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
Filed by Registrant (x)
Filed by a party other than Registrant ( )
Check the appropriate box:
(x) Preliminary Proxy Statement
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
( ) Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
TWEEDY,BROWNE FUND,INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if Other Than Registrant)
Payment of filing fee (Check the appropriate box):
(x) No Fee Required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
____________________
(2) Aggregate number of securities to which transaction
applies:
____________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
___________________
(4) Proposed maximum aggregate value of transaction:
_________________________________
(5) Total fee paid:
_________________________________
( ) Fee paid previously with preliminary materials:
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of
its filing.
(1) Amount previously paid:
____________________________________
(2) Form, Schedule or Registration Statement no.:
____________________________________
(3) Filing party:
_____________________________________________
(4) Date filed:
________________________________________________
TWEEDY, BROWNE GLOBAL VALUE FUND
TWEEDY, BROWNE AMERICAN VALUE FUND
52 VANDERBILT AVENUE
NEW YORK, NEW YORK 10017
August __, 1997
Dear Shareholder:
As you may know, Tweedy, Browne Company L.P. ("Tweedy,
Browne"), the investment adviser to Tweedy, Browne Global Value
Fund and Tweedy, Browne American Value Fund (each a "Fund" and
collectively the "Funds") and its partners have entered into an
agreement under which it will convert to a limited liability
company and Affiliated Managers Group, Inc. ("AMG") will acquire
a majority interest in the firm.
After careful consideration, the Board of Directors of your
Fund has approved the new advisory agreements and recommends that
you vote FOR all of the proposals described in the following
materials.
Your vote is important. Please take a moment now to sign
and return your proxy cards in the enclosed postage paid return
envelope. If you have questions about the transaction, please
call us at [ ] Ext. [ ].
The acquisition of an interest in Tweedy, Browne by AMG
will, in our opinion, have no effect on the management of our
mutual funds. Our agreement with AMG does not provide for a
payment to us if the assets of the Funds increase by some pre-
determined amount. The Funds will continue to be no-load funds;
you will not have to pay a broker a commission to invest in our
Funds. We have autonomy to manage the assets entrusted to us
by our shareholders and clients and AMG is contractually
prohibited from interfering in the investment management process
at Tweedy, Browne. The partners of Tweedy, Browne have signed
ten-year employment and non-compete agreements with the firm
which include significant penalties as regards our continuing
ownership of the firm should we retire earlier. We have no plans
to move to a warmer climate and pursue some life-long
recreational desire. We believe our agreement has significant
advantages in that we no longer need be distracted by estate
planning concerns, and that the long-term continuity of Tweedy,
Browne as an independent advisor beholden first to its clients is
secure.
The decision to bring in an outside investor has not been
taken lightly as we have no interest in changing what we do for
our own investments and those entrusted to us by our clients.
However, the realities of life, or more specifically the reality
of our mortality, dictate that we take steps that will ensure the
independence of Tweedy, Browne for the benefit of our clients
while providing liquidity for our estates. While we consider
ourselves to be relatively young at 48, 50 and 52, we believe the
time to make plans is when it may not be immediately necessary to
do so, and at a time when these issues can be confronted without
pressure.
In the now 77-year history of Tweedy, Browne, the firm has
always been owned only by its partners, and no provisions have
ever been formally made for any compensation to a general partner
in the event of retirement, death or disability. Fortunately, in
the past, we have only had to deal with the issue of retirement
which was always considered on a case-by-case basis. We have
never felt the need to conduct our relationship through lengthy
contracts or agreements, but have on good faith treatment of
people with whom we had been partners and friends for many years.
The three of us who are currently active as general partners of
Tweedy, Browne Company L.P. agreed among ourselves that in the
event of our retirement or one of the unforeseen events mentioned
above, we would continue to retain an interest equal to one-half
of the interest we held while we were still an active,
contributing member of the firm. In effect, we agreed that half
of our interest in Tweedy, Browne was due to our prior
contribution and half was due to our active contribution to the
management of clients' assets. We believe this agreement was
fair and provided more than adequate compensation to those
partners, present and future, who would actually be "carrying the
water." We have no intention of doing anything other than what
we are doing now, and at least actuarially believe we have many
years left on our personal odometers. However, ultimately this
is not our decision. We would like to see the firm continue to
prosper and serve the interests of its clients, but believe that
cannot happen if the owners do not plan for an orderly transfer
of ownership in the future.
The only problem with the agreement we had in place, in
which our estates would retain a significant ownership interest
in Tweedy, Browne, relates to the potentially enormous burden of
inheritance taxes that would be due. These taxes would be based
upon the value that could be placed on those retained interests
by the Internal Revenue Service, which would have a vested
interest in making the value as high as possible. Estate
planning would be a nightmare if not virtually impossible. For
every $100 of value ascribed to our interests in Tweedy, Browne,
we would need $150 of liquid assets for taxes as every $250 of
estate assets is taxed at an approximate rate of 60%. The
possibility exists that all of the liquid net worth we have
accumulated over the course of our lives would have to be sold to
pay inheritance taxes, leaving our heirs with only a non-
marketable interest in Tweedy, Browne. The solution of requiring
the active partners to buy out our estates' interests could be a
problem because the price may be greater than what they might be
comfortable paying, unless we were willing to accept an unfairly
low valuation. For this reason, we felt it was necessary to
investigate the alternative of seeking an outside partner who
would buy our "estate" interests in the firm.
The acquisition of investment management companies is a
fairly commonplace occurrence these days. Numerous articles have
been written about the need to consolidate in the money
management industry to provide a full range of investment
products and have the necessary capital to compete for the
growing retirement funds of the aging baby-boom generation. This
may be true for the majority of our peers; who are we to argue
with the experts? As regards Tweedy, Browne, we do not agree.
We place a very high value on our independence and our ability to
make investment decisions free of any consideration other than
what is in the best interest of the assets we manage. This is
not a totally selfless point of view as the assets under
management of the current partners, their families, our employees
and our retired partners are in excess of $240 million. It is
also part of the reason we enjoy coming to work as much as we do.
For this reason we were not even remotely interested in selling
our business to a large bank or money management company which
would want to absorb us into their asset management division, and
involve us in endless hours conceiving of ways to grow our
business with new products or avenues of distribution. We
believe a money management firm should be first and foremost
concerned with the management of its clients' money for the
benefit of its clients. If that is accomplished, the rest is
easy. We also believe a money management firm should be managed
by money managers who have the greater part of their own net
worth invested alongside their clients. In our opinion, if a
money manager is not willing to own the same stocks for his or
her own account that are bought for the clients' accounts, or
knows of another manager he has more faith in than himself, the
clients should know that as well.
Although it may be a bit conceited to say our firm has a
culture, it does have its own character. Those of you who have
visited our offices know them to be plain if not a little shabby.
We have no art on the walls or expensive china for coffee; we
would rather use the money to buy more stocks. We have almost no
management meetings and no strategic planning department. We do
have a dedicated group of people who do their jobs very well
without layers of supervision. We all seem to enjoy coming to
work each day, and we all seem to get along quite well. Were we
to be acquired by a large company, the firm's ambience would
likely change, coming to work would not be as much fun, and we
believe our clients' interests would not be served. We would
rather stay independent and hope we live forever than be
swallowed up by some large financial conglomerate. In an ideal
world, we would want an investor who would permit us to continue
to run our business as we have in the past, who would assure us
of the independence to manage money as we always have, and who
would permit us to continue as significant owners. We also did
not want a situation where an investor we had selected could turn
around and resell their interests to someone who was not
acceptable to us or who could interfere with the independence we
had bargained for. We were not interested in a transaction which
further paid us if we reached certain predetermined targets of
assets under management as we wanted our principal goal to
continue to be satisfactory investment performance. With our
wish list in hand, we consulted an investment banking firm active
in the field of money managers and discussed whether such an
investor existed. The bankers identified several companies that
offered firms like ours operational independence, but only one
which would partner with us, by which we mean allow us to remain
significant owners of the firm. Rather than talk to a long list
of potential buyers or investors, we decided to approach the one
we believed would most fulfill our needs and requirements. That
company is AMG.
AMG is a company that makes investments in firms like ours
that need assistance with succession planning and liquidity for
the owners' estates, while assuring the independence and
continuity of the firm for the benefit of clients and employees.
AMG has a proven record of such relationships with eight other
investments in firms such as ours. AMG presents a better
solution to our problems as compared to a sale of the entire
company which could come with numerous strings attached that
would hamper our ability to serve our clients as we have in the
past, and which would remove the incentive of equity ownership in
the future.
The chairman of AMG is Bill Nutt, former President of The
Boston Company. AMG has substantial equity investors such as TA
Associates, NationsBank Capital and The Hartford Insurance
Company. We have come to know the AMG people over the past
several months and have spoken with others who have known them
far longer. We have found that AMG is considered an excellent
equity partner. We believe that the AMG people will be excellent
partners for us because their philosophy, permitting affiliates
to manage their businesses independently as they have in the past
while requiring that they remain significant owners, agrees with
ours.
The agreement we have made provides for our continuing
independence in the day-to-day operation of Tweedy, Browne and,
more importantly, complete independence in managing money. There
are no targets for increasing assets under management and no
specific financial incentives to do so other than an increase in
the value of our retained ownership should the firm continue to
prosper. The principal requirements of AMG, as we see them, are
that the firm convert from a partnership to a limited liability
company and that the general partners invest an additional $100
million in accounts under the firm's management, bringing the
total commitment of the partners, their families and former
partners to our investment philosophy to more than $300 million.
In our view, we are reducing our holdings in Tweedy, Browne and
increasing our holdings in the stocks our clients own. We have
stated our intention to maintain this investment for at least ten
years and will sign ten year employment and non-compete
agreements with the firm. As we have no intention of using these
funds for anything other than increasing the size of our personal
portfolios and no interest in embarking on another career at this
point in our lives, but do have a strong desire to continue
managing money, we do not find these terms particularly onerous.
A further requirement of AMG is that we begin to identify the
next generation of Tweedy, Browne partners and provide a plan
that gives them equity ownership in the firm. We believe this
makes sense for the firm and our clients by assuring continuity
while not imposing any specific retirement date on us. In this
regard, we plan to admit two of our key employees, Tom Shrager
and Bob Wyckoff, as members of the firm upon completion of this
transaction. And, of course, Jim Clark who retired from active
participation in the firm in 1995, and who has a continuing
interest in the firm's profits, will maintain his office with us
and provide counsel as needed.
A valid concern shareholders of the Funds should have is
whether, following such a transaction, the principals become so
rich that they lose interest in the business and investment
performance begins to deteriorate. While this may require a leap
of faith on your part, we do not believe this will be the case.
The three of us are fortunate in that we are already rich enough
that we do not have to do what we do. We manage money because
that is what we like to do. One of our clients manages the tours
for the Rolling Stones. When they were about to embark on their
latest world tour, one of us asked why would Mick Jagger with all
his wealth choose to go on the road for a year or two. The
response was because that was what he did. "He does what he
likes to do, and you do what you like to do." We enjoy what we
do and we enjoy winning at it. We do not have personal wealth
goals after which we intend to head to the beach or the golf
course. What the investment by AMG does do is permit us to go
about our business as we have for the past twenty years without
the fear that when we are gone, our heirs will be left in a
potentially untenable situation. Until that day, we can manage
Tweedy, Browne as we see best, and we have significant incentives
through our own portfolios and through our substantial continuing
ownership in the firm to continue to perform for our clients and
ourselves.
We hope this brief explanation of our arrangements with AMG
and the reasons for coming to you at this time is helpful. The
enclosed proxy materials contain further detail which we urge you
to read, and then date, sign and return one proxy for each Fund in
which you have an investment.
Thank you for your cooperation and continued support.
Sincerely,
Christopher H. Browne
President
TWEEDY, BROWNE GLOBAL VALUE FUND
TWEEDY, BROWNE AMERICAN VALUE FUND
52 VANDERBILT AVENUE
NEW YORK, NEW YORK 10017
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [SEPTEMBER __,] 1997
[ ] Ext. [ ]
A Meeting of Shareholders (the "Meeting") of Tweedy, Browne
Fund Inc. (the "Corporation") and each series of the Corporation,
Tweedy, Browne Global Value Fund and Tweedy, Browne American
Value Fund (each a "Fund" and collectively the "Funds"), will be
held at [ ], on [September __,] 1997 at
[x:xx] a.m., New York City time, for the following purposes:
1. To consider and act upon the approval of a new
investment advisory agreement between each Fund and
Tweedy, Browne Company, LLC ("Tweedy, Browne") to take
effect upon the closing of the acquisition of a
majority interest in Tweedy, Browne by Affiliated
Managers Group, Inc.
2. To consider and act upon the election of 6 members of
the Board of Directors of each Fund to serve until the
next shareholders meeting or until their successors are
elected and qualified;
3. To consider and act upon the ratification of the
selection of Ernst & Young LLP as independent auditors
for each Fund for the fiscal year ending March 31,
1998; and
4. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The stock transfer books will not be closed but, in lieu
thereof, the Board of Directors has fixed the close of business
on [August ___, 1997] as the record date for the determination of
shareholders of each Fund entitled to notice of, and to vote at,
the Meeting.
By order of the Board of Directors
M. GERVASE ROSENBERGER, Secretary
New York, New York
[August __, 1997]
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
MEETING IN PERSON OR BY PROXY; IF YOU DO NOT EXPECT TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
APPROPRIATE ENCLOSED PROXY OR PROXIES IN THE ACCOMPANYING
ENVELOPE PROVIDED FOR YOUR CONVENIENCE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
TWEEDY, BROWNE GLOBAL VALUE FUND
TWEEDY, BROWNE AMERICAN VALUE FUND
PROXY STATEMENT
FOR A MEETING OF SHAREHOLDERS
TO BE HELD ON [SEPTEMBER __, 1997]
[ ] EXT. [ ]
INTRODUCTION
This Proxy Statement (the "Proxy") is furnished in
connection with the solicitation by the Board of Directors (the
"Board") of Tweedy, Browne Fund Inc. (the "Corporation") of
proxies to be voted at a Meeting of Shareholders (the "Meeting")
of the Corporation and each series of the Corporation, Tweedy,
Browne Global Value Fund (the "Global Fund") and Tweedy, Brown
American Value Fund (the "American Fund") (each a "Fund" and
collectively the "Funds") to he held at the [
] on [September __, 1997] at [x:xx] a.m., New York City
time, and at any adjournment thereof, for the purposes set forth
in the accompanying Notice of Meeting of Shareholders.
The costs of preparing, printing, mailing and soliciting the
proxies will be borne by Tweedy, Browne Company L.P. ("Tweedy,
Browne"), and Affiliated Managers Group, Inc. (AMG). In
addition, certain officers, directors and employees of Tweedy,
Browne and officers and directors of the Fund (none of whom will
receive additional compensation therefor) may solicit proxies in
person or by telephone, telegraph or mail. [Shareholder
Communications Corporation ("SCC")] will also solicit proxies.]
All properly executed proxies received prior to the Meeting
will be voted at the Meeting in accordance with the instructions
marked thereon or otherwise as provided therein. Unless
instructions to the contrary are marked, shares represented by
the proxies will be voted "FOR" all the proposals. All shares in
Fund-sponsored IRA accounts not voted by the account owner will
be voted by the IRA trustee in the same proportion (for, against
and abstain) as all other votes cast whether in person or by
proxy. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions will be counted
as present and broker "non-votes" (that is, proxies from brokers
or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled
to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be
treated as shares that are not present with respect to that
particular nondiscretionary matter. Any proxy may be revoked at
any time prior to the exercise thereof by submitting another
proxy bearing a later date or by giving written notice to the
Secretary of the Fund at the Fund's address indicated above or by
voting in person at the Meeting. A majority of the outstanding
shares eligible to vote on a particular matter is necessary for
there to be a quorum for that matter. If a quorum is present at
the Meeting, the affirmative vote of either a majority of the
outstanding shares of a Fund or, if less, 67% of the shares of
that Fund present at the Meeting is necessary to approve that
Fund's new investment advisory agreement. The six nominees for
director receiving the highest number of votes will be elected
and approval by a majority of the shares present for such purpose
is necessary to ratify the Board's selection of the independent
auditors.
The Board of Directors of the Corporation knows of no
business other than that specifically mentioned in the Notice of
Meeting which will be presented for consideration at the Meeting.
If any other matters are properly presented, it is the intention
of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
The Board of Directors of the Corporation has fixed the
close of business on [August ___, 1997] as the record date (the
"Record Date") for the determination of shareholders of each Fund
entitled to notice of and to vote at the Meeting or any
adjournment thereof. Shareholders of each Fund on that date will
be entitled to one vote on each matter on which they are entitled
to vote for each share held and a fractional vote with respect to
fractional shares and shareholders will not have cumulative
voting rights. At the close of business on the Record Date, the
Fund had outstanding [ ] shares of the Global Fund and
[ ] shares of the American Fund, each with a par value
of $.0001 per share, which comprise the only authorized series of
shares of the Fund.
The principal executive offices of the Funds are located at
52 Vanderbilt Avenue, New York, New York 10017. The enclosed
proxy and this proxy statement are first being sent to the Fund's
shareholders on or about [August ___, 1997].
PROPOSAL NO. 1.
TO CONSIDER A NEW ADVISORY AGREEMENT FOR EACH FUND WHICH WILL
TAKE EFFECT UPON THE CLOSING OF THE ACQUISITION OF
THE ADVISER
SUMMARY OF THE TRANSACTION
Tweedy, Browne and its partners have entered into a
definitive agreement (the "Agreement') for Tweedy, Browne to
convert to a limited liability company and for Affiliated
Managers Group, Inc. ("AMG") to acquire a majority interest in
the firm through a sale of interests to AMG (the "Transaction").
At that time AMG will become the managing member of Tweedy,
Browne. A self-perpetuating management committee consisting
initially of Tweedy, Browne's current general partners,
Christopher H. Browne, William H. Browne and John D. Spears, will
have the authority and responsibility to conduct the day-to-day
operations of the adviser. The Transaction is expected to close
on or prior to September 30, 1997 (the "Closing") and is subject
to various conditions, including approval by the shareholders of
each Fund of new investment advisory agreements between Tweedy,
Browne and each Fund (the "New Advisory Agreements"). After the
Closing, Tweedy, Browne, will continue to operate out of its New
York office. The firm's current general partners will sign long-term
employment contracts and will continue to be responsible for the
day-to-day affairs of Tweedy, Browne. In addition, Tweedy,
Browne will admit two other key employees, Robert Q. Wyckoff, Jr.
and Thomas Shrager, as members of the firm. See "The Employment
Agreements," below. Thus, in the view of the Board and Tweedy,
Browne, the Transaction will not result in any changes in the
portfolio management and investment operations of the Fund.
AMG is a Boston-based holding company which makes equity
investments in investment management firms in which management
personnel retain a significant interest in the profits of the
business. As of June 30, 1997, AMG serves as general partner or
manager member of seven registered investment advisers (and has a
minority investment in an eighth), which in the aggregate manage
approximately $34 billion. Each of the registered investment
advisers in which AMG holds an interest are independently managed
by their respective principals, and AMG does not participate in
day-to-day management or the investment process of such firms.
Under the organizational documents of Tweedy, Browne, AMG will
have no authority to manage the day-to-day operations or
participate in the investment process at Tweedy, Browne.
AMG is a Delaware corporation which has its offices at Two
International Place, Boston, MA 02110. AMG's largest stockholder
is Advent VII, L.P., an investment fund controlled by TA
Associates, Inc., a Delaware corporation. As of June 30, 1997,
seven private equity funds managed by TA Associates, Inc. ("TA")
collectively owned more than a majority of the voting stock of
AMG and, therefore, TA may be deemed to be the parent of AMG;
however, it is anticipated that after the date of this Proxy, AMG
will issue additional stock in private and/or public financing
transactions and issue stock as consideration for the acquisition
of additional investment advisers. These issuances will have the
effect of diluting the interest in AMG of the funds managed by TA
to less than a quarter of the outstanding voting interests in
AMG. In addition because the funds managed by TA are investment
funds, and not operating companies, they may elect to distribute
stock of AMG to investors in such funds. Neither TA nor any of
its investment funds has the power or authority to participate in
the management or operations of any of the investment advisers in
which AMG holds an interest. Neither TA nor any of its
investment funds will have actual control of Tweedy, Browne upon
consummation of the Transaction. The address of TA and each of
the investment funds it manages is High Street Tower, Suite 2500,
.125 High Street, Boston, MA 02110
Pursuant to Section 15 of the Investment Company Act of
1940, as amended (the "1940 Act"), each Fund's existing
investment advisory agreement terminates automatically upon its
"assignment", which term includes any transfer of at least 25% of
the voting interest in an adviser. Section 15(a) of the 1940 Act
prohibits any person from serving as an investment adviser to a
registered investment company except pursuant to a written
contract that has been approved by the shareholders. Therefore,
in order for Tweedy, Browne to continue to provide investment
advisory services to each Fund after the closing of the
Transaction, the shareholders of each Fund must approve a New
Advisory Agreement.
The Transaction also contemplates that Tweedy, Browne, AMG
and other persons will comply with the requirements of Section
15(f) of the 1940 Act after the Closing. Section 15(f) provides,
in pertinent part, that the partners of Tweedy, Browne may
receive any amount or benefit in connection with a sale of
securities of, or a sale of any other interest in, Tweedy, Browne
which results in an assignment of the investment advisory
contract if (1) for a period of three years after such event, at
least 75% of the members of the board of directors of the
investment company which it advises are not "interested persons"
(as defined in the 1940 Act) of the new or old investment
adviser; and (2) for a two-year period there is no "unfair
burden" imposed on the investment company as a result of the
Transaction. In order to satisfy the 75% condition, it is
expected that William H. Browne will resign as director effective
on the completion of the Transaction. In the Agreement with
Tweedy, Browne, AMG has represented and warranted to Tweedy,
Browne that it has no express or implied understanding or
arrangement that would impose an unfair burden on the Corporation
as a result of the Transaction.
Each New Advisory Agreement, if approved by the Fund's
shareholders, will commence at the Closing, will remain in effect
for an initial two-year term and will continue in effect
thereafter for successive periods if and so long as such
continuance is specifically approved annually by (a) the Board of
Directors or (b) the Fund's shareholders, provided that in either
event, the continuance also is approved by a majority of the
directors who are not "interested persons" by vote cast in person
at a meeting called for the purpose of voting on such approval.
After careful consideration, the Board of Directors of the
Fund unanimously recommends that shareholders of each Fund vote
"FOR" the New Advisory Agreement between the Corporation on
behalf of such Fund and Tweedy, Browne to replace the current
advisory agreements with Tweedy, Browne upon consummation of the
Transaction. See "Evaluation by the Boards" below.
BENEFITS TO SHAREHOLDERS
The Board has identified the following benefits which the
shareholders are anticipated to realize as a result of the
Transaction:
1. Christopher H. Browne, William H. Browne and John D. Spears,
the individuals who have managed the Funds since their
inception, will serve in the management board of and retain
an interest in Tweedy, Browne, will continue to manage the
Funds and the day-to-day operations of Tweedy, Browne, and
will invest substantial additional amounts in the Funds or
accounts at Tweedy, Browne managed similarly to the Funds;
2. Christopher H. Browne, William H. Browne and John D. Spears,
who have not previously been parties to any employment
contracts, will be subject to 10-year employment agreements,
thereby providing the Funds with greater assurances of being
able to continue receiving their services; and
3. Christopher H. Browne, William H. Browne and John D. Spears
have agreed to transfer a substantial portion of their
retained interest in Tweedy, Browne to new members of
Tweedy, Browne thereby providing for the development of new
managers who can eventually succeed to their positions and
provide continuity to the Funds' management.
THE INVESTMENT ADVISER
Tweedy, Browne, 52 Vanderbilt Avenue, New York, New York
10017 currently serves as each Fund's investment adviser.
Tweedy, Browne manages each Fund's investments, provides various
administrative services (not otherwise provided by third parties)
and supervises each Fund's daily business affairs, subject to
supervision by the Corporation's Board of Directors. Christopher
H. Browne, William H. Browne and John D. Spears have been
responsible for the day to day management of the Funds since
their inception. Tweedy, Browne is owned substantially and
controlled by its general partners, who are Christopher H.
Browne, William H. Browne and John D. Spears.
THE EMPLOYMENT AGREEMENTS
Christopher H. Browne, William H. Browne and John D. Spears
will enter into employment agreements that provide for their
continued service to Tweedy, Browne for 10 years after the
Transaction occurs. These agreements also provide that they
cannot be terminated except for cause or disability and contain
non-solicitation and non-competition provisions that extend
beyond the term of these agreements. These individuals will have
a right to sell their retained interests in Tweedy, Browne to AMG
over a period of time starting in the sixth year after the
Transaction, and will be required to sell upon retirement or any
other termination of employment.
THE NEW ADVISORY AGREEMENTS
Pursuant to the current advisory agreements between Tweedy,
Browne and the Corporation on behalf of each Fund, Tweedy, Browne
has been retained to manage the investments of the Funds and to
provide such investment research, advice and supervision, in
conformity with each Fund's investment objectives and policies,
as may be necessary for the operations of each Fund. The New
Advisory Agreements provide the same authority. The current
advisory agreement for each Fund was last continued on March 5,
1997. The current advisory agreements and New Advisory
Agreements provide that each Fund will pay Tweedy, Browne a fee
for its services equal to 1.25% of its average daily net asset
value. Tweedy, Browne has voluntarily agreed with the Board of
Directors to waive such portion of its fees on the American Fund
as may be necessary to keep the total expense ratio of the
American Fund from exceeding 1.45%. This waiver may be withdrawn
or modified by Tweedy, Browne although it does not expect to do
so. During each Fund's fiscal year ended March 31, 1997, Tweedy,
Browne's net fees earned were: $__________ for the Global Fund
and $____________ (net of fee waivers of $__________) for the
American Fund.
The New Advisory Agreements provide for the furnishing of
the same advisory services for the same advisory fees as the
current advisory agreements with each Fund. The current advisory
agreements provide, among other things, that Tweedy, Browne will
bear all expenses of its employees and overhead incurred in
connection with its duties, and that the Funds will pay (or
reimburse Tweedy, Browne, if it has paid), all direct and
indirect costs, charges, and expenses of or related to each
Fund's business and operations, including the compensation of the
Corporation's directors (other than those who are interested
persons), as well as the pro rata portion of the salaries,
bonuses, health insurance, retirement benefits and all similar
employment costs for the time spent on each Fund's operations of
all personnel employed by Tweedy, Browne who devote substantial
time to the Fund's operations including administrative and other
personnel. A form of the New Advisory Agreement is attached as
Appendix A.
Pursuant to both the current and new Advisory Agreements,
although the adviser intends to devote such time and effort to
the business of a Fund as is reasonably necessary to perform its
duties to such Fund, the services of the adviser are not
exclusive and the adviser may provide similar services to other
investment companies and other clients and may engage in other
activities.
The current agreements and New Advisory Agreements both
provide that in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations
thereunder, the adviser is not liable to either Fund or the
shareholders of either Fund for any act or omission by the
adviser in the supervision or management of investment activities
or for any loss sustained by either Fund or the shareholders of
either Fund, and that a Fund will indemnify the adviser subject
to the requirements and limitations of the 1940 Act. Currently,
Messrs. Browne, Browne and Spears are general partners of Tweedy,
Browne and have unlimited personal liability for Tweedy, Browne's
liabilities. Upon conversion of Tweedy, Browne to a limited
liability company neither they nor AMG will have personal
liability for Tweedy, Browne's liabilities in excess of their
respective interest in Tweedy, Browne.
Both the current and the New Advisory Agreements may be
terminated on 60 days' written notice at any time without the
payment of any penalty either by the Corporation, upon the vote
of a majority of the Corporation's Board or a majority of the
outstanding voting securities of the respective Fund, or by
Tweedy, Browne.
EVALUATION BY THE BOARDS
On August 12, 1997, the independent directors of the Board
(other than Mr. Loventhal, who was unable to attend) met and
discussed the Transaction and its possible effect on the
Corporation and each Fund and evaluated the New Advisory
Agreements. The general partners of Tweedy, Browne and senior
officers of AMG were present to answer questions from the Board.
In evaluating the New Advisory Agreements, the Board reviewed
materials furnished by Tweedy, Browne relevant to its decision.
Those materials included information regarding Tweedy, Browne and
AMG (including information describing their respective personnel
and operations) as well as materials regarding the services
rendered, absolute and relative performance of the Funds,
profitability of Tweedy, Browne relating to the Funds and
comparative advisory fee information. Representatives of Tweedy,
Browne discussed with the Board Tweedy, Browne's philosophy of
management and methods of operation insofar as they related to
either Fund and indicated their belief that, as a consequence of
the Transaction, the operations of Tweedy, Browne and its ability
to provide services to the Funds would not be adversely affected.
Representatives of AMG discussed with the Board AMG's philosophy
management and expected relationship with Tweedy, Browne and the
Funds. In its deliberations, the Board considered the terms of
the Transaction, including, among other things, the continued
investment and employment of Christopher H. Browne, William H.
Browne and John D. Spears, which it believed to be important to
assure continuity of the advisory services provided by Tweedy,
Browne to the Funds, and the requirement that the current general
partners transfer a portion of their interests to other senior
managers over the next several years. The Board also considered
comparative information on other investment companies with
similar investment objectives. In addition, the Board reviewed
and discussed the terms and provisions of the New Advisory
Agreements and compared fees and expenses under the New Advisory
Agreements with those paid by other investment companies. The
Board considered the benefits that the Funds might obtain from
the sale of a majority interest of Tweedy, Browne to AMG.
The Board was advised by its own counsel and considered all
information that it determined was relevant to its deliberations.
In determining to recommend that shareholders of each Fund
vote to approve the New Advisory Agreements as being in the best
interest of each Fund's shareholders, it was noted that the
advisory services to be provided by Tweedy, Browne would be
performed by the same principals in the business who had
previously been providing such services and that expenses of the
Funds in the future should not be any greater than those under
the current advisory agreements.
ACCORDINGLY, AFTER CONSIDERATION OF THE ABOVE, AND SUCH
OTHER FACTORS AND INFORMATION AS IT DEEMED RELEVANT, THE BOARD OF
DIRECTORS, INCLUDING ALL OF THE BOARD MEMBERS PRESENT AT THE
MEETING WHO ARE NOT INTERESTED PERSONS (AS SUCH TERM IS DEFINED
BY THE 1940 ACT), APPROVED EACH NEW ADVISORY AGREEMENT AND VOTED
TO RECOMMEND ITS APPROVAL TO EACH FUNDS' SHAREHOLDERS. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
NO. 1.
PROPOSAL NO. 2
ELECTION OF THE BOARD OF
DIRECTORS OF THE CORPORATION
At the Meeting, six directors will be elected to serve until
the next Meeting of Shareholders and until their successors are
elected and qualified. The affirmative vote of a majority of the
shares of the Co present at the Meeting is required to elect the
nominees. It is the intention of the persons named in the
enclosed proxy to vote in favor of the election of the persons
listed below. The Board of Directors unanimously recommends that
you vote "FOR" the nominees.
The Board of Directors of the Corporation knows of no reason
why any of the nominees listed below will be unable to serve but
in the event of any such unavailability, the proxies received
will be voted for such substitute nominees as the Board of
Directors may recommend.
Certain information concerning the nominees and the offices
of the Funds is set forth below. The six nominees that are
currently directors of the Corporation were elected by
shareholders other than Richard Salomon, who was subsequently
appointed by the Board of Directors. Messrs. Beal, C. Browne, W.
Browne, Lazar, Loventhal and Salomon were nominated by the Board
of Directors at its meeting on August 12, 1997. The "interested"
directors (as defined by Section 2(a)(19) of the Investment
Company Act of 1940) are indicated by an asterisk(*). The
directors who are not "interested directors" are referred to as
"independent directors."
Director Fund
Principal of the Shares
Occupations or Corpora- Owned % of
Name and Employment in Past tion as of Shares
Age 5 Years Since 8/x/97 Outstanding
Bruce A. Partner and [1993] [ ] (1)
Beal Officer, The Beal
Age: 60 Companies and Beal
& Company, Inc.,
various real estate
development and
investment
companies. Real
estate consultant.
Christopher General Partner of [1993] [ ] (1)
H. Browne* Tweedy, Browne.
Age: 50
William H. General Partner of [1993] [ ] (1)
Browne* Tweedy, Browne.
Age: 52
Arthur President of Lazar [1993] [ ] (1)
Lazar Brokerage
Age: 84 (insurance
brokerage).
Daniel J. Private Investor. [1993] [ ] (1)
Loventhal
Age: 75
Richard Partner in Christy [1995] [ ] (1)
Salomon & Viener (law
Age: 49 firm).
All directors and officers as a group (8 persons) owned an
aggregate of [ ] shares of the Global Fund and
[ ] shares of the American Fund as of [__________ __,
1997].
* Messrs. Christopher Browne and William Browne are considered
by the Corporation to be Directors who are "interested
persons" of Tweedy, Browne or of the Corporation (within the
meaning of the 1940 Act). Messrs. Browne are brothers.
(1) Less than 1%.
Four meetings of the Board of Directors of the Corporation
were held between April 1, 1996 and March 31, 1997. In that
period, all incumbent directors attended 75% or more of the
meetings. The Corporation has no standing committee of the Board
of Directors.
Only the independent directors receive remuneration from the
Fund for acting as a director. During the 1996 fiscal year,
director fees for independent directors were set at $2,000 per
annum plus $500 for each Board of Directors meeting attended plus
out-of-pocket expenses.
The following table sets forth certain information regarding
compensation of the Corporation's Board of Directors and
officers. Except as disclosed below, no executive officer or
person affiliated with the Corporation received compensation from
the Corporation for the calendar year ended December 31, 1996.
Compensation Table
Total Compensation
Aggregate From Corporation
Compensation and Complex
Name and Position From Corporation Paid to Directors
Christopher H. Browne
Chairman of the Board
and President $0 $0
William H. Browne
Treasurer and Director $0 $0
John D. Spears $0 $0
Vice President
M. Gervase Rosenberger $0 $0
Secretary
Bruce A. Beal $4,000 $4,000
Director
Arthur Lazar
Director $4,000 $4,000
Daniel J. Loventhal
Director $4,000 $4,000
Richard Salomon
Director $4,000 $4,000
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF
THE NOMINEES.
PROPOSAL NO. 3.
RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
Ernst & Young LLP ("E&Y") has been selected by the vote cast
in person by a majority of the Board of Directors, including a
majority of the independent directors, subject to the
ratification by the shareholders at the Meeting, as the
independent auditors to audit the accounts of the Corporation and
each Fund for and during the fiscal year ending March 31, 1997.
Representatives of E&Y will attend the Meeting, will have an
opportunity to make a statement if they desire to do so, and will
be available to answer questions.
THE AFFIRMATIVE VOTE OF A SIMPLE MAJORITY OF SHARES OF THE
CORPORATION AND EACH FUND PRESENT AND VOTING AT THE MEETING IS
REQUIRED TO RATIFY THE SELECTION OF E&Y. THE BOARD OF DIRECTORS
RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF
SELECTION OF INDEPENDENT AUDITORS.
PRINCIPAL HOLDERS
[As of the Record Date, to the best knowledge of the Fund,
the following persons beneficially owned more than 5% of any
class of the outstanding shares of either Fund.]
BROKERAGE FEES AND PORTFOLIO TRANSACTIONS
Tweedy, Browne conducts all of the trading operations,
except clearing, for both the Global Fund and the American Fund.
Tweedy, Browne executes portfolio transactions with or through
issuers, underwriters and other brokers and dealers. In its
capacity as a broker-dealer, Tweedy, Browne reserves the right to
receive a ticket charge from each Fund for such service although
it currently does not engage in this practice.
The primary objective of Tweedy, Browne in placing orders
for the purchase and sale of securities for each Fund's portfolio
is to obtain the most favorable net results, taking into account
such factors as price, commission, where applicable (which is
negotiable in the case of U.S. national securities exchange
transactions but which is generally fixed in the case of foreign
exchange transactions), size of order, difficulty of execution
and skill required of the executing broker/dealer. Tweedy,
Browne reviews on a routine basis commission rates, execution and
settlement services performed, making internal and external
comparisons.
Tweedy, Browne is authorized to place orders for portfolio
transactions on behalf of the Funds with brokers and dealers who
supply market quotations to the custodian of the Funds for
appraisal purposes, or who supply research, market and
statistical information to either Fund or Tweedy, Browne when it
can be done consistently with the policy of obtaining the most
favorable net results.. The term "research, market and
statistical information" includes advice as to the value of
securities, the advisability of investing in, purchasing or
selling securities, and the availability of securities or
purchasers or sellers of securities, and furnishing analyses and
reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of
accounts. However, Tweedy, Browne currently does not engage in
these practices. Tweedy, Browne is not authorized, when placing
portfolio transactions for either Fund, to pay a brokerage
commission on account of receiving such services or information
in excess of that which another broker might have charged for
executing the same transaction. Tweedy, Browne does not place
orders with brokers or dealers on the basis that the broker or
dealer has or has not sold a Fund's shares. There is no
intention to place portfolio transactions with particular brokers
or dealers or groups thereof. In effecting transactions in over-
the-counter securities, orders are placed with the principal
market makers for the security being traded unless it appears
that more favorable results are available otherwise.
Although certain research, market and statistical
information from brokers and dealers can be useful to the Funds
and to Tweedy, Browne, it is the opinion of Tweedy, Browne, that
such information is only supplementary to its own research effort
since the information must still be analyzed, weighed, and
reviewed by Tweedy, Browne's staff. Such information may be
useful to Tweedy, Browne in providing services to clients other
than the Funds, and not all such information is useful to Tweedy,
Browne in providing services to the Funds. For the fiscal
years ended March 31, 1997 and March 31, 1996, the Global Fund
paid brokerage commissions of $2,167,248 and $1,135,039,
respectively, none of which were paid to affiliates. For the
fiscal years ended March 31, 1997 and March 31, 1996, the
American Fund paid brokerage commissions of $223,652 and
$210,767, respectively, none of which were paid to affiliates.
The increase in commission payments is attributable to the
increased size of the Funds.
DEADLINE FOR SHAREHOLDER PROPOSALS
The Corporation does not hold regularly scheduled meetings
of shareholders of either Fund. Any shareholder desiring to
present a proposal for inclusion at the meeting of shareholders
next following the meeting should submit such [proposal to the
Corporation].
OTHER MATTERS
The management knows of no other matters which are to be
brought before the Meeting. However, if any other matters not
now known or determined properly come before the Meeting, it is
the intention of the persons named in the enclosed form of Proxy
to vote such Proxy in accordance with their best judgment on such
matters.
All Proxies received will be voted in favor of all the
proposals, unless otherwise directed therein.
Very truly yours,
CHRISTOPHER H. BROWNE
President
[August x,] 1997
APPENDIX A
FORM OF
INVESTMENT ADVISORY AGREEMENT
Meeting of Stockholders
Tweedy, Browne Global Value Fund Series of Tweedy, Browne Fund, Inc.
52 Vanderbilt Avenue, New York, New York 10017
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 proposals 1, 2 and 3.
<TABLE>
<S> <C> <C> <C>
1. To consider and act upon the approval of FOR ( ) AGAINST ( ) ABSTAIN ( )
a new investment advisory agreement to
take effect upon the closing of the
acquisition of a majority interest in
Tweedy, Browne Company LLC by Affiliated
Managers Group, Inc.
2. To consider and act upon the election of FOR ( ) AGAINST ( ) ABSTAIN ( )
6 members of the Board of Directors of
the Company to serve until the next
meeting or until their successors are
elected and qualified. STOCKHOLDERS MAY
WITHHOLD THEIR VOTE FOR ANY NOMINEES BY
STRIKING OUT THE NAME OF SUCH NOMINEE OR
NOMINEES.
Bruce A. Beal Christopher H. Browne
William H. Browne Arthur Lazar
Daniel J. Loventhal Richard Salomon
3. To consider and act upon the ratification FOR ( ) AGAINST ( ) ABSTAIN ( )
of the selection of Ernst & Young LLP as
independent auditors for the Company for
the fiscal year ending March 31, 1998.
4. To transact such other business as may FOR ( ) AGAINST ( ) ABSTAIN ( )
properly come before the meeting or any
adjournments thereof.
</TABLE>
(OVER)
TWEEDY, BROWNE GLOBAL VALUE FUND SERIES OF
TWEEDY, BROWNE FUND, INC PROXY SOLICITED BY THE
BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS [M. GERVASE ROSENBERGER] AND [ ] AS
PROXIES, EACH WITH THE POWER TO APPOINT HIS OR HER SUBSTITUTE, AND
HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS DESIGNATED
BELOW, ALL SHARES OF TWEEDY, BROWN GLOBAL VALUE FUND (THE "FUND") OF
TWEEDY, BROWNE FUND, INC. (THE "COMPANY") HELD OF RECORD BY THE
UNDERSIGNED ON AUGUST__, 1997, AT THE MEETING OF STOCKHOLDERS OF THE
COMPANY TO BE HELD ON SEPTEMBER __, 1997 OR ANY ADJOURNMENT THEREOF.
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE
THE PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED TO
VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY
OTHER MATTER AS MAY PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT
INTEND TO PERSONALLY ATTEND THE MEETING PLEASE COMPLETE AND MAIL
THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE.
Please sign name or names as
printed on proxy to authorize
the voting of your shares as
indicated. Where shares are
registered with joint owners
all joint owners should sign.
Persons signing as executors,
administrators, trustees, etc.
should so indicate.
_______________________________
Signature
_______________________________
Signature
_______________________________
Date
Meeting of Stockholders
Tweedy, Browne American Value Fund Series of Tweedy, Brown, Fund, Inc.
52 Vanderbilt Avenue, New York, New York 10017
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 proposals 1, 2 and 3.
<TABLE>
<S> <C> <C> <C>
1. To consider and act upon the approval of FOR ( ) AGAINST ( ) ABSTAIN ( )
a new investment advisory agreement to
take effect upon the closing of the
acquisition of a majority interests in
Tweedy, Browne Company LLC by Affiliated
Managers Group, Inc.
2. To consider and act upon the election of FOR ( ) AGAINST ( ) ABSTAIN ( )
6 members of the Board of Directors of
the Company to serve until the next
meeting or until their successors are
elected and qualified. STOCKHOLDERS MAY
WITHHOLD THEIR VOTE FOR ANY NOMINEES BY
STRIKING OUT THE NAME OF SUCH NOMINEE OR
NOMINEES.
Bruce A. Beal Christopher H. Browne
William H. Browne Arthur Lazar
Daniel J. Loventhal Richard Salomon
3. To consider and act upon the ratification FOR ( ) AGAINST ( ) ABSTAIN ( )
of the selection of Ernst & Young LLP as
independent auditors for the Fund for the
fiscal year ending March 31, 1998.
4. To transact such other business as may FOR ( ) AGAINST ( ) ABSTAIN ( )
properly come before the meeting or any
adjournments thereof.
</TABLE>
(OVER)
TWEEDY, BROWN AMERICAN VALUE FUND SERIES OF
TWEEDY, BROWNE FUND, INC. PROXY SOLICITED BY THE BOARD
OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS [M. GERVASE ROSENBERGER] AND [ ] AS
PROXIES, EACH WITH THE POWER TO APPOINT HIS OR HER SUBSTITUTE, AND
HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS DESIGNATED
BELOW, ALL SHARES OF TWEEDY, BROWNE AMERICAN VALUE FUND STOCK (THE
"FUND") OF TWEEDY, BROWNE FUND, INC. (THE "COMPANY") HELD OF RECORD
BY THE UNDERSIGNED ON AUGUST __, 1997, AT THE MEETING OF
STOCKHOLDERS OF THE COMPANY TO BE HELD ON SEPTEMBER __, 1997 OR ANY
ADJOURNMENT THEREOF.
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE
THE PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED TO
VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY
OTHER MATTER AS MAY PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT
INTEND TO PERSONALLY ATTEND THE MEETING PLEASE COMPLETE AND MAIL
THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE.
Please sign name or names as
printed on proxy to authorize
the voting of your shares as
indicated. Where shares are
registered with joint owners
all joint owners should sign.
Persons signing as executors,
administrators, trustees, etc.
should so indicate.
______________________________
Signature
_______________________________
Signature
_______________________________
Date
