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 Sec. 240.14a-11(c) or Sec. 240.14a-12
Schroder Asian Growth Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3). [ ] Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
SCHRODER ASIAN GROWTH FUND, INC.
787 Seventh Avenue
New York, New York 10019
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996
TO THE STOCKHOLDERS OF
SCHRODER ASIAN GROWTH FUND, INC.:
Notice is hereby given that the 1996 Annual Meeting of
Stockholders (the "Meeting") of Schroder Asian Growth Fund, Inc. (the "Fund")
will be held at 787 Seventh Avenue, Fourth Floor Auditorium, New York, New York
10019 on Wednesday, May 15, 1996, at 2:30 p.m. for the following purposes:
(1) To elect two Directors of the Fund to hold office for a
three-year term or until their respective successors are elected and
qualify;
(2) To consider and act upon a proposal to ratify the selection
of Coopers & Lybrand L.L.P. as independent accountants of the Fund for
its fiscal year ending October 31, 1996;
(3) To approve an amendment to the investment advisory agreement
between the Fund and Schroder Capital Management International Inc. in
order to provide for a reduction in the advisory fee once the Fund
exceeds $300 million in net assets; and
(4) To transact such other business as may properly come before
the Meeting or any adjournment thereof.
The Board of Directors of the Fund has fixed the close of
business on March 21, 1996, as the record date for the determination of
stockholders entitled to notice of and to vote at the Meeting and at any
adjournment thereof.
You are cordially invited to attend the Meeting. Stockholders who
do not expect to attend the Meeting in person are requested to complete, date
and sign the enclosed form of proxy and return it promptly in the envelope
provided for that purpose. Your vote is important. The enclosed proxy is being
solicited on behalf of the Board of Directors of the Fund.
By Order of the Board of Directors
Margaret H. Douglas-Hamilton
Secretary
<PAGE>
New York, New York
Dated: March , 1996
<PAGE>
[This page intentionally left blank.]
<PAGE>
PROXY STATEMENT
SCHRODER ASIAN GROWTH FUND, INC.
787 Seventh Avenue
New York, New York 10019
1996 ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Schroder Asian
Growth Fund, Inc., a Maryland corporation (the "Fund"), to be voted at the 1996
Annual Meeting of Stockholders of the Fund (the "Meeting") to be held at 787
Seventh Avenue, Fourth Floor Auditorium, New York, New York 10019, on Wednesday,
May 15, 1996, at 2:30 p.m. The approximate mailing date of this Proxy Statement
is March ___, 1996.
The Board of Directors of the Fund knows of no business other
than that mentioned in Items 1, 2 and 3 of the Notice of Meeting which will be
presented for consideration at the Meeting. If any other matter is properly
presented, it is the intention of the persons named in the enclosed proxy to
vote in accordance with their best judgment.
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. In the absence of instructions to the contrary,
proxies will be voted as recommended by the Board of Directors. Any proxy may be
revoked at any time prior to the exercise thereof by giving written notice to
the Secretary of the Fund at the Fund's address indicated above, by properly
executing and delivering a later dated proxy, or by voting in person at the
Meeting.
The Board of Directors has fixed the close of business on March
21, 1996, as the record date for the determination of stockholders entitled to
notice of and to vote at the Meeting and at any adjournment thereof.
Stockholders will be entitled to one vote for each share of Common Stock, par
value $0.01 per share ("Common
<PAGE>
Stock"), held on the record date, on each matter submitted to a vote at the
Meeting, with no shares having cumulative voting rights.
As of March 21, 1996, the Fund had outstanding 19,607,100 shares
of Common Stock. To the knowledge of the management of the Fund, no person owned
beneficially more than 5% of the Fund's outstanding shares of Common Stock at
such date.
ELECTION OF DIRECTORS
In the absence of contrary instructions, the persons named on the
enclosed proxy card intend to vote all proxies in favor of the election of the
two nominees listed below as Class I directors of the Fund to serve until the
1999 Annual Meeting of Stockholders or until their successors are elected and
qualify. The Board of Directors of the Fund knows of no reason why any of these
nominees will be unable to serve, but in any event of such unavailability, the
proxies received will be voted for such substitute nominees as the Board of
Directors may recommend.
The Board of Directors is divided into three classes. At the 1995
Annual Meeting of Stockholders, Peter E. Guernsey and I. Peter Sedgwick were
elected Class I directors for terms expiring at the 1996 Annual Meeting of
Stockholders; John I. Howell and David M. Salisbury, Class II directors, for
terms expiring at the 1997 Annual Meeting of Stockholders; and Laura E.
Luckyn-Malone, William L. Means, and Madelon DeVoe Talley, Class III directors,
for terms expiring at the 1998 Annual Meeting of Stockholders, or, in each case,
until their successors are elected and qualify. Mr. Guernsey and Mr. Sedgwick
have been nominated to continue to serve as Class I directors until the 1999
Annual Meeting of Stockholders.
At each subsequent Annual Meeting of Stockholders, the directors
chosen to succeed those whose terms are expiring shall be identified as being of
the same class as the directors whom they succeed and shall be elected for a
term expiring at the time of the third succeeding Annual Meeting of Stockholders
subsequent to their election, or thereafter in each case until their successors
are elected and qualify.
The election of each person nominated as a director requires the
affirmative vote of a plurality of all the votes cast at a meeting of the
stockholders duly called and at which a quorum is present. Each share of Common
Stock may be voted for as many individuals as there are directors to be elected.
Abstentions and broker non-votes will be counted toward the presence of a quorum
but will not count
2
<PAGE>
as votes cast and therefore will have no effect on the result of the vote. The
Board of Directors recommends that stockholders vote FOR each nominee.
The following table sets forth certain information concerning the
directors of the Fund who have been nominated to continue to serve as Class I
directors of the Fund. Unless otherwise noted, each of the nominees has engaged
in the principal occupations listed in the following table for more than five
years, but not necessarily in the same capacity.
Class I Directors
Nominees to serve until the 1999 Annual Meeting of Stockholders:
<TABLE>
<CAPTION>
Director of the Shares of
Fund (which Common Stock
commenced of the Fund
Principal Occupations operations Beneficially
Name, Age and Address During Past Five Years and 12/31/93) Owned at
of Nominee Public Directorships Since March 21, 1996
-------------------- ------------------------------ --------------- --------------
<S> <C> <C> <C>
Peter E. Guernsey, 74 Since 1982, Trustee, Schroder Capital Funds and Schroder 11/16/93 None
45 East 72nd St. Capital Funds (Delaware) (the successor entities of Schroder
Apartment 10A Capital Funds, Inc.); since 1986, insurance consultant; prior
N.Y., NY 10021 thereto, Senior Vice President, Marsh & McLennan, Inc.
(2) (insurance brokers).
I. Peter Sedgwick*, 60 Chairman of the Fund; since 1995, Vice Chairman, 11/5/93 1,680
(1), (4) Schroders plc; 1982-1995, Chairman and Director, Schroder
Capital Management International Inc.; 1989-1995,
Chairman and Director, Schroder Capital Management
International Ltd.; Director, Schroder Investment
Management Ltd. (Chief Executive 1985-1994);
Director, The Equitable Life Assurance Society,
Wertheim Schroder & Co. Inc. (broker-dealer);
1989-1995, Director, Church, Charity & Local
Authority Fund Managers, Schroder Personal Financial
Management Limited (investment advisers); Director,
various offshore investment funds for which an
affiliate of Schroders plc serves as investment
manager.
</TABLE>
Continuing Directors
The following table sets forth certain information regarding the Class II and
Class III directors, whose terms continue, in the case of the Class II
directors, until the 1997 Annual Meeting of Stockholders and, in the case of the
Class III directors, until the 1998 Annual Meeting of Stockholders.
3
<PAGE>
<TABLE>
Class II
<CAPTION>
Director of the Shares of
Fund (which Common Stock
commenced of the Fund
Principal Occupations operations Beneficially
Name, Age and Address During Past Five Years and 12/31/93) Owned at
of Nominee Public Directorships Since March 21, 1996
-------------------- ------------------------------ --------------- --------------
<S> <C> <C> <C>
John I. Howell, 79 Since 1988, Trustee, Schroder Capital Funds and Schrode 11/16/93 1,000
47 Mayfair Lane Capital Funds (Delaware) (the successor entities of Schroder
Greenwich, CT 06831 Capital Funds, Inc.); Director, American International
(2) Group; Director, American International Life Assurance
Company of New York; private consultant since 1987.
David M. Salisbury*, 44 Vice Chairman of the Fund; Chairman, Chief Executive and 11/5/93 1,650
(1), (4) Director, Schroder Capital Management International Inc. and
Schroder Capital Management International Ltd.;
Director and Joint Chief Executive, Schroder
Investment Management Ltd. (investment adviser);
Chairman, Schroder Wertheim Investment Services
Inc.; Director, Dimensional Fund Advisers Inc.
(investment adviser) and DFA Securities Inc.
(broker-dealer); since 1995, Director, Schroder
Investment Management Europe Ltd.; 1991-1993,
Director, Schroder Korea Fund plc; 1989-1992,
Chairman and Director, Schroder Fund Advisors Inc.;
1984-1991, Director, Schroder Capital Funds, Inc.
</TABLE>
4
<PAGE>
<TABLE>
Class III
<CAPTION>
Director of the Shares of
Fund (which Common Stock
commenced of the Fund
Principal Occupations operations Beneficially
Name, Age and Address During Past Five Years and 12/31/93) Owned at
of Nominee Public Directorships Since March 21, 1996
-------------------- ------------------------------ --------------- --------------
<S> <C> <C> <C>
Laura E. Luckyn-Malone*, 43 President of the Fund; Managing Director and Director, 11/5/93 1,700
(1), (3) Schroder Capital Management International Inc. and Schroder
Capital Management International Ltd. (investment advisers);
Director, Schroder Wertheim Investment Services, Inc.;
President, Schroder Wertheim Investment Services Trust;
since 1995, President and Trustee, Schroder Capital Funds
and Schroder Capital Funds (Delaware) (the successor entities
of Schroder Capital Funds, Inc.); since 1994, President,
Director and Chairman, Schroder Fund Advisors Inc.
(broker-dealer).
William L. Means, 59 1983-1994, Chief Investment Officer, Alaska Permanent 2/10/95 1,000
P.O. Box 20277 Fund Corporation; 1973-1983, Investment Officer, State of
Juneau, AK 99802 Alaska, Department of Revenue, Treasury Division; 1960-
(2) 1973, Security Pacific National Bank.
Madelon DeVoe Talley, 64 Since 1986, Vice Chairman, W.P. Carey & Co. (asset 11/16/93 1,000
876 Park Avenue manager); since 1987, Board Member and Trustee, Smith
N.Y., NY 10028 Barney Equity Funds, Income Funds and Trak Fund (mutual
(2) funds); since 1990, Director, Global Asset Management
Funds, Inc. (mutual fund); since 1993, Director, Alliance
Capital Management L.P. (investment adviser); Director,
Biocraft Laboratories (generic drugs); marketing consultant,
Three Cities Research (venture capital); since 1994, Director,
Laidlaw Covenant Fund (mutual fund); since 1995,
Commissioner, The Port Authority of New York and New
Jersey; 1988-1993, Trustee, New York State Teachers
Retirement System.
<FN>
- ---------------
* "Interested person," as defined by Section 2(a)(19) of the Investment Company Act of 1940, of the Fund.
(1) Director, officer, employee or stockholder of Schroder Capital Management International Inc.
(2) Member of Audit Committee and Nominating Committee of the Board of Directors.
(3) Address: Schroder Capital Management International Inc., 787 Seventh Avenue, New York, New York 10019
(4) Address: Schroder Capital Management International Inc., 33 Gutter Lane, London, England EC2V 8AS
</TABLE>
Committees and Directors' Meetings. The Board of Directors has a
standing Audit Committee and Nominating Committee, each of which consists of the
directors who are not "interested persons" of the Fund (the "Independent
Directors") within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The principal purpose of the Audit Committee is
to
5
<PAGE>
recommend to the Board of Directors the firm of independent accountants to
conduct the Fund's annual audit, as well as to review the scope of the annual
audit conducted by the Fund's independent accountants and the evaluation by such
accountants of the accounting procedures followed by the Fund. The principal
purpose of the Nominating Committee is to recommend proposed nominees to serve
as directors of the Fund.
The Nominating Committee does not presently consider nominees
recommended by stockholders. However, stockholders may nominate persons for
election to the Board of Directors at an annual meeting of the Fund by
delivering proper and timely notice thereof in writing to the Secretary of the
Fund.
During the fiscal year ended October 31, 1995, the Board of
Directors held four meetings. Each then-incumbent director attended at least 75%
of the total number of meetings of the Board of Directors and at least 75% of
the total number of meetings of the committees on which they served. Mr. William
L. Means was elected to the Board of Directors on February 10, 1995 to fill the
vacancy created by the resignation of Mr. Richard M. Furber, who resigned from
the Board of Directors effective January 31, 1995. During the fiscal year ended
October 31, 1995, the Audit Committee held two meetings and the Nominating
Committee held one meeting.
Compensation of Directors. Schroder Capital Management
International Inc. ("SCMI"), the investment adviser to the Fund, pays all
compensation of each director of the Fund who is affiliated with SCMI or any of
its affiliates, including the Fund, except that the Fund bears the out-of-pocket
expenses of such directors to the extent that such expenses relate to attendance
at meetings of the Board of Directors of the Fund or any committees thereof. The
Fund pays each director not affiliated with SCMI an annual fee of $7,500 plus
$500 per meeting attended, together with such director's actual out-of-pocket
expenses relating to attendance at meetings. Such fees and expenses aggregated
$72,121 for the fiscal year ended October 31, 1995.
The following table sets forth, for the periods indicated, the
compensation paid by the Fund to its directors and certain officers and the
aggregate compensation paid by all investment companies managed or advised by
SCMI to the directors and such officers:
6
<PAGE>
<TABLE>
Compensation Table
Fiscal Year Ended October 31, 1995
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits From Fund
Compensation Accrued As Part Complex*
Name From the Fund of Fund Expenses Paid to Directors
------ ------------- ---------------- -----------------
<S> <C> <C> <C>
Richard M. Furber+ $2,875 None $2,875
Peter E. Guernsey $11,500 None $15,500
John I. Howell $11,500 None $15,500
Laura E. Luckyn-Malone None None None
William L. Means+ $8,625 None $8,625
David M. Salisbury None None None
I. Peter Sedgwick None None None
Madelon DeVoe Talley $11,500 None $11,500
<FN>
- ---------------
* In addition to the Fund, the "Fund Complex" includes Schroder Capital Funds
and Schroder Capital Funds (Delaware) (the successor entities of Schroder
Capital Funds, Inc.), and their four series funds, which are the
International Equity Fund, the Schroder U.S. Equity Fund, the Schroder U.S.
Smaller Companies Fund, and the Schroder Emerging Markets Fund Institutional
Portfolio.
+ Mr. Furber resigned from the Board of Directors effective January 31, 1995;
Mr. Means was elected to the Board of Directors on February 10, 1995.
</TABLE>
Executive Officers of the Fund. The following table sets forth
certain information concerning the executive officers of the Fund. Officers of
the Fund are elected and appointed by the Board of Directors of the Fund and
hold office until the next annual meeting of the Board of Directors and until
such officers' successors are elected and qualify.
7
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock of the Fund
Name, Age and Office Principal Occupations Officer Beneficially Owned
With the Fund During Past Five Years Since at March 21, 1996
------------- ---------------------- ----- -----------------
<S> <C> <C> <C>
Laura E. Luckyn-Malone, 43 Managing Director and Director, Schroder Capital Management 11/7/93 1,700
President and Director International Inc. and Schroder Capital Management
International Ltd. (investment advisers); Director,
Schroder Wertheim Investment Services, Inc.;
President, Schroder Wertheim Investment Services
Trust; since 1995, President and Trustee, Schroder
Capital Funds and Schroder Capital Funds (Delaware)
(the successor entities of Schroder Capital Funds,
Inc.); since 1994, President, Director and
Chairman, Schroder Fund Advisors Inc.
(broker-dealer).
Mark J. Smith, 34 First Vice President and Director, SCMI and Schroder Capital 11/7/93 None
Vice President Management International Ltd.; Vice President and Director,
Schroder Fund Advisors Inc.; Trustee, Schroder Capital Funds
and Schroder Capital Funds (Delaware) (the successor entities
of Schroder Capital Funds, Inc.).
Robert Jackowitz, 29 Comptroller and Vice President, SCMI; Vice President and 11/7/93 None
Treasurer Assistant Treasurer, Schroders Incorporated; Treasurer,
Schroder Capital Funds and Schroder Capital Funds
(Delaware) (the successor entities of Schroder
Capital Funds, Inc.); Treasurer, Schroder Fund
Advisors Inc.
Margaret H. Secretary, First Vice President and General Counsel, Schroders 11/7/93 185
Douglas-Hamilton, 54 Incorporated; Secretary, SCMI, Schroder Fund Advisors Inc.,
Secretary Schroder Capital Funds and Schroder Capital Funds (Delaware)
(the successor entities of Schroder Capital Funds, Inc.),
Schroder Structured Investments Inc., and Schroder Venture
Managers Inc.
Heather F. Crighton, 29 Vice President, SCMI and Schroder Capital Management 6/23/94 None
Vice President International Ltd.; 1988-1992: Portfolio Manager, Mercantile
and General Reinsurance Co.
</TABLE>
At March 21, 1996, the directors and officers of the Fund as a
group (11 persons) owned an aggregate of 8,215 shares, less than 1% of the
outstanding shares of Common Stock of the Fund.
SELECTION OF INDEPENDENT ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of
Directors of the Fund and by separate action a majority of the Independent
Directors have unanimously selected the firm of Coopers & Lybrand L.L.P.
("Coopers &
8
<PAGE>
Lybrand") as independent accountants to audit the financial statements of the
Fund for the fiscal year ending October 31, 1996. Such selection is subject to
ratification or rejection by the stockholders of the Fund. Unless a contrary
specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of Coopers & Lybrand.
Representatives of Coopers & Lybrand are expected to be present
at the Meeting and will have the opportunity to make a statement if they desire
to do so. Such representatives will be available to respond to appropriate
questions.
The Fund knows of no direct or indirect financial interest of
Coopers & Lybrand in the Fund. Coopers & Lybrand also serves as the independent
accountants for other funds advised by SCMI. The Board of Directors of the Fund
considered the fact that Coopers & Lybrand has been retained as the independent
accountants for these other entities in its evaluation of the ability of Coopers
& Lybrand to also function in that capacity for the Fund.
Ratification of the selection of independent accountants requires
the affirmative vote of a majority of all the votes cast at a meeting of the
stockholders duly called and at which a quorum is present. Abstentions and
broker non-votes will be counted toward the presence of a quorum but will not
count as votes cast and therefore will have no effect on the result of the vote.
The Board of Directors recommends that stockholders vote FOR ratification of the
selection of Coopers & Lybrand as independent accountants.
APPROVAL OF AMENDMENT TO
INVESTMENT ADVISORY AGREEMENT
SCMI serves as investment adviser to the Fund pursuant to an
Investment Advisory Agreement, dated as of December 21, 1993 (the "Present
Agreement"). The Board of Directors has approved an amendment to the fee
provisions of the Present Agreement, proposed by SCMI, in order to provide for a
reduction in the advisory fee once the Fund exceeds $300 million in net assets.
The Board of Directors of the Fund recommends that stockholders vote FOR the
approval of the proposed amendment to the Present Agreement (as so amended, the
"Amended Agreement"). The Amended Agreement, marked to show changes from the
Present Agreement, is attached to this Proxy Statement as Exhibit A.
At a meeting held on March 15, 1996, the Directors of the Fund,
and, separately, the Independent Directors, approved the terms of the Amended
Agreement and its adoption, subject to approval by stockholders. The Board of
Directors voted
9
<PAGE>
to approve submission of the Amended Agreement to the stockholders of the Fund
for approval at the 1996 Annual Meeting of Stockholders and to recommend that
the stockholders vote for the approval of the Amended Agreement.
The Amended Agreement provides that the Fund shall pay to SCMI a
fee at an annual rate of (i) 1.00% of the Fund's average weekly net assets
(i.e., the average weekly value of the total assets of the Fund minus the sum of
liabilities of the Fund) up to and including $300 million; and (ii) 0.85% of the
Fund's average weekly net assets in excess of $300 million. The Present
Agreement provides for a fee of 1.0% per annum of the value of all the Fund's
average weekly assets. Under either Agreement, the net assets for each weekly
period are determined by averaging the net assets at the last business day of
such weekly period with the net assets at the last business day of the
immediately preceding weekly period. Payment is made in arrears to SCMI as of
the end of each calendar month.
In the event the Fund's average weekly net assets grew beyond
$300 million, approval of the Amended Agreement would have the effect of
reducing the fees payable by the Fund to SCMI in respect of such excess assets.
For example, assuming an increase in the Fund's portfolio to an average weekly
net asset value of $320 million, the Present Agreement would require an annual
fee of $3.2 million (1.0% of the full amount). Under the Amended Agreement, a
fee of $3.17 million (1.0% of net assets up to $300 million plus 0.85% of the
$20 million in additional net assets) would be required, a total reduction of
$30,000. As of March 15, 1996, the average weekly net assets of the Fund were
$259 million. There can be no guarantee that the net assets of the Fund will
exceed $300 million. If they do not do so, the Fund will not benefit from the
amendment to the fee provisions, because the advisory fee will not change for
the Fund's net assets up to and including $300 million.
For the year ended October 31, 1995, the Fund paid advisory fees
totaling $2,491,352.00 to SCMI pursuant to the Present Agreement. During such
period, the average weekly net assets of the Fund varied but at no time exceeded
$269 million. Accordingly, had the Amended Agreement been in effect for such
period, the Fund would have paid the same amount of fees to SCMI.
The directors determined that a reduction in the fees payable to
SCMI would be appropriate in respect of average weekly net assets of the Fund in
excess of $300 million, based principally on their consideration of the
likelihood that the net assets of the Fund could be expected to grow to beyond
$300 million in the future. In this regard, the directors considered, among
other things, the current net asset value of the Fund; the prospects for
increases in the value of the Fund's current investments in light of
developments in both the United States and in Asia; and the investment
strategies formulated for the Fund by SCMI. The directors also reviewed
10
<PAGE>
comparative fee and expense data with respect to other closed-end funds. In
addition, the directors took into account that Princeton Administrators, L.P.
(the "Administrator"), the Fund's administrator, had undertaken to reduce its
fee in proportion to any reduction in the advisory fee payable to SCMI. For a
description of the expected reduction in the Administrator's fee, please see
"Additional Information," below.
The directors also considered the possibility that the net assets
of the Fund could be increased through a rights offering, noting that a
Registration Statement on Form N-2 with respect to a proposed rights offering
had been filed with the U.S. Securities and Exchange Commission on February 22,
1996. However, at the Meeting of the Board of Directors on March 15, 1996, at
which the Amended Agreement was approved, the directors, after considering,
among other things, (i) the present volatility in the Asian markets as well as
in the United States and (ii) recent changes in the discount between the market
price for shares of the Fund's Common Stock and the Fund's net asset value,
determined to defer consideration of the proposed rights offering. No date for
such consideration was set. There can be no guarantee that the directors would
approve any such offering or transaction and accordingly no guarantee that the
Fund will enter into any such offering or transaction.
In addition, the directors took into account the fact that the
Amended Agreement would not affect the fees paid to SCMI based on the average
weekly net assets of the Fund as of March 15, 1996, and that it cannot be
predicted if or when the net assets of the Fund will exceed $300 million.
However, the directors concluded that it would be in the best interest of the
Fund and its stockholders to seek approval of the Amended Agreement at the 1996
Annual Meeting of Stockholders.
The directors also considered that the Amended Agreement and the
Present Agreement are substantially identical, other than with respect to the
fees to be charged. In this regard, the directors took into account the prior
review and approval of the Present Agreement.
Each quarter, the directors are provided with information reports
regarding the Fund relevant to their consideration of the Fund's advisory
agreement. These materials have three components. First, financial and
investment information provided includes summaries of the cost, value and
distribution of assets held by the Fund, valuations of the Fund's component
assets, financial statements for the Fund, descriptions of changes in individual
Fund investments over time, the amount of brokerage commissions paid to
individual brokers, descriptions of the sector diversification of the Fund's
investments and security-by-security analysis of the sector weighting of the
Fund's investments. Second, the directors are provided with
11
<PAGE>
materials pertaining to the performance of the Fund, including the
premium/discount history of the price of shares of Common Stock as against the
net asset value of such shares, as well as comparisons of Fund performance to
appropriate indexes and to other comparable funds. Third, the directors are
provided with an investment review that, among other things, describes the
investment objectives of the Fund; compares the relative performance of
different Asian stock markets; sets forth the Fund's country weightings for its
investments, the market return from its investments in each country, and the
market price earnings ratios for each country; and lists the ten largest
holdings in the Fund's portfolio. The materials may also include SCMI memoranda
on the investment outlook in various countries in which the Fund may invest.
On November 21, 1994, the Board of Directors voted to approve
submission of the Present Agreement to the stockholders of the Fund for approval
at the Annual Meeting of Stockholders to be held on May 11, 1995, and to
recommend that the stockholders vote for the approval of the Present Agreement.
At the Annual Meeting of Stockholders held on May 11, 1995, the stockholders
voted to approve the Present Agreement. Thereafter, on November 30, 1995, the
Board of Directors and, separately, the Independent Directors, voted to continue
and approve the Present Agreement.
In addition to the information described above, matters
considered by the Board of Directors and the Independent Directors in connection
with their approval of the Present Agreement on November 30, 1995 included the
following: (i) the quality of the investment management services provided by
SCMI, as well as the nature of SCMI's research and decision-making processes;
(ii) information concerning SCMI's resources, areas of expertise, and the
qualifications of SCMI personnel; (iii) the investment performance of the Fund,
including comparisons to similar funds and appropriate market indices; (iv) the
profits realized by SCMI on the operation of the Fund; (v) consolidated
financial statements for SCMI and its subsidiary; (vi) the cost of services
performed by SCMI and the methodology and assumptions utilized by SCMI in
assessing such costs; and (vii) a comparison of the Fund's expense ratio to that
of other funds.
The directors also took into account the terms of the Present
Agreement and the services provided by SCMI, fee data and related matters,
including comparisons of advisory and administrative fees charged to other
funds, the Fund's policies with respect to portfolio transactions and brokerage,
and the possibility of recapture of commissions of portfolio transactions. The
directors noted that the Fund has no understanding or arrangement to direct any
specific portion of its brokerage to brokerage firms affiliated with SCMI, and
that the Fund will not direct brokerage to any of such firms in recognition of
research services. Although SCMI may obtain
12
<PAGE>
certain benefits from research services from brokers, in light of the markets in
which the Fund invests, such benefits are not expected to be significant. For
the year ended October 31, 1995, the Fund paid total brokerage commissions of
$1,731,825.07. Of that amount, no commissions were paid to brokerage firms
affiliated with SCMI, and $161,313.20, or 9.5%, was paid to Merrill Lynch,
Pierce, Fenner & Smith, Inc., an affiliate of Merrill Lynch & Co., Inc., the
parent of both the Administrator and Middlesex Administrators L.P., the former
administrator to the Fund.
The directors also reviewed the services performed by the
Administrator and SCMI in respect of administration of the Fund and
communications with the Fund's stockholders.
Apart from the fee arrangements described above, the provisions
of the Present Agreement and the Amended Agreement are the same. SCMI manages
the Fund's assets in accordance with the Fund's stated investment objective,
policies and restrictions and subject to the supervision of the Fund's Board of
Directors. SCMI makes investment decisions on behalf of the Fund, including the
selection of, and placement of orders with, brokers, dealers and banks to
execute portfolio transactions on behalf of the Fund. SCMI also provides certain
other services, reports and advice to the Fund in connection with its
investments. SCMI bears all of the expenses necessary to perform its obligations
under the Agreements. SCMI also pays the salaries, fees and expenses of such of
the Fund's officers and employees, and the fees and expenses of such of the
Fund's directors as are directors, officers or employees of SCMI. Otherwise, the
Fund pays all of its expenses.
In the event the operating expenses of the Fund, including
amounts payable to SCMI, for any fiscal year of the Fund exceed the expense
limitations applicable to the Fund imposed by applicable state securities laws
or regulations thereunder, SCMI will reduce its advisory fee by the extent of
such excess and, if required pursuant to any such laws or regulations, SCMI will
reimburse the Fund in the amount of such excess. During the fiscal year ended on
October 31, 1995, the Fund paid to SCMI aggregate investment advisory fees of
$2,491,352.00. In addition, the Fund accrued $27,900 in out-of-pocket expenses
to be reimbursed to SCMI pursuant to the Present Agreement.
The Agreements provide that SCMI shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution and management of the
Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of SCMI's
obligations and duties under the Agreements. No exculpatory language in the
Agreements in any way limits the causes of action and remedies which may,
notwithstanding such language, be available to the Fund either
13
<PAGE>
under common law fiduciary principles or statutory law principles applicable to
fiduciary relationships or under the federal securities laws.
If approved by the stockholders, the Amended Agreement will
become effective on the day following such approval and will continue in effect
until the second anniversary of such date. If the Amended Agreement is not
approved by the stockholders, the Present Agreement will continue in effect
until December 21, 1996. If an Agreement is not terminated prior to its
expiration date, it will continue in effect for successive periods of twelve
months thereafter, provided that each continuance is specifically approved
annually by a vote of a majority of the Independent Directors, cast in person at
a meeting called for the purpose of voting on such approval, and by a majority
vote either of the Fund's Board of Directors or of the Fund's outstanding voting
securities.
An Agreement may be terminated at any time, without payment of
any penalty, by the Fund either by the vote of the Board of Directors or by the
vote of a majority of the outstanding voting securities of the Fund on 60 days'
written notice to SCMI, and by SCMI on 60 days' written notice to the Fund. An
Agreement will terminate automatically in the event of its assignment, as
defined by the Investment Company Act, by either party.
Required Vote
Approval of the Amended Agreement requires the affirmative vote,
at a meeting of the stockholders duly called and at which a quorum is present,
of a majority of the Fund's outstanding voting securities, which for purposes of
the approval of the Amended Agreement means the affirmative votes of (1) the
holders of more than 50% of the outstanding shares of Common Stock of the Fund
or (2) the holders of 67% or more of the shares of Common Stock present if more
than 50% of the outstanding shares of Common Stock are present at the meeting in
person or by proxy, whichever is the less. Abstentions and broker non-votes have
the effect of votes against the approval of the Amended Agreement. The Board of
Directors recommends that stockholders vote FOR the approval of the Amended
Agreement.
SCMI
SCMI, an investment adviser registered under the Investment
Advisers Act of 1940, as amended, was established in 1980 to provide
international investment advice to U.S. clients from its New York and London,
England offices. Together with its U.K. affiliate, Schroder Capital Management
International Ltd., SCMI had over $15.9 billion in assets under management at
December 31, 1995, of which
14
<PAGE>
approximately $6 billion was invested in the Asian region. SCMI is a
wholly-owned indirect subsidiary of Schroders Public Limited Company ("Schroders
plc"), the London Stock Exchange-listed holding company of an investment banking
and investment management group of companies that dates its origins to 1804. The
Schroder group of companies has investment management operations located in 18
countries around the world, including 10 in Asia. At December 31, 1995, these
companies had over $100 billion in assets under management for a wide range of
investment companies and institutional clients in many nations.
SCMI has access to an extensive network of research offices, many
long established, in Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Singapore,
Shanghai, Sydney, Seoul, Taipei, and Tokyo. Each year, these offices research
and screen for investment potential more than 1,850 companies in Asia. Of those
companies, the investment professionals further develop extensive management
contacts, including on-site visits, with over 1,000 companies.
SCMI advises individuals, trusts, charitable organizations,
banks, corporations, funds and pension plans. SCMI offers investment counseling
services on both a discretionary and advisory basis. Certain information
regarding the directors and principal executive officer of SCMI is set forth
below:
15
<PAGE>
Name Principal Occupation
---- --------------------
John S. Ager (1) Senior Vice President and Director, SCMI
Robert G. Davy (1) First Vice President and Director, SCMI
Richard R. Foulkes (1) Deputy Chairman and Director, SCMI
David Gibson (2) Senior Vice President and Director, SCMI
C. John Govett (1) Director, SCMI; Chairman, Schroder Investment
Management Limited
Sharon L. Haugh (2) Senior Vice President and Director, SCMI
Jane Lucas (2) Senior Vice President and Director, SCMI
Laura E. Luckyn-Malone (2) Managing Director and Director, SCMI; President
and Director of the Fund
Gavin D.L. Ralston (1) Senior Vice President and Director, SCMI
David M. Salisbury* (1) Chief Executive and Director, SCMI and Schroder
Capital Management International Ltd.; Director and
Joint Chief Executive, Schroder Investment
Management Ltd.; Vice Chairman and Director of
the Fund
I. Peter Sedgwick (1) Vice Chairman, Schroders plc; Chairman and Director
of the Fund
Mark J. Smith (1) First Vice President and Director, SCMI; Vice
President of the Fund
John A. Troiano (1) Managing Director and Director, SCMI
------------
* Principal executive officer.
(1) Address: Schroder Capital Management International Inc.,
33 Gutter Lane, London, England EC2V 8AS
(2) Address: Schroder Capital Management International Inc.,
787 Seventh Avenue, New York, New York 10019
SCMI is a New York corporation. Schroders Incorporated owns 100%
of the voting securities of SCMI. Schroder International Holdings Limited owns
100% of the voting securities of Schroders Incorporated. Schroders plc owns 100%
of the voting securities of Schroder International Holdings Limited. The voting
securities of Schroders plc are publicly traded on the London Stock Exchange.
Certain of such voting securities are held by the following persons (the
"Trustees"):
16
<PAGE>
20.5% by Vincitas Limited, 13.2% by Veritas Limited, and 5.9% by One Forty-Five
Limited. To the knowledge of the Fund, no other person holds 5% or more of the
voting securities of Schroders plc. The Trustees hold interests as trustees of
certain discretionary trusts created by members of the Schroder family. None of
the persons for whom such voting securities are held in trust has an absolute
interest in any of such securities, since such securities are held in fully
discretionary trusts. No individual or organization beneficially owns a 5% or
greater interest in any of such trusts, nor does any person or entity other than
the Trustees themselves possess direct or indirect 5% control over any of the
Trustees.
The address of SCMI and Schroders Incorporated is 787 Seventh
Avenue, New York, New York 10019. The address of each of Schroder International
Holdings Limited and Schroders plc is 120 Cheapside, London, England EC2V 6DS.
The address of Vincitas Limited, Veritas Limited and One Forty-Five Limited is
22 Church Street, Hamilton, Bermuda HM 11.
ADDITIONAL INFORMATION
The presence at the Meeting, in person or by proxy, of holders of
shares of Common Stock entitled to cast a majority of the votes entitled to be
cast at the Meeting constitutes a quorum for the transaction of business. Shares
as to which a valid proxy is signed and returned, including any proxies marked
"Withhold" as to the election of directors or "Abstain" as to any other matter,
and including any broker non-votes, will be counted as present for purposes of
determining the existence of a quorum at the Meeting. "Broker non-votes" with
respect to shares of Common Stock are those shares for which a valid proxy has
been returned by a broker-dealer firm, as record holder, without casting a vote
on non-routine matters for which such firm is not authorized to vote.
In the absence of a quorum, the holders of a majority of shares
entitled to vote at the Meeting and present in person or by proxy, or, if no
stockholder entitled to vote is present in person or by proxy, any officer
present entitled to preside or act as secretary of the Meeting, may adjourn the
Meeting sine die or from time to time without further notice to a date not more
than 120 days after March 21, 1996. Any business that might have been transacted
at the Meeting may be transacted at any such adjourned meeting at which a quorum
is present.
The Fund expects that broker-dealer firms holding shares of the
Fund in "street name" for the benefit of their customers and clients will
request the instructions of such customers and clients on how to vote their
shares on each proposal before the Meeting. The Fund understands that, under the
rules of the New
17
<PAGE>
York Stock Exchange, such broker-dealers may, without instructions from their
customers and clients, grant authority to the proxies designated by the Fund to
vote on the items to be considered at the Meeting if no instructions have been
received prior to the date specified in the broker-dealer firm's request for
voting instructions. Certain broker-dealer firms may exercise discretion over
shares held in their name for which no instructions are received by voting such
shares in the same proportion as they have voted shares for which they have
received instructions.
While the Fund is a Maryland corporation, certain of its
directors and officers are non-residents of the United States and have all, or a
substantial part, of their assets located outside of the United States. As a
result, it may be difficult for U.S. investors to effect service of process upon
such directors or officers within the United States or effectively to enforce
judgments of courts of the United States predicated upon civil liabilities of
such directors or officers under the federal securities laws of the United
States. In addition, such civil remedies as are afforded by the federal
securities laws of the United States may not be enforceable in England, the
residence of the non-U.S. resident directors and officers of the Fund.
The Fund's administrator is Princeton Administrators, L.P. (the
"Administrator"), 800 Scudders Mill Road, Plainsboro, New Jersey 08536. The
Fund's administrator was formerly Middlesex Administrators L.P. ("Middlesex").
The Administrator, a wholly-owned subsidiary of Merrill Lynch & Co., Inc.,
merged with Middlesex, another wholly-owned subsidiary of Merrill Lynch, on or
about January 26, 1996. The Administrator and the Fund have all of the rights
and obligations of Middlesex and the Fund, respectively, under the
Administration Agreement made as of December 21, 1993, by and between the Fund
and Middlesex. Contingent upon the approval of the Amended Agreement between the
Fund and SCMI, the Fund and the Administrator will amend the Administration
Agreement to reduce the administrative fees payable to the Administrator in
proportion to the reduction in the advisory fee payable to SCMI. Pursuant to
such amendment, the fees paid under the Administration Agreement, which are
presently paid monthly at the greater of (a) $150,000 per annum ($12,500 per
month) or (b) an annual rate of 0.25% of the average weekly net assets of the
Fund, would be as follows: the greater of (a) $150,000 per annum or (b) an
annual rate of (i) 0.25% of average weekly net assets up to and including $300
million and (ii) 0.22% of average weekly net assets in excess of $300 million.
The Fund's custodian is The Chase Manhattan Bank, N.A., Global
Custody Division, Chase MetroTech Center, Brooklyn, New York 11245. The Fund's
transfer agent is State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110.
18
<PAGE>
The expense of preparation, printing and mailing the enclosed
form of proxy and accompanying Notice of Meeting and Proxy Statement will be
borne by the Fund. The Fund will reimburse banks, brokers and others for their
reasonable expenses in forwarding proxy solicitation material to the beneficial
owners of the shares of the Fund. In addition to the solicitation of proxies by
mail, proxies may be solicited in person or by telephone. The Fund has retained
at its expense Tritech Services to perform certain proxy solicitation services
in respect of the Meeting, for a fee of $2,500, together with reimbursement of
such firm's expenses. The address of Tritech Services is Four Corporate Place,
Corporate Park 287, Piscataway, New Jersey 08854.
Pursuant to Section 30(f) of the Investment Company Act, officers
and directors of the Fund and officers and directors of SCMI are required to
file with the SEC reports under Section 16 of the Securities Exchange Act of
1934, as amended, with respect to their beneficial ownership of shares of Common
Stock of the Fund. Based solely upon a review of copies of such reports received
by it, for its fiscal year ended October 31, 1995, the Fund states that a late
filing of a Form 3 initial statement of beneficial ownership was made with
respect to the following persons, each of whom, to the knowledge of the Fund,
has made such filing and timely made all other required reports with respect to
their beneficial ownership of shares of the Fund: Clement J. Govett, a director
of SCMI, Jane P. Lucas, Senior Vice President and a director of SCMI, William
Means, a director of the Fund, Robert Jackowitz, Treasurer of the Fund, and
Catherine A. Mazza, Vice President and Assistant Secretary of the Fund. None of
these persons held any shares of Common Stock at the time of their respective
filings on Form 3. The Fund believes that for such fiscal year all other
required filings were timely made.
The Fund sends annual and quarterly reports to stockholders. THE
FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT AND
SEMI-ANNUAL REPORT SUCCEEDING SUCH ANNUAL REPORT, IF ANY, TO STOCKHOLDERS UPON
REQUEST TO THE FUND'S ADMINISTRATOR, PRINCETON ADMINISTRATORS, L.P., 800
SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY 08536 (OR CALL 1-800-688-0928).
Proposals of Stockholders
Proposals of stockholders intended to be presented at the next
annual meeting of stockholders of the Fund must be received by the Fund for
inclusion in its proxy statement and form of proxy relating to that meeting by
December 1, 1996.
By Order of the Board of Directors
19
<PAGE>
Margaret H. Douglas-Hamilton
Secretary
New York, New York
Dated: March ___, 1996
20
<PAGE>
Exhibit A
[Marked to show
changes from the
Present Agreement]
INVESTMENT ADVISORY AGREEMENT
Agreement, dated and effective as of _______, 1996, between
Schroder Asian Growth Fund, Inc., a Maryland corporation (herein referred to as
the "Fund") and Schroder Capital Management International Inc., a New York
corporation (herein referred to as the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is a non-diversified closed-end management
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act");
WHEREAS, the Investment Adviser provides investment advice and is
registered with the Securities and Exchange Commission (the "SEC") as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act") and is registered with the United Kingdom Investment Management
Regulatory Organisation ("IMRO");
WHEREAS, the Fund has previously retained the Investment Adviser
to render investment advisory services to or on behalf of the Fund pursuant to
an Investment Advisory Agreement dated and effective as of December 21, 1993
(the "Agreement"); and
WHEREAS, the Fund and the Investment Adviser desire to amend the
Agreement in order to revise the provisions relating to the compensation of the
Investment Adviser;
NOW, THEREFORE, in consideration of the promises and covenants
hereinafter contained, the Fund and the Investment Adviser hereby agree as
follows:
1. Engagement of the Investment Adviser. The Fund hereby employs
the Investment Adviser to act as the investment adviser to the Fund and to
provide the investment advisory services described below, subject to the
supervision of the Board of Directors of the Fund, for the period and on the
terms and conditions set forth in this Agreement. The Investment Adviser hereby
accepts such employment and agrees
A-1
<PAGE>
during such period to render such services and to assume the obligations herein
set forth for the compensation provided for herein. The Investment Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority hereunder
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Fund.
2. Investment Advisory Services. Subject always to the Fund's
Articles of Incorporation, its Bylaws and its registration statement filed on
Form N-2 with the SEC, as such registration statement may be amended from time
to time (the "Registration Statement"), the Investment Adviser shall act as
investment adviser to the Fund and as such shall furnish continuously an
investment program for the Fund consistent with the Fund's investment objective,
policies and restrictions. In the performance of its duties hereunder, the
Investment Adviser shall:
(a) determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the assets of the Fund shall be
held in the various securities and assets in which the Fund invests or in cash;
(b) make decisions for the Fund with respect to foreign currency
matters and foreign exchange contracts, having regard to foreign exchange
controls, if any;
(c) advise the Fund in connection with policy decisions to be
made by its Board of Directors or any committee thereof with respect to its
investments and, as requested, furnish the Fund with research, economic and
statistical data in connection with its investments and investment policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Fund's Board of Directors or the Fund's administrator may
reasonably request;
(e) place orders for the purchase, sale or exchange of portfolio
assets for the Fund's accounts with brokers or dealers selected by the
Investment Adviser; provided, however, that in connection with the placing of
such orders and the selection of such brokers or dealers the Investment Adviser
shall seek to obtain execution and pricing within the policy guidelines
established by the Fund's Board of Directors and set forth in the Registration
Statement of the Fund as in effect from time to time;
(f) provide information in the possession of the Investment
Adviser to the Fund's administrator as the Fund's administrator may request to
maintain and preserve the records required by the Investment Company Act;
A-2
<PAGE>
(g) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as the Investment
Adviser may deem necessary or useful in the discharge of its duties hereunder;
and
(h) from time to time, or at any time requested by the Fund's
Board of Directors, make reports to the Fund concerning its performance of the
foregoing services and furnish advice and recommendations with respect to other
aspects of the business and affairs of the Fund.
3. Allocation of Charges and Expenses.
(a) The Investment Adviser shall pay for maintaining its staff
and personnel necessary to perform its obligations under this Agreement and
shall, at its own expense, maintain the office space, facilities, equipment and
personnel that are reasonably necessary to carry out its obligations hereunder.
In addition, the Investment Adviser shall pay the reasonable salaries, fees and
expenses of such of the Fund's officers and employees (including the Fund's
share of payroll taxes) and any fees and expenses of such of the Fund's
directors as are directors, officers or employees of the Investment Adviser,
provided, however, that the Fund, and not the Investment Adviser, shall bear
out-of-pocket travel expenses of directors and officers of the Fund who are
directors, officers or employees of the Investment Adviser to the extent that
such expenses relate to attendance at meetings of the Board of Directors of the
Fund or any committees thereof.
(b) The Fund assumes and shall pay or cause to be paid fees to
the Investment Adviser and the Fund's administrator and all other expenses of
the Fund including, without limitation: (i) charges and expenses of any
custodian, subcustodian or depositary appointed by the Fund for the safekeeping
of its cash, securities or property and fees and expenses of any transfer agent,
dividend paying agent and registrar for the Fund; (ii) charges and expenses of
accounting and auditing; (iii) expenses and fees associated with registering and
qualifying securities issued by the Fund for sale with the SEC and in various
states and foreign jurisdictions and expenses of preparing share certificates
and other expenses in connection with the issuance, offering or underwriting of
securities issued by the Fund, including stock exchange listing fees and freight
insurance and other charges in connection with the shipment of the Fund's
portfolio securities; (iv) expenses of stationery, preparing, printing and
distributing reports, notices and dividends and other documents to the Fund's
shareholders, including, without limitation, expenses of tender offers for and
repurchases of securities issued by the Fund, in each case, to the extent not
borne by the Fund's administrator; (v) interest on any indebtedness of the Fund;
(vi) governmental fees and taxes of the Fund, including any stock transfer tax
payable on a portfolio security of the Fund; (vii) brokerage commissions and
other expenses
A-3
<PAGE>
incurred in acquiring or disposing of the Fund's portfolio securities; (viii)
costs of directors' and officers' insurance and fidelity bonds; (ix)
compensation and expenses of the directors who are not interested persons of the
Investment Adviser, including out-of-pocket travel expenses; (x) costs and
expenses incidental to holding meetings of the Board of Directors, or any
committees thereof, or meetings of shareholders including out-of-pocket travel
expenses of directors and officers of the Fund who are directors, officers or
employees of the Investment Adviser to the extent that such expenses relate to
attendance at such meetings; (xi) fees for legal, auditing and consulting
services and litigation expenses, including settlement or arbitration costs;
(xii) dues and expenses incurred in connection with membership in investment
company organizations and expenses relating to investor and public relations;
and (xiii) costs, expenses and fees incurred in connection with obtaining,
maintaining, refinancing or repaying indebtedness. It is understood that the
organizational, offering and marketing expenses, including accounting, legal and
printing expenses and registration fees incurred by the Investment Adviser on
behalf of the Fund in connection with the initial public offering of the Fund's
securities will be reimbursed to the Investment Adviser by the Fund within the
limitations set forth in the Prospectus of the Fund contained in the Fund's
Registration Statement.
4. Compensation of the Investment Adviser.
(a) For the services rendered, the equipment and facilities
furnished and expenses assumed by the Investment Adviser, commencing on the date
of effectiveness hereof, the Fund shall pay in arrears to the Investment Adviser
as of the end of each calendar month a fee in U.S. dollars at an annual rate of
(i) 1.00% of the Fund's average weekly net assets (i.e., the average weekly
value of the total assets of the Fund minus the sum of liabilities of the Fund)
up to and including $300 million; and (ii) 0.85% of the Fund's average weekly
net assets in excess of $300 million. For purposes of this calculation, average
weekly net assets is determined at the end of each month on the basis of the
average net assets of the Fund for each week during the month. The net assets
for each weekly period are determined by averaging the net assets at the last
business day of such weekly period with the net assets at the last business day
of the immediately preceding weekly period. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for that part of the month that this Agreement is in
effect shall be subject to a pro rata adjustment based on the number of days
elapsed in the relevant month as a percentage of the total number of days in
such month in order to permit the fee to be calculated in a manner consistent
with the calculation of the fee as set forth above. During any period when the
determination of net asset value is suspended by the Board of Directors of the
Fund, the average net asset value of a share for the last week prior to such
suspension shall for this purpose be deemed to
A-4
<PAGE>
be the average net asset value at the close of each succeeding week until it is
again determined.
(b) Expense Limitations. In the event the operating expenses of
the Fund, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year of the Fund ending on a date on which
this Agreement is in effect, exceed the expense limitations applicable to the
Fund imposed by applicable state securities laws or regulations thereunder, as
such limitations may be raised or lowered from time to time, the Investment
Adviser shall reduce its management fee by the extent of such excess and, if
required pursuant to any such laws or regulations, will reimburse the Fund in
the amount of such excess; provided, however, to the extent permitted by law,
there shall be excluded from such expenses the amount of any interest, taxes,
brokerage commissions and extraordinary expenses (including but not limited to
legal claims and liabilities and litigation costs, including settlement or
arbitration costs, and any indemnification related thereto) paid or payable by
the Fund. Whenever the expenses of the Fund exceed a pro rata portion of the
applicable annual expense limitations, the estimated amount of reimbursement
under such limitations shall be applicable as an offset against the monthly
payment of the management fee due to the Investment Adviser. Should two or more
such expense limitations be applicable as at the end of the last business day of
the month, that expense limitation which results in the largest reduction in the
Investment Adviser's fee shall be applicable.
5. Limitation of Liability of the Investment Adviser.
(a) The Investment Adviser shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in the execution and management of the Fund, except for
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder. As used in this Article 5, the term "Investment Adviser" shall
include any affiliates of the Investment Adviser performing services for the
Fund contemplated hereby and directors, officers and employees of the Investment
Adviser as well as that corporation itself.
(b) The Investment Adviser shall not be liable for any losses
caused by disturbances of its operations by virtue of force majeure, war, riot,
or damage caused by nature or due to other events for which it is not
responsible (e.g., strike, lock-out or losses caused by the imposition of
foreign exchange controls, expropriation of assets or other acts of domestic or
foreign authorities).
(c) The presence of exculpatory language in this Agreement shall
not be deemed by the Fund, the Investment Adviser or any other party appointed
pursuant
A-5
<PAGE>
to this Agreement, including without limitation any custodian, as in any way
limiting causes of action and remedies which may, notwithstanding such language,
be available to the Fund either under common law or statutory law principles
applicable to fiduciary relationships or under the federal securities laws.
6. Other Activities of the Investment Adviser and its
Affiliates.
(a) Nothing herein contained shall prevent the Investment Adviser
or any of its affiliates from engaging in any other business or from acting as
investment adviser or investment manager for any other person or entity, whether
or not having investment policies or portfolios similar to that of the Fund; and
it is specifically understood that officers, directors and employees of the
Investment Adviser and its affiliates may continue to engage in providing
portfolio management services and advice to other investment companies, whether
or not registered, and to other investment advisory clients. When other clients
of the Investment Adviser desire to purchase or sell a security at the same time
such security is purchased or sold for the Fund, such purchases and sales will,
to the extent feasible, be allocated among the Fund and such clients in a manner
believed by the Investment Adviser to be equitable to the Fund and such clients.
(b) The Investment Adviser reserves the right to grant the use of
the name "SCHRODER," or any derivative thereof, to any other investment company
or business enterprise. The Investment Adviser reserves the right to withdraw
from the Fund the use of the name "SCHRODER" and the use of its registered
service mark; at such time of withdrawal of the right to use the name
"SCHRODER," the Investment Adviser agrees that the question of continuing this
Agreement may be submitted to a vote of the Fund's shareholders. In the event of
such withdrawal or the termination of this Agreement, for any reason, the Fund
will, on the written request of the Investment Adviser, take such action as may
be necessary to change its name and eliminate all reference to the word
"SCHRODER" in any form, and will no longer use such registered service mark.
7. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the effective date of this
Agreement first set forth above and from year to year thereafter, but only so
long as such continuance is approved at least annually by (a) the vote of a
majority of the directors of the Fund who are not parties to the Agreement or
interested persons of the Investment Adviser or interested persons of any such
party (other than as directors of the Fund), cast in person at a meeting called
for the purpose of voting on such approval, and (b) the vote of either (i) the
Board of Directors of the Fund or (ii) a majority of the outstanding voting
securities of the Fund. This Agreement may be terminated at any time, without
payment of any penalty, by the Fund either by the
A-6
<PAGE>
vote of Board of Directors of the Fund or by the vote of a majority of the
outstanding voting securities of the Fund on sixty (60) days' written notice to
the Investment Adviser, and by the Investment Adviser on sixty (60) days'
written notice to the Fund. This Agreement shall automatically terminate in the
event of its assignment by either party. In interpreting the provisions of this
Section 7, the definitions contained in Section 2(a) of the Investment Company
Act (particularly the definitions of "assignment," "interested person" and
"voting security") shall be applied.
8. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by the vote of: (a) the Board of Directors, including a majority
of the directors who are not parties to the Agreement or interested persons of
the Investment Adviser or interested persons of any such party (other than as
directors of the Fund), cast in person at a meeting called for the purpose of
voting on such approval and (b) a majority of the outstanding voting securities
of the Fund.
9. Notice. Any notice or other communication required to be given
pursuant to this Agreement shall be in writing or by fax, with hard copy to
follow, and shall be effective upon receipt. Notices and communications shall be
given: (a) to the Fund at c/o Schroder Capital Management International Inc.,
787 Seventh Avenue, 29th Floor, New York, New York l00l9, Attention: Laura E.
Luckyn- Malone and (b) to the Investment Adviser at the same address.
10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the applicable provisions
of the Investment Company Act. To the extent the applicable laws of the State of
New York, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
11. Miscellaneous. 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. This
Agreement may be executed simultaneously 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.
The Investment Adviser confirms that the Fund is a "business
Customer" as defined by IMRO and is being treated with the same standard of care
as an employee benefit plan subject to regulation under the Employment
Retirement Income Security Act of 1974, as amended.
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<PAGE>
The Fund confirms that it has been provided with independent
legal advice on this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
SCHRODER ASIAN GROWTH
FUND, INC.
By:_________________________
Name:
Title:
SCHRODER CAPITAL MANAGEMENT
INTERNATIONAL INC.
By:_________________________
Name:
Title:
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<PAGE>
SCHRODER ASIAN GROWTH FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Annual Meeting of Stockholders - May 15, 1996
The undersigned stockholder of Schroder Asian Growth Fund, Inc., a Maryland
corporation (the "Fund"), hereby appoints Ms. Laura E. Luckyn- Malone and Mr. I.
Peter Sedgwick and each of them, as the proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of
Stockholders of the Fund to be held at 787 Seventh Avenue, Fourth Floor
Auditorium, New York, New York 10019, on May 15, 1996 at 2:30 p.m., Eastern
time, and at any adjournment or postponement thereof and to cast on behalf of
the undersigned all votes that the undersigned is entitled to cast at such
meeting and otherwise to represent the undersigned at the meeting with all
powers possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of notice of the meeting and of the
accompanying Proxy Statement and revokes any proxy previously given with respect
to the meeting.
Unless otherwise specified in the squares provided, the undersigned's vote will
be cast FOR each numbered item listed on the reverse side.
PLEASE VOTE AND SIGN ON THE OTHER SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
1) The election of Directors; [ ] [ ] [ ]
Nominees:
Class I Directors (to serve until the 1999 Annual Meeting of
Stockholders):
Peter E. Guernsey, I. Peter Sedgwick
If you do not wish your shares voted "FOR" a particular nominee, mark
the "For All Except" box and strike a line through that nominee's name.
Your shares voted for the remaining nominee.
For Against Abstain
2) Ratification of the selection of Coopers
& Lybrand L.L.P. as independent
accountants for the fiscal year ending
October 31, 1996;
For Against Abstain
3) Approval of the amended investment [ ] [ ] [ ]
advisory agreement between Schroder
Asian Growth Fund, Inc. and Schroder
Capital Management International Inc.;
4) The proxies are authorized to vote in their discretion on any other business
which may properly come before the meeting or any adjournments thereof.
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Please be sure to sign and date this Proxy. Mark box at right if comments or
Please sign exactly as your name or names address change have been noted on
appear on this Proxy. When signing as the reverse side of this card.
attorney, executor, administrator, trustee [ ]
or guardian, please give your full title as
such.
Date
- -------------------------------------------------------------------
Shareholder sign here Co-owner sign here
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