As filed with the Securities and Exchange Commission on August 7, 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:
/x/ Preliminary Proxy Statement / / Confidential, for Use of
the Commission Only
/ / Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
/ / 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 9:00 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
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., a new
Investment Advisory Agreement between Nomura Asset Management U.S.A. Inc.
and Nomura Asset Management Co., Ltd. and a new Investment Sub-Advisory
Agreement between Nomura Asset Management Co., Ltd. and Nomura Asset
Management Singapore Ltd.;
(4) To consider and act upon a shareholder proposal asking the Board
of Directors to adopt a fundamental policy to make offers to repurchase the
Fund's shares at periodic intervals pursuant to Rule 23c-3 under the
Investment Company Act of 1940 and submit, as required by Rule 23c-3, such
policy for shareholder approval; and
(5) 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, 2, and 3, and
AGAINST item 4.
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.
<PAGE>
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
Secretary
New York, New York
Dated: August , 1997
2
<PAGE>
PROXY STATEMENT
JAKARTA GROWTH FUND, INC.
180 Maiden Lane
New York, New York 10038
-----------------
NOTICE OF 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 9:00 A.M. The approximate mailing date of this
Proxy Statement is August __, 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."), a new Investment Advisory Agreement between NAM-U.S.A. and
Nomura Asset Management Co., Ltd. ("NAM") and a new Investment Sub-Advisory
Agreement between NAM and Nomura Asset Management Singapore Ltd.
("NAM-Singapore"), and (d) AGAINST the shareholder proposal asking the Board of
Directors to adopt a fundamental policy to make offers to repurchase the Fund's
shares at periodic intervals pursuant to Rule 23c-3 under the Investment Company
Act of 1940 and submit, as required by Rule 23c-3, such policy for shareholder
approval. 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 4 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
Greenwich, Connecticut 06830 President 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 62 1990 -0-
2400 Chew Street since 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 Pitney Bowes, Inc. and
Louisiana Land & Exploration
Company.
John F. Wallace (3) ......... Secretary and Treasurer of the Fund 68 1990 -0-
180 Maiden Lane since 1990; Senior Vice
New York, New York 10038 President 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 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 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.
Shares of
Common Stock
of the Fund
Beneficially
Owned at
Name and Principal Occupation Officer August 4,
During Past Five Years Office Age Since 1997
- -------------------------------- ------ --- ------- ------------
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 48 1990 -0-
Senior Vice President of NCM President
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 Treasurer
since 1981, 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.
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.
ITEM 3. 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 NCM-Singapore will merge into a
subsidiary of NSITM located in Singapore. After the restructuring, the advisory
firms will operate under the following names: the Japanese firm will be Nomura
Asset Management Co., Ltd. ("NAM"), the United States firm will be Nomura Asset
5
<PAGE>
Management U.S.A. Inc. ("NAM-U.S.A."), and the Singapore firm 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,
shareholders can only vote on the three agreements together and not
individually.
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. 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;
6
<PAGE>
suspension of all securities transactions at Nomura's headquarters; and ban from
participation in the auction and underwriting of public bonds in Japan. 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").
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. also is obligated to provide
all the office space, facilities, equipment and personnel necessary to perform
its duties thereunder.
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:
Title with NAM-U.S.A. Present
Name* after NAM Restructuring Principal Occupation
- ----- ----------------------- --------------------
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 Director of NSITM
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
- --------------
* 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, Hayakawa, Hirasawa, Mizuno, and Nakamura is 1-12-11,
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:
Title with NAM after Present
Name* NAM Restructuring Principal Occupation
- ----- ----------------- --------------------
Hitoshi Tonomura............. Chairman of President of NSITM
the Board
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
- ---------------
* 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
8
<PAGE>
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.
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.
Title with
NAM-Singapore
after NAM Present
Name* Restructuring Principal Occupation
- ----- ------------- --------------------
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
- ---------------
* The address of Messrs. Kusano and Frank is 6 Battery Road, 42-03 Standard
Chartered 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 Nomura House, 1 St.
Martin's-le-Grand, London EC1A 4NP, England.
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-
9
<PAGE>
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.
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 justified by
the types of portfolio securities held by the Fund and that 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:
10
<PAGE>
Approximate
Net Assets at
July 31, 1997
Investment Company Annual Advisory Fees (millions)
- ------------------ -------------------- ----------
Japan OTC Equity Fund, Inc. $77.5
Manager: Management Fee:
NAM-U.S.A. 1.10% of net assets not in excess
Investment Adviser: of $50 million, 1.00% of net assets
NAM in excess of $50 million but 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.
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
- ---------------
(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.
11
<PAGE>
ITEM 4. SHAREHOLDER PROPOSAL THAT THE BOARD OF DIRECTORS ESTABLISH
A FUNDAMENTAL POLICY REQUIRING THE FUND TO MAKE
REPURCHASE OFFERS AT PERIODIC INTERVALS
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY AND STRONGLY RECOMMENDS THAT
SHAREHOLDERS VOTE AGAINST ITEM 4. THE DIRECTORS BELIEVE THE PROPOSAL IS
INCONSISTENT WITH THE INTERESTS OF LONG-TERM INVESTORS IN THE FUND.
Shareholder Proposal
The Fund has been informed by Newgate Management Associates ("Newgate"), 80
Field Point Road, Greenwich, Connecticut 06830, a shareholder claiming
beneficial ownership of 581,490 shares of common stock of the Fund, that it
expects to present the following proposal at the meeting:
RESOLVED, that the holders of the common stock of Jakarta Growth Fund,
Inc. (the "Fund") hereby recommend that the Fund's Board of Directors
establish a fundamental policy requiring the Fund to make repurchase offers
for Fund's shares at periodic intervals pursuant to Rule 23c-3 promulgated
under the Investment Company Act of 1940, as such Rule may be amended from
time to time.
Based upon information available to the Fund, the Fund believes that
Newgate failed to timely comply with Commission requirements to file reports
with the Commission and provide copies to the Fund relating to such firm's
ownership of shares of the Fund. Newgate claims beneficial ownership of shares
representing in excess of 10% of the Fund's outstanding shares. With respect to
such share ownership, Rule 13d-1 adopted by the Commission under the Securities
Exchange Act of 1934, as amended, requires the beneficial owner of more than 5%
of an issuer's outstanding stock to file reports with the Commission, the New
York Stock Exchange (the "NYSE") (in the case of the Fund), and the Fund.
Newgate was required by federal securities laws to file a report on Schedule 13G
no later than February 14, 1997. Such report was not filed by Newgate until July
25, 1997, following notice by the Fund to Newgate of the Fund's belief that
Newgate did not comply with the applicable federal securities laws.
Newgate has requested that the following statement be included in the proxy
statement in support of its proposal:
The prospectus, dated April 10, 1990, pursuant to which the Fund offered
its Common Stock to the public, states that: "In recognition of the
possibility that the Fund's shares may trade at a discount, the Fund may
from time to time take action to attempt to reduce or eliminate a market
value discount from net asset value, either by repurchasing Fund shares in
the open market when it can do so at prices below the current net asset
value per shares, or by making a tender offer for shares of the Fund."
DESPITE THE FACT THAT THE FUND HAS TRADED AT AN AVERAGE DISCOUNT OF 10.65%
FOR THE PAST 52 WEEKS (AUGUST 2, 1996 TO JULY 25, 1997), THE BOARD OF
TRUSTEES HAS NOT CONDUCTED TENDER OFFERS OR REPURCHASED FUND SHARES IN THE
OPEN MARKET.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T. The plot points replace a chart showing the premium/discount at
which shares of the Fund have traded for the period August 2, 1996 to July 25,
1997.]
8/2/96 (7.51%)
8/23/96 (2.71%)
9/13/96 (6.91%)
10/4/96 (5.90%)
10/25/96 (10.41%)
11/15/96 (8.41%)
12/6/96 (14.38%)
12/27/96 (12.21%)
1/17/97 (13.62%)
2/7/97 (13.15%)
12
<PAGE>
2/28/97 (13.35%)
3/21/97 (12.13%)
4/11/97 (10.62%)
5/2/97 (13.92%)
5/23/97 (11.97%)
6/13/97 (12.46%)
7/4/97 (11.50%)
7/25/97 (8.88%)
If the Fund adopted the proposed fundamental policy, the Fund would become
a "closed-end interval fund." Rule 23c-3, under the Investment Company Act
of 1940, provides that closed-end management investment companies such as
the Fund may make periodic and certain discretionary repurchases of their
securities at net asset value. Periodic repurchases, which may be for
between 5% and 25% of the Fund's outstanding shares must be made pursuant
to a fundamental policy adopted by the Fund. The Board of Directors of the
Fund would determine the interval between repurchase offers and the
percentage of Fund shares subject to repurchases consistent with Rule
23c-3.
o Adoption of this policy would assure shareholders of at least an
annual opportunity to obtain net asset value for at least some of
their shares, subject to certain limitations imposed by Rule 23c-3.
o The periodic repurchase offer by the Fund for a portion of its shares
may reduce the discount to net asset value at which shares of the Fund
have historically traded on the NYSE.
o In the opinion of the Proponent, this policy will promote stable
portfolio management and maintain the Fund as a viable investment
vehicle for its long-term shareholders.
FOR ALL OF THE FOREGOING REASONS, THE PROPONENT STRONGLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THIS PROPOSAL.
Response by the Board of Directors
I. Recommendation.
THE BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE PROPOSAL DESCRIBED ABOVE AND
STRONGLY URGES ALL SHAREHOLDERS TO VOTE AGAINST THE PROPOSAL. THE REASONS FOR
THIS UNANIMOUS OPINION, WHICH ARE DISCUSSED BELOW, ARE AS FOLLOWS:
Purpose of o The Fund is designed to produce returns for
The Fund long-term investors in Indonesia, a the Fund
developing country with great natural wealth
whose securities market has been constricted.
The Directors and management believe that (a)
Indonesia offers promise for growth over the
long-term, (b) the Fund is a long-term
investment vehicle to participate in this
growth, and (c) the shareholder proposal to
require periodic repurchases -- which would
reduce the size of the Fund over long-term --
is inconsistent with the Fund's purpose.
Trading o Over the past five years, trading in the
history Fund's shares has ranged from a share price
premium of 34% above net asset value to a
discount of 15%. (A chart is set forth
below.) From the Fund's inception through
July 31, 1997, the Fund's shares traded at an
average premium of 1.6%.
o The market price behavior of the Fund has not
been dissimilar to that of other single
country funds. Sentiment in the United States
toward international investment has not been
as favorable as toward domestic investment in
recent years and this has depressed prices of
substantially all closed-end single country
funds investing in
13
<PAGE>
developing markets.
o Management of the Fund is aware of no
evidence that conversion to an interval fund
would have any significant long-term impact
on any discount at which the Fund's shares
trade on the NYSE.
Disadvantages o In light of the Fund's objective and
of proposal long-term investment horizon, it is illogical
for the Fund to be subjected to continuing
repurchase requirements. The Fund's
investment advisers believe, contrary to the
proponent's assertion, that periodic
repurchases would not promote stable
portfolio management. Rather, the Fund's
advisers are of the conviction that any
periodic repurchases would disrupt the
portfolio management and could cause the Fund
to dispose of its assets in an illiquid
market at undervalued prices.
o Periodic repurchases would reduce the Fund's
assets. The Fund's operating expense ratio
will increase as its assets are reduced.
Conclusion o Management of the Fund is not aware of a
single instance where a country fund has
converted to an interval fund. The Directors
believe the proposal for the Fund is
inconsistent with the interests of the
long-term investors for whom the Fund is
designed. The Directors believe that the
proposal (if adopted) would largely benefit
investors seeking a short-term profit at the
expense of the long-term investors for whom
the Fund was designed.
II. Basis for Directors' Views. In determining their response to the
shareholder proposal, the Directors held three board meetings and reviewed
extensive materials concerning the performance of the Fund, the attributes
of its closed-end structure, historical discount/premium data for the
trading of the Fund's shares, and the trading experience of other
closed-end funds investing in developing countries such as Indonesia. The
Directors' analysis is summarized below.
o Purpose of Fund. Indonesia is a developing country with the fourth
largest population in the world and vast natural resources. The Fund
was formed in 1990 to provide long-term participation in the growth of
Indonesia. The Directors continue to believe that this objective is
sound. The Indonesian market has been constricted by a political
system that has not been conducive to the growth of wealth by second
and third party ownership through securities. The Directors and
management expect that this will change over time and that the Fund
will be well-positioned to participate in the growth of Indonesia.
o Portfolio management. The Directors believe that the traditional
closed-end fund structure is the only appropriate structure for a
single country fund investing in Indonesia. This format provides
flexibility for investment management and has no limitations on the
holding of illiquid securities. The Fund's investment advisers have
informed the Directors that share repurchase requirements could
severely disrupt the Fund's portfolio strategy and require the sale of
securities in a relatively illiquid market at times when it is not in
the best interests of the Fund.
o Costs to the Fund and the Shareholders. The Directors have reviewed
operating expense information prepared by the Fund's management
company. This information indicates that the operating expense ratio
of the Fund will increase as assets of the Fund are reduced by share
repurchases. The amount of any such increase will vary directly with
the size of the repurchase commitment. In addition, the Fund would
incur substantial costs in connection with any periodic repurchase
(such as shareholder communication costs, portfolio transaction
expenses, and legal fees) which would be borne in large part
14
<PAGE>
by shareholders who remain in the Fund.
o Limited experience by interval funds. The shareholder proposal
involves adoption of a policy requiring repurchases of shares by the
Fund. Investment companies operating under such rule are frequently
referred to as "interval funds". Although this rule was adopted more
than four years ago, only a few investment companies have opted for
this status. The Board of Directors believes that there is little
experience of any investment company in operating under such rule and
is not aware of a single country fund that is an interval fund.
Further, the proponent of the proposal has provided no evidence to the
effect that interval fund status is effective in narrowing discounts.
o Actions by Board of Directors. The Fund's Board of Directors has
reviewed the relative trading discount or premium of the Fund's shares
on the NYSE at each quarterly Board meeting since the Fund was
established. To date, the Board of Directors has not determined that a
tender offer or open market repurchase would be in the best interests
of the Fund. The Board of Directors continues to retain authority to
evaluate what action is in the best interests of the Fund.
o The Fund's trading history. Since its formation in 1990, the Fund's
shares have traded during various periods at both a discount from net
asset value and a premium over net asset value. From the Fund's
inception through July 31, 1997, the Fund's shares traded at an
average premium of 1.6%. Over the past five years, the shares have
traded at a premium over net asset value as high as 34% and a discount
to net asset value as much as 15%. This experience is not dissimilar
to that of other single country funds.
The chart below indicates the premium/discount trading history since
inception of the Fund. Accordingly, this chart is more complete than the chart
included in the proponent's statement, which covers only a one-year period.
Jakarta Growth Fund, Inc.
Premium/Discount
For the Period April 11, 1990 (inception of the Fund) to July 31, 1997
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T. The plot points replace a chart showing the premium/discount at
which shares of the Fund have traded for the period April 11, 1990 (inception of
the Fund) to July 31, 1997.]
4/11/90 7.53%
4/30/90 8.50%
5/31/90 22.17%
6/30/90 5.31%
7/31/90 6.09%
8/31/90 (13.34%)
9/30/90 (30.34%)
10/31/90 (17.69%)
11/30/90 (13.03%)
12/31/90 (20.36%)
1/31/91 (13.43%)
2/28/91 1.92%
3/31/91 (8.93%)
4/30/91 (6.25%)
5/31/91 (8.68%)
6/30/91 (7.35%)
7/31/91 (10.60%)
8/31/91 (13.10%)
9/30/91 4.98%
10/31/91 6.43%
11/30/91 7.26%
12/31/91 (7.11%)
1/31/92 8.28%
2/29/92 23.18%
3/31/92 11.71%
4/30/92 (0.76%)
5/31/92 7.76%
6/30/92 9.38%
7/31/92 7.19%
8/31/92 11.67%
9/30/92 2.52%
10/31/92 (4.26%)
11/30/92 5.61%
12/31/92 13.46%
15
<PAGE>
1/31/93 8.52%
2/28/93 6.66%
3/31/93 4.02%
4/30/93 (1.41%)
5/31/93 17.86%
6/30/93 17.59%
7/31/93 13.93%
8/31/93 18.41%
9/30/93 13.36%
10/31/93 15.87%
11/30/93 2.93%
12/31/93 31.26%
1/31/94 15.72%
2/28/94 13.53%
3/31/94 0.81%
4/30/94 12.25%
5/31/94 4.72%
6/30/94 (1.05%)
7/31/94 15.25%
8/31/94 14.84%
9/30/94 17.11%
10/31/94 10.82%
11/30/94 2.55%
12/31/94 4.41%
1/31/95 8.56%
2/28/95 0.90%
3/31/95 5.66%
4/30/95 3.75%
5/31/95 10.55%
6/30/95 1.47%
7/31/95 3.51%
8/31/95 0.00%
9/30/95 (1.93%)
10/31/95 0.97%
11/30/95 (0.36%)
12/31/95 4.53%
1/31/96 3.74%
2/29/96 5.47%
3/31/96 1.54%
4/30/96 (4.64%)
5/31/96 (4.85%)
6/30/96 (5.84%)
7/31/96 (6.17%)
8/31/96 (3.16%)
9/30/96 (6.67%)
10/31/96 (11.43%)
11/30/96 (9.65%)
12/31/96 (12.21%)
1/31/97 (15.01%)
2/28/97 (13.51%)
3/31/97 (12.30%)
4/30/97 (13.75%)
5/30/97 (13.15%)
6/30/97 (9.83%)
7/31/97 (7.88%)
III. Consequences of conversion to an interval fund
The shareholder proposal recommends that the Board of Directors of the Fund
establish a fundamental policy of making periodic repurchases under Rule 23c-3
under the Investment Company Act. The Board of Directors unanimously recommends
that shareholders vote against such proposal. If the Board of Directors did
determine to approve such fundamental policy, the policy could not be adopted
until it was approved at a subsequent shareholders meeting by a majority of the
outstanding shares of the Fund (as defined in the Investment Company Act). Set
forth below is certain summary information concerning interval funds, which is a
term applied to funds making periodic repurchases under Rule 23c-3.
Repurchase offers. Interval funds must periodically make repurchase offers
for not less than five percent, nor more than 25 percent, of their outstanding
common stock. The repurchase offer amount for each offer is to be determined by
the board of directors of the interval fund. The interval between repurchase
offers, which is part of the fundamental policy of an interval fund, is three,
six, or 12 months.
Terms of repurchase. An interval fund repurchases its shares, in cash, at
the net asset value determined on a specified pricing date prior to the
repurchase. An interval fund may deduct from the proceeds a repurchase fee, not
to exceed two percent of the proceeds, that is paid to the fund to compensate it
for expenses related to the repurchases.
Tenders in excess of the repurchase amount. Repurchase offers by interval
funds are made for only a specified percentage of outstanding shares. An
interval fund may purchase up to an additional two percent of its outstanding
shares if the acceptances under the offer exceed the repurchase offer amount. If
an interval fund determines not to
16
<PAGE>
repurchase more than the repurchase offer amount, or if shareholders tender
shares in an amount exceeding the repurchase offer amount plus two percent of
the shares outstanding on the repurchase request deadline, the interval fund
must repurchase the shares tendered on a pro rata basis, subject to limited
exceptions. Accordingly, if an offer is oversubscribed, shareholders may be
unable to liquidate the desired number of shares.
FOR THE REASONS EXPRESSED ABOVE, THE BOARD OF DIRECTORS OF THE FUND
STRONGLY URGES EACH SHAREHOLDER TO VOTE AGAINST ITEM 4.
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 ("Newgate"), 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.
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
17
<PAGE>
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. Approval of the shareholder proposal requires the affirmative vote
of a majority of the votes cast, in person or by proxy, at a meeting at which a
quorum is duly constituted. 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 counted as votes cast. Therefore,
abstentions and broker non-votes will not have an effect on the election of
Directors, the ratification of the selection of independent accountants, or the
approval of the shareholder proposal. 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).
18
<PAGE>
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 , 1997
19
<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 April 9, 1990 (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" PROPOSALS 1, 2 AND 3.
1. Election of Directors.
William G. Barker, Jr.
George H. Chittenden
Haruo Sawada
Chor Weng Tan
Arthur R. Taylor
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 new Management, Investment Advisory and
Investment Sub-Advisory Agreements.
For |_| Against |_| Abstain |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" PROPOSAL 4.
4. A shareholder proposal asking the Board of Directors to approve a
fundamental policy to make periodic offers to repurchase the Fund's
shares.
For |_| Against |_| Abstain |_|
5. 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 Items 1, 2 and 3, and
AGAINST Item 4.
RECORD DATE SHARES:
