SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
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 Section 240.14a-11(c) or Section
240.14a-12
THE PAKISTAN INVESTMENT FUND, INC.
------------------------
(Names of Registrant as Specified in Its Charters)
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 the 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>
Preliminary Copy
THE PAKISTAN 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
Pakistan Investment Fund, Inc. (the "Fund") will be held on Wednesday, April
30, 1997, at [ ] (New York time), in Conference Room
[ ] at 1221 Avenue of the Americas, 22nd Floor, New York, New York
10020, for the following purposes:
1. To elect two Class II Directors for a term of three years.
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 approve or disapprove an Investment Advisory Agreement between
the Fund, Morgan Stanley Asset Management Inc. and International Asset
Management Company Limited.
5. 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 [ ], 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>
Preliminary Copy
THE PAKISTAN 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 Pakistan
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 [ ] (New York time), in
Conference Room [ ] 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, among other matters, a New Management
Agreement and New Sub-Advisory Agreement (each defined below) (collectively,
the "New Advisory Agreements") 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 the Manager and an indirect parent of International Asset Management
Company Limited, the Fund's sub-adviser in Pakistan (the "Pakistan Adviser").
Pursuant to the Merger Agreement, the Fund's Manager will become a direct
subsidiary of the merged company and the Pakistan Adviser will become an
indirect subsidiary of such merged company, which will be called Morgan
Stanley, Dean Witter, Discover & Co. The Fund's New Advisory Agreements are
identical to the current forms of those agreements (collectively, the "Current
Advisory Agreements"), except for the dates of execution, effectiveness and
termination.
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, FOR the approval of the New Management Agreement and FOR the approval
of the New Sub-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
[ ] 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 the Fund 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 not expected to exceed $5,000 plus
expenses. The Manager has agreed to reimburse the Fund for all incremental
expenses incurred by the Fund that would not have been incurred if the New
Advisory Agreements was not submitted to stockholders of the Fund for their
approval.
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
PAKISTAN INVESTMENT FUND, INC., C/O CHASE GLOBAL FUNDS SERVICES COMPANY, P.O.
BOX 2798, BOSTON, MASSACHUSETTS 02208-2798, OR BY CALLING 1-800-221-6726.
Chase Global Funds Services Company is an affiliate of the Fund's
administrator, The Chase Manhattan Bank ("Chase Bank"), and provides
administrative services to the Fund. The business address of Chase Bank and
Chase Global Funds Services Company is 73 Tremont Street, Boston, Massachusetts
02108.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF EACH OF THE
MATTERS MENTIONED IN ITEMS 1, 2, 3 AND 4 OF THE NOTICE OF ANNUAL MEETING.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, two Directors will be elected to hold office for a term
of three years and until their successors are duly elected and 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 John W. Croghan and
Graham E. Jones as Class II Directors.
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 Brazilian Investment
Fund, Inc., 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 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, the terms of office of the Directors are
staggered. The Board of Directors is divided into three classes, designated
Class I, Class II and Class III, with each class having a term of three years.
Each year the term of one class expires. Class I currently consists of Peter J.
Chase, David B. Gill and Warren J. Olsen. Class II currently consists of John
W. Croghan and Graham E. Jones. Class III currently consists of Barton M.
Biggs, John A. Levin and William G. Morton, Jr. Only the Directors in Class II
are being considered for election at this Meeting.
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
2
<PAGE>
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.
Each of the nominees for Director has consented to be named in this Proxy
Statement and to serve as a director of the Fund if elected. The Board of
Directors has no reason to believe that any of the nominees named above will
become unavailable for election as a director, but if that should occur before
the Meeting, Proxies will be voted for such persons as the Board of Directors
may recommend.
Certain information regarding the Directors and officers of the Fund is
set forth below:
<TABLE>
<CAPTION>
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
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* Director and Chairman, Director and 64 10,000 - ***
1221 Avenue of the Americas Chairman of the Managing Director of Morgan
New York, New York 10020 Board since Stanley Asset Management Inc.
1995 and Chairman and Director of
Morgan Stanley Asset
Management Limited; Managing
Director of Morgan Stanley &
Co. Incorporated; Director of
Morgan Stanley Group Inc.;
Member of the Investment
Advisory Council of The
Thailand Fund; 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 Director Chairman and Chief Financial 64 500 0 ***
1441 Paseo De Peralta since 1995 Officer, High Mesa
Santa Fe, New Mexico 87501 Technologies, LLC; Chairman
of CGL, Inc.; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management, Inc.; Member of
the Investment Advisory
Council of The Thailand Fund.
John W. Croghan Nominee; Chairman of Lincoln Capital 66 1,000 987.2825 ***
200 South Wacker Drive Director Management Company; Director
Chicago, Illinois 60606 since 1995 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>
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 Director Director of thirteen U.S. 70 500 679.1887 ***
26210 Ingleton Circle since 1995 registered investment
Easton, Maryland 21601 companies managed by Morgan
Stanley Asset Management
Inc.; Director of the
Mauritius Fund Limited;
Director of Moneda Chile Fund
Limited; Director of 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 64 500 0 ***
330 Garfield Street Director Properties; Trustee of nine
Suite 200 since 1994 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.; Member of
the Investment Advisory
Council of The Thailand Fund;
Previously Chief Financial
Officer of Practice
Management Systems, Inc.
John A. Levin Director President of John A. Levin & 58 4,000 1,652.5541 ***
One Rockefeller Plaza since 1993 Co., Inc.; Director of
New York, New York 10020 fourteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
William G. Morton, Jr. Director Chairman and Chief Executive 60 599 0 ***
1 Boston Place since 1995 Officer of Boston Stock
Boston, Massachusetts 02108 Exchange; Director of Tandy
Corporation; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
4
<PAGE>
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* Director Principal of Morgan Stanley & 40 501 - ***
1221 Avenue of the Americas and President Co. Incorporated and Morgan
New York, New York 10020 since 1993 Stanley Asset Management
Inc.; Director and President
of seventeen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
James W. Grisham* Vice Principal of Morgan Stanley & 55 100 - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1993 Stanley Asset Management
Inc.; Officer of various
investment companies managed
by Morgan Stanley Asset
Management Inc.
Michael F. Klein* Vice President Principal of Morgan Stanley & 37 0 - ***
1221 Avenue of the Americas since 1996 Co. Incorporated and Morgan
New York, New York 10020 Stanley Asset Management Inc.
and previously a Vice
President thereof; Officer of
various investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously practiced law with
the New York law firm of
Rogers & Wells.
Harold J. Schaaff, Jr.* Vice Principal of Morgan Stanley & 36 702 - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1993 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 0 - ***
1221 Avenue of the Americas President since Stanley & Co. Incorporated
New York, New York 10020 1993 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 0 - ***
1221 Avenue of the Americas 1993 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>
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 0 - ***
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 0 - ***
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 18,402 3,319.0253 ***
- --------------------
* "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 $4,000. 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, will receive an additional fee
of $750 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 $40,000.
Each of the Directors who is not an "affiliated person" of MSAM within
the meaning of the 1940 Act may enter into a deferred fee arrangement (the "Fee
Arrangement") with the Fund, pursuant to which such Director may defer to a
later date the receipt of his Director's fees. The deferred fees owed by the
Fund are credited to a bookkeeping account maintained by the Fund on behalf of
such Director and accrue income from and after the date of credit in an amount
equal to the amount that would have been earned had such fees (and all income
earned thereon) been invested and reinvested either (i) in shares of the Fund
or (ii) at a rate equal to the prevailing rate applicable to 90-day United
States Treasury Bills at the beginning of each calendar quarter for which this
rate is in effect, whichever method is elected by the Director.
Under the Fee Arrangement, deferred Director's fees (including the return
accrued thereon) will become payable in cash upon such Director's resignation
from the Board of Directors in generally equal annual installments over a
period of five years (unless the Fund has agreed to a longer or shorter payment
period) beginning on the first day of the year following the year in which such
Director's resignation occurred. In the event of a Director's death, remaining
amounts payable to him under the Fee Arrangement will thereafter be payable to
6
<PAGE>
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, Jones 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 4,000 None 57,691 13
John W. Croghan 4,750 None 73,925 13
David B. Gill 4,000 None 59,910 13
Graham E. Jones 4,000 None 60,546 13
John A. Levin 4,750 None 77,539 14
William G. Morton, Jr. 4,750 None 67,893 13
Warren J. Olsen(1) 0 None 0 17
J. Antonio Quila(1)(6) 0 None 0 1
Altaf M. Saleem(1)(6) 0 None 0 1
Frederick B. Whittemore(1)(6) 0 None 0 16
- --------------------
(1) "Interested persons" of the Fund within the meaning of the 1940 Act.
(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 $4,750, Mr. Gill earned $4,000 and Mr. Levin earned $4,750 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) Messrs. Quila, Saleem and Whittemore resigned as Directors of the Fund effective March [ ], 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
believes that its officers and Directors complied with all applicable filing
requirements for the fiscal year ended December 31, 1996.]
The election of Messrs. Croghan and Jones 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
7
<PAGE>
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" THE
ELECTION OF THE TWO NOMINEES AS DIRECTORS.
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 as defined in the 1940 Act, 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 NEW ADVISORY AGREEMENTS
(PROPOSAL NO. 3 AND PROPOSAL NO. 4)
THE MANAGER AND THE PAKISTAN ADVISER
THE MANAGER. MSAM acts as investment manager for the Fund. The Manager
has acted as investment manager for the Fund since the Fund commenced its
investment operations.
The Manager currently is a wholly-owned subsidiary of MS Group and is
registered under the U.S. Investment Advisers Act of 1940, as amended. The
Manager provides portfolio management and named fiduciary services to various
closed-end and open-end investment companies, taxable and nontaxable
institutions, international organizations and individuals investing in United
States and international equities and fixed income securities. At December 31,
1996, MSAM had, together with its affiliated investment management companies
(which include Van Kampen American Capital, Inc. and Miller Anderson &
Sherrerd, LLP), assets under management (including assets under fiduciary
advisory control) totaling approximately $162.0 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,
8
<PAGE>
as well as the research and investment ideas of other companies whose brokerage
services MSAM utilizes.
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>
THE PAKISTAN ADVISER. The Fund also employs International Asset
Management Company Limited as its sub-adviser in Pakistan.
The Pakistan Adviser, a corporation formed on June 17, 1992 under the
laws of Pakistan, has acted as the Fund's investment adviser with respect to
the Fund's investments in Pakistan since the Fund commenced its investment
operations. The stockholders of the Pakistan Adviser are the Manager, National
Development Finance Corporation, Crescent Business Management (Pvt.) Ltd.,
Asian Development Bank and Crescent Investment Bank Limited. National
Development Finance Corporation is wholly owned by the Government of Pakistan.
Crescent Business Management (Pvt.) Ltd. is a wholly owned subsidiary of
Shakarganj Mills Ltd. Asian Development Bank is owned by the countries which
have contributed capital to it, including Japan, the United States, the Peoples
Republic of China, India, Indonesia, Canada, the Republic of Korea and
Australia. The Pakistan Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended. The Pakistan Adviser is also
registered with the Pakistani Corporate Law Authority as an investment adviser
under the Pakistan Investment Companies and Investment Advisers Rules, 1971.
At December 31, 1996, the Pakistan Adviser was investment adviser to only one
U.S. registered investment company, the Fund.
The Manager owns approximately 37% of the outstanding shares of the
Pakistan Adviser and is the Pakistan Adviser's largest shareholder. The
address of the Pakistan Adviser is Nacon House, Fifth Floor, Maulana Deen
Mohammad Wafai Road, Karachi, Pakistan.
9
<PAGE>
Certain information regarding the directors and principal executive
officers of the Pakistan Adviser is set forth below.
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION AND
NAME AND ADDRESS PAKISTAN ADVISER OTHER INFORMATION
- ---------------- ---------------- ----------------------------------------
<S> <C> <C>
Altaf M. Saleem Chairman Chief Executive of Shakarganj Mills
c/o Shakarganj Mill Limited Limited
Management House
Toba Road
Jhang, Pakistan
Marianne L. Hay Chief Executive Officer Managing Director of Morgan Stanley
Morgan Stanley Asset Management Inc. Asset Management Inc., and Principal of
1221 Avenue of the Americas Morgan Stanley & Co. Incorporated
New York, New York 10020
Mehmood Ahmed Director Senior Vice President of Crescent
c/o Crescent Investment Bank Ltd. Investment Bank Limited
45 Shahrah-i-Quaid-e-Azam
Lahore, Pakistan
Nessar Ahmed Director President of Crescent Investment Bank
c/o Crescent Investment Bank Ltd. Limited
Sidco Avenue Centre
Karachi, Pakistan
Shahid Hassan Director Executive Vice President of National
c/o National Development Finance Development Finance Corporation,
Corporation Pakistan
Finance and Trade Centre
Shahrah-i-Faisal
Karachi, Pakistan
G.M.Z. Kahn Director Senior Investment Officer of Asian
House No.6 Development Bank PRM, Pakistan Senior
Street No.90, G-6/3 Control Officer of Asian Development
Islamabad, Pakistan Bank, ADB, Philippines
Warren J. Olsen Director Principal of Morgan Stanley Asset
Morgan Stanley Asset Management Inc. Management Inc. and Morgan Stanley &
1221 Avenue of the Americas Co., Incorporated
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
10
<PAGE>
principal investment activities; stock brokerage and research services; asset
management; the trading of foreign exchange and commodities as well as
derivatives on a broad range or asset categories, rates and indices; real
estate advice, financing and investing; and global custody, securities
clearance services and securities lending.
INFORMATION CONCERNING DEAN WITTER, DISCOVER & CO.
Dean Witter Discover is a diversified financial services company offering
a broad range of nationally marketed credit and investment products with a
primary focus on individual customers. Dean Witter Discover has two principal
lines of business: credit services and securities. Its credit services
business consists primarily of the issuance, marketing and servicing of general
purpose credit cards and the provision of transaction processing services,
private-label credit cards services and real estate secured loans. It is the
largest single issuer of general purpose credit cards in the United States as
measured by number of accounts and cardmembers and the third largest originator
and servicer of credit card receivables, as measured by managed loans. Dean
Witter Discover's securities business is conducted primarily through its wholly
owned subsidiaries, Dean Witter Reynolds Inc. ("DWR") and Dean Witter
InterCapital Inc. ("Intercapital"). DWR is a full-service securities firm
offering a wide variety of securities products, with a particular focus on
serving the investment needs of its individual clients through over 9,100
professional account executives located in 371 branch offices. DWR is among
the largest NYSE members and is a member of other major securities, futures and
options exchanges. Intercapital is a registered investment adviser that, along
with its subsidiaries, services investment companies, individual accounts and
institutional portfolios.
THE MERGER
Pursuant to the Merger Agreement, MS Group will be merged (the "Merger")
with and into Dean Witter Discover and the surviving corporation will be named
Morgan Stanley, Dean Witter, Discover & Co. Following the Merger, the Manager
will be a direct subsidiary, and the Pakistan Adviser will be an indirect
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 initially consist of fourteen members, two of whom will be MS Group
insiders and two of whom will be Dean Witter Discover insiders. The remaining
ten directors will be independent directors, with MS Group and Dean Witter
Discover each nominating five of the ten. The Chairman and Chief Executive
Officer of Morgan Stanley, Dean Witter, 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 the Pakistan Adviser or in
the manner in which the Manager and the Pakistan Adviser render services to the
Fund. Nor does the Manager anticipate that the Merger or any ancillary
transactions will have any adverse effect on the ability of the Manager or the
Pakistan Adviser to fulfill their respective obligations under the New Advisory
Agreements or to operate their businesses in a manner consistent with past
business practice.
11
<PAGE>
THE ADVISORY AGREEMENTS
In anticipation of the Merger, a majority of the Directors of the Fund
who are not parties to the New Advisory Agreements or interested persons of any
such party ("Disinterested Directors") approved a new investment management and
advisory agreement between the Fund and the Manager (the "New Management
Agreement") and a new investment advisory agreement between the Fund, the
Manager and the Pakistan Adviser (the "New Sub-Advisory Agreement"). The form
of each of the New Advisory Agreements is identical to the current form of each
of those agreements, except for the dates of execution, effectiveness and
termination. 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
each of the New Advisory Agreements. See "The New Advisory Agreements" below.
The following is a summary of the Current Advisory Agreements and the New
Advisory Agreements. The description of the New Advisory Agreements is
qualified by reference to Annex A.
THE CURRENT ADVISORY AGREEMENTS. The Current Advisory Agreements, each
dated as of December 16, 1993, were last approved by stockholders of the Fund
at a meeting held on June 6, 1994.
The Current Management Agreement, dated as of December 16, 1993 (the
"Current Management Agreement"), provides that the Manager will supply
investment research and portfolio management, including the selection of
securities for the Fund to purchase, hold or sell and the selection of brokers
through whom the Fund's portfolio transactions are executed. 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 Current Management 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 Management Agreement
relates except a loss resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
Under the Current Management Agreement the Fund pays the Manager as
compensation for the services rendered an annual fee equal to 1.00% of the
Fund's average weekly net assets.
The Manager's activities are subject to the review and supervision of the
Board to which the Manager renders periodic reports with respect to the Fund's
investment activities. The Current Management Agreement may be terminated by
either party, at any time, without penalty, on 60 days' written notice, or upon
such shorter notice as may be mutually agreed upon, and will automatically
terminate in the event of its assignment.
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 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.
Under the Current Management 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.
Pursuant to the Current Management Agreement, the Fund utilizes the
services of the Pakistan Adviser under a Sub-Advisory Agreement, dated as of
December 16, 1993 (the "Current Sub-Advisory Agreement").
The Current Sub-Advisory Agreement provides that, under the supervision
of the Fund's Board of Directors and MSAM, the Pakistan Adviser will provide to
the Fund a variety of services, including furnishing the Fund and MSAM with
factual information, research reports and investment recommendations regarding
investments in Pakistan, including reports (written and oral), analyses,
statistical information and advice concerning market trends, specific
industries and securities to be purchased or sold by the Fund, assisting the
12
<PAGE>
Fund in identifying regulatory and other governmental requirements applicable
to the Fund in connection with the Fund's investment activities in Pakistan,
assisting the Fund in monitoring the execution of transactions and the
settlement and clearance of the Fund's securities transactions, and providing
the Fund and MSAM with information regarding Pakistani corporate actions,
repatriation and currency restrictions and such other matters as may be
requested by the Fund or MSAM.
Under the Current Sub-Advisory Agreement, the Fund pays the Pakistan
Adviser a fee, computed weekly and payable monthly in Pakastani Rupees, at an
annual rate of 0.30% of the Fund's average weekly net assets. The Current Sub-
Advisory Agreement contains provisions regarding limitations of liability,
indemnification and termination identical to those contained in the Current
Management Agreement described above.
Currently, the Fund is the only U.S. registered investment company to
which the Pakistan Adviser provide advisory services. For the fiscal year
ended December 31, 1996, the Pakistan Adviser received $222,000 in advisory
fees from the Fund.
THE NEW ADVISORY AGREEMENTS. The Board approved each of the New Advisory
Agreements on March 13, 1997, the forms of which are attached as Annex A. The
form of each of the proposed New Advisory Agreements is identical to each of
the current forms of those agreements, except for the dates of execution,
effectiveness and termination.
The investment advisory fees as a percentage of net assets payable by the
Fund to the Manager and the Pakistan Adviser will be the same under the New
Advisory Agreements as under their respective Current Advisory Agreements. If
the investment advisory fees under the New Advisory Agreements had been in
effect for the Fund's most recently completed fiscal year, advisory fees paid
to the Manager and the Pakistan Adviser by the Fund would have been identical
to those paid under their respective Current Advisory Agreements.
The Board of the Fund held a meeting on March 13, 1997, at which meeting
the Directors, including the Disinterested Directors, unanimously approved each
of the New Advisory Agreements for the Fund and recommended each of the
Agreements for approval by the stockholders of the Fund. Each of the New
Advisory Agreements would take effect upon the later to occur of (i) the
obtaining of stockholder approval or (ii) the closing of the Merger. Each of
the New Advisory Agreements 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 Agreements, the Board took into account
that the terms of each of the Fund's Current Advisory Agreements and the
corresponding New Advisory Agreements, including their terms relating to the
services to be provided thereunder by the Manager and the Pakistan Adviser and
the fees and expenses payable by the Fund, are identical, except for the dates
of execution, effectiveness and termination. The Board also considered other
possible benefits to the Manager and the Pakistan Adviser and Morgan Stanley,
Dean Witter, Discover & Co. that may result from the Merger including the
continued use of Morgan Stanley & Co. and Dean Witter Discover brokers and its
affiliates, to the extent permitted by law, for brokerage services.
The Board also examined the terms of the Merger Agreement and the
possible effects of the Merger upon the Manager's organization and upon the
ability of the Manager and the Pakistan Adviser to provide advisory services to
the Fund. The Board also considered the skills and capabilities of the Manager
and the Pakistan Adviser. In this regard, the Board was informed of the
resources of Morgan Stanley, Dean Witter, Discover & Co. to be made available
to the Manager and the Pakistan Adviser.
The Board also weighed the effect on the Fund of the Manager and the
Pakistan Adviser 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 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
13
<PAGE>
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 Agreements and voted to recommend their approval to the stockholders
of the Fund.
In the event that stockholders of the Fund do not approve one or both of
the New Advisory Agreements, the current Advisory Agreement or Agreements not
approved 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 or agreements in lieu of the
New Advisory Agreement or Agreements not approved. In the event the Merger is
not consummated, the Manager would continue to serve as investment manager of
the Fund, and the Pakistan Adviser would continue to serve as sub-adviser of
the Fund, each pursuant to the terms of the applicable Current Advisory
Agreement.
STOCKHOLDER APPROVAL
To become effective, each of the New Advisory Agreements 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. Each of the New Advisory Agreements were 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 each of the New Advisory Agreements 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 AGREEMENTS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Fund's management, the following persons owned
beneficially more than 5% of the Fund's outstanding shares at February 28,
1997:
14
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------------------- ----------------------------------------- ----------------
<S> <C> <C>
Morgan Stanley Group Inc. 29,571 shares, with shared voting power 5.0%
1585 Broadway and shared dispositive power; 555,539
New York, New York 10036 shares, with no voting power and shared
dispositive power(1)
Hermes Investment Management Limited* 742,600 shares with sole voting and 6.4%
Standon House dispositive power (2)
21 Massell Street
London, E1 8 AA,
United Kingdom
- --------------------
* Hermes Investment Management Limited is a wholly owned subsidiary of Hermes Pensions Management Limited, and
therefore, Hermes Pensions Management Limited is deemed to beneficially own the shares reported above.
(1) Based on a Schedule 13G filed with the Commission on February 7, 1997.
(2) Based on a Schedule 13D filed with the Commission on June 20, 1996.
</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.
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 [ ], 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.
15
PAGE
<PAGE>
ANNEX A
INVESTMENT ADVISORY AND
MANAGEMENT AGREEMENT
AGREEMENT, dated as of March 13, 1997, between THE PAKISTAN
INVESTMENT FUND, INC., a Maryland corporation (the "Fund"), and MORGAN
STANLEY ASSET MANAGEMENT INC., a Delaware corporation (the "Investment
Manager").
WHEREAS, the Fund is a closed-end, non-diversified
management investment company registered under the U.S. Investment
Company Act of 1940, as amended (the "1940 Act"), shares of common stock
of which are registered under the Securities Act of 1933, as amended;
and
WHEREAS, the Fund's investment objective is long-term
capital appreciation, which it seeks to achieve by investing primarily
in equity securities of Pakistani issuers (as defined in the Prospectus
dated December 16, 1993 (the "Prospectus") contained in the Fund's
Registration Statement on Form N-2 (File Nos. 33-47270 and 811-6636)
(the "Registration Statement")); and
WHEREAS, the Fund desires to retain the Investment Manager
to render investment management services with respect to its assets and
the Investment Manager is willing to render such services.
NOW, THEREFORE, in consideration of the mutual covenants
hereafter contained, it is hereby agreed by and between the parties
hereto as follows:
1. APPOINTMENT OF INVESTMENT MANAGER.
(a) The Fund hereby employs the Investment Manager for the
period and on the terms and conditions set forth herein, subject at all
times to the supervision of the Board of Directors of the Fund, to:
(i) Make all investment decisions for the
assets of the Fund and manage the investment and reinvestment of
those assets in accordance with the investment objective and
policies of the Fund, as set forth in the Fund's Prospectus, and
subject always to the restrictions of the Fund's Articles of
Incorporation and By-Laws, as amended or restated from time to
time, the provisions of the 1940 Act and the Fund's investment
objective and policies and investment restrictions, as the same
are set forth in the Fund's Prospectus. Should the Board of
Directors of the Fund at any time make any definite determination
as to investment policy and notify the Investment Manager thereof,
the Investment Manager shall be bound by such determination for
the period, if any, specified in such notice or until similarly
notified that such determination has been revoked. The Investment
Manager shall take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies of the Fund
and to place all orders for the purchase or sale of portfolio
securities for the Fund with brokers or dealers selected by it
and, in connection therewith, the Investment Manager is authorized
as agent of the Fund to give instructions to the custodians from
time to time of the Fund's assets as to deliveries of securities
and payments of cash for the account of the Fund. In connection
with the selection of such brokers or dealers and the placing of
such orders, the Investment Manager is directed at all times to
seek to obtain for the Fund the most favorable net results as
determined by the Board of Directors of the Fund. Subject to this
requirement and the provisions of the 1940 Act, the U.S.
Securities Exchange Act of 1934, as amended, and any other
applicable provisions of law, nothing shall prohibit the
Investment Manager from selecting brokers or dealers with which it
or the Fund is affiliated or which provide the Investment Manager
with investment research services as described in the Fund's
Prospectus;
(ii) Prepare and make available to the Fund
research and statistical data in connection therewith; and
<PAGE>
(iii) Maintain or cause to be maintained for the
Fund all books and records required under the 1940 Act, to the
extent that such books and records are not maintained or furnished
by administrators, custodians or other agents of the Fund.
(b) The Investment Manager accepts such employment and
agrees during the term of this Agreement to render such services, to
permit any of its directors, officers or employees to serve without
compensation as directors or officers of the Fund if elected to such
positions, and to assume the obligations set forth herein for the
compensation herein provided. The Investment Manager shall for all
purposes herein provided be deemed to be an independent contractor and,
unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund.
2. COMPENSATION. For the services and facilities
described in Section 1, the Fund agrees to pay in United States dollars
to the Investment Manager, a fee, computed weekly and payable monthly,
at an annual rate of 1.00% of the Fund's average weekly net assets. For
the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the
number of days that this Agreement is in effect during such month and
year, respectively.
3. INVESTMENT IN FUND STOCK. The Investment 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 other than
for investment.
4. NON-EXCLUSIVITY OF SERVICES. Nothing herein shall be
construed as prohibiting the Investment Manager from providing
investment advisory services to, or entering into investment advisory
agreements with, any other clients (including other registered
investment companies), including clients which may invest in Pakistani
equity securities, so long as the Investment Manager's services to the
Fund are not impaired thereby.
5. STANDARD OF CARE; INDEMNIFICATION.
(a) The Investment Manager may rely on information
reasonably believed by it to be accurate and reliable. Neither the
Investment Manager nor its officers, directors, employees, agents or
controlling persons (as defined in the 1940 Act) 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 Investment Manager in the performance of its duties or by reason
of reckless disregard on the part of the Investment Manager of its
obligations and duties under this Agreement. Any person, even though
also employed by the Investment Manager, who may be or become an
employee of 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 Investment Manager.
(b) The Fund agrees to indemnify and hold harmless the
Investment Manager, its officers, directors, employees, agents,
shareholders, controlling persons or other affiliates (each an
"Indemnified Party"), for any losses, costs and expenses incurred or
suffered by any Indemnified Party arising from any action, proceeding or
claims which may be brought against such Indemnified Party in connection
with the performance or non-performance in good faith of its functions
under this Agreement, except losses, costs and expenses resulting from
willful misfeasance, bad faith or gross negligence in the performance of
such Indemnified Party's duties or from reckless disregard on the part
of such Indemnified Party of such Indemnified Party's obligations and
duties under this Agreement.
2
<PAGE>
6. ALLOCATION OF CHARGES AND EXPENSES.
(a) The Investment Manager shall assume and pay for
maintaining its staff and personnel, and shall, at its own expense,
provide the equipment, office space and facilities necessary to perform
its obligations hereunder. The Investment Manager shall pay the
salaries and expenses of such of the Fund's officers and employees and
any fees and expenses of such of the Fund's directors who are directors,
officers or employees of the Investment Manager or any of its
affiliates, PROVIDED, HOWEVER, that the Fund, and not the Investment
Manager, shall bear travel expenses or an appropriate fraction thereof
of directors and officers of the Fund who are directors, officers or
employees of the Investment Manager to the extent that such expenses
relate to attendance at meetings of the Board of Directors of the Fund
or any committees thereof.
(b) In addition to the fee of the Investment Manager, the
Fund shall assume and pay the following expenses: organization expenses
(but not the overhead or employee costs of the Investment Manager);
legal fees and expenses of counsel to the Fund; auditing and accounting
expenses; taxes and governmental fees; New York Stock Exchange listing
fees; dues and expenses incurred in connection with membership in
investment company organizations; fees and expenses of the Fund's
custodians, sub-custodians, investment advisers, transfer agents and
registrars; fees and expenses with respect to administration, except as
may be herein expressly provided otherwise; expenses for portfolio
pricing services by a pricing agent, if any; expenses of preparing share
certificates and other expenses in connection with the issuance,
offering and underwriting of shares issued by the Fund; expenses
relating to investor and public relations; expenses of registering or
qualifying securities of the Fund for public 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 holding of the Fund; expenses of
preparation and distribution of reports, notices and dividends to
stockholders; expenses of the dividend reinvestment and cash purchase
plan; costs of stationery; any litigation expenses; and costs of
stockholders' and other meetings.
7. POTENTIAL CONFLICTS OF INTEREST.
(a) Subject to applicable statutes and regulations, it is
understood that directors, officers or agents of the Fund are or may be
interested in the Investment Manager or its affiliates as directors,
officers, employees, agents, shareholders or otherwise, and that the
directors, officers, employees, agents or shareholders of the Investment
Manager or its affiliates may be interested in the Fund as directors,
officers, agents or otherwise.
(b) If the Investment Manager considers the purchase or
sale of securities for the Fund and other advisory clients of the
Investment Manager at or about the same time, transactions in such
securities will be made for the Fund and such other clients in a manner
equitable to the Fund and such other clients or, insofar as feasible, in
accordance with guidelines which may be adopted by the Board of
Directors of the Fund.
8. DURATION AND TERMINATION.
(a) This Agreement shall be effective for a period of two
years commencing on the later of (i) the date that the requisite
stockholder approval as required under Section 15 of the 1940 Act has
been obtained or (ii) the date that the Agreement and Plan of Merger,
dated February 4, 1997, between Dean Witter, Discover & Co. and Morgan
Stanley Group Inc. is consummated. Thereafter, this Agreement will
continue in effect from year to year, provided that such continuance is
specifically approved at least annually by (A) a vote of a majority of
the members of the Fund's Board of Directors who are neither parties to
this Agreement nor interested persons of the Fund or of the Investment
Manager or of any entity regularly furnishing investment advisory
services with respect to the Fund pursuant to an agreement with the
Investment Manager, cast in person at a meeting called for the purpose
of voting on such approval, and (B) a vote of a majority of either the
Fund's Board of Directors or the Fund's outstanding voting securities.
(b) This Agreement may nevertheless be terminated at any
time without payment of penalty by the Fund or by the Investment Manager
upon 60 days' written notice. This Agreement shall automatically be
3
<PAGE>
terminated in the event of its assignment, PROVIDED, HOWEVER, that a
transaction which does not, in accordance with the 1940 Act, result in a
change of actual control or management of the Investment Manager's
business shall not be deemed to be an assignment for the purposes of
this Agreement.
(c) Termination of this Agreement shall not (i) affect the
right of the Investment Manager to receive payments of any unpaid
balance of the compensation described in Section 2 earned prior to such
termination, or (ii) extinguish the Investment Manager's right of
indemnification under Section 5.
As used herein, the terms "interested person," "assignment,"
and "vote of a majority of the outstanding voting securities" shall have
the meanings set forth in the 1940 Act.
9. AMENDMENT. This Agreement 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 persons of the Fund or
of the Investment Manager, cast in person at a meeting called for the
purpose of voting on such approval.
10. GOVERNING LAW. 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.
11. NOTICES. Any communication hereunder shall be in
writing and shall be delivered in person or by telex or facsimile
(followed by mailing such communication, air mail postage prepaid, on
the date on which such telex or facsimile is sent, to the address set
forth below). Any communication or document to be made or delivered by
one person to another pursuant to this Agreement shall be made or
delivered to that other person at the following relevant address (unless
that other person has by fifteen (15) days' notice to the other
specified another address):
If to the Investment Manager:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: General Counsel
Telephone No.: (212) 762-7188
Facsimile No.: (212) 762-7377
If to the Fund:
The Pakistan Investment Fund, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: President
Telephone No.: (212) 296-7100
Facsimile No.: (212) 762-7326
Communications or documents made or delivered by personal delivery shall
be deemed to have been received on the day of such delivery.
Communications or documents made or delivered by telex or facsimile
shall be deemed to have been received, if by telex, when acknowledged by
the addressee's correct answer back code and, if by facsimile, upon
4
<PAGE>
production of a transmission report by the machine from which the
facsimile was sent which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient; provided that a hard
copy of the communication or document so made or delivered by telex or
facsimile was posted the same day as the communication or document was
made or delivered by electronic means.
12. JURISDICTION. Each party hereto irrevocably agrees
that any suit, action or proceeding against either of the Investment
Manager or the Fund arising out of or relating to this Agreement shall
be subject exclusively to the jurisdiction of the United States District
Court for the Southern District of New York or the Supreme Court of the
State of New York, New York County, and each party hereto irrevocably
submits to the jurisdiction of each such court in connection with any
such suit, action or proceeding. Each party hereto waives any objection
to the laying of venue of any such suit, action or proceeding in either
such court, and waives any claim that such suit, action or proceeding
has been brought in an inconvenient forum. Each party hereto
irrevocably consents to service of process in connection with any such
suit, action or proceeding by mailing a copy thereof in English by
registered or certified mail, postage prepaid, to their respective
addresses as set forth in this Agreement.
13. REPRESENTATION AND WARRANTY OF THE INVESTMENT MANAGER.
The Investment Manager represents and warrants that it is duly
registered as an investment adviser under the U.S. Investment Advisers
Act of 1940, as amended, and that it will use its reasonable efforts to
maintain effective its registration during the term of this Agreement.
14. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
15. CAPTIONS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have executed this
Investment Advisory and Management Agreement by their officers thereunto
duly authorized as of the day and year first written above.
THE PAKISTAN INVESTMENT FUND, INC.
By:/S/ WARREN J. OLSEN
--------------------------------
Name: Warren J. Olsen
Title: President
MORGAN STANLEY ASSET MANAGEMENT
INC.
By: /S/ WARREN J. OLSEN
--------------------------------
Name: Warren J. Olsen
Title: Principal
5
PAGE
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of March 13, 1997, by and among THE
PAKISTAN INVESTMENT FUND, INC., a Maryland corporation (the "Fund"),
MORGAN STANLEY ASSET MANAGEMENT INC., a Delaware corporation (the
"Manager"), and INTERNATIONAL ASSET MANAGEMENT COMPANY LIMITED, a
corporation organized under the laws of Pakistan (the "Adviser").
WHEREAS, the Fund is a closed-end, non-diversified
management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), shares of common stock of
which are registered under the Securities Act of 1933, as amended; and
WHEREAS, the Fund's investment objective is long-term
capital appreciation, which it seeks to achieve by investing primarily
in equity securities of Pakistani issuers (as defined in the Prospectus
dated December 16, 1993 (the "Prospectus") contained in the Fund's
Registration Statement on Form N-2 (File Nos. 33-47270 and 811-6636)
(the "Registration Statement")); and
WHEREAS, the Fund has retained the Manager, to provide
certain investment advisory and management services to the Fund; and
WHEREAS, the Fund desires to retain the Adviser to render
investment advisory and research services to the Manager with respect to
the Fund, and the Adviser is willing to render such services.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and among the parties
hereto as follows:
1. APPOINTMENT OF ADVISER:
(a) The Fund hereby employs the Adviser for the period
and on the terms and conditions set forth herein, subject at all times
to the supervision of the Board of Directors of the Fund, to:
(i) Furnish the Fund and the Manager with
factual information, research reports and investment
recommendations regarding investments in Pakistan, including
reports (written and oral), analyses, statistical information and
advice concerning market trends, specific industries, companies
and securities to be purchased or sold by the Fund;
(ii) Assist the Fund in identifying regulatory
and other governmental requirements applicable to the Fund in
connection with the Fund's investment activities in Pakistan;
(iii) Assist the Fund in monitoring the
execution of transactions and the settlement and clearance of the
Fund's securities transactions;
(iv) Provide the Fund and the Manager with
information regarding Pakistani corporate actions, repatriation
and currency restrictions and such other matters as may be
requested by the Fund or the Manager from time to time; and
(v) Arrange, if desired by the Fund, for
officers and employees of the Adviser to serve, without
compensation from the Fund, as directors, officers or agents of
the Fund if duly elected or appointed to such positions and
subject to their individual consent and to any limitations imposed
by law.
1
<PAGE>
(b) The Adviser accepts such employment and agrees
during the term of this Agreement to render such services and to assume
the obligations herein set forth for the compensation herein provided.
The Adviser shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
2. COMPENSATION. For the services described in Section 1
hereof, the Fund agrees to pay in Pakistani Rupees to the Adviser, a
fee, computed weekly and payable monthly, at an annual rate of .30% of
the Fund's average weekly net assets.
3. INVESTMENT IN FUND STOCK. The Adviser agrees that it
will not make a short sale of any capital stock of the Fund or purchase
any capital stock of the Fund other than for investment.
4. NON-EXCLUSIVITY OF SERVICES. Nothing herein shall be
construed as prohibiting the Adviser 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 Pakistani equity securities, so long as the
Advisers's services to the Fund and the Manager are not impaired
thereby.
5. STANDARD OF CARE; INDEMNIFICATION.
(a) The Adviser may rely on information reasonably
believed by it to be accurate and reliable. Neither the Adviser nor its
officers, directors, employees, agents or controlling persons (as
defined in the 1940 Act) 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 Adviser in
the performance of its duties or by reason of reckless disregard on the
part of the Adviser of its obligations and duties under this Agreement.
Any person, even though also employed by the Adviser, who may be or
become an employee of 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 Adviser.
(b) The Fund agrees to indemnify and hold harmless
the Adviser, its officers, directors, employees, agents, shareholders,
controlling persons or other affiliates (each an "Indemnified Party"),
for any losses, costs and expenses incurred or suffered by any
Indemnified Party arising from any action, proceeding or claims which
may be brought against such Indemnified Party in connection with the
performance or non-performance in good faith of its functions under this
Agreement, except losses, costs and expenses resulting from willful
misfeasance, bad faith or gross negligence in the performance of such
Indemnified Party's duties or from reckless disregard on the part of
such Indemnified Party of such Indemnified Party's obligations and
duties under this Agreement.
6. ALLOCATION OF CHARGES AND EXPENSES.
(a) The Adviser shall assume and pay for maintaining
its staff and personnel, and shall, at its own expense, provide the
equipment, office space and facilities necessary to perform its
obligations hereunder. The Adviser shall pay the salaries and expenses
of such of the Fund's officers and employees and any fees and expenses
of such of the Fund's directors who are directors, officers or employees
of the Adviser or any of its affiliates, PROVIDED, HOWEVER, that the
Fund, and not the Adviser, shall bear travel expenses or an appropriate
fraction thereof of directors and officers of the Fund who are
directors, officers or employees of the Adviser to the extent such
expenses relate to attendance at meetings of the Fund's Board of
Directors or any committee thereof.
(b) In addition to the fee of the Adviser, the Fund
shall assume and pay the following expenses: organization expenses (but
not the overhead or employee costs of the Adviser); legal fees and
expenses of counsel to the Fund; auditing and accounting expenses; taxes
and governmental fees; New York 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, investment manager and advisers, transfer agents and
2
<PAGE>
registrars; fees and expenses with respect to administration; expenses
for portfolio pricing services by a pricing agent, if any; expenses of
preparing share certificates and other expenses in connection with the
issuance, offering and underwriting of shares issued by the Fund;
expenses relating to investor and public relations; expenses of
registering or qualifying securities of the Fund for public 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 holding of the Fund; expenses of
preparation and distribution of reports, notices and dividends to
stockholders; expenses of the dividend reinvestment and cash purchase
plan; costs of stationery; any litigation expenses; and costs
stockholders' and other meetings.
7. POTENTIAL CONFLICTS OF INTEREST. Subject to
applicable statutes and regulations, it is understood that directors,
officers or agents of the Fund are or may be interested in the Adviser
as directors, officers, employees, agents, shareholders or otherwise,
and that the directors, officers, employees, agents or shareholders of
the Adviser may be interested in the Fund as a director, officer, agent
or otherwise.
8. DURATION AND TERMINATION.
(a) This Agreement shall be effective for a period of
two years commencing on the later of (i) the date that the requisite
stockholder approval as required under Section 15 of the 1940 Act has
been obtained or (ii) the date that the Agreement and Plan of Merger,
dated February 4, 1997, between Dean Witter, Discover & Co. and Morgan
Stanley Group Inc. is consummated. Thereafter, this Agreement will
continue in effect from year to year, provided that such continuance is
specifically approved at least annually by (A) a vote of a majority of
the members of the Fund's Board of Directors who are neither parties to
this Agreement nor interested persons of the Fund or of the Investment
Manager or of any entity regularly furnishing investment advisory
services with respect to the Fund pursuant to an agreement with the
Investment Manager, cast in person at a meeting called for the purpose
of voting on such approval, and (B) a vote of a majority of either the
Fund's Board of Directors or the Fund's outstanding voting securities.
(b) This Agreement may nevertheless be terminated at
any time without payment of penalty by the Fund or by the Adviser upon
60 days' written notice. This Agreement shall automatically be
terminated in the event of its assignment, PROVIDED, HOWEVER, that a
transaction which does not, in accordance with the 1940 Act, result in a
change of actual control or management of the Adviser's business shall
not be deemed to be an assignment for the purposes of this Agreement.
(c) Termination of this Agreement shall not (i)
affect the right of the Adviser to receive payments of any unpaid
balance of the compensation described in Section 2 earned prior to such
termination, or (ii) extinguish the Adviser's right of indemnification
under Section 5.
As used herein, the terms "interested person," "assignment,"
and "vote of a majority of the outstanding voting securities" shall have
the meanings set forth in the 1940 Act.
9. AMENDMENT. This Agreement 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 persons of the Fund or
of the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.
10. GOVERNING LAW. 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.
11. NOTICES. Any communication hereunder shall be in
writing and shall be delivered in person or by telex or facsimile
(followed by mailing such communication, air mail postage prepaid, on
the day on which such telex or facsimile is sent to the addresses set
forth below). Any communication or document to be made or delivered by
one person to another pursuant to this Agreement shall be made or
delivered to that person at the following relevant address (unless that
3
<PAGE>
other person has by fifteen (15) days' notice to the other specified
another address):
If to the Fund:
The Pakistan Investment Fund, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: President
Telephone No.: (212) 762-7188
Facsimile No.: (212) 762-7377
If to the Manager:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: General Counsel
Telephone No.: (212) 296-7100
Facsimile No. (212) 762-7326
If to the Adviser:
International Asset Management
Company Limited
Nacon House
5th Floor
Maulana Deen Mohammad Wafi Road
Karachi, Pakistan
Attention: General Counsel
Telephone No.: 92-21-568-7271
Facsimile No.: 92-21-568-9625
Communications or documents made or delivered by personal delivery shall
be deemed to have been received on the day of such delivery.
Communications or documents made or delivered by telex or facsimile
shall be deemed to have been received, if by telex, when acknowledged by
the addressee's correct answer back code and, if by facsimile, upon
production of a transmission report by the machine from which the
facsimile was sent which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient; provided that a hard
copy of the communication or document so made or delivered by telex or
facsimile was posted the same day as the communication or document was
made or delivered by electronic means.
12. JURISDICTION. Each party hereto irrevocably agrees
that any suit, action or proceeding against either of the Adviser or the
Fund arising out of or relating to this Agreement shall be subject
exclusively to the jurisdiction of the United States District Court for
the Southern District of New York or the Supreme Court of the State of
New York, New York County, and each party hereto irrevocably submits to
the jurisdiction of each such court in connection with any such suit,
action or proceeding. Each party hereto waives any objection to the
laying of venue of any such suit, action or proceeding in either such
court, and waives any claim that such suit, action or proceeding has
been brought in an inconvenient forum. Each party hereto irrevocably
consents to service of process in connection with any such suit, action
or proceeding by mailing a copy thereof in English by registered or
certified mail, postage prepaid, to their respective addresses as set
forth in this Agreement.
13. REPRESENTATION AND WARRANTY OF THE ADVISER. The
Adviser represents and warrants that it is duly registered and
authorized as an investment adviser under the U.S. Investment Advisers
Act of 1940, as amended, and that it will use all reasonable efforts to
4
<PAGE>
maintain effective its registration and authorization until the
termination of this Agreement.
14. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
15. CAPTIONS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have executed this
Investment Advisory Agreement by their officers thereunto duly
authorized as of the day and year first above written.
THE PAKISTAN INVESTMENT FUND, INC.
By:/S/ WARREN J. OLSEN
-------------------------------
Name: Warren J. Olsen
Title: President
MORGAN STANLEY ASSET MANAGEMENT INC.
By:/S/ WARREN J. OLSEN
---------------------------------
Name: Warren J. Olsen
Title: Principal
INTERNATIONAL ASSET MANAGEMENT
COMPANY LIMITED
By:/S/ MARIANNE L. HAY
---------------------------------
Name: Marianne L. Hay
Title: Chief Executice Officer
5
<PAGE>
<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>
<PAGE>
PROXY
THE PAKISTAN 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
[ ] [ ] Class II Nominees:
John W. Croghan, and Graham E. Jones
______________________________________
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. Approval of the Investment Advisory Agreement between the Fund, Morgan
Stanley Asset Management Inc. and International Asset Management Company
Limited.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. 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, PROPOSAL NO. 3 AND PROPOSAL NO. 4
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.
