<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
The Latin America Investment 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 statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE CHILE FUND, INC.
THE INDONESIA FUND, INC.
THE LATIN AMERICA EQUITY FUND, INC.
THE LATIN AMERICA INVESTMENT FUND, INC.
THE PORTUGAL FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
-------------------
NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON TUESDAY, APRIL 22, 1997
-----------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of each of
the funds listed above (each a "Fund" and collectively, the "Funds") will be
held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East
53rd Street, 47th Floor, New York, New York 10022, on Tuesday, April 22, 1997,
commencing at the following times:
<TABLE>
<S> <C>
The Indonesia Fund, Inc. ("IF").................................. 10:00 a.m.
The Chile Fund, Inc. ("CH")...................................... 10:30 a.m.
The Latin America Equity Fund, Inc. ("LAQ")...................... 11:00 a.m.
The Latin America Investment Fund, Inc. ("LAM").................. 11:30 a.m.
The Portugal Fund, Inc. ("PGF").................................. 12:00 p.m.
</TABLE>
The meetings are being held to consider and vote on the following matters
for each Fund as indicated in the table below and described under the
corresponding numbers in the accompanying joint proxy statement (the "Joint
Proxy Statement") and such other matters as may properly come before the
meetings or any adjournments thereof:
<TABLE>
<CAPTION>
PROPOSALS CH IF LAQ LAM PGF
---------------------------------------- ----- --- ----- ----- -----
<C> <S> <C> <C> <C> <C> <C>
1. Election of Directors. X X X X X
2. Ratification of Coopers & Lybrand L.L.P.
as independent public accountants. X X X X X
3. Approval or Disapproval of a
Sub-Advisory Agreement with Credit
Suisse Asset Management Limited. X
4. Approval or Disapproval of an amendment
to the Fund's investment restrictions
to permit the Fund to issue "senior
securities" to the extent permitted by
the Investment Company Act of 1940, as
amended. X X X
5. Approval or Disapproval of an amendment
to the Fund's Articles of Incorporation
relating to the size of the Board of
Directors and the removal of Directors. X X X
</TABLE>
The close of business on February 24, 1997 has been fixed as the record date
for the determination of the shareholders of the Funds entitled to notice of,
and to vote at, the meetings.
This notice and related proxy material are first being mailed on or about
March 14, 1997.
By order of each Board of Directors,
/s/ Michael A. Pignataro
MICHAEL A. PIGNATARO
SECRETARY OF EACH FUND
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON AND WISH YOUR STOCK TO BE
VOTED, PLEASE COMPLETE, SIGN AND DATE THE PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. IT IS
IMPORTANT THAT YOUR PROXY CARD BE RETURNED PROMPTLY IN ORDER TO AVOID THE
ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
Dated: March 14, 1997
New York, New York
<PAGE>
THE CHILE FUND, INC.
THE INDONESIA FUND, INC.
THE LATIN AMERICA EQUITY FUND, INC.
THE LATIN AMERICA INVESTMENT FUND, INC.
THE PORTUGAL FUND, INC.
(EACH A "FUND" AND COLLECTIVELY, THE "FUNDS")
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
-------------------
JOINT PROXY STATEMENT FOR THE
ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON TUESDAY, APRIL 22, 1997
-----------------
This Joint Proxy Statement is furnished in connection with a solicitation of
proxies by the Boards of Directors (each a "Board" and collectively, the
"Boards") of the Funds for use at the Annual Meetings of Shareholders to be held
at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd
Street, 47th Floor, New York, New York 10022, on Tuesday, April 22, 1997 and at
any adjournments thereof (each a "Meeting" and collectively, the "Meetings"). A
Notice of Annual Meetings of Shareholders and a proxy card or cards (the
"Proxy") accompany this Joint Proxy Statement. Proxy solicitations will be made
primarily by mail, but solicitations may also be made by telephone, telegraph or
personal interviews conducted by officers or employees of the Funds, BEA
Associates, the investment adviser to the Funds ("BEA"), Bear Stearns Funds
Management Inc., U.S. administrator to the Funds (the "U.S. Administrator"), or
MacKenzie Partners, Inc. ("MacKenzie"), a proxy solicitation firm that has been
retained by each of the Funds and which will receive a fee of approximately
$5,000 per Fund and will be reimbursed for its reasonable expenses. All costs of
solicitation, including (a) printing and mailing of this Joint Proxy Statement
and accompanying material, (b) the reimbursement of brokerage firms and others
for their expenses in forwarding solicitation material to the beneficial owners
of the Funds' shares, (c) payment of MacKenzie for its services in soliciting
Proxies and (d) supplementary solicitations to submit Proxies, will be borne by
the Funds. This Joint Proxy Statement is expected to be mailed to shareholders
on or about March 14, 1997.
The principal executive office of BEA is One Citicorp Center, 153 East 53rd
Street, 57th Floor, New York, New York 10022. The U.S. Administrator has its
principal executive office at 245 Park Avenue, 15th Floor, New York, New York
10167. Salomon Brothers Asset Management Inc. ("SBAM"), located at 7 World Trade
Center, New York, New York 10048, serves as investment adviser to LAM with
respect to investments in external debt obligations of Latin American
governments or governmental entities. Celfin Servicios Financieros Limitada
("Celfin"), located at Apoquindo 3721, Piso 19, Santiago, Chile, serves as
Chilean investment sub-adviser and Chilean sub-administrator to CH, LAQ and LAM.
1
<PAGE>
The Funds' Annual Reports containing audited financial statements for the
fiscal year ended December 31, 1996 have previously been furnished to the
shareholders of the respective Funds. The reports are not to be regarded as
proxy-soliciting material.
If the enclosed Proxy is properly executed and returned in time to be voted
at the Meetings, the shares represented thereby will be voted in accordance with
the instructions marked on the Proxy. If no instructions are marked on the
Proxy, the Proxy will be voted FOR election of the nominees for director and FOR
the other Proposals stated in the accompanying Notice of Annual Meetings. Any
shareholder giving a Proxy has the right to attend a Meeting to vote his shares
in person (thereby revoking any prior Proxy) and also the right to revoke the
Proxy at any time by written notice received by a Fund prior to the time it is
voted.
In the event that a quorum is present at a Meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of Proxies. Any such adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by Proxy. If a quorum is
present, the persons named as proxies will vote those Proxies that they are
entitled to vote FOR any proposal in favor of an adjournment and will vote those
Proxies required to be voted AGAINST any such proposal against any adjournment.
A shareholder vote may be taken on one or more of the proposals in the Joint
Proxy Statement prior to any adjournment if sufficient votes have been received
and it is otherwise appropriate. A quorum of shareholders is constituted by the
presence in person or by proxy of the holders of a majority of the outstanding
shares of a Fund entitled to vote at a Meeting. For purposes of determining the
presence of a quorum for transacting business at a Meeting, abstentions and
broker "non-votes" (that is, proxies from brokers or nominees indicating that
such persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted.
Proposal 1 requires for approval the affirmative vote of a plurality of the
votes cast at a Meeting in person or by proxy while Proposal 2 requires for
approval the vote of a majority of the votes cast at a Meeting in person or by
proxy. Because abstentions and broker non-votes are not treated as shares voted,
any abstentions and broker non-votes would have no impact on such proposals.
Proposals 3 and 4 require for approval the affirmative vote of a majority of
the applicable Fund's outstanding shares, as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"). A "majority of the Fund's outstanding
shares" means the lesser of (a) 67% or more of the Fund's shares present at a
meeting of its shareholders if the owners of more than 50% of the shares of the
Fund then outstanding are present in person or by proxy or (b) more than 50% of
the Fund's outstanding shares. Proposal 5 requires for approval the affirmative
vote of at least 66-2/3% (with respect to CH), a majority (with respect to LAQ)
and at least 75% (with respect to LAM) of the votes entitled to be cast. Any
abstentions and broker non-votes would have the effect of a "no" vote for
purposes of obtaining the requisite approval under Proposals 3, 4 and 5.
Each Fund has one class of shares of capital stock, par value $.001 per
share (the "Shares"). On the record date, February 24, 1997, the following
number of Shares of each Fund were issued and outstanding:
<TABLE>
<S> <C> <C>
CH....................................... 14,060,458 Shares
IF....................................... 4,608,989 Shares
LAQ...................................... 8,598,377 Shares
LAM...................................... 7,867,385 Shares
PGF...................................... 5,319,276 Shares
</TABLE>
2
<PAGE>
This Joint Proxy Statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate statement for each Fund and, because shareholders may own Shares of
more than one Fund, to avoid burdening shareholders with more than one proxy
statement. Shares of a Fund are entitled to one vote each at such Fund's Meeting
and fractional Shares are entitled to proportionate shares of one vote. To the
extent information relating to common ownership is available to the Funds, a
shareholder that owns of record Shares in two or more of the Funds will receive
a package containing a Joint Proxy Statement and Proxies for the Funds in which
such shareholder is a record owner. If the information relating to common
ownership is not available to the Funds, a shareholder that beneficially owns
Shares in two or more Funds may receive two or more packages each containing a
Joint Proxy Statement and a Proxy for each Fund in which such shareholder is a
beneficial owner. Thus, if a proposal is approved by shareholders of one Fund
and disapproved by shareholders of other Funds, the proposal will be implemented
for the Fund that approved the proposal and will not be implemented for any Fund
that did not approve the proposal. Therefore, it is essential that shareholders
complete, date, sign and return EACH enclosed Proxy.
In order that your Shares may be represented, you are requested to:
-- indicate your instructions on the Proxy or Proxies;
-- date and sign the Proxy or Proxies;
-- mail the Proxy or Proxies promptly in the enclosed envelope;
-- allow sufficient time for the Proxy or Proxies to be received before the
commencement of the applicable Meetings on April 22, 1997.
PROPOSAL 1: ELECTION OF DIRECTORS
The first proposal to be submitted at the Meetings will be the election of
directors of the Funds. Unless otherwise described below, each nominee is a
current director whose term expires on the date of the Meetings and, if elected,
will serve until the 2000 Annual Meetings of the Funds and hold office for a
term of three years and until his successor is elected and qualified. Each Board
is divided into three classes, each class having a term of no more than three
years. Each year the term of office of one class expires and the successor or
successors elected to such class will serve for a three-year term.
Effective February 11 , 1997, Mr. William W. Priest, Jr. was elected by the
Board of Directors of each of CH, LAQ, LAM and PGF to fill the vacancy resulting
from Mr. Daniel Sigg's resignation from such Boards, and Mr. Richard W. Watt was
elected by the Board of Directors of each of CH, LAM and PGF to fill the vacancy
resulting from Mr. Emilio Bassini's resignation from such Boards. The election
of Messrs. Priest and Watt is now being submitted to the shareholders of the
respective Funds for their approval.
3
<PAGE>
The following identifies the nominees for election to the Boards of the
Funds. Information with respect to such nominees is set forth further below.
<TABLE>
<S> <C> <C> <C>
CH: Dr. Enrique R. Arzac (three-year LAM: Dr. Enrique R. Arzac (three-year
term) term)
William W. Priest, Jr. (one-year George W. Landau (three-year term)
term) William W. Priest, Jr. (one-year
Richard W. Watt (two-year term) term)
Richard W. Watt (three-year term)
IF: C. Oscar Morong, Jr. (three-year PGF: Dr. Enrique R. Arzac (three-year
term) William W. Priest, Jr. term)
(three-year term) Jonathan W. Lubell (three-year term)
William W. Priest, Jr. (one-year
term)
Richard W. Watt (two-year term)
LAQ: Dr. Enrique R. Arzac (three-year
term)
George W. Landau (three-year term)
Richard W. Watt (three-year term)
William W. Priest, Jr. (two-year
term)
</TABLE>
Each nominee has indicated an intention to continue to serve if elected and
has consented to being named in this Joint Proxy Statement. Each nominee or
director who is deemed an "interested person" of a Fund, as defined in the 1940
Act, is indicated by an asterisk in the following table. Messrs. Priest and Watt
are interested persons of the Funds by virtue of their positions as directors
and/or officers of BEA. Mr. Hyland is an interested person of LAM by virtue of
his position as President of SBAM and managing director of Salomon Brothers Inc.
SBAM is a wholly owned subsidiary of Salomon Brothers Inc.
The following table sets forth certain information regarding the nominees
for election to the Boards of the Funds, the directors of the Funds and the
officers and directors of the Funds as a group. Each of the nominees, the
directors and the officers of the Funds has sole voting and investment power
with respect to the Shares shown. Each nominee, each director and the officers
and directors of each Fund as a group owns less than one percent of the
outstanding Shares of such Fund.
4
<PAGE>
<TABLE>
<CAPTION>
SHARES LENGTH OF SERVICE
BENEFICIALLY CURRENT PRINCIPAL AS DIRECTOR AND MEMBERSHIP ON BOARDS
OWNED ON OCCUPATION TERM OF MEMBERSHIP OF OTHER REGISTERED
FEBRUARY 24, AND PRINCIPAL EMPLOYMENT ON BOARDS OF INVESTMENT COMPANIES AND
NAME (AGE) 1997 DURING THE PAST FIVE YEARS THE FUNDS PUBLICLY HELD COMPANIES
- ----------------------------- -------------- --------------------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
Dr. Enrique R. Arzac (55) . CH: 200 Professor of Finance and CH: since 1996; Director of six other
Columbia University LAQ: 200 Economics and Director of current term ends BEA-advised investment
Graduate School of LAM: 200 the Financial Management at the 1997 annual companies; Director of
Business PGF: 200 Program, Graduate School of meeting. The Adam Express
New York, NY 10027 Business, Columbia LAQ: since 1996; Company; Director of
University (1971-present). current term ends Petroleum and Resources
at the 1997 annual Corporation.
meeting.
LAM: since 1996;
current term ends
at the 1997 annual
meeting.
PGF: since 1996;
current term ends
at the 1997 annual
meeting.
James J. Cattano (53) ....... CH: 256 President, Primary Re- CH: since 1989; Director of three other
78 Manor Road LAQ: 533 source Inc. (an interna- current term ends BEA-advised investment
Ridgefield, CT 06877 LAM: -- tional trading company at the 1999 annual companies.
PGF: -- specializing in the sale of meeting
agricultural commodities in LAQ: since 1991;
Latin American markets) current term ends
(10/96-present); President, at the 1998 annual
Atlantic Fertilizer & meeting
Chemical Company (an LAM: since 1990;
international trading current term ends
company specializing in the at the 1999 annual
sale of agricultural meeting PGF: since
commodities in Latin 1989; current term
American mar- ends at the 1999
kets)(10/91-10/96). annual meeting
Richard H. Francis (64) ..... IF: 1,000 Currently retired; Execu- IF: since 1990; Director of two other
c/o BEA Associates tive Vice President and current term ends BEA-advised investment
153 East 53rd Street Chief Financial Officer of at the 1998 annual companies.
New York, NY 10022 Pan Am Corporation and Pan meeting
American World Airways,
Inc. (1988-1991).
Peter A. Gordon (54) ........ LAQ: -- General Partner of Ethos LAQ: since 1994; Director of four other
284 Coopers Neck Lane LAM: -- Capital Management current term ends BEA-advised investment
P.O. Box 1327 (6/92-12/95); Managing at the 1999 annual companies; Director of
Southampton, NY 11968 Director at Salomon meeting TCS Fund, Inc.; Director
Brothers Inc (1981-6/92). LAM: since 1994; of the Mills
current term ends Corporation.
at the 1998 annual
meeting
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES LENGTH OF SERVICE
BENEFICIALLY CURRENT PRINCIPAL AS DIRECTOR AND MEMBERSHIP ON BOARDS
OWNED ON OCCUPATION TERM OF MEMBERSHIP OF OTHER REGISTERED
FEBRUARY 24, AND PRINCIPAL EMPLOYMENT ON BOARDS OF INVESTMENT COMPANIES AND
NAME (AGE) 1997 DURING THE PAST FIVE YEARS THE FUNDS PUBLICLY HELD COMPANIES
- ----------------------------- -------------- --------------------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
Michael Hyland* (51) ........ LAM: -- President and Director of LAM: since 1992; Director of 13 other
7 World Trade Center SBAM and Managing Di- current term ends SBAM-advised investment
New York, NY 10048 rector, Salomon Brothers at the 1999 annual companies.
Inc (1989-present). meeting
Peter J. Kaplan (54) ........ IF: 1,000 President of National Me- IF: since 1990; --
1790 Broadway dia Group, Inc. (sports current term ends
New York, NY 10019 marketing and management at the 1999 annual
company)(1981-present). meeting
George W. Landau (77) ....... CH: 1,568 Senior Advisor for Latin CH: since 1989; Director of four other
Two Grove Isle Drive LAQ: 2,333 America Coca-Cola Inter- current term ends BEA-advised investment
Coconut Grove, FL 33133 LAM: 444 national (1988-present); at the 1998 annual companies;
President of the Americas meeting Director of Emigrant
Society and Council of the LAQ: since 1991; Savings Bank; Director
Americas (7/85-10/93); current term ends of GAM Funds, Inc.
United States Ambassador to at the 1997 annual
Venezuela (1982-1985); meeting
United States Ambassador to LAM: since 1990;
Chile (1977-1982) and current term ends
United States Ambassador to at the 1997 annual
Paraguay (1972-1977). meeting
Jonathan W. Lubell (67) ..... PGF: -- Partner, Morrison Cohen PGF: since 1989; Director of one other
750 Lexington Avenue Singer & Weinstein (a law current term ends BEA-advised investment
New York, NY 10022 firm) (2/89-present). at the 1997 annual company.
meeting
C. Oscar Morong, Jr. (61) ... IF: -- Managing Director, Morong IF: since 1990; Chairman of the Board of
c/o BEA Associates Capital Management current term ends the Landmark Family of
153 East 53rd Street (1/93-present); Senior Vice at the 1997 annual Funds and Director of
New York, NY 10022 President--Investments of meeting MAS Funds.
TIAA-CREF (retired 1/93).
William W. Priest, Jr.* CH: -- Chairman-Management CH: since 1997; Director of six other
(55) . . IF: -- Committee, Chief Executive current term ends BEA-advised investment
153 East 53rd Street LAQ: -- Officer and Executive at the 1997 annual companies.
New York, NY 10022 LAM: -- Director of BEA meeting
PGF: -- (12/90-present). IF: since 1990;
current term ends
at the 1997 annual
meeting
LAQ: since 1997;
current term ends
at the 1997 annual
meeting
LAM: since 1997;
current term ends
at the 1997 annual
meeting
PGF: since 1997;
current term ends
at the 1997 annual
meeting
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES LENGTH OF SERVICE
BENEFICIALLY CURRENT PRINCIPAL AS DIRECTOR AND MEMBERSHIP ON BOARDS
OWNED ON OCCUPATION TERM OF MEMBERSHIP OF OTHER REGISTERED
FEBRUARY 24, AND PRINCIPAL EMPLOYMENT ON BOARDS OF INVESTMENT COMPANIES AND
NAME (AGE) 1997 DURING THE PAST FIVE YEARS THE FUNDS PUBLICLY HELD COMPANIES
- ----------------------------- -------------- --------------------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
Martin M. Torino (47) ....... LAQ: -- Chairman of the Board of LAQ: since 1991; Director of three other
Reconquista 365, 9th Fl LAM: -- Ingenio y Refineria San current term ends BEA-advised investment
Capital Federal 1003 PGF: -- Martin Del Tabacal S.A. at the 1999 annual companies.
Buenos Aires, Argentina (8/96-present); Executive meeting
Director of TAU S.A. (a LAM: since 1990;
commodities trading firm) current term ends
(11/90-present); President at the 1998 annual
of DYAT S.A. meeting
(10/93-present). PGF: since 1989;
current term ends
at the 1998 annual
meeting
Richard W. Watt* (38) ....... CH: -- Managing Director of BEA CH: since 1997; Director of four other
153 East 53rd Street LAQ: -- (7/96-present); Senior Vice current term ends BEA-advised investment
New York, NY 10022 LAM: -- President of BEA (8/95-pre- at the 1997 annual companies.
PGF: -- sent); Head of Emerging meeting
Markets Investments and LAQ: since 1995;
Research at Gartmore In- current term ends
vestment Limited at the 1997 annual
(11/92-6/95); Director of meeting
Kleinwort Benson Interna- LAM: since 1997;
tional Investment current term ends
(5/87-10/92). at the 1997 annual
meeting
PGF: since 1997;
current term ends
at the 1997 annual
meeting
All directors and officers
as a group
CH (9):................. 2,024
IF (9):................. 2,000
LAQ (11):............... 3,066
LAM (12):............... 997
PGF (10):............... 200
</TABLE>
During the fiscal year ended December 31, 1996, each director who is not a
director, officer, partner, co-partner or employee of BEA, SBAM, or any
affiliate thereof, received an annual fee of $5,000 and $500 for each meeting of
the Board attended by him and was reimbursed for expenses incurred in connection
with his attendance at the Board meetings. The total remuneration paid by CH,
IF, LAQ, LAM and PGF during the fiscal year 1996 to all such unaffiliated
directors was $26,375, $21,000, $35,375, $37,375 and $28,875, respectively.
During the fiscal year 1996, the Board of CH, IF, LAQ, LAM and PGF convened 5,
4, 7, 8, and 5 times, respectively. Each director except Messrs. Gordon (LAM,
LAQ) and Hyland (LAM) attended at least seventy-five percent of the aggregate
number of meetings of the Boards and any committees on which he served.
7
<PAGE>
The Funds' Audit Committees are composed of directors who are not interested
persons of the Funds. Messrs. Arzac, Cattano and Landau are the members of the
Audit Committee of CH; Messrs. Francis, Kaplan and Morong are the members of the
Audit Committee of IF; Messrs. Arzac, Cattano, Gordon, Landau and Torino are the
members of the Audit Committee of LAQ and LAM and Messrs. Arzac, Cattano, Lubell
and Torino are the members of the Audit Committee of PGF. The Audit Committee of
each of CH, IF, LAQ, LAM and PGF convened twice during the fiscal year 1996. The
Audit Committee of a Fund advises the full Board with respect to accounting,
auditing and financial matters affecting that Fund. Each Board performs the
functions of a nominating committee. The Board of Directors of each Fund will
consider nominees recommended by shareholders. Recommendations should be
submitted to the Board in care of the Secretary of the Fund. None of the Funds
has a compensation committee.
Section 16(a) of the Securities Exchange Act of 1934 requires a Fund's
officers and directors, officers and directors of the investment adviser,
affiliated persons of the investment adviser, and persons who beneficially own
more than ten percent of a Fund's Shares to file reports of ownership with the
Securities and Exchange Commission, the New York Stock Exchange and the Fund.
Based solely upon its review of the copies of such forms received by it and
written representations from such persons, each Fund believes that for the
fiscal year ended December 31, 1996, all filings applicable to such persons were
complied with, except that an Initial Statement of Beneficial Ownership on Form
3 was filed late by Wendy Setnicka (officer of the Funds).
The following table shows certain information about officers of the Funds
other than Messrs. Priest and Watt, who are described above. Mr. Priest is the
Chairman of the Board of each of the Funds and President of IF and was elected
to such positions in February 1997. Mr. Watt is President and Chief Investment
Officer of CH, LAQ, LAM and PGF. He has been an officer of CH, LAQ and LAM since
August 15, 1995 and an officer of PGF since February 11, 1997. Mr. Stamler has
been a Senior Vice President of the Funds since 1993. Mr. Pignataro has served
as Chief Financial Officer for CH and PGF since 1991 and Secretary for CH and
PGF since 1989. He was elected Secretary of IF on February 5, 1997 (after having
held a previous position with IF since 1990) and has held his respective
positions with the remaining Funds since their commencement of operations. Ms.
Manney has been Vice President and Treasurer of the Funds since 1992. Mr. Swift
was elected to his office on August 2, 1995. Wendy Setnicka was appointed to her
position as Assistant Treasurer of CH, LAQ, LAM and PGF on May 14, 1996 and of
IF on May 8, 1996.
8
<PAGE>
Each officer will hold office until a successor has been elected. All
officers of the Funds except Mr. Swift are employees of and are compensated by
BEA. Mr. Swift is an employee of and is compensated by Credit Suisse Asset
Management Limited ("CSAM"). The Funds have no bonus, profit sharing, pension or
retirement plans.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY CURRENT PRINCIPAL
OWNED ON OCCUPATION
FEBRUARY 24, AND PRINCIPAL EMPLOYMENT
NAME AGE 1997 POSITION WITH FUNDS DURING THE PAST FIVE YEARS
- ----------------------- --- ------------- --------------------- --------------------------
<S> <C> <C> <C> <C>
Stephen Swift ......... 51 IF: -- Chief Investment Managing Director of CSAM
Beaufort House Officer of IF (2/97-present); Managing
15 St. Botolph Street Director of BEA
London EC3A 7JJ, (6/95-2/97); Head of
England Global Equities at CSAM
(10/91-5/95); Portfolio
manager of CS Tiger Fund
(10/91-present); Managing
Director of Southeast
Asian Equities at Wardley
Investment Services (a
subsidiary of Hong Kong
and Shanghai Bank)
(1/89-9/91).
Paul P. Stamler ....... 36 CH: -- Senior Vice President Vice President of BEA
153 East 53rd Street IF: -- of CH, IF, LAQ, LAM (6/93-present); self-
New York, NY 10022 LAQ: -- and PGF employed as a certified
LAM: -- public accountant
PGF: -- (4/92-5/93); Vice
President of Bear, Stearns
& Co. Inc. (6/88-3/92).
Michael A. 37 CH: -- Chief Financial Vice President of BEA
Pignataro ........... IF: -- Officer and Secretary (12/95-present); Assistant
153 East 53rd Street LAQ: -- of CH, IF, LAQ, LAM Vice President and Chief
New York, NY 10022 LAM: 353 and PGF Administrative Officer for
PGF: -- Investment Companies of
BEA (9/89-12/95).
Rachel D. Manney ...... 29 CH: -- Vice President and Assistant Vice President
153 East 53rd Street IF: -- Treasurer of CH, and Administrative Officer
New York, NY 10022 LAQ: -- IF, LAQ, LAM and for Investment Companies
LAM: -- PGF of BEA (4/92-present);
PGF: -- Senior Associate at
Coopers & Lybrand L.L.P.
(certified public
accountant) (1989-1992).
Wendy S. Setnicka ..... 32 CH: -- Assistant Treasurer Assistant Vice President
153 East 53rd Street IF: -- of CH, IF, LAQ, LAM of BEA (1/97-present);
New York, NY 10022 LAQ: -- and PGF Administrative Officer for
LAM: -- Investment Companies of
PGF: -- BEA (11/93-present);
Supervisor of Fund
Accounting and
Administration at Reich &
Tang LP (6/89-11/93).
</TABLE>
9
<PAGE>
The following table shows certain compensation information for the directors
of the Funds for the fiscal year ended December 31, 1996. None of the Funds'
executive officers and directors who are also officers or directors of BEA or
SBAM received any compensation from the Funds for such period.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT TOTAL
BENEFITS ESTIMATED COMPENSATION FROM TOTAL NUMBER OF
ACCRUED AS ANNUAL FUND AND BOARDS OF
AGGREGATE PART OF BENEFITS FUND COMPLEX BEA-ADVISED
COMPENSATION FUND UPON PAID TO INVESTMENT
NAME OF DIRECTOR FROM FUND EXPENSES RETIREMENT DIRECTORS COMPANIES SERVED
- -------------------------------- ------------------- ----------- --------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
Dr. Enrique R. Arzac+ .......... CH: $6,375 0 0 $55,000 10
LAQ: $6,875
LAM: $7,375
PGF: $6,375
James J. Cattano ............... CH: $7,500 0 0 $ 53,500 7
LAQ: $7,500
LAM: $8,000
PGF: $7,500
Richard H. Francis ............. IF: $7,000 0 0 $ 8,919 3
Peter A. Gordon ................ LAQ: $5,000 0 0 $ 30,000 6
LAM: $5,000
Jose Ibanez++ .................. CH: $5,000 0 0 $ 5,000 1
Peter J. Kaplan ................ IF: $7,000 0 0 $ 7,000 1
George W. Landau ............... CH: $7,500 0 0 $ 56,500 7
LAQ: $8,000
LAM: $8,500
Jonathan W. Lubell ............. PGF: $7,500 0 0 $ 16,000 2
C. Oscar Morong, Jr. ........... IF: $7,000 0 0 $ 7,000 1
Martin M. Torino ............... LAQ: $8,000 0 0 $ 47,500 6
LAM: $8,500
PGF: $7,500
</TABLE>
- --------------
+ Dr. Arzac became a director of each of CH, LAQ, LAM and PGF in February 1996
and therefore earned a prorated annual fee for his services for the 1996
fiscal year.
++ Mr. Ibanez resigned as a director of CH on January 30, 1997.
10
<PAGE>
VOTE REQUIRED
Proposal 1 requires for approval the affirmative vote of a plurality of the
votes cast at a Meeting in person or by proxy. Because abstentions and broker
non-votes are not treated as shares voted, any abstentions and broker non-votes
would have no impact on such proposal.
THE BOARDS OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMEND
THAT THE SHAREHOLDERS VOTE "FOR" THE NOMINEES FOR DIRECTOR.
PROPOSAL 2: RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The second proposal to be submitted at the Meetings will be the ratification
or rejection of the selection by the Boards of Coopers & Lybrand L.L.P. as
independent public accountants of the Funds for the present fiscal year ending
December 31, 1997. At a meeting held on February 11, 1997, the Boards of CH,
LAQ, LAM and PGF, including those directors who are not "interested persons" of
the Funds, approved the selection of Coopers & Lybrand L.L.P. for the fiscal
year ending December 31, 1997. At a meeting held on February 5, 1997, the Board
of IF, including those directors who are not "interested persons" of IF,
approved the selection of Coopers & Lybrand L.L.P. for the fiscal year ending
December 31, 1997. Coopers & Lybrand L.L.P. has been independent public
accountants for each of the Funds since commencement of operations of the
respective Funds, and has informed each Fund that it has no material direct or
indirect financial interest in that Fund. A representative of Coopers & Lybrand
L.L.P. will be available by telephone at the Meetings and will have the
opportunity to make a statement if the representative so desires and will be
available to respond to appropriate questions.
THE BOARDS OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMEND
THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT PUBLIC ACCOUNTANTS.
VOTE REQUIRED
Proposal 2 requires for approval the vote of a majority of the votes cast at
a Meeting in person or by proxy. Because abstentions and broker non-votes are
not treated as shares voted, any abstentions and broker non-votes would have no
impact on such proposal.
PROPOSAL 3: (FOR SHAREHOLDERS OF IF ONLY)
APPROVAL OR DISAPPROVAL OF THE CSAM SUB-ADVISORY AGREEMENT
The third proposal to be submitted at the Meeting will be the approval or
disapproval of an Investment Sub-Advisory Agreement among IF, BEA and CSAM (the
"CSAM Sub-Advisory Agreement"). A copy of the proposed CSAM Sub-Advisory
Agreement is attached as Exhibit A to this Proxy Statement.
APPROVAL OF THE CSAM SUB-ADVISORY AGREEMENT
The CSAM Sub-Advisory Agreement was approved by the Board of Directors of IF
on February 5, 1997. At that meeting, all of the directors present, including a
majority of the directors who are not "interested persons" (as defined in the
1940 Act) of any party to the CSAM Sub-Advisory Agreement, approved the CSAM
Sub-Advisory Agreement and directed that the agreement be submitted to the
shareholders of IF at the Meeting for their approval or disapproval.
11
<PAGE>
In recommending the approval of the CSAM Sub-Advisory Agreement, the Board
of IF has considered, among other things, the qualifications of CSAM and the
range of services to be provided by CSAM. The Board also considered the fact
that Mr. Swift, Chief Investment Officer of IF, is now an employee of CSAM and
the retention of CSAM is necessary to secure the continuing services of Mr.
Swift.
INFORMATION ABOUT CSAM
CSAM is a corporation organized under the laws of England in 1982 and is
registered as an investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act"). The principal executive office of CSAM is Beaufort House,
15 St. Botolph Street, London EC3A 7JJ, England. CSAM is a diversified asset
manager, handling global equity, balanced, fixed income and derivative
securities accounts for other investment companies, corporate pension and
profit-sharing plans, state pension funds, union funds, endowments and other
charitable institutions. CSAM has been in the money management business for over
13 years and currently manages approximately $30 billion in assets.
CSAM is a wholly owned subsidiary of Credit Suisse Asset Management (UK)
Holding Limited ("CSAM Holding"). CSAM Holding is a wholly owned subsidiary of
Credit Suisse, the largest global financial services group based in Switzerland,
which in turn is a subsidiary of CS Holding, a Swiss Corporation. Both Credit
Suisse and CS Holding are located at Paradeplatz 8, 8001 Zurich, Switzerland.
CSAM is governed by a Board of Directors. Subject to the overall authority
of the Board of Directors, the day-to-day affairs of CSAM are managed by an
Executive Committee. The names and principal occupations of the directors and
principal executive officers of CSAM are set forth below. Each of these persons
may be contacted c/o CSAM, Beaufort House, 15 St. Botolph Street, London EC3A
7JJ, England.
<TABLE>
<CAPTION>
NAME CURRENT POSITION WITH CSAM OTHER CURRENT PRINCIPAL OCCUPATIONS
- --------------------------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
Heinz Hofmann.............. Director; Managing Director and Chief
Executive of Credis International Fund
Holding and Head of Mutual Fund Business
Robert W. Jenkins.......... Director; Chief Operating Officer Executive Director of BEA
The Rt. Hon. Lord Moore of
Lower Marsh, P.C.......... Chairman; Director Chairman of CSAM Holding and Credit
Suisse (UK) Limited; Chairman of Credit
Suisse Investment Management
(Australia); European Chairman of The
Monitor Company; Deputy Chairman of
Rolls Royce plc
Robert J. Parker........... Director; Managing Director, Chief Co-Chairman Credit Suisse First Boston
Executive and Chief Investment Officer Investment Management
of CSAM London
William W. Priest, Jr...... Director Chairman-Management Committee, Chief
Executive Officer and Executive Director
of BEA
Dilip G. Rasgotra.......... Director; Managing Director and Head of
Global Fixed Income Investment
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NAME CURRENT POSITION WITH CSAM OTHER CURRENT PRINCIPAL OCCUPATIONS
- --------------------------- ----------------------------------------- -----------------------------------------
William P. Sterling........ Director Managing Director and Portfolio Manager
of BEA
<S> <C> <C>
Timothy T. Taussig......... Director Executive Director and Member of
Management Committee of BEA
Henry Wegmann.............. Director; Managing Director and Head of
Swiss Operations
Glenn Wellman.............. Director; Managing Director for Global
Equity Portfolio Management
</TABLE>
Mr. William W. Priest, Jr., President of IF, is a Director of CSAM. Mr.
Stephen Swift, Chief Investment Officer of IF, is a Managing Director of CSAM.
Both BEA and CSAM are part of the Credit Suisse Asset Management Business
Unit, which is controlled by Credit Suisse First Boston (a Swiss Bank).
DESCRIPTION OF THE CSAM SUB-ADVISORY AGREEMENT
CSAM is proposed to serve as the Fund's investment sub-adviser pursuant to
the CSAM Sub-Advisory Agreement. Under the supervision of the Board of Directors
of each of IF and BEA, CSAM will provide a variety of services, including (1)
assisting BEA in managing IF's assets in accordance with IF's investment
objective and policies, (2) assisting BEA in making investment decisions and
exercising voting rights in respect of portfolio securities for IF, (3) placing
purchase and sale orders on behalf of IF, (4) providing investment research and
supervision of IF's investments and conducting a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of IF's assets
and (5) furnishing IF and/or BEA with whatever statistical information as they
may reasonably request with respect to the securities that IF may hold or
contemplate purchasing.
Upon approval of the CSAM Sub-Advisory Agreement by the shareholders of IF,
CSAM will be paid by BEA a quarterly fee of $18,750. The Fund will not pay any
portion of such sub-advisory fee. Since January 1, 1997, the date Mr. Swift
relocated from BEA to CSAM, CSAM has made his services available to IF at no
cost.
BEA is and will continue to act as the investment adviser of IF. For its
services, BEA is paid a quarterly fee computed at an annual rate of 1.0% of the
Fund's average weekly net assets from which fee it will provide the compensation
to CSAM for sub-advisory services. For the fiscal year ended December 31, 1996,
BEA was paid $454,020 by IF for its services.
The CSAM Sub-Advisory Agreement provides that CSAM shall not be liable for
any error of judgment or mistake of law or for any loss suffered by IF or BEA in
connection with the matters to which the CSAM Sub-Advisory Agreement relates,
except liability resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations and duties under the CSAM Sub-Advisory Agreement.
DURATION AND TERMINATION; NON-EXCLUSIVE SERVICES
The CSAM Sub-Advisory Agreement will remain in effect for an initial
two-year period unless sooner terminated, and will remain in effect from year to
year thereafter if approved annually (1) by the Board of IF or by a majority (as
defined in the 1940 Act) of IF's outstanding voting securities and (2) by a
majority of the
13
<PAGE>
directors who are not parties to the CSAM Sub-Advisory Agreement or "interested
persons" (as defined in the 1940 Act) of any such party. The CSAM Sub-Advisory
Agreement will automatically terminate on its assignment (as defined in the 1940
Act) and is terminable, without penalty, on 60 days' written notice by either
BEA or the Board of IF or by the vote of the holders of a majority (as defined
in the 1940 Act) of the Shares or upon 90 days' written notice by CSAM.
The services of CSAM are not deemed to be exclusive and nothing in the CSAM
Sub-Advisory Agreement prevents CSAM from providing similar services to other
investment companies and other clients (whether or not their investment
objectives and policies are similar to those of IF) or from engaging in other
activities.
EXPENSES
CSAM is obligated to pay expenses associated with providing the services
contemplated by the CSAM Sub-Advisory Agreement, including compensation of and
office space for its respective officers and employees connected with investment
and economic research, trading and investment management and administration of
IF.
VOTE REQUIRED
Proposal 3 requires for approval the affirmative vote of a majority of the
applicable Fund's outstanding shares, as defined in the 1940 Act. A "majority of
the Fund's outstanding shares" means the lesser of (a) 67% or more of the Fund's
shares present at a meeting of its shareholders if the owners of more than 50%
of the shares of the Fund then outstanding are present in person or by proxy or
(b) more than 50% of the Fund's outstanding shares. Any abstentions and broker
non-votes would have the effect of a "no" vote for purposes of obtaining the
requisite approval under Proposal 3.
THE BOARD OF DIRECTORS OF IF, INCLUDING ALL "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF THE CSAM SUB-ADVISORY
AGREEMENT.
PROPOSAL 4: (FOR SHAREHOLDERS OF CH, LAQ AND LAM ONLY)
APPROVAL OR DISAPPROVAL OF MODIFICATION TO THE FUNDS' INVESTMENT
RESTRICTIONS CONCERNING THE ISSUANCE OF SENIOR SECURITIES
The fourth proposal to be submitted at the Meeting will be the approval or
disapproval of a proposed change to the investment restrictions of each of CH,
LAQ and LAM regarding the issuance of senior securities. The current investment
restrictions of each of LAQ and LAM state as follows:
"Under its fundamental restrictions, the Fund may not issue senior
securities, borrow money or pledge its assets, except that the Fund may
borrow from a lender (i) for temporary or emergency purposes, (ii) for
such short-term credits as may be necessary for the clearance or
settlement of transactions, (iii) to refinance repurchases of its Shares
in amounts not exceeding 10% (taken at the lower of cost or current
value) of its total assets (not including the amount borrowed), (iv) to
pay any dividends required to be distributed in order for the Fund to
maintain its qualification as a regulated investment company under the
U.S. Internal Revenue Code of 1986, as amended (the "Code"), or (v) to
pay Fund expenses outside of Latin America, and not for the purpose of
leveraging. In no event shall borrowings by the Fund exceed 33 1/3% of
the Fund's total assets (not
14
<PAGE>
including the amount borrowed). Additional investments will not be made
when borrowings exceed 5% of the Fund's total assets. The Fund may
pledge its assets to secure such borrowings. For the purpose of this
investment restriction, collateral arrangements with respect to the
writing of options or the purchase or sale of future contracts or
related options or forward currency contracts are not deemed a pledge of
assets or the issuance of a senior security."
With the exception of the substitution of the word "Chile" for "Latin
America" in item (v) of the foregoing restrictions, the current investment
restrictions of CH are identical to those of LAQ and LAM. This provision may
prohibit CH, LAQ and LAM from issuing any senior securities under circumstances
where such issuance is permitted under the 1940 Act.
The Board of Directors of each of CH, LAQ and LAM voted at a meeting held on
February 11, 1997 to replace that portion of this investment restriction dealing
with senior securities, subject to approval by the respective shareholders of
CH, LAQ and LAM, with the following investment restriction governing the
issuance of senior securities:
"The Fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940... ."
In voting in favor of relaxing the Fund's investment restrictions, each
Board considered, among other things, the economic benefits that may be derived
from having the investment flexibility to issue senior securities in appropriate
circumstances in a manner that is permitted under the 1940 Act, but precluded by
the current investment restriction as written.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings that
takes precedence over the claims of the fund's common shareholders. The 1940 Act
generally prohibits closed-end investment companies from issuing senior
securities unless certain asset coverage and other requirements are satisfied;
in addition, investment companies are permitted to engage in certain types of
transactions that might otherwise be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which obligates a
fund to pay money at a future date (e.g., the purchase of securities to be
settled on a date that is further away than the normal settlement period) may be
considered a "senior security," and arguably would be prohibited under the
current investment restrictions of CH, LAQ and LAM. Under the 1940 Act, however,
a fund is permitted to enter into this type of transaction if it maintains a
segregated account containing liquid securities in an amount equal to its
obligation to pay cash for the securities at a future date. If this proposal is
approved, CH, LAQ and LAM may, from time to time, utilize transactions that may
be considered "senior securities" but only in accordance with applicable
regulatory requirements under the 1940 Act.
In addition, the Board of Directors of each of CH, LAQ and LAM may in the
future wish to consider the issuance of preferred stock or debt in a manner that
would comply with the 1940 Act requirements but that would be precluded by each
Fund's current investment restriction, although no such issuance is currently
being considered. The terms of such securities cannot be stated or estimated
because no offering thereof is contemplated in the proximate future. The terms
of the securities that may be authorized, including dividend or interest rates,
conversion prices, voting rights, redemption prices, maturity dates and similar
matters, will be determined by the respective Boards.
15
<PAGE>
A leveraged capital structure creates certain special risks not associated
with unleveraged funds having similar investment objectives and policies. If CH,
LAQ or LAM were to issue preferred stock or debt and incur an obligation to pay
dividends or interest, any investment income or gains earned from the capital
contributed by the purchases of the senior securities which is in excess of the
interest or dividends due thereon will cause the net asset value of such Fund's
Shares to increase to a greater extent than would otherwise be the case.
Conversely, if the investment performance of the capital contributed by the
purchasers of the senior securities fails to cover the interest or dividends on
such capital, the net asset value of such Fund would decrease to a greater
extent than would otherwise be the case, and dividends on the Shares might be
reduced or eliminated. A leveraged capital structure may be implemented by any
Fund only if the Board of Directors of that Fund determines in light of all
relevant circumstances that to do so would be in the best interests of such Fund
and its shareholders.
VOTE REQUIRED
Proposal 4 requires for approval the affirmative vote of a majority of the
applicable Fund's outstanding shares, as defined in the 1940 Act. A "majority of
the Fund's outstanding shares" means the lesser of (a) 67% or more of the Fund's
shares present at a meeting of its shareholders if the owners of more than 50%
of the shares of the Fund then outstanding are present in person or by proxy or
(b) more than 50% of the Fund's outstanding shares. Any abstentions and broker
non-votes would have the effect of a "no" vote for purposes of obtaining the
requisite approval under Proposal 4.
THE BOARD OF DIRECTORS OF EACH OF CH, LAQ AND LAM, INCLUDING THE
"NON-INTERESTED" DIRECTORS, RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
MODIFICATION OF SUCH FUND'S INVESTMENT RESTRICTIONS CONCERNING THE ISSUANCE OF
SENIOR SECURITIES AS DESCRIBED ABOVE.
PROPOSAL 5: (FOR SHAREHOLDERS OF CH, LAQ AND LAM ONLY)
AMENDMENT TO THE FUND'S ARTICLES OF INCORPORATION
The Articles of Incorporation of each of CH, LAQ and LAM state that "[t]he
number of Directors shall in no event be greater than nine (9)." Currently,
there are 5, 7 and 8 directors on the Board of Directors of CH, LAQ and LAM,
respectively. The proposed amendment would amend the Articles of Incorporation
of each Fund to state that "[t]he number of Directors shall in no event be
greater than nine (9) or such greater number as may be provided in any Articles
Supplementary." The purpose of this amendment is to provide for an adequate
number of directors in the event that the Fund issues preferred stock.
In the event that the amendment to the investment restrictions described in
Proposal 4 is approved, the Fund may determine to issue preferred stock. Under
Section 18(a) of the 1940 Act, the holders of preferred stock in a closed-end
investment company such as the Fund are entitled to certain rights. Included
among these rights is the right of such holders:
voting as a class, to elect at least two directors at all times, and,
subject to the prior rights, if any, of the holders of any other class of
senior securities outstanding, to elect a majority of the directors if at
any time dividends on the preferred stock shall be unpaid in an amount equal
to two full years' dividends on such securities, and to continue to be so
represented until all dividends in arrears have been paid or otherwise
provided for.
16
<PAGE>
If preferred stock is issued by the Fund and the Fund fails to pay dividends
such that the amount unpaid is equal to two full years' dividends, the current
limit of nine directors provided for in the Articles of Incorporation of each
Fund may be insufficient, depending upon the number of directors then in office,
to permit the preferred stockholders to elect a majority of the Board of
Directors as required by the 1940 Act. Under Maryland law, the Board of
Directors in connection with the authorization of a series of preferred stock
would approve Articles Supplementary which describe the rights, preferences and
restrictions of the preferred stock, including any voting rights. The proposed
amendment will permit the Board of Directors to include in any Articles
Supplementary a provision to implement an increase in the size of the Board of
Directors of the Fund to the extent necessary to comply with the requirements of
the 1940 Act described above.
In addition, the Articles of Incorporation of each of LAQ and LAM state
that:
A Director may be removed with or without cause, but only by action of the
stockholders taken by the holders of at least seventy-five percent (75%) of
the votes entitled to be cast.
The corresponding provision in the Articles of Incorporation of CH is identical,
except for the phrase "seventy-five percent (75%)" in which place the Articles
of CH state "sixty-six and two-thirds (66 2/3%)".
The 1940 Act may be read to require that the holders of preferred stock
acting alone must have the power to remove any director elected by them.
Accordingly, the proposed amendment would amend the Articles of Incorporation of
LAQ and LAM by adding the following proviso at the end of the section quoted
above:
; provided, however, that a Director designated for election by or elected
by a class or series of capital stock of the Corporation may be removed with
or without cause by and only by action of the stockholders taken by the
holders of at least seventy-five percent (75%) of the shares of such class
or series entitled to be cast.
The proposed amendment to the Articles of Incorporation of CH is identical
except that in lieu of the phrase "seventy-five percent (75%)" the proposed
amendment to the Articles of CH states "sixty-six and two-thirds (66 2/3%)".
REQUIRED VOTE
Proposal 5 requires for approval the affirmative vote of at least 66 2/3%
(with respect to CH), a majority (with respect to LAQ) and at least 75% (with
respect to LAM) of the votes entitled to be cast. Any abstentions and broker
non-votes would have the effect of a "no" vote for purposes of obtaining the
requisite approval under Proposal 5.
THE BOARD OF DIRECTORS OF EACH OF CH, LAQ AND LAM, INCLUDING THE "NON-
INTERESTED" DIRECTORS, RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE PROPOSAL
TO AMEND THE ARTICLES OF INCORPORATION.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETINGS;
SHAREHOLDER PROPOSALS
The Boards are not aware of any other matters that will come before the
Meetings. Should any other matter properly come before a Meeting, it is the
intention of the persons named in the accompanying Proxy to vote the Proxy in
accordance with their judgment on such matters.
17
<PAGE>
Notice is hereby given that for a shareholder proposal to be considered for
inclusion in any Fund's proxy material relating to its 1998 annual meetings of
shareholders, the shareholder proposal must be received by that Fund no later
than November 11, 1997. A shareholder desiring to submit a proposal must be a
record or beneficial owner of at least 1% of the outstanding Shares or Shares
with a market value of $1,000 entitled to be voted at the meeting and must have
held such Shares for at least one year. Further, the shareholder must continue
to hold such Shares through the date on which the meeting is held. Documentary
support regarding the foregoing must be provided along with the proposal. There
are additional requirements regarding proposals of the shareholders, and a
shareholder contemplating submission of a proposal is referred to Rule 14a-8
promulgated under the Securities Exchange Act of 1934.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
18
<PAGE>
ADDITIONAL INFORMATION
BENEFICIAL OWNERS
The following table shows certain information concerning persons who may be
deemed beneficial owners of 5% or more of the Shares of any Fund because they
possessed or shared voting or investment power with respect to the Shares of
that Fund:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
FUND NAME AND ADDRESS OWNED SHARES
- --------- ----------------------------------------------------------------- ----------------- ------------
<S> <C> <C> <C>
IF *United Nations Joint Staff Pension Fund ....................... 400,000 8.7%
United Nations
New York, NY 10017
CH *Franklin Resources Inc. ....................................... 711,696 5.1%
777 Mariners Island Boulevard
San Mateo, CA 94403
LAM *Lazard Freres & Co. LLC ....................................... 450,332 5.8%
30 Rockefeller Plaza
New York, NY 10020
LAQ *President and Fellows of Harvard College ...................... 806,000 9.4%
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
PGF *President and Fellows of Harvard College ...................... 328,400 6.2%
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
</TABLE>
- --------------
* As stated in a Schedule 13G filed with the Securities and Exchange
Commission.
REPORTS TO SHAREHOLDERS
The Funds send unaudited semi-annual and audited annual reports to their
shareholders, including a list of investments held. EACH FUND WILL FURNISH,
WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL AND SEMI-ANNUAL REPORT, UPON
REQUEST TO THAT FUND AT ONE CITICORP CENTER, 153 EAST 53RD STREET, NEW YORK, NEW
YORK 10022, TELEPHONE (1-800-293-1232). THESE REQUESTS WILL BE HONORED WITHIN
THREE BUSINESS DAYS OF RECEIPT.
19
<PAGE>
EXHIBIT A
INVESTMENT SUB-ADVISORY AGREEMENT
Credit Suisse Asset Management Ltd.
Beaufort House
15 St. Botolph Street
London EC3A 7JJ
Dear Sirs:
The Indonesia Fund, Inc. (the "Company"), a corporation organized under the
laws of the state of Maryland, and BEA Associates (the "Adviser"), a general
partnership formed under the laws of the state of New York, hereby confirm their
agreement with Credit Suisse Asset Management Limited, a corporation organized
under the laws of England (the "Sub-Adviser") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Company desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Articles of Incorporation, as amended, and in its Registration Statement as from
time to time in effect, and in such manner and to such extent as may from time
to time be approved by the Board of Directors of the Company. Copies of the
Company's Registration Statement and Articles of Incorporation, as amended, have
been or will be submitted to the Sub-Adviser. The Company agrees to provide
copies of all amendments to the Company's Registration Statement and Articles of
Incorporation to the Sub-Adviser on an ongoing basis. The Company and the
Adviser desire to employ and hereby appoint the Sub-Adviser to act as investment
sub-adviser to the Company. The Sub-Adviser accepts the appointment and agrees
to furnish the services described herein for the compensation set forth below.
2. SERVICES AS INVESTMENT SUB-ADVISER
Subject to the supervision and direction of the Board of Directors of the
Company and of the Adviser, the Sub-Adviser will (a) act in accordance with the
Company's Articles of Incorporation, the Investment Company Act of 1940 and the
Investment Advisers Act of 1940, as the same may from time to time be amended,
(b) assist the Adviser in managing the Company's assets in accordance with its
investment objective and policies as stated in the Company's Registration
Statement as from time to time in effect, (c) assist the Adviser in making
investment decisions and exercise voting rights in respect of portfolio
securities for the Company and (d) place purchase and sale orders on behalf of
the Company. In providing these services, the Sub-Adviser will provide
investment research and supervision of the Company's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Company's assets. In addition, the Sub-Adviser will furnish
the Company and/or the Adviser with whatever statistical information the Company
and/or the Adviser may reasonably request with respect to the securities that
the Company may hold or contemplate purchasing.
3. BROKERAGE
In executing transactions for the Company and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Company
transaction, the Sub-Adviser will consider all factors it deems relevant
including, but not limited
20
<PAGE>
to, breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and the
reasonableness of any commission for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, the Sub-Adviser
may consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Company
and/or other accounts over which the Sub-Adviser or an affiliate exercises
investment discretion.
4. INFORMATION PROVIDED TO THE COMPANY AND THE ADVISER
The Sub-Adviser will keep the Company and the Adviser informed of
developments materially affecting the Company, and will, on its own initiative,
furnish the Company from time to time with whatever information the Sub-Adviser
believes is appropriate for this purpose.
5. STANDARD OF CARE
The Sub-Adviser shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Company
or the Adviser in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Sub-Adviser against any liability to the Adviser, the Company or its
shareholders to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
6. COMPENSATION
(a) In consideration of the services rendered pursuant to this Agreement,
(i) the Sub-Adviser shall not receive any compensation prior to the
approval of this Agreement by the shareholders of the Company and (ii)
thereafter, the Adviser will at its expense pay the Sub-Adviser after the
end of each calendar quarter a flat fee of $18,750 per quarter.
(b) Upon any termination of this Agreement before the end of a quarter,
the fee for such part of that quarter shall be prorated according to
the proportion that such period bears to the full quarterly period and shall
be payable upon the date of termination of this Agreement.
7. EXPENSES
The Sub-Adviser will bear all expenses in connection with the performance of
its services under this Agreement. The Company will bear certain other expenses
to be incurred in its operation, including: organizational expenses; taxes,
interest, brokerage costs and commissions and stock exchange fees; fees of
directors of the Company who are not officers, directors, or employees of the
Adviser, the Sub-Adviser or any of their affiliates; Securities and Exchange
Commission fees; state Blue Sky qualification fees; charges of custodians,
sub-custodians and transfer and dividend disbursing agents; expenses in
connection with the Company's Dividend Reinvestment and Cash Purchase Plan;
insurance premiums; outside auditing, pricing and legal expenses; cost of
maintenance of the Company's existence; costs attributable to investor services,
including, without limitation, telephone and personnel expenses; costs of
printing stock certificates; costs of shareholders' reports and meetings of the
shareholders of the Company and of the officers or Board of Directors of the
Company; membership fees in trade associations; stock exchange listing fees and
expenses; litigation and other extraordinary or non-recurring expenses.
21
<PAGE>
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Company understands that the Sub-Adviser now acts, will continue to act
or may act in the future as investment adviser or sub-adviser to investment
fiduciary and other managed accounts or as investment adviser or sub-adviser to
one or more other investment companies, and the Company has no objection to the
Sub-Adviser so acting, provided that whenever the Company and one or more other
accounts or investment companies advised by the Sub-Adviser have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with procedures believed to be equitable to each entity.
Similarly, opportunities to sell securities will be allocated in an equitable
manner. The Company recognizes that in some cases this procedure may adversely
affect the size of the position that may be acquired or disposed of for the
Company. In addition, the Company understands that the persons employed by the
Sub-Adviser to assist in the performance of the Sub-Adviser's duties hereunder
will not devote their full time to such service and nothing contained herein
shall be deemed to limit or restrict the right of the Sub-Adviser or any
affiliate of the Sub-Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
9. TERM OF AGREEMENT
This Agreement shall become effective upon its execution and shall continue
for an initial two-year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by (i) the Board of
Directors of the Company or (ii) a vote of a "majority" (as defined in the
Investment Company Act of 1940) of the Company's outstanding voting securities,
provided that in either event the continuance is also approved by a majority of
the Board of Directors who are not "interested persons" (as defined in said Act)
of any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable, without
penalty, on 60 days' written notice, by the Board of Directors of the Company or
the Adviser or by vote of holders of a majority of the Company's shares, or upon
90 days' written notice, by the Sub-Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in said Act).
10.ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto.
11.GOVERNING LAW
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the state of New York without giving effect to the conflicts of
laws principles thereof.
If the foregoing accurately sets forth our agreement, kindly indicate your
acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
THE INDONESIA FUND, INC.
By: ________________________________________
Name:
Title:
22
<PAGE>
BEA ASSOCIATES
By: ________________________________________
Name:
Title:
Accepted:
CREDIT SUISSE ASSET MANAGEMENT LIMITED
By: ________________________________________
Name:
Title:
23
<PAGE>
THE CHILE FUND, INC.
--------------------------------------------------------------
THE INDONESIA FUND, INC.
-------------------------------------------------------------------
THE LATIN AMERICA
EQUITY FUND, INC.
----------------------------------------------------------
THE LATIN AMERICA
INVESTMENT FUND, INC.
----------------------------------------------------------------
THE PORTUGAL FUND, INC.
-------------------------------------------------------------------
<PAGE>
THE LATIN AMERICA INVESTMENT FUND, INC.
This Proxy is Solicited on Behalf of the Board of Directors
P The undersigned hereby appoints Paul P. Stamler and Michael A.
Pignataro as Proxies, each with the power to appoint his substitute,
R and hereby authorizes them to represent and to vote, as designated on
the reverse side and in accordance with their judgment on such other
O matters as may properly come before the meeting or any adjournments
thereof, all shares of The Latin America Investment Fund, Inc.
X (the "Fund") that the undersigned is entitled to vote at the annual
meeting of shareholders to be held on April 22, 1997, and at any
Y adjournments thereof.
-------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE /SEE REVERSE/
/ SIDE /
-------------
<PAGE>
-----
/ / Please mark
/ X / votes as in
/ / this example.
-----
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted "FOR" Proposals 1, 2, 4 and 5.
The Board of Directors recommends a vote "FOR" the nominees in Proposal 1
and "FOR" Proposals 2, 4 and 5.
<TABLE>
<S> <C> <C> <C> <C>
1. ELECTION OF THE FOLLOWING NOMINEES AS 2. TO RATIFY THE SELECTION OF FOR AGAINST ABSTAIN
DIRECTORS. COOPERS & LYBRAND L.L.P. AS ------- ------- -------
Dr. Enrique R. Arzac (three-year term) INDEPENDENT PUBLIC ACCOUNTANTS / / / / / /
George W. Landau (three-year term) OF THE FUND FOR THE FISCAL / / / / / /
Richard W. Watt (three-year term) YEAR ENDING DECEMBER 31, 1997. ------- ------- -------
William W. Priest, Jr. (one-year term)
4. TO APPROVE AN AMENDMENT TO THE FOR AGAINST ABSTAIN
FOR WITHHELD FUND'S INVESTMENT RESTRICTIONS ------- ------- -------
------- ------- TO PERMIT THE FUND TO ISSUE / / / / / /
/ / / / "SENIOR SECURITIES" TO THE / / / / / /
/ / / / EXTENT PERMITTED BY THE ------- ------- -------
------- ------- INVESTMENT COMPANY ACT OF 1940,
AS AMENDED.
------
/ / 5. TO APPROVE AN AMENDMENT TO THE FOR AGAINST ABSTAIN
/ / FUND'S ARTICLES OF INCORPORATION ------- ------- -------
-------------------------------------------- RELATING TO THE SIZE OF THE / / / / / /
For all nominees except as noted above BOARD OF DIRECTORS AND THE / / / / / /
REMOVAL OF DIRECTORS. ------- ------- -------
</TABLE>
MARK HERE ------
FOR ADDRESS / /
CHANGE AND / /
NOTE AT LEFT ------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears at left. 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 person.
Signature:_______________ Date:______ Signature:_______________ Date:______
