<PAGE>
As filed with the Securities and Exchange Commission on May 30, 1996.
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ____)
Filed by the registrant /X/
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
THE FRANCE GROWTH FUND, INC.
(Name of Registrant as Specified in Its Charter)
THE FRANCE GROWTH FUND, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Rule 14a-6(h) and Item 22(a)(2) under the Securities Exchange Act
of 1934 (Previously transmitted by wire transfer on May 21, 1996)
<PAGE>
[LOGO] THE FRANCE GROWTH FUND, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 1996
------------------------
To our Stockholders:
Notice is hereby given that a Special Meeting of Stockholders of The France
Growth Fund, Inc. (the 'Fund') will be held at 10:00 a.m., New York City time,
on Friday, June 28, 1996, at the offices of Banque Indosuez, 1211 Avenue of the
Americas, New York, New York 10036, for the following purposes:
1. To approve a new Investment Advisory Agreement between the Fund and
Indosuez International Investment Services, Inc.
Only holders of record of the Fund's common stock at the close of business
on May 21, 1996 are entitled to notice of and to vote at this meeting or any
adjournments thereof.
Steven M. Cancro
Secretary
Dated: May 30, 1996
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK FOR YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
<PAGE>
THE FRANCE GROWTH FUND, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
SPECIAL MEETING OF STOCKHOLDERS
JUNE 28, 1996
------------------------
PROXY STATEMENT
------------------------
This proxy statement is furnished on behalf of the Board of Directors of
The France Growth Fund, Inc. (the 'Fund') in connection with the solicitation of
proxies to be voted at the Special Meeting of Stockholders (the 'Meeting') to be
held at 10:00 a.m., New York City time, on Friday, June 28, 1996, at the offices
of Banque Indosuez, 1211 Avenue of the Americas, New York, New York 10036, and
any adjournments thereof. As discussed in greater detail under Proposal 1, the
principal purpose of the meeting is to approve a new investment advisory
contract between the Fund and Indosuez International Investment Services (the
'Adviser'). The new agreement will permit the Adviser to continue to act as
investment advisor to the Fund following a change in control of a parent company
of the Adviser. No change in the management or investment approach of the
Adviser or the Fund is expected to result from such change in control and the
terms of the new investment advisory agreement, including the fee, are identical
to the current agreement. It is expected that this Proxy Statement and form of
proxy will first be mailed to stockholders on or about May 30, 1996. THE FUND'S
ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995, WAS PREVIOUSLY MAILED
TO STOCKHOLDERS ON FEBRUARY 29, 1996. COPIES OF SUCH ANNUAL REPORT ARE AVAILABLE
WITHOUT CHARGE UPON REQUEST MADE IN WRITING TO PNC BANK, NATIONAL ASSOCIATION AT
P.O. BOX 8950, WILMINGTON, DELAWARE 19809, OR BY TELEPHONE TO THE FUND'S
TRANSFER AGENT AT 1-800-852-4750.
If the accompanying form of proxy is executed properly and returned, shares
of the Fund's common stock, par value $.01 per share (the 'Common Stock'),
represented by such proxy will be voted at the Meeting in accordance with the
instructions on the form of proxy. However, if no instructions are specified,
shares will be voted FOR the approval of a new Investment Advisory Agreement
between the Fund and Indosuez International Investment Services. A stockholder
may revoke a proxy at any time prior to the time it is voted by written notice
to the Secretary of the Fund at the Fund's address set forth above or by signing
and returning another proxy of a later date or by personally casting a vote at
the Meeting. The vote of the lesser of (i) 67% or more of the shares of the Fund
represented at the Meeting, if at least 50% of all outstanding shares of the
Fund are represented at the Meeting, or (ii) more than 50% of the Fund's
outstanding shares, is required for the approval of the Investment Advisory
Agreement. Abstentions and broker non-votes will not be considered votes cast
for the foregoing purposes but are considered as present for the purpose of
determining whether a quorum has been achieved at the Meeting. Because broker
non-votes are considered outstanding shares, a broker non-vote has the same
effect as a vote against the proposal to approve a new Investment Advisory
Agreement.
The close of business on May 21, 1996 has been fixed as the record date for
the determination of stockholders entitled to notice of, and to vote at, the
Meeting. On this date, the Fund had 15,345,333 shares of Common stock
outstanding and entitled to vote. Each share will be entitled to one vote at the
Meeting. The Fund's Articles of Incorporation and Amended and Restated By-Laws
(the 'By-Laws') provide that the presence in person or by proxy of 33 1/3% of
the shares of Common
<PAGE>
Stock issued and outstanding and entitled to vote at the Meeting shall
constitute a quorum for the transaction of business.
The cost of preparing, assembling and mailing materials in connection with
this solicitation will be borne by the Adviser or an affiliate. In addition to
the use of the mails, proxies may be solicited personally, or by telephone or
telegraph, by officers of the Fund or by employees of Mitchell Hutchins Asset
Management, Inc., the Fund's Administrator, whose principal address is 1285
Avenue of the Americas, New York, New York 10019. In addition, the Fund has
retained Shareholder Communications Corporation to aid in the solicitation of
proxies, for whose services the Adviser will pay an estimated fee of $7,500
including reasonable out-of-pocket expenses. Brokerage houses, banks and other
fiduciaries may also be requested to forward proxy solicitation material to
their principals to obtain authorization for the execution of proxies and will
be reimbursed by the Fund for out-of-pocket expenses incurred in this
connection.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(PROPOSAL 1)
Indosuez International Investment Services (the 'Adviser'), with its
principal office at 44 rue de Courcelles, 75008 Paris, France and an office at
1211 Avenue of the Americas, New York, New York 10036, serves as the Fund's
investment adviser pursuant to the terms of an Investment Advisory Agreement
between the Fund and the Adviser dated as of May 10, 1990 (the 'Existing
Advisory Agreement'). The Existing Advisory Agreement was initially approved by
the Board of Directors of the Fund and the initial sole shareholder of the Fund
on May 7, 1990. The Existing Advisory Agreement was most recently approved by
the Directors on March 12, 1996.
Compagnie de Suez, through 100% ownership of Banque Indosuez (the 'Bank'),
is currently the Adviser's parent company. Compagnie de Suez has agreed to sell
a 51% interest in the Bank to a French banking institution, the Caisse Nationale
de Credit Agricole ('Credit Agricole'), 91-93 boulevard Pasteur, 75015 Paris,
France. As a result of the transfer of a majority of the shares of the Bank, an
indirect change in control of the Adviser will occur. No change in the Fund's
portfolio managers or in the management of the Adviser are expected to occur.
Under the Investment Company Act of 1940 Act, as amended (the '1940 Act'),
the transfer of a 51% interest in the Bank (because it is an indirect parent
company of the Adviser) constitutes an assignment of the Existing Advisory
Agreement. The Existing Advisory Agreement automatically terminates upon
assignment according to its terms and the terms of the 1940 Act. In order for
the Adviser to continue providing advisory services to the Fund after the sale,
therefore, a new investment advisory agreement must be adopted by the Fund's
shareholders.
At a meeting of the Board of Directors held on May 21, 1996, a majority of
the Directors, including a majority of the Directors who are not 'interested
persons' (as defined by the 1940 Act) of the Fund (the 'Independent Directors'),
approved and voted to recommend to shareholders of the Fund that they approve a
new investment advisory agreement (the 'Proposed Advisory Agreement') by and
between the Fund and the Adviser. The terms of the Proposed Advisory Agreement
are identical, including the fees payable to the Adviser, to the terms of the
Existing Advisory Agreement. A copy of the Proposed Advisory Agreement is
attached hereto as Exhibit A.
2
<PAGE>
The Existing Advisory Agreement provides, as will the new advisory
agreement, that the Fund pay the Adviser an advisory fee at the annual rate of
0.90% of the Fund's average weekly net assets up to $100 million and 0.80% of
such assets in excess of $100 million, based upon the net asset value calculated
at the end of each month and payable at the end of each calendar month in French
Francs. During the last fiscal year of the Fund ended December 31, 1995, the
Fund paid the Adviser a total of $1,569,156 in advisory fees.
The Adviser is a wholly-owned subsidiary of Indosuez Asset Management
('IAM'), 44 rue de Courcelles, 75008, Paris, France, which is currently a
wholly-owned subsidiary of the Bank, 96 boulevard Haussmann, 75008, Paris,
France. The Bank is currently a wholly-owned subsidiary of Compagnie de Suez, 1
rue d'Astorg, 75008, Paris, France.
THE SALE
Compagnie de Suez and Credit Agricole have entered into an agreement
pursuant to which Compagnie de Suez will sell 51% of its ownership interest in
the Bank to Credit Agricole for a purchase price of approximately 6.3 billion
French Francs (approximately $1.22 billion U.S. Dollars)(1) subject to certain
adjustments. Although final terms have not been arranged, it is expected that
Credit Agricole will have the right to acquire, and Compagnie de Suez will have
the right to sell, an additional 29% ownership interest in the Bank as of July
1, 1997, which would bring Credit Agricole's ownership interest in the Bank to
80%. The completion of the transaction between Compagnie de Suez and Credit
Agricole is subject to a number of conditions, including necessary regulatory
approvals. The closing is expected to occur as soon as practicable after such
approvals are obtained. In the event that such transaction is not consummated,
the Existing Advisory Agreement will not terminate and the Adviser will continue
to act as Adviser to the Fund.
Credit Agricole acts as the central clearinghouse and coordinating body for
a group of 60 banks which operate throughout France. Credit Agricole is owned by
these banks, which in turn are mutually owned agricultural credit cooperatives.
Credit Agricole is responsible for the liquidity and solvency of the banks under
French law. Credit Agricole is the largest banking institution in France,
providing retail banking, asset and fund management, insurance and investment
banking services. Credit Agricole had as of December 31, 1994, assets of
approximately 1,754 billion French Francs (approximately $328 billion U.S.
Dollars).(2)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
The Board of Directors believes that it will be beneficial to the Fund to
continue to receive the high quality of advisory services provided by the
Adviser on the same terms as they are currently provided. The Directors
considered the fact that the Proposed Advisory Agreement is identical to the
Existing Advisory Agreement and provision of advisory services to the Fund,
therefore, will not change as a result of the change in control of the Bank. The
Directors believe that the Proposed Advisory Agreement is reasonable, fair and
in the best interests of the Fund's shareholders.
- ------------------
(1) Based on the exchange rate as of the close of business on May 8, 1996.
(2) Based on the exchange rate as of the close of business on December 31,
1994.
3
<PAGE>
ADDITIONAL INFORMATION ABOUT THE ADVISER
The following table provides information with respect to the principal
executive officer and the directors of the Adviser:
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Jean-Claude Kaltenbach Chairman and Chief Executive Officer, the Adviser; Chief Investment
3 boulevard Emile Augier Officer, Indosuez Asset Management (investment advisor) (since February
Paris, France 75116 1994).
Ian Gerald McEvatt Director, the Adviser; Director, Indosuez Asia Advisers Ltd. (investment
5 Pacific View, 22 Cape Road management) (since January 1994); Chairman, Indosuez Asia Strategic
Chung Hom Kok, Hong Kong Growth Fund, Inc. (investment company) (since January 1994); Managing
Director and Chief Investment Officer, Indosuez Asset Management Asia
Ltd. (investment management) (since October 1992); Chairman, Indosuez
Asset Management (Singapore) Ltd. (investment management) (since October
1992); Director, Indosuez Asset Management (Japan) Ltd. (investment
management) (since October 1992).
Rene Claude Doumic Director, the Adviser; Chairman, Societe de Port de Tanger (investment
48 rue Jacob company) (since June 1989).
Paris, France 75006
Didier de la Pommeraye Director, the Adviser; International Development, Indosuez Asset
7 avenue des Loges Management (investment advisor) (since January 1995).
St. Germain-en-Layes,
France 78100
Charles Dennis Jules Vergnot Director, the Adviser; Chairman, Danubexsa (international trade) (since
13 avenue Lulli February 1986).
Sceaux, France 92300
Eric Harrison Jostrom Director, the Adviser; Chief Executive Officer and Chief Operating
3 Brookwood Road Officer, Constitution Management Company, Inc. (investment advisor)
Manchester-by-the-Sea, (since October 1992); Director, Indosuez Asia Advisers Ltd. (investment
Massachusetts 01944 management); President, Indosuez Asia Strategic Growth Fund, Inc.
(investment company) (since March 1994).
</TABLE>
4
<PAGE>
INFORMATION REGARDING OWNERSHIP OF THE COMMON STOCK
The following table sets forth information, as of May 21, 1996, regarding
the ownership of the Fund's Common Stock by (i) each Director of the Fund, (ii)
each officer of the Fund, (iii) all Directors and officers of the Fund as a
group and (iv) the only persons known by the Fund to own more than five percent
of the outstanding shares.
<TABLE>
<CAPTION>
SHARES OF THE COMMON
STOCK OF THE FUND PERCENTAGE OF
BENEFICIALLY OWNED COMMON STOCK
(DIRECTLY OR INDIRECTLY) OUTSTANDING
NAME OF BENEFICIAL OWNER ON MAY 21, 1996 ON MAY 21, 1996
- -------------------------------------------------------------------- ------------------------ ---------------
<S> <C> <C>
Directors:
Marc de F. de Logeres............................................... 0 0
Michel Longchampt................................................... 98 *
Michel A. Rapaccioli................................................ 1,914 *
Michel Somnolet..................................................... 0 0
Jean A. Arvis....................................................... 4,460 *
Thomas C. Barry..................................................... 1,333 *
John A. Bult........................................................ 0 0
Walter J.P. Curley.................................................. 1,094 *
Pierre H.R. Daviron................................................. 0 0
Jacques Regniez..................................................... 0 0
Bernard Simon-Barboux............................................... 0 0
John W. Spurdle, Jr................................................. 0 0
Officers:
Gerard Jeannin, President........................................... 0 0
Steven M. Cancro, Vice President and Secretary...................... 4,000 *
Frederick J. Schmidt, Vice President and Treasurer.................. 0 0
Officers and Directors as a Group................................... 12,899 *
5% Shareholder:
Cede & Co., as nominee for
The Depository Trust Company
P.O. Box 20
Bowling Green Station
New York, NY 10004 15,080,605 98.3%
</TABLE>
- ------------------
* Denotes ownership of less than 1% of the Fund's outstanding shares.
5
<PAGE>
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders arise,
including any question as to an adjournment of the Meeting, the persons named in
the enclosed proxy will vote thereon according to their best judgment in the
interests of the Fund.
For the year ended December 31, 1995, certain direct and indirect
subsidiaries of the Bank, CPR Actions (formerly Schelcher Prince), Cheuvreux de
Virieu and Indosuez Carr Futures received $20,682, $76,223 and $275,529,
respectively, in brokerage commissions as a result of executing agency
transactions on portfolio securities and future contracts on behalf of the Fund.
In addition, the Bank earned fees of approximately $54,500 in its capacity as
subcustodian for the Fund of which approximately $13,300 was unpaid at December
31, 1995. For the year ended December 31, 1995, the Fund earned approximately
$722,297 in interest income from call account deposits held with the Bank. The
Fund had $14,165,087 of such deposits at December 31, 1995.
Mr. Arvis has indicated ownership of Directors' qualifying shares (less
than 1% of the outstanding shares) of Banque Indosuez. Messrs. Arvis and
Simon-Barboux have indicated ownership of ordinary shares and subscription
rights (less than 1% of the outstanding shares) of Compagnie de Suez. In
addition, Mr. Simon-Barboux has indicated ownership of one share of stock of
Indosuez Asset Management International, which is a subsidiary of Banque
Indosuez.
------------------------
Dated May 30, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT TO THE FUND IN THE ENVELOPE
PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK FOR
YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
6
<PAGE>
THE FRANCE GROWTH FUND, INC.
1211 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10036
SPECIAL MEETING OF SHAREHOLDERS
JUNE 28, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Frederick J. Schmidt and Steven M. Cancro as
proxies, each with full power of substitution, and hereby authorizes each of
them, with authority in each to act in the absence of the other, to represent
and to vote, as designated below, all the shares of Common Stock of The France
Growth Fund, Inc. (the 'Fund') held of record by the undersigned on May 21, 1996
at the Special Meeting of Shareholders of the Fund to be held on June 28, 1996,
or any adjournments thereof.
The Board of Directors recommends a vote FOR Proposal 1.
1. TO APPROVE THE TERMS OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE
COMPANY AND INDOSUEZ INTERNATIONAL INVESTMENT SERVICES, INC.
FOR / / AGAINST / / ABSTAIN / /
2. In their discretion, the proxies are authorized to consider and act upon such
other business as may properly come before the meeting or any adjournments
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1.
<PAGE>
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. If shares are held jointly, each
Shareholder named should sign. If only one signs, his or her signature will be
binding. If the Shareholder is a corporation, the President or a Vice President
should sign in his or her own name, indicating title. If the Shareholder is a
Partnership, a partner should sign in his or her own name, indicating that he or
she is a 'Partner.'
Dated:
---------------------------------, 1996
Name of Corporation (if applicable):
- ---------------------------------------------
(By)
----------------------------------------
Signature
(By)
----------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
<PAGE>
EXHIBIT A
FORM OF
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT dated as of between The France Growth Fund,
Inc., a Maryland corporation (the 'Fund'), and Indosuez International Investment
Services, a French corporation (the 'Investment Adviser').
WHEREAS, the Fund is a diversified, closed-end management investment
company registered with the Securities and Exchange Commission (the 'SEC') under
the Investment Company Act of 1940, as amended (the '1940 Act');
WHEREAS, the Investment Adviser is a wholly owned subsidiary of Banque
Indosuez, a French financial institution ('BI'), and is a registered investment
adviser under the Investment Advisers Act of 1940, as amended (the 'Advisers
Act'); and
WHEREAS, the Fund desires to retain the Investment Adviser to render
certain investment advisory and management services to the Fund and the
Investment Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties as follows:
1. Appointment of the Adviser. The Fund hereby appoints the Investment
Adviser to act as investment adviser and manager to the Fund for the period and
on the terms set forth in this Agreement. The Investment Adviser hereby accepts
such appointment and agrees to furnish the services herein set forth for the
compensation provided.
2. Investment Advisory and Management Services. The Investment Adviser
undertakes and agrees:
2.1. To make investment decisions on behalf of the Fund as to the
structure of the Fund's investment portfolio and the acquisition and
disposition of securities by the Fund, all in accordance with the Fund's
stated investment objective and policies and subject to the direction and
control of the Board of Directors of the Fund; to provide or obtain such
research and statistical data as may be necessary in connection with the
foregoing services; and to decide on the selection of, and to place
purchase and sale orders with, brokers and dealers to execute portfolio
transactions on behalf of the Fund;
2.2. To provide office facilities and personnel adequate to perform
the services undertaken by the Investment Adviser pursuant to this
Agreement, together with those clerical and bookkeeping services which are
not being furnished by the Fund's administrator, custodians or transfer,
dividend paying agent and registrar, and to arrange for the provision of
administrative services for the Fund;
2.3. To provide periodic reports to the Fund with respect to portfolio
transactions for the Fund; to provide to the Board of Directors such other
reports relating to the investments of the Fund as are necessary for the
members of the Board of Directors to fulfill their fiduciary
responsibilities; and to maintain the books and records of the Fund
required under Rule 31a-1 under the 1940 Act (other than those being
maintained by the Fund's administrator, custodians and transfer, dividend
paying agent and registrar); and
<PAGE>
2.4. To comply with any and all provisions of the 1940 Act and the
Advisers Act and all provisions of any rules, regulations and orders of the
SEC which are now or may, from time to time, be applicable to the
Investment Adviser and to its directors, officers, employees and interested
persons (as such term is defined in the 1940 Act) and to comply with any
and all provisions of French law which are now or may, from time to time,
be applicable to the Investment Adviser and to its directors, officers and
employees.
3. Fees. In consideration of the services described herein, the Fund will
pay to the Investment Adviser, at the end of each calendar month and in French
Francs, a management and advisory fee computed at the annual rate of .90% of the
Fund's average weekly net assets up to U.S. $100 million and .80% of such assets
in excess of U.S. $100 million, based upon the net asset value of the Fund
calculated at the end of each week. For the month and year in which this
Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect
during the month and year, respectively. The net asset value of the Fund shall
be calculated in accordance with the provisions of the Fund's prospectus or at
such other time or times as the Board of Directors of the Fund may determine in
accordance with the provisions of the 1940 Act. For each day on which net asset
value of the Fund is not calculated, the net asset value of a share of the
Fund's common stock shall be deemed to be the net asset value per share as of
the close of business on the last day on which such calculation was made for the
purpose of the foregoing computations.
4. Expenses.
4.1. The Investment Adviser shall bear all expenses of its employees
and overhead incurred in connection with its duties under this Agreement
and shall pay all salaries and fees of the Fund's directors and officers
who are also directors, officers or employees of the Investment Adviser,
except that the Fund will bear travel and certain other expenses of
directors and officers of the Fund who are directors, officers or employees
of the Investment Adviser to the extent that such expenses relate to
attendance at meetings of the Fund's Board of Directors or any committees
thereof.
4.2. The Fund will bear all of its other expenses, including, among
others: directors' and officers' liability insurance; organizational
expenses (which shall include out-of-pocket expenses and reasonable
attorneys' fees, but not overhead or employee costs of the Investment
Adviser); legal expenses; auditing and accounting expenses; taxes and
governmental fees; stock exchange listing fees; dues and expenses incurred
in connection with membership in investment company organizations; fees and
expenses of the Fund's custodians, transfer agent, dividend paying agent
and registrar; payment for portfolio pricing services to a pricing agent,
if any; expenses of preparing share certificates and other expenses in
connection with the issuance, offering or underwriting of securities issued
by the Fund; expenses relating to investor relations; expenses of
registering or qualifying securities of the Fund for sale; freight,
insurance and other charges in connection with the shipment of the Fund's
portfolio securities, if any; brokerage commissions or other costs of
acquiring or disposing of any portfolio securities of the Fund; expenses of
preparing and distributing reports, notices and dividends to shareholders;
expenses of the Dividend Reinvestment Plan (except for brokerage expenses
paid by participants in such plan); costs of stationery; any litigation
expenses; and costs of shareholders' and other meetings.
A-2
<PAGE>
5. Liability.
5.1. Neither the Investment Adviser nor any of its shareholders,
officers, directors, employees or agents shall be liable for any act or
omission, error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates,
except (i) that the Investment Adviser shall be under a fiduciary duty with
respect to receipt of compensation for services pursuant to Section 36 of
the 1940 Act and shall therefore be liable for a loss resulting from a
breach of such fiduciary duty (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act) or (ii) for any loss resulting from willful misfeasance, bad
faith or gross negligence in the performance of, or from reckless disregard
of, the Investment Adviser's obligations and duties under this Agreement.
5.2. To the extent permitted by the 1940 Act, the Advisers Act and the
rules and regulations promulgated thereunder and by other applicable law,
the Fund shall indemnify and hold harmless the Investment Adviser and its
shareholders, officers, directors, employees or agents from and against any
Liability for and any damages, expenses or losses incurred in connection
with any act or omission in the course of, connected with or arising out of
any services to be rendered hereunder, except by reason of willful
malfeasance, bad faith or gross negligence in the performance of, or by
reason of reckless disregard of, the Investment Adviser's obligations and
duties under this Agreement.
5.3. The Investment Adviser shall not be liable for any losses caused
by disturbances of its operations by virtue of force majeure, riot or
damage caused by nature or due to other events for which it is not
responsible (e.g., strikes, lock-outs or acts of domestic or foreign
authorities).
5.4. The Investment Adviser may rely on information reasonably
believed by it to be accurate and reliable.
5.5. The Investment Adviser does not assume responsibility for the
acts or omissions of any other person.
6. Services Not Exclusive. It is understood that the services of the
Investment Adviser are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Investment Adviser or any of its affiliates from providing
investment advisory and asset management services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of the Fund) or from engaging in other activities. When other
clients of the Investment Adviser desire to purchase or sell a security at the
same time such security is purchased or sold for the Fund, it is understood that
such purchases and sales will, to the extent feasible, be allocated among the
Fund and such clients in a manner believed by the Investment Adviser to be
equitable to the Fund and such other clients. If two or more of the Investment
Adviser's clients purchase or sell the same security on a given day from the
same broker-dealer, such transactions may be averaged as to price.
7. Further Agreements. The Investment Adviser further undertakes and
agrees:
7.1. To file or cause to be filed with the SEC on or before May 16,
1990, a Form ADV and such other documents and information, and to take such
other action, as may be necessary to effectuate its registration as a
successor investment adviser pursuant to Section 203(g) of the Adviser's
Act, to maintain such registration under the Adviser Act in effect during
the term hereof and any continuation thereof, and to comply with the
requirements of the Advisers Act and the 1940 Act as they relate to the
Investment Adviser's services hereunder. The
A-3
<PAGE>
Investment Adviser hereby represents and warrants to the Fund that, pending
and subject to the timely filing of such Form ADV, the Investment Adviser
is deemed to be a registered investment adviser under the Advisers Act
pursuant to Section 203(g) thereof;
7.2. Not to discuss investment decisions or positions of the Fund with
personnel of BI or its affiliates who are involved in the securities
underwriting or broker-dealer activities of BI, except, as to
broker-dealers, for discussions relating generally to research provided to
the Investment Adviser by such broker-dealers;
7.3. Not to purchase securities for the Fund in any primary public
offering where, to the Investment Adviser's knowledge, the proceeds will be
used to retire indebtedness to BI or its affiliates; nor to knowingly cause
the Fund to make investments which are designed to benefit the commercial
interests of BI or its affiliates; and
7.4. Not to permit its employees to obtain or use material inside
information in the possession of employees of BI or its affiliates who are
not employees of the Investment Adviser nor disclose to such persons any
material inside information.
8. Notices. Any notice or other communication required to be given pursuant
to this Agreement shall be in writing and shall be deemed duly given if
delivered or mailed by registered mail, postage prepaid, (i) to the Fund, c/o
Banque Indosuez, 1230 Avenue of the Americas, New York, New York 10020, U.S.A.,
Attention: Francine Marx, Esq., Secretary; and (ii) to the Investment Adviser,
at 44 rue de Courcelles, 75008, Paris, France, Attention: Chairman and Chief
Executive Officer; or to such other address, or to the attention of such other
person or officer, as either party may from time to time designate to the other
party by written notice given in accordance with this Section 8.
9. Duration and Termination. This Agreement shall become effective as of
June 28, 1996 and shall, unless sooner terminated pursuant hereto, continue in
effect for an initial term of two years ending June 27, 1998 and shall continue
in effect thereafter for successive periods of twelve months each; provided that
such continuance beyond the initial two-year term shall be specifically
approved, at least annually, by a vote of a majority of the members of the Board
of Directors of the Fund who are not interested persons (as defined in the 1940
Act) of either party to the Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and by a vote of either (i) the Fund's
Board of Directors or (ii) a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act); provided, further, that if the
continuation of this Agreement is not so approved, the Investment Adviser may,
at the Fund's request, continue to serve in such capacity in the manner and to
the extent permitted by the 1940 Act and the rules and regulations thereunder.
The annual approval of the continuance of this Agreement shall be confirmed to
the Investment Adviser by the Fund in writing. Notwithstanding any of the
foregoing, this Agreement may be terminated by the Fund in the manner prescribed
by the 1940 Act, without the payment of any penalty, at any time upon no less
than sixty days' prior written notice to the Investment Adviser, or by the
Investment Adviser upon not less than sixty days' prior written notice to the
Fund. This Agreement shall automatically terminate in the event of its
assignment (as defined under the 1940 Act) by either party. Termination of this
Agreement shall not affect the right of the Investment Adviser to receive
payment of any unpaid balance of the compensation described in Section 3 earned
prior to such termination.
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<PAGE>
10. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York, provided that nothing herein shall be construed
as being inconsistent with the 1940 Act, the Advisers Act, applicable French
laws and any rules, regulations and orders of the SEC.
11. Miscellaneous.
11.1. Subject to the policy of obtaining best execution and to the
other requirements of the 1940 Act and subject, further, to the supervision
and control of the Board of Directors of the Fund, the Investment Adviser
may place brokerage orders for the Fund with, and obtain research from,
affiliates of the Investment Adviser and of BI; provided, however, that any
commissions paid to such affiliates shall be reasonable and fair in
comparison to commissions received by other brokers in connection with
comparable transactions involving similar securities. Any research provided
to the Investment Adviser by third parties shall be in addition to and not
in lieu of the services to be provided herein and shall not reduce the
Investment Adviser's fees hereunder.
11.2. The captions in this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
11.3. If any provisions of this Agreement shall be held or made
invalid in whole or in part, the other provisions of this Agreement shall
remain in force. Invalid provisions shall, in accordance with the intent
and purpose of this Agreement, be replaced by such valid provisions which
in their economic effect come as close as legally possible to such invalid
provisions.
11.4. The Investment Adviser shall for all purposes herein provided be
deemed to be an independent contractor, and nothing herein shall be
construed as constituting the Investment Adviser an agent of the Fund.
11.5. The Investment Adviser shall be entitled to rely on any notice
or communication believed by it to be genuine and correct and to have been
sent to it by or on behalf of the Fund.
11.6. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but both of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FRANCE GROWTH FUND, INC.
BY: ________________________________
Name:
Title:
INDOSUEZ INTERNATIONAL INVESTMENT
SERVICES
By: ________________________________
Name:
Title:
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