The New
Advisory Agreement."
BACKGROUND CONCERNING THE TRANSACTION
CS First Boston, Inc. and CS Holding have agreed that it would be desirable
to more closely integrate their respective investment management businesses on a
worldwide basis. This integration is being implemented in the United States
through the Transaction. CS First Boston, Inc., CSFBIM and CS Capital have
entered into an agreement (the "Asset Purchase Agreement") providing for the
sale of CSFBIM assets to, and the assumption of certain CSFBIM liabilities by,
CS Capital. The aggregate consideration to be received by CSFBIM is
approximately $8.3 million (including the value of liabilities to be assumed,
based on March 31, 1995 estimates, but excluding the value of certain contingent
and potential liabilities to be assumed), subject to certain adjustments. On
April 24, 1995, the investment management personnel of CSFBIM transferred to
BEA, and BEA became the Fund's investment adviser under the Interim Advisory
Agreement. The remainder of the Transaction is expected to be consummated
shortly after the Meeting. It is contemplated that after a brief transition
period following the consummation of the Transaction, CSFBIM will cease its
operations.
5
<PAGE> 8
SECTION 15(F)
In the Asset Purchase Agreement, CS Capital agreed to use its best efforts
to comply, and to use its best efforts to cause BEA to comply, with the
provisions of Section 15(f) of the 1940 Act. That section provides, in pertinent
part, that an investment adviser to an investment company may receive any amount
or benefit in connection with a sale of securities of, or a sale of any other
interest in, the investment adviser that results in an assignment of an
investment advisory contract if (1) for a period of three years after the time
of the assignment, at least 75% of the members of the board of directors of the
investment company are not "interested persons" (as defined in the 1940 Act) of
the new investment adviser or its predecessor; and (2) for a period of two years
from the event, there is no "unfair burden" imposed on the investment company as
a result of the transaction. The term "unfair burden" is defined in Section
15(f) to include any arrangement during the two-year period after the
transaction whereby the investment adviser or its predecessor or successor, or
any interested person of such adviser, predecessor or successor, receives or is
entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from, or on behalf of the
investment company (other than bona fide ordinary compensation as principal
underwriter for such investment company).
EVALUATION BY THE BOARD
The Directors discussed the Transaction and its implications for the Fund
at their meeting held on April 19, 1995. The Directors received from
representatives of BEA (the "Representatives") such information as the Directors
requested and as was reasonably necessary to evaluate the New Adviser and the
terms of the proposed Interim Advisory Agreement and the proposed New Advisory
Agreement, and to determine whether approval of the New Adviser and such
agreements was in the best interest of the Company and its stockholders.
During the meeting, the Directors (including a majority of those Directors
who are not "interested persons" of the Company, as that term is defined in the
1940 Act), after evaluation and with the advice and assistance of independent
counsel to such Directors, voted to approve the Interim Advisory Agreement and
the New Advisory Agreement described below.
The Board of Directors also approved the proposal to change the name of the
Company to "BEA Investment Funds, Inc." in order to reflect the change in the
Company's adviser, as more fully discussed under Proposal No. 4 below.
During their deliberations, the Directors reviewed and discussed financial
and other information provided by the Representatives relating to BEA,
addressing issues that the Directors, with the assistance of independent
counsel, determined were raised by the Transaction. Among other things, the
Directors considered the fact that BEA is a significant and sophisticated
investment management company with substantial experience in providing
investment advisory, management, and administrative services to investment
companies, pension funds and other institutional clients. The Directors
evaluated the management and operations of BEA and information provided by BEA
regarding the personnel proposed to manage the Company, the investment
performance of BEA, and the fact that BEA has stated that it has no plan to
change or to recommend that the stockholders of the Company change any of the
Fund's investment policies or objectives. The Directors also took into account
the fact that BEA has stated its intention to employ certain of CSFBIM's key
employees currently involved in the management and administration of the
Company. BEA therefore expects to provide the Company and the Fund with a degree
of continuity in portfolio management; however, there can be no assurance that
the investment professionals of either CSFBIM or BEA will continue to serve in
their current capacities. The Directors also considered that, following the
transfer of the assets of CSFBIM, CSFBIM would be unable to continue to provide
either management or investment advisory services to the Company and the Fund
and that the only proposal presented to the Directors was the assumption of
management of the Company and the Fund by BEA. The Board of Directors obtained
assurances from the Representatives that BEA would provide satisfactory advisory
and other services during the interim period and thereafter to the Company and
the Fund of a scope and quality at least equivalent, in
6
<PAGE> 9
the Directors' judgment, to the scope and quality of services previously
provided to the Company and the Fund.
The Directors recommend that the stockholders of the Fund approve the New
Advisory Agreement.
THE PREVIOUS AND INTERIM ADVISORY AGREEMENTS
BEA presently acts as the investment adviser to the Fund pursuant to the
Interim Advisory Agreement. Prior to approval by the Directors of the Interim
Advisory Agreement, CSFBIM served as investment adviser to the Fund pursuant to
the Previous Advisory Agreement, dated as of January 22, 1991, between the
Company and CSFBIM. The Previous Advisory Agreement was approved by the
Directors and the Fund's initial stockholders at a meeting held on December 11,
1990. The Previous Advisory Agreement was last approved for continuance by the
Board of Directors at a meeting held on January 25, 1995. The provisions of the
Interim Advisory Agreement and the Previous Advisory Agreement are the same,
except for the identity of the parties, commencement dates and the payment of
fees, which have been waived by BEA under the Interim Advisory Agreement. See
"Service Provided" and "Fees" below.
Service Provided. Both the Previous Advisory Agreement and the Interim
Advisory Agreement provide that the investment adviser, subject to the general
supervision of the Directors and in accordance with the investment objectives,
policies and restrictions of the Fund, will manage the investment operations of
the Fund and the composition of the portfolio of securities and investments
(including cash) belonging to the Fund. It is the responsibility of the
investment adviser to make investment decisions for the Fund and to place
purchase and sale orders for portfolio transactions. The investment adviser
furnishes a continuous investment program for the Fund, maintains books and
records with respect to its securities transactions, and pays all expenses
involved in management of the Fund's investments. The investment adviser pays
the salaries, fees and expenses of directors or officers of the Company who are
directors or partners, as the case may be, officers and employees of the
investment adviser. The Previous Advisory Agreement and the Interim Advisory
Agreement provide that the investment adviser shall not be liable to the Fund or
any stockholder for anything done or omitted by it except acts or omissions
involving willful misfeasance, bad faith, gross negligence or reckless disregard
of duties imposed upon it pursuant to the Previous Advisory Agreement or the
Interim Advisory Agreement, as the case may be, or for any losses that may be
sustained in the purchase, holding or sale of securities.
The Interim Advisory Agreement, which was approved by the Board of
Directors as a temporary measure to provide for continuity of management of the
Fund during and following the Transaction, will continue until the approval of
the New Advisory Agreement by the stockholders of the Fund, and thereupon will
automatically terminate. See "The New Advisory Agreement" below.
Fees. For the services provided and expenses formerly borne by CSFBIM
under the Previous Advisory Agreement, the Fund paid to CSFBIM as full
compensation therefor, a fee, computed daily and payable monthly, at an annual
rate equal to 0.50% of the average daily net assets of the Fund. For the fiscal
year ended December 31, 1994, CSFBIM was paid a fee of $137,243, which was
equivalent to an annual rate of 0.50% of the average daily net assets of the
Fund. Under the Interim Advisory Agreement, BEA has agreed not to charge an
advisory fee.
THE NEW ADVISORY AGREEMENT
Service Provided. The terms of the New Advisory Agreement for the Fund
between the Company and BEA are the same as the terms of the Previous Advisory
Agreement, except as to the commencement and termination dates and the identity
of the parties. A copy of the New Advisory Agreement is attached hereto as
Exhibit A.
If approved by the Fund's stockholders, the New Advisory Agreement shall
continue in effect until January 31, 1997, and from year to year thereafter,
subject to termination as hereinafter provided, if such continuance is
specifically approved at least annually (i) by a vote of the holders of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act) or by a vote of the Directors, cast in
7
<PAGE> 10
person at a meeting called for the purpose of voting on such approval, and (ii)
by a vote of a majority of the directors who are not parties to the New Advisory
Agreement or "interested persons" (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The New Advisory Agreement, like the Previous Advisory Agreement, will
terminate automatically upon its assignment and is terminable at any time
without penalty by a vote of the Directors or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) on 60
days' written notice to the New Adviser, or by the New Adviser on 90 days'
written notice to the Company.
Fees. As compensation for services provided and the expenses borne by the
New Adviser under the New Advisory Agreement, the Fund will pay the New Adviser
the same fee as was paid to CSFBIM under the Previous Advisory Agreement, i.e.,
a fee computed daily and payable monthly, at an annual rate equal to 0.50% of
the Fund's average daily net assets.
In order to be approved by stockholders of the Fund, the New Advisory
Agreement must be approved by the holders of a majority of the outstanding
voting securities of the Fund, which is defined in the 1940 Act as the lesser of
(i) 67% of such shares present at the Meeting if the owners of more than 50% of
the shares of the Fund then outstanding are present in person or by proxy, or
(ii) more than 50% of the outstanding shares.
In the event stockholder approval of the New Advisory Agreement is not
obtained, the Directors will take such action as they deem to be in the best
interests of the Company and the Fund's stockholders.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR
PROPOSAL NO. 3.
APPROVAL OF AN AMENDMENT TO THE
ARTICLES OF INCORPORATION OF THE COMPANY
TO CHANGE ITS NAME TO "BEA INVESTMENT FUNDS, INC."
(PROPOSAL NO. 4)
The Directors have considered and approved, subject to stockholder
approval, an amendment to the Company's Articles of Incorporation to change its
name to "BEA Investment Funds, Inc." The proposed amendment to the Company's
name would reflect the Fund's change of investment adviser (see Proposal No. 3).
Under the Company's Articles of Incorporation, and Maryland law, this
amendment of the Articles of Incorporation requires the affirmative vote of a
majority of the Company's outstanding shares. The only class of outstanding
shares of the Company are shares in the Fund. In the event that the stockholders
do not approve the proposed amendment to the Articles of Incorporation and the
change in name is not adopted, the Directors will consider other appropriate
action.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR
PROPOSAL NO. 4.
CERTAIN INFORMATION ABOUT THE
NEW ADVISER AND THE COMPANY
BEA is a general partnership organized under the laws of the State of New
York and, together with its predecessor firms, has been engaged in the
investment advisory business for over 50 years. CS Capital is an 80% partner and
Basic Appraisals, Inc., which is owned by members of BEA management, is a 20%
partner in BEA. CS Capital is a wholly-owned subsidiary of Credit Suisse
Investment Corporation, which is a wholly-owned subsidiary of Credit Suisse. In
turn, Credit Suisse is a subsidiary of CS Holding, which is also the ultimate
parent of CSFBIM. No one person or entity possesses a controlling interest in
Basic Appraisals, Inc. BEA is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended.
BEA is a diversified asset manager, handling global equity, balanced, fixed
income and derivative securities accounts for private individuals, as well as
corporate pension and profit-sharing plans, state pension
8
<PAGE> 11
funds, union funds, endowments and other charitable institutions. As of December
31, 1994, BEA managed approximately $21 billion in assets, of which
approximately $2.6 billion are assets of registered investment companies under
the 1940 Act.
As an investment adviser, BEA emphasizes a global investment strategy. BEA
currently acts as investment adviser for fourteen registered investment
companies under the 1940 Act. They are: The Chile Fund, Inc., The Indonesia
Fund, Inc., The Portugal Fund, Inc., The Latin America Investment Fund, Inc.,
The Latin America Equity Fund, Inc., The Brazilian Equity Fund, Inc., The First
Israel Fund, Inc., The Emerging Markets Telecommunications Fund, Inc., The
Emerging Markets Infrastructure Fund, Inc., The Bear Stearns Emerging Markets
Debt Fund, Inc., The BEA International Equity Fund, The BEA Emerging Markets
Equity Fund, The BEA Strategic Fixed Income Fund and The BEA U.S. Core Fixed
Income Fund. BEA also acts as investment adviser for eighteen offshore funds,
thirteen of which are equity funds: The South America Fund N.V., The Mexican
Investment Company, Latin America Capital Partners, Ltd., Brazilian Equity
Investments I Ltd., Argentine Equity Investments I Ltd., C.I. Global Fund, C.I.
Emerging Markets Fund, C.I. North America Fund, C.I. Global Equity RSP Fund,
C.I. Latin America Fund, Credit Suisse North America Fund, Credit Suisse Equity
Fund-Latin America and Credit Suisse Transatlantic Fund; and five of which focus
on investments in fixed income securities: The Mexico Debt Fund, The Bear
Stearns Emerging Markets Fixed Income Fund, C.I. World Bond Fund, C.I. Global
Bond RSP Fund and The Credis Emerging Markets Debt Fund. None of the funds for
which BEA currently acts as investment adviser have investment objectives
similar to those of the Fund.
Pursuant to an Amended and Restated Partnership Agreement between Basic
Appraisals and CS Capital, BEA is governed by a Board of Directors. Subject to
the overall authority of the Board of Directors, the day to day affairs of BEA
are managed by an Executive Committee. The names and principal occupations of
the directors and principal executive officers of BEA are set forth below.
<TABLE>
<CAPTION>
NAME POSITION WITH BEA ASSOCIATES OTHER PRINCIPAL OCCUPATIONS
- ------------------------- ------------------------------- -------------------------------
<S> <C> <C>
Manfred Adami............ Chairman of the Board of Member of the Executive Board
Directors of Credit Suisse.
Dr. Hans Geiger.......... Director Member of the Executive Board
of Credit Suisse.
Dr. Hermann Maurer....... Director Member of Senior Management and
Head of Asset Management of
Credit Suisse.
Michael F. Orr........... Director and Executive Consulting Partner, Milbank,
Committee Member Tweed, Hadley & McCloy (active
Partner prior to July 1, 1990).
William W. Priest, Director, Co-Chairman -- Director of The Indonesia Fund
Jr. ................... Executive Committee, Chief Inc.
Executive Officer and Managing
Director
John B. Hurford.......... Vice President -- Executive
Committee and Managing Director
Albert L. Zesiger........ Honorary Chairman -- Executive
Committee and Managing Director
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
NAME POSITION WITH BEA ASSOCIATES OTHER PRINCIPAL OCCUPATIONS
- ------------------------- ------------------------------- -------------------------------
<S> <C> <C>
Emilio Bassini........... Member of the Executive President and Secretary of The
Committee, Chief Financial Indonesia Fund, Inc.; Director,
Officer and Managing Director President and Chief Investment
Officer of The Chile Fund,
Inc., The Portugal Fund, Inc.,
The Emerging Markets
Infrastructure Fund, Inc. and
The Emerging Markets
Telecommunications Fund, Inc.;
Director, Chairman of the
Board, President and Chief
Investment Officer of The Latin
America Investment Fund, Inc.
and The Latin American Equity
Fund, Inc.; Director, Chairman
of the Board, President and
Chief Executive Officer of The
Brazilian Equity Fund, Inc.
Jeffrey A. Geller........ Member of the Executive
Committee and Managing Director
Robert Moore............. Executive Director, Fixed Mr. Moore joined BEA in 1987
Income Portfolio Manager and manages various fixed
income portfolios. Prior to
joining BEA, he was a Vice
President at Salomon Brothers,
heading a fixed income team.
Timothy T. Taussig....... Managing Director, Director of Mr. Taussig joined BEA in 1985
Client Development and is the Director of Client
Development at BEA. His
responsibilities include the
marketing of all of BEA's
portfolio investment
strategies. Prior to joining
BEA, he was Vice President and
Marketing Director at Aetna
Capital Management.
</TABLE>
The principal business address of all of the foregoing and of BEA is One
Citicorp Center, 153 East 53rd Street, New York, New York 10022.
10
<PAGE> 13
CERTAIN INFORMATION ABOUT CSFBIM
AND THE COMPANY
CSFBIM, an indirect subsidiary of CS First Boston, Inc., was incorporated
in 1984 and is a registered investment adviser under the Investment Advisers Act
of 1940, as amended. Prior to the Transaction, CSFBIM provided investment
services to institutional clients in both the equity and fixed-income markets.
At December 31, 1994, CSFBIM had approximately $7.0 billion of assets under
management and advisement. CS First Boston Securities Corporation, the parent of
CSFBIM, is a wholly-owned subsidiary of CS First Boston, Inc. At December 31,
1994, CS Holding, a Swiss corporation, held 100% of the outstanding voting
common stock and approximately 65% of the economic interest in CS First Boston,
Inc.
In addition to the Fund, as of December 31, 1994, CSFBIM acted as the
investment adviser or sub-adviser for six other registered investment companies
or portfolios, as set forth below.
<TABLE>
<CAPTION>
APPROXIMATE NET
ASSETS AS OF
DECEMBER 31, 1994
FUNDS (IN THOUSANDS) ANNUAL RATE OF COMPENSATION
- ------------------------------------------ ----------------- -------------------------------------
<S> <C> <C>
CS First Boston Strategic Income Fund,
Inc. ................................... $ 78,252 0.50% of average weekly net assets
CS First Boston Income Fund, Inc.......... $ 196,379 0.50% of average weekly net assets
CS First Boston Investment Funds, Inc.
Institutional Money Market Fund......... $ 432,287 0.15% of average daily net assets
Institutional Tax-Exempt Money
Market Fund.......................... $ 53,223 0.20% of average daily net assets
Equi-Select Series Trust Money
Market Portfolio........................ $ 200 0.125% of average daily net assets*
Mortgage-Backed Securities Portfolio.... $ 5,000 0.35% of average daily net assets*
</TABLE>
- ---------------
* CSFBIM currently waives its fee under the terms of its sub-advisory agreement
with the portfolios of Equi-Select Series Trust.
11
<PAGE> 14
Certain information regarding the Directors and the principal Executive
Officers of CSFBIM prior to the Transaction is set forth below:
<TABLE>
<CAPTION>
POSITION WITH CS FIRST BOSTON
NAME INVESTMENT MANAGEMENT CORPORATION
------------------------------------------ ---------------------------------
<S> <C>
Joseph F. Huber........................... Co-Chairman of the Board
Robert J. Parker.......................... Co-Chairman of the Board
Richard J. Lindquist...................... Director
Robert C. Coby............................ Chief Operating Officer
Hal Liebes................................ Chief Compliance Officer
Agnes F. Reicke........................... Secretary
Lori M. Russo............................. Assistant Secretary
</TABLE>
The principal business address of all of the foregoing and of CSFBIM is 599
Lexington Avenue, New York, New York 10022, except for Mr. Parker, whose
principal business address is One Cabot Square, London E14 4QJ, England.
PORTFOLIO TRANSACTIONS
If approved by the stockholders, the New Adviser will select the dealers
that will execute the purchases and sales of portfolio securities for the Fund.
Fixed-income securities are generally traded on a "net" basis with dealers
acting as principal for their own account without a stated commission, although
the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter. In the purchase and sale of
portfolio securities, the New Adviser will seek the best available price and
most favorable execution. The Fund will not purchase securities from affiliates
in principal transactions.
Some securities considered for investment by the Fund may also be
appropriate for other funds served by the New Adviser. If the purchase or sale
of securities consistent with the investment policies of the Fund and one or
more of the other funds served by the New Adviser are considered at about the
same time, transactions in such securities will be allocated among the several
funds in a manner deemed equitable by the New Adviser. The Fund paid no
brokerage commissions for the year ended December 31, 1994 and expects to pay no
brokerage commissions in 1995.
At their April 19, 1995 meeting, the Directors approved a new Distribution
Agreement between the Company and Funds Distributor, Inc. (the "New
Distributor"), pursuant to which the New Distributor will serve as exclusive
distributor of shares of the Fund.
THE ADMINISTRATOR
The Company employs U.S. Trust Company of New York (the "Administrator"),
under an Administration Agreement, to provide certain administrative services to
the Fund. The principal business address of the Administrator is 73 Tremont
Street, Boston, MA 02108-3913.
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 as set forth on page 1 of this Proxy
Statement and according to their best judgment in the interest of the Fund.
12
<PAGE> 15
STOCKHOLDER'S PROPOSALS
A stockholder proposal intended to be presented at any subsequent meeting
of the stockholders of the Fund must be received by the Fund a reasonable time
before the Board of Directors makes the solicitation relating to such meeting in
order to be included in the Fund's proxy statement and form of proxy relating to
that meeting. The mere submission of a proposal by a shareholder does not
guarantee that such proposal will be included in the proxy statement because
certain rules under the Federal securities laws must be complied with before
inclusion of the proposal is required.
HAL LIEBES
Secretary
Dated: June 1, 1995
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.
13
<PAGE> 16
EXHIBIT A
INSTITUTIONAL GOVERNMENT FUND
OF
CS FIRST BOSTON INVESTMENT FUNDS, INC.
(BEING CHANGED TO "BEA INVESTMENT FUNDS, INC.")
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the day of , 1995 between CS FIRST BOSTON
INVESTMENT FUNDS, INC., a Maryland corporation whose name is being changed to
"BEA Investment Funds, Inc." (the "Company"), with respect to its portfolio
known as INSTITUTIONAL GOVERNMENT FUND (the "Fund") and BEA Associates, a New
York general partnership (the "Manager").
W I T N E S S E T H
WHEREAS, the Company is engaged in business as an open-end, diversified
management investment company and is so registered under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company is authorized to issue shares of Common Stock in
separate classes with each such class representing the interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Fund is a separate class of the Company and the Company
desires to retain the Manager to render investment advisory services to it with
respect to the Fund, and the Manager is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Company hereby appoints the Manager to act as investment
adviser to it with respect to the Fund. The Manager accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Company, the Manager will manage the portfolio of securities and
investments (including cash) belonging to the Fund including the purchase,
retention and disposition thereof and the execution of agreements relating
thereto, in accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus (as defined in paragraph 4(f) of
this Agreement) and subject to the following understandings:
(a) The Manager shall furnish a continuous investment program for
the Fund and in so doing shall determine from time to time what
investments or securities will be purchased, retained or sold by the
Fund, and what portion of the assets will be invested or held uninvested
as cash;
(b) The Manager shall use its best judgment in the performance of
its duties under this Agreement;
(c) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation and the Bylaws of the Company and Prospectus of the Fund
and with the instructions and directions of the Board of Directors of
the Company and will conform to and comply with the requirements of the
1940 Act and all other applicable federal and state laws and
regulations;
(d) The Manager shall determine the securities to be purchased or
sold by the Fund and as agent for the Fund will effect portfolio
transactions pursuant to its determinations either directly with the
issuer or with any broker and/or dealer in such securities; in placing
orders with brokers and/or dealers the Manager intends to seek the best
available price and execution for purchases and sales; the Manager shall
also determine whether or not the Fund shall enter into repurchase or
reverse repurchase agreements;
i
<PAGE> 17
On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
customers, the Manager may, to the extent permitted by applicable laws
and regulations, but shall not be obligated to, aggregate the securities
to be so sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to
be the most equitable and consistent with its fiduciary obligations to
the Fund and, if applicable, to such other customers;
(e) The Manager shall maintain books and records with respect to
the securities transactions of the Fund and shall render to the
Company's Board of Directors such periodic and special reports as the
Board of Directors may reasonably request;
(f) The Manager shall provide the Fund's Custodian as required with
information relating to all transactions concerning the assets belonging
to the Fund, except redemptions of and any subscriptions for shares of
the class of the Company's Common Stock relating to the Fund ("Fund
Shares"); and
(g) The investment advisory services of the Manager to the Fund
under this Agreement are not to be deemed exclusive, and the Manager
shall be free to render similar services to others.
3. The Manager is authorized to select the brokers or dealers that
will execute the purchases and sales of portfolio securities for the Fund
and is directed to use its best efforts to obtain the best available price
and execution, except as prescribed herein. Unless and until otherwise
directed by the Board of Directors of the Company, the Manager may also
effect individual securities transactions at commission rates in excess of
the minimum commission rates available, if the Manager determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage or research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Manager's
overall responsibilities with respect to the Fund. The execution of such
transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise.
4. The Fund has delivered copies of each of the following documents to
the Manager and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) Amended and Restated Articles of Incorporation of the Company,
filed with the Department of Assessments and Taxation of the State of
Maryland on February 19, 1993, as amended and supplemented to the date
hereof (such Amended and Restated Articles of Incorporation, as
presently in effect and as amended from time to time, being herein
called the "Articles of Incorporation");
(b) Bylaws of the Company (such Bylaws, as presently in effect and
as amended from time to time, being herein called the "Bylaws");
(c) Certified resolutions of the Board of Directors of the Company
authorizing the appointment of the Manager and approving the form of
this Agreement;
(d) Post-Effective Amendment No. 23 to the Registration Statement
under the 1940 Act and the Securities Act of 1933, as amended, on Form
N-1A (No. 33-22120) (the "Registration Statement") as filed with the
Securities and Exchange Commission (the "Commission") on March 17, 1995
relating to the Company and the Fund Shares, and all amendments thereto;
(e) Notification of Registration of the Company under the 1940 Act
on Form N-8A as filed with the Commission on May 26, 1988 and all
amendments thereto; and
(f) Prospectus of the Company dated March 17, 1995 (such
prospectus, as presently in effect and as amended or supplemented from
time to time, but solely in relation to the Fund and Fund Shares, being
herein called the "Prospectus").
5. The Manager shall authorize and permit any of its partners, agents
and employees who may be elected as directors or officers of the Company to
serve in the capacities in which they are elected.
ii
<PAGE> 18
Services to be furnished by the Manager under this Agreement may be
furnished through the medium of any of such partners, agents or employees
of the Manager.
6. The Manager shall keep the Company's books and records relating to
the Fund required to be maintained by it pursuant to paragraph 2(e) of this
Agreement. The Manager agrees that all records which it maintains for the
Company are the property of the Company and it will promptly surrender any
of such records to the Company upon the Company's request. The Manager
further agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by the Manager with respect to the Fund by Rule 31a-1 of the
Commission under the 1940 Act.
7. (a) During the term of this Agreement the Manager will pay all
expenses (including without limitation the compensation of all its
partners, agents and employees serving as directors or officers of the
Company pursuant to paragraph 5 of this Agreement) incurred by it in
connection with its activities under this Agreement other than the cost of
securities and investments purchased for the Fund (including taxes and
brokerage commissions, if any).
(b) In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Manager and including the fees payable
to the Fund's administrative agent and custodian, but excluding interest,
taxes, brokerage commissions and litigation and indemnification expenses
and other extraordinary expenses not incurred in the ordinary course of the
Fund's business) exceed the lowest applicable annual expense limitation, if
any, established pursuant to the statutes or regulations of any
jurisdictions in which Fund Shares are then qualified for offer and sale
(such excess hereinafter called the "Blue Sky Excess Expense"), the
compensation due to the Manager under paragraph 8 for the fiscal year in
question shall be reduced by the Blue Sky Excess Expense and the Manager
shall, to the extent required by such statutes or regulations, reimburse
the Company on behalf of the Fund for any such Blue Sky Excess Expense
previously paid to the Manager. Any reduction in the fee payable and any
reimbursement by the Manager to the Company on behalf of the Fund shall be
made quarterly and subject to readjustment during the year.
8. For the services provided and the expenses borne pursuant to this
Agreement, the Company will pay to the Manager with respect to the Fund as
full compensation therefor a fee, calculated daily and payable monthly, at
a base annual rate of .50% of the Fund's average daily net assets.
9. (a) The Manager shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period
and the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
(b) The Fund indemnifies the Manager to the fullest extent permitted
by law against any and all judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees incurred by the Manager as
the result of any action, suit or proceeding against the Manager in its
capacity as investment adviser of the Fund in connection with the matters
to which this Agreement relates except to the extent that such action, suit
or proceeding results from the willful misfeasance, bad faith or gross
negligence on the part of the Manager.
10. This Agreement shall become effective upon the later of (a) the
termination of the previous Investment Advisory Agreement between the Fund
and CS First Boston Investment Management Corporation or (b) its approval
by the stockholders of the Company in the manner prescribed by the 1940
Act. Upon becoming effective, this Agreement shall remain in effect until
January 31, 1997, and shall continue in effect from year to year thereafter
if such continuance is approved at least annually by (a) a majority of the
outstanding voting securities (as defined in the 1940 Act) or by vote of
the Company's Board of Directors, cast in person at a meeting called for
the purpose of voting on such approval, and
iii
<PAGE> 19
(b) vote of a majority of the Directors of the Company who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of
any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval. This Agreement may be terminated by the
Company at any time, without the payment of any penalty, by the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund on 60 days' written
notice to the Manager, or by the Manager at any time, without the payment
of any penalty, on 90 days' written notice to the Company. This Agreement
will automatically and immediately terminate in the event of its assignment
(as defined in the 1940 Act).
11. The Manager shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided
herein or authorized by the Board of Directors of the Company from time to
time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
12. This Agreement may be amended by mutual consent, but the consent
of the Company must be approved (a) by vote of a majority of those
Directors of the Company who are not parties to this Agreement or
"interested persons" (as defined in the 1940 Act) of any such party, cast
in person at a meeting called for the purpose of voting on such amendment,
and (b) by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund.
13. Notices of any kind to be given to the Manager by the Fund shall
be in writing and shall be duly given if mailed or delivered to the Manager
at One Citicorp Center, 153 East 53rd Street, New York, New York 10022,
Attention: President, or at such other address or to such other individual
as shall be specified by the Manager to the Fund in accordance with this
paragraph 13. Notices of any kind to be given to the Fund by the Manager
shall be in writing and shall be duly given if mailed or delivered to the
Fund at CS First Boston Investment Funds, Inc., One Citicorp Center, 153
East 53rd Street, New York, New York 10022, Attention: President, or at
such other address or to such other individual as shall be specified by the
Fund to the Manager in accordance with this paragraph 13. The Manager
agrees to notify the Company of any change in its membership within a
reasonable time of such change.
14. The Company agrees that if this Agreement is terminated and the
Manager shall no longer be the adviser to any class of Fund Shares, the
Company will, within a reasonable period of time, change its name to delete
reference to "BEA".
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
CS FIRST BOSTON INVESTMENT FUNDS, INC.
(being changed to "BEA Investment Funds,
Inc.")
BY
----------------------------------------
BEA ASSOCIATES
BY
----------------------------------------
iv
<PAGE> 20
CS FIRST BOSTON INVESTMENT FUNDS, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT A SPECIAL
MEETING OF STOCKHOLDERS (THE "MEETING") OF THE INSTITUTIONAL GOVERNMENT FUND
(THE "FUND") OF CS FIRST BOSTON INVESTMENT FUNDS, INC. (THE "COMPANY") TO BE
HELD AT 2:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 1995, AT ONE
CITICORP CENTER, 153 EAST 53RD STREET, NEW YORK, NEW YORK 10022.
The undersigned hereby appoints Joseph Huber, Hal Liebes and Paul Stamler,
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the Meeting and at all adjournments thereof, all shares of the Fund
held of record by the undersigned on the record date for the Meeting upon the
following matters, and upon any other matter which may properly come before
the Meeting or any adjournment thereof, in their discretion.
NEW ADDRESS:
------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREON,
AND IN THE ABSENCE OF SPECIFICATIONS, WILL BE TREATED AS VOTING FOR PROPOSALS
(1), (2), (3) AND (4) BELOW.
/X/ Please mark your choices like this
1. Election of Directors:
NOMINEES: Desmond G. FitzGerald, Bruce N. Lehmann, Robert G. Stone, Jr. and
Richard H. Francis
/ / FOR ALL NOMINEES / / WITHHELD FROM ALL NOMINEES
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. To ratify the selection by the Board of Directors of Price Waterhouse LLP as
independent accountants for the Company for the year 1995.
/ / FOR / / AGAINST / / ABSTAIN
3. To approve a new Investment Advisory Agreement for the Fund between the
Company and BEA Associates containing substantially the same terms,
conditions and fees as the Fund's previous investment advisory agreement
with CS First Boston Investment Management Corporation.
/ / FOR / / AGAINST / / ABSTAIN
4. To approve an amendment to the Articles of Incorporation of the Company to
change its name to "BEA Investment Funds, Inc."
/ / FOR / / AGAINST / / ABSTAIN
5. To consider and act upon any other business as may properly come before the
Meeting or any adjournment thereof.
I PLAN TO ATTEND THE MEETING / /
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign, or if he/she signs, that stockholder's vote binds
both stockholders. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by a duly authorized officer. If a partnership,
please sign in partnership name by an authorized person. Receipt of Notice of
Special Meeting and Proxy Statement is hereby acknowledged.
SIGNATURE(S) DATE
------------------------------------------ -------------------
Note: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
