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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] 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>
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 [<circle>], 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>
<PAGE>
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
[<circle>] 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 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 $[<circle>] 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 02108-2798, OR BY CALLING 1-800-221-6726.
<PAGE>
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 as directors of such other investment companies the same people nominated
to be Directors of the Fund. Accordingly, if elected, all of the nominees for
Directors of the Fund 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.
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
2
<PAGE>
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
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND FEBRUARY 28, DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> 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 the Stanley Asset Management Inc.
the Board and Chairman and Director of
since Morgan Stanley Asset
[<circle>] 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.
Peter J. Chase Nominee; Chairman and Chief Financial 64 -- - ***
1441 Paseo De Peralta Director Officer, High Mesa
Santa Fe, New Mexico 87501 since [<circle>] Technologies, LLC; Chairman
of CGL, Inc.; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management, Inc.
John W. Croghan Nominee; Chairman of Lincoln Capital 66 1,000 97 ***
200 South Wacker Drive Director Management Company; Director
Chicago, Illinois 60606 since [<circle>] 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.
3
<PAGE>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND FEBRUARY 28, DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- ------------ -------------------- ----------
David B. Gill Nominee; Director of thirteen U.S. 70 214 - ***
26210 Ingleton Circle Director registered investment
Easton, Maryland 21601 since [<circle>] 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.
Graham E. Jones Nominee; Senior Vice President of BGK 64 -- - ***
330 Garfield Street Director Properties; Trustee of nine
Suite 200 since [<circle>] investment companies managed
Santa Fe, New Mexico 87501 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 of
New York, New York 10020 since [<circle>] 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 [<circle>] Exchange; Director of Tandy
Corporation; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
4
<PAGE>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND FEBRUARY 28, DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- ------------ -------------------- ----------
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 [<circle>] Stanley Asset Management
and President Inc.; Director of Sixteen and
since [<circle>] 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 since Strategy and Asset Allocation
New York, NY 10153 [<circle>] and Director, General Motors
Investment Management
Corporation
James W. Grisham* Vice Principal of Morgan Stanley & 55 -- - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1992 Stanley Asset Management
Inc.; Officer of various
investment companies managed
by Morgan Stanley Asset
Management Inc.
Michael F. Klein* Vice Principal of Morgan Stanley & 37 -- - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1996 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 Principal of Morgan Stanley & 36 -- - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1992 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 Vice President of Morgan 42 -- - ***
1221 Avenue of the Americas President since Stanley & Co. Incorporated
New York, New York 10020 1994 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.
5
<PAGE>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND FEBRUARY 28, DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- ------------ -------------------- ----------
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.
Belinda Brady Assistant Manager, Fund Administration, 28 -- - ***
73 Tremont Street Treasurer since Chase Global Funds Services
Boston, Massachusetts 02108 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 ***
========== === ===
- --------------------
* "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%.
<dagger> 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.
</TABLE>
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 $[<circle>] 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 $[<circle>] 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
$[<circle>].
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
6
<PAGE>
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 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>
PENSION OR NUMBER OF
RETIREMENT TOTAL COMPENSATION FUNDS IN
AGGREGATE BENEFITS ACCRUED FROM FUND AND FUND COMPLEX
COMPENSATION AS PART OF THE FUND COMPLEX PAID FOR WHICH
NAME OF DIRECTORS FROM FUND(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
- --------------------
(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 [<circle>], 1997.
</TABLE>
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 and Exchange
Commission (the "Commission") and the New York Stock Exchange, Inc. The Fund
7
<PAGE>
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.
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 &
8
<PAGE>
Sherrerd, LLP), assets under management (including assets under fiduciary
advisory control) totaling approximately $[<circle>] 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 $[<circle>] in brokerage commissions, of which approximately
$[<circle>] was paid by the Fund to affiliates of the Manager, including Morgan
Stanley & Co.
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 Managing Chairman and Director of Morgan Stanley
Director Asset Management Limited; Managing Director
of Morgan Stanley & Co. Incorporated;
Director of Morgan Stanley Group Inc.
Peter A. Nadosy* Vice Chairman, Director and Managing Managing Director of Morgan Stanley & Co.
Director Incorporated; Director of Morgan Stanley
Asset Management Limited
James M. Allwin* President, Director and Managing Managing Director of Morgan Stanley & Co.
Director Incorporated; President of Morgan Stanley
Realty Inc.
Gordon S. Gray* Director and Managing Director Managing Director of Morgan Stanley & Co.
Incorporated; Director of Morgan Stanley
Asset Management Limited
Dennis G. Sherva* Director and Managing Director Managing Director of Morgan Stanley & Co.
Incorporated
- --------------------
* Business Address: 1221 Avenue of the Americas, New York, New York 10020
</TABLE>
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
9
<PAGE>
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 361 branch offices. DWR is among
the largest members 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.
The Board of Directors of Morgan Stanley, Dean Witter, Discovery & Co.
will 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, Discovery & 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 to 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.
10
<PAGE>
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 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 aggregate amount of any other material
payments by the Fund to the Manager is set forth at 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 to 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 [19__].
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
11
<PAGE>
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 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.
12
<PAGE>
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 [<circle>],
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 Group Pension Trust* 310,324.494 55.70%
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 16.70%
1818 H Street, N.W.
Washington, District of Columbia 20433
KBD Limited Partnership*** 91,305.000 16.40%
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 16.40%
First Interstate Bank of Nevada N.A. Trust Department
3800 Howard Hughes Parkway, Suite 2000
Las Vegas, Nevada 89109
Tepe & Co.** 30,897.952 5.50%
c/o Morgan Stanley Guaranty Trust Company of New York
P.O. BOX 1479
Church Street Station
New York, New York 10008
- --------------------
* 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.
</TABLE>
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.
13
<PAGE>
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 [<circle>], 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.
14
<PAGE>
ANNEX A
DRAFT of March 10, 1997
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
<PAGE>
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
-2-
<PAGE>
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 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
-3-
<PAGE>
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
-4-
<PAGE>
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.
-5-
<PAGE>
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
-6-
<PAGE>
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
-7-
<PAGE>
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. 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
-8-
<PAGE>
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:
-9-
<PAGE>
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>
INVESTMENT COMPANY Net Assets as of Aggregate amount of Amount of Other Asset Management Fee as
FEBRUARY 28, 1997 Advisory / Material Payments to Percent
Subadvisory the Manager for of Average Net Assets
Fee for Last THE LAST FISCAL YEAR (ANNUAL RATE OF MSAM'S
FISCAL YEAR COMPENSATION)
<S> <C> <C> <C> <C>
Morgan Stanley Institutional Fund,
Inc. (1)
- -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 (2) 0 0 0 1.00% 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 1.00% 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(3) 38,303,227 274,000 0 1.00% of average daily net
assets
- -Growth and Income Fund (2) 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
- -Money Market Portfolio 1,278,773,524 3,343,176 0 0.30% of average daily net
assets
- -Mortgaged-Backed Securities 0 0 0 0.30% of average daily net
Portfolio (2) assets
- -Municipal Bond Portfolio 43,819,386 134,963 0 0.30% 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(4) 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. (5)
- -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
- -Global Equity Allocation Fund 161,349,524 1,047,751 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 Market 122,965,353 0 0 0.45% of the first $250
(6) million
0.40% of the next $250
million
0.35% of the excess over
$500 million
- -High Yield Fund 16,444,430 12,710 0 0.75% of average daily net
assets
- -Japanese Equity Fund (2) 0 0 0 1.00% of average daily net
assets
- -International Magnum Fund 24,529,959 0 0 1.00% of average daily net
assets
- -Latin America Fund 53,413,053 218,502 0 1.25% of average daily net
assets
- -Money Market Fund (6) 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
- -U.S. Real Estate Fund 21,362,116 8,641 0 1.00% of average daily net
asset
- -Worldwide High Income Fund 164,403,651 527,214 0 0.75% of average daily net
assets
Morgan Stanley Universal Funds, Inc.
- -Asian Equity (7) 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
- -Balanced (2) 0 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% of the excess over $1
billion
- -Core Equity (2) 0 0 0 0.55% of the first $500
million
0.50% of the next $500
million
0.45% of the excess over $1
billion
- -Emerging Markets Debt (2) 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
- -Fixed Income (8) 8,126,150 0 0 0.40% of the first $500
million
0.35% of the next $500
million
0.30% 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
- -High Yield (8) 8,228,296 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% of the excess over $1
billion
- -International Fixed Income (2) 0 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% 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
- -Mid-Cap Growth (2) 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
- -Mid-Cap Value (8) 3,126,150 0 0 0.75% of the first $500
million
0.70% of the next $500
million
0.65% of the excess over $1
billion
- -Money Market (2) 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
- -Multi-Asset Class (2) 0 0 0 0.65% of the first $500
million
0.60% of the next $500
million
0.55% of the excess over $1
billion
- -U.S. Real Estate (7) 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
- -Value (8) 3,167,098 0 0 0.55% of the first $500
million
0.50% of the next $500
million
0.45% 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, 204,346,643 1,899,000 0 1.15% of average weekly net
Inc. 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 310,803,693 3,106,000 0 1.20% of average weekly net
Fund,Inc. assets
Morgan Stanley Asia-Pacific Fund, 854,649,586 8,796,000 0 1.00% of average weekly net
Inc.. assets
Morgan Stanley Emerging Markets Debt 321,966,172 3,125,000 0 1.00% of average weekly net
Fund, Inc. assets
Morgan Stanley Emerging Markets 407,981,941 4,713,000 0 1.25% of average weekly net
Fund, Inc. assets
Morgan Stanley Global Opportunity 65,384,292 585,000 0 1.00% of average weekly net
Bond Fund, Inc. assets
Morgan Stanley High Yield Fund, Inc. 129,972,796 842,000 0 0.70% of average weekly net
assets
Morgan Stanley India Investment 341,625,451 3,812,000 0 1.10% of average weekly net
Fund, Inc. assets
Morgan Stanley Russia & New Europe 142,333,723 400,000 0 1.60% of average weekly net
Fund, Inc. assets
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
(1) Includes Class A and Class B shares.
(2) Currently Inactive.
(3) Management fee includes a 0.40% sub-advisory fee payable by the Manager.
(4) Commenced operations March 16, 1996.
(5) Includes Class A, Class B and Class C shares. Fiscal year end June 30, 1996.
(6) Formerly, a portfolio of PCS Cash Fund, which was merged with and into Morgan Stanley Fund, Inc. on September 27, 1996.
(7) Commenced operations March 3, 1997.
(8) Commenced operations January 2, 1997.
</TABLE>
<PAGE>
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>
[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 TWO CLASS II 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.
