SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
As filed with the Securities and Exchange Commission on September 20, 1999.
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
JAPAN OTC EQUITY FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(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 transaction:
-------------------------------------------------------------------------
5. Total fee paid:
-------------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration 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>
JAPAN OTC EQUITY FUND, INC.
180 Maiden Lane
New York, New York 10038-4936
---------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
November 9, 1999
---------
TO THE SHAREHOLDERS OF
JAPAN OTC EQUITY FUND, INC.:
Notice is hereby given that the 1999 Annual Meeting of Shareholders (the
"Meeting") of Japan OTC Equity Fund, Inc. (the "Fund") will be held at the
offices of Nomura Asset Management U.S.A. Inc., 180 Maiden Lane, New York, New
York on Tuesday, November 9, 1999, at 11:00 A.M. for the following purposes:
(1) To elect six Directors to serve for the ensuing year;
(2) To consider and act upon a proposal to ratify the selection of
PricewaterhouseCoopers llp as independent accountants of the Fund for its fiscal
year ending February 29, 2000; and
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 3,
1999 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting or any adjournment thereof.
A complete list of the shareholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Fund for any purpose germane to the Meeting during ordinary business hours from
and after October 25, 1999, at the offices of the Fund, 180 Maiden Lane, New
York, New York.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the envelope provided for
that purpose. The enclosed proxy is being solicited on behalf of the Board of
Directors of the Fund.
By Order of the Board of Directors
JOHN J. BORETTI
Secretary
New York, New York
Dated: September 20, 1999
<PAGE>
[This Page intentionally left blank]
<PAGE>
PROXY STATEMENT
JAPAN OTC EQUITY FUND, INC.
180 Maiden Lane
New York, New York 10038-4936
------------
1999 ANNUAL MEETING OF SHAREHOLDERS
November 9, 1999
------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Japan OTC Equity Fund, Inc., a
Maryland corporation (the "Fund"), to be voted at the 1999 Annual Meeting of
Shareholders of the Fund (the "Meeting") to be held at the offices of Nomura
Asset Management U.S.A. Inc. ("NAM-U.S.A."), 180 Maiden Lane, New York, New York
on Tuesday, November 9, 1999, at 11:00 A.M. The approximate mailing date of this
Proxy Statement is September 20, 1999.
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, proxies
will be voted (a) FOR the election of six Directors, and (b) FOR the
ratification of the selection of independent accountants. Any proxy may be
revoked at any time prior to the exercise thereof by giving written notice to
the Secretary of the Fund at the Fund's address indicated above or by voting in
person at the Meeting.
The Board of Directors has fixed the close of business on September 3,
1999, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting and at any adjournment thereof.
Shareholders on the record date will be entitled to one vote for each share
held, with no shares having cumulative voting rights. As of September 3, 1999,
the Fund had outstanding 11,387,819 shares of Common Stock, par value $0.10 per
share. To the knowledge of management of the Fund, no person owned beneficially
more than 5% of the outstanding shares at such date.
The Board of Directors of the Fund knows of no business other than that
mentioned in Items 1 and 2 of the Notice of meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgement.
ITEM 1. ELECTION OF DIRECTORS
At the Meeting six Directors will be elected to serve until the next
Annual Meeting of Shareholders and until their successors are elected and
qualified. 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.
The Board of Directors of the Fund knows of no reason why any of these
nominees will be unable to serve, but in the event of any such unavailability,
the proxies received will be voted for such substitute nominees as the Board of
Directors may recommend.
<PAGE>
Certain information concerning the nominees is set forth as follows:
<TABLE>
<CAPTION>
Shares of
Common Stock
of the Fund
Principal Occupations Beneficially
Name and Address During Past Five Years Director Owned at
of Nominee and Public Directorships(1) Age Since September 3, 1999
---------- --------------------------- --- ----- -----------------
<S> <C> <C> <C> <C>
William G. Barker, Jr.(2) ..... Consultant to the television industry since 66 1993 -0-
111 Parsonage Road 1991.
Greenwich, Connecticut 06830
George H. Chittenden(2) ....... Director of Bank Audi (U.S.A.). 82 1990 500
155 Buffalo Bay, Neck Road
Madison, Connecticut 06443
Nobuo Katayama(3)(4) .......... President of the Fund since 1999; President 52 1999 -0-
180 Maiden Lane and Director of NAM-U.S.A. since 1999;
New York, New York 10038 Marketing Officer of Nomura Asset
Management Co., Ltd. ("NAM") from 1997 to
1999; Director and Chief Portfolio Manager
of NAM from 1993 to 1997.
Chor Weng Tan(2) .............. Managing Director for Education, The American 63 1990 -0-
3 Park Avenue Society of Mechanical Engineering since
New York, New York 10016 1991; and Director of Tround International,
Inc. from 1984 to 1997.
Arthur R. Taylor(2) ........... President of Muhlenberg College since 1992; 64 1990 -0-
2400 Chew Street Dean of the Faculty of Business of
Allentown, Pennsylvania 18104 Fordham University from 1985 to 1992;
Chairman of Arthur R. Taylor & Co. (
Investment firm); and Director of Louisiana
Land & Exploration Company and Pitney Bowes,
Inc from 1982 to 1997.
John F. Wallace(3) ............ Vice President of the Fund since 1997 and 71 1990 500
180 Maiden Lane Secretary and Treasurer of the Fund from
New York, New York 10038 1993 to 1997; Senior Vice President of
NAM-U.S.A. since 1981, Secretary since
1976, Treasurer since 1984 and Director since
1986.
</TABLE>
- ----------
(1) Each of the nominees is also a director of Jakarta Growth Fund, Inc.,
Korea Equity Fund, Inc. and Nomura Pacific Basin Fund, Inc., investment
companies for which NAM-U.S.A. acts as manager.
(2) Member of Audit Committee and Nominating Committee of the Board of
Directors.
(3) "Interested person," as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the Fund.
(4) Effective June 1, 1999, Nobuo Katayama was elected a Director of the Fund
to fill the vacancy created by the resignation of Haruo Sawada.
2
<PAGE>
Committees and Directors' Meetings. The Board of Directors has a standing
Audit Committee and Nominating Committee, each of which consists of the
Directors who are not "interested persons" of the Fund within the meaning of the
Investment Company Act. The principal purpose of the Audit Committee is to
review the scope of the annual audit conducted by the Fund's independent
accountants and the evaluation by such accountants of the accounting procedures
followed by the Fund. The principal purpose of the Nominating Committee is to
select and nominate the Directors who are not "interested persons" of the Fund
as defined in the Investment Company Act. The Nominating Committee will consider
nominees recommended by shareholders of the Fund. Shareholders should submit
nominees to the Secretary of the Fund. The Fund has no standing Compensation
Committee.
During the fiscal year ended February 28, 1999, the Board of Directors
held four meetings, and the Audit Committee and the Nominating Committee each
held one meeting. Each Director attended at least 75% of the meetings of the
Board of Directors, and each Director who is a member of the Audit and
Nominating Committees attended at least 75% of the meetings of such Committees
held during such period.
Interested Persons. The Fund considers two nominees, Messrs. Katayama and
Wallace, to be "interested persons" of the Fund within the meaning of Section
2(a) (19) of the Investment Company Act. Mr. Katayama is President of the Fund,
the President and a director of NAM-U.S.A. Mr. Wallace is a Vice President of
the Fund, a Senior Vice President, Secretary, Treasurer and a director of
NAM-U.S.A.
Compensation of Directors. The Manager pays all compensation of all
Directors of the Fund who are affiliated with the Manager or any of its
affiliates. The Fund pays to each Director not affiliated with the Manager an
annual fee of $5,000 plus $500 per meeting attended, together with such
Director's actual out-of-pocket expenses relating to attendance at meetings.
Such fees and expenses aggregated $40,075 for the fiscal year ended February 28,
1999. The Fund has paid affiliated directors' out-of-pocket expenses in
connection with attendance at meetings of the Board of Directors; such expenses
aggregated $6,047 for the fiscal year ended February 28, 1999.
The following table sets forth for the periods indicated compensation paid
by the Fund to its Directors and the aggregate compensation paid to the
Directors by all investment companies managed by NAM-U.S.A. or advised by NAM:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation from
Compensation Benefit Accrued as Part of Fund Complex Paid to
from Fund For Fund Expenses for its Directors During the
its Fiscal Year Ended Fiscal Year Ended Calendar Year Ended
Name of Director February 28, 1999 February 28, 1999* December 31, 1998*
---------------- ----------------- ------------------ ------------------
<S> <C> <C> <C>
William G. Barker ....... $7,000 None $29,000
George H. Chittenden .... $7,000 None $29,000
Nobuo Katayama** ........ -- None --
Chor Weng Tan ........... $7,000 None $29,000
Arthur R. Taylor ........ $7,000 None $29,000
John F. Wallace ......... -- None --
</TABLE>
- ----------
* In addition to the Fund, the "Fund Complex" includes Jakarta Growth Fund,
Inc., Korea Equity Fund, Inc., and Nomura Pacific Basin Fund, Inc.
** Effective June 1, 1999, Nobuo Katayama was elected a Director of the Fund
to fill the vacancy created by the resignation of Haruo Sawada.
3
<PAGE>
Officers of the Fund. The following table sets forth information
concerning the officers of the Fund. Officers of the Fund are elected and
appointed by the Directors and hold office until they resign, are removed or are
otherwise disqualified to serve.
<TABLE>
<CAPTION>
Shares of
Common Stock
of the Fund
Beneficially
Officer Owned at
Name and Principal Occupation During Past Five Years Office Age Since September 3, 1999
- ---------------------------------------------------- ------ --- ----- -----------------
<S> <C> <C> <C> <C>
Nobuo Katayama ................................................ President 52 1999 -0-
President and Director of NAM-U.S.A. since 1999,
Marketing Officer of NAM from 1997 to 1999, Director
and Chief Portfolio Manager of NAM from 1993 to 1997.
Keisuke Haruguchi ............................................. Vice President 49 1999 -0-
Senior Vice President and Director of NAM-U.S.A. since
1999; Senior Manager of NAM from 1997 to 1998; Manager
of The Nomura Securities Co., Ltd. from 1994 to 1996.
John F. Wallace ............................................... Vice President 71 1990 500
Senior Vice President of NAM-U.S.A. since 1981, Secretary
since 1976, Treasurer since 1984 and Director since
1986.
John J. Boretti ............................................... Secretary and 47 1997 -0-
Senior Vice President of NAM-U.S.A. since 1996, Vice Treasurer
President and Chief Financial Officer of Kidder
Peabody Asset Management, Inc. and Kidder, Peabody
Mutual Funds and Vice President of Kidder, Peabody &
Co. Inc. from 1993 to 1995.
</TABLE>
Stock Ownership. At September 3, 1999, the Directors and officers of the
Fund as a group (8 persons) owned an aggregate of 1,000 shares of the Fund,
representing less than 1% of the outstanding shares of the Fund. Mr. Katayama,
President of the Fund and Mr. Haruguchi a Vice President of the Fund, together
own less than 1% of the shares of The Nomura Securities Co., Ltd., an affiliate
of both NAM-U.S.A. and NAM.
4
<PAGE>
ITEM 2. SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected the firm of
PricewaterhouseCoopers llp ("PricewaterhouseCoopers"), as independent
accountants, to audit the financial statements of the Fund for the fiscal year
ending February 29, 2000. PricewaterhouseCoopers has acted as the Fund's
independent accountants since the inception of the Fund. The Fund knows of no
direct or indirect financial interest of such firm in the Fund. Such appointment
is subject to ratification or rejection by the shareholders of the Fund. Unless
a contrary specification is made, the accompanying proxy will be voted in favor
of ratifying the selection of such accountants.
PricewaterhouseCoopers also acts as independent accountants for The Nomura
Securities Co., Ltd. and certain of its affiliated entities, including
NAM-U.S.A., and for three other investment companies for which NAM-U.S.A. acts
as manager. The Board of Directors of the Fund considered the fact that
PricewaterhouseCoopers has been retained as the independent accountants for
these other entities in its evaluation of the ability of PricewaterhouseCoopers
to also function in that capacity for the Fund.
A representative of PricewaterhouseCoopers is expected to be present at
the Meeting and will have the opportunity to respond to questions from
shareholders and to make a statement if such person so desires.
ADDITIONAL INFORMATION
The expense of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund. The
Fund will reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the shares of
the Fund. In addition to the solicitation of proxies by mail, proxies may be
solicited in person or by telephone. The Fund has retained Corporate Investor
Communications, Inc., a proxy solicitation firm, to assist in the solicitation
of proxies for the Meeting, for a fee of approximately $3,500, together with
reimbursement of such firm's expenses.
The election of Directors requires a plurality of the votes cast, in
person or by proxy, at a meeting at which a quorum is duly constituted.
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of shares present and voting on the proposal at a
meeting at which a quorum is present. The holders of a majority of the shares of
stock of the Fund entitled to vote at the Meeting, present in person or by
proxy, shall constitute a quorum for the transaction of business at the Meeting.
The Fund expects that broker-dealer firms holding shares of the Fund in "street
name" for the benefit of their customers and clients will request the
instructions of such customers, clients and beneficial shareholders, on how to
vote their shares on each proposal before the Meeting. The Fund understands that
the rules of the New York Stock Exchange permit such broker-dealers, without
instructions from such customers, clients and beneficial shareholders, to grant
authority to the proxies designated by the Fund to vote on the items to be
considered at the Meeting if no instructions have been received prior to the
date specified in the broker-dealer firm's request for voting instructions.
Certain broker-dealer firms may exercise discretion over shares held in their
name for which no instructions are received by voting such shares in the same
proportion as they have voted shares for which they have received instructions.
5
<PAGE>
The shares as to which the proxies so designated are granted authority by
broker-dealer firms to vote on the items to be considered at the Meeting, the
shares as to which broker-dealer firms have declined to vote ("broker
non-votes"), as well as the shares as to which proxies are returned by record
shareholders but which are marked "abstain" on any item will be included in the
Fund's tabulation of the total number of votes present for purposes of
determining whether the necessary quorum of shareholders exists. However,
abstentions and broker non-votes will not be counted as votes cast. Therefore,
abstentions and broker non-votes will not have an effect on the vote on the
items to be considered at the meeting.
The address of NAM-U.S.A. is 180 Maiden Lane, New York, New York
10038-4936. The address of NAM is 2-1-14, Nihonbashi, Chuo-ku, Tokyo 103-8260,
Japan.
The Fund sends quarterly reports to shareholders. The Fund will furnish,
without charge, a copy of its most recent annual and semi-annual report
succeeding such annual report, if any, to shareholders upon request to the Fund
at 180 Maiden Lane, New York, New York 10038-4936 (or call 1-800-833-0018).
Proposals of Shareholders
Proposals of shareholders intended to be presented at the next annual
meeting of shareholders of the Fund must be received by the Fund for inclusion
in its proxy statement and form of proxy relating to that meeting by June 1,
2000.
By Order of the Board of Directors
JOHN J. BORETTI
Secretary
New York, New York
Dated: September 20, 1999
6
<PAGE>
JAPAN OTC EQUITY FUND, INC.
180 Maiden Lane
New York, New York 10038-4936
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Nobuo Katayama and John F. Wallace as proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated on the reverse hereof, all the common stock
of Japan OTC Equity Fund, Inc. (the "Fund") held of record by the undersigned on
September 3, 1999 at the Annual Meeting of the Shareholders of the Fund to be
held on November 9, 1999 or any adjournment thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as name(s) appear(s) hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized persons.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
<PAGE>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
JAPAN OTC EQUITY FUND, INC.
- --------------------------------------------------------------------------------
Mark box at right if an address change or comment has been noted on |_|
the reverse side of this card.
--------------------------
Please be sure to sign and date this Proxy Date
- --------------------------------------------------------------------------------
- ------Shareholder sign here---------------------------Co-owner sign here--------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" ALL PROPOSALS
1. Proposal for the election of Directors.
For For All
William G. Barker, Jr. Chor Weng Tan All With- Nominees
George H. Chittenden Arthur R. Taylor Nominees hold Except
Nobuo Katayama John F. Wallace |_| |_| |_|
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Nominees Except" box and strike a line through the nominee(s)'
name(s). Your shares will be voted for the remaining nominee(s).
2. Proposal to ratify the selection of For Against Abstain
PricewaterhouseCoopers LLP as the |_| |_| |_|
independent accountants of the Fund.
3. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR Proposals 1 and 2.
RECORD DATE SHARES:
