THE EUROPE FUND, INC.
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 1998
-----------------------
To the Stockholders of
The Europe Fund, Inc.:
The annual meeting of the stockholders of The Europe Fund, Inc. will be
held on Wednesday, June 3, 1998 at 10:00 a.m., New York City time, at the
Waldorf-Astoria Hotel, 301 Park Avenue, 4th Floor, New York, New York for the
following purposes:
1. To elect directors.
2. To ratify or reject the selection of Ernst & Young LLP as
independent accountants for the Fund for the fiscal year ending December
31, 1998.
3. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on April 20, 1998 will be
entitled to vote at the meeting.
By order of the Board of Directors,
RITA J. KLEINMAN
Secretary
New York, New York
May 5, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. IT IS REQUIRED THAT THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING SHARES BE REPRESENTED IN PERSON OR BY PROXY AT THIS MEETING. YOU ARE
URGED TO SPECIFY YOUR CHOICE AND SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED
PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING.
YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU DO ATTEND. NO POSTAGE NEED BE AFFIXED
IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
THE EUROPE FUND, INC.
780 Third Avenue
New York, New York 10017
-------------------------
P R O X Y S T A T E M E N T
-------------------------
This proxy statement is furnished to stockholders of The Europe Fund, Inc.
(the "Fund") in connection with the solicitation of proxies for the Annual
Meeting of Stockholders of the Fund to be held at 10:00 a.m. on Wednesday, June
3, 1998 at the Waldorf-Astoria Hotel, 301 Park Avenue, New York, New York in
accordance with the attached notice of meeting. It is expected that this proxy
statement and the accompanying form of proxy will be mailed to stockholders of
the Fund on May 5, 1998 or as soon as possible thereafter.
The solicitation of the accompanying form of proxy is made on behalf of the
Board of Directors of the Fund (the "Board of Directors"). Revocation of any
proxy may be effected orally at the meeting prior to voting or by notice in
writing to the Secretary of the Fund provided the notice is received by the
Secretary prior to voting. Each valid proxy received in time will be voted at
the meeting in favor of Proposals 1 and 2, or, if a contrary choice is specified
on the proxy, will be voted in accordance with the specification. It is required
that holders of more than 50% of the outstanding shares be represented in person
or by proxy at this meeting for a quorum to be established. Proposals 1 and 2
require the favorable vote of the holders of a majority of the shares entitled
to vote at the meeting at which a quorum is present. The Fund intends to treat
properly executed proxies that are marked "abstain" as present for the purpose
of determining whether a quorum has been achieved. The Fund does not intend to
treat a broker "non-vote" (that is, a proxy from a broker or nominee indicating
that such person has not received instructions from the beneficial owner or
other person entitled to vote shares on a particular matter with respect to
which the broker or nominee does not have discretionary power) as present for
quorum purposes unless the proxy represented by that non-vote votes on at least
one Proposal. Broker non-votes will have no effect on the majority vote required
for approval of the proposals (unless the proxy voted for one Proposal), while
abstentions will have the effect of a vote against the Proposals.
There were 10,066,319 shares of common stock of the Fund outstanding on the
record date, April 20, 1998. Each of these shares will be entitled to one
noncumulative vote. If a stockholder participates in the Fund's Automatic
Distribution Reinvestment and Cash Purchase Plan (the "Plan"), any proxy given
by the stockholder will also govern the voting of all shares held for the
stockholder's account under the Plan, unless contrary instructions are received
by The Bank of New York, as agent under the Plan.
The Fund will furnish to shareholders upon request and without charge a
copy of its annual report (and its most recent semi-annual report succeeding the
annual report, if any). To obtain a copy, call toll free (800) 543-6217 or write
Princeton Administrators, L.P., P.O. Box 9011, Princeton, New Jersey 08543-9011.
PROPOSAL 1
Election of Directors
Eight directors are to be elected for the ensuing year and until their
successors have been elected and have qualified. The names of the persons
nominated for election as directors, their principal occupations and other
directorships and their previous principal occupations during the past five
years are set forth below.
Except where a stockholder has indicated that he does not wish his proxy to
be voted for all nominees or for any particular nominee or nominees, it is
intended that the proxies received in the accompanying form will be voted for
the election of all such nominees, all of whom are currently directors. Each of
the directors has indicated his willingness to serve for the ensuing term. If
for any reason any of the nominees shall become unavailable for election,
discretionary authority may be exercised by the persons named in the proxy to
vote for substitute nominees proposed by the Board of Directors.
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of
Common Stock Owned
Name, Principal Occupations and Beneficially as of Date of Election to
Other Directorships and Previous Occupations March 1, 1998*** Board of Directors Age
- ----------------------------------------------------------------------- --------------------- ------------------- ----
<S> <C> <C> <C>
Anthony M. Solomon, Chairman of the Board 1,200 February 1990 78
Chairman, The United Kingdom Fund Inc.; Director, Alexandria Real
Estate Inc.; Adviser, Blackstone Group; previously, President,
Federal Reserve Bank of New York; Director, S.G. Warburg Group plc
(investment banking), Boards of Overseers: Teachers Insurance and
Annuity Association and College Retirement Equities Fund, Syntex
Corporation
George F. Bennett 2,000 February 1990 86
Director: Gefinor S.A., The United Kingdom Fund Inc.; previously,
Chairman, President and Chief Executive Officer, State Street
Research & Management Co., Chairman and/or President of various
State Street investment funds and affiliated companies (investment
management) and Trustee of Met Life - State Street investment funds;
Director, Mercury Asset Management International Ltd; Chairman,
Capital Trust Ltd.
**Sir Arthur Bryan 1,120 February 1990 75
Director: The United Kingdom Fund Inc., Dartington Crystal Ltd.;
previously, Lord Lieutenant of Staffordshire; Director, Friends'
Provident Life Office, Chairman and Managing Director, Josiah
Wedgwood & Sons Ltd. (manufacturers of fine china and crystal),
Director: JCB Inc. of America, Director, The Rank Organization plc
*Peter Stormonth Darling None February 1990 65
Chairman: Mercury Asset Management International Ltd, Mercury
European Privatisation Trust plc, Deltec International S.A.;
Director: Mercury Asset Management Group Ltd, Scottish Equitable
plc, Scottish Hydro-Electric plc, The United Kingdom Fund Inc.,
Greenwich Associates, Mercury Keystone Investment Trust plc, The
National Association of Securities Dealers International Advisory
Board, Sagitta Asset Management Ltd
Leon Levy 500 February 1990 72
General Partner, Odyssey Partners, L.P. (private investors);
Chairman: Avatar Holdings, Inc., Oppenheimer Mutual Funds; Director:
The United Kingdom Fund Inc. and various Mercury and other
investment funds; previously, Chairman, Oppenheimer Management
Corporation; Director: Mercury Asset Management Group Ltd and Long
Lake Energy Corporation
**J. Murray Logan 1,200 April 1990 63
Vice President and Chairman of Investment Policy Committee,
Rockefeller & Co., Inc. (investment management); General Partner,
various Rockefeller & Co., Inc. related partnerships; Managing
Partner, L-R Global Partners, L.P.; Director: Mercury Selected Trust
(SICAV), The United Kingdom Fund Inc., World Trust Fund (SICAV);
previously, Trustee and Chairman, Committee for Investments, The
Johns Hopkins University
**James S. Martin None February 1990 62
Director, The United Kingdom Fund Inc.; previously, Executive Vice
President, Chief Investment Officer and Trustee, College Retirement
Equities Fund
Francois-Xavier Ortoli None April 1990 73
Honorary Chairman and Director, Total S.A. (oil company); Director:
Marceau Investissements, Marcuard Holding SA; President: Asean
Mezzanine Infrastructure Fund, MC & Cle; Vice President, TOTAL
Foundation; Advisory Committee, Energy International; previously,
Director: Omnium Financier de Paris, Athena, Total Chimie, Unilever;
Advisor, Credit Suisse First Boston Ltd.
- -------------------
* An "interested person" of the Fund, as defined by the Investment Company
Act of 1940, as amended (the "1940 Act"). Mr. Stormonth Darling is an
"interested" director because he owns beneficially 12,000 shares of
Merrill Lynch & Co., Inc. ("Merrill Lynch"), an affiliate of the Fund's
Investment Manager and Investment Adviser, with sole voting and
investment power; and owns non-beneficially 3,200 shares of Merrill
Lynch. Mr. Stormonth Darling is also an "interested" director because he
is chairman of Mercury Asset Management International Ltd, the Fund's
Investment Adviser.
** A member of the Audit Committee of the Board of Directors.
*** All shares listed in this table are owned with sole voting and investment
power.
</TABLE>
No directors have owned shares during the last five years in Princeton
Administrators, L.P., the Fund's Administrator, or any of its parents, including
Merrill Lynch, other than as disclosed above.
During the fiscal year ended December 31, 1997, five meetings of the Board
of Directors were held. Messrs. Ortoli and Stormonth Darling attended fewer than
75% of the total number of meetings of the Board of Directors. Mr. Logan
attended fewer than 75% of the Audit Committee meetings last year.
The Audit Committee is responsible for: (1) reviewing with the independent
accountants the scope and results of their examination of the financial
statements of the Fund, changes in accounting practices or auditing standards,
and such other matters as the Committee may determine; (2) recommending each
year to the Board of Directors independent accountants to examine the financial
statements of the Fund; (3) reporting to the Board of Directors with respect to
(1) and (2); and (4) reviewing generally the maintenance and safekeeping of the
records and documents of the Fund. The Audit Committee held two meetings during
the past fiscal year. At the present time, the Board of Directors has no
compensation or nominating committees, or other committees performing similar
functions.
No officer or director of the Fund received aggregate remuneration from the
Fund of over $60,000 during the fiscal year ended on December 31, 1997. The
officers received no remuneration from the Fund. Each director who is not an
interested person (as defined in the 1940 Act) received from the Fund an annual
fee of $10,000 for the fiscal year ended December 31, 1997 plus $500 for each
meeting of the Board of Directors attended by that director and all directors
were entitled to receive any out-of-pocket travel expenses for attendance at
meetings. In addition, Mr. Solomon received as Chairman of the Board an
additional annual fee of $5,000. During the past fiscal year, all directors as a
group received aggregate remuneration amounting to $87,500.
<PAGE>
<TABLE>
1997 Compensation Table
<CAPTION>
Pension or Total Compensation
Retirement Benefits From Fund and
Aggregate Compensation Accrued As Part Fund Complex*
Name and Position From Fund of Fund Expenses Paid to Directors
----------------- ---------------------- ----------------- ------------------
<S> <C> <C> <C>
Anthony M. Solomon
Chairman of the Board............... $17,000 None $29,500
George F. Bennett
Director............................ 11,500 None 19,000
Sir Arthur Bryan
Director............................ 12,000 None 19,500
Peter Stormonth Darling
Director............................ 0 None 0
Leon Levy
Director............................ 12,000 None 19,500
J. Murray Logan
Director............................ 11,500 None 19,000
James S. Martin
Director............................ 12,000 None 19,500
Francois-Xavier Ortoli
Director............................ 11,500 None 19,000
* The Fund Complex includes two funds: the Fund and The United Kingdom Fund Inc.
The executive officers of the Fund are:
</TABLE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Age Position with Fund During Past 5 Years
------------- ------------------ ------------------
<S> <C> <C>
J. Loughlin Callahan, 50 President and Treasurer Director, Mercury Asset Management
Ltd;
Steven W. Golann, 54 Vice President and Director, Mercury Asset Management
Secretary International Ltd; previously, Managing
Director, Wertheim Philippe International
Rita J. Kleinman, 41 Secretary Vice President, Mercury Asset
Management International Ltd;
previously, Director of Client Services,
SBC Portfolio Management International
Mr. Golann is a director and Ms. Kleinman is an officer of the Fund's Investment Adviser.
The executive officers of the Fund are elected by the Board of Directors.
</TABLE>
<PAGE>
While the Fund is a Maryland corporation, Sir Arthur Bryan and Messrs.
Stormonth Darling, Callahan and Ortoli are not residents of the United States
and substantially all of their assets may be located outside of the United
States. As a result, it may be difficult for U.S. investors to effect service of
process upon them within the United States or to realize judgments against them
of courts of the United States predicated upon civil liabilities under the
Federal securities laws of the United States.
On March 1, 1998, the officers and directors of the Fund as a group owned
beneficially 6,020 shares, or less than 1.0% of the Fund's outstanding shares.
As of April 20, 1998, no person or group was known to the Fund to be the
beneficial owner of more than 5.0% of the outstanding shares of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL OF THE NOMINEES LISTED ABOVE
PROPOSAL 2
Ratification or Rejection of Selection of Independent Accountants
Pursuant to the 1940 Act, a majority of the directors of the Fund who are
not "interested persons" of the Fund have selected Ernst & Young LLP as
independent accountants for the Fund for the fiscal year ending December 31,
1998. Ernst & Young LLP has advised the Fund that neither that firm nor any of
its partners have any direct or indirect material financial interest in the
Fund. In accordance with the By-Laws of the Fund and the 1940 Act, this
selection is being presented to stockholders for ratification or rejection. A
representative of Ernst & Young LLP will be present at the 1998 Annual Meeting
with the opportunity to make a statement if he so desires and will be available
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
RATIFICATION OF THE REAPPOINTMENT OF ERNST & YOUNG LLP
OTHER MATTERS
The Investment Manager and the Investment Adviser
The Fund's Investment Manager is Mercury Asset Management International
Channel Islands Ltd (formerly known as Warburg Investment Management
International (Jersey) Limited) and its Investment Adviser is Mercury Asset
Management International Ltd (formerly known as Warburg Investment Management
International Limited) (individually, the "Investment Manager" and the
"Investment Adviser", respectively, and together the "Advisers"). The Investment
Manager is a wholly-owned subsidiary of the Investment Adviser, which in turn is
a wholly-owned subsidiary of Mercury Asset Management Ltd, one of the largest
investment managers in Europe. It is headquartered in London, England, at 33
King William Street, EC4R 9AS and is a wholly-owned subsidiary of Mercury Asset
Management Group Ltd ("MAM") of the same address, whose ultimate parent is
Merrill Lynch, located at 250 Vesey St., New York, NY 10281, USA.
The Investment Manager is a corporation organized under the laws of Jersey
(Channel Islands), with its principal office at Forum House, Grenville Street,
St. Helier, Jersey JE4 8RL, Channel Islands. The Investment Manager was formed
in January 1983 for the purposes of providing investment advisory and management
services for international portfolios desiring to utilize the services of the
Investment Adviser and is registered as an investment adviser with the
Securities and Exchange Commission. The Investment Manager's other clients
include individuals, a charitable organization and a registered investment
company, The United Kingdom Fund Inc. The Investment Adviser is a corporation
incorporated in 1981 under the Companies Act of Great Britain with its
registered office and principal place of business at 33 King William Street,
London EC4R 9AS, England. The Investment Adviser is registered as an investment
adviser with the Securities and Exchange Commission and is regulated by the
United Kingdom's Investment Management Regulatory Organization Ltd. The
Investment Adviser's advisory clients include charitable organizations,
corporations, pension plans and private investment companies. The Investment
Adviser has also entered into a sub-advisory contract with the Investment
Manager to provide advisory services to The United Kingdom Fund Inc.
The Advisers now act as investment adviser or sub-investment adviser for
other persons and entities and may, under agreements with the Fund, act as
investment adviser or sub-investment adviser to other registered investment
companies.
Messrs. Peter J. Gibbs, John Gillespie, Frank P. Le Feuvre and Robin E.R.
Rumboll are the directors of the Investment Manager. The principal occupation of
each director is as follows: Mr. Gibbs is the principal executive officer of the
Investment Manager and a director of Mercury Asset Management Ltd; Mr. Gillespie
is secretary of the Investment Manager and a director of Mercury Asset
Management Channel Islands Ltd; Mr. Le Feuvre is a director of Mercury Asset
Management Channel Islands Ltd; and Mr. Rumboll is an independent financial
consultant. The address of Mr. Gibbs is 33 King William Street, London, EC4R
9AS, England. The address of Messrs. Gillespie and Le Feuvre is Forum House,
Grenville Street, St. Helier, Jersey JE4 8RL, Channel Islands. The address of
Mr. Rumboll is Windsor House, St. Lawrence, Jersey, Channel Islands.
Mrs. C. Consuelo Brooke and Messrs. David M.F. Scott, Peter Stormonth
Darling, Peter J. Gibbs, Steven W. Golann and J. Eric Nelson are the directors
of the Investment Adviser. The principal occupation of each director is as
follows: Mrs. Brooke and Mr. Scott are fund managers of the Investment Adviser;
Mr. Stormonth Darling is chairman of the Investment Adviser and a non-executive
director of MAM; Mr. Gibbs is the principal executive officer of the Investment
Adviser and a director of Mercury Asset Management Ltd; and Messrs. Golann and
Nelson are directors of the Investment Adviser. The address of Mrs. Brooke and
Messrs. Stormonth Darling, Gibbs and Scott is 33 King William Street, London,
EC4R 9AS, England. The address of Messrs. Golann and Nelson is 780 Third Avenue,
34th Floor, New York, NY, 10017, USA.
The Investment Management Agreement and the Investment Advisory Agreement
Under the Investment Management Agreement dated as of December 11, 1997
between the Fund and the Investment Manager, the Investment Manager, on the
basis of advice given by the Investment Adviser, will structure the Fund's
portfolio, manage the Fund's investments and make investment decisions on behalf
of the Fund in accordance with the Fund's stated investment objective, policies
and limitations and subject to the supervision, review and direction of the
Board of Directors.
Under the Investment Advisory Agreement dated as of December 11, 1997
between the Investment Manager and the Investment Adviser (together with the
Investment Management Agreement, the "Agreements"), the Investment Adviser will
advise the Investment Manager with respect to the investment and reinvestment of
the assets of the Fund in accordance with the Fund's stated investment
objective, policies and limitations and subject to the supervision, review and
direction of the Board of Directors.
Under the Agreements, the Investment Manager or the Investment Adviser,
with the consent of the Investment Manager, will select and place orders with
brokers and dealers to execute portfolio transactions on behalf of the Fund. The
Advisers are obligated to provide to the Fund at least once every six months a
statement of the contents and valuation of the Fund's investments (not
necessarily including any evaluation of the performance of the Fund during that
period).
The Investment Management Agreement provides that the Fund will pay the
Investment Manager a fee at the annual rate of 0.75% of the Fund's average
weekly net assets up to $250 million and 0.65% of such assets in excess of $250
million based upon net asset value at the end of each week and payable on the
last day of each calendar month. For the fiscal year ended December 31, 1997,
the Investment Manager received from the Fund investment management fees
totaling $1,469,629. The fee paid by the Fund to the Investment Manager is
higher than that paid by most investment companies, although lower than the fee
paid by most other closed-end investment companies which invest primarily in the
securities of companies in foreign countries. Pursuant to the Investment
Advisory Agreement, the Investment Adviser is paid by the Investment Manager a
fee at the annual rate of 0.15% of the average weekly net assets of the Fund,
based upon net asset value at the end of each week and payable on the last day
of each calendar month, which fee amounted to $293,926 for the fiscal year ended
December 31, 1997.
The Agreements provide that neither the Investment Manager nor the
Investment Adviser will be liable for any error of judgment or for any loss
suffered by the Fund in connection with the matters to which the Investment
Management Agreement or the Investment Advisory Agreement, respectively, relate,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance, or from reckless disregard by it, of its
obligations and duties under the Agreements.
Each of the Agreements provides that each party will bear all expenses of
its employees and overhead incurred by it in connection with its duties under
the Agreements. Each party (other than the Fund) further agrees to pay all
salaries and fees of the Fund's directors and officers who are "interested
persons" of that party. The Fund will bear all of its own expenses, including
but not limited to: expenses of organizing the Fund; fees of the Fund's
directors who are not "interested persons" of any other party; out-of-pocket
travel expenses for all directors and officers in connection with their
attendance at, and other expenses incurred by the Fund relating to, directors'
or committee meetings; interest expense; taxes and governmental fees; brokerage
commissions and other expenses incurred in acquiring or disposing of the Fund's
portfolio securities; expenses of preparing stock certificates; expenses in
connection with the issuance, offering, distribution, sale or underwriting of
securities by the Fund; expenses of registering and qualifying the Fund's shares
for sale with the Securities and Exchange Commission and in various states and
foreign jurisdictions; auditing, accounting, insurance and legal costs;
administrator's fee; custodian, dividend disbursing and transfer agent expenses;
expenses of obtaining and maintaining the listing of the Fund's shares on the
New York Stock Exchange; membership dues to professional organizations; expenses
of stockholders' meetings and preparing and distributing proxies and reports to
stockholders; and costs of information obtained from services other than the
Investment Manager or its affiliated persons relating to the valuation of
securities.
Both the Investment Management Agreement and the Investment Advisory
Agreement were approved by the stockholders of the Fund on February 25, 1998.
The prior Investment Management Agreement and the prior Investment Advisory
Agreement, both dated as of April 26, 1990 (collectively, the "Prior
Agreements"), had been approved by the stockholders of the Fund on June 5, 1991.
The continuation of the Prior Agreements had been approved annually by the
Fund's Board of Directors and, at the same meetings, had been unanimously
approved by the Fund's directors who are not "interested persons" of the Fund.
On December 22, 1997, the Prior Agreements terminated pursuant to the 1940 Act
as a result of the acquisition by Merrill Lynch of MAM (the "Acquisition"). The
Investment Manager and the Investment Adviser provided services under interim
arrangements, in accordance with an order granted by the Securities and Exchange
Commission, between December 22, 1997 and January 12, 1998 (at no more than
cost) and between January 12, 1998 and February 25, 1998 (at standard fee
levels).
Each Agreement may be terminated at any time by the Fund on 60 days'
written notice, without the payment of any penalty, upon the vote of a majority
of the Fund's Board of Directors or a majority of the outstanding voting
securities of the Fund. Each Agreement will terminate automatically in the event
of its assignment, as defined in the 1940 Act. The Investment Adviser may
terminate the Investment Advisory Agreement without penalty on 90 days' written
notice to the Fund and the Investment Manager. In addition, the Investment
Manager may terminate the Investment Management Agreement on 90 days' written
notice to the Fund and the Investment Advisory Agreement on 90 days' written
notice to the Fund and the Investment Adviser.
Securities Transactions For and With the Fund
Total brokerage commissions paid by the Fund amounted to $284,714.13 for
the fiscal year ended December 31, 1997. The rate of total portfolio turnover of
the Fund for the fiscal year ended December 31, 1997 was 35.4%.
The Investment Manager is responsible for the selection of brokers to
execute the Fund's portfolio transactions. In placing such transactions, the
Investment Manager will seek to obtain best execution for the Fund, taking into
account factors such as price, commission, size of order, difficulty of
execution, skill required of the broker and investment market and statistical
information provided by the broker. In seeking best execution of its
transactions, the Fund may employ several different brokers.
Orders may be placed with brokers and banks who supply research to the
Fund, the Investment Manager and the Investment Adviser. The research may be
used by the Investment Manager and the Investment Adviser in advising other
clients, and the Fund's commissions to brokers supplying research may not
represent the lowest obtainable commission rates. Although the Fund may receive
research from firms affiliated with the Investment Manager or the Investment
Adviser, the Fund will not pay any higher commission to these entities than
would have been paid if that affiliated entity had not provided any research.
The Fund cannot engage in principal transactions with the Investment
Manager, the Investment Adviser or their affiliates.
Administrator
The Fund's Administrator is Princeton Administrators, L.P. (the
"Administrator") which is headquartered in Plainsboro, New Jersey at 800
Scudders Mill Road and the mailing address for which is P.O. Box 9011,
Princeton, New Jersey 08543-9011. The Administrator is an affiliate of Merrill
Lynch. The Administrator provides administrative services, including
record-keeping, preparation of reports, accounting services and legal support
services. The Administrator currently provides third-party fund administration
services to five (5) open-end and twenty-two (22) closed-end investment
companies with more than $5.2 billion in net assets. Pursuant to the
Administration Agreement dated April 7, 1990, which terminated as a result of
the Acquisition, by and between the Fund and the Administrator, the Fund had
paid to the Administrator on the first business day of each calendar month a fee
for the previous month at an annual rate equal to 0.25% of the Fund's average
weekly net assets up to U.S. $200 million and 0.20% in excess thereof subject to
a minimum fee. For the fiscal year ended December 31, 1997, the aggregate fee
amounted to $496,061. In connection with the Acquisition, on December 11, 1997,
the Board of Directors of the Fund approved a new administration agreement, the
terms of which are substantially similar to the Administration Agreement dated
April 7, 1990 except for the dates of execution, effectiveness and termination.
General
The Management of the Fund does not intend to present to the meeting any
business other than the matters stated in the related notice. As of the date of
this proxy statement, the Management of the Fund was not aware of any other
matters which might be presented for action at the meeting. If any matter not
referred to in the enclosed proxy should properly come before the meeting, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies in accordance with their best judgment.
The cost of soliciting proxies for the annual meeting will be borne by the
Fund. In addition to the solicitation by mail, the Fund's officers may solicit
proxies personally, for which they will receive no special compensation. The
Fund also has retained D.F. King & Co., Inc. to assist in the solicitation of
proxies for a fee of $3,500 plus out-of-pocket expenses. The Fund may reimburse
brokers or persons holding stock in their names or in the name of their nominees
for their expenses in sending proxy material to the beneficial owners.
In the event that sufficient votes in favor of any of the items set forth
in the notice of annual meeting of stockholders are not received by the time
scheduled for the annual meeting of the stockholders, the persons named as
proxies may propose one or more adjournments of such annual meeting to permit
further solicitation of proxies with respect to any such items. Any such
adjournment will require the affirmative vote of a majority of the shares
present in person or by proxy at the session of such annual meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment,
if proposed, those proxies which they are entitled to vote in favor of such
items and against such adjournment those proxies required to be voted against
such items. Broker non-votes and abstentions will have no effect on the majority
vote required for adjournment.
In order for any stockholder proposal to be included in the Fund's proxy
statement and form of proxy for the Fund's 1999 annual meeting of stockholders,
the stockholder proposal must be received by the Fund on or before February 1,
1999 and must satisfy other applicable legal requirements.
By order of the Board of Directors,
ANTHONY M. SOLOMON
Chairman of the Board
New York, New York
May 5, 1998
<PAGE>
THE EUROPE FUND, INC.
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 3, 1998
The undersigned, revoking previous proxies, hereby appoints Anthony M.
Solomon, J. Loughlin Callahan and Thaddea M. Feldman, and each of them, the
proxies of the undersigned, with power of substitution to each of them, to vote
all shares of common stock of The Europe Fund, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of The Europe Fund, Inc.
to be held at The Waldorf-Astoria Hotel, 301 Park Avenue, 4th Floor, New York,
New York, on June 3, 1998 at 10:00 A.M., New York City time, and at any and all
adjournments thereof.
(Continued on reverse side)
<PAGE>
<TABLE>
<S> <C>
Please mark boxes [|] or [X] in blue or black ink. Unless otherwise specified in the squares provided the undersigned's
vote will be cast FOR Proposals 1 and 2 below.
1 -- ELECTION OF DIRECTORS. [ ]FOR ALL NOMINEES LISTED BELOW [ ]WITHHOLD AUTHORITY
(except as marked to the contrary below)
(to vote for all nominees listed below)
Anthony M. Solomon, George F. Bennett, Sir Arthur Bryan, Peter Stormonth Darling, Leon Levy, J. Murray Logan,
James S. Martin and Francois-Xavier Ortoli
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below).
- -------------------------------------------------------------------------------------------------------------------------------
2 -- RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998:
FOR[ ] AGAINST[ ] ABSTAIN[ ]
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSALS 1 AND 2.
Please mark, date and sign as your name appears and
return in the enclosed envelope. If acting as executor,
administrator, trustee, guardian, etc., you should so
indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized
officer. If shares are held jointly, each stockholder
named should sign.
The undersigned hereby acknowledges receipt of a copy of
the accompanying notice of meeting and proxy statement
and hereby revokes any proxy or proxies heretofore given.
-------------------------------------------------
Signature
-------------------------------------------------
Signature
Date_______________________________________, 1998
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE - NO POSTAGE IS REQUIRED
</TABLE>
