345 Park Avenue (at 51st Street)
New York, New York 10154
(800) 349-4281
The Argentina Fund, Inc.
June 6, 1995
To the Stockholders:
The Annual Meeting of Stockholders of The Argentina Fund, Inc. (the "Fund")
is to be held at 10:15 a.m., eastern time, on Tuesday, July 25, 1995 at the
offices of Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at 51st
Street), New York, New York 10154. Stockholders who are unable to attend this
meeting are strongly encouraged to vote by proxy, which is customary in
corporate meetings of this kind. A Proxy Statement regarding the meeting, a
proxy card for your vote at the meeting and an envelope--postage prepaid--in
which to return your proxy card are enclosed.
At the Annual Meeting, the stockholders will elect three Directors,
consider the ratification of the selection of Coopers & Lybrand L.L.P. as the
Fund's independent accountants, consider the approval of the continuance of the
Investment Advisory, Management and Administration Agreement between the Fund
and its investment manager, Scudder, Stevens & Clark, Inc., and consider the
approval of the continuance of the Sub-Advisory Contract between Scudder,
Stevens & Clark, Inc. and its Argentine adviser, Sociedad General de Negocios y
Valores S.A. In addition, the stockholders present will hear a report on the
Fund. There will be an opportunity to discuss matters of interest to you as a
stockholder.
Your Fund's Directors recommend that you vote in favor of each of the
foregoing matters.
Respectfully,
/s/Nicholas Bratt /s/Edmond D. Villani
Nicholas Bratt Edmond D. Villani
President Chairman of the Board
- - --------------------------------------------------------------------------------
STOCKHOLDERS ARE URGED TO SIGN THE PROXY CARD AND MAIL IT IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
- - --------------------------------------------------------------------------------
<PAGE>
THE ARGENTINA FUND, INC.
Notice of Annual Meeting of Stockholders
To the Stockholders of
The Argentina Fund, Inc.:
Please take notice that the Annual Meeting of Stockholders of The Argentina
Fund, Inc. (the "Fund"), has been called to be held at the offices of Scudder,
Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York,
New York 10154, on Tuesday, July 25, 1995 at 10:15 a.m., eastern time, for the
following purposes:
(1) To elect three Directors of the Fund to hold office for a term
of three years or until their respective successors shall have been duly
elected and qualified.
(2) To ratify or reject the action taken by the Board of Directors
in selecting Coopers & Lybrand L.L.P. as independent accountants for the
fiscal year ending October 31, 1995.
(3) To approve or disapprove the continuance of the Investment
Advisory, Management and Administration Agreement between the Fund and
Scudder, Stevens & Clark, Inc.
(4) To approve or disapprove the continuance of the Sub-Advisory
Contract between Scudder, Stevens & Clark, Inc. and Sociedad General de
Negocios y Valores S.A.
The appointed proxies will vote on any other business as may properly come
before the meeting or any adjournments thereof.
Holders of record of the shares of common stock of the Fund at the close of
business on May 30, 1995 are entitled to vote at the meeting and any
adjournments thereof.
By order of the Board of Directors,
Thomas F. McDonough, Secretary
June 6, 1995
- - --------------------------------------------------------------------------------
IMPORTANT--We urge you to sign and date the enclosed proxy card and return it in
the enclosed addressed envelope which requires no postage and is intended for
your convenience. Your prompt return of the enclosed proxy card may save the
Fund the necessity and expense of further solicitations to ensure a quorum at
the Annual Meeting. If you can attend the meeting and wish to vote your shares
in person at that time, you will be able to do so.
- - --------------------------------------------------------------------------------
2
<PAGE>
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Argentina Fund, Inc. (the "Fund") for
use at the Annual Meeting of Stockholders, to be held at the offices of Scudder,
Stevens & Clark, Inc. ("Scudder"), 25th Floor, 345 Park Avenue (at 51st Street),
New York, New York 10154, on Tuesday, July 25, 1995, at 10:15 a.m., eastern
time, and at any adjournments thereof (collectively, the "Meeting").
This Proxy Statement, the Notice of Annual Meeting and the proxy card are
first being mailed to stockholders on or about June 6, 1995, or as soon as
practicable thereafter. Any stockholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary at the principal executive office of the
Fund, 345 Park Avenue, New York, New York 10154) or in person at the Meeting, by
executing a superseding proxy or by submitting a notice of revocation to the
Fund. All properly executed proxies received in time for the Meeting will be
voted as specified in the proxy or, if no specification is made, for each
proposal referred to in the Proxy Statement.
The presence at any stockholders' meeting, in person or by proxy, of
stockholders entitled to cast a majority of the votes entitled to be cast shall
be necessary and sufficient to constitute a quorum for the transaction of
business. For purposes of determining the presence of a quorum for transacting
business at the Meeting, abstentions and broker "non-votes" will be treated as
shares that are present but which have not been voted. Broker non-votes are
proxies received by the Fund from brokers or nominees when the broker or nominee
has neither received instructions from the beneficial owner or other persons
entitled to vote nor has discretionary power to vote on a particular matter.
Accordingly, stockholders are urged to forward their voting instructions
promptly.
Abstentions and broker non-votes will not be counted in favor of, but will
have no other effect on, the vote for proposals (1) and (2), which require the
approval of a majority of shares voting at the Meeting. Abstentions and broker
non-votes will have the effect of a "no" vote for proposals (3) and (4), which
require the approval of a specified percentage of the outstanding shares of the
Fund or of such shares present at the Meeting.
Holders of record of the common stock of the Fund at the close of business
on May 30, 1995, (the "Record Date"), will be entitled to one vote per share on
all business of the Meeting and any adjournments. There were 9,244,879 shares of
common stock outstanding on the Record Date.
The Fund provides periodic reports to all stockholders which highlight
relevant information, including investment results and a review of portfolio
changes. You may receive an additional copy of the annual report for the fiscal
year ended October 31, 1994, without charge, by calling 800-349-4281 or writing
the Fund at 345 Park Avenue, New York, New York 10154.
(1) ELECTION OF DIRECTORS
Persons named on the accompanying proxy card intend, in the absence of
contrary instructions, to vote all proxies in favor of the election of the three
nominees listed below as Directors of the Fund (Class of 1998) to serve for a
term of three years, or until their successors are duly elected and qualified.
All nominees have consented to stand for election and to serve if elected. If
any such nominee should be unable to serve, an event not now anticipated, the
proxies will be voted for such person, if any, as shall be designated by the
Board of Directors to replace any such nominee.
3
<PAGE>
Information Concerning Nominees
The following table sets forth certain information concerning each of the
three nominees as a Director of the Fund. Each of the nominees is now a Director
of the Fund. Unless otherwise noted, each of the nominees has engaged in the
principal occupation listed in the following table for more than five years, but
not necessarily in the same capacity.
Class of 1998
- - -------------
Nominees to serve until 1998 Annual Meeting of Stockholders:
<TABLE>
<CAPTION>
Present Office with the Fund, if Shares
any; Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director April 30, 1995(1) Class
---------- -------------------------- -------- ----------------- -----
<S> <C> <C> <C> <C>
Jose E. Rohm (49)* Managing Director, Banco General de 1991 -- --
Negocios (bank); Director, Banco
Comercial and Sulzer Argentina S.A.;
Member, Chairman's International
Advisory Council, Americas Society;
Member, International Advisory Board,
Chemical Bank.
Ronaldo A. da Frota Director and Chief Executive Officer, 1991 1,000 less than
Nogueira (56) IMF Editora Ltda. (financial publisher). 1/4 of 1%
Mr. Nogueira serves on the boards of an
additional three funds managed by
Scudder.
Dr. Susan Kaufman Managing Director, Council of the 1991 200 less than
Purcell (52) Americas; Vice President, Americas 1/4 of 1%
Society; Director, Valero Energy Corp.
Dr. Purcell serves on the boards of an
additional two funds managed by Scudder.
4
<PAGE>
Information Concerning Continuing Directors
The Board of Directors is divided into three classes, each Director serving
for a term of three years. The terms of Classes of 1996 and 1997 do not expire
this year. The following table sets forth certain information regarding the
Directors in such classes.
Class of 1996
-------------
Directors serving until 1996 Annual Meeting of Stockholders:
Present Office with the Fund, if Shares
any; Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director April 30, 1995(1) Class
---------- -------------------------- -------- ----------------- -----
Edmond D. Villani (48)*+ Chairman of the Board; President and 1991 8,000 less than
Managing Director of Scudder, Stevens & 1/4 of 1%
Clark, Inc. Mr. Villani serves on the
boards of an additional 15 funds managed
by Scudder.
Dr. Wilson Nolen (68) Consultant; Director, Ecohealth, Inc. 1991 10,432 less than
(biotechnology company). Dr. Nolen 1/4 of 1%
serves on the boards of an additional 14
funds managed by Scudder.
5
<PAGE>
Class of 1997
- - -------------
Directors serving until 1997 Annual Meeting of Stockholders:
Present Office with the Fund, if Shares
any; Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director April 30, 1995(1) Class
---------- -------------------------- -------- ----------------- -----
Juris Padegs (63)*+ Vice President; Managing Director of 1991 -- --
Scudder, Stevens & Clark, Inc. Mr.
Padegs serves on the boards of an
additional 27 funds managed by Scudder.
Dr. Adalbert Krieger Independent Economic Consultant; Member, 1991 -- --
Vasena (75) The Academy of Economic Sciences, The
Council of the Buenos Aires Stock
Exchange, The Latin American Economic
Research Foundation (FIEL) and the Board
of International Center of Economic
Growth (ICEG).
All Directors and Officers as a group 19,734 (2) less than
1/4 of 1%
<FN>
* Directors considered by the Fund and its counsel to be "interested persons" (which
as used in this proxy statement is as defined in the Investment Company Act of
1940, as amended) of the Fund or of the Fund's investment manager or Argentine
adviser. Messrs. Villani and Padegs are deemed to be interested persons because of
their affiliation with the Fund's investment manager, Scudder, Stevens & Clark,
Inc., or because they are Officers of the Fund or both. Mr. Rohm is deemed to be
an interested person because of his affiliation with the Fund's Argentine adviser,
Sociedad General de Negocios y Valores S.A.
+ Messrs. Villani and Padegs are members of the Executive Committee of the Fund.
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by the Directors. Unless otherwise noted, beneficial ownership
is based on sole voting and investment power.
(2) The total for the group includes 102 shares held with shared investment and voting
power.
</FN>
</TABLE>
6
<PAGE>
Section 30(f) of the Investment Company Act of 1940, as amended (the "1940
Act"), as applied to a fund requires the fund's officers and directors,
investment manager, affiliates of the investment manager, and persons who
beneficially own more than ten percent of a registered class of the fund's
outstanding securities ("Reporting Persons"), to file reports of ownership of
the fund's securities and changes in such ownership with the Securities and
Exchange Commission (the "SEC") and the New York Stock Exchange. Such persons
are required by SEC regulations to furnish the fund with copies of all such
filings.
Based solely upon its review of the copies of such forms received by it and
written representations from certain Reporting Persons that no year-end reports
were required for those persons, the Fund believes that during the fiscal year
ended October 31, 1994, all filing requirements applicable to its Reporting
Persons were complied with, except that Form 3 on behalf of Ricardo Cavanagh,
Marcia Garcia, Margaret D. Hadzima, Richard A. Holt and Arturo Torres were filed
late.
According to a filing with the SEC on Schedule 13G on February 1, 1995,
Fiduciary Trust Company International, Two World Trade Center, New York, New
York 10048, beneficially owned 585,700 shares (6.36% of the Fund's outstanding
stock). 9,700 of these shares were held with sole voting power including 3,700
held with sole dispositive power. Fiduciary Trust Company International shares
voting and dispositive power with respect to 575,000 shares with its client, the
United Nations Joint Staff Pension Fund.
Except as noted above, to the best of the Fund's knowledge, as of April 30,
1995 no other person owned beneficially more than 5% of the Fund's outstanding
stock.
Committees of the Board--Board Meetings
The Board of Directors of the Fund met six times during the fiscal year
ended October 31, 1994. Each Director attended at least 75% of the total number
of meetings of the Board of Directors and of all committees of the Board on
which they served as regular members, except Mr. Rohm and Dr. Krieger, who
attended 67% and 50% of the meetings of the Board of Directors and related
committees on which they serve, respectively.
The Board of Directors, in addition to an Executive Committee, has an Audit
Committee, a Valuation Committee and a Special Nominating Committee. The
Executive and Valuation Committees consist of regular members, allowing
alternates.
Audit Committee
The Board has an Audit Committee consisting of those Directors who are not
interested persons of the Fund or of Scudder or of Sociedad General de Negocios
y Valores S.A. ("Noninterested Directors") as defined in the 1940 Act, which met
once during the Fund's last fiscal year. The Audit Committee reviews with
management and the independent accountants for the Fund, among other things, the
scope of the audit and the controls of the Fund and its agents, reviews and
approves in advance the type of services to be rendered by independent
accountants, recommends the selection of independent accountants for the Fund to
the Board and in general considers and reports to the Board on matters regarding
the Fund's accounting and bookkeeping practices.
7
<PAGE>
Nominating Committee
The Board has a Special Nominating Committee consisting of the
Noninterested Directors. The Committee is charged with the duty of making all
nominations for Noninterested Directors. Stockholders' recommendations as to
nominees received by management are referred to the Committee for its
consideration and action. The Committee met on March 2, 1995 to consider and to
nominate the nominees as set forth above.
Executive Officers
In addition to Messrs. Villani and Padegs, Directors who are also Officers
of the Fund, the following persons are Executive Officers of the Fund:
<TABLE>
<CAPTION>
Present Office with the Fund; Year First Became
Name (Age) Principal Occupation or Employment (1) an Officer (2)
---------- -------------------------------------- --------------
<S> <C> <C>
Nicholas Bratt (46) President; Managing Director of 1991
Scudder, Stevens & Clark, Inc.
Paul J. Elmlinger (36) Vice President and Assistant 1991
Secretary; Principal of Scudder,
Stevens & Clark, Inc.
Edmund B. Games, Jr. (57) Vice President; Principal of Scudder, 1991
Stevens & Clark, Inc.
Jerard K. Hartman (62) Vice President; Managing Director of 1991
Scudder, Stevens & Clark, Inc.
David S. Lee (61) Vice President; Managing Director of 1991
Scudder, Stevens & Clark, Inc.
Luis R. Luis (51) Vice President; Managing Director of 1991
Scudder, Stevens & Clark, Inc.
Pamela A. McGrath (41) Vice President and Assistant 1991
Treasurer; Principal of Scudder,
Stevens & Clark, Inc.
Kathryn L. Quirk (42) Vice President and Assistant 1991
Secretary; Managing Director of
Scudder, Stevens & Clark, Inc.
William F. Truscott (34) Vice President; Principal of Scudder, 1992
Stevens & Clark, Inc.; Vice President,
Latin American Structured Finance,
Capital Markets Group, Chemical Bank
(1983-1992).
Edward J. O'Connell (50) Treasurer; Principal of Scudder, 1991
Stevens & Clark, Inc.
Thomas F. McDonough (48) Secretary; Principal of Scudder, 1991
Stevens & Clark, Inc.
Coleen Downs Dinneen (34) Assistant Secretary; Vice President of 1992
Scudder, Stevens & Clark, Inc.
<FN>
(1) Unless otherwise stated, all Executive Officers have been associated with
Scudder for more than five years, although not necessarily in the same
capacity.
(2) The President, Treasurer and Secretary each hold office until his or her
successor has been duly elected and qualified, and all other officers hold
offices at the pleasure of the Directors.
</FN>
</TABLE>
8
<PAGE>
Transactions with and Remuneration of Directors and Officers
The aggregate direct remuneration by the Fund of Directors not affiliated
with Scudder was $64,606, including expenses, during the fiscal year ended
October 31, 1994. Each such unaffiliated Director currently receives fees, paid
by the Fund, of $750 per Directors' meeting attended and an annual Director's
fee of $6,000. Each Director also receives $250 per committee meeting attended
(other than audit committee meetings, for which such Director receives a fee of
$750). Scudder supervises the Fund's investments, pays the compensation and
certain expenses of its personnel who serve as Directors and Officers of the
Fund and receives a management fee for its services. Several of the Fund's
Officers and Directors are also Officers, Directors, employees or stockholders
of Scudder and participate in the fees paid to that firm (see "Investment
Manager," page 13), although the Fund makes no direct payments to them other
than for reimbursement of travel expenses in connection with the attendance at
Board of Directors and committee meetings.
The following Compensation Table, provides in tabular form, the following data:
Column (1) All Directors who receive compensation from the Fund.
Column (2) Aggregate compensation received by a Director from the Fund.
Columns (3) and (4) Pension or retirement benefits accrued or proposed to be
paid by the Fund. The Fund does not pay its Directors such benefits.
Column (5) Total compensation received by a Director from the Fund, plus
compensation received from all funds managed by Scudder for which a Director
serves. The total number of funds from which a Director receives such
compensation is also provided in column (5). Generally, compensation received by
a Director for serving on the Board of a closed-end fund is greater than the
compensation received by a Director for serving on the Board of an open-end
fund.
<TABLE>
<CAPTION>
Compensation Table
for the year ended December 31, 1994
-------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or Estimated Total Compensation
Aggregate Retirement Benefits Annual Benefits From the Fund and
Name of Person, Compensation Accrued As Part of Upon Fund Complex
Position from the Fund Fund Expenses Retirement Paid to Director
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ronaldo A. da Frota Nogueira, $13,750 N/A N/A $54,997
Director (4 funds)
Dr. Wilson Nolen, $14,000 N/A N/A $132,023
Director (15 funds)
Dr. Susan Kaufman Purcell, $13,000 N/A N/A $37,500
Director (3 funds)
Dr. Adalbert Krieger Vasena, $11,250 N/A N/A $11,250
Director (1 fund)
</TABLE>
9
<PAGE>
The Fund's Board of Directors has established a board of outside,
independent advisers (the "Advisory Board") with which Scudder and the Board of
Directors consult on economic and political trends and developments affecting
Argentina. The Advisory Board currently is composed of five persons selected on
the basis of their expertise and accomplishments in Argentine affairs. The
Advisory Board possesses no authority or responsibility with respect to the
Fund's investments, management or operation and will make no recommendations as
to particular investments made or contemplated by the Fund. Each member of the
Advisory Board receives from the Fund an annual fee of $7,000. For the fiscal
year ended October 31, 1994, Advisory Board fees and expenses amounted to
$24,380.
Required Vote
Election of each of the listed nominees for Director requires the
affirmative vote of a majority of the votes cast at the Meeting in person or by
proxy. Your Fund's Directors recommend that stockholders vote in favor of each
of the nominees.
(2) RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
At a meeting held on May 17, 1995, the Board of Directors of the Fund,
including a majority of the Noninterested Directors, selected Coopers & Lybrand
L.L.P. to act as independent accountants for the Fund for the fiscal year ending
October 31, 1995. Coopers & Lybrand L.L.P. are independent accountants and have
advised the Fund that they have no direct financial interest or material
indirect financial interest in the Fund. One or more representatives of Coopers
& Lybrand L.L.P. are expected to be present at the Meeting and will have an
opportunity to make a statement if they so desire. Such representatives are
expected to be available to respond to appropriate questions posed by
stockholders or management.
The Fund's financial statements for the fiscal year ended October 31, 1994
were audited by Coopers & Lybrand L.L.P. In connection with its audit services,
Coopers & Lybrand L.L.P. reviewed the financial statements included in the
Fund's annual and semiannual reports to stockholders and its filings with the
SEC.
Required Vote
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at the Meeting in person or by
proxy. Your Fund's Directors recommend that stockholders ratify the selection of
Coopers & Lybrand L.L.P.
as independent accountants.
(3) and (4) APPROVAL OR DISAPPROVAL OF THE CONTINUANCE OF THE
INVESTMENT ADVISORY, MANAGEMENT AND ADMINISTRATION AGREEMENT
AND THE SUB-ADVISORY CONTRACT
Scudder, Stevens & Clark, Inc., 345 Park Avenue, New York, New York, acts
as investment adviser to and manager and administrator for the Fund pursuant to
an Investment Advisory, Management and Administration Agreement dated October
10, 1991 (the "Agreement"). Sociedad General de Negocios y Valores S.A. (the
"Argentine Adviser") acts as Argentine Adviser to Scudder pursuant to a
Sub-Advisory Contract (the "Sub-Advisory Contract") with Scudder dated October
7, 1991. The continuance of the Agreement and the Sub-Advisory Contract was last
approved by both the Directors, including a majority of the Noninterested
Directors, and by a vote of stockholders on July 26, 1994. At a meeting held on
10
<PAGE>
May 17, 1995, the Directors of the Fund, including a majority of the
Noninterested Directors, recommended that the stockholders approve the
continuance of the Agreement and the Sub-Advisory Contract at the Meeting.
In considering the Agreement and the Sub-Advisory Contract and recommending
their approval by the stockholders, the Directors of the Fund, including the
Noninterested Directors, considered the best interests of the stockholders of
the Fund and in light of their business judgment, took into account all such
factors they deemed relevant.
Such factors included the nature, quality and extent of the services
furnished by Scudder to the Fund; the necessity of Scudder maintaining and
enhancing its ability to attract and retain capable personnel to serve the Fund;
the experience of Scudder in the field of international investing; Scudder's
profitability from advising the Fund; the investment record of Scudder in
managing the Fund; comparative data as to investment performance, advisory and
other fees and expense ratios, particularly fees and expense ratios of funds
with foreign investments, including single country funds, advised by Scudder and
other investment advisers; the risks assumed by Scudder; the advantages and
possible disadvantages to the Fund of having an adviser which also serves other
investment companies as well as other accounts; possible benefits to Scudder
from serving as adviser of the Fund; current and developing conditions in the
financial services industry, including the entry into the industry of large and
well capitalized companies which are spending and appear to be prepared to
continue to spend substantial sums to engage personnel and to provide services
to competing investment companies; the financial resources of Scudder and the
continuance of appropriate incentives to assure that Scudder will furnish high
quality services to the Fund; similar factors regarding the Argentine Adviser to
the extent applicable; the position of the Argentine Adviser and its parent as a
leading firm in Argentina in developing investment research capabilities;
information submitted by the Argentine Adviser as to revenues and expenses; and
various other factors.
In reviewing the terms of the Agreement and Sub-Advisory Contract and in
discussions with Scudder and the Argentine Adviser concerning such Agreement and
Contract, the Noninterested Directors of the Fund have been advised and
represented at the Fund's expense by independent counsel, Ropes & Gray. Counsel
for the Fund is Willkie Farr & Gallagher.
Required Vote
Approval of the continuance of the Agreement and the Sub-Advisory Contract
requires the affirmative vote of a majority of the Fund's outstanding voting
securities which, as used in this proposal, means (1) the holders of more than
50% of the outstanding shares of the Fund or (2) the holders of 67% or more of
the shares present if more than 50% of the shares are present at the Meeting in
person or by proxy, whichever is less. Because approval of the Agreement and
Sub-Advisory Contract by the Directors, including the Noninterested Directors,
has been obtained, it is not required that the continuance of the Agreement and
Sub-Advisory Contract be submitted to stockholders. Accordingly, if an
affirmative vote of stockholders is not obtained, the Agreement and Sub-Advisory
Contract will not terminate and will continue in effect for the time being
pending consideration by the Directors of such further action as they may deem
to be in the best interests of the stockholders of the Fund. Your Fund's
Directors recommend that stockholders vote to approve the continuance of the
Agreement and the Sub-Advisory Contract.
11
<PAGE>
Investment Advisory, Management and Administration Agreement
The Agreement continues in effect by its terms from year to year only so
long as its continuance is specifically approved at least annually by the vote
of a majority of the Noninterested Directors cast in person at a meeting called
for the purpose of voting on such approval, and either by the vote of a majority
of all the Directors or a majority of the Fund's outstanding voting securities,
as defined on page 11. The Agreement may be terminated on 60 days' written
notice, without penalty, by the Directors, by the vote of the holders of a
majority of the Fund's outstanding voting securities, or by Scudder, and
automatically terminates in the event of its assignment, as defined in the 1940
Act.
Under the Agreement, Scudder regularly makes investment decisions, makes
available research and statistical data and supervises the acquisition and
disposition of securities by the Fund, all in accordance with the Fund's
investment objective and policies and the direction and control of the Fund's
Board of Directors. Scudder maintains or causes to be maintained for the Fund
all books and records required to be maintained under the 1940 Act, as amended,
to the extent such books, records and reports and other information are not
maintained or furnished by the Fund's custodian or other agents. Scudder also
supplies office space in New York and furnishes clerical services in the United
States related to research, statistical and investment work. In addition,
Scudder pays the reasonable salaries and expenses of the Fund's Officers, and
any fees and expenses of the Fund's Directors, who are Directors, Officers or
employees of Scudder, except that the Fund bears travel expenses or an
appropriate portion thereof of Directors and Officers of the Fund who are
Directors, Officers or employees of Scudder to the extent that such expenses
relate to attendance at meetings of the Fund's Board of Directors or any
committees thereof.
The Fund pays or causes to be paid all of its other expenses, including
among other things: legal expenses; auditing and accounting expenses; taxes and
governmental fees; stock exchange listing fees; dues and expenses incurred in
connection with membership in investment company organizations; fees and
expenses of the Fund's custodians, 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 or underwriting of securities issued by the Fund;
expenses relating to investor and public relations; expenses of registering or
qualifying securities of the Fund for sale; freight, insurance and other charges
in connection with the shipment of the Fund's portfolio securities; 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; expenses of the Dividend Reinvestment and Cash
Purchase Plan (except for brokerage expenses paid by participants in such Plan);
costs of stationery; litigation expenses; and costs of stockholders' and other
meetings.
For its services, Scudder receives a monthly fee, payable in U.S. dollars,
at an annual rate of 1.30% of the average weekly net assets of the Fund. This
fee is higher than management fees paid by most other investment companies,
primarily because of the Fund's objective of investing in Argentine securities,
the additional time and expenses required of Scudder in pursuing such objective
and the need to enable Scudder to compensate the Argentine Adviser for its
services. For the fiscal year ended October 31, 1994, the aggregate fee incurred
by the Fund for the services of Scudder was $1,486,911, which includes a fee
payable to the Argentine Adviser as described herein under "Sub-Advisory
Contract."
12
<PAGE>
Under the Agreement, Scudder is permitted to provide investment advisory
services to other clients, and, in providing such services, may use information
furnished by others. Conversely, information furnished by others to Scudder in
providing services to other clients may be useful to Scudder in providing
services to the Fund.
The Agreement provides that Scudder shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Scudder in the
performance of its duties or from reckless disregard by Scudder of its
obligations and duties under the Agreement.
Investment Manager
Scudder is a Delaware corporation. Daniel Pierce* is the Chairman of the
Board of Scudder. Edmond D. Villani# is the President of Scudder. Stephen R.
Beckwith#, Lynn S. Birdsong#, Nicholas Bratt#, Linda C. Coughlin#, Margaret D.
Hadzima*, Jerard K. Hartman#, Richard A. Holt@, Dudley H. Ladd*, Douglas M.
Loudon#, John T. Packard+, Juris Padegs# and Cornelia M. Small# are the other
members of the Board of Directors of Scudder. The principal occupation of each
of the above named individuals is serving as a Managing Director of Scudder.
All of the outstanding voting and nonvoting securities of Scudder are held
of record by Stephen R. Beckwith, Juris Padegs, Daniel Pierce and Edmond D.
Villani in their capacity as the representatives (the "Representatives") of the
beneficial owners of such securities, pursuant to a Security Holders' Agreement
among Scudder, the beneficial owners of securities of Scudder, and such
Representatives. Pursuant to the Security Holders' Agreement, the
Representatives have the right to reallocate shares among the beneficial owners
from time to time. Such reallocations will be at net book value in cash
transactions. All Managing Directors of Scudder own voting and nonvoting stock;
all Principals own nonvoting stock.
Messrs. Villani, Bratt and Padegs, who are Officers and/or Directors of the
Fund, are Managing Directors of Scudder. In addition, the following directors,
officers, employees or stockholders of Scudder are Officers of the Fund in the
following capacities: Edmund B. Games, Jr., Jerard K. Hartman, David S. Lee,
Luis R. Luis and William F. Truscott, Vice Presidents; Kathryn L. Quirk, Vice
President and Assistant Secretary; Pamela A. McGrath, Vice President and
Assistant Treasurer; Edward J. O'Connell, Treasurer; Paul J. Elmlinger, Vice
President and Assistant Secretary; Thomas F. McDonough, Secretary; and Coleen
Downs Dinneen, Assistant Secretary. Messrs. Hartman, Lee and Luis and Ms. Quirk
are Managing Directors and Messrs. Elmlinger, Games, O'Connell, McDonough and
Truscott and Ms. McGrath are Principals of Scudder. Ms. Dinneen is a Vice
President of Scudder.
Scudder or an affiliate manages in excess of $90 billion in assets for
individuals, mutual funds and other organizations. The following are other open-
or closed-end mutual funds with investment objectives similar to the Fund, for
which Scudder provides investment management:
- - --------------------------
* Two International Place, Boston, Massachusetts
# 345 Park Avenue, New York, New York
+ 101 California Street, San Francisco, California
@ Two Prudential Plaza, 180 North Stetson, Suite 5400, Chicago, Illinois
13
<PAGE>
<TABLE>
<CAPTION>
Total Net Assets
as of Management Compensation
April 30, 1995 on an Annual Basis Based on the
Name (000 omitted) Value of Average Daily Net Assets
---- ------------- ---------------------------------
<S> <C> <C>
Scudder Greater Europe Growth Fund+ $ 28,100 1.00%.
Scudder International Fund $ 2,310,100 0.90 of 1%; 0.85 of 1% on net assets in
excess of $500 million; 0.80 of 1% on net
assets in excess of $1 billion; 0.75 of 1% on
net assets in excess of $2 billion.
Scudder Latin America Fund $ 547,200 1.25%
Scudder Pacific Opportunities Fund $ 397,400 1.10%.
The Japan Fund, Inc. $ 511,300 0.85 of 1% of the first $100 million of
average daily net assets; 0.75 of 1% on
assets in excess of $100 million up to and
including $300 million; 0.70 of 1% on assets
in excess of $300 million up to and including
$600 million; 0.65 of 1% on assets in excess
of $600 million. Scudder pays The Nikko
International Capital Management Co., Ltd.
for investment and research services: 0.15 of
1% up to $700 million of average daily net
assets; 0.14 of 1% on assets in excess of
$700 million, payable monthly during fiscal
year 1994; 0.10 of 1% on average daily net
assets, payable during fiscal year 1995.
Total Net Assets
as of Management Compensation
April 30, 1995 on an Annual Basis Based on the
Name (000 omitted) Value of Average Weekly Net Assets
---- ------------- ----------------------------------
The Brazil Fund, Inc.*++ $ 306,000 1.30%; 1.25% on net assets in excess of $150
million; and 1.20% on net assets in excess of
$300 million. Scudder pays Banco Icatu S.A.
for investment and research services 0.25 of
1%; 0.15 of 1% on net assets in excess of
$150 million; and 0.05 of 1% on net assets in
excess of $300 million.
The First Iberian Fund, Inc.* $ 60,800 1.00%.
Scudder New Asia Fund, Inc.* $ 132,600 1.25%; 1.15% on net assets in excess of $75
million; 1.10% on net assets in excess of
$200 million.
Scudder New Europe Fund, Inc.* $ 193,400 1.25%; 1.15% on net assets in excess of $75
million; 1.10% on net assets in excess of
$200 million.
14
<PAGE>
Total Net Assets
as of Management Compensation
April 30, 1995 on an Annual Basis Based on the
Name (000 omitted) Value of Average Monthly Net Assets
---- ------------- -----------------------------------
The Korea Fund, Inc.* $ 608,100 1.15%; 1.10% on net assets in excess of $50
million; 1% on net assets in excess of $100
million; 0.95 of 1% on net assets in excess
of $350 million; 0.90 of 1% on net assets in
excess of $750 million. Scudder pays Daewoo
Capital Management Co., Ltd. for investment
and research services 0.2875 of 1%; 0.275 of
1% on net assets in excess of $50 million;
0.25 of 1% on net assets in excess of $100
million; 0.2375 of 1% on net assets in excess
of $350 million; 0.2250 of 1% on net assets
in excess of $750 million.
<FN>
+ Scudder has agreed to maintain the total annualized expenses of the fund at
not more than 1.50% of average daily net assets until February 29, 1996.
* These funds are not subject to state imposed expense limitations.
++ Banco Icatu S.A. has agreed to waive 50% of the fee it receives from Scudder. As a result of the
waiver, Scudder will waive a portion of its investment management fee from the fund equal to the
amount of the fee waived by Banco Icatu S.A.
</FN>
</TABLE>
Directors, Officers and employees of Scudder from time to time may have
transactions with various banks, including the Fund's custodian bank. It is
Scudder's opinion that the terms and conditions of those transactions that have
occurred were not influenced by existing or potential custodial or other Fund
relationships.
Sub-Advisory Contract
Under the Sub-Advisory Contract, the Argentine Adviser has agreed to
furnish to Scudder such information, investment recommendations, advice and
assistance as Scudder shall from time to time reasonably request. The Argentine
Adviser has agreed to maintain within its organization a technical department
specialized in the analysis of securities to furnish such services exclusively
to Scudder. The Argentine Adviser has agreed to pay the fees and expenses of any
Directors or officers of the Fund who are Directors, officers or employees of
the Argentine Adviser or any of its affiliates.
Information from the Argentine Adviser will be evaluated by Scudder's
research department and portfolio managers, in light of their own expertise and
information from other sources, in making investment decisions for the Fund.
For its services, the Argentine Adviser receives from Scudder a monthly fee
in U.S. dollars, equal to an annualized rate of 0.36% of 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 the fee is computed. For the fiscal year ended October 31,
1994 the aggregate fee paid by Scudder to the Argentine Adviser amounted to
$411,760.
15
<PAGE>
Under the Sub-Advisory Contract, the Argentine Adviser will not be liable
for any act or omission in the course of, connected with or arising out of any
services rendered under the agreement, except by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the agreement.
The Sub-Advisory Contract continues in effect by its terms from year to
year only so long as its continuance is specifically approved at least annually
by the affirmative vote of a majority of the Noninterested Directors, in person
at a meeting called for the purpose of voting on such approval, and by a
majority vote of either the Fund's Board of Directors or of the Fund's
outstanding voting securities. The Sub-Advisory Contract may be terminated at
any time without penalty by the Fund on 60 days' written notice, and by the
Argentine Adviser, but only after written notice to the Fund and Scudder of not
less than 60 days. The Sub-Advisory Contract automatically terminates in the
event of termination of the Fund's agreement with Scudder or in the event the
Sub-Advisory Contract is assigned, as defined under the 1940 Act.
Argentine Adviser
The Argentine Adviser, an investment adviser registered under the United
States Investment Advisers Act of 1940, was organized in August 1991, and is 99%
owned by Banco General de Negocios ("BGN"), an Argentine bank.
The Directors of the Argentine Adviser are Armando M. Braun, Juan Carlos
Iarezza and Julio D. Barroero. The managing directors of BGN are Carlos A. Rohm
and Jose E. Rohm. The directors of BGN are Dr. Jose Maria Alvarez de Toledo, Dr.
Rudolf W. Hug, Dr. Jose A. Martinez de Hoz, Donald G. McCouch, Dr. Carlos Felix
Pando Casado, Hector E. Puppo and Albrecht C. Raedecke. The Argentine
stockholders of BGN are the Rohm, Dodero and de Corral family interests, and the
non-Argentine stockholders are Credit Suisse, Chemical Bank, Deutsche
Sudamerikanische Bank and Banca Nazionale del Lavoro.
Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible Scudder places orders for portfolio
transactions through Scudder Investor Services, Inc. (the "Distributor") (a
corporation registered as a broker/dealer and a wholly- owned subsidiary of
Scudder), which in turn places orders on behalf of the Fund with issuers,
underwriters or other brokers and dealers. The Distributor receives no
commissions, fees or other remuneration from the Fund for this service.
Allocation of portfolio transactions is supervised by Scudder.
During the fiscal year ended October 31, 1994, the Fund paid total
brokerage commissions of $101,411 of which $21,188 (20.9% of the Fund's total
brokerage commissions for the period) was paid to BGN in respect to portfolio
transactions for the Fund, which amounted to 9.3% of the aggregate dollar volume
of the Fund's portfolio transactions during the year which involved the payment
of commissions.
Other Matters
The Board of Directors does not know of any matters to be brought before
the Meeting other than those mentioned in this Proxy Statement. The appointed
proxies will vote on any other business that comes before the Meeting or any
adjournments thereof in accordance with their best judgment.
16
<PAGE>
Miscellaneous
Proxies will be solicited by mail and may be solicited in person or by
telephone or telegraph by Officers of the Fund or personnel of Scudder. The Fund
has retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey 07072-2586, to assist in the proxy solicitation. The cost
of their services is estimated at $4,500. The expenses connected with the
solicitation of the proxies and with any further proxies which may be solicited
by the Fund's Officers or Corporate Investor Communications, Inc., in person, by
telephone or by telegraph will be borne by the Fund. The Fund will reimburse
banks, brokers, and other persons holding the Fund's shares registered in their
names or in the names of their nominees, for their expenses incurred in sending
proxy material to and obtaining proxies from the beneficial owners of such
shares.
In the event that sufficient votes in favor of any proposal set forth in
the Notice of this Meeting are not received by July 25, 1995, the persons named
as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the session of the Meeting to be
adjourned. The persons named as appointed proxies on the enclosed proxy card
will vote in favor of such adjournment those proxies which they are entitled to
vote in favor of the proposal for which further solicitation of proxies is to be
made. They will vote against any such adjournment those proxies required to be
voted against such proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by the Fund.
Stockholder Proposals
Any proposal by a stockholder of the Fund intended to be presented at the
1996 meeting of Stockholders of the Fund must be received by Thomas F.
McDonough, Secretary of the Fund, c/o Scudder, Stevens & Clark, Inc., 345 Park
Avenue, New York, New York 10154, not later than January 31, 1996.
By order of the Board of Directors,
Thomas F. McDonough
Secretary
345 Park Avenue
New York, New York 10154
June 6, 1995
17
<PAGE>
<TABLE>
<S> <C> <C>
PROXY THE ARGENTINA FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders--July 25, 1995
The undersigned hereby appoints Edmond D. Villani, Wilson Nolen and Juris Padegs and each of them, the proxies of the
undersigned, with the power of substitution to each of them, to vote all shares of The Argentina Fund, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of The Argentina Fund, Inc. to be held at the offices of Scudder, Stevens &
Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York, New York 10154, on Tuesday, July 25, 1995 at 10:15 a.m.,
eastern time, and at any adjournments thereof.
Unless otherwise specified in the squares provided, the undersigned's vote will be cast FOR each numbered item listed below.
1. The election of Directors;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [] to vote for all nominees listed below []
Nominees: Jose E. Rohm, Ronaldo A. da Frota Nogueira and Dr. Susan Kaufman Purcell
(INSTRUCTION To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.)
2. Ratification of the selection of Coopers & Lybrand L.L.P. as independent FOR [] AGAINST [] ABSTAIN []
accountants; (continued on other side)
<PAGE>
3. Approval of the continuance of the Investment Advisory, Management and Ad- FOR [] AGAINST [] ABSTAIN []
ministration Agreement between the Fund and Scudder, Stevens & Clark, Inc.;
4. Approval of the continuance of the Sub-Advisory Contract between Sociedad FOR [] AGAINST [] ABSTAIN []
General de Negocios y Valores S.A., and Scudder Stevens & Clark, Inc.;
The Proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names appear.
When signing as attorney, executor, administrator,
trustee or guardian, please give your full title
as such.
____________________________________________________
(Signature of Stockholder)
____________________________________________________
(Signature of joint owner, if any)
Date__________________________________________, 1995
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
</TABLE>
