SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
File 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 Section 240.14a-11(c) or Section
240.14a-12
The Austria Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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), 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 Rule 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ 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:
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LOGO
THE AUSTRIA FUND, INC.
1345 Avenue of the Americas, New York, New York 10105
Toll Free (800) 221-5672
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 8, 1995
To the Stockholders of The Austria Fund, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of The Austria Fund, Inc. (the "Fund") will be held at the offices of
the Fund, 1345 Avenue of the Americas, 33rd Floor, New York, New York, on
Wednesday, March 8, 1995 at 11:00 a.m., for the following purposes, all of which
are more fully described in the accompanying Proxy Statement dated February 3,
1995:
1. To elect four Directors of the Fund, each to hold office for a term of
three years, and until his or her successor is duly elected and qualified;
2. To ratify the selection of Price Waterhouse LLP as independent
accountants of the Fund for its fiscal year ending August 31, 1995;
3. To approve a new sub-advisory agreement (the "New Sub-Advisory
Agreement") between the Fund and BAI Fondsberatung Ges. m.b.H ("BAI Fund
Adviser"), the successor of GiroCredit Research Anlageberatung und
Kapitalmarktforschung Ges. m.b.H. ("GiroCredit Research") which presently
provides sub-advisory services to the Fund, containing the same terms and
conditions as the Fund's sub-advisory agreement with GiroCredit Research (the
"GiroCredit Sub-Advisory Agreement") except for the dates of execution,
effectiveness and termination, the pro-rating of fees paid for services provided
for less than one month and the entity serving as sub-adviser; and
4. To transact such other business as may properly come before the Meeting.
Your consideration of the New Sub-Advisory Agreement is necessitated by the
occurrence of certain events in April 1994 in connection with the reorganization
of the parent of GiroCredit Research, GiroCredit Bank Aktiengesellschaft der
Sparkassen ("GiroCredit Bank"). Under the terms of the GiroCredit Sub-Advisory
Agreement, and as required by the Investment Company Act of 1940, as amended,
the GiroCredit Sub-Advisory Agreement contained a provision for its automatic
termination upon its assignment. As more fully discussed in the accompanying
Proxy Statement, the consummation of certain aspects of the acquisition of a
controlling interest in GiroCredit Bank by Anteilsverwaltung Zentralsparkasse,
the holding company of Bank Austria AG, was considered to be an assignment of
the GiroCredit Sub-Advisory Agreement, thereby causing its termination. In
order for the Fund to continue to receive sub-advisory services it is necessary
that the New Sub-Advisory Agreement be approved by the stockholders of the Fund.
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The Board of Directors has fixed the close of business on December 19, 1994
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Meeting or any adjournment thereof. The enclosed proxy is
being solicited on behalf of the Board of Directors.
By order of the Board of Directors,
EDMUND P. BERGAN, JR.
Secretary
New York, New York
February 3, 1995
________________________________________________________________________________
YOUR VOTE IS IMPORTANT
________________________________________________________________________________
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, SIGN AND
DATE IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO SAVE THE FUND ANY ADDITIONAL EXPENSE
OF FURTHER SOLICITATION, PLEASE MAIL YOUR PROXY PROMPTLY.
________________________________________________________________________________
This registered service mark used under license from the owner, Alliance
Capital Management L.P.
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PROXY STATEMENT
THE AUSTRIA FUND, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
ANNUAL MEETING OF STOCKHOLDERS
MARCH 8, 1995
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The Austria Fund, Inc., a
Maryland corporation (the "Fund"), to be voted at the Annual Meeting of
Stockholders of the Fund (the "Meeting"), to be held at the offices of the Fund,
1345 Avenue of the Americas, 33rd Floor, New York, New York, on Wednesday,
March 8, 1995 at 11:00 a.m. This annual meeting relates to the Fund's fiscal
year ended August 31, 1994. Such solicitation will be by mail and the cost will
be borne by the Fund. The Notice of Meeting, Proxy Statement and Proxy are
being mailed to stockholders on or about February 3, 1995.
The Board of Directors has fixed the close of business on December 19, 1994
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Meeting and at any adjournment thereof. The outstanding
voting shares of the Fund as of December 19, 1994 consisted of 11,703,031 shares
of common stock, each share being entitled to one vote. All properly executed
proxies received prior to the Meeting will be voted at the Meeting in accordance
with the instructions marked thereon or otherwise provided therein.
Accordingly, unless instructions to the contrary are marked, proxies will be
voted (i) for the election of four Directors, (ii) for the ratification of the
selection of Price Waterhouse LLP as the Fund's independent accountants for its
fiscal year ending August 31, 1995 and (iii) for the approval of a new
sub-advisory agreement (the "New Sub-Advisory Agreement") between the Fund and
BAI Fondsberatung Ges. m.b.H. ("BAI Fund Adviser"), the successor of GiroCredit
Research Anlageberatung und Kapitalmarktforschung Ges. m.b.H. ("GiroCredit
Research") which presently provides sub-advisory services to the Fund. Any
stockholder may revoke his proxy at any time prior to exercise thereof by giving
written notice to the Secretary of the Fund at the Fund's offices at 1345 Avenue
of the Americas, New York, New York 10105, by signing another proxy of a later
date or by personally voting at the Meeting.
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A quorum for the Meeting will consist of a majority of the shares
outstanding and entitled to vote. In the event that such quorum is not
represented at the Meeting or, even if a quorum is so represented, in the event
that sufficient votes in favor of any of the proposals set forth in the Notice
of Meeting are not received by March 8, 1995, the persons named as proxies may
propose and vote for one or more adjournments of the Meeting with no other
notice than announcement at the Meeting, and further solicitation of proxies
with respect to such proposals may be made. Shares represented by proxies
indicating a vote against any such proposals will be voted against such
adjournment.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, four Directors will be elected, each to serve for a term of
three years and until their successors are elected and qualified. The
affirmative vote of a plurality of the votes cast at the Meeting is required to
elect a Director. It is the intention of the persons named in the enclosed
proxy to nominate and vote in favor of the election of the persons listed below.
Pursuant to the Articles of Incorporation and Bylaws of the Fund, the Board
of Directors has been divided into three classes. The term of office of the
first class will expire as of the Meeting (Class One), the term of office of the
second class will expire as of the annual meeting of stockholders to be held in
1995 which relates to the fiscal year ending August 31, 1995 (Class Two), and
the term of office of the third class will expire as of the annual meeting of
stockholders to be held in 1996 (Class Three). Upon expiration of the term of
office of each class as set forth above, those persons then elected as Directors
in that class will serve until the third annual meeting of stockholders
following their election. Messrs. William H.M. de Gelsey and Peter Nowak, Dipl.
Ing. Hellmut Longin and Dr. Josef Vlcek are currently members of Class One;
Mr. Dave H. Williams, Dipl. Ing. Peter Mitterbauer, Mag. Reinhard Ortner,
Dr. Walter Wolfsberger and Ms. Inmaculada de Habsburgo-Lorena are currently
members of Class Two; and Mr. John D. Carifa, H.R.H. Pilar de Borbon y Borbon,
Duchess of Badajoz, Dr. Hans Haumer and Ms. Reba W. Williams are currently
members of Class Three.
As a result of this system, only those Directors in a single class may be
changed in any one year, and it would require two years to change a majority of
the Board of Directors (although under Maryland law, procedures are available
for the removal of Directors even if they are not then standing for re-election
and, under Securities and Exchange Commission regulations, procedures are
available for including appropriate stockholder proposals in management's annual
proxy statement). This system of electing Directors, which may be regarded as
an "anti-takeover" provision, may make it more difficult for the Fund's
stockholders to change the majority of Directors and, thus have the effect of
maintaining the continuity of management.
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Each nominee has consented to serve as a Director. The Board of Directors
knows of no reason why any of these nominees will be unable to serve, but in the
event of such inability, the proxies received will be voted for such substitute
nominees as the Board of Directors may recommend. Certain of the Fund's
Directors and officers are residents of Austria, Spain or the United Kingdom and
substantially all of the assets of such persons may be located outside of the
United States. As a result, it may be difficult for United States investors to
effect service upon such Directors or officers within the United States, or to
realize judgments of courts of the United States predicated upon civil
liabilities of such Directors or officers under the federal securities laws of
the United States. The Fund has been advised that there is substantial doubt as
to the enforceability in Austria, Spain or the United Kingdom of the civil
remedies and criminal penalties afforded by the federal securities laws of the
United States. It is also unclear if extradition treaties now in effect between
the United States and Austria, Spain or the United Kingdom would subject such
Directors and officers to effective enforcement of the criminal penalties of the
federal securities laws.
Certain information concerning the Fund's Directors and nominees for
election as Directors is set forth below.
Messrs. Williams and Carifa, Princess Borbon and Mses. de Habsburgo-Lorena
and Williams are each a director or trustee of one or more other investment
companies sponsored by Alliance Capital Management L.P. ("Alliance Capital"),
the Fund's investment adviser, whose principal offices are located at 1345
Avenue of the Americas, New York, New York 10105.
Number of shares
Name, age, positions and offices beneficially
with the Fund, principal Year first Year term owned directly or
occupations during the past became a as Director indirectly as of
five years and other Directorships Director will expire December 19, 1994
---------------------------------- -------- ----------- -----------------
*Dave H. Williams, Chairman, 62. 1989 1995+++ 18,000
Chairman of the Board of Alliance (Class Two)
Capital Management Corporation
("ACMC")**, since prior to 1989;
Director of The Equitable Companies
Incorporated ("Equitable")
*John D. Carifa, Director, 49. 1991 1996 -0-
President, Chief Operating Officer, (Class Three)
and a Director of ACMC; the Chief
Financial Officer thereof prior to
1994; Executive Vice President and
the Chief Administrative Officer
thereof prior to 1993
***++H.R.H. Pilar de Borbon y 1991 1996 -0-
Borbon, Duchess of Badajoz, (Class Three)
Director, 58. Director of Cartier
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France and member of the Advisory
Board of Sotheby's Holdings Inc.;
Member of the Board of Plus Ultra
Insurance Company; Chairman of the
International Equestrian
Federation; Member of the Spanish
Olympic Committee
***++William H.M. de Gelsey, 1991 1997+ -0-
Director, 72. Senior Advisor to (Class One)
the Managing Board of
Creditanstalt-Bankverein, Vienna
since 1988; prior thereto, Deputy
Chairman of Orion Royal Bank,
London, England
***++Inmaculada de Habsburgo- 1989 1995+++ -0-
Lorena, Director, 49. Director of (Class Two)
The Spanish Institute
Dr. Hans Haumer, Director, 54. 1989 1996 -0-
Chairman of the Managing Board of (Class Three)
Bank Liechtenstein and Director BIL
GT Group; former Chairman of the
Managing Board of GiroCredit Bank
Aktiengesellschaft der Sparkassen;
formerly Chairman of Die Erste
Osterreichische SparCasse-Bank
*++***Dipl. Ing. Hellmut Longin, 1989 1997+ -0-
Director, 60. Chairman of the (Class One)
Management Board and Chief
Executive Officer of Radex-
Heraklith Industriebeteiligungs
A.G.; Chairman of the Supervisory
Board of all subsidiaries of Radex-
Heraklith A.G. (mining industries);
Member of the Supervisory Board of
Interunfall Versicherungs A.G.
(insurance); Member of the
Supervisory Boards of Maculan
Holding A.G. (building industry),
Zumtobel A.G. and Zumtobel Holding
A.G.; Member of Supervisory Board
of BA-GC Investment Bank Austria
AG; Member of Supervisory Board of
Umdasch AG (supplier to building
industry)
***++Dipl. Ing. Peter Mitterbauer, 1989 1995+++ -0-
Director, 52. Chairman of the (Class Two)
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Executive Board of Miba A.G.
(diversified engineering company);
Chairman of the Supervisory Boards
of Miba Gleitlager A.G., Miba
Sintermetall A.G., Miba Frictec
Ges. m.b.H. and Alcatel Austria
A.G.; President of the Upper
Austrian Association of
Industrialists; Vice President of
Upper Austrian Chamber of Industry
and Commerce; and Member of the
Supervisory Boards of Strabag
Osterreich A.G., Creditanstalt-
Bankverein, Gmundener Zementwerke
A.G., Teufelberger Holding A.G.,
Bank fur Oberosterreich and
Salzburg and SCA Laakitchen AG.
*Peter Nowak, Director, 49. 1990 1997+ -0-
Chairman of BA-GC Investment Bank (Class One)
Austria AG; Member of the
Supervisory Boards of Heraklith
Baustoffe A.G., Darbo Beteiligungs-
A.G., Rath Beteilgungs A.G. and
Sparinvest Kapitalanlage
Aktiengesellschaft
*++***Mag. Reinhard Ortner, 1992 1995+++ -0-
Director, 45. Member of Management (Class Two)
Board of First Austrian Bank;
Member of Supervisory Boards of
GiroCredit Bank AG der Sparkassen,
Sparkassenverlag Ges. m.b.H.
(trading), SPV-Druck Gesellschaft
m.b.H. (printing) and Generali
Allgemeine Lebensversicherung AG;
Director of First Austrian
International
***++Dr. Josef Vlcek, Director, 63. 1990 1997+ -0-
Consultant of Universale-Bau A.G. (Class One)
(construction); Member of Advisory
Board of Scania Osterreich Ges.
m.b.H.; Member of Supervisory Board
of Osterreichische Realitaten A.G.
(real estate), Montana A.G.
(industry and banking),
Jungbunzlauer A.G. (chemical
industry) and Hutter & Schrantz
A.G. (steel construction); Member
of Advisory Board of Erste
7
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Allgemeine Versicherungs
A.G./Assicurazione Generali
(insurance company); and member of
the Board of Directors of
Vereinigung Osterreichischer
Industrieller (industrial
associations)
*Reba W. Williams, Director, 58. 1991 1996 18,000
Director of ACMC; Director of (Class Three)
Special Projects, ACMC; art
historian and writer. She was
formerly a financial writer and
consultant, Vice President and
security analyst, Mitchell
Hutchins, Inc. and an analyst for
McKinsey & Company, Inc.
***++Dr. Walter Wolfsberger, 1991 1995+++ -0-
Director, 64. Vice Chairman of the (Class Two)
Board, Siemens A.G. Austria
(electronics)
_____________________________
* "Interested person," as defined in the Investment Company Act of 1940, of
the Fund because of affiliation with Alliance Capital, BAI Fund Adviser or
GiroCredit Bank.
** For purposes of this Proxy Statement, ACMC refers to Alliance Capital
Management Corporation, the sole general partner of Alliance Capital, and
to the predecessor general partner of the same name.
*** Member of the Audit Committee.
+ If elected at this Meeting.
++ Member of the Nominating Committee.
+++ Term will expire as of the annual meeting of stockholders to be held in
1995 which relates to the fiscal year ending August 31, 1995.
During the fiscal year ended August 31, 1994, the Board of Directors met
four times. The Audit Committee met once during the fiscal year ended
August 31, 1994 for the purposes described below in Proposal Two. The
Nominating Committee, constituted for the purpose of selecting and nominating
persons to fill any vacancies on the Board of Directors, did not meet during the
fiscal year ended August 31, 1994. The Nominating Committee does not currently
consider candidates proposed by stockholders for election as Directors. H.R.H.
Pilar de Borbon y Borbon, Princess of Badajoz and Dr. Josef Vlcek attended fewer
than 75% of the meetings of the Fund's Board or Committees of the Board.
The Fund does not pay any fees to, or reimburse expenses of, its Directors
who are considered "interested persons" of the Fund. The aggregate
compensation for the fiscal year ended August 31, 1994, paid by the Fund to each
of the Directors, and the aggregate compensation paid to each of the Directors
8
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for the most recently completed fiscal year by other funds to which Alliance
Capital provides investment advisory services (collectively, the "Alliance Fund
Complex"), is set forth below.
Pension or Estimated Total
Retirement Annual Compensation
Aggregate Benefits Accrued Benefits from Fund and
Compensation As Part of Fund upon Alliance Fund
Name of Director from Fund Expenses Retirement Complex
- ---------------- ------------ ---------------- ---------- -------------
Dave H. Williams $ 0 $ -0- $ -0- $ 0
John D. Carifa $ 0 -0- -0- $ 0
H.R.H. Pilar de Borbon $ 9,000 -0- -0- $19,500*
y Borbon, Duchess of
Badajoz
William H.M. de Gelsey $10,500 -0- -0- $10,500
Inmaculada de Habsburgo- $10,500 -0- -0- $21,000*
Lorena
Dr. Hans Haumer $ 0 -0- -0- $ 0
Dipl. Ing. Hellmut Longin $10,500 -0- -0- $10,500
Dipl. Ing. Peter Mitterbauer $10,500 -0- -0- $10,500
Peter Nowak $ 0 -0- -0- $ 0
Mag. Reinhard Ortner $10,500 -0- -0- $10,500
Dr. Josef Vlcek $ 9,000 -0- -0- $ 9,000
Reba W. Williams $ 0 -0- -0- $ 0
Dr. Walter Wolfsberger $10,500 -0- -0- $10,500
____________________________
* Each of Princess Borbon and Ms. Habsburgo-Lorena is a director of one other
registered investment company in the Alliance Fund Complex.
As of December 19, 1994, the Directors and officers of the Fund as a group
owned less than 1% of the shares of the Fund. Since September 1, 1993, none of
the Fund's Directors engaged in a purchase or sale of the securities of Alliance
Capital, GiroCredit Research, BAI Fund Adviser or any of their respective
parents or subsidiaries, in an amount exceeding 1% of the relevant class of
outstanding securities.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE FOREGOING NOMINEES TO SERVE AS DIRECTORS OF THE FUND.
PROPOSAL TWO
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the stockholders of the Fund ratify
the selection of Price Waterhouse LLP, independent accountants, to audit the
accounts of the Fund for the fiscal year ending August 31, 1995. Their
selection was approved by the vote, cast in person, of a majority of the Board
of Directors, including a majority of the Directors who are not "interested
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persons" of the Fund, as defined in the Investment Company Act of 1940 (the
"Act"), at a meeting held on September 30, 1994. Price Waterhouse LLP has
audited the accounts of the Fund since the Fund's commencement of operations and
does not have any direct financial interest or any material indirect financial
interest in the Fund. A representative of Price Waterhouse LLP is expected to
attend the Meeting and to have the opportunity to make a statement and to
respond to appropriate questions from the stockholders. The Audit Committee of
the Board of Directors generally meets twice a year with representatives of
Price Waterhouse LLP to discuss the scope of their engagement and review the
financial statements of the Fund and the results of their examination thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS
OF THE FUND.
PROPOSAL THREE
APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
WITH BAI FUND ADVISER
BACKGROUND
GiroCredit Research, an Austrian advisory firm with principal offices at
Schubertring 5, A-1010, Vienna, Austria, has served as sub-adviser to the Fund
with respect to the Fund's investments in Austrian securities since the
inception of the Fund in 1989. GiroCredit Research was established as a wholly-
owned subsidiary of GiroCredit Bank Aktiengesellschaft der Sparkassen, formerly
known as Girozentrale und Bank der Osterreichischen Sparkassen
Aktiengesellschaft, ("GiroCredit Bank") in June 1989 for the purpose of
providing international portfolio management services to investors. The
Managing Directors of GiroCredit Research are Messrs. Heinz Bednar and Roland
Haas. Their address is Beethovenplatz 3, A-1010, Vienna, Austria. GiroCredit
Bank was established in 1937 and until recently was owned by Anteilsverwaltung
Zentralsparkasse ("AVZ"), the holding company of Bank Austria AG ("Bank
Austria") and GiroCredit Bank, and a number of Austrian savings banks.
GiroCredit Bank has undergone a restructuring pursuant to which AVZ has acquired
beneficial ownership of approximately 56% of the outstanding shares of
GiroCredit Bank. In connection with the change in the beneficial ownership of
GiroCredit Bank, and therefore the indirect beneficial ownership of GiroCredit
Research, GiroCredit Research became a wholly-owned subsidiary of BA-GC
Investment Bank Austria AG, which is owned 38.8% by Bank Austria and 38.8% by
GiroCredit Bank. BAI Fund Adviser is a wholly-owned subsidiary BA-GC Investment
Bank Austria AG. It is the Fund's understanding that the assets and resources
of GiroCredit Research will be contributed to BAI Fund Adviser.
The GiroCredit Sub-Advisory Agreement, which is dated September 28, 1989,
was initially approved by the stockholders at the adjourned Annual Meeting of
Stockholders held on January 22, 1991 and its continuance was most recently
approved by the Fund's Board of Directors, for the period ending December 31,
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1994, at the Board's regular meeting on December 21, 1993. As required by the
Act, the GiroCredit Sub-Advisory Agreement contained a provision for its
automatic termination upon its "assignment." Under the Act an "assignment"
includes any direct or indirect transfer of a controlling block of the
assignor's outstanding voting securities by a security holder of the assignor
that results in a change of actual control or management. Certain events that
occurred as of April 29, 1994 in connection with the reorganization of
GiroCredit Bank are deemed to have caused an assignment and corresponding
termination of the GiroCredit Sub-Advisory Agreement as of such date. In
February 1994, AVZ conducted a tender offer for shares of GiroCredit Bank.
Certain shareholders of GiroCredit Bank that accepted the tender had been unable
to transfer their shares to AVZ until the completion of the liquidation of a
holding company. Prior to a general shareholders meeting of GiroCredit Bank on
April 29, 1994, however, certain shareholders of GiroCredit Bank each granted a
power of attorney to AVZ giving AVZ the unrestricted right to vote their shares
of GiroCredit Bank at all shareholder meetings during 1994. Accordingly, at the
April 29 shareholders meeting, AVZ was in a position to exercise voting power
with respect to more than 50% of the outstanding shares of GiroCredit Bank with
respect to the election of members of the supervisory board of GiroCredit Bank
and on all other matters. The restructuring was completed in December 1994 and
AVZ is now the beneficial owner of approximately 56% of the outstanding shares
of GiroCredit Bank. The Fund believes that, under the Act and based on
discussions with Austrian counsel to GiroCredit Bank and GiroCredit Research,
once AVZ attained majority voting power, even though AVZ was not yet the legal
owner of a majority of the outstanding shares of GiroCredit Bank, a change in
control of GiroCredit Bank had occurred that resulted in a statutory assignment
and the termination of the GiroCredit Sub-Advisory Agreement under the Act. The
facts regarding the events that led to the termination of the GiroCredit Sub-
Advisory Agreement were not available to the Fund until late November 1994.
In order for the Fund to continue to receive sub-advisory services, it will
be necessary for the Fund to enter into the New Sub-Advisory Agreement to become
effective upon the date of approval of the New Sub-Advisory Agreement by the
stockholders pursuant to its terms as required by the Act. Since the
termination of the GiroCredit Sub-Advisory Agreement as of April 29, 1994,
GiroCredit Research has continued to provide sub-advisory services to the Fund
on an interim basis. GiroCredit Research has agreed to reimburse the Fund for
$101,428 in compensation it received for services performed between April 29,
1994 and November 18, 1994. For sub-advisory services provided since
November 18, 1994 GiroCredit Research has received no compensation from the
Fund. GiroCredit Research will not be able to receive retroactive payment for
services rendered without obtaining exemptive relief from the staff of the
Securities and Exchange Commission. At this time the Fund is unaware whether or
not GiroCredit Research intends to seek such exemptive relief.
BAI FUND ADVISER AND BANK AUSTRIA
BAI Fund Adviser was established on March 4, 1994 as a company with limited
liability under Austrian law and has its principal office at Burgring 3,
A-1010, Vienna, Austria. BAI Fund Adviser is a wholly-owned subsidiary of BA-GC
Investment Bank Austria AG, which has its principal office at Burgring 3,
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A-1010, Vienna, Austria and which specializes in research, trading activities,
mergers and acquisitions, underwriting initial public offerings and asset
management. BA-GC Investment Bank Austria AG is a publicly owned Austrian
company, 38.8% of whose shares are held by Bank Austria AG, whose principal
office is located at Am Huf 2, A-1010, Vienna, Austria, and 38.8% of whose
shares are held by GiroCredit Bank, whose principal office is located at
Schubertring 5, A-1010, Vienna, Austria. The remaining shares of BA-GC
Investment Bank Austria AG are held by a number of institutional shareholders,
each of which owns less than 10% of the outstanding shares. Bank Austria AG is
a publicly owned Austrian company, 45.6% of whose shares are held by AVZ, whose
principal office is located at Vordere Zollamtsstrafe 13, A-1030, Vienna,
Austria and 19.61% of the capital stock and 22.55% of the voting rights of which
are held by The Republic of Austria. Bank Austria was established as of
October 7, 1991 as the result of the merger of Zentralsparkasse und
Kommerzialbank Wien, AG and Osterreichische Landerbank AG and provides a full
range of commercial, securities and investment banking services to customers in
Austria and abroad. As of December 31, 1993, the total assets of Bank Austria
were ATS 572,792 million* and total deposits were ATS 456,226 million on an
unconsolidated basis, making it the largest bank in Austria, as ranked by
assets. BAI Fund Adviser has a board of directors, that operate independent of
influence from Bank Austria, and is autonomous in making its investment
decisions and in rendering investment advice to its clients, but has access to
the extensive research and other resources of Bank Austria. BAI Fund Adviser is
an investment adviser registered under the Investment Advisers Act of 1940. The
Managing Directors of BAI Fund Adviser are Dkfm. Dr. Karl Eugen Kaniak and
Dr. Friedrich Josef Schweiger, both of whose address is Burgring 3, 1010,
Vienna, Austria.
BAI Fund Adviser's personnel will not discuss their investment advice with
personnel of BA-GC Investment Bank Austria AG or Bank Austria who are managing
the investment portfolios of BA-GC Investment Bank Austria AG or Bank Austria.
Bank Austria or its affiliates may have deposit, loan and other commercial
banking relationships with issuers of securities purchased by the Fund. The
Fund will not purchase securities in any primary public offering where, to the
knowledge of BAI Fund Adviser, the proceeds will be used to retire indebtedness
to Bank Austria or its affiliates. The Fund and Bank Austria or its affiliates
will not act jointly to cause the Fund to make investments which are designed to
benefit other commercial interests of Bank Austria or its affiliates. BAI Fund
Adviser has advised the Fund that in rendering its investment advice, the
investment personnel of BAI Fund Adviser will not obtain or use material inside
information in the possession of Bank Austria or its other affiliates and that
its personnel will not disclose to Bank Austria or its affiliates any material
inside information in their possession.
____________________
* References to "ATS" are to Austrian Schilling. On December 31, 1993, the
Austrian Schilling-U.S. Dollar exchange rate was ATS 12.197 per U.S. Dollar.
On December 31, 1994, the Austrian Schilling-U.S. Dollar exchange rate was
ATS 10.904 per U.S. Dollar.
12
<PAGE>
BOARD APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
At a meeting held on December 9, 1994, the Board of Directors of the Fund,
including a majority of the Directors of the Fund who are not "interested
persons" within the meaning of the Act (the "Disinterested Directors"),
concluded that entry into the New Sub-Advisory Agreement would be in the best
interests of the Fund and its stockholders. The Board of Directors of the Fund
approved the New Sub-Advisory Agreement and recommended it for approval by the
stockholders of the Fund at the Meeting with the New Sub-Advisory Agreement to
take effect upon the date of stockholder approval.
The prior approval of the stockholders of the Fund is necessary in order for
the New Sub-Advisory Agreement to become effective. This requires the
affirmative vote of a majority of the outstanding voting securities (as defined
below) of the Fund. If the New Sub-Advisory Agreement is not approved by the
stockholders of the Fund, the Board of Directors of the Fund would consider what
action to take, if any, to provide the Fund with sub-advisory services of the
type previously provided by GiroCredit Research.
REASONS FOR RECOMMENDATION
FOR THE REASONS STATED BELOW, THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS
THAT THE STOCKHOLDERS OF THE FUND VOTE FOR THE APPROVAL OF THE NEW SUB-ADVISORY
AGREEMENT.
In determining to recommend that the Fund's stockholders approve the New
Sub-Advisory Agreement, the Board of Directors took into account that, except
for the dates of execution, effectiveness and termination, the pro-rating of
fees paid for services provided for less than one month and the entity serving
as sub-adviser there are no differences between the terms and conditions of the
GiroCredit Sub-Advisory Agreement and the New Sub-Advisory Agreement, including
the terms relating to the services to be provided thereunder by the sub-adviser
and the fees and expenses payable by the Fund. The Board of Directors of the
Fund also considered that the combined resources of GiroCredit Research and BAI
Fund Adviser will provide the Fund with sub-advisory services of equal or higher
quality than it had previously received for the same fee. The Board of
Directors was informed that provisions of the Act prohibit purchases by the Fund
of securities in offerings in which an investment adviser or any of its
affiliates is an underwriter, and that the Fund might, therefore, be precluded
from purchasing securities in offerings in which Bank Austria is an underwriter.
The Board of Directors was further informed that the impact of this prohibition
on the Fund, and the desirability of obtaining exemptive relief therefrom from
the Securities and Exchange Commission, would be considered.
In the course of their deliberations regarding the New Sub-Advisory
Agreement, the Disinterested Directors consulted separately with their
independent counsel.
On the basis of its review of the information and factors discussed above,
the Board of Directors of the Fund, including a majority of the Disinterested
Directors, has concluded that it is in the best interests of the Fund and its
13
<PAGE>
stockholders to approve the New Sub-Advisory Agreement, thereby enabling the
Fund to receive sub-advisory services from BAI Fund Adviser and, accordingly,
continue to receive the benefit of sub-advisory services of the type previously
provided by GiroCredit Research.
COMPARISON OF THE GIROCREDIT SUB-ADVISORY AGREEMENT AND THE
NEW SUB-ADVISORY AGREEMENT
The only differences between the GiroCredit Sub-Advisory Agreement and the
New Sub-Advisory Agreement (collectively, the "Agreements") are the dates of
execution, effectiveness and termination, the pro-rating of fees paid for
services provided for less than one month and the entity serving as sub-adviser.
A copy of the New Sub-Advisory Agreement (which reflects these differences) is
attached hereto as Exhibit A. If the New Sub-Advisory Agreement is approved by
the Fund's stockholders, it will be dated and will take effect upon stockholder
approval. The New Sub-Advisory Agreement, if approved at the Meeting by a vote
of a majority of the outstanding voting securities of the Fund, will continue in
effect until December 31, 1995 and thereafter for successive twelve-month
periods if approved at least annually (i) by the Directors of the Fund or by
vote of a majority of the outstanding voting securities of the Fund and (ii) by
vote of the majority of the Disinterested Directors, cast in person at a meeting
called for the purpose of voting on such approval.
The Agreements provide that they will remain in effect for successive
twelve-month periods (computed from each January 1), provided that such
continuance is specifically approved at least annually (a) by the Fund's Board
of Directors or by vote of a majority of the outstanding voting securities (as
defined in the Act) of the Fund and, in either case, (b) by vote of a majority
of the Directors who are not "interested persons" of the Fund, the sub-adviser
or Alliance Capital, within the meaning of the Act, cast in person at a meeting
called for the purpose of voting on such approval.
Under the Agreements, the sub-adviser, subject to the supervision of
Alliance Capital, provides investment advice and research to the Fund and
Alliance Capital with respect to investments in Austrian securities on a
continuing basis. The sub-adviser does not have any investment discretion. The
sub-adviser renders its services on its own initiative and in response to the
inquiries and requests of Alliance Capital. Representatives of the sub-adviser
report directly to representatives of Alliance Capital on both a formal and
informal basis. For its services under the Agreements, the Fund pays the sub-
adviser a fee, calculated and paid monthly, at an annualized rate of .20 of 1%
of the Fund's average weekly net assets. The fees payable by the Fund to the
sub-adviser are based on all of the Fund's assets, not just those invested in
Austrian securities. The sub-adviser will bear all of its expenses in
connection with the performance of its services under the Agreements. For the
fiscal year ended August 31, 1994, the fees paid under the GiroCredit Sub-
Advisory Agreement amounted to $171,424 of which $57,614 will be reimbursed to
reflect the fact that GiroCredit Research has provided sub-advisory services
without compensation since the termination of the GiroCredit Sub-Advisory
Agreement.
14
<PAGE>
The Agreements are terminable at any time, without penalty, on 60 days'
written notice to the sub-adviser, or by vote of a majority of the Fund's
outstanding voting securities, or by vote of a majority of the Fund's Board of
Directors or by Alliance Capital, or by the sub-adviser, on 60 days' written
notice to Alliance Capital and the Fund, and will automatically terminate in the
event of its assignment. The Agreements provide that in the absence of willful
misfeasance, bad faith or gross negligence on the part of the sub-adviser, or of
reckless disregard of its obligations and duties thereunder, the sub-adviser
shall not be liable for any action or failure to act in accordance with its
duties thereunder.
Subject to best execution the Fund has placed or may place orders for
portfolio transactions with banks and brokers that supply research, market and
statistical information ("research" as defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Fund and GiroCredit Research or BAI Fund
Adviser. The research has been or may be used by GiroCredit Research or BAI
Fund Adviser in advising other clients, and the Fund's negotiated commissions to
brokers and banks supplying research may not represent the lowest obtainable
commission rates. During the fiscal year ended August 31, 1994, the Fund paid
brokerage commissions to GiroCredit Bank amounting to $5,459 which represented
8.6% of the Fund's aggregate brokerage commission for such period.
PRINCIPAL OFFICERS OF THE FUND
AND CERTAIN OTHER INFORMATION
The principal officers of the Fund and their principal occupations during
the past five years are set forth below. Each of the officers listed below
serves as an officer of one or more of the other registered investment companies
sponsored by Alliance Capital.
Dave H. Williams, Chairman, (see Proposal One, "Election of the Directors,"
at page 3 for biographical information).
Norman S. Bergel, 44, Vice President, Vice President of ACMC and a Director
and Vice President of Alliance Capital Limited ("ACL").
Nicholas Crossland, 23, Vice President, an Assistant Vice President of ACL
with which he has been associated since 1991. Previously, he was a Trading
Assistant with Brewin Dolphin.
Mark H. Breedon, 42, Vice President, Vice President of ACMC and a Director
and Senior Vice President of ACL.
Mark D. Gersten, 44, Treasurer and Chief Financial Officer, a Senior Vice
President of Alliance Fund Services, Inc. ("AFS").
Edmund P. Bergan, Jr., 44, Secretary, Senior Vice President and General
Counsel of Alliance Fund Distributors, Inc. and AFS; Vice President and
Assistant General Counsel of ACMC.
15
<PAGE>
Section 30(f) of the Act and the rules under Section 16 of the Securities
Exchange Act of 1934, as amended, require that the Directors and officers of the
Fund and the Directors of ACMC and the managing directors of GiroCredit, among
others, file with the Securities and Exchange Commission and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
shares of the Fund. During 1994, required reports were not filed on a timely
basis on behalf of Ms. Madelon Devoe Talley and Messrs. Brian S. O'Neil and
Jerry M. de St. Paer, each a Director of ACMC. The report, in each case,
related to Form 3.
DEFINITION OF "VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" OF THE FUND
The "vote of a majority of the outstanding voting securities" of the Fund,
as defined in Section 2(a)(42) of the Act, means the vote (i) of 67% or more of
the voting securities of the Fund present or represented at any meeting, if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy, or (ii) of more than 50% of the outstanding
voting securities of the Fund, whichever is less. The only voting securities of
the Fund are its outstanding shares of common stock.
SUBMISSION OF PROPOSALS FOR THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual
meeting of stockholders of the Fund must be received by the Fund by October 6,
1995 for inclusion in the Fund's proxy statement and form of proxy relating to
that meeting. The submission by a stockholder of a proposal for inclusion in
the proxy statement does not guarantee that it will be included. Stockholder
proposals are subject to certain regulations under federal securities laws.
OTHER MATTERS
Management of the Fund does not know of any matters to be presented at the
Meeting other than those mentioned in this Proxy Statement. If any other
matters properly come before the Meeting, the shares represented by proxies will
be voted with respect thereto in accordance with the best judgment of the person
or persons voting the proxies.
REPORTS TO STOCKHOLDERS
The Fund will furnish each person to whom the proxy statement is delivered
with a copy of the Fund's latest annual report to stockholders upon request and
without charge. To request a copy, please call Alliance Fund Services at (800)
16
<PAGE>
227-4618 or contact Ms. Nancy Davis at Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105.
By order of the Board of Directors,
Edmund P. Bergan, Jr.
Secretary
February 3, 1995
New York, New York
17
00250000.AT3
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the day of March, 1995, by and between The
Austria Fund, Inc. (the "Fund"), a corporation organized under the laws of the
State of Maryland, and BAI Fondsberatung Ges. m.b.H., a corporation organized
under the laws of the Republic of Austria (the "Sub-Adviser").
WITNESSETH:
WHEREAS, the Fund has entered into an Investment Management and
Administration Agreement (the "Management Agreement") with Alliance Capital
Management L.P. (the "Investment Adviser"), a Delaware limited partnership,
pursuant to which the Fund has engaged the Investment Adviser to manage the
investment and reinvestment of its assets; and
WHEREAS, as permitted under the Management Agreement, the Investment
Adviser desires to utilize the services of the Sub-Adviser as sub-adviser with
respect to certain portfolio assets as defined in the Management Agreement; and
WHEREAS, the Sub-Adviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
1. The Sub-Adviser agrees to furnish to the Fund and the Investment
Adviser information, investment recommendations, advice and assistance with
respect to the Fund's investment in Austrian securities and shall furnish the
Fund and the Investment Adviser with such data, analysis and other information
regarding particular Austrian securities and issuers and such information on
Austrian economic conditions, statistics and forecasts as the Fund or the
Investment Adviser shall reasonably require from time to time. The Sub-
Adviser's activities under this Agreement will at all times be subject to the
supervision of the Investment Adviser. The Investment Adviser will from time to
time instruct the Sub-Adviser to render investment advice with respect to all or
some of the Fund's assets.
2. In consideration of the services to be performed by the Sub-
Adviser hereunder, the Fund shall pay the Sub-Adviser a fee, calculated and paid
monthly, at an annualized rate of .20% of the Fund's average weekly net assets.
For purposes of the calculation of such fee, average weekly net assets shall be
determined on the basis of the average net assets of the Fund for each weekly
period (ending on Friday) ending during the month. The net assets for each
weekly period are determined by averaging the net assets on the Friday of such
weekly period with the net assets on the Friday of the immediately preceding
weekly period. When a Friday is not a business day for the Fund, then the
calculation will be based on the Fund's net assets on the business day
immediately preceding such Friday. Such fee shall be payable in arrears on the
A-1
<PAGE>
last day of each calendar month for services performed hereunder during such
month. For purposes of this Agreement, a business day shall be a day on which
stock exchanges in the United States are open for business. If this Agreement
becomes effective after the beginning of a month, or this Agreement terminates
prior to the end of a month, such fee shall be pro-rated according to the
proportion which such portion of the month bears to the full month.
3. The Sub-Adviser will bear all of its expenses in connection with
the performance of its services hereunder and will from time to time at its sole
expense employ or associate with itself such persons as it believes to be
particularly fitted to assist it in the execution of its duties. The Investment
Adviser will be responsible for all expenses which it has agreed to bear
pursuant to the Management Agreement.
4. The Sub-Adviser is, and at all times during the term of this
Agreement shall be, duly registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act") and not prohibited by the
Advisers Act or the Investment Company Act of 1940, as amended (the "Investment
Company Act") or the rules and regulations under such Acts, from acting as Sub-
Adviser for the Fund as contemplated by the Fund's Prospectus and this
Agreement. The Sub-Adviser agrees that it will be in full compliance with any
provisions of the Investment Company Act and the Advisers Act, applicable to it
and its directors, officers or employees, and to interested persons with respect
to it.
5. The Sub-Adviser's services to the Fund and the Investment Adviser
are not to be deemed exclusive, and the Sub-Adviser is free to render similar
services to others.
6. Nothing herein shall be construed as constituting the Sub-Adviser
an agent of the Investment Adviser or of the Fund or requiring the Sub-Adviser
to take or refrain from taking any action that would cause the Sub-Adviser to be
in violation of the laws of the Republic of Austria or any other law applicable
to the Sub-Adviser in connection with its duties hereunder.
7. The Sub-Adviser shall be entitled to rely on information
reasonably believed by it to be accurate and reliable. The Fund and the
Investment Adviser agree that, except as may otherwise be provided by the
Investment Company Act, neither the Sub-Adviser nor its officers, directors,
employees or agents shall be subject to any liability for any mistake of
judgment or in any event whatsoever, except for lack of good faith, provided
that nothing herein shall be deemed to protect, or purport to protect, the Sub-
Adviser against any liability to the Fund or the Investment Adviser to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of its
reckless disregard of its obligations and duties hereunder.
8. This Agreement shall become effective on the date it is approved
by the majority vote of holders of the Fund's outstanding securities (as defined
in the Investment Company Act), and shall continue in effect until December 31,
1995 and thereafter for successive twelve month periods (computed from each
A-2
<PAGE>
January 1) provided that such continuance is specifically approved at least
annually by the affirmative vote of (i) a majority of the members of the Fund's
Board of Directors who are not interested persons of the Fund, the Sub-Adviser
or the Investment Adviser, cast in person at a meeting called for the purpose of
voting on such approval and (ii) the Fund's 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 penalty, by the Investment
Adviser or by the Fund's Board of Directors or by vote of holders of a majority
of the outstanding voting securities of the Fund, upon sixty (60) days written
notice delivered or sent by registered mail, postage prepaid, to the Sub-
Adviser, at its latest known address or at any other address of which the Sub-
Adviser shall have notified the Fund or the Investment Adviser in writing, or by
the Sub-Adviser upon sixty (60) days written notice to the Investment Adviser
and to the Fund. Any such notice shall be deemed given when received by the
addressee.
9. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by either party hereto, and this Agreement shall
terminate automatically in the event of its assignment. 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 Fund's Board of
Directors who are not interested persons of the Fund, the Sub-Adviser or the
Investment Adviser, cast in person at a meeting called for the purpose of voting
on such amendment.
10. 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, this Agreement has been entered into the day and
year first above written.
THE AUSTRIA FUND, INC.
By_________________________
Name:
Title:
BAI Fondsberatung Ges. m.b.H.
By________________________
Name:
Title:
A-3
<PAGE>
Agreed to and accepted as
of the date first set forth
above.
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its
General Partner
By____________________________
Name:
Title:
A-4
<PAGE>
TABLE OF CONTENTS Page
Introduction.......................... 1
Proposal One: Election of Directors.. 2
Proposal Two: Ratification of
Selection of Independent
Accountants........................ 8
Proposal Three: Approval of The New
Sub-Advisory Agreement With BAI
Fund Adviser....................... 8
Principal Officers of the Fund and
Certain Other Information.......... 13
Definition of "Vote of A Majority Of
The Outstanding Voting Securities"
of the Fund........................ 13
Submission of Proposals for the Next
Annual Meeting of Stockholders..... 14
Other Matters......................... 14
Reports to Stockholders............... 14
Exhibit A (Sub-Advisory Agreement)....A-1
__________________________________
The Austria Fund, Inc.
LOGO
Alliance Capital Management L.P.
__________________________________
NOTICE OF ANNUAL
MEETING OF
STOCKHOLDERS AND
PROXY STATEMENT
March 8, 1995
<PAGE>
APPENDIX
PROXY PROXY
THE AUSTRIA FUND, INC.
Instructions to the Stockholders of
The Austria Fund, Inc. in connection with the
Annual Meeting of Stockholders to be held on March 8, 1995.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE AUSTRIA FUND, INC.
The undersigned hereby instructs George O. Martinez and Carol H.
Rappa to vote all shares of the Common Stock of The Austria Fund,
Inc. (the "Corporation") registered in the name of the
undersigned at the Annual Meeting of Stockholders of the
Corporation to be held at 11:00 a.m. Eastern Standard Time on
March 8, 1995 at the offices of the Corporation, 1345 Avenue of
the Americas, 33rd Floor, New York, New York, 10105, and at all
adjournments thereof. The undersigned hereby acknowledges
receipt of the Notice of Meeting and accompanying Proxy Statement
and hereby instructs said promise to vote said shares as
indicated hereon.
This proxy, if properly executed, will be voted in the manner
directed by the undersigned, if no direction is made, this proxy
will be voted FOR election of the nominees as Directors and FOR
any proposal for which no choice is indicated.
PLEASE VOTE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE
Please sign this proxy exactly as your name appears on the books
of the Corporation. Joint owners should each sign personally.
Trustees and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority
must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
Has your address changes? Do you have any comments?
_____________________________ ___________________________
_____________________________ ____________________________
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN IT IN THE ENCLOSED ENVELOPE
<PAGE>
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE
With- For All
For held Except
1. Election of Directors / / / / / /
Class One Directors (term expires in 1997)
Mr. William H.M. de Gelsey, Dipl. Ing. Hellmut Longin, Mr. Peter
Nowak and Dr. Josef Vlcek
If you do not wish your shares voted "FOR" a particular nominee,
mark the "For All Except" box and strike a line through the
nominee's name. Your shares will be voted for the remaining
nominees.
2. Ratification of the selection of Price Waterhouse LLP as the
independent accountants for the Corporation for the fiscal
year ending August 31, 1995.
With-
For held Abstain
/ / / / / /
3. Approval of the proposed Sub-Advisory Agreement between the
Corporation and BAI Fondsberatung Ges. m.b.H.
With-
For held Abstain
/ / / / / /
4. In their decision on all the other business that may
properly come before the Annual Meeting and any adjournments
thereof.
REGISTRATION
Please be sure to sign and date this proxy. Date
Shareholder sign here Co-owner sign here
Mark box at right if comments or address
change have been name of the reverse side / /
side of this case.
RECORD DATE SHARES
