As filed with the Securities and Exchange Commission on August 20, 1997
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
/x/ Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JAKARTA GROWTH FUND, INC.
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- - --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration state-
<PAGE>
ment 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:
- - --------------------------------------------------------------------------------
2
<PAGE>
JAKARTA GROWTH FUND, INC.
180 Maiden Lane
New York, New York 10038
----------
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 24, 1997
----------
TO THE SHAREHOLDERS OF
JAKARTA GROWTH FUND, INC.:
Notice is hereby given that the 1997 Annual Meeting of Shareholders (the
"Meeting") of Jakarta Growth Fund, Inc. (the "Fund") will be held at the offices
of Nomura Capital Management, Inc., 180 Maiden Lane, New York, New York on
Wednesday, September 24, 1997 at 10:30A.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
Price Waterhouse LLP as independent accountants of the Fund for its fiscal
year ending March 31, 1998;
(3) To consider and act upon a proposal to approve a new Management
Agreement between the Fund and Nomura Asset Management U.S.A. Inc.;
(4) To consider and act upon a proposal to approve a new Investment
Advisory Agreement between Nomura Asset Management U.S.A. Inc. and Nomura
Asset Management Co., Ltd.;
(5) To consider and act upon a proposal to approve a new Investment
Sub-Advisory Agreement between Nomura Asset Management Co., Ltd. and Nomura
Asset Management Singapore Ltd.; and
(6) 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 August 4, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1 THROUGH 5.
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 September 10, 1997, 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 F. WALLACE
New York, New York Secretary
Dated: August 20, 1997
<PAGE>
PROXY STATEMENT
JAKARTA GROWTH FUND, INC.
180 Maiden Lane
New York, New York 10038
----------
1997 ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 24, 1997
----------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Jakarta Growth Fund, Inc., a
Maryland corporation (the "Fund"), to be voted at the 1997 Annual Meeting of
Shareholders of the Fund (the "Meeting") to be held at the offices of Nomura
Capital Management, Inc. ("NCM"), 180 Maiden Lane, New York, New York, on
Wednesday, September 24, 1997, at 10:30A.M. The approximate mailing date of this
Proxy Statement is August 21, 1997.
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, (b) FOR the ratification of
the selection of independent accountants, (c) FOR the approval of a new
Management Agreement between the Fund and Nomura Asset Management U.S.A. Inc.
("NAM-U.S.A."), (d) FOR the approval of a new Investment Advisory Agreement
between NAM-U.S.A. and Nomura Asset Management Co., Ltd. ("NAM"), and (e) FOR
the approval of a new Investment Sub-Advisory Agreement between NAM and Nomura
Asset Management Singapore Ltd. ("NAM-Singapore"). 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 August 4, 1997
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 August 4, 1997, the Fund had outstanding
5,016,740 shares of Common Stock, par value $0.10 per share.
The Board of Directors of the Fund knows of no business other than that
mentioned in Items 1 through 5 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 judgment.
<PAGE>
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 duly 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.
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 August 4, 1997
---------------- ------------------------ --- ------ --------------
<S> <C> <C> <C> <C>
William G. Barker, Jr. (2).......... Consultant to the television industry 64 1993 -0-
111 Parsonage Road since 1991; Senior Vice President
Greenwich, Connecticut 06830 and Chief Financial Officer of The
CBS/Fox Company from 1982 to 1991.
George H. Chittenden (2)............ Director of Bank Audi (US). 80 1990 750
155 Buffalo Bay, Neck Road
Madison, Connecticut 06443
Haruo Sawada (3).................... President of the Fund since 1997; 47 1997 -0-
180 Maiden Lane President and Director of NCM
New York, New York 10038 since 1997; General Manager of
Nomura Investment Management
Co., Ltd. ("NIMCO") from 1994
to 1996; Senior Vice President of
NCM from 1990 to 1994.
Chor Weng Tan (2)................... Managing Director for Education, The 61 1990 -0-
345 East 47th Street American Society of Mechanical
New York, New York 10017 Engineering since 1991;
Professor, School of Engineering,
The Cooper Union from 1963 to
1991; Dean, School of
Engineering, The Cooper Union
from 1975 to 1987; Executive
Officer, The Cooper Union
Research Foundation from 1976
to 1987; Program Director,
Presidential Young Investigator
Awards of National Science
Foundation from 1987 to 1989;
and Director, Tround
International, Inc.
</TABLE>
2
<PAGE>
<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 August 4, 1997
---------------- ------------------------ --- ------ --------------
<S> <C> <C> <C> <C>
Arthur R. Taylor (2)................ President of Muhlenberg College since 62 1990 -0-
2400 Chew Street 1992; Dean of the Faculty of
Allentown, Pennsylvania 18104 Business of 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)................. Secretary and Treasurer of the Fund 68 1990 -0-
180 Maiden Lane since 1990; Senior Vice President
New York, New York 10038 of NCM since 1981, Secretary
since 1976, Treasurer since 1984 and
Director since 1986; Senior Vice
President of Nomura Securities
International, Inc. ("NSI") since 1978,
Secretary from 1977 to 1991, and
Director from 1983 to 1991.
</TABLE>
- - ---------------------
(1) Each of the nominees is also a director of Japan OTC Equity Fund, Inc.,
Korea Equity Fund, Inc. and Nomura Pacific Basin Fund, Inc., investment
companies for which NCM 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.
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 March 31, 1997, the Board of Directors held
seven meetings; the Audit Committee held one meeting; and the Nominating
Committee 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. Sawada and
Wallace, to be "interested persons" of the Fund within the meaning of Section
2(a)(19) of the Investment Company Act. Mr. Sawada is President of the Fund and
the President and a director of NCM. Mr. Wallace is Secretary and Treasurer of
the Fund, Senior Vice President, Secretary, Treasurer and a director of NCM and
Senior Vice President of NSI, which is an affiliate of NCM.
3
<PAGE>
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 a Director's
actual out-of-pocket expenses related to attendance at meetings. Such fees and
expenses aggregated $40,821 for the fiscal year ended March 31, 1997. The Fund
has paid affiliated Directors' out-of-pocket expenses in connection with
attendance at meetings of the Board of Directors; such expenses aggregated
$2,776 for the fiscal year ended March 31, 1997.
The following table sets forth for the periods indicated compensation paid
by the Fund to its Directors and the aggregate compensation paid by all
investment companies managed by NCM or advised by NIMCO to the Directors:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation from
Compensation Benefits Accrued as Part ofFund 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 March 31, 1997 March 31, 1997 December 31, 1996*
---------------- ----------------- --------------------- --------------------
<S> <C> <C> <C>
William G. Barker, Jr................... $8,500 None $33,000
George H. Chittenden.................... $8,500 None $33,000
Haruo Sawada............................ -- None --
Chor Weng Tan........................... $8,500 None $33,000
Arthur R. Taylor........................ $8,500 None $33,000
John F. Wallace......................... -- None --
</TABLE>
- - -----------------
* In addition to the Fund, the "Fund Complex" includes Japan OTC Equity Fund,
Inc., Korea Equity Fund, Inc. and Nomura Pacific Basin Fund, Inc.
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
Name and Principal Officer Owned at
Occupation During Past Five Years Office Age Since August 4, 1997
----------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
Haruo Sawada..................................... President 47 1997 -0-
President and Director of NCM since 1997,
General Manager of NIMCO from 1994 to 1996,
Senior Vice President of NCM
from 1990 to 1994.
Mitsutoyo Kohno.................................. Vice President 48 1990 -0-
Senior Vice President of NCM since 1991
and Director since 1994, Vice President
from 1989 to 1991.
John F. Wallace.................................. Secretary and 68 1990 -0-
Senior Vice President of NCM since 1981, Treasurer
Secretary since 1976, Treasurer since 1984
and Director since 1986. Senior Vice President
of NSI since 1978, Secretary from 1977 to 1991,
and Director from 1983 to 1991.
</TABLE>
4
<PAGE>
Stock Ownership. At August 4, 1997, the Directors and officers of the Fund
as a group (7 persons) owned an aggregate of 750 shares, less than 1% of the
outstanding shares of the Fund. Mr. Sawada, President of the Fund, and Mr.
Mitsutoyo Kohno, Vice President of the Fund, together own less than 1% of the
shares of The Nomura Securities Co., Ltd., an affiliate of both NCM and NIMCO.
ITEM 2. SELECTION OF INDEPENDENT ACCOUNTANTS
On the recommendation of the Audit Committee, 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 Price Waterhouse LLP ("Price Waterhouse"),
as independent accountants, to audit the financial statements of the Fund for
the fiscal year ending March 31, 1998. Price Waterhouse 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.
Price Waterhouse also acts as independent accountants for The Nomura
Securities Co., Ltd. and certain of its affiliated entities, including NCM, and
for three other investment companies for which NCM acts as manager. The Board of
Directors of the Fund considered the fact that Price Waterhouse has been
retained as the independent accountants for these other entities in its
evaluation of the ability of Price Waterhouse to also function in that capacity
for the Fund.
A representative of Price Waterhouse 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.
ITEMS 3., 4. AND 5. APPROVAL OR DISAPPROVAL OF THE MANAGEMENT, INVESTMENT
ADVISORY AND INVESTMENT SUB-ADVISORY ARRANGEMENTS
Nomura Capital Management, Inc. ("NCM") has served as the management
company for the Fund since the Fund commenced operations in 1990. Nomura
Investment Management Co., Ltd. ("NIMCO"), the parent of NCM, has served as the
investment adviser for the Fund since that time. During 1996, following approval
by the Fund's shareholders, NIMCO entered into an investment sub-advisory
agreement with Nomura Capital Management (Singapore) Ltd. ("NCM-Singapore"),
another subsidiary of NIMCO. NCM, NIMCO, and NCM-Singapore are each affiliates
of The Nomura Securities Co., Ltd. ("Nomura"), which is the largest securities
company in Japan. The existing agreements between the Fund and NCM, NCM and
NIMCO, and NIMCO and NCM-Singapore are referred to below as the Current
Management Agreement, the Current Investment Advisory Agreement, and the Current
Investment Sub-Advisory Agreement, respectively.
NIMCO has announced a proposed merger pursuant to which it and The Nomura
Securities Investment Trust Management Co., Ltd. ("NSITM"), another investment
advisory company affiliated with Nomura, will consolidate their organizations.
The merger of the two affiliated companies is permitted by recent changes in
Japanese law. NIMCO is the largest investment advisory company in Japan in terms
of total assets under management. NSITM is the largest investment trust
management company in Japan. At June 30, 1997, NIMCO and NSITM together managed
approximately $127.9 billion of investments.
It is presently contemplated that the corporate restructuring of NIMCO and
NSITM (the "NAM Restructuring") will take place on or about October 1, 1997. As
part of the NAM Restructuring, it is anticipated that a subsidiary of NSITM
based in New York will merge into NCM, and that a subsidiary of NSITM located in
Singapore will merge into NCM-Singapore. After the restructuring, the advisory
firms will operate under the following names: the successor firm to NIMCO will
be Nomura Asset Management Co., Ltd. ("NAM"), the successor firm to NCM will be
Nomura
5
<PAGE>
Asset Management U.S.A. Inc. ("NAM-U.S.A."), and the successor firm to
NCM-Singapore will be Nomura Asset Management Singapore Ltd. ("NAM-Singapore").
NCM has advised the Board of Directors and the Fund that the changes in
the corporate structure of the advisers in the United States, Japan and
Singapore are not expected to affect the portfolio management or day-to-day
operations of the Fund. However, these changes may constitute an "assignment" of
the relevant contracts under the Investment Company Act, which would result in a
termination of the Current Management Agreement, the Current Investment Advisory
Agreement and the Current Investment Sub-Advisory Agreement. Accordingly, in
anticipation of the consummation of the NAM Restructuring and in order to ensure
the continuity of management, investment advisory and investment sub-advisory
services provided to the Fund by NCM, NIMCO and NCM-Singapore, respectively, a
new management agreement between the Fund and NAM-U.S.A. (the "New Management
Agreement"), a new investment advisory agreement between NAM-U.S.A. and NAM (the
"New Investment Advisory Agreement"), and a new investment sub-advisory
agreement between NAM and NAM-Singapore (the "New Investment Sub-Advisory
Agreement") are proposed to be approved prior to such date by a majority of the
Fund's shareholders.
The proposed new agreements under which the Fund will operate after the
NAM Restructuring are substantively identical to the agreements under which the
Fund currently operates. The services to be provided by NAM-U.S.A., NAM and
NAM-Singapore after the NAM Restructuring will be identical to the services
currently provided by NCM, NIMCO and NCM-Singapore, respectively. NCM has
advised the Board of Directors of the Fund that the NAM Restructuring will
provide the Fund with access to an investment adviser with a larger capital base
and increased investment research staff. NCM has further advised the Board of
Directors that it believes that there will be no reduction in the quality of any
of the services presently furnished by NCM, NIMCO, and NCM-Singapore,
respectively. AS DESCRIBED BELOW, THE PROPOSED NEW AGREEMENTS DO NOT ALTER THE
RATE OF MANAGEMENT COMPENSATION PRESENTLY PAYABLE BY THE FUND.
In their consideration of the above agreements, the Board of Directors
received information relating to, among other things, alternatives to the
present arrangements, the nature, quality and extent of the advisory and other
services to be provided to the Fund by NAM-U.S.A., NAM and NAM-Singapore, and
comparative data with respect to the advisory fees paid by other international
funds, the operating expenses and expense ratio of the Fund as compared to such
funds and the performance of the Fund as compared to such funds. The Independent
Directors also considered the quality of the personnel providing management and
investment advisory services to the Fund, NCM's representations that there will
be no material adverse change in the services provided to the Fund after the NAM
Restructuring is completed, the relative profitability of the present
arrangements to NCM, NIMCO and NCM-Singapore, and information about the services
to be performed and the personnel performing such services under the proposed
agreements. The Independent Directors were advised by separate counsel in
connection with their review of the management, investment advisory and
investment sub-advisory arrangements of the Fund.
If approved by the Fund's shareholders at the Meeting, each of the New
Management Agreement, the New Investment Advisory Agreement and the New
Investment Sub-Advisory Agreement will remain in effect until September 30,
1999, unless terminated as described below. The Fund's management agreement with
NCM was last approved by its shareholders on July 9, 1991. The Fund's investment
advisory and investment sub-advisory arrangements were last approved by its
shareholders on November 12, 1996. Although the management, investment advisory
and investment sub-advisory arrangements consist of three separate contracts,
none of the agreements will become effective unless all three are approved by
shareholders.
As indicated above, NIMCO and NSITM are affiliates of Nomura, the largest
securities company in Japan. The Tokyo Prosecutor's Office indicted Nomura and
certain of its former officers in June and July, 1997 for loss compensation in
violation of the Securities and Exchange Law of Japan. Such transactions
involved compensation of a client for losses incurred in prior securities
transactions for the purpose of rewarding him for cooperating with
6
<PAGE>
Nomura in ensuring the smooth conduct of its annual shareholders' meeting
held in June 1995. In addition, on July 30, 1997, the Ministry of Finance of
Japan announced administrative penalties against Nomura, each for certain
specified time periods, as follows: suspension of Nomura's own-account
stock-related dealing; suspension of stock-related business at all Nomura branch
offices; suspension of all securities transactions at certain divisions of
Nomura's headquarters; suspension of all securities transactions at Nomura's
headquarters; and ban from participation in the auction and underwriting of
public bonds in Japan. On August 8, 1997, the Tokyo Stock Exchange (which had
previously imposed certain sanctions against Nomura) and the Japan Securities
Dealers Association each imposed fines on Nomura of approximately $845,000. NCM
has advised the Board of Directors that neither NCM nor NIMCO had any
involvement in any of the activities that were the subject of the indictments
and administrative penalties, and that NCM has been advised by NSITM that
neither it nor any of its subsidiaries had any such involvement.
INFORMATION CONCERNING NAM-U.S.A., NAM, AND NAM-SINGAPORE
NAM-U.S.A. will provide global investment advisory services, primarily
with respect to Japanese and other Pacific Basin securities, for U.S.
institutional clients. NAM-U.S.A. also will act as one of the investment
advisers to six other investment companies, three of which are U.S. registered
investment companies. NAM-U.S.A. will be a subsidiary of NAM and Nomura Research
Institute ("NRI").
The following table sets forth the name, proposed title and principal
occupations of the proposed principal executive officer and each director of
NAM-U.S.A. upon the completion of the NAM Restructuring:
<TABLE>
<CAPTION>
TITLE WITH NAM-U.S.A. PRESENT
NAME* AFTER NAM RESTRUCTURING PRINCIPAL OCCUPATION
- - ----- ---------------------- ------------------
<S> <C> <C>
Haruo Sawada......................... Director and President Director and President of NCM
Brian X. Fitzgibbon.................. Director Director and Senior Vice President of NCM
Takashi Harino....................... Director Director of NSITM
Shigenobu Hayakawa................... Director Managing Director of NRI
Shigehito Hayashi.................... Director Director and President of Nomura Asset
Management (U.S.A.) Inc.
Naotake Hirasawa..................... Director Director of NIMCO
Mitsutoyo Kohno...................... Director Director and Senior Vice President of NCM
Takahide Mizuno...................... Director Director of NIMCO
Takeo Nakamura....................... Director Managing Director of NIMCO
Marti G. Subrahmanyam................ Director Professor of Finance and Economics,
New York University, Leonard N. Stern
School of Business Administration
John F. Wallace...................... Director Director, Senior Vice President, Secretary and
Treasurer of NCM
</TABLE>
- - -----------------
* The address of Messrs. Sawada, Fitzgibbon, Hayashi, Kohno, Subrahmanyam,
and Wallace is 180 Maiden Lane, New York, New York 10038. The address of
Messrs. Harino, Hirasawa, Mizuno, and Nakamura is 1-12-11, Nihonbashi,
Chuo-ku, Tokyo 103, Japan. The address of Mr. Hayakawa is 1-10-1,
Nihonbashi, Chuo-ku, Tokyo 103, Japan.
7
<PAGE>
NAM will provide investment advisory services for Japanese and
international clients. In addition to the Fund, NAM will act as an investment
adviser with respect to the following registered investment companies: Japan OTC
Equity Fund, Inc., Korea Equity Fund, Inc., and Nomura Pacific Basin Fund, Inc.
NRI, whose address is 1-10-1, Nihonbashi, Chuo-ku, Tokyo 103, Japan, will own
12.44% of NAM.
The following table sets forth the name, proposed title and principal
occupation of the proposed principal executive officer and each director of NAM
upon the completion of the NAM Restructuring:
<TABLE>
<CAPTION>
TITLE WITH NAM AFTER PRESENT
NAME* NAM RESTRUCTURING PRINCIPAL OCCUPATION
- - ----- ------------------ -------------------
<S> <C> <C>
Hitoshi Tonomura..................... Chairman of the Board President of NSITM
Tadashi Takubo....................... President President of NIMCO
Tadashi Akimoto...................... Director Director of NIMCO
Kazuhiko Hama ....................... Director Director of NSITM
Takashi Harino....................... Director Director of NSITM
Naotake Hirasawa..................... Director Director of NIMCO
Toshio Ikawa......................... Director Director of NSITM
Hideaki Ishii........................ Director Managing Director of NSITM
Shinzo Katada........................ Director Managing Director of NIMCO
Atsushi Kinebuchi.................... Director Executive Managing Director of NSITM
Norio Kinoshita...................... Director Director of NSITM
Masami Kitaoka....................... Director Director of NSITM
Mitsunori Minamio.................... Director Director of NIMCO
Haruo Miyako......................... Director Managing Director of NSITM
Takahide Mizuno...................... Director Director of NIMCO
Takeo Nakamura....................... Director Managing Director of NIMCO
Naoki Santo.......................... Director Executive Managing Director of NIMCO
Takanori Shimizu..................... Director Managing Director of NSITM
Teruo Shimizu........................ Director Director of NSITM
Hiromichi Tabata..................... Director Director of NSITM
Katsuya Takanashi.................... Director Executive Vice President of NSITM
Yasuo Takebayashi.................... Director Managing Director of NSITM
Takanori Tanabe...................... Director Executive Managing Director of NSITM
Isao Teranishi....................... Director Executive Managing Director of NIMCO
</TABLE>
- - ----------------------
* The address of the principal executive officer and each director is
1-12-11, Nihonbashi, Chuo-ku, Tokyo 103, Japan.
NAM-Singapore, a Singapore corporation, will be a subsidiary of NAM and
Nomura Asset Management U.K. Limited ("NAM-U.K."). NAM-Singapore will provide
investment advisory services relating to Pacific Basin securities to
institutional clients, including pension and profit sharing plans. In addition,
NAM-Singapore will act as an investment adviser for Nomura Pacific Basin Fund,
Inc. and for such services will receive from NAM-U.S.A. an investment advisory
fee of .0275% of such Fund's average daily net assets. NAM, whose address will
be 1-12-11, Nihonbashi, Chuo-ku, Tokyo 103, Japan, and NAM-U.K., whose address
is Nomura House, 1 St. Martin's-le-Grand, London EC1A 4NP, England, will own 75%
and 20%, respectively, of NAM-Singapore.
8
<PAGE>
The following table sets forth the name, proposed title and principal
occupation of the proposed principal executive officer and each director of
NAM-Singapore upon the completion of the NAM Restructuring.
<TABLE>
<CAPTION>
TITLE WITH NAM-SINGAPORE PRESENT
NAME* AFTER NAM RESTRUCTURING PRINCIPAL OCCUPATION
- - ----- ----------------------- -------------------
<S> <C> <C>
Takashi Kusano....................... Managing Director Managing Director of NCM-Singapore
Reginald J. Frank.................... Director Director of NCM-Singapore
Takashi Harino....................... Director Director of NSITM
Naotake Hirasawa..................... Director Director of NIMCO
Noritada Ishikawa.................... Director Senior Manager of NSITM
Takahide Mizuno...................... Director Director of NIMCO
Takeo Nakamura....................... Director Managing Director of NIMCO
Koichi Suzuki........................ Director President and Managing Director of Nomura
Asset Management (Singapore) Limited
</TABLE>
- - ---------------------
* The address of Messrs. Kusano and Frank is 6 Battery Road, 42-03, Standard
Chartered Bank Building, Singapore 049909. The address of Messrs. Harino,
Hirasawa, Ishikawa, Mizuno, and Nakamura is 1-12-11, Nihonbashi, Chuo-ku,
Tokyo 103, Japan. The address of Mr. Suzuki is 6 Battery Road, 40-02,
Standard Chartered Bank Building, Singapore 049909.
TERMS OF THE NEW MANAGEMENT AGREEMENT, THE NEW INVESTMENT ADVISORY AGREEMENT,
AND THE NEW INVESTMENT SUB-ADVISORY AGREEMENT
Copies of the forms of the New Management Agreement, the New Investment
Advisory Agreement, and the New Investment Sub-Advisory Agreement are set forth
as Exhibits A, B, and C, respectively. Set forth below is a summary of the terms
of such agreements. As discussed above, the proposed agreements are
substantively identical to the agreements under which the Fund currently
operates. THE PROPOSED AGREEMENTS DO NOT CHANGE THE AMOUNT OF MANAGEMENT FEES
PAYABLE BY THE FUND.
Under the New Management Agreement, NAM-U.S.A. agrees to provide, or
arrange for the provision of, investment advisory and management services to the
Fund, subject to the oversight and supervision of the Board of Directors of the
Fund. In addition to the management of the Fund's portfolio in accordance with
the Fund's investment policies and the responsibility for making decisions to
buy, sell or hold particular securities, NAM-U.S.A. is obligated to perform, or
arrange for the performance of, the administrative and management services
necessary for the operation of the Fund. NAM-U.S.A. is also obligated to provide
all the office space, facilities, equipment and personnel necessary to perform
its duties thereunder. Pursuant to such Agreement, NAM-U.S.A. is authorized to
retain NAM to act as an investment adviser for the Fund.
Pursuant to the New Investment Advisory Agreement between NAM-U.S.A. and
NAM, NAM will agree to furnish NAM-U.S.A. with economic research, securities
analysis and investment recommendations and to review and render investment
advice with respect to the Fund. NAM will not be responsible for the actual
portfolio decisions of the Fund. Pursuant to such Agreement, NAM is authorized
to retain NAM-Singapore to act as an investment sub-adviser for the Fund.
Pursuant to the New Investment Sub-Advisory Agreement between NAM and
NAM-Singapore, NAM-Singapore will agree to furnish NAM-U.S.A. and NAM with
economic research, securities analysis and investment recommendations and to
review and render investment advice with respect to the Fund. NAM-Singapore will
not be responsible for the actual portfolio decisions of the Fund.
9
<PAGE>
COMPENSATION AND EXPENSES
AS DESCRIBED ABOVE, THE MANAGEMENT COMPENSATION PRESENTLY PAYABLE BY THE
FUND WILL REMAIN THE SAME UNDER THE PROPOSED CONTRACTUAL ARRANGEMENTS. As
compensation for its services to the Fund, NAM-U.S.A. will receive a monthly
fee, computed daily, at the annual rate of 1.10% of the value of the Fund's
average weekly net assets. NAM-U.S.A. will pay NAM monthly fees at the annual
rate of .50% of the Fund's average weekly net assets, and NAM will pay
NAM-Singapore monthly fees at the annual rate of .25% of the Fund's average
weekly net assets. The fee payable to NAM-U.S.A. is higher than that paid by
most management investment companies, but NAM-U.S.A. believes it is comparable
to fees paid by other international funds. For the fiscal year ended March 31,
1997, the Fund paid or accrued fees to NCM of $506,083. At July 31, 1997, the
net assets of the Fund aggregated approximately $52.1 million. At this net asset
level, the annual management fee would aggregate $572,595.
The New Management Agreement obligates NAM-U.S.A. to provide, or arrange
for the provision of, investment advisory services and to pay all compensation
of and furnish office space for officers and employees of the Fund, as well as
the fees of all Directors of the Fund who are affiliated persons of NAM-U.S.A.
or any of its affiliates. The Fund pays all other expenses incurred in the
operation of the Fund, including, among other things, taxes, expenses for legal,
tax and auditing services, costs of printing proxies, listing fees, stock
certificates, shareholder reports, prospectuses, charges of the custodian,
sub-custodians and transfer agent, Securities and Exchange Commission (the
"Commission") fees, expenses of registering the shares under Federal, state and
foreign laws, fees and expenses of unaffiliated Directors, accounting and
pricing costs (including the weekly calculation of net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or non-recurring
expenses, and other expenses properly payable by the Fund.
For the fiscal year ended March 31, 1997, the Fund paid brokerage
commissions of $240,252. Nomura and its affiliates earned no commissions on
execution of such portfolio security transactions.
The following table sets forth information relating to the registered
investment companies which invest primarily in securities of companies domiciled
in Pacific Basin countries with the investment objective of long-term capital
appreciation for which NAM-U.S.A., NAM, and their affiliates will act as manager
or investment adviser:
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS AT
JULY 31, 1997
INVESTMENT COMPANY ANNUAL ADVISORY FEES (MILLIONS)
------------------- -------------------- ------------
<S> <C> <C>
JAPAN OTC EQUITY FUND, INC.
Manager: Management Fee: $77.5
NAM-U.S.A. 1.10% of net assets not in excess of $50 million,
Investment Adviser: 1.00% of net assets in excess of $50 million but
NAM not exceeding $100 million, and .90% of net
assets in excess of $100 million
Investment Advisory Fee:
.50% of net assets not in excess of $50 million,
.45% of net assets in excess of $50 million but
not exceeding $100 million, and .40% of net
assets in excess of $100 million; paid by
NAM-U.S.A.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS AT
JULY 31, 1997
INVESTMENT COMPANY ANNUAL ADVISORY FEES (MILLIONS)
------------------- -------------------- ------------
<S> <C> <C>
KOREA EQUITY FUND, INC.(1) $50.5
Manager: Management Fee:
NAM-U.S.A. 1.10% of net assets.
Investment Adviser: Investment Advisory Fee:
NAM .55% of net assets; paid by NAM-U.S.A.
NOMURA PACIFIC BASIN FUND, INC. $23.8
Manager: Management Fee:
NAM-U.S.A. .75% of net assets.
Investment Advisers: Investment Advisory Fees:
NAM .26125% of net assets; paid by NAM-U.S.A.
to NAM
NAM-Singapore .0275% of net assets; paid by NAM-U.S.A. to
NAM-Singapore
</TABLE>
- - ----------------
(1) LG Investment Trust Management Co., Ltd. will act as investment sub-adviser
to Korea Equity Fund, Inc. for which it will receive compensation of .10%
of net assets paid by NAM-U.S.A.
Duration and Termination. As indicated above, each of the New Management
Agreement, the New Investment Advisory Agreement and the New Investment
Sub-Advisory Agreement will remain in effect until September 30, 1999, and from
year to year thereafter if approved annually (a) by the Board of Directors of
the Fund or by a majority of the outstanding shares of the Fund and (b) by a
majority of the Directors who are not parties to such contract or interested
persons (as defined in the Investment Company Act) of any such party. Such
contracts are not assignable and may be terminated without penalty on 60 days'
written notice at option of either party thereto or by the vote of the
shareholders of the Fund.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Allied Dunbar Assurance plc, an English corporation ("Allied Dunbar"),
Threadneedle Investment Managers Limited, an English Corporation
("Threadneedle") and B.A.T. Industries plc, and English corporation ("B.A.T."),
have reported a 5.3% beneficial ownership of the Fund's Common Stock. Allied
Dunbar, located at Allied Dunbar Centre, Swindon SN1 1EZ England, is the
beneficial owner of the Fund's Common Stock through its Allied Dunbar Far East
Fund, Allied Dunbar Equity Far East Fund and Allied Dunbar Pension Equity Far
East Fund. Threadneedle, located at 9-15 Sackville Street, London W1A 2JP
England, acts as investment adviser to such funds and, therefore, may be deemed
to be a beneficial owner of such securities. In addition, B.A.T., located at
Windsor House, 50 Victoria Street, London SW1H 0NL England, may be deemed to be
the indirect beneficial owner of such securities by indirectly owning 99% of the
outstanding shares of Allied Dunbar.
Newgate Management Associates, located at 80 Field Point Road, Greenwich,
Connecticut 06830, claims beneficial ownership of shares representing in excess
of 10% of the Fund's outstanding shares.
11
<PAGE>
To the knowledge of the management of the Fund, the persons listed below
are the only beneficial owners of more than 5% of the Fund's outstanding shares.
Percent of
Shares of Common Stock the Fund's
Name of of the Fund Common Stock
Beneficial Owner Beneficially Owned Owned
---------------- ---------------------- -------------
Allied Dunbar Assurance plc, 265,800 5.3%
Threadneedle Investment Managers Limited,
and B.A.T. Industries plc
Newgate Management Associates 575,500 11.5%
ADDITIONAL INFORMATION
The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund,
except to the extent such expenses are attributable to the NAM Restructuring, in
which case they will be borne by NCM. 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 $10,000, 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 the shares present and voting on the proposal
at a meeting at which a quorum is present. Approval of each of the Management
Agreement, Investment Advisory Agreement and Investment Sub-Advisory Agreement
requires the vote of a majority of the outstanding voting securities of the Fund
which, under the Investment Company Act, is the vote (a) of 67% or more of the
shares of the Fund present at the meeting of the holders if more than 50% of the
outstanding shares are present or represented by proxy, or (b) of more than 50%
of the outstanding shares, whichever is less. If the Management, Investment
Advisory and Investment Sub-Advisory Agreements are not approved by shareholders
at the Meeting, the Board of Directors will reconsider the Fund's management,
investment advisory and investment sub-advisory arrangements. 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 and clients on how to vote their shares on each
proposal before the Meeting. The Fund understands that, under the rules of the
NYSE, such broker-dealers may, without instructions from such customers and
clients, grant authority to the proxies designated by the Fund to vote on
certain 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.
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
12
<PAGE>
counted as votes cast. Therefore, abstentions and broker non-votes will not have
an effect on the election of Directors or the ratification of the selection of
independent accountants. Abstentions and broker non-votes will have the same
effect as a vote against the approval of each of the Management Agreement,
Investment Advisory Agreement and Investment Sub-Advisory Agreement.
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 (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,
1998.
By Order of the Board of Directors
JOHN F. WALLACE
Secretary
Dated: August 20, 1997
13
<PAGE>
Exhibit A
MANAGEMENT AGREEMENT
AGREEMENT made this ____ day of _____________ 1997, by and between JAKARTA
GROWTH FUND, INC., a Maryland corporation (hereinafter referred to as the
"Fund"), and NOMURA ASSET MANAGEMENT U.S.A. INC., a New York corporation
(hereinafter referred to as the "Manager").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a non-diversified, closed-end,
management investment company registered under the Investment Company Act of
1940, as amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE I
DUTIES OF THE MANAGER
The Fund hereby retains the Manager to act as the manager of the Fund and
to furnish the Fund with the management and investment advisory services
described below, subject to the policies of, review by and overall control of
the Board of Directors of the Fund, for the period and on the terms and
conditions set forth in this Agreement. The Manager hereby accepts such
employment and agrees during such period, at its own expense, to render, or
arrange for the rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein.
(a) Management and Administrative Services. The Manager shall perform, or
supervise the performance of, the management and administrative services
necessary for the operation of the Fund including administering stockholder
accounts and handling stockholder relations. The Manager shall provide the Fund
with office space, equipment and facilities and such other services as the
Manager, subject to review by the Board of Directors of the Fund, shall from
time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Manager shall also, on behalf of the Fund, conduct
relations with custodians, depositories, transfer agents, dividend disbursing
agents, other stockholder servicing agents, accountants, attorneys,
underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and
such other persons in any such other capacity deemed to be necessary or
desirable. The Manager shall generally monitor the Fund's compliance with
investment policies and restrictions as set forth in filings made by the Fund
under Federal securities laws. The Manager shall make reports to the Board of
Directors of the Fund of the performance of its obligations hereunder and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable. The
Manager and each of its affiliates shall for all purposes herein be deemed to be
an independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
(b) Investment Advisory Services. The Manager shall provide the Fund with
such investment research, advice and supervision as the latter may from time to
time consider necessary for the proper supervision of the assets of the Fund.
The Manager shall act as investment adviser to the Fund and as such shall
furnish continuously an investment
A-1
<PAGE>
program for the Fund and shall determine from time to time which securities
shall be purchased, sold or exchanged and what portion of the assets of the Fund
shall be held in the various securities in which the Fund invests, options,
futures, options on futures or in cash, subject always to the restrictions of
the Articles of Incorporation and By-Laws of the Fund, as amended from time to
time, the provisions of the Investment Company Act and the statements relating
to the Fund's investment objective, investment policies and investment
restrictions as the same are set forth in filings made by the Fund under Federal
securities laws. The Manager shall make decisions for the Fund as to foreign
currency matters and make determinations as to foreign exchange contracts. The
Manager shall make recommendations as to the manner in which voting rights,
rights to consent to corporate action and any other rights pertaining to the
Fund's portfolio securities shall be exercised. Should the Board of Directors of
the Fund at any time, however, make any definite determination as to investment
policy and notify the Manager thereof in writing, the Manager shall be bound by
such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Manager shall
take, on behalf of the Fund, all actions which it deems necessary to implement
the investment policies determined as provided above, and in particular to place
all orders for the purchase or sale of portfolio securities for the Fund's
account with brokers or dealers selected by it, and to that end, the Manager is
authorized as the agent of the Fund to give instructions to the Custodian of the
Fund as to deliveries of securities and payments of cash for the account of the
Fund. In connection with the selection of such brokers and dealers and the
placing of such orders, the Manager is directed at all times to seek to obtain
execution and price within the policy guidelines determined by the Board of
Directors of the Fund and set forth in the filings made by the Fund under
Federal securities laws. Subject to this requirement and the provisions of the
Investment Company Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Manager may select brokers or dealers
with which it, or the Fund, is affiliated.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Manager. The Manager assumes and shall pay for maintaining the
staff and personnel necessary to perform its obligations under this Agreement
and shall, at its own expense, provide the office space, equipment and
facilities which it is obligated to provide under Article I hereof, and shall
pay all compensation of officers of the Fund and all directors of the Fund who
are "affiliated persons" (as defined in the Investment Company Act) of the
Manager.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including, without limitation: organization costs, taxes,
expenses for legal and auditing services, costs of printing proxies, stock
certificates, stockholder reports, prospectuses, charges of the Custodian, any
Sub-Custodian and Transfer and Dividend Disbursing Agent, expenses of portfolio
transactions, Securities and Exchange Commission and stock exchange fees,
expenses of registering the Fund's shares under Federal, state and foreign laws,
expenses of administering any dividend reinvestment plan (except to the extent
set forth in such plan), fees and actual out-of-pocket expenses of directors who
are not affiliated persons of the Manager, accounting and pricing costs
(including the calculation of the net asset value), insurance, interest,
brokerage costs, litigation and other extraordinary or non-recurring expenses,
and other like expenses properly payable by the Fund.
ARTICLE III
COMPENSATION OF THE MANAGER
For the services rendered, the equipment and facilities furnished and
expenses assumed by the Manager, the Fund shall pay to the Manager at the end of
each calendar month a fee based upon the average weekly value of the net assets
of the Fund at the annual rate of 1.10% of the Fund's average weekly net assets
(i.e., the average weekly
A-2
<PAGE>
value of the total assets of the Fund, minus the sum of liabilities of the
Fund), commencing on the day following effectiveness hereof. For purposes of
this calculation, average weekly net assets is determined at the end of each
month on the basis of the average net assets of the Fund for each week during
the month. The assets for each weekly period are determined by averaging the net
assets at the last business day of the prior week. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fee as set forth above. During any period when the determination of net asset
value is suspended by the Board of Directors of the Fund, the net asset value of
a share for the last week prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding week until it
is again determined.
ARTICLE IV
INVESTMENT ADVISORY AGREEMENT
This Agreement is entered into with the understanding that the Manager
will enter into a Investment Advisory Agreement with Nomura Asset Management
Co., Ltd., in the form attached hereto as Exhibit A, in which the Manager will
contract for advisory services and pay the Investment Adviser compensation for
its services out of the compensation received hereunder pursuant to Article III
at the rates set forth therein. Such Investment Advisory Agreement will be
coterminous with this Management Agreement.
ARTICLE V
LIMITATION OF LIABILITY OF THE MANAGER
The Manager shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the execution and management of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article V, the term "Manager" shall include any affiliates of the Manager
performing services for the Fund contemplated hereby and directors, officers and
employees of the Manager as well as that corporation itself.
ARTICLE VI
ACTIVITIES OF THE MANAGER
The services of the Manager to the Fund are not to be deemed to be
exclusive, the Manager and any person controlled by or under common control with
the Manager (for purposes of this Article VI referred to as "affiliates") being
free to render services to others. It is understood that directors, officers,
employees and stockholders of the Fund are or may become interested in the
Manager and its affiliates, as directors, officers, employees, partners, and
stockholders or otherwise and that directors, officers, employees, partners, and
stockholders of the Manager and its affiliates are or may become similarly
interested in the Fund, and that the Manager is or may become interested in the
Fund as stockholder or otherwise.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force until ______________ __, 1999 and thereafter, but only
so long as such continuance is specifically approved at least annually by (i)
the Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities
A-3
<PAGE>
of the Fund, and (ii) a majority of those directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, or by the Manager, on sixty days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its assignment.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those directors who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered the
Agreement as of the date first above written.
JAKARTA GROWTH FUND, INC.
By _______________________________
NOMURA ASSET MANAGEMENT U.S.A. INC.
By _______________________________
A-4
<PAGE>
Exhibit B
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of _____________ 1997, by and between NOMURA
ASSET MANAGEMENT U.S.A. INC., a New York corporation (hereinafter referred to as
the "Manager"), and NOMURA ASSET MANAGEMENT CO., LTD., a Japanese corporation
(hereinafter referred to as the "Investment Adviser").
W I T N E S S E T H :
WHEREAS, Jakarta Growth Fund, Inc. (the "Fund") is engaged in business as
a non-diversified, closed-end, management investment company registered under
the Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, the Manager and the Investment Adviser are engaged in business as
registered investment advisers under the Investment Advisers Act of 1940, as
amended; and
WHEREAS, the Manager has entered into a management agreement with the Fund
dated as of _________, 1997 (the "Management Agreement"); and
WHEREAS, the Investment Adviser is willing to provide investment advisory
services to the Manager in connection with the Fund's operations on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE I
DUTIES OF THE INVESTMENT ADVISER
Subject to the broad supervision of the Manager and the Fund, the
Investment Adviser shall provide the Manager with such economic research and
securities analysis as the latter may from time to time consider necessary for
the proper supervision of the Fund's assets. The Investment Adviser shall
continuously review the Fund's holdings and shall make recommendations as to
which securities shall be purchased, sold or exchanged and what portion of the
assets of the Fund shall be held in the various securities in which the Fund
invests, subject always to the restrictions of the Articles of Incorporation and
By-Laws of the Fund, as amended from time to time, the provisions of the
Investment Company Act and the statements relating to the Fund's investment
objective, investment policies and investment restrictions as the same are set
forth in filings made by the Fund under Federal securities law. The Investment
Adviser shall make recommendations as to foreign currency matters and the
advisability of entering into foreign exchange contracts. The Investment Adviser
shall also make recommendations as to the manner in which voting rights, rights
to consent to corporate action and any other rights pertaining to the Fund's
portfolio securities shall be exercised.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Investment Adviser shall furnish, at its own expense, all
administrative services, office space, equipment and facilities, investment
advisory, statistical and research services, and executive, supervisory and
clerical personnel necessary to carry out its obligations under this Agreement.
B-1
<PAGE>
ARTICLE III
COMPENSATION OF THE INVESTMENT ADVISER
For the services to be rendered as provided herein, the Manager shall pay
to the Investment Adviser at the end of each calendar month a fee based upon the
average weekly value of the net assets of the Fund at the annual rate of 0.50%
of the Fund's average weekly net assets (i.e., the average weekly value of the
total assets of the Fund minus the sum of accrued liabilities of the Fund),
commencing on the day following effectiveness hereof. For purposes of this
calculation, average weekly net assets is determined at the end of each month on
the basis of the average net assets of the Fund for each week during the month.
The assets for each weekly period are determined by averaging the net assets at
the last business day of the prior week. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for that part of the month that this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the fee
as set forth above. During any period when the determination of net asset value
is suspended by the Board of Directors of the Fund, the average net asset value
of a share for the last week prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding week until it
is again determined. It is understood that a portion of such compensation is
being paid by the Manager to the Investment Adviser, as agent for the Investment
Sub-adviser referenced in Article IV hereof, and that the Investment Adviser
will remit such compensation to the Investment Sub-adviser pursuant to the
Investment Sub-Advisory Agreement referenced in such Article IV.
ARTICLE IV
INVESTMENT SUB-ADVISORY AGREEMENT
This Agreement is entered into with the understanding that the Investment
Adviser will enter into an Investment Sub-Advisory Agreement with Nomura Asset
Management Singapore Ltd., substantially in the form attached hereto as an
Exhibit, in which the Investment Adviser will contract for advisory services and
pay the Investment Sub-adviser compensation for its services out of the
compensation received hereunder pursuant to Article III.
ARTICLE V
LIMITATION OF LIABILITY OF THE INVESTMENT ADVISER
The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article V, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Fund contemplated hereby and
directors, officers, partners and employees of the Investment Adviser and such
affiliates.
ARTICLE VI
ACTIVITIES OF THE INVESTMENT ADVISER
The services of the Investment Adviser to the Fund are not to be deemed to
be exclusive, the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purpose of this Article VI
referred to as "affiliates") being free to render services to others. It is
understood that directors, officers, employees and stockholders of the Manager
are or may become interested in the Investment Adviser and its affiliates, as
directors, officers, employees and stockholders or otherwise and that directors,
officers, employees and stockholders of the Investment Adviser and its
affiliates are or may become similarly interested in the Manager or the Fund,
and that the Investment Adviser is or may become interested in the Manager or
the Fund as stockholder or otherwise.
B-2
<PAGE>
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force until ___________ __, 1999 and thereafter, but only so
long as the Management Agreement remains in force and provided that such
continuance is specifically approved at least annually by (i) the Board of
Directors of the Fund or by the vote of a majority of the outstanding voting
securities of the Fund and (ii) a majority of those directors who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Manager, by the Board of Directors of the Fund, by vote of a
majority of the outstanding voting securities of the Fund or by the Investment
Adviser, on sixty days' written notice to the other parties hereto. This
Agreement shall automatically terminate in the event of its assignment.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those directors of the Fund who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
B-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
NOMURA ASSET MANAGEMENT U.S.A. INC.
By ________________________________
NOMURA ASSET MANAGEMENT CO., LTD.
By ________________________________
B-4
<PAGE>
Exhibit C
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of ____________ 1997, by and between NOMURA
ASSET MANAGEMENT CO., LTD., a Japanese corporation (hereinafter referred to as
the "Investment Adviser") and NOMURA ASSET MANAGEMENT SINGAPORE LTD., a
Singapore corporation (hereinafter referred to as the "Investment Sub-adviser").
W I T N E S S E T H :
WHEREAS, Jakarta Growth Fund, Inc. (the "Fund") is engaged in business as
a non-diversified, closed-end, management investment company registered under
the Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, Nomura Asset Management U.S.A. Inc., a New York corporation
(hereinafter referred to as the "Manager"), has entered into a management
agreement with the Fund dated as of __________ __, 1997 (the "Management
Agreement") and an investment advisory agreement relating to the Fund with the
Investment Adviser dated as of __________ __, 1997 (the "Investment Advisory
Agreement"); and
WHEREAS, the Manager, the Investment Adviser and the Investment
Sub-adviser are engaged in business as registered investment advisers under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Investment Sub-adviser is willing to provide investment
advisory services to the Manager and the Investment Adviser in connection with
the Fund's operations on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE I
DUTIES OF THE INVESTMENT SUB-ADVISER
Subject to the broad supervision of the Investment Adviser and the Fund,
the Investment Sub-adviser shall provide the Manager and the Investment Adviser
with such economic research and securities analysis as the Manager and the
Investment Adviser may request. The Investment Sub-adviser shall continuously
review the Fund's holdings and shall make recommendations to the Manager and the
Investment Adviser as to which such securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held in the
various securities in which the Fund invests, subject always to the restrictions
of the Articles of Incorporation and By-Laws of the Fund, as amended from time
to time, the provisions of the Investment Company Act and the statements
relating to the Fund's investment objective, investment policies and investment
restrictions as the same are set forth in filings made by the Fund under Federal
securities laws. The Investment Sub-adviser shall make recommendations as to
foreign currency matters and the advisability of entering into foreign exchange
contracts. The Investment Sub-adviser shall also make recommendations as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Fund's portfolio securities shall be exercised.
Recommendations made by the Investment Sub-adviser pursuant to this Article I
shall be provided concurrently to the Manager and the Investment Adviser. The
Manager shall advise the Investment Sub-adviser as to action taken or to be
taken based upon such recommendations.
C-1
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Investment Sub-adviser shall furnish, at its own expense, all
administrative services, office space, equipment and facilities, investment
advisory, statistical and research services, and executive, supervisory and
clerical personnel necessary to carry out its obligations under this Agreement.
ARTICLE III
COMPENSATION OF THE INVESTMENT SUB-ADVISER
For the services to be rendered as provided herein, the Investment Adviser
shall pay to the Investment Sub-adviser at the end of each calendar month a fee
based upon the average weekly value of the net assets of the Fund at the annual
rate of 0.25% of the Fund's average weekly net assets (i.e., the average weekly
value of the total assets of the Fund minus the sum of accrued liabilities of
the Fund), commencing on the day following effectiveness hereof. For purposes of
this calculation, average weekly net assets is determined at the end of each
month on the basis of the average net assets of the Fund for each week during
the month. The assets for each weekly period are determined by averaging the net
assets at the last business day of the prior week. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month that this Agreement
is in effect shall be prorated in a manner consistent with the calculation of
the fee as set forth above. During any period when the determination of net
asset value is suspended by the Board of Directors of the Fund, the average net
asset value of a share for the last week prior to such suspension shall for this
purpose be deemed to be the net asset value at the close of each succeeding week
until it is again determined.
ARTICLE IV
LIMITATION OF LIABILITY OF THE INVESTMENT SUB-ADVISER
The Investment Sub-adviser shall not be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in the management of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Sub-adviser" shall include any affiliates of
the Investment Sub-adviser performing services for the Fund contemplated hereby
and directors, officers, partners and employees of the Investment Sub-adviser
and such affiliates.
ARTICLE V
ACTIVITIES OF THE INVESTMENT SUB-ADVISER
The services of the Investment Sub-adviser to the Fund are not to be
deemed to be exclusive, the Investment Sub-adviser and any person controlled by
or under common control with the Investment Sub-adviser (for purpose of this
Article V referred to as "affiliates") being free to render services to others.
It is understood that directors, officers, employees and stockholders of the
Manager and the Investment Adviser are or may become interested in the
Investment Sub-adviser and its affiliates, as directors, officers, employees and
stockholders or otherwise and that directors, officers, employees and
stockholders of the Investment Sub-adviser and its affiliates are or may become
similarly interested in the Manager, the Investment Adviser or the Fund, and
that the Investment Sub-adviser is or may become interested in the Manager, the
Investment Adviser or the Fund as stockholder or otherwise.
C-2
<PAGE>
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force until __________ __, 1999 and thereafter, but only so
long as the Management Agreement and the Investment Advisory Agreement remain in
force and provided that such continuance is specifically approved at least
annually by (i) the Board of Directors of the Fund or by the vote of a majority
of the outstanding voting securities of the Fund and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Investment Adviser, by the Board of Directors of the Fund, by
vote of a majority of the outstanding voting securities of the Fund or by the
Investment Sub-adviser, on sixty days' written notice to the parties hereto.
This Agreement shall automatically terminate in the event of its assignment or
upon the termination of the Management Agreement or the Investment Advisory
Agreement.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved in accordance with applicable requirements under the
Investment Company Act.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York or any of the
provisions herein conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
C-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
NOMURA ASSET MANAGEMENT CO., LTD.
By ____________________________________
NOMURA ASSET MANAGEMENT SINGAPORE LTD.
By ____________________________________
C-4
<PAGE>
JAKARTA GROWTH FUND, INC.
180 Maiden Lane
New York, New York 10038
P R O X Y
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Haruo Sawada 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 Jakarta Growth Fund, Inc. (the "Fund") held of record by the undersigned on
August 4, 1997 at the Annual Meeting of the shareholders of the Fund to be held
on September 24, 1997 or any adjournment thereof.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY USING 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 full 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
JAKARTA GROWTH 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. Election of Directors.
William G. Barker, Jr. Chor Weng Tan
George H. Chittenden Arthur R. Taylor
Haruo Sawada John F. Wallace
For All Nominees |_| Withhold |_| For All Nominees Except |_|
If you do not wish your shares voted "For" a particular nominee, mark the "For
All Nominees Except" box and strike a line through that nominee's(s') name(s).
Your shares will be voted for the remaining nominee(s).
2. Proposal to ratify the selection of Price Waterhouse LLP
as the independent accountants of the Fund.
For |_| Against |_| Abstain |_|
3. Proposal to approve the new Management Agreement.
For |_| Against |_| Abstain |_|
4. Proposal to approve the new Investment Advisory Agreement.
For |_| Against |_| Abstain |_|
5. Proposal to approve the new Investment Sub-Advisory Agreement.
For |_| Against |_| Abstain |_|
6. 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 ALL PROPOSALS.
.
RECORD DATE SHARES:
<PAGE>
Jakarta Growth Fund, Inc.
180 Maiden Lane
New York, NY 10038
August 20, 1997
Dear Shareholder:
We are writing to request your vote on matters that are important to the
Fund. We urge you to review the attached proxy statement, cast your vote on the
attached proxy card and return your card in the enclosed envelope.
Of particular importance are the proposals to approve new management,
investment advisory and investment sub-advisory agreements. As described in the
enclosed proxy statement, these new agreements are required in light of a
corporate restructuring of the Fund's investment advisers in which they are
being consolidated with affiliated advisory companies. The new agreements do not
change the fee paid by the Fund. The agreements will not become effective unless
each of them is approved.
The Directors unanimously recommend that you vote "FOR" each of the
proposals described in the Fund's proxy statement. Your participation is
important. If you will not be attending the meeting personally, we urge you to
return the enclosed proxy card.
On behalf of the Board of Directors
Haruo Sawada
President
