<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENTS
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 Rule 14a-11(c) or Rule 14a-12
The Brazilian 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> 2
THE BRAZILIAN INVESTMENT FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of The
Brazilian Investment Fund, Inc. (the "Fund") will be held on Wednesday, April
30, 1997, at 10:45 a.m. (New York time), in Conference Room 2 at 1221 Avenue of
the Americas, 22nd Floor, New York, New York 10020, for the following purposes:
1. To elect Directors until the next meeting of stockholders at which
Directors are to be elected and until their successors are elected and have
qualified.
2. To ratify or reject the selection by the Board of Directors of
Price Waterhouse LLP as independent accountants of the Fund for the fiscal
year ending December 31, 1997.
3. To approve or disapprove an Investment Advisory and Management
Agreement between the Fund and Morgan Stanley Asset Management Inc.
4. To consider and act upon any other business as may properly come
before the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 24, 1997 are
entitled to notice of, and to vote at, this Meeting or any adjournment thereof.
VALERIE Y. LEWIS
Secretary
Dated: March 27, 1997
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. IN ORDER TO AVOID
THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
<PAGE> 3
THE BRAZILIAN INVESTMENT FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
-------------------------------
PROXY STATEMENT
-------------------------------
This statement is furnished by the Board of Directors of The Brazilian
Investment Fund, Inc. (the "Fund") in connection with the solicitation of
Proxies for use at the Annual Meeting of Stockholders (the "Meeting") to be held
on Wednesday, April 30, 1997, at 10:45 a.m. (New York time), in Conference Room
2 at the principal executive office of Morgan Stanley Asset Management Inc.
(hereinafter "MSAM" or the "Manager"), 1221 Avenue of the Americas, 22nd Floor,
New York, New York 10020. It is expected that the Notice of Annual Meeting,
Proxy Statement and form of Proxy will first be mailed to stockholders on or
about March 27, 1997.
The purpose of the Meeting and the matters to be acted upon are set forth
in the accompanying Notice of Annual Meeting of Stockholders. At the Meeting,
the Fund's stockholders will consider a New Advisory Agreement (defined below)
to take effect following the consummation of the transactions contemplated by an
Agreement and Plan of Merger, dated as of February 4, 1997 (the "Merger
Agreement"), between Dean Witter, Discover & Co. ("Dean Witter Discover") and
Morgan Stanley Group Inc. ("MS Group"), the direct parent of MSAM, the Fund's
investment manager. Pursuant to the Merger Agreement, the Fund's investment
manager will become a direct subsidiary of the merged company, which will be
called Morgan Stanley, Dean Witter, Discover & Co. The Fund's New Advisory
Agreement is substantially the same as the Fund's Current Advisory Agreement
(defined below), except for its date of execution.
If the accompanying form of Proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. A Proxy may be revoked at any time prior to the time
it is voted by written notice to the Secretary of the Fund or by attendance at
the Meeting. If no instructions are specified, shares will be voted FOR the
election of the nominees for Directors, FOR ratification of Price Waterhouse LLP
as independent accountants of the Fund for the fiscal year ending December 31,
1997 and FOR the approval of the New Advisory Agreement. Abstentions and broker
non-votes are each included in the determination of the number of shares present
and voting at the Meeting.
The Board has fixed the close of business on March 24, 1997 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. On that date, the Fund had
1,028,088 shares of Common Stock outstanding and entitled to vote. Each share
will be entitled to one vote at the Meeting.
The expense of solicitation will be borne by MSAM and will include
reimbursement to brokerage firms and others for expenses in forwarding proxy
solicitation materials to beneficial owners. The solicitation of Proxies will be
largely by mail, but may include, without cost to the Fund, telephonic,
telegraphic or oral communications by regular employees of the Manager. The
solicitation of Proxies is also expected to include communications by employees
of Shareholder
<PAGE> 4
Communications Corporation, a proxy solicitation firm expected to be engaged by
the Fund at a cost (to be reimbursed by MSAM) not expected to exceed $5,000 plus
expenses.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR ITS
FISCAL YEAR ENDED DECEMBER 31, 1996, TO ANY STOCKHOLDER REQUESTING SUCH REPORT.
REQUESTS FOR THE ANNUAL REPORT SHOULD BE MADE IN WRITING TO THE BRAZILIAN
INVESTMENT FUND, INC., C/O CHASE GLOBAL FUNDS SERVICES COMPANY, P.O. BOX 2798,
BOSTON, MASSACHUSETTS 02208-2798, OR BY CALLING 1-800-221-6726.
Chase Global Funds Services Company is an affiliate of the Fund's
administrator, The Chase Manhattan Bank ("Chase Bank"), and provides
administrative services to the Fund. The business address of Chase Bank and
Chase Global Funds Services Company is 73 Tremont Street, Boston, Massachusetts
02108.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF EACH OF THE
MATTERS MENTIONED IN ITEMS 1, 2 AND 3 OF THE NOTICE OF ANNUAL MEETING.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, nine directors will be elected to hold office until the
next meeting of stockholders at which directors are to be elected and until
their successors are elected and have qualified. It is the intention of the
persons named in the accompanying form of Proxy to vote, on behalf of the
stockholders, for the election of Barton M. Biggs, Warren J. Olsen, Peter J.
Chase, John W. Croghan, David B. Gill, Graham E. Jones, John A. Levin, William
G. Morton, Jr. and R. Charles Tschampion.
On or about the same date as the Meeting, each of the other closed-end,
U.S. registered investment companies advised by MSAM (except Morgan Stanley
India Investment Fund, Inc.) also is holding a meeting of stockholders at which,
among other things, such stockholders are considering a proposal to elect
Messrs. Croghan and Jones as directors of such other investment companies, while
Messrs. Biggs, Olsen, Chase, Gill, Levin and Morton are Directors of such other
investment companies whose terms of office do not expire this year. Accordingly,
if elected, all of the nominees for Directors of the Fund (except Mr.
Tschampion) also will act as directors of: The Latin American Discovery Fund,
Inc., The Malaysia Fund, Inc., Morgan Stanley Africa Investment Fund, Inc.,
Morgan Stanley Asia-Pacific Fund, Inc., Morgan Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley Emerging Markets Fund, Inc., Morgan Stanley Global
Opportunity Bond Fund, Inc., The Morgan Stanley High Yield Fund, Inc., Morgan
Stanley Russia & New Europe Fund, Inc., The Pakistan Investment Fund, Inc., The
Thai Fund, Inc. and The Turkish Investment Fund, Inc. (collectively, with the
Fund, the "MSAM closed-end funds"). The Board believes that this arrangement
enhances the ability of the Directors to deal expeditiously with administrative
matters common to the MSAM closed-end funds, such as evaluating the performance
of common service providers, including MSAM and the administrators, transfer
agents, custodians and accountants of the MSAM closed-end funds.
Pursuant to the Fund's By-Laws, each Director holds office until (i) the
expiration of his term and until his successor has been elected and qualified,
(ii) his death, (iii) his resignation, (iv) December 31 of the year in which he
reaches seventy-three years of age, or (v) his removal as provided by statute or
the Articles of Incorporation.
2
<PAGE> 5
The Board of Directors has an Audit Committee. The Audit Committee makes
recommendations to the full Board of Directors with respect to the engagement of
independent accountants and reviews with the independent accountants the plan
and results of the audit engagement and matters having a material effect on the
Fund's financial operations. The members of the Audit Committee are currently
John W. Croghan, John A. Levin and William G. Morton, Jr., none of whom is an
"interested person," as defined under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Chairman of the Audit Committee is Mr. Levin.
After the Meeting, the Audit Committee will continue to consist of Directors of
the Fund who are not "interested persons." The Audit Committee met twice during
the fiscal year ended December 31, 1996. The Board of Directors does not have
nominating or compensation committees or other committees performing similar
functions.
There were four meetings of the Board of Directors held during the fiscal
year ended December 31, 1996. For the fiscal year ended December 31, 1996, each
current Director, during his tenure, attended at least seventy-five percent of
the aggregate number of meetings of the Board and of any committee on which he
served, except Mr. Biggs, who attended two of the four meetings of the Board.
Each of the nominees for Director has consented to be named in this Proxy
Statement and to serve as a director of the Fund if elected. The Board of
Directors has no reason to believe that any of the nominees named above will
become unavailable for election as a director, but if that should occur before
the Meeting, Proxies will be voted for such persons as the Board of Directors
may recommend.
Certain information regarding the Directors and officers of the Fund is set
forth below:
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ----------------------------- --- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barton M. Biggs*............... Nominee; Chairman, Director and 64 3,749 -- ***
1221 Avenue of the Americas Director and Managing Director of Morgan
New York, New York 10020 Chairman of Stanley Asset Management
the Board Inc. and Chairman and
since 1995 Director of Morgan Stanley
Asset Management Limited;
Managing Director of Morgan
Stanley & Co. Incorporated;
Director of Morgan Stanley
Group Inc.; Director of the
Rand McNally Company;
Member of the Yale
Development Board; Director
and Chairman of the Board
of seventeen U.S.
registered investment
companies managed by Morgan
Stanley Asset Management
Inc.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS AGE MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS -- 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ----------------------------- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C>
Peter J. Chase................. Nominee; Chairman and Chief Financial 64 -- -- ***
1441 Paseo De Peralta Director Officer, High Mesa
Santa Fe, New Mexico 87501 since 1995 Technologies, LLC; Chairman
of CGL, Inc.;
Principal/Owner of
STATEMENTS; Director of
thirteen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.
John W. Croghan................ Nominee; President of Lincoln 66 1,000 97 ***
200 South Wacker Drive Director Partners, a partnership of
Chicago, Illinois 60606 since 1995 Lincoln Capital Management
Company; Director of St.
Paul Bancorp, Inc. and
Lindsay Manufacturing Co.;
Director of thirteen U.S.
registered investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously Director
of Blockbuster
Entertainment Corporation.
David B. Gill.................. Nominee; Director of thirteen U.S. 70 214 -- ***
26210 Ingleton Circle Director registered investment
Easton, Maryland 21601 since 1995 companies managed by Morgan
Stanley Asset Management
Inc.; Director of the
Mauritius Fund Limited;
Director of Moneda Chile
Fund Limited; Director of
First NIS Regional Fund
SIAC; Director of
Commonwealth Africa
Investment Fund Ltd.;
Member of the Investment
Advisory Council of The
Thailand Fund; Chairman of
the Advisory Board of
Advent Latin American
Private Equity Fund;
Chairman and Director of
Norinvest Bank; Director of
Surinvest International
Limited; Director of
National Registry Company;
Previously Director of
Capital Markets Department
of the International
Finance Corporation;
Trustee, Batterymarch
Finance Management;
Chairman and Director of
Equity Fund of Latin
America S.A.; Director of
Commonwealth Equity Fund
Limited; and Director of
Global Securities, Inc.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS AGE MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS -- 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ----------------------------- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C>
Graham E. Jones................ Nominee; Senior Vice President of BGK 64 -- -- ***
330 Garfield Street Director Properties; Trustee of nine
Suite 200 since 1995 investment companies
Santa Fe, New Mexico 87501 managed by Weiss, Peck &
Greer, Trustee of eleven
investment companies
managed by Morgan Grenfell
Capital Management
Incorporated; Director of
thirteen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously Chief Financial
Officer of Practice
Management Systems, Inc.
John A. Levin.................. Nominee; President of John A. Levin & 58 2,989 67 ***
One Rockefeller Plaza Director Co., Inc.; Director and
New York, New York 10020 since 1995 President of Baker,
Fentress & Company;
Director of fourteen U.S.
registered investment
companies managed by Morgan
Stanley Asset Management
Inc.
William G. Morton, Jr.......... Nominee; Chairman and Chief Executive 60 -- -- ***
1 Boston Place Director Officer of Boston Stock
Boston, Massachusetts 02108 since 1995 Exchange; Director of Tandy
Corporation; Director of
thirteen U.S. registered
investment companies
managed by Morgan Stanley
Asset Management Inc.
Warren J. Olsen*............... Nominee; Principal of Morgan Stanley & 40 15 -- ***
1221 Avenue of the Americas Director Co. Incorporated and Morgan
New York, New York 10020 since 1991 Stanley Asset Management
and President Inc.; Director of sixteen
since 1991 and President of seventeen
U.S. registered investment
companies managed by Morgan
Stanley Asset Management
Inc.
R. Charles Tschampion.......... Nominee; Managing Director, Investment 51 -- -- ***
767 Fifth Avenue Director Strategy and Asset
New York, NY 10153 since 1991 Allocation and Director,
General Motors Investment
Management Corporation
James W. Grisham*.............. Vice President Principal of Morgan Stanley & 55 -- -- ***
1221 Avenue of the Americas since 1992 Co. Incorporated and Morgan
New York, New York 10020 Stanley Asset Management
Inc.; Officer of various
investment companies
managed by Morgan Stanley
Asset Management Inc.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS AGE MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS -- 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ----------------------------- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C>
Michael F. Klein*.............. Vice President Principal of Morgan Stanley & 37 -- -- ***
1221 Avenue of the Americas since 1996 Co. Incorporated and Morgan
New York, New York 10020 Stanley Asset Management
Inc. and previously a Vice
President thereof; Officer
of various investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously practiced
law with the New York law
firm of Rogers & Wells.
Harold J. Schaaff, Jr.*........ Vice President Principal of Morgan Stanley & 36 -- -- ***
1221 Avenue of the Americas since 1992 Co. Incorporated and Morgan
New York, New York 10020 Stanley Asset Management
Inc.; General Counsel and
Secretary of Morgan Stanley
Asset Management Inc.;
Officer of various
investment companies
managed by Morgan Stanley
Asset Management Inc.
Joseph P. Stadler*............. Vice President Vice President of Morgan 42 -- -- ***
1221 Avenue of the Americas since 1994 Stanley & Co. Incorporated
New York, New York 10020 and Morgan Stanley Asset
Management Inc.; Officer of
various investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously with Price
Waterhouse LLP.
Valerie Y. Lewis*.............. Secretary since Vice President of Morgan 41 -- -- ***
1221 Avenue of the Americas 1992 Stanley & Co. Incorporated
New York, New York 10020 and Morgan Stanley Asset
Management Inc.; Officer of
various investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously with
Citicorp.
James M. Rooney................ Treasurer since Assistant Vice President and 38 -- -- ***
73 Tremont Street 1994 Manager of Fund
Boston, Massachusetts 02108 Administration, Chase
Global Funds Services
Company; Officer of various
investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously Assistant Vice
President and Manager of
Fund Compliance and
Control, Scudder Stevens &
Clark Inc. and Audit
Manager, Ernst & Young LLP.
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
OWNED AS OF OWNED UNDER
POSITION WITH PRINCIPAL OCCUPATIONS MARCH 24, DEFERRED FEE
NAME AND ADDRESS THE FUND AND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS+ PERCENTAGE
- ------------------------------- --------------- ----------------------------- --- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Belinda Brady.................. Assistant Manager, Fund Administration, 28 -- -- ***
73 Tremont Street Treasurer Chase Global Funds Services
Boston, Massachusetts 02108 since 1996 Company; Officer of various
investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously with Price
Waterhouse LLP.
------ -------- ---
All Directors and Officers as a Group............................................ 7,967 164 ***
====== ======== ===
</TABLE>
- ---------------
* "Interested person" within the meaning of the 1940 Act. Mr. Biggs is
chairman, director and managing director of the Manager, and Messrs. Olsen,
Grisham, Klein, Schaaff and Stadler and Ms. Lewis are officers of the
Manager.
** This information has been furnished by each nominee and officer.
*** Less than 1%.
+ Indicates share equivalents owned by the Directors and held in cash accounts
by the Fund on behalf of the Directors in connection with the deferred fee
arrangements described below.
Each officer of the Fund will hold such office until a successor has been
duly elected and qualified.
The Fund pays each of its Directors who is not a director, officer or
employee of MSAM or its affiliates, in addition to certain out-of-pocket
expenses, an annual fee of $4,000 ($3,000 in 1996) plus certain out-of-pocket
expenses. Each of the members of the Fund's Audit Committee, which will consist
of the Fund's Directors who are not "interested persons" of the Fund as defined
in the 1940 Act, as amended, will receive an additional fee of $500 for serving
on such committee. Aggregate fees and expenses paid or payable to the Board of
Directors for the fiscal year ended December 31, 1996 were approximately
$27,156.
Each of the Directors who is not an "affiliated person" of MSAM within the
meaning of the 1940 Act may enter into a deferred fee arrangement (the "Fee
Arrangement") with the Fund, pursuant to which such Director may defer to a
later date the receipt of his Director's fees. The deferred fees owed by the
Fund are credited to a bookkeeping account maintained by the Fund on behalf of
such Director and accrue income from and after the date of credit in an amount
equal to the amount that would have been earned had such fees (and all income
earned thereon) been invested and reinvested either (i) in shares of the Fund or
(ii) at a rate equal to the prevailing rate applicable to 90-day United States
Treasury Bills at the beginning of each calendar quarter for which this rate is
in effect, whichever method is elected by the Director.
Under the Fee Arrangement, deferred Director's fees (including the return
accrued thereon) will become payable in cash upon such Director's resignation
from the Board of Directors in generally equal annual installments over a period
of five years (unless the Fund has agreed to a longer or shorter payment period)
beginning on the first day of the year following the year in which such
Director's resignation occurred. In the event of a Director's death, remaining
amounts payable to him under the Fee Arrangement will thereafter be payable to
his designated beneficiary; in all other events, a Director's right to receive
payments is non-transferable. Under the Fee Arrangement, the Board of Directors
of the Fund, in its sole discretion, has reserved the right, at
7
<PAGE> 10
the request of a Director or otherwise, to accelerate or extend the payment of
amounts in the deferred fee account at any time after the termination of such
Director's service as a director. In addition, in the event of liquidation,
dissolution or winding up of the Fund or the distribution of all or
substantially all of the Fund's assets and property to its stockholders (other
than in connection with a reorganization or merger into another fund advised by
MSAM), all unpaid amounts in the deferred fee account maintained by the Fund
will be paid in a lump sum to the Directors participating in the Fee Arrangement
on the effective date thereof.
Currently, Messrs. Croghan and Levin are the only Directors who have
entered into the Fee Arrangement with the Fund.
Set forth below is a table showing the aggregate compensation paid by the
Fund to each of its Directors, as well as the total compensation paid to each
Director of the Fund by the Fund and by other U.S. registered investment
companies advised by MSAM or its affiliates, (collectively, the "Fund Complex")
for their services as Directors of such investment companies for the fiscal year
ended December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION NUMBER OF FUNDS
COMPENSATION BENEFITS ACCRUED FROM FUND AND IN FUND COMPLEX
FROM FUND AS PART OF THE FUND COMPLEX PAID FOR WHICH
NAME OF DIRECTORS (2)(3) FUND'S EXPENSES TO DIRECTORS(2)(4) DIRECTOR SERVES(5)
- ------------------------- ------------ --------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Barton M. Biggs(1) $ 0 None $ 0 17
Peter J. Chase 3,269 None 57,691 13
John W. Croghan 3,802 None 73,925 13
David B. Gill 3,269 None 59,910 13
Graham E. Jones 3,269 None 60,546 13
John A. Levin 3,778 None 77,539 14
William G. Morton, Jr. 3,769 None 67,893 13
Warren J. Olsen(1) 0 None 0 17
R. Charles Tschampion 6,000 None 6,000 1
Frederick B.
Whittemore(1)(6) 0 None 0 16
</TABLE>
- ---------------
(1) "Interested persons" of the Fund within the meaning of the 1940 Act. Messrs.
Biggs and Olsen do not receive any compensation from the Fund or any other
investment company in the Fund Complex for their services as a director of
such investment companies.
(2) The amounts reflected in this table include amounts payable by the Fund and
the Fund Complex for services rendered during the fiscal year ended December
31, 1996, regardless of whether such amounts were actually received by the
Directors during such fiscal year.
(3) Mr. Croghan earned $3,802 and Mr. Levin earned $3,375 in deferred
compensation from the Fund, pursuant to the deferred fee arrangements
described above, including any capital gains or losses or interest
associated therewith, during the fiscal year ended December 31, 1996. Such
amounts are included in these Directors' respective aggregate compensation
from the Fund reported in this table.
(4) Mr. Croghan earned $72,671, Mr. Gill earned $21,027, Mr. Jones earned
$21,605 and Mr. Levin earned $70,597 in deferred compensation from the Fund
and the Fund Complex, pursuant to the deferred fee arrangements described
above, including any capital gains or losses or interest associated
therewith, during the fiscal year ended December 31, 1996. Such amounts are
included in these Directors' respective compensations from the Fund and the
Fund Complex reported in this table.
(5) Indicates the total number of boards of directors of investment companies in
the Fund Complex, including the Fund, on which the Director served at any
time during the fiscal year ended December 31, 1996.
(6) Mr. Whittemore resigned as a Director of the Fund effective March 14, 1997.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Fund's officers and directors, and persons who own more than ten percent of
a registered class of the Fund's equity securities, to file reports of ownership
and changes in ownership with the Securities
8
<PAGE> 11
and Exchange Commission (the "Commission") and the New York Stock Exchange, Inc.
The Fund believes that its officers and Directors complied with all applicable
filing requirements for the fiscal year ended December 31, 1996.
The election of each of the directors requires the affirmative vote of a
majority of the votes cast at a meeting at which a quorum is present. Under the
Fund's By-laws, the presence in person or by proxy of stockholders entitled to
cast a majority of the votes entitled to be cast thereat shall constitute a
quorum. For this purpose, abstentions and broker non-votes will be counted in
determining whether a quorum is present at the Meeting, but will not be counted
as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 1.
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected Price Waterhouse LLP as
independent accountants for the Fund for the fiscal year ending December 31,
1997. The ratification of the selection of
independent accountants is to be voted on at the Meeting, and it is intended
that the persons named in the accompanying Proxy will vote for Price Waterhouse
LLP. Price Waterhouse LLP acts as the independent accountants for certain of the
other investment companies advised by MSAM. Although it is not expected that a
representative of Price Waterhouse LLP will attend the Meeting, a representative
will be available by telephone to respond to stockholder questions, if any.
The Board's policy regarding engaging independent accountants' services is
that management may engage the Fund's principal independent accountants to
perform any services normally provided by independent accounting firms, provided
that such services meet any and all of the independence requirements of the
American Institute of Certified Public Accountants and the Securities and
Exchange Commission. In accordance with this policy, the Audit Committee reviews
and approves all services provided by the independent accountants prior to their
being rendered. The Board of Directors also receives a report from its Audit
Committee relating to all services that have been performed by the Fund's
independent accountants.
The ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at a meeting at which a quorum
is present. For this purpose, abstentions and broker non-votes will be counted
in determining whether a quorum is present at the Meeting, but will not be
counted as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 2.
9
<PAGE> 12
APPROVAL OF A NEW ADVISORY CONTRACT
(PROPOSAL NO. 3)
THE MANAGER
MSAM acts as investment manager for the Fund. The Manager has acted as
investment manager for the Fund since the Fund commenced its investment
operations.
The Manager currently is a wholly-owned subsidiary of MS Group and is
registered under the U.S. Investment Advisers Act of 1940, as amended. The
Manager provides portfolio management and named fiduciary services to various
closed-end and open-end investment companies, taxable and nontaxable
institutions, international organizations and individuals investing in United
States and international equities and fixed income securities. At December 31,
1996, MSAM had, together with its affiliated investment management companies
(which include Van Kampen American Capital, Inc. and Miller Anderson & Sherrerd,
LLP), assets under management (including assets under fiduciary advisory
control) totaling approximately $162 billion.
As an investment adviser, MSAM emphasizes a global investment strategy and
benefits from research coverage of a broad spectrum of investment opportunities
worldwide. MSAM draws upon the capabilities of its asset management specialists
located in its various offices throughout the world. It also draws upon the
research capabilities of MS Group and its other affiliates, as well as the
research and investment ideas of other companies whose brokerage services MSAM
utilizes. For the fiscal year ended December 31, 1996, the Fund paid
approximately $448,000 in brokerage commissions, none of which was paid by the
Fund to affiliates of the Manager.
The address of the Manager is 1221 Avenue of the Americas, New York, New
York 10020. The principal address of MS Group is 1585 Broadway, New York, New
York 10036.
Certain information regarding the directors and the principal executive
officers of the Manager is set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AND ADDRESS POSITION WITH MSAM OTHER INFORMATION
- ---------------------- ----------------------------- -----------------------------
<S> <C> <C>
Barton M. Biggs*...... Chairman, Director and Chairman and Director of
Managing Director Morgan Stanley Asset
Management Limited; Managing
Director of Morgan Stanley &
Co. Incorporated; Director of
Morgan Stanley Group Inc.
Peter A. Nadosy*...... Vice Chairman, Director and Managing Director of Morgan
Managing Director Stanley & Co. Incorporated;
Director of Morgan Stanley
Asset Management Limited
James M. Allwin*...... President, Director and Managing Director of Morgan
Managing Director Stanley & Co. Incorporated;
President of Morgan Stanley
Realty Inc.
Gordon S. Gray*....... Director and Managing Managing Director of Morgan
Director Stanley & Co. Incorporated;
Director of Morgan Stanley
Asset Management Limited
Dennis G. Sherva*..... Director and Managing Managing Director of Morgan
Director Stanley & Co. Incorporated
</TABLE>
- ---------------
* Business Address: 1221 Avenue of the Americas, New York, New York 10020
10
<PAGE> 13
INFORMATION CONCERNING MORGAN STANLEY GROUP INC.
MS Group and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and Morgan Stanley & Co.
International provide a wide range of financial services on a global basis.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring, real estate, project finance and
other corporate finance advisory activities; merchant banking and other
principal investment activities; stock brokerage and research services; asset
management; the trading of foreign exchange and commodities as well as
derivatives on a broad range or asset categories, rates and indices; real estate
advice, financing and investing; and global custody, securities clearance
services and securities lending.
INFORMATION CONCERNING DEAN WITTER, DISCOVER & CO.
Dean Witter Discover is a diversified financial services company offering a
broad range of nationally marketed credit and investment products with a primary
focus on individual customers. Dean Witter Discover has two principal lines of
business: credit services and securities. Its credit services business consists
primarily of the issuance, marketing and servicing of general purpose credit
cards and the provision of transaction processing services, private-label credit
cards services and real estate secured loans. It is the largest single issuer of
general purpose credit cards in the United States as measured by number of
accounts and cardmembers and the third largest originator and servicer of credit
card receivables, as measured by managed loans. Dean Witter Discover's
securities business is conducted primarily through its wholly owned
subsidiaries, Dean Witter Reynolds Inc. ("DWR") and Dean Witter InterCapital
Inc. ("Intercapital"). DWR is a full-service securities firm offering a wide
variety of securities products, with a particular focus on serving the
investment needs of its individual clients through over 9,100 professional
account executives located in 371 branch offices. DWR is among the largest NYSE
members and is a member of other major securities, futures and options
exchanges. Intercapital is a registered investment adviser that, along with its
subsidiaries, services investment companies, individual accounts and
institutional portfolios.
THE MERGER
Pursuant to the Merger Agreement, MS Group will be merged (the "Merger")
with and into Dean Witter Discover and the surviving corporation will be named
Morgan Stanley, Dean Witter, Discover & Co. Following the Merger, the Manager
will be a direct subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Under the terms of the Merger Agreement, each of MS Group's common shares
will be converted into the right to receive 1.65 shares of Morgan Stanley, Dean
Witter, Discover & Co. common stock and each issued and outstanding share of
Dean Witter Discover common stock will remain outstanding and will thereafter
represent one share of Morgan Stanley, Dean Witter, Discover & Co. common stock.
Following the Merger, MS Group's former shareholders will own approximately 45%
and Dean Witter Discover's former shareholders will own approximately 55% of the
outstanding shares of common stock of Morgan Stanley, Dean Witter, Discover &
Co.
The Merger is expected to be consummated in mid-1997 and is subject to
certain closing conditions, including certain regulatory approvals and the
approval of shareholders of both MS Group and Dean Witter Discover.
11
<PAGE> 14
The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co. will
initially consist of fourteen members, two of whom will be MS Group insiders and
two of whom will be Dean Witter Discover insiders. The remaining ten directors
will be independent directors, with MS Group and Dean Witter Discover each
nominating five of the ten. The Chairman and Chief Executive Officer of Morgan
Stanley, Dean Witter, Discover & Co. will be the current Chairman and Chief
Executive Officer of Dean Witter Discover, Phillip Purcell. The President and
Chief Operating Officer of Morgan Stanley, Dean Witter, Discover & Co. will be
the current President of MS Group, John Mack.
The Manager does not anticipate any reduction in the quality of services
now provided to the Fund and does not expect that the Merger will result in any
material changes in the business of the Manager or in the manner in which the
Manager renders services to the Fund. Nor does the Manager anticipate that the
Merger or any ancillary transactions will have any adverse effect on its ability
to fulfill its obligations under the New Advisory Agreement (as defined below)
with the Fund or to operate its business in a manner consistent with past
business practice.
THE ADVISORY AGREEMENTS
In anticipation of the Merger, a majority of the Directors of the Fund who
are not parties to the New Advisory Agreement or interested persons of any such
party ("Disinterested Directors") approved a new investment advisory agreement
(the "New Advisory Agreement") between the Fund and the Manager. The form of the
New Advisory Agreement is substantially the same as the Fund's Current Advisory
Agreement, except for the date of execution and the omission of obsolete
provisions described below. The holders of a majority of the outstanding voting
securities (within the meaning of the 1940 Act) of the Fund are being asked to
approve the New Advisory Agreement. See "The New Advisory Agreement" below.
The following is a summary of the Current Advisory Agreement and the New
Advisory Agreement. The description of the New Advisory Agreement is qualified
by reference to Annex A.
THE CURRENT ADVISORY AGREEMENT. The Current Advisory Agreement, dated as
of June 4, 1991 (the "Current Advisory Agreement"), was last approved by
stockholders of the Fund at a meeting held on June 3, 1993.
Under the Current Advisory Agreement, the Manager is responsible for the
investment and reinvestment of the assets of the Fund, subject to the
supervision of the Funds' Directors. The Manager also administers the business
affairs of the Fund, furnishes offices, necessary facilities and equipment,
provides administrative services, and permits its officers and employees to
serve without compensation as Directors and officers of the Fund if duly elected
to such positions.
The Fund pays the Manager for services performed a fee payable monthly at
the annual rates of 0.90% of the first $50 million of the Fund's average weekly
net assets, 0.70% of such assets in excess of $50 million up to and including
$100 million and 0.50% of such assets in excess of $100 million. This fee is
higher than advisory fees paid by most other investment companies, primarily
because of the additional time and expense required of the Manager in pursuing
the Fund's objective of investing in Brazilian securities.
The net assets of the Fund as of February 28, 1997, as well as the net
assets of other U.S. registered investment companies advised by the Manager, and
the other U.S. registered investment companies for which the Manager acts as
sub-adviser, the rates of compensation to the Manager, the aggregate amount of
advisory fees paid by the Fund to the Manager and the
12
<PAGE> 15
aggregate amount of any other material payments by the Fund to the Manager are
set forth in Annex B hereto.
The Current Advisory Agreement will automatically terminate if assigned,
and may be terminated without penalty at any time by the Fund or by the Manager
upon 60 days' written notice.
The Current Advisory Agreement provides that the Manager shall not be
liable for any error of judgment or of law, or for any loss suffered by the Fund
in connection with the matters to which the Current Advisory Agreement relates
except a loss resulting from willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations or duties.
Under the Current Advisory Agreement, the Manager is permitted to provide
investment advisory services to other clients, including clients who may invest
in securities in which the Fund may invest.
THE NEW ADVISORY AGREEMENT. The Board approved a proposed new advisory
agreement between the Fund and the Manager on March 13, 1997, the form of which
is attached as Annex A (the "New Advisory Agreement"). The form of the proposed
New Advisory Agreement is substantially the same as the Current Advisory
Agreement, except for the date of execution and the deletion of references in
the Current Advisory Agreement to a subadvisory arrangement with a Brazilian
adviser that was terminated by the Fund in 1994.
The investment advisory fee as a percentage of net assets payable by the
Fund to the Manager will be the same under the New Advisory Agreement as under
the Current Advisory Agreement. If the investment advisory fee under the New
Advisory Agreement had been in effect for the Fund's most recently completed
fiscal year, advisory fees paid to the Manager by the Fund would have been
identical to those paid under the Current Advisory Agreement.
The Board of the Fund held a meeting on March 13, 1997, at which meeting
the Directors, including the Disinterested Directors, unanimously approved the
New Advisory Agreement for the Fund and recommended the Agreement for approval
by the stockholders of the Fund. The New Advisory Agreement would take effect
upon the later to occur of (i) the obtaining of stockholder approval or (ii) the
closing of the Merger. The New Advisory Agreement will continue in effect for an
initial two year term and thereafter for successive annual periods as long as
such continuance is approved in accordance with the 1940 Act.
In evaluating the New Advisory Agreement, the Board took into account that
the Fund's Current Advisory Agreement and its New Advisory Agreement, including
their terms relating to the services to be provided thereunder by the Manager
and the fees and expenses payable by the Fund, are identical, except for the
date of execution and the omission of obsolete provisions described above. The
Board also considered other possible benefits to the Manager and Morgan Stanley,
Dean Witter, Discover & Co. that may result from the Merger including the
continued use of Morgan Stanley & Co. and Dean Witter Discover brokers and its
affiliates, to the extent permitted by law, for brokerage services.
The Board also examined the terms of the Merger Agreement and the possible
effects of the Merger upon the Manager's organization and upon the ability of
the Manager to provide advisory services to the Fund. The Board also considered
the skills and capabilities of the Manager. In this
13
<PAGE> 16
regard, the Board was informed of the resources of Morgan Stanley, Dean Witter,
Discover & Co. to be made available to the Manager.
The Board also weighed the effect on the Fund of the Manager becoming an
affiliated person of Morgan Stanley, Dean Witter, Discover & Co. Following the
Merger, the 1940 Act will prohibit or impose certain conditions on the ability
of the Fund to engage in certain transactions with Morgan Stanley, Dean Witter,
Discover & Co. and its affiliates. For example, absent exemptive relief the Fund
will be prohibited from purchasing securities from Morgan Stanley & Co. and DWR
in transactions in which Morgan Stanley & Co. and/or DWR act as principal.
Currently the Fund is prohibited from making such purchases in only those
transactions in which Morgan Stanley & Co. or an affiliate acts as principal.
The Fund will also have to satisfy certain conditions in order to engage in
securities transactions in which Morgan Stanley & Co. or DWR is acting as an
underwriter. The Fund is already required to satisfy such conditions when
engaging in transactions in which Morgan Stanley & Co. or an affiliate is acting
as an underwriter. In this connection, management of the Manager represented to
the Board that they do not believe these prohibitions or conditions will have a
material effect on the management or performance of the Fund.
After consideration of the above factors and such other factors and
information that the Board deemed relevant, the Directors, and the Disinterested
Directors voting separately, unanimously approved the New Advisory Agreement and
voted to recommend its approval to the stockholders of the Fund.
In the event that stockholders of the Fund do not approve the New Advisory
Agreement, the Current Advisory Agreement will remain in effect and the Board
will take such action as it deems in the best interest of the Fund and its
stockholders, which may include proposing that stockholders approve an agreement
in lieu of the New Advisory Agreement. In the event the Merger is not
consummated, the Manager would continue to serve as investment manager of the
Fund pursuant to the terms of the Current Advisory Agreement.
STOCKHOLDER APPROVAL
To become effective, the New Advisory Agreement must be approved by a vote
of a majority of the outstanding voting securities of the Fund. The "vote of a
majority of the outstanding voting securities" is defined under the 1940 Act as
the lesser of the vote of (i) 67% or more of the shares of the Fund entitled to
vote thereon present at the Meeting if the holders of more than 50% of such
outstanding shares of the Fund are present in person or represented by proxy, or
(ii) more than 50% of such outstanding shares of the Fund entitled to vote
thereon. The New Advisory Agreement was unanimously approved by the Board after
consideration of all factors which they determined to be relevant to their
deliberations, including those discussed above. The Board also unanimously
determined to submit the New Advisory Agreement for consideration by the
stockholders of the Fund.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" APPROVAL
OF THE NEW ADVISORY AGREEMENT.
14
<PAGE> 17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Fund's management, the following person owned
beneficially more than 5% of the Fund's outstanding shares at March 24, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------------------- -------------------- ----------------
<S> <C> <C>
General Motors Employees Global.................. 310,324.494 30.2%
Group Pension Trust* c/o Chase Manhattan Bank,
National Association, Trustee 1211 Avenue of
the Americas, 33rd Floor New York, New York
10153
International Finance Corporation**.............. 92,881.986 9.0%
1818 H Street, N.W. Washington, District of
Columbia 20433
KBD Limited Partnership***....................... 91,305.000 8.9%
First Interstate Bank of Nevada N.A. Trust
Department 3800 Howard Hughes Parkway, Suite
2000 Las Vegas, Nevada 89109
RCD Limited Partnership+......................... 91,305.000 8.9%
First Interstate Bank of Nevada N.A. Trust
Department 3800 Howard Hughes Parkway, Suite
2000 Las Vegas, Nevada 89109
Tepe & Co.**..................................... 30,897.952 3.0%
c/o Morgan Stanley Guaranty Trust Company of
New York P.O. BOX 1479 Church Street Station
New York, New York 10008
</TABLE>
- ---------------
* Fund's knowledge based on records available to the Fund and a Schedule 13D
filed with the Commission on September 1, 1995. Voting power with respect to
such shares is shared with General Motors Investment Management Corporation
and dispositive power with respect to such shares is shared with the Pension
Investment Committee of General Motors.
** Fund's knowledge based solely on records available to it.
*** Fund's knowledge based on records available to the Fund and a Schedule 13D
filed with the Commission on February 12, 1993. KBD Corporation, the sole
general partner of KBD Limited Partnership, and Robert C. Dart and William
A. Dart, each a 50% shareholder of KBD Corporation, share voting and
dispositive power with respect to such shares and are beneficial owners due
to its or his position.
+ Fund's knowledge based on records available to the Fund and a Schedule 13D
filed with the Commission on February 12, 1993. RCD Corporation, the sole
general partner of RCD Limited Partnership, and Kenneth B. Dart and William
A. Dart, each a 50% shareholder of RCD Corporation, share voting and
dispositive power with respect to such shares and are beneficial owners due
to its or his position.
15
<PAGE> 18
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.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A stockholders' proposal intended to be presented at the Fund's Annual
Meeting of Stockholders in 1998 must be received by the Fund on or before
November 27, 1997, in order to be included in the Fund's proxy statement and
form of proxy relating to that meeting.
VALERIE Y. LEWIS
Secretary
Dated: March 27, 1997
STOCKHOLDERS 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.
16
<PAGE> 19
ANNEX A
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Agreement, dated and effective as of , 1997 between THE BRAZILIAN
INVESTMENT FUND, INC., a Maryland corporation (herein referred to as the
"Fund"), and MORGAN STANLEY ASSET MANAGEMENT INC. (herein referred to as the
"Manager").
WITNESSETH: That in consideration of the mutual covenants herein contained,
it is agreed by the parties as follows:
1. The Manager hereby undertakes and agrees, upon the terms and conditions
herein set forth,
(i) to make investment decisions for the Fund, to prepare and make
available to the Fund research and statistical data in connection
therewith, and to supervise the acquisition and disposition of securities
by the Fund, including the selection of brokers or dealers to carry out the
transactions, all in accordance with the Fund's investment objective and
policies and in accordance with guidelines and directions from the Fund's
Board of Directors;
(ii) to assist the Fund as it may reasonably request in the conduct of
the Fund's business, subject to the direction and control of the Fund's
Board of Directors;
(iii) to maintain or cause to be maintained for the Fund all books and
records required under applicable law, including the United States
Investment Company Act of 1940, as amended (the "1940 Act"), and Brazilian
law, and to furnish or cause to be furnished all required reports or other
information under the 1940 Act and Brazilian securities laws, to the extent
that such books, records and reports and other information are not
maintained or furnished by the administrators, custodians or other agents
of the Fund;
(iv) to furnish at the Manager's expense for the use of the Fund such
office space and facilities as the Fund may require for its reasonable
needs in the City of New York, and to furnish at the Manager's expense
clerical services in the United States related to research, statistical and
investment work; and
(v) to pay the reasonable salaries, fees and expenses of such of the
Fund's officers and employees (including the Fund's share of payroll taxes)
and any fees and expenses of such of the Fund's directors as are directors,
officers or employees of the Manager, provided, however, that the Fund, and
not the Manager, shall bear travel expenses (or an appropriate portion
thereof) of directors and officers of the Fund who are managing directors,
officers or employees of the Manager to the extent that such expenses
relate to attendance at meetings of the Board of Directors of the Fund or
any committees thereof or advisors thereto. The Manager shall bear all
expenses arising out of its duties hereunder but shall not be responsible
for any expenses of the Fund other than those specifically allocated to the
Manager in this paragraph 1. In particular, but without limiting the
generality of the foregoing, the Fund, and not the Manager, shall be
responsible for all of its operating expenses (except to the extent that
such expenses relate to the reasonable compensation of such of the Fund's
employees as are directors, officers or employees of the Manager whose
services may be involved), including without limitation, the following
expenses of the Fund: organization expenses of the
A-1
<PAGE> 20
Fund (including out-of-pocket expenses, but not including overhead or
employee costs of the Manager or of any one or more organizations retained
by the Fund or by the Manager as a Brazilian administrator or Brazilian
adviser of the Fund); legal fees and expenses (United States and
Brazilian); auditing and accounting expenses; telephone, telex, postage and
other communications expenses; taxes and governmental fees; stock exchange
listing fees, if any; fees, dues and expenses incurred by the Fund in
connection with membership in investment company and other organizations;
fees and expenses of the Fund's custodians, subcustodians, transfer agents
and registrars; 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, distribution, sale or underwriting
of securities issued by the Fund; expenses of registering or qualifying
securities of the Fund for sale; expenses relating to investor and public
relations; freight, insurance and other charges in connection with the
shipment of the Fund's portfolio securities; 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
stockholders; costs of stationery; costs of stockholders' and other
meetings; litigation expenses; expenses relating to the Fund's dividend
reinvestment plan (except for brokerage expenses, if any, paid by
participants in such plans); and expenses relating to tender offers by the
Fund for its securities.
2. In connection with the rendering of the services required under
paragraph 1, the Manager may contract with or consult with such banks,
securities firms or other parties in Brazil or elsewhere as it may deem
appropriate to obtain information and advice, including investment
recommendations, advice regarding economic factors and trends, advice as to
currency exchange matters, and clerical and accounting services and other
assistance, but any fee, compensation or expenses to be paid to any such parties
shall be paid by the Manager, and no obligation shall be incurred on the Fund's
behalf in any such respect.
3. The Fund agrees to pay to the Manager in United States dollars, as full
compensation for the services to be rendered and expenses to be borne by the
Manager hereunder, an annual fee, calculated weekly and payable monthly, equal
to 0.90% of the value of the average weekly net assets of the Fund up to and
including $50 million, plus 0.70% of the value of the next $50 million of the
average weekly net assets up to and including $100 million, plus 0.50% of the
value of the average weekly net assets of the Fund over $100 million. For
purposes of computing the monthly fee, the weekly net assets of the Fund for any
month shall be equal to the average of the values of the net assets of the Fund
as of the last business day of each week in the month for which such fee is
computed; provided, however, that the fee for the period from the end of the
last month ending prior to termination of this Agreement, for whatever reason,
to the date of termination shall be based on the average of the values of the
net assets of the Fund determined as of the close of business on the last
business day of each week in the month for which such fee is computed and on the
date of termination, and the fee for such period and for the period from the
date on which the Fund receives the net proceeds of the sale of its shares of
common stock in the private placement thereof through the end of the month in
which such proceeds are received shall be prorated according to the proportion
which such period bears to a full monthly period. Each payment of a monthly fee
to the Manager shall be made within the ten days next following the day as of
which such payment is so computed.
A-2
<PAGE> 21
The value of the net assets of the Fund shall be determined pursuant to the
applicable provisions of the Articles of Incorporation and by-laws of the Fund.
4. The Manager agrees that it will not make a short sale of any capital
stock of the Fund, or purchase any share of the capital stock of the Fund
otherwise than for investment.
5. Nothing herein shall be construed as prohibiting the Manager from
providing investment advisory services to, or entering into investment advisory
agreements with, other clients (including other registered investment
companies), including clients which may invest in securities of Brazilian
issuers, or from utilizing (in providing such services) information furnished to
the Manager by any Brazilian adviser and others as contemplated by sections 1
and 2 of this Agreement; nor shall anything herein be construed as constituting
the Manager an agent of the Fund.
6. The Manager may rely on information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its officer, directors, employees
or agents shall be subject to any liability for any act or omission, error of
judgment or mistake of law, or for any loss suffered by the Fund, in the course
of, connected with or arising out of any services to be rendered hereunder,
except by reason of willful misfeasance, bad faith or gross negligence on the
part of the Manager in the performance of its duties or by reason of reckless
disregard on the part of the Manager of its obligations and duties under this
Agreement. Any person, even though also employed by the Manager, who may be or
become an employee of the Fund and paid by the Fund shall be deemed, when acting
within the scope of his employment by the Fund, to be acting in such employment
solely for the Fund and not as an employee or agent of the Manager.
7. This Agreement shall remain in effect for a period of two years from
the date hereof, and shall continue in effect from year to year thereafter, but
only so long as such continuance is specifically approved at least annually by
the affirmative vote of (i) a majority of those members of the Fund's Board of
Directors who are not interested persons of the Fund or of the Manager, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
a majority of the Fund's Board of Directors or of a majority of the outstanding
voting securities of the Fund. This Agreement may be terminated at any time
without penalty, on 60 days' written notice, by the Fund's Board of Directors,
by vote of a majority of the outstanding voting securities of the Fund, or by
the Manager. This Agreement shall automatically be terminated in the event of
its assignment; provided that, an assignment or transaction that, under the 1940
Act, does not result in a change of actual control or management of the
Manager's business shall not be deemed to be an assignment for the purposes of
this Agreement. Any notice of termination shall be deemed given when received by
the addressee.
8. This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto. It may be amended by mutual
agreement, but only after authorization of such amendment by the affirmative
vote of (i) the holders of a majority of the outstanding voting securities of
the Fund, and (ii) a majority of the members of the Fund's Board of Directors
who are not interested person of the Fund or of the Manager or of any entity
regularly furnishing investment advisory services with respect to the Fund
pursuant to an agreement with the Manager, cast in person at a meeting called
for the purpose of voting on such approval.
9. This Agreement shall be construed in accordance with the laws of the
State of New York, provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
A-3
<PAGE> 22
As used herein, the terms "interested person", "assignment" and "vote of a
majority of the outstanding voting securities" shall have the meaning set forth
in the 1940 Act.
10. Any notice hereunder shall be in writing and shall be delivered in
person or by telex or facsimile (followed by mailing such notice, air mail
postage prepaid, on the day on which such telex or facsimile is sent to the
address set forth below) to the following address or telex or facsimile numbers:
If to Morgan Stanley Asset Management Inc.
to the attention of the General Counsel
1221 Avenue of the Americas
New York, New York 10020
Telex No. 212-765-3114
Facsimile No. 212-921-5477.
If to The Brazilian Investment Fund, Inc.
to the attention of the President
1221 Avenue of the Americas
New York, New York 10020
Telex No. 212-765-3114
Facsimile No. 212-921-5477
or to such other address as to which the recipient shall have informed the
other party in writing.
Notice given as provided above shall be deemed to have been given, if by
personal delivery, on the day of such delivery, and, if by telex or facsimile
and mail, on the date on which such telex or facsimile and confirmatory letter
are sent.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
officers hereunto duly authorized as of the day and year first written above.
THE BRAZILIAN INVESTMENT FUND, INC.
By:
--------------------------------------------
Name:
Title:
MORGAN STANLEY ASSET MANAGEMENT INC.
By:
--------------------------------------------
Name:
Title:
A-4
<PAGE> 23
ANNEX B
The following table indicates the size of each U.S. investment company
advised or sub-advised by the Manager, the amount of advisory fees or
sub-advisory fees paid to the Manager for the last fiscal year of such
investment company, the amount of other material fees paid to the Manager for
such fiscal year and the advisory fee rate. Average net assets are calculated on
a daily basis for open-end funds and on a weekly basis for closed-end funds.
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- -------------- ---------------------------------------
<S> <C> <C> <C> <C>
Morgan Stanley Institutional Fund, Inc.*(2)
- -- Active Country Allocation Portfolio $ 187,031,777 $ 1,168,571 $0 0.65% of average daily net assets
- -- Aggressive Equity Portfolio 121,791,751 400,006 0 0.80% of average daily net assets
- -- Asian Equity Portfolio 365,212,440 3,378,056 0 0.80% of average daily net assets
- -- Balanced Portfolio 7,573,877 74,832 0 0.50% of average daily net assets
- -- China Growth Portfolio(3) 0 0 0 1.25% of average daily net assets
- -- Emerging Growth Portfolio 82,677,378 1,024,956 0 1.00% of average daily net assets
- -- Emerging Markets Debt Portfolio 162,883,938 1,887,155 0 1.00% of average daily net assets
- -- Emerging Markets Portfolio 1,557,680,866 15,367,651 0 1.25% of average daily net assets
- -- Equity Growth Portfolio 467,132,622 1,192,888 0 0.60% of average daily net assets
- -- European Equity Portfolio 215,681,709 1,034,869 0 0.80% of average daily net assets
- -- Fixed Income Portfolio 122,195,042 559,304 0 0.35% of average daily net assets
- -- Global Equity Portfolio 87,115,900 630,346 0 0.80% of average daily net assets
- -- Global Fixed Income Portfolio 116,017,909 437,198 0 0.40% of average daily net assets
- -- Gold Portfolio(4) 38,303,227 274,000 0 1.00% of average daily net assets
- -- Growth and Income Fund(3) 0 0 0 0.75% of average daily net assets
- -- High Yield Portfolio 123,820,445 438,512 0 0.50% of average daily net assets
- -- International Equity Portfolio 2,412,774,091 15,860,657 0 0.80% of average daily net assets
- -- International Magnum Portfolio 124,710,803 381,756 0 0.80% of average daily net assets
- -- International Small Cap Portfolio 239,291,131 2,092,097 0 0.95% of average daily net assets
- -- Japanese Equity Portfolio 156,667,861 1,642,268 0 0.80% of average daily net assets
- -- Latin American Portfolio 55,950,497 287,055 0 1.10% of average daily net assets
- -- MicroCap Portfolio(3) 0 0 0 1.00% of average daily net assets
- -- Money Market Portfolio 1,278,773,524 3,343,176 0 0.30% of average daily net assets
- -- Mortgaged-Backed Securities 0 0 0 0.35% of average daily net assets
Portfolio(3)
- -- Municipal Bond Portfolio 43,819,386 134,963 0 0.35% of average daily net assets
- -- Municipal Money Market Portfolio 721,197,094 1,932,187 0 0.30% of average daily net assets
- -- Small Cap Value Equity Portfolio 29,921,023 345,122 0 0.85% of average daily net assets
- -- Technology Portfolio(5) 5,504,680 12,699 0 1.00% of average daily net assets
- -- U.S. Real Estate Portfolio 246,501,294 1,017,980 0 0.80% of average daily net assets
- -- Value Equity Portfolio 109,811,808 655,516 0 0.50% of average daily net assets
Morgan Stanley Fund, Inc.*(6)
- -- American Value Fund 54,190,478 363,998 0 0.85% of average daily net assets
- -- Aggressive Equity Fund 30,105,256 31,323 0 0.90% of average daily net assets
- -- Asian Growth Fund 394,810,098 3,762,252 0 1.00% of average daily net assets
- -- Emerging Markets Fund 174,767,303 1,081,943 0 1.25% of average daily net assets
- -- Emerging Markets Debt Fund(3) 0 0 0 1.25% of average daily net assets
- -- Equity Growth Fund(3) 0 0 0 0.70% of average daily net assets
- -- European Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- Global Equity Allocation Fund 161,349,524 1,047,751 0 1.00% of average daily net assets
- -- Global Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- Global Fixed Income Fund 9,525,078 121,568 0 0.75% of average daily net assets
- -- Government Obligations Money 122,965,353 0 0 0.45% of the first $250 million
Market(7) 0.40% of the next $250 million
0.35% of the excess over $500 million
</TABLE>
B-1
<PAGE> 24
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- ---------------------------------------
<S> <C> <C> <C> <C>
- -- Growth and Income Fund(3) $ 0 $ 0 $0 1.00% of average daily net assets
- -- High Yield Fund 16,444,430 12,710 0 0.75% of average daily net assets
- -- Japanese Equity Fund(3) 0 0 0 1.00% of average daily net assets
- -- International Magnum Fund 24,529,959 0 0 0.80% of average daily net assets
- -- Latin America Fund 53,413,053 218,502 0 1.25% of average daily net assets
- -- Money Market Fund(7) 153,358,157 0 0 0.45% of the first $250 million
0.40% of the next $250 million
0.35% of the excess over $500 million
- -- Tax Free Money Market Fund(3) 0 0 0 0.45% of the first $250 million
0.40% of the next $250 million
0.35% of the excess over $500 million
- -- U.S. Real Estate Fund 21,362,116 8,641 0 1.00% of average daily net assets
- -- Worldwide High Income Fund 164,403,651 527,214 0 0.75% of average daily net assets
Morgan Stanley Universal Funds, Inc.*
- -- Asian Equity(3) 0 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Emerging Markets Debt(3) 0 0 0 0.75% of the first $500 million
0.70% of the next $500 million
0.65% of the excess over $1 billion
- -- Emerging Markets Equity 15,607,752 32,000 0 1.25% of the first $500 million
1.20% of the next $500 million
1.15% of the excess over $1 billion
- -- Global Equity(8) 5,225,659 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Growth(8) 2,843,221 0 0 0.55% of the first $500 million
0.50% of the next $500 million
0.45% of the excess over $1 billion
- -- International Magnum(8) 10,283,605 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
- -- Money Market(3) $ 0 $ 0 $0 0.30% of the first $500 million
0.25% of the next $500 million
0.20% of the excess over $1 billion
- -- U.S. Real Estate(8) 0 0 0 0.80% of the first $500 million
0.75% of the next $500 million
0.70% of the excess over $1 billion
The Brazilian Investment Fund, Inc. 58,816,028 425,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
The Latin American Discovery Fund, Inc. 204,346,643 1,899,000 0 1.15% of average weekly net assets
The Malaysia Fund, Inc. 192,501,967 1,330,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
Morgan Stanley Africa Investment Fund, 310,803,693 3,106,000 0 1.20% of average weekly net assets
Inc.
Morgan Stanley Asia-Pacific Fund, Inc. 854,649,586 8,796,000 0 1.00% of average weekly net assets
Morgan Stanley Emerging Markets Debt 321,966,172 3,125,000 0 1.00% of average weekly net assets
Fund, Inc.
Morgan Stanley Emerging Markets Fund, 407,981,941 4,713,000 0 1.25% of average weekly net assets
Inc.
</TABLE>
B-2
<PAGE> 25
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF
ADVISORY/ AMOUNT OF
SUBADVISORY OTHER MATERIAL
NET ASSETS AS FEE FOR THE PAYMENTS TO ASSET MANAGEMENT FEE AS PERCENTAGE
OF LAST THE MANAGER OF AVERAGE NET ASSETS
FEBRUARY 28, FISCAL FOR THE LAST (ANNUAL RATE OF MSAM'S
INVESTMENT COMPANY 1997 YEAR(1) FISCAL YEAR COMPENSATION)
- --------------------------------------- -------------- ----------- -------------- ---------------------------------------
<S> <C> <C> <C> <C>
Morgan Stanley Global Opportunity Bond 65,384,292 585,000 0 1.00% of average weekly net assets
Fund, Inc.
Morgan Stanley High Yield Fund, Inc. 129,972,796 842,000 0 0.70% of average weekly net assets
Morgan Stanley India Investment Fund, 341,625,451 3,812,000 0 1.10% of average weekly net assets
Inc.
Morgan Stanley Russia & New Europe 142,333,723 400,000 0 1.60% of average weekly net assets
Fund, Inc.
The Pakistan Investment Fund, Inc. 67,931,758 743,000 0 1.00% of average weekly net assets
The Thai Fund, Inc. 183,531,329 1,812,000 0 0.90% of the first $50 million
0.70% of the next $50 million
0.50% of the excess over $100 million
The Turkish Investment Fund, Inc. 51,846,955 359,000 0 0.95% of the first $50 million
0.75% of the next $50 million
0.55% of the excess over $100 million
</TABLE>
- ---------------
* With respect to each of Morgan Stanley Institutional Fund, Inc., Morgan
Stanley Fund, Inc. and Morgan Stanley Universal Funds, Inc., MSAM has
voluntarily agreed to a reduction in the fees payable to it and to
reimburse each portfolio, if necessary, if payment of advisory fees would
cause the total annual operating expenses of such portfolio to exceed
certain minimums.
(1) Net of any fees waived by the Manager for the last fiscal year.
(2) Includes Class A and Class B shares.
(3) Currently Inactive.
(4) Management fee includes a 0.40% sub-advisory fee payable by the Manager.
(5) Commenced operations March 16, 1996.
(6) Includes Class A, Class B and Class C shares. Fiscal year end June 30, 1996.
(7) Formerly, a portfolio of PCS Cash Fund, which was merged with and into
Morgan Stanley Fund, Inc. on September 27, 1996.
(8) Portfolio had not commenced operations as of December 31, 1996.
B-3
<PAGE> 26
PROXY
THE BRAZILIAN INVESTMENT FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints WARREN J. OLSEN,
MICHAEL F. KLEIN, VALERIE Y. LEWIS and HAROLD J. SCHAAFF, JR., and each of
them, as proxies for the undersigned, with full power of substitution and
resubstitution, and hereby authorizes said proxies, and each of them, to
represent and vote, as designated on the reverse side, all stock of the
above Company held of record by the undersigned on March 24, 1997 at the
Annual Meeting of Stockholders to be held on April 30, 1997, and at any
adjournment thereof.
The undersigned hereby revokes any and all proxies with respect to
such stock heretofore given by the undersigned. The undersigned
acknowledges receipt of the Proxy Statement dated March 27, 1997.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE.)
SEE REVERSE SIDE
<PAGE> 27
[X] Please mark your votes as in this sample.
1. Election of the following nominees as Directors:
FOR WITHHELD
[ ] [ ] Nominees:
Barton M. Biggs, Warren J. Olsen, Peter J. Chase,
John W. Croghan, David B. Gill, Graham E. Jones,
John A. Levin, William G. Morton, Jr. and
R. Charles Tschampion
______________________________________
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
2. Ratification of the selection of Price Waterhouse LLP as independent
accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the Investment Advisory and Management Agreement with
Morgan Stanley Asset Management Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In the discretion of such proxies, upon any and all other business as
may properly come before the Meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NINE NOMINEES AND IN FAVOR OF
PROPOSAL NO. 2 AND PROPOSAL NO. 3. PLEASE SIGN EXACTLY AS YOUR NAME APPEARS.
WHEN SHARES ARE HELD BY JOINT TENANTS, EACH JOINT TENANT SHOULD SIGN.
SIGNATURES(S)___________________________________
DATE _______________,1997
When signing as attorney, executor, administrator, trustee, guardian or
custodian, please sign full title as such. If a corporation, please sign
full corporate name by authorized officer and indicate the signer's office.
If a partnership, please sign in partnership name. PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
