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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] 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.
- --------------------------------------------------------------------------------
(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):
[ ] $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):
------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[X] 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:
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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
/s/ MARGARET H. DOUGLAS-HAMILTON
Margaret H. Douglas-Hamilton
Secretary
New York, New York
Dated: March 29, 1996
<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 29,
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 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.
1
<PAGE>
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 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.
2
<PAGE>
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
NAME, AGE AND PRINCIPAL OCCUPATIONS OPERATIONS BENEFICIALLY
ADDRESS OF DURING PAST FIVE YEARS AND 12/31/93) OWNED AT
NOMINEE PUBLIC DIRECTORSHIPS SINCE MARCH 21, 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Peter E. Guernsey, Since 1982, Trustee, Schroder Capital 11/16/93 None
74 Funds and Schroder Capital Funds
45 East 72nd St. (Delaware) (the successor entities of
Apartment 10A Schroder Capital Funds, Inc.); since
N.Y., NY 10021 1986, insurance consultant; prior
(2) thereto, Senior Vice President, Marsh
& McLennan, Inc. (insurance brokers).
I. Peter Sedgwick*, Chairman of the Fund; since 1995, Vice 11/5/93 1,680
60 Chairman, Schroders plc; 1982-1995,
(1), (4) Chairman and Director, Schroder
Capital Management International Inc.;
1989-1995, Chairman and Director,
Schroder Capital Management Interna-
tional Ltd.; Director, Schroder
Investment Management Ltd. (Chief
Executive 1985-1994); Director, The
Equitable Life Assurance Society,
Wertheim Schroder & Co. Inc. (bro-
ker-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 affil-
iate of Schroders plc serves as
investment manager.
</TABLE>
3
<PAGE>
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.
CLASS II
<TABLE>
<CAPTION>
DIRECTOR OF
THE SHARES OF
FUND (WHICH COMMON STOCK
COMMENCED OF THE FUND
NAME, AGE AND PRINCIPAL OCCUPATIONS OPERATIONS BENEFICIALLY
ADDRESS OF DURING PAST FIVE YEARS AND 12/31/93) OWNED AT
DIRECTOR PUBLIC DIRECTORSHIPS SINCE MARCH 21, 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John I. Howell, 79 Since 1988, Trustee, Schroder Capital 11/16/93 1,000
47 Mayfair Lane Funds and Schroder Capital Funds
Greenwich, CT 06831 (Delaware) (the successor entities of
(2) Schroder Capital Funds, Inc.);
Director, American International
Group; Director, American
International Life Assurance Company
of New York; private consultant since
1987.
David M. Salisbury*, Vice Chairman of the Fund; Chairman, 11/5/93 1,650
44 Chief Executive and Director, Schroder
(1), (4) 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. (the predecessor
of Schroder Capital Funds and Schroder
Capital Funds (Delaware)).
</TABLE>
4
<PAGE>
CLASS III
<TABLE>
<CAPTION>
DIRECTOR OF
THE SHARES OF
FUND (WHICH COMMON STOCK
COMMENCED OF THE FUND
NAME, AGE AND PRINCIPAL OCCUPATIONS OPERATIONS BENEFICIALLY
ADDRESS OF DURING PAST FIVE YEARS AND 12/31/93) OWNED AT
DIRECTOR PUBLIC DIRECTORSHIPS SINCE MARCH 21, 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Laura E. Luckyn- President of the Fund; Senior Vice 11/5/93 1,700
Malone*, 43 President/Managing Director and
(1), (3) Director, Schroder Capital Management
International Inc. and Schroder
Capital Management International Ltd.;
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, 2/10/95 1,000
P.O. Box 20277 Alaska Permanent Fund Corporation;
Juneau, AK 99802 1973-1983, Investment Officer, State
(2) of Alaska, Department of Revenue,
Treasury Division; 1960-1973, Security
Pacific National Bank.
Madelon DeVoe Since 1986, Vice Chairman, W.P. Carey 11/16/93 1,000
Talley, 64 & Co. (asset manager); since 1987,
876 Park Avenue Board Member and Trustee, Smith Barney
N.Y., NY 10028 Equity Funds, Income Funds and Trak
(2) Fund (mutual 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.
</TABLE>
(Footnotes on following page)
5
<PAGE>
(Footnotes for preceding tables)
- ------------
* "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
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 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.
6
<PAGE>
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:
<TABLE>
COMPENSATION TABLE
Fiscal Year Ended October 31, 1995
<CAPTION>
PENSION OR
AGGREGATE RETIREMENT BENEFITS TOTAL COMPENSATION
COMPENSATION ACCRUED AS PART FROM FUND 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>
7
<PAGE>
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.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
OF THE FUND
NAME, AGE AND BENEFICIALLY
OFFICE WITH THE PRINCIPAL OCCUPATIONS OFFICER OWNED AT
FUND DURING PAST FIVE YEARS SINCE MARCH 21, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Laura E. Luckyn- Senior Vice President/Managing Director 11/7/93 1,700
Malone, 43 and Director, SCMI and Schroder Capital
President and Management International Ltd.; Director,
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 11/7/93 None
Vice President and Schroder Capital 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.); Deputy Group Operations
Director, Schroder Investment Management
Ltd.; Director, Schroder Japanese Warrant
Fund Ltd. and Schroder Investment
Management (Guernsey) Ltd.
Robert Jackowitz, 29 Comptroller and Vice President, SCMI; 11/7/93 None
Treasurer Vice President and 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.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
OF THE FUND
NAME, AGE AND BENEFICIALLY
OFFICE WITH THE PRINCIPAL OCCUPATIONS OFFICER OWNED AT
FUND DURING PAST FIVE YEARS SINCE MARCH 21, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Margaret H. Secretary, First Vice President and 11/7/93 185
Douglas- General Counsel, Schroders Incorporated;
Hamilton, 54 Secretary, SCMI, Schroder Fund Advisors
Secretary Inc., 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, Vice President, SCMI and Schroder Capital 6/23/94 None
29 Management International Ltd.; 1988-1992:
Vice President 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 & 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
9
<PAGE>
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 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 net 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 28, 1996, the average weekly net assets of the Fund were $270 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
10
<PAGE>
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
$2,479,442.00 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 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.
11
<PAGE>
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 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 and, separately, the Independent
Directors voted to continue and approve the Present Agreement. On that date, 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
12
<PAGE>
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 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 $2,479,442.00.
In addition, the Fund accrued $27,900.00 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 under common law fiduciary principles or statutory
law principles applicable to fiduciary relationships or under the federal
securities laws.
13
<PAGE>
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
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.
14
<PAGE>
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:
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 Senior Vice President/Managing Director and Director,
(2) 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) Senior Vice President/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
15
<PAGE>
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"): 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 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 York Stock Exchange, such broker-dealers may, without instructions from
their customers and clients, grant authority to the proxies designated by the
16
<PAGE>
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").
Middlesex, a wholly-owned subsidiary of Merrill Lynch & Co., Inc., merged with
and into the Administrator, another wholly-owned subsidiary of Merrill Lynch &
Co., Inc., effective 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 ($12,500 per
month) 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.
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
17
<PAGE>
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 Securities and Exchange Commission 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
Common Stock 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
/s/ MARGARET H. DOUGLAS-HAMILTON
Margaret H. Douglas-Hamilton
Secretary
New York, New York
Dated: March 29, 1996
18
<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 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.
A-1
<PAGE>
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;
(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
A-2
<PAGE>
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 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.
A-3
<PAGE>
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 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
A-4
<PAGE>
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 Section 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
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.
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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 vote of the 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, 34th 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.
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<PAGE>
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 Employee Retirement Income
Security Act of 1974, as amended.
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>
SCHRODER ASIAN GROWTH FUND, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
PLEASE BE SURE TO SIGN AND DATE THIS PROXY. PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR ON THIS PROXY. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
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.
Mark box at right if comments or
address change have been noted on
the reverse side of this card.
[ ]
Date
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Shareholder sign here Co-owner sign here
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