Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
The Emerging Markets Income Fund Inc
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
|x| No fee required.
|_| 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:
___________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it is determined):
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total fee paid:
___________________________________________________________________________
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
___________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
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THE EMERGING MARKETS INCOME FUND INC
THE EMERGING MARKETS INCOME FUND II INC
THE EMERGING MARKETS FLOATING RATE FUND INC.
GLOBAL PARTNERS INCOME FUND INC.
MUNICIPAL ADVANTAGE FUND INC.
MUNICIPAL PARTNERS FUND INC.
MUNICIPAL PARTNERS FUND II INC.
THE CZECH REPUBLIC FUND, INC.
September 4, 1997
Dear Stockholder:
We are pleased to enclose the notice and proxy statement for the Annual and
Special Meetings of Stockholders (the "Meetings") of each of the above funds
(the "Funds") to be held on October 14, 1997.
As you may know, PIMCO Advisors L.P., its affiliate, Thomson Advisory Group
Inc., Oppenheimer Group, Inc., its subsidiary, Oppenheimer Financial Corp. and
certain related parties have entered into an agreement for PIMCO Advisors L.P.,
Thomson Advisory Group Inc. and its successor (together, the "PIMCO Parties") to
acquire all of the securities of Value Advisors LLC ("Value Advisors"), an
affiliate of Advantage Advisers, Inc. ("Advantage") which will be the transferee
of Advantage's management and advisory agreements with the Funds, and a
controlling interest in Oppenheimer Capital, whose subsidiary, OpCap Advisors,
serves as investment adviser to certain Funds. At the Meetings, stockholders of
each Fund will be asked to approve one or more new management or advisory
agreements, which will be substantially similar to the existing agreements with
such Fund, to be in effect following such acquisition. In addition, stockholders
of The Emerging Markets Income Fund II Inc, The Emerging Markets Floating Rate
Fund Inc., Municipal Partners Fund Inc. and Municipal Partners Fund II Inc. will
be asked to vote on the election of directors and to ratify the selection of
independent accountants.
It is important to keep in mind that the PIMCO Parties are acquiring Value
Advisors and OpCap Advisors, not the Funds. Your Fund shares and the management
or advisory fees charged each Fund will not change as a result of the
acquisition. Moreover, the PIMCO Parties have advised each Fund's Board of
Directors that Value Advisors and OpCap Advisors will continue following the
acquisition to provide the high-quality services to which you've grown
accustomed. The acquisition does not involve Salomon Brothers Asset Management
Inc ("SBAM"), which serves as investment adviser or manager to all of the
Funds except Municipal Advantage Fund Inc. and The Czech Republic Fund, Inc.
However, because Value Advisors will be a party to the current agreements
between SBAM and certain of the Funds at the time of consummation of the
acquisition, stockholders of such Funds are being asked to consider new
agreements with SBAM.
Because the Funds are affected similarly by the acquisition, each Fund's
Board of Directors determined it would be most efficient to prepare a single
combined notice and proxy statement which has been sent to the stockholders of
all of the Funds. Further information relating to each Fund is contained in a
separate
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exhibit, which is an important part of the proxy statement. If you are a
stockholder of more than one Fund, you will receive the combined notice of
meetings, proxy statement and proxy card for each such Fund. Each Fund votes
separately, so please sign and return all of your proxy cards if you are a
stockholder of more than one Fund.
Please note that you are not being asked to vote on every proposal included
in the proxy statement. The enclosed notice of meetings describes which Funds'
stockholders are being asked to vote on each proposal, and the proxy card
provides for voting only with respect to the proposals relating to such Funds.
After careful consideration, each Fund's Board of Directors, including its
independent directors, approved the proposals relating to such Fund and
recommends that its stockholders vote "FOR" each such proposal.
We urge you to review the enclosed materials for all of the details on the
proposals described above. It is very important that you complete and return the
enclosed proxy card(s).
We thought it would be helpful to provide the following questions and
answers regarding the acquisition and the related proposals. They are designed
to help answer questions you may have and help you cast your votes, and are
being provided as a supplement to, not a substitute for, the proxy statement,
which we urge you to carefully review.
Please feel free to call the proxy solicitor, D.F. King & Co., Inc., at
1-800-735-3568 to answer any questions you may have regarding the voting of your
shares. Please do not hesitate to call 1-800-421-4777 with any questions
regarding the acquisition or other matters. If we have not received your proxy
card(s) prior to the date of the Meetings, you may receive a telephone call from
D.F. King & Co., Inc. encouraging you to exercise your right to vote. As always,
we thank you for your confidence and support.
Sincerely,
The Chairmen of the Boards and Presidents of:
THE EMERGING MARKETS INCOME FUND INC
THE EMERGING MARKETS INCOME FUND II INC
THE EMERGING MARKETS FLOATING RATE FUND INC.
GLOBAL PARTNERS INCOME FUND INC.
MUNICIPAL ADVANTAGE FUND INC.
MUNICIPAL PARTNERS FUND INC.
MUNICIPAL PARTNERS FUND II INC.
THE CZECH REPUBLIC FUND, INC.
<PAGE>
QUESTIONS & ANSWERS
Q. WHO IS BEING ACQUIRED IN THE ACQUISITION?
A. PIMCO Advisors L.P., a publicly traded investment management firm, and its
affiliate, Thomson Advisory Group Inc., have agreed for the PIMCO Parties
to acquire all of the securities of Value Advisors, an affiliate of
Advantage which will be the transferee of Advantage's management and
advisory agreements with the Funds, and a controlling interest in
Oppenheimer Capital, whose subsidiary, OpCap Advisors, is investment
adviser to certain Funds. The Funds themselves are not being acquired.
Q. WHY AM I BEING ASKED TO VOTE ON THESE PROPOSALS?
A. Pursuant to the Investment Company Act of 1940, as amended, consummation of
the acquisition will cause the automatic termination of each of the current
management or investment advisory agreements with Advantage and OpCap
Advisors and each of the current investment advisory agreements with SBAM.
Therefore, in order to ensure continuity of management, stockholders are
being asked to approve substantially similar new agreements with Value
Advisors, OpCap Advisors and SBAM.
Q. HOW WILL THE ACQUISITION AFFECT ME AS A FUND STOCKHOLDER?
A. Your Fund shares and the fees charged each Fund will not change as a result
of the acquisition. Moreover, the PIMCO Parties have advised each Fund's
Board that Value Advisors and OpCap Advisors will continue following the
acquisition to provide the high-quality services to which you've grown
accustomed. Consequently, management of each Fund believes that the
acquisition will not adversely affect the operations of the Fund.
Q. HOW DO THE BOARDS RECOMMEND THAT I VOTE?
A. After careful consideration, each Fund's Board of Directors, including its
independent directors, recommends that stockholders vote "FOR" each of the
proposals relating to such Fund on the enclosed proxy card(s).
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. Please feel free to call the proxy solicitor, D.F. King & Co., Inc., at
1-800-735-3568 to answer any questions you may have regarding the voting of
your shares, and please feel free to call 1-800-421-4777 with any questions
regarding the acquisition or other matters.
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PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD(S) IN THE POSTAGE-PAID
ENVELOPE. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
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<PAGE>
THE EMERGING MARKETS INCOME FUND INC
THE EMERGING MARKETS INCOME FUND II INC
THE EMERGING MARKETS FLOATING RATE FUND INC.
GLOBAL PARTNERS INCOME FUND INC.
MUNICIPAL ADVANTAGE FUND INC.
MUNICIPAL PARTNERS FUND INC.
MUNICIPAL PARTNERS FUND II INC.
THE CZECH REPUBLIC FUND, INC.
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NOTICE OF ANNUAL AND SPECIAL MEETINGS OF STOCKHOLDERS
September 4, 1997
To the Stockholders of the above funds:
Notice is hereby given that Annual Meetings of the stockholders of each of
The Emerging Markets Income Fund II Inc, The Emerging Markets Floating Rate Fund
Inc., Municipal Partners Fund Inc. and Municipal Partners Fund II Inc. and
Special Meetings of the stockholders of each of The Emerging Markets Income Fund
Inc, Global Partners Income Fund Inc., Municipal Advantage Fund Inc. and The
Czech Republic Fund, Inc. (each, a "Fund" and, collectively, the "Funds") will
be held on October 14, 1997, at Oppenheimer Tower, 200 Liberty Street, One World
Financial Center, New York, New York on the 40th Floor at the following times:
The Emerging Markets Income Fund Inc: 10:00 a.m.
The Emerging Markets Income Fund II Inc: 10:30 a.m.
The Emerging Markets Floating Rate Fund Inc.: 11:00 a.m.
Global Partners Income Fund Inc.: 11:30 a.m.
Municipal Advantage Fund Inc.: 12:00 p.m.
Municipal Partners Fund Inc.: 12:30 p.m.
Municipal Partners Fund II Inc.: 1:00 p.m.
The Czech Republic Fund, Inc.: 1:30 p.m.
The Annual and Special Meetings (the "Meetings") will be held for the
following purposes:
THE FOLLOWING PROPOSAL RELATES TO EACH FUND:
1. The approval of a new management or advisory agreement between Value
Advisors LLC ("Value Advisors") and the Fund. NO FEE INCREASE IS PROPOSED.
THE FOLLOWING PROPOSAL RELATES TO THE EMERGING MARKETS INCOME FUND II INC, THE
EMERGING MARKETS FLOATING RATE FUND INC., GLOBAL PARTNERS INCOME FUND INC.,
MUNICIPAL PARTNERS FUND INC. AND MUNICIPAL PARTNERS FUND II INC.:
2. The approval of a new investment advisory and administration agreement
among Value Advisors, Salomon Brothers Asset Management Inc and the Fund. NO FEE
INCREASE IS PROPOSED.
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THE FOLLOWING PROPOSAL RELATES TO THE CZECH REPUBLIC FUND, INC. AND MUNICIPAL
ADVANTAGE FUND INC.:
3. The approval of a new investment advisory or investment advisory and
administration agreement, as the case may be, among Value Advisors, OpCap
Advisors and the Fund. NO FEE INCREASE IS PROPOSED.
THE FOLLOWING PROPOSAL RELATES TO THE EMERGING MARKETS INCOME FUND II INC, THE
EMERGING MARKETS FLOATING RATE FUND INC., MUNICIPAL PARTNERS FUND INC. AND
MUNICIPAL PARTNERS FUND II INC.:
4. The election of directors for the Funds, to hold office until their
successors are duly elected and qualified.
THE FOLLOWING PROPOSAL RELATES TO THE EMERGING MARKETS INCOME FUND II INC, THE
EMERGING MARKETS FLOATING RATE FUND INC., MUNICIPAL PARTNERS FUND INC. AND
MUNICIPAL PARTNERS FUND II INC.:
5. The ratification of the selection of Price Waterhouse LLP as the Funds'
independent accountants for the fiscal years ending May 31, 1998, February 28,
1998, December 31, 1997 and June 30, 1998, respectively.
THE FOLLOWING RELATES TO EACH FUND:
To conduct any other business as may properly come before the Meeting or
any adjournment(s) thereof.
The close of business on Monday, August 25, 1997 has been fixed as the
record date for the determination of stockholders who will be entitled to
receive notice of, and to vote at, each of the Meetings and any adjournment(s)
thereof.
By Order of the Boards of Directors,
Noel B. Daugherty,
Secretary of the following Funds:
THE EMERGING MARKETS INCOME FUND INC
THE EMERGING MARKETS INCOME FUND II INC
THE EMERGING MARKETS FLOATING RATE FUND INC.
GLOBAL PARTNERS INCOME FUND INC.
MUNICIPAL PARTNERS FUND INC.
MUNICIPAL PARTNERS FUND II INC.
Robert I. Kleinberg,
Secretary of the following Funds:
MUNICIPAL ADVANTAGE FUND INC.
THE CZECH REPUBLIC FUND, INC.
New York, New York
September 4, 1997
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TO AVOID UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO INDICATE
VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS
MAY BE.
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[This page intentionally left blank]
<PAGE>
THE EMERGING MARKETS INCOME FUND INC
THE EMERGING MARKETS INCOME FUND II INC
THE EMERGING MARKETS FLOATING RATE FUND INC.
GLOBAL PARTNERS INCOME FUND INC.
MUNICIPAL ADVANTAGE FUND INC.
MUNICIPAL PARTNERS FUND INC.
MUNICIPAL PARTNERS FUND II INC.
THE CZECH REPUBLIC FUND, INC.
----------
COMBINED PROXY STATEMENT
MEETINGS OF STOCKHOLDERS
This combined proxy statement is furnished in connection with a
solicitation of proxies by the Board of Directors of each of the above funds
(each, a "Fund" and, collectively, the "Funds"), to be used at meetings of
stockholders (in each case, the "Meeting") of the Funds and any adjournment(s)
thereof. Each Meeting will be held on October 14, 1997, at Oppenheimer Tower,
200 Liberty Street, One World Financial Center, New York, New York on the 40th
Floor at the following times: 10:00 a.m. for The Emerging Markets Income Fund
Inc, 10:30 a.m. for The Emerging Markets Income Fund II Inc, 11:00 a.m. for The
Emerging Markets Floating Rate Fund Inc., 11:30 a.m. for Global Partners Income
Fund Inc., 12:00 p.m. for Municipal Advantage Fund Inc., 12:30 p.m. for
Municipal Partners Fund Inc., 1:00 p.m. for Municipal Partners Fund II Inc. and
1:30 p.m. for The Czech Republic Fund, Inc. This proxy statement and the
accompanying form of proxy are first being mailed to stockholders on or about
September 4, 1997.
The primary purpose of the Meetings is to permit each Fund's stockholders
to consider one or more new management and/or investment advisory agreements to
take effect upon consummation of the acquisition (the "Acquisition")
contemplated by the Amended and Restated Merger Agreement, dated as of July 22,
1997 (the "Amended Merger Agreement"), by and among PIMCO Advisors L.P. ("PIMCO
Advisors"), its affiliate, Thomson Advisory Group Inc. ("TAG"), Oppenheimer
Group, Inc. ("Oppenheimer Group"), its subsidiary, Oppenheimer Financial Corp.
("Opfin" and, collectively with Oppenheimer Group, "Oppenheimer") and certain
related parties. Pursuant to the Amended Merger Agreement, PIMCO Advisors, TAG
and its successor (collectively, the "PIMCO Parties") will acquire all of the
securities of Value Advisors LLC ("Value Advisors"), an affiliate of Advantage
Advisers, Inc. ("Advantage") which will be the transferee of Advantage's
advisory agreement with The Emerging Markets Income Fund Inc and management
agreement with each other Fund, and a controlling interest in Oppenheimer
Capital, whose subsidiary, OpCap Advisors, serves as investment adviser to The
Czech Republic Fund, Inc. and as investment adviser and administrator to
Municipal Advantage Fund Inc. For a discussion of the Acquisition, see "The
Acquisition" under Proposal 1 below. Pursuant to the Investment Company Act of
1940, as amended (the "1940 Act"), consummation of the Acquisition will cause
the automatic termination of each Fund's management or investment advisory
agreements currently in place with Advantage and OpCap Advisors. Therefore, in
order to ensure continuity in the management of the Funds, stockholders of The
Emerging Markets Income Fund Inc are being asked to approve a new advisory
agreement and stockholders of each other Fund are being asked to approve a new
management agreement, in each case with Value Advisors. For the same reason,
stockholders of The Czech Republic Fund, Inc. are being asked to approve a new
investment advisory agreement and stockholders of
<PAGE>
Municipal Advantage Fund Inc. are being asked to approve a new investment
advisory and administration agreement, in each case with Value Advisors and
OpCap Advisors. Moreover, since Value Advisors will be a party to the investment
advisory and administration agreement with each SBAM Fund (as defined on the
following page) and Salomon Brothers Asset Management Inc ("SBAM"), which serves
as investment adviser and administrator to each SBAM Fund, at the time of
consummation of the Acquisition, stockholders of each SBAM Fund are being asked
to approve a new investment advisory and administration agreement with Value
Advisors and SBAM so that SBAM may continue to serve as investment adviser and
administrator to each SBAM Fund. In addition, the Meeting will serve as the
Annual Meeting of Stockholders of The Emerging Markets Income Fund II Inc, The
Emerging Markets Floating Rate Fund Inc., Municipal Partners Fund Inc. and
Municipal Partners Fund II Inc., and such stockholders also are being asked to
vote on the election of directors for the respective Funds and ratify the
selection of the Funds' respective independent accountants.
Stockholders who execute proxies retain the right to revoke them in person
at the relevant Meeting or by written notice received by the Secretary of the
relevant Fund at any time before they are voted. Unrevoked proxies will be voted
in accordance with the specifications thereon and, unless specified to the
contrary, will be voted "FOR" each of the proposals set forth below (each, a
"Proposal" and, collectively, the "Proposals"). The close of business on Monday,
August 25, 1997 has been fixed as the record date (the "Record Date") for the
determination of stockholders of each Fund entitled to notice of, and to vote
at, the relevant Meeting and any adjournment(s) thereof. Each stockholder is
entitled to one vote for each full share (and a fractional vote for each
fractional share) held of record on the Record Date, with no shares having
cumulative voting rights. On the Record Date, each Fund had outstanding the
number of shares indicated in the separate fund exhibit pertaining to the Funds
(the "Fund Exhibit") accompanying as Exhibit A to, and forming an important part
of, this proxy statement. Stockholders of each Fund may vote only on those
Proposals affecting their Fund, and stockholders of each Fund will vote
separately on each such Proposal from stockholders of the other Funds voting on
such Proposal. Except as otherwise noted in Proposal 4 with respect to the
election of directors of Municipal Partners Fund Inc. and Municipal Partners
Fund II Inc., all of the outstanding capital stock of each Fund will vote
together as a single class with respect to each Proposal.
The Proposals are to be voted upon by stockholders of the Funds as follows:
================================================================================
PROPOSALS FUNDS TO WHICH EACH PROPOSAL APPLIES
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1. Approval of a new investment All Funds.
management or advisory
agreement between Value
Advisors and the Fund.
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2. Approval of a new investment The Emerging Markets Income Fund II
advisory and administration Inc, The Emerging Markets Floating
agreement among Value Rate Fund Inc., Global Partners
Advisors, SBAM and the Fund. Income Fund Inc., Municipal
Partners Fund Inc. and Municipal
Partners Fund II Inc.
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3. Approval of a new investment The Czech Republic Fund, Inc. and
advisory or investment Municipal Advantage Fund Inc.
advisory and administration
agreement among Value Advisors,
OpCap Advisors and the Fund.
================================================================================
2
<PAGE>
================================================================================
PROPOSALS FUNDS TO WHICH EACH PROPOSAL APPLIES
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4. Election of directors to the The Emerging Markets Income Fund II
Board of Directors to hold Inc, The Emerging Markets Floating
office until their successors Rate Fund Inc., Municipal Partners
are duly elected and Fund Inc. and Municipal Partners
qualified. Fund II Inc.
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5. Ratification of the selection The Emerging Markets Income Fund II
of Price Waterhouse LLP as the Inc, The Emerging Markets Floating
independent accountants of the Rate Fund Inc., Municipal Partners
Fund. Fund Inc. and Municipal Partners
Fund II Inc.
================================================================================
Abstentions and Broker Non-Votes (reflected by signed but unvoted proxies),
as defined below, do not count as votes cast with respect to any Proposal. With
respect to a Proposal requiring the affirmative vote of a majority of a Fund's
outstanding shares of capital stock, the effect of abstentions and Broker
Non-Votes is the same as a vote against such Proposal. Otherwise, abstentions
and Broker Non-Votes have no effect on the outcome of a Proposal. "Broker
Non-Votes" are shares held in the name of a broker or nominee for which an
executed proxy is received by a Fund, but are not voted on the Proposal because
voting instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power.
In accordance with each Fund's By-Laws, a quorum is constituted by the
presence in person or by proxy of the holders of record of a majority of the
outstanding shares of the Fund entitled to vote at the Meeting. In the event
that a quorum is not present at the Meeting of any Fund, or in the event that a
quorum is present but sufficient votes to approve any of the Proposals to be
acted on at such Meeting are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to a date not more than 120 days
after the Record Date to permit further solicitation of proxies and without
establishing a new Record Date. Any such adjournment will require the
affirmative vote of a majority of those shares present at the relevant Meeting
in person or by proxy. The persons named as proxies will vote those proxies
which they are entitled to vote FOR or AGAINST any such proposal in their
discretion. A stockholder vote may be taken on one or more of the Proposals in
this proxy statement with respect to a Fund prior to any such adjournment if
sufficient votes have been received for approval.
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT TO STOCKHOLDERS AND ITS MOST RECENT SEMI-ANNUAL REPORT TO STOCKHOLDERS,
IF ANY, SUCCEEDING SUCH ANNUAL REPORT, TO ANY STOCKHOLDER UPON REQUEST. REQUESTS
SHOULD BE DIRECTED TO THE SECRETARY OF THE RELEVANT FUND IN WRITING AT ITS
ADDRESS BELOW OR BY CALLING 1-800-421-4777.
The principal executive offices of The Emerging Markets Income Fund II Inc,
The Emerging Markets Floating Rate Fund Inc., Global Partners Income Fund Inc.,
Municipal Partners Fund Inc. and Municipal Partners Fund II Inc. (each sometimes
referred to herein as an "SBAM Fund" and collectively as the "SBAM Funds") and
The Emerging Markets Income Fund Inc are located at 7 World Trade Center, New
York, New York 10048. The principal executive offices of Municipal Advantage
Fund Inc. and The Czech Republic Fund,
3
<PAGE>
Inc. (each sometimes referred to herein as an "OpCap Fund" and collectively as
the "OpCap Funds") are located at Oppenheimer Tower, 200 Liberty Street, One
World Financial Center, New York, New York 10281. Each of the Funds is a
closed-end management investment company.
PROPOSAL 1: APPROVAL OF A NEW INVESTMENT MANAGEMENT OR ADVISORY
AGREEMENT BETWEEN VALUE ADVISORS AND THE FUND
STOCKHOLDERS OF EACH OF THE FUNDS WILL VOTE ON THIS PROPOSAL.
INTRODUCTION
Advantage currently serves as investment adviser to The Emerging Markets
Income Fund Inc pursuant to an advisory agreement with such Fund and as
investment manager to each other Fund pursuant to a management agreement with
such Fund (in each case, the "Existing Advantage Agreement" and, collectively,
the "Existing Advantage Agreements"), the date of each of which is set forth in
the Fund Exhibit. The Fund Exhibit sets forth the respective dates on which each
Fund's stockholders and its Board of Directors, including a majority of the
directors who are not "interested persons" (as defined in the 1940 Act) of such
Fund or Advantage, most recently approved the Fund's Existing Advantage
Agreement.
Prior to consummation of the Acquisition, Value Advisors will be formed as
an affiliate of Advantage, and Advantage's rights and obligations under the
Existing Advantage Agreements, the Existing SBAM Agreements (as defined below
under Proposal 2) and the Existing OpCap Agreements (as defined below under
Proposal 3) will be transferred to Value Advisors, resulting in Value Advisors
becoming the investment adviser or manager, as the case may be, to each of the
Funds currently served by Advantage. When formed, Value Advisors will be under
common control with Advantage and will have the same management as Advantage.
As required by the 1940 Act, each Existing Advantage Agreement provides for
its automatic termination in the event of its "assignment," as defined in such
Act. The transfer of Advantage's rights and obligations under the Existing
Advantage Agreements, the Existing SBAM Agreements and the Existing OpCap
Agreements to Value Advisors will not constitute an "assignment" under the 1940
Act because it will not result in a change of actual control or management of
the adviser to the Funds. As discussed below, however, the subsequent
consummation of the Acquisition will constitute an assignment of the Existing
Advantage Agreement with each Fund because it will result in a change of control
of Value Advisors. Therefore, in anticipation of the Acquisition, the Board of
Directors of each Fund is proposing that its stockholders approve a new
investment management or advisory agreement between the Fund and Value Advisors
(in each case, the "New Value Agreement" and, collectively, the "New Value
Agreements"). The New Value Agreement proposed for each Fund is substantially
similar to its Existing Advantage Agreement. A description of the New Value
Agreement proposed for each Fund, including the services to be provided by Value
Advisors thereunder, is set forth below. The description is qualified in its
entirety by reference to the form of New Value Agreement attached hereto as
Exhibit B.
INFORMATION CONCERNING ADVANTAGE AND VALUE ADVISORS
Advantage is a corporation organized under the laws of Delaware on May 31,
1990 and a registered investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act"). Advantage
4
<PAGE>
has served as investment adviser or manager, as the case may be, to each Fund
pursuant to such Fund's Existing Advantage Agreement since commencement of the
Fund's operations. The Fund Exhibit provides information with respect to the
investment companies with similar investment objectives to each Fund for which
Advantage currently provides, and Value Advisors will upon consummation of the
Acquisition provide, management or advisory services.
Advantage is a wholly-owned subsidiary of Oppenheimer & Co., Inc. ("OpCo").
All of the issued and outstanding stock of OpCo is owned by Oppenheimer
Holdings, Inc., which in turn is a wholly-owned subsidiary of Oppenheimer
Equities, Inc. Oppenheimer Equities, Inc. is a wholly-owned subsidiary of Opfin,
which in turn is a wholly-owned subsidiary of Oppenheimer Group. Oppenheimer &
Co., L.P. ("OpCo LP") currently owns approximately 71% of the common stock of
Oppenheimer Group. Nathan Gantcher and Stephen Robert are the managing general
partners of OpCo LP, the remaining general and limited partner interests of
which are owned by employees of OpCo and its affiliates, including Alan H.
Rappaport, Mark C. Biderman, Robert I. Kleinberg and Dennis E. Feeney, each of
whom is both a general and limited partner of OpCo LP and serves as a director
and/or officer of one or more of the Funds, and Robert A. Blum, who is a limited
partner of OpCo LP and serves as an officer of two Funds.
Value Advisors will be organized as a limited liability company under the
laws of Delaware and will be registered as an investment adviser under the
Advisers Act. As described above, Value Advisors will succeed Advantage as
investment adviser or manager, as the case may be, to each Fund. Prior to
consummation of the Acquisition, Value Advisors will have the same business
address and management as Advantage and will be an indirect wholly-owned
subsidiary of Oppenheimer Group.
The principal business address of each of the foregoing entities is
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York 10281. The principal business address of Value Advisors following the
Acquisition will be 800 Newport Center Drive, Suite 100, Newport Beach,
California 92660.
The names, titles and principal occupations of the current directors and
executive officers of Advantage are set forth in the following table. The
business address of each person listed below is Oppenheimer Tower, 200 Liberty
Street, One World Financial Center, New York, New York, 10281.
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Stephen Robert................. Chairman of Advantage and Chairman and
Co-Chief Executive Officer of OpCo
Alan H. Rappaport.............. President and Member of the Board of
Advantage and Executive Vice President of
OpCo
Mark C. Biderman............... Executive Vice President of Advantage and
Managing Director of OpCo
Nitin Sheth.................... Vice President of Advantage and Managing
Director and Director of Corporate Taxes of
OpCo
Charles J. DeMarco............. Vice President of Advantage and Senior Vice
President of OpCo
5
<PAGE>
Melvin S. Herman............... Treasurer of Advantage and Managing Director
and Treasurer of OpCo
Robert I. Kleinberg............ Secretary and Member of the Board of
Advantage and Executive Vice President,
Secretary and General Counsel of OpCo
Robert A. Blum................. Assistant Secretary of Advantage and
Associate General Counsel and Managing
Director of OpCo
Joyce L. Kramer................ Assistant Secretary of Advantage and Deputy
General Counsel and Managing Director of OpCo
Prior to the consummation of the Acquisition, Value Advisors will have the
same management as Advantage. The names, titles and principal occupations of the
directors and executive officers of Value Advisors expected to be in effect upon
the consummation of the Acquisition are set forth in the following table.
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
William D. Cvengros............. Chief Executive Officer, President and Member
of the Board of Value Advisors and Chief
Executive Officer and President of PIMCO
Advisors
Robert M. Fitzgerald............ Senior Vice President, Chief Financial
Officer and Principal Accounting Officer of
Value Advisors and Senior Vice President,
Chief Financial Officer and Principal
Accounting Officer of PIMCO Advisors
Kenneth M. Poovey............... Executive Vice President and General Counsel
and Member of the Board of Value Advisors and
Executive Vice President and General Counsel
of PIMCO Advisors
Stephen J. Treadway............. Executive Vice President and Member of the
Board of Value Advisors and Executive Vice
President of PIMCO Advisors
James G. Ward................... Senior Vice President of Value Advisors and
Senior Vice President of PIMCO Advisors
Richard M. Weil................. Senior Vice President of Value Advisors and
Senior Vice President of PIMCO Advisors
6
<PAGE>
The business address of each person listed above other than Mr. Treadway
will be 800 Newport Center Drive, Suite 100, Newport Beach, California 92660 and
the business address of Mr. Treadway will be 2187 Atlantic Street, Stamford,
Connecticut 06902.
INFORMATION CONCERNING THE PIMCO PARTIES
PIMCO Advisors is a publicly traded investment management firm whose
principal business address is 800 Newport Center Drive, Suite 100, Newport
Beach, California 92660. As of July 31, 1997, PIMCO Advisors had approximately
$120 billion of assets under management.
PIMCO Partners, G.P. ("PIMCO GP") owns approximately 42.83% and 66.37%,
respectively (and will at the closing of the Acquisition own a majority of the
voting stock of TAG, which owns approximately 14.94% and 25.06%, respectively),
of the total outstanding Class A and Class B units of limited partner interest
("Units") of PIMCO Advisors and is PIMCO Advisors' sole general partner. PIMCO
GP is a California general partnership with two general partners. The first of
these is an indirect wholly-owned subsidiary of Pacific Mutual Life Insurance
Company ("Pacific Mutual"). PIMCO Partners L.L.C. ("PPLLC"), a California
limited liability company, is the second, and managing, general partner of PIMCO
GP. PPLLC's members are the Managing Directors (the "PIMCO Managers") of Pacific
Investment Management Company (the "PIMCO Subpartnership"), a subsidiary of
PIMCO Advisors. The PIMCO Managers are: William H. Gross, Dean S. Meiling, James
F. Muzzy, William F. Podlich, III, Frank B. Rabinovitch, Brent R. Harris, John
L. Hague, William S. Thompson Jr., William C. Powers, David H. Edington,
Benjamin Trosky, William R. Benz, II and Lee R. Thomas, III.
PIMCO Advisors is governed by an Operating Board and an Equity Board.
Governance matters are allocated generally to the Operating Board and the
Operating Board delegates to the Operating Committee the authority to manage
day-to-day operations of PIMCO Advisors. The Operating Board is comprised of
twelve members, including the chief executive officer of the PIMCO
Subpartnership, as Chairman, and six PIMCO Managers designated by the PIMCO
Subpartnership. The authority of PIMCO Advisors' Operating Board and Operating
Committee to take certain specified actions is subject to the approval of PIMCO
Advisors' Equity Board. Equity Board approval is required for certain major
transactions (e.g., issuance of additional Units and appointment of PIMCO
Advisors' chief executive officer). In addition, the Equity Board has
jurisdiction over matters such as actions which would have a material effect
upon PIMCO Advisors' business taken as a whole and (after an appeal from an
Operating Board decision) matters likely to have a material adverse economic
effect on any investment management subpartnership of PIMCO Advisors. The Equity
Board is composed of twelve members, including the chief executive officer of
PIMCO Advisors, three members designated by a subsidiary of Pacific Mutual, the
chairman of the Operating Board, two members designated by PPLLC, two members
designated by the preferred stockholders of TAG and three independent members.
Because of its power to appoint (directly or indirectly) seven of the
twelve members of the Operating Board as described above, the PIMCO
Subpartnership may be deemed to control PIMCO Advisors. Because of the direct or
indirect power to appoint 25% of the members of the Equity Board, (i) Pacific
Mutual and (ii) the PIMCO Managers and/or the PIMCO Subpartnership may each be
deemed, under applicable provisions of the 1940 Act, to control PIMCO Advisors.
Pacific Mutual, the PIMCO Subpartnership and the PIMCO Managers disclaim such
control.
7
<PAGE>
THE ACQUISITION
On July 22, 1997, PIMCO Advisors and TAG entered into the Amended Merger
Agreement with Oppenheimer and certain related parties, which agreement modified
the merger agreement between PIMCO Advisors and TAG and Oppenheimer entered into
on February 13, 1997. Pursuant to the Amended Merger Agreement, the PIMCO
Parties will acquire all of the securities of Value Advisors and all of the
direct and indirect interests of Opfin in Oppenheimer Capital. The aggregate
purchase price is approximately $262 million, including the issuance of
convertible preferred stock and the assumption of certain indebtedness. The
amount of preferred stock comprising the purchase price is subject to reduction
in certain circumstances.
The Acquisition is subject to the satisfaction or waiver of certain
conditions prior to closing, including the consummation of the sale by
Oppenheimer Group and Oppenheimer Equities, Inc. of all of the stock of
Oppenheimer Holdings, Inc., an indirect parent of Advantage and OpCo,
Advantage's broker-dealer affiliate, to CIBC Wood Gundy Securities Corp. (the
"CIBC Sale"), approval of the Acquisition by certain regulatory authorities and
the consent of certain clients of Oppenheimer and its affiliates. Additionally,
consummation of the Acquisition is conditioned on the stockholders of each of
the relevant Funds at their respective Meetings approving the New Value
Agreements and the New OpCap Agreements (as defined below under Proposal 3)
being considered at the Meetings. If for any reason the Acquisition is not
consummated, the Existing Advantage Agreements, Existing SBAM Agreements and
Existing OpCap Agreements will remain in effect in accordance with their terms;
in such event, if the CIBC Sale has been consummated, Value Advisors will be
party to such agreements, and if the CIBC Sale is not consummated, Advantage
will remain party to such agreements.
In connection with the consummation of the Acquisition, each of Alan H.
Rappaport, Mark C. Biderman and Robert I. Kleinberg will resign from the Board
of Directors of each Fund of which he is a member (as set forth in the Fund
Exhibit), and it is a condition to such consummation that an officer or employee
of PIMCO Advisors or one of its affiliates will have been elected by each such
Board to join such Board. In addition, it is a condition to such consummation
that the Board of Directors of each SBAM Fund and The Emerging Markets Income
Fund Inc will have elected those persons designated by the PIMCO Parties to hold
such titles with each such Fund as are currently held by persons affiliated with
OpCo and also will have appointed one additional designee of the PIMCO Parties
to the office of Vice President of each such Fund. Moreover, it is a condition
to such consummation that the Board of Directors of each OpCap Fund will have
elected those persons designated by the PIMCO Parties to hold such titles with
each OpCap Fund as may be determined by the PIMCO Parties. Pursuant to the
Amended Merger Agreement, for a period of one year following consummation of the
Acquisition, Messrs. Rappaport and Biderman will act as consultants to Value
Advisors upon its request with respect to the operations of the Funds, and will
receive from Value Advisors or its affiliates compensation for such services as
reasonably determined by the PIMCO Parties.
Upon consummation of the Acquisition, Value Advisors will be a subsidiary
of PIMCO Advisors and Oppenheimer Capital and OpCap Advisors will be controlled
by PIMCO Advisors and its affiliates. Therefore, consummation of the Acquisition
will involve a change of control of Value Advisors and OpCap Advisors, which
will constitute an assignment, and thus cause a termination, of each Existing
Advantage Agreement and each Existing OpCap Agreement. In addition, since Value
Advisors will be a party to each Existing SBAM Agreement at the time of
consummation of the Acquisition, consummation of the Acquisition will constitute
an assignment of, and thus a termination of, each such agreement. PIMCO Advisors
has advised each Fund that it anticipates upon consummation of the Acquisition
that the eligibility of Value Advisors to serve as an investment adviser or
investment manager, as the case may be, will not be affected by the Acquisition
and
8
<PAGE>
that Value Advisors will continue to provide the same level of advisory or
management services as have been provided to the Fund to date.
SECTION 15(F) OF THE 1940 ACT
Section 15(f) of the 1940 Act is available to Oppenheimer in connection
with the PIMCO Parties' acquisition of Value Advisors and a controlling interest
in OpCap Advisors. Section 15(f) provides in substance that when a sale of a
controlling interest in an investment adviser occurs, the investment adviser or
any of its affiliated persons may receive any amount or benefit in connection
therewith as long as two conditions are satisfied. First, an "unfair burden"
must not be imposed on the investment company as a result of the transaction
relating to the sale of such interest, or any express or implied terms,
conditions or understandings applicable thereto. The term "unfair burden" (as
defined in the 1940 Act) includes any arrangement during the two-year period
after the transaction whereby the investment adviser (or predecessor or
successor adviser), or any "interested person" (as defined in the 1940 Act) of
any such adviser, receives or is entitled to receive any compensation, directly
or indirectly, from the investment company or its security holders (other than
fees for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company. Each Fund's Board of Directors is aware of
no circumstances arising from the Acquisition that might result in an unfair
burden being imposed on the Fund. Moreover, the PIMCO Parties have agreed with
Oppenheimer that they will use commercially reasonable efforts to insure that no
unfair burden will be imposed on the Fund by or as a result of the Acquisition
during such two-year period. The second condition of Section 15(f) is that
during the three-year period following the consummation of a transaction, at
least 75% of the investment company's board of directors must not be "interested
persons" of the investment adviser or predecessor adviser. Each Fund's
compliance with or exemption from such 75% disinterested board requirement is a
condition to consummation of the Acquisition, and the PIMCO Parties have entered
into related agreements with Oppenheimer with respect to such requirement during
such three-year period. In connection with compliance with Section 15(f),
Oppenheimer and The Emerging Markets Income Fund Inc, The Emerging Markets
Income Fund II Inc, The Emerging Markets Floating Rate Fund Inc., Global
Partners Income Fund Inc., Municipal Partners Fund Inc. and Municipal Partners
Fund II Inc. have been granted by the Securities and Exchange Commission an
exemption from the 75% disinterested board requirement to avoid the need to
reconstitute the Funds' Boards of Directors upon consummation of the
Acquisition.
EXISTING ADVANTAGE AGREEMENTS AND NEW VALUE AGREEMENTS
The Existing Advantage Agreement and the New Value Agreement for each Fund
are substantially similar. The following description of the New Value Agreement
for each Fund is qualified in its entirety by reference to the form of New Value
Agreement attached hereto as Exhibit B.
Services to be Performed
- ------------------------
Pursuant to each New Value Agreement, Value Advisors will continue to
supervise the Fund's investment program, including advising and consulting with
the Fund's investment adviser (or manager, in the case of The Emerging Markets
Income Fund Inc) regarding the Fund's overall investment strategy. Value
Advisors also will provide access to economic information, research and
assistance to all Funds.
9
<PAGE>
Expenses and Advisory Fees
- --------------------------
Each New Value Agreement provides that the Fund is responsible for all of
its expenses and liabilities, except that Value Advisors is responsible for the
expenses in connection with maintaining a staff within its organization to
furnish the above services to the Fund and the investment adviser (or manager,
in the case of The Emerging Markets Income Fund Inc).
FOR EACH FUND, THE RATE USED TO DETERMINE FEES PAYABLE BY THE FUND PURSUANT
TO ITS NEW VALUE AGREEMENT IS IDENTICAL TO THE RATE IN ITS EXISTING ADVANTAGE
AGREEMENT. Consequently, each Fund will pay Value Advisors a monthly fee at a
rate under its New Value Agreement which is identical to the fee rate for its
Existing Advantage Agreement, which is set forth in the Fund Exhibit. For each
Fund, the aggregate amount of investment management or advisory fees paid by
such Fund to Advantage for the Fund's most recent fiscal year under its Existing
Advantage Agreement is set forth in the Fund Exhibit. Advantage remitted a
certain percentage of such fees to third parties, including (i) SBAM, pursuant
to the Existing SBAM Agreements (for a discussion of such agreements, see
Proposal 2) and (ii) OpCap Advisors, an affiliated person of Advantage, pursuant
to the Existing OpCap Agreements (for a discussion of such agreements, see
Proposal 3).
Limitation of Liability
- -----------------------
Each New Value Agreement provides that, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations thereunder ("disabling conduct"), Value Advisors shall not be liable
to the Fund or its stockholders for any act or omission in the course of or in
connection with the rendering of its services thereunder. In addition, each New
Value Agreement provides that the Fund, under certain circumstances, will
indemnify Value Advisors against any losses or expenses incurred, including
amounts paid in satisfaction of judgments and reasonable legal costs, not
resulting from disabling conduct.
Duration and Termination
- ------------------------
Each Fund's New Value Agreement will have an initial term of two years, and
thereafter will continue in effect for successive annual periods provided such
continuance is specifically approved at least annually by (i) a majority of the
members of the Fund's Board of Directors who are not parties to the New Value
Agreement, and who are not "interested persons" (as defined in the 1940 Act) of
any such party, and (ii) a majority of the Fund's Board of Directors or the
holders of a "majority of the outstanding voting securities" (as defined in the
1940 Act) of the Fund. For each Fund, its New Value Agreement may be terminated,
without penalty, on 60 days' notice, by the Fund's Board of Directors, by a vote
of the holders of a "majority of the outstanding voting securities" of the Fund
or by Value Advisors, and each New Value Agreement will terminate automatically
in the event of its "assignment" (as defined in the 1940 Act).
EVALUATION BY THE BOARDS OF DIRECTORS
Each Fund's Board of Directors, including the Board members who are not
interested persons of any party to the New Value Agreement or its affiliates,
has approved the New Value Agreement for such Fund and recommends that
stockholders of the Fund approve such agreement. Such Board approvals occurred
at meetings held on April 1, 1997 with respect to each Fund and on July 1, 1997
with respect to The
10
<PAGE>
Emerging Markets Income Fund Inc, The Emerging Markets Income Fund II Inc, The
Emerging Markets Floating Rate Fund Inc. and Global Partners Income Fund Inc.,
on July 10, 1997 with respect to Municipal Advantage Fund Inc., Municipal
Partners Fund Inc. and Municipal Partners Fund II Inc. and on July 11, 1997 with
respect to The Czech Republic Fund, Inc. Each New Value Agreement will become
effective on the later of the date the Acquisition is consummated and the date
the stockholders of the relevant Fund approve such agreement.
In approving the New Value Agreement and determining to submit it to
stockholders for their approval, the Board of Directors of each Fund has
determined that continuity and efficiency of management or advisory services
after the Acquisition can best be assured by approving the New Value Agreement
on behalf of the Fund. The Board of Directors of each Fund believes that the New
Value Agreement will enable the Fund to obtain high-quality services at costs
which it deems appropriate and reasonable and that approval of the New Value
Agreement is in the best interests of the Fund and its stockholders. In
connection with its review of the New Value Agreement, each Fund's Board of
Directors requested and reviewed, with the assistance of its own legal counsel,
materials furnished by Advantage and PIMCO Advisors. These materials included
financial statements as well as other written information regarding PIMCO
Advisors and its personnel, operations and financial condition.
In approving the New Value Agreement, the Board of Directors of each Fund
focused primarily on the nature, quality and scope of the operations and
services to date provided by Advantage to the Fund, which are expected to
continue to be provided by Value Advisors after the Acquisition with no change
in fees, comparative fee information concerning other investment companies
currently advised by Advantage, and to be advised by Value Advisors, with
similar investment objectives (which information is presented in the Fund
Exhibit as the first item appearing under the heading "A. General Information"),
and the fact that the Existing Advantage Agreement and the New Value Agreement
for such Fund, including the terms relating to the services to be performed
thereunder by Value Advisors, are substantially similar (and are identical with
respect to the expenses and fees payable by the Fund). In connection with these
primary considerations, comparisons were made between the New Value Agreement
and similar arrangements by other investment companies, particularly with regard
to levels of fees and the anticipated benefits to Value Advisors of its
relationship with each Fund. In addition, each Fund's Board of Directors
considered the commitment of the PIMCO Parties to maintain and enhance the
services provided to the Fund by Value Advisors, and met with representatives of
PIMCO Advisors to discuss their current intentions with respect to Value
Advisors.
In addition to the foregoing primary considerations, each Fund's Board of
Directors considered the likelihood of Value Advisors's financial stability
following consummation of the Acquisition, particularly in light of the overall
experience and reputation of the PIMCO Parties and their financial stability,
and whether there are any aspects of the Acquisition likely to affect the
ability of Value Advisors to retain and attract qualified personnel following
consummation. In connection with these considerations, each Board considered
possible alternatives to approval of the New Value Agreement.
Based upon its review of the above factors, the Board of Directors of each
Fund concluded that the New Value Agreement is in the best interests of the Fund
and its stockholders.
Certain directors and officers of each Fund may have a substantial interest
in the approval of the New Value Agreement for such Fund as a result of their
interests in Advantage or affiliates thereof, as described above under
"Information Concerning Advantage and Value Advisors" and in the Fund Exhibit.
11
<PAGE>
REQUIRED VOTE
As provided by the 1940 Act, approval of each Fund's New Value Agreement
will require the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which means the affirmative vote of the lesser of (a)
67% or more of the shares of the Fund entitled to vote thereon present or
represented by proxy at the Meeting, if the holders of more than 50% of the
outstanding shares of the Fund entitled to vote thereon are present or
represented by proxy, or (b) more than 50% of the total outstanding shares of
the Fund entitled to vote thereon. For this purpose, abstentions and broker
non-votes will be counted as shares present at the Meeting for quorum purposes
but not voting and will have the same effect as votes cast against the Proposal.
THE DIRECTORS OF EACH FUND, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" (AS DEFINED IN THE 1940 ACT) OF THE FUND, ADVANTAGE, PIMCO ADVISORS OR
THEIR AFFILIATES, RECOMMEND THAT THE STOCKHOLDERS OF THE FUND VOTE "FOR" THE NEW
VALUE AGREEMENT.
PROPOSAL 2: APPROVAL OF A NEW INVESTMENT ADVISORY AND
ADMINISTRATION AGREEMENT AMONG VALUE ADVISORS, SBAM AND THE FUND
STOCKHOLDERS OF THE EMERGING MARKETS INCOME FUND II INC, THE EMERGING MARKETS
FLOATING RATE FUND INC., GLOBAL PARTNERS INCOME FUND INC., MUNICIPAL PARTNERS
FUND INC. AND MUNICIPAL PARTNERS FUND II INC. WILL VOTE ON THIS PROPOSAL.
INTRODUCTION
SBAM serves as investment adviser and administrator to each SBAM Fund
pursuant to an investment advisory and administration agreement currently in
place among Advantage, SBAM and such SBAM Funds (in each case, the "Existing
SBAM Agreement" and, collectively, the "Existing SBAM Agreements"), the date of
each of which is set forth in the Fund Exhibit. In addition, SBAM serves as
investment manager and administrator to The Emerging Markets Income Fund Inc
pursuant to a management agreement with such Fund. The Fund Exhibit sets forth
the respective dates on which each SBAM Fund's stockholders and Board of
Directors, including a majority of the directors who are not "interested
persons" (as defined in the 1940 Act) of such SBAM Fund, Advantage or SBAM, most
recently approved the SBAM Fund's Existing SBAM Agreement.
As required by the 1940 Act, each Existing SBAM Agreement provides for its
automatic termination in the event of its "assignment, "as defined in such Act.
As discussed under Proposal 1 above, prior to consummation of the Acquisition,
the Existing SBAM Agreement will be transferred by Advantage to Value Advisors.
Therefore, since Value Advisors will be a party to each Existing SBAM Agreement
at the time of consummation of the Acquisition, consummation of the Acquisition
will constitute an assignment by Value Advisors of each such agreement. For a
discussion of the Acquisition, see "The Acquisition" under Proposal 1 above.
Therefore, in anticipation of the Acquisition, the Board of Directors of each
SBAM Fund is proposing that its stockholders approve a new investment advisory
and administration agreement among Value Advisors, SBAM and the SBAM Fund (in
each case, the "New SBAM Agreement" and, collectively, the "New SBAM
Agreements"). The New SBAM Agreement proposed for each SBAM Fund is
substantially similar to its Existing
12
<PAGE>
SBAM Agreement. A description of the New SBAM Agreement proposed for each SBAM
Fund, including the services to be provided by SBAM thereunder, is set forth
below. The description is qualified in its entirety by reference to the form of
New SBAM Agreement for each SBAM Fund attached hereto as Exhibit C.
INFORMATION CONCERNING SBAM
SBAM is a corporation organized under the laws of Delaware on December 24,
1987 and is registered as an investment adviser pursuant to the Advisers Act.
SBAM has served as investment adviser and administrator to each SBAM Fund
pursuant to such SBAM Fund's Existing SBAM Agreement since commencement of the
Fund's operations. As of July 31, 1997, SBAM and its worldwide investment
advisory affiliates managed approximately $24.2 billion of assets of which SBAM
managed approximately $18.9 billion. The Fund Exhibit provides information with
respect to the investment companies with similar investment objectives to each
SBAM Fund for which SBAM provides management, advisory or sub-advisory services.
SBAM is an indirect wholly-owned subsidiary of Salomon Brothers Holding
Company Inc, which in turn is a wholly-owned subsidiary of Salomon Inc. The
principal business address of each of the foregoing entities is 7 World Trade
Center, New York, New York 10048.
The names, titles and principal occupations of the current directors and
executive officers of SBAM are set forth in the following table.
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Thomas W. Brock................. Chairman, Chief Executive Officer and
Managing Director of SBAM and Managing
Director and Member of the Management
Board of Salomon Brothers Inc
Michael S. Hyland............... President, Managing Director and Member of
the Board of SBAM and Managing Director of
Salomon Brothers Inc
Rodney B. Berens................ Managing Director and Member of the Board of
SBAM and Managing Director and Member of the
Management Board of Salomon Brothers Inc
Vilas V. Gadkari................ Managing Director and Member of the Board of
SBAM and Managing Director of Salomon
Brothers Inc
Zachary Snow.................... Secretary of SBAM and Managing Director and
Counsel of Salomon Brothers Inc
13
<PAGE>
The business address of each person listed above other than Mr. Gadkari is
7 World Trade Center, New York, New York 10048 and the business address of Mr.
Gadkari is Victoria Plaza, 111 Buckingham Palace Road, London, England SW1W OSB.
Each SBAM Fund has been informed that Berkshire Hathaway, Inc., a Delaware
corporation, owned beneficially as of July 31, 1997, shares of Common Stock and
Preferred Stock, Series A, of Salomon Inc, constituting in excess of 10% of the
votes entitled to be cast by the outstanding voting securities of Salomon Inc.
EXISTING AND NEW SBAM AGREEMENTS
The Existing SBAM Agreement and the New SBAM Agreement for each SBAM Fund
are substantially similar. The following description of the New SBAM Agreement
for each SBAM Fund is qualified in its entirety by reference to the form of New
SBAM Agreement attached hereto as Exhibit C.
Services to be Performed
- ------------------------
Pursuant to each New SBAM Agreement, subject to the direction and control
of the directors of the SBAM Fund and in consultation with Value Advisors, SBAM
will make investment strategy decisions for each SBAM Fund, manage the investing
and reinvesting of assets in accordance with the SBAM Fund's stated policies,
place purchase and sale orders for the SBAM Fund, provide financial research and
data to the SBAM Fund and be responsible for administrative and stockholder
services.
Expenses and Advisory Fees
- --------------------------
Each New SBAM Agreement provides that the SBAM Fund is responsible for all
of its expenses and liabilities, except that SBAM is responsible for the
expenses in connection with providing facilities and personnel reasonably
necessary for the performance of the services to be provided by it to the SBAM
Fund.
FOR EACH SBAM FUND, THE RATE USED TO DETERMINE FEES PAYABLE BY VALUE
ADVISORS TO SBAM PURSUANT TO THE NEW SBAM AGREEMENT IS IDENTICAL TO THE RATE IN
THE EXISTING SBAM AGREEMENT. Consequently, SBAM will be paid by Value Advisors a
monthly fee at a rate under each SBAM Fund's New SBAM Agreement which is
identical to the fee rate for its Existing SBAM Agreement, which is set forth in
the Fund Exhibit. For each SBAM Fund, the aggregate amount of fees paid to SBAM
for the SBAM Fund's most recent fiscal year under its Existing SBAM Agreement is
set forth in the Fund Exhibit.
Limitation of Liability
- -----------------------
Each New SBAM Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder ("disabling conduct"), SBAM shall not be liable to the
SBAM Fund or its stockholders for any act or omission in the course of or in
connection with the rendering of its services thereunder. In addition, each New
SBAM Agreement provides that the SBAM Fund, under certain circumstances, will
indemnify SBAM against any losses or expenses incurred, including amounts paid
in satisfaction of judgments and reasonable legal costs, not resulting from
disabling conduct.
14
<PAGE>
Duration and Termination
- ------------------------
Each SBAM Fund's New SBAM Agreement will have an initial term of two years,
and thereafter will continue in effect for successive annual periods provided
such continuance is specifically approved at least annually by (i) a majority of
the members of the SBAM Fund's Board of Directors who are not parties to the New
SBAM Agreement, and who are not "interested persons" (as defined in the 1940
Act) of any such party, and (ii) a majority of the SBAM Fund's Board of
Directors or the holders of a "majority of the outstanding voting securities"
(as defined in the 1940 Act) of the SBAM Fund. For each SBAM Fund, its New SBAM
Agreement may be terminated, without penalty, on 60 days' notice, by the SBAM
Fund's Board of Directors, by a vote of the holders of a "majority of the
outstanding voting securities" of the SBAM Fund, or by SBAM, and each New SBAM
Agreement will terminate automatically in the event of its "assignment" (as
defined in the 1940 Act).
EVALUATION BY THE BOARDS OF DIRECTORS
Each SBAM Fund's Board of Directors, including the Board members who are
not "interested persons" (as defined in the 1940 Act) of any party to the New
SBAM Agreement or its affiliates, has approved the New SBAM Agreement for such
SBAM Fund and recommends that stockholders of the SBAM Fund approve such
agreement. Such Board approvals occurred at meetings held on April 1, 1997 with
respect to each SBAM Fund and on July 1, 1997 with respect to The Emerging
Markets Income Fund Inc, The Emerging Markets Income Fund II Inc, The Emerging
Markets Floating Rate Fund Inc. and Global Partners Income Fund Inc. and on July
10, 1997 with respect to Municipal Partners Fund Inc. and Municipal Partners
Fund II Inc. Each New SBAM Agreement will become effective on the later of the
date the Acquisition is consummated and the date the stockholders of the
relevant Fund approve such agreement.
In approving the New SBAM Agreement and determining to submit it to the
stockholders for their approval, the Board of Directors of each SBAM Fund has
determined that continuity and efficiency of management or advisory services
after the Acquisition can best be assured by approving the New SBAM Agreement on
behalf of the SBAM Fund. The Board of each SBAM Fund believes that the New SBAM
Agreement will enable the SBAM Fund to obtain high-quality services at costs
which it deems appropriate and reasonable and that approval of the New SBAM
Agreement is in the best interests of the SBAM Fund and its stockholders.
In connection with its review of the New SBAM Agreement, each SBAM Fund's
Board of Directors requested and reviewed, with the assistance of its own legal
counsel, materials furnished by SBAM. These materials included financial
statements as well as other written information regarding SBAM and its
personnel, operations and financial condition.
In approving the New SBAM Agreement, the Board of Directors of each SBAM
Fund focused primarily on the nature, quality and scope of the services provided
to date by SBAM to the SBAM Fund, which are expected to continue to be provided
after the Acquisition with no change in fees, comparative fee information
concerning other investment companies advised by SBAM with similar investment
objectives (which information is presented in the Fund Exhibit as the first item
appearing under the heading "A. General Information"), and the fact that the
Existing SBAM Agreement and the New SBAM Agreement for such SBAM Fund, including
the terms relating to the services to be performed thereunder by SBAM, are
substantially similar (and identical with respect to the expenses and fees
payable to SBAM). In connection with these primary considerations, comparisons
were made between the New SBAM Agreement and similar arrangements by other
investment companies, particularly with regard to levels of fees and the
benefits to SBAM of its
15
<PAGE>
relationship with each SBAM Fund. In addition, each SBAM Fund's Board of
Directors considered the commitment of SBAM to maintain and enhance the services
provided to the SBAM Fund by it.
In addition to the foregoing primary considerations, each SBAM Fund's Board
of Directors considered the likelihood of SBAM's continued financial stability,
particularly in light of its overall experience and reputation and the fact that
the Acquisition will have no impact on SBAM, its personnel or the services it
provides to the SBAM Fund. In connection with these considerations, each SBAM
Fund's Board considered possible alternatives to approval of the New SBAM
Agreement.
Based upon its review of the above factors, the Board of Directors of each
SBAM Fund concluded that the New SBAM Agreement is in the best interests of the
SBAM Fund and its stockholders.
Certain directors and officers of each SBAM Fund may have a substantial
interest in the approval of the New SBAM Agreement for such Fund as a result of
their interests in SBAM or affiliates thereof, as described in the Fund Exhibit.
REQUIRED VOTE
As provided by the 1940 Act, approval of each SBAM Fund's New SBAM
Agreement will require the affirmative vote of a "majority of the outstanding
voting securities" of the SBAM Fund. For a discussion of the definition of a
"majority of the outstanding voting securities," see "Required Vote" under
Proposal 1 above.
THE DIRECTORS OF EACH FUND, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" (AS DEFINED IN THE 1940 ACT) OF THE FUND, ADVANTAGE, SBAM, PIMCO
ADVISORS OR THEIR AFFILIATES, RECOMMEND THAT THE STOCKHOLDERS OF THE FUND VOTE
"FOR" THE NEW SBAM AGREEMENT.
PROPOSAL 3: APPROVAL OF A NEW INVESTMENT ADVISORY OR INVESTMENT ADVISORY AND
ADMINISTRATION AGREEMENT AMONG VALUE ADVISORS, OPCAP ADVISORS AND THE FUND
STOCKHOLDERS OF THE CZECH REPUBLIC FUND, INC. AND MUNICIPAL ADVANTAGE FUND INC.
WILL VOTE ON THIS PROPOSAL.
INTRODUCTION
OpCap Advisors serves as investment adviser and administrator to Municipal
Advantage Fund Inc. pursuant to an investment advisory and administration
agreement currently in place among Advantage, OpCap Advisors and such Fund and
as investment adviser to The Czech Republic Fund, Inc. pursuant to an investment
advisory agreement currently in place among Advantage, OpCap Advisors and such
Fund (in each case, the "Existing OpCap Agreement" and, collectively, the
"Existing OpCap Agreements"), the date of each of which is set forth in the Fund
Exhibit. The Fund Exhibit sets forth the respective dates on which each OpCap
16
<PAGE>
Fund's stockholders and Board of Directors, including a majority of the
directors who are not "interested persons" (as defined in the 1940 Act) of such
OpCap Fund, Advantage or OpCap Advisors, most recently approved the OpCap Fund's
Existing OpCap Agreement.
As required by the 1940 Act, each Existing OpCap Agreement provides for its
automatic termination in the event of its "assignment", as defined in such Act.
As discussed under Proposal 1 above, prior to consummation of the Acquisition,
the Existing OpCap Agreement will be transferred by Advantage to Value Advisors.
Therefore, since Value Advisors will, at the time of consummation of the
Acquisition, be a party to, and OpCap Advisors is a party to, each Existing
OpCap Agreement, consummation of the Acquisition will constitute an assignment
by each of Value Advisors and OpCap Advisors of each such Agreement. For a
discussion of the Acquisition, see "The Acquisition" under Proposal 1 above.
Therefore, in anticipation of the Acquisition, the Board of Directors of each
OpCap Fund is proposing that its stockholders approve a new investment advisory
or investment advisory and administration agreement among Value Advisors, OpCap
Advisors and the OpCap Fund (in each case, the "New OpCap Agreement" and,
collectively, the "New OpCap Agreements"). The New OpCap Agreement proposed for
each OpCap Fund is substantially similar to its Existing OpCap Agreement. In
this connection, stockholders of The Czech Republic Fund, Inc. should note that
such Fund's New OpCap Agreement has an initial term of two years, while its
Existing OpCap Agreement has a one year initial term. A description of the New
OpCap Agreement proposed for each OpCap Fund, including the services to be
provided by OpCap thereunder, is set forth below. The description is qualified
in its entirety by reference to the form of New OpCap Agreement for each OpCap
Fund attached hereto as Exhibit D.
INFORMATION CONCERNING OPCAP ADVISORS
OpCap Advisors, formerly known as Quest for Value Advisors, is a Delaware
general partnership and a registered investment adviser under the Advisers Act.
OpCap Advisors has served as the investment adviser and administrator to
Municipal Advantage Fund Inc. since commencement of the Fund's operations. OpCap
Advisors has served as the investment adviser to The Czech Republic Fund, Inc.
since commencement of the Fund's operations. The Fund Exhibit provides
information with respect to the investment companies with similar investment
objectives to each OpCap Fund for which OpCap Advisors provides advisory
services.
Oppenheimer Capital, a general partnership that is a registered investment
adviser, and Opfin, a holding company, currently hold 99% and 1% general
partnership interests in OpCap Advisors, respectively. Opfin currently holds a
32.52% general partner interest in Oppenheimer Capital, and Oppenheimer Capital,
L.P., a Delaware limited partnership whose units are traded on the New York
Stock Exchange and of which Opfin currently is the sole 1% general partner, owns
the remaining 67.48% interest. Opfin currently is a wholly-owned subsidiary of
Oppenheimer Group, 71% of the common stock of which currently is owned by OpCo
LP. The principal business address of each of the foregoing entities is
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York 10281. The principal business address of OpCap Advisors is not expected to
change as a result of the Acquisition.
17
<PAGE>
The names, titles and principal occupations of the current executive
officers of OpCap Advisors are set forth in the following table. The business
address of each person listed below is Oppenheimer Tower, 200 Liberty Street,
One World Financial Center, New York, New York 10281.
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Joseph M. LaMotta............... Chairman of OpCap Advisors and Chairman of
Oppenheimer Capital
Bernard H. Garil................ President of OpCap Advisors
Sheldon M. Siegel............... Treasurer and Chief Financial Officer of
OpCap Advisors and Managing Director,
Treasurer and Chief Financial Officer of
Oppenheimer Capital
Upon consummation of the Acquisition, Oppenheimer Capital and OpCap
Advisors will be controlled by PIMCO Advisors (as discussed under "The
Acquisition" in Proposal 1 above). PIMCO Advisors has advised each OpCap Fund
that it anticipates that the senior portfolio management team of Oppenheimer
Capital and OpCap Advisors will continue in their present capacities upon
consummation of the Acquisition, that the eligibility of OpCap Advisors to serve
as an investment adviser will not be affected by the Acquisition and that
Oppenheimer Capital and OpCap Advisors will be able to continue to provide
advisory services with no material changes in operating conditions. PIMCO
Advisors has further advised each OpCap Fund that it anticipates that the
Acquisition will not affect the ability of Oppenheimer Capital and OpCap
Advisors to fulfill their obligations under each New OpCap Agreement.
OpCo, an affiliate of Advantage and OpCap Advisors, currently serves as the
administrator to The Czech Republic Fund, Inc. pursuant to an administration
agreement (the "Administration Agreement"), and The Czech Republic Fund, Inc.
currently pays OpCo a monthly fee of 0.20% of the Fund's average weekly net
assets for OpCo's administrative services. For the fiscal year ended August 31,
1996 and the six-month period ended February 28, 1997, the aggregate amount of
administrative fees paid by the Fund to OpCo was $151,031 and $94,026,
respectively. The address of OpCo is Oppenheimer Tower, 200 Liberty Street, One
World Financial Center, New York, New York 10281. OpCo subcontracts certain of
its administrative responsibilities to PFPC Inc., whose address is 103 Bellevue
Parkway, Wilmington, Delaware 19809. At a meeting held on April 1, 1997, the
Board of Directors of The Czech Republic Fund, Inc. approved an administration
agreement with OpCap Advisors, substantially in the form of the Administration
Agreement, pursuant to which OpCap Advisors will replace OpCo as administrator
of the Fund upon consummation of the Acquisition.
SECTION 15(F) OF THE 1940 ACT
Section 15(f) of the 1940 Act is available to Oppenheimer in connection
with the PIMCO Parties' acquisition of Value Advisors and a controlling interest
in OpCap Advisors. For a discussion of Section 15(f), see "Section 15(f) of the
1940 Act" under Proposal 1 above.
EXISTING AND NEW OPCAP AGREEMENTS
The Existing OpCap Agreement and the New OpCap Agreement for each OpCap
Fund are substantially similar. The following description of the New OpCap
Agreement for each OpCap Fund is qualified in its entirety by reference to the
form of New OpCap Agreement attached hereto as Exhibit D.
18
<PAGE>
Services to be Performed
- ------------------------
Pursuant to each New OpCap Agreement, subject to the direction and control
of the directors of the OpCap Fund and in consultation with Value Advisors,
OpCap Advisors will make investment strategy decisions for each OpCap Fund,
manage the investing and reinvesting of assets in accordance with the OpCap
Fund's stated policies, place purchase and sale orders for the OpCap Fund,
provide financial research and data to the OpCap Fund and, with respect to
Municipal Advantage Fund Inc., be responsible for administrative and
stockholders services.
Expenses and Advisory Fees
- --------------------------
Each New OpCap Agreement provides that the Fund is responsible for all of
its expenses and liabilities, except that OpCap Advisors is responsible for the
expenses in connection with providing office space, office facilities and
personnel reasonably necessary for performance of the services to be provided by
it to the OpCap Fund.
FOR EACH OPCAP FUND, THE RATE USED TO DETERMINE FEES PAYABLE BY VALUE
ADVISORS TO OPCAP ADVISORS PURSUANT TO THE NEW OPCAP AGREEMENT IS IDENTICAL TO
THE RATE IN ITS EXISTING OPCAP AGREEMENT. Consequently, OpCap Advisors will be
paid by Value Advisors a monthly fee at a rate under each OpCap Fund's New OpCap
Agreement which is identical to the fee rate for its Existing OpCap Agreement,
which is set forth in the Fund Exhibit. For each OpCap Fund, the aggregate
amount of the fees paid to OpCap Advisors for the OpCap Fund's most recent
fiscal year under its Existing OpCap Agreement is set forth in the Fund Exhibit.
Limitation of Liability
- -----------------------
Each New OpCap Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder ("disabling conduct"), OpCap Advisors shall not be liable
to the OpCap Fund or its stockholders for any act or omission in the course of
or in connection with the rendering of its services thereunder. In addition,
each New OpCap Agreement provides that the OpCap Fund, under certain
circumstances, will indemnify OpCap Advisors against any losses or expenses
incurred, including amounts paid in satisfaction of judgments and reasonable
legal costs, not resulting from disabling conduct.
Duration and Termination
- ------------------------
Each OpCap Fund's New OpCap Agreement will have an initial term of two
years, and thereafter will continue in effect for successive annual periods
provided such continuance is specifically approved at least annually by (i) a
majority of the members of the OpCap Fund's Board of Directors who are not
parties to the New OpCap Agreement, and who are not "interested persons" (as
defined in the 1940 Act) of any such party,
19
<PAGE>
and (ii) a majority of the OpCap Fund's Board of Directors or the holders of a
"majority of the outstanding voting securities" (as defined in the 1940 Act) of
the OpCap Fund. The Existing OpCap Agreement for The Czech Republic Fund, Inc.
has an initial term of one year. For each OpCap Fund, its New OpCap Agreement
may be terminated, without penalty, on 60 days' notice, by the OpCap Fund's
Board of Directors, by a vote of the holders of a "majority of the outstanding
voting securities" of the OpCap Fund, or by Value Advisors, and each New OpCap
Agreement will terminate automatically in the event of its "assignment" (as
defined in the 1940 Act). In addition, like such Fund's Existing OpCap
Agreement, the New OpCap Agreement for Municipal Advantage Fund Inc. may be
terminated, without penalty, on 60 days' notice, by OpCap Advisors.
EVALUATION BY THE BOARDS OF DIRECTORS
Each OpCap Fund's Board of Directors, including the Board members who are
not "interested persons" (as defined in the 1940 Act) of any party to the New
OpCap Agreement or its affiliates, has approved the New OpCap Agreement for such
OpCap Fund and recommends that the stockholders of the OpCap Fund approve such
agreement. Such Board approvals occurred at meetings held on April 1, 1997 with
respect to each OpCap Fund and on July 10, 1997 with respect to Municipal
Advantage Fund Inc. and on July 11, 1997 with respect to The Czech Republic
Fund, Inc. Each New OpCap Agreement will become effective on the later of the
date the Acquisition is consummated and the date the stockholders of the
relevant OpCap Fund approve such agreement.
In approving the New OpCap Agreement and determining to submit it to
stockholders for their approval, the Board of Directors of each OpCap Fund has
determined that continuity and efficiency of advisory services after the
Acquisition can best be assured by approving the New OpCap Agreement on behalf
of the OpCap Fund. The Board of each OpCap Fund believes that the New OpCap
Agreement will enable the OpCap Fund to obtain high-quality services at costs
which it deems appropriate and reasonable and that approval of the New OpCap
Agreement is in the best interests of the OpCap Fund and its stockholders.
In connection with its review of the New OpCap Agreement, each OpCap Fund's
Board of Directors requested and reviewed, with the assistance of its own legal
counsel, materials furnished by OpCap Advisors and PIMCO Advisors. These
materials included financial statements as well as other written information
regarding PIMCO Advisors and its personnel, operations and financial condition.
In approving the New OpCap Agreement, the Board of Directors of each OpCap
Fund focused primarily on the nature, quality and scope of the operations and
services to date provided by OpCap Advisors to the OpCap Fund, which are
expected to continue to be provided after the Acquisition with no change in
fees, comparative fee information concerning other investment companies (if any)
advised by OpCap Advisors with similar investment objectives (which information
is presented in the Fund Exhibit as the first item appearing under the heading
"A. General Information"), and the fact that the Existing OpCap Agreement and
the New OpCap Agreement for such OpCap Fund, including the terms relating to the
services to be performed thereunder by OpCap Advisors, are substantially similar
(and identical with respect to the expenses and fees payable to OpCap Advisors).
In connection with these primary considerations, comparisons were made between
the New OpCap Agreement and similar arrangements by other investment companies,
particularly with regard to levels of fees and the benefits to OpCap of its
relationship with each OpCap Fund. In addition, each OpCap Fund's Board of
Directors considered the commitment of the PIMCO Parties to maintain and enhance
the services provided to the OpCap Fund by OpCap, and met with representatives
of PIMCO Advisors to discuss their current intentions with respect to
Oppenheimer Capital and OpCap Advisors.
20
<PAGE>
In addition to the foregoing primary considerations, each OpCap Fund's
Board of Directors considered the likelihood of OpCap's continued financial
stability following consummation of the Acquisition, particularly in light of
the overall experience and reputation of the PIMCO Parties and their financial
stability, and whether there are any aspects of the Acquisition likely to affect
the ability of OpCap Advisors to retain and attract qualified personnel
following consummation. In connection with these considerations, each OpCap
Fund's Board considered possible alternatives to approval of the New OpCap
Agreement.
Based upon its review of the above factors, the Board of Directors of each
Fund concluded that the New OpCap Agreement is in the best interests of the Fund
and its stockholders.
Certain directors and officers of each OpCap Fund may have a substantial
interest in the approval of the New OpCap Agreement for such Fund as a result of
their interests in OpCap Advisors or affiliates thereof, as described in
Proposal 1 and in the Fund Exhibit.
REQUIRED VOTE
As provided by the 1940 Act, approval of each OpCap Fund's New OpCap
Agreement will require the affirmative vote of a "majority of the outstanding
voting securities" of the OpCap Fund. For a discussion of the definition of a
"majority of the outstanding voting securities", see "Required Vote" under
Proposal 1 above.
THE DIRECTORS OF EACH FUND, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" (AS DEFINED IN THE 1940 ACT) OF THE FUND, ADVANTAGE, OPCAP ADVISORS,
PIMCO ADVISORS OR THEIR AFFILIATES, RECOMMEND THAT THE STOCKHOLDERS OF THE FUND
VOTE "FOR" THE NEW OPCAP AGREEMENT.
PROPOSAL 4: ELECTION OF DIRECTORS
STOCKHOLDERS OF THE EMERGING MARKETS INCOME FUND II INC, THE EMERGING MARKETS
FLOATING RATE FUND INC., MUNICIPAL PARTNERS FUND INC. AND MUNICIPAL PARTNERS
FUND II INC. WILL VOTE ON THIS PROPOSAL.
The Meetings of each of the Funds listed above also will serve as such
Fund's Annual Meeting of Stockholders for the 1997 calendar year, and
stockholders of each such Fund are being asked to consider for election as
directors the individuals (the "Nominees") listed in the Fund Exhibit. As
described in the Fund Exhibit, each Fund's Board of Directors is divided into
three classes. Consequently, stockholders of each Fund will be electing two
directors at the respective Meetings to hold office until the year 2000 Annual
Meeting of Stockholders for such Fund or thereafter when their respective
successors are elected and qualified.
In addition, preferred stockholders of Municipal Partners Fund Inc. and
Municipal Partners Fund II Inc., in accordance with such Funds' respective
Charters and By-Laws, will each be electing one additional director to fill a
vacancy created by the resignation of Allan C. Hamilton on July 23, 1997. In the
case of each such Fund, the Nominee to fill such vacancy has, in accordance with
such Funds' respective Charters and By-Laws, been appointed a director to serve
as such from July 23, 1997 until this Proposal is voted on by
21
<PAGE>
the preferred stockholders of such Funds, and, if elected by such stockholders,
will hold office until the year 1998 Annual Meeting of Stockholders or
thereafter when his successor is elected and qualified.
Biographical information about the Nominees and other directors and
executive officers of the Funds, and other information relating to, among other
things, compensation of such individuals, is set forth in the Fund Exhibit
(Exhibit A) under the heading "B. Specific Fund Information." Each Nominee
currently serves as a director of the relevant Fund.
The persons named in the accompanying form of proxy intend to vote at the
Meeting (unless directed otherwise) FOR the election of the Nominees. Each
Nominee has indicated that he or she will serve if elected, but if any Nominee
should be unable to serve, the proxy will be voted for any other person
determined by the persons named in the proxy in accordance with their judgment.
REQUIRED VOTE
For each of The Emerging Markets Income Fund II Inc and The Emerging
Markets Floating Rate Fund Inc., the two Nominees will be elected by a plurality
of the votes cast by the holders of shares of the Fund's common stock present in
person or represented by proxy at the Meeting, provided a quorum is present. For
each of Municipal Partners Fund Inc. and Municipal Partners Fund II Inc., the
two Nominees to hold office until the year 2000 Annual Meetings of Stockholders
will be elected by a plurality of the votes cast by the holders of such Fund's
common stock and preferred stock, voting together as a single class, present in
person or represented by proxy at the Meeting, provided a quorum is present, and
the Nominee to hold office until the year 1998 Annual Meetings of Stockholders
will be elected by a plurality of the votes cast by the holders of such Fund's
preferred stock, voting as a separate class, present in person or represented by
proxy at the Meeting, provided a quorum is present. For purposes of the election
of directors of each of the above Funds, abstentions and broker non-votes will
not be considered votes cast, and do not affect the plurality vote required for
the election of directors.
THE DIRECTORS OF EACH FUND, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" (AS DEFINED IN THE 1940 ACT) OF THE FUND, RECOMMEND THAT THE
STOCKHOLDERS OF THE FUND VOTE "FOR" EACH OF THE NOMINEES FOR DIRECTOR.
PROPOSAL 5: RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
STOCKHOLDERS OF THE EMERGING MARKETS INCOME FUND II INC, THE EMERGING MARKETS
FLOATING RATE FUND INC., MUNICIPAL PARTNERS FUND INC. AND MUNICIPAL PARTNERS
FUND II INC. WILL VOTE ON THIS PROPOSAL.
Because the Meetings of the Funds listed above will serve as each such
Fund's Annual Meeting of Stockholders for the 1997 calendar year, the
stockholders of each such Fund will be asked to ratify the selection by the
Fund's Board of Directors of the Fund's independent accountants. The Board of
Directors of each such Fund has selected Price Waterhouse LLP as independent
accountants of the Fund for the fiscal year of the Fund set forth in the Fund
Exhibit. The appointment of independent accountants is approved annually by each
Fund's Board of Directors and is subsequently submitted to its stockholders for
ratification.
22
<PAGE>
Price Waterhouse LLP served as independent accountant for each such Fund for the
fiscal year most recently completed. Each Fund has been advised by Price
Waterhouse LLP that, as of the Record Date, neither the firm nor any of its
partners had any direct or material indirect financial interest in the Fund. A
representative of Price Waterhouse LLP is expected to attend the Meeting to
answer questions concerning each Fund's financial statements and will have an
opportunity to make a statement if he or she chooses to do so.
THE DIRECTORS OF EACH FUND, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" (AS DEFINED IN THE 1940 ACT) OF THE FUND, RECOMMEND THAT THE
STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS
THE FUND'S INDEPENDENT ACCOUNTANTS.
REQUIRED VOTE
Ratification of the selection of Price Waterhouse LLP as independent
accountants of The Emerging Markets Income Fund II Inc and The Emerging Markets
Floating Rate Fund Inc. requires the affirmative vote of a majority of the votes
cast by the holders of the Fund's common stock at the Meeting at which a quorum
is present. Ratification of the selection of Price Waterhouse LLP as independent
accountants of Municipal Partners Fund Inc. and Municipal Partners Fund II Inc.
requires the affirmative vote of a majority of the votes cast by the holders of
the Fund's common stock and preferred stock, voting together as a single class,
at the Meeting at which a quorum is present. For purposes of this Proposal,
abstentions and broker non-votes will not be considered votes cast and do not
affect the vote required for ratification.
INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS
Information regarding the number and percentage of outstanding shares of
each Fund owned beneficially by each director and executive officer thereof, and
all directors and executive officers as a group, in each case as of July 31,
1997, is set forth in the Fund Exhibit. To the knowledge of each of the Funds,
as of the Record Date no person owned beneficially more than 5% of any class of
such Fund's outstanding shares.
OTHER BUSINESS
Each Fund's Board of Directors does not know of any other matter which may
come before the Meeting. If any other matter properly comes before the Meeting,
it is the intention of the persons named in the proxy to vote the shares
represented thereby in accordance with their judgment on that matter.
EXPENSES OF THE MEETING
The expenses of the Meeting of each Fund other than The Emerging Markets
Income Fund II Inc, The Emerging Markets Floating Rate Fund Inc., Municipal
Partners Fund Inc. and Municipal Partners Fund II Inc. will be borne two-thirds
by the PIMCO Parties and one-third by Oppenheimer. The expenses of the Meetings
of The Emerging Markets Income Fund II Inc, The Emerging Markets Floating Rate
Fund Inc., Municipal Partners Fund Inc. and Municipal Partners Fund II Inc.
relating to the approval of new investment advisory or management agreements
will be borne two-thirds by the PIMCO Parties and one-third by Oppenheimer,
23
<PAGE>
while the expenses of such Meetings relating to the governance of such Funds
will be borne by the respective Funds.
Proxies may be solicited personally by officers of each Fund and by regular
employees of Advantage, SBAM and OpCap Advisors, or their affiliates, or other
representatives of each Fund or by telephone or telegraph, in addition to the
use of mails. Brokerage houses, banks and other fiduciaries may be requested to
forward proxy solicitation material to their principals to obtain authorization
for the execution of proxies, and they will be reimbursed for such out-of-pocket
expenses. In addition, each Fund has retained D.F. King & Co., Inc., a proxy
solicitation firm, to assist in the solicitation of the proxy vote. It is
anticipated that D.F. King & Co., Inc. will be paid for such solicitation
services in an amount not to exceed $1,000 per Fund plus reasonable
out-of-pocket expenses. Therefore, expenses of the Meetings will include costs
of (i) preparing, assembling and mailing material in connection with the
solicitation, (ii) soliciting proxies by officers or employees, personally or by
telephone or telegraph, (iii) reimbursing brokerage houses, banks and other
fiduciaries and (iv) compensating the proxy solicitor.
D.F. King & Co., Inc. may call stockholders to ask if they would be willing
to have their votes recorded by telephone. The telephone voting procedure is
designed to authenticate stockholders' identities, to allow stockholders to
authorize the voting of their shares in accordance with their instructions and
to confirm that their instructions have been recorded properly. Each Fund has
been advised by counsel that these procedures are consistent with the
requirements of applicable law. A stockholder voting by telephone would be asked
for his or her social security number or other identifying information and would
be given an opportunity to authorize proxies to vote his or her shares in
accordance with his or her instructions. To insure that the stockholder's
instructions have been recorded correctly, he or she will receive a confirmation
of such instructions in the mail. The confirmation is a replica of the proxy
card but with marks indicating how the stockholder voted along with a special
toll-free number which will be available in the event the stockholder wishes to
change or revoke the vote. Although a stockholder's vote may be taken by
telephone, each stockholder will receive a copy of this proxy statement and may
vote by mail using the enclosed proxy card. If you have any questions or need
assistance in voting, please contact D.F. King & Co., Inc. at its toll-free
number, 1-800-735-3568.
September 4, 1997
24
<PAGE>
EXHIBIT A
FUND EXHIBIT
A. General Information. The following information relates to each of the
Funds identified below and is provided in connection with the proposals in the
proxy statement relating to each such Fund. Stockholders of The Emerging Markets
Income Fund II Inc, The Emerging Markets Floating Rate Fund Inc., Municipal
Partners Fund Inc. and Municipal Partners Fund II Inc. also should refer to the
information relating specifically to each such Fund which is provided below
under the heading "Specific Fund Information." Terms used herein and not
otherwise defined have the meanings given to them in the proxy statement.
1. COMPARATIVE FEE INFORMATION:
Advantage currently serves as an investment adviser or manager to each
Fund, and, prior to the consummation of the Acquisition, Value Advisors will
become the investment adviser or manager to each Fund in place of Advantage. For
purposes of comparison of the information listed below, The Emerging Markets
Income Fund Inc, The Emerging Markets Income Fund II Inc, The Emerging Markets
Floating Rate Fund Inc. and Global Partners Income Fund Inc. have similar
investment objectives; and Municipal Advantage Fund Inc., Municipal Partners
Fund Inc. and Municipal Partners Fund II Inc. have similar investment
objectives.
<TABLE>
<CAPTION>
INVESTMENT ADVISORY
OR MANAGEMENT FEE APPROXIMATE NET ASSETS
(AS A PERCENTAGE OF AS OF JULY 31, 1997
NAME OF FUND AVERAGE WEEKLY NET ASSETS) (IN MILLIONS)
- ------------ -------------------------- -------------
<S> <C> <C>
The Emerging Markets Income Fund Inc 0.50% $ 77.8
The Emerging Markets Income Fund II Inc 1.20% <F1> 398.1
The Emerging Markets Floating Rate Fund Inc. 1.10% <F2> 73.4
Global Partners Income Fund Inc. 1.10% <F2> 238.2
Municipal Partners Fund Inc. 0.60% <F3> 84.4
Municipal Partners Fund II Inc. 0.60% <F3> 85.7
Municipal Advantage Fund Inc. 0.60% <F4> 161.5
The Czech Republic Fund, Inc. 1.00% <F5> 90.1
</TABLE>
- ----------
[FN]
<F1> Advantage remits (and Value Advisors will remit) a portion of its fee to
SBAM at an annual rate of 0.70% of the Fund's average weekly net assets.
<F2> Advantage remits (and Value Advisors will remit) a portion of its fee to
SBAM at an annual rate of 0.65% of the Fund's average weekly net assets.
<F3> Advantage remits (and Value Advisors will remit) a portion of its fee to
SBAM at an annual rate of 0.36% of the Fund's average weekly net assets.
<F4> Advantage remits (and Value Advisors will remit) a portion of its fee to
OpCap Advisors at an annual rate of 0.36% of the Fund's average weekly net
assets.
<F5> Advantage remits (and Value Advisors will remit) a portion of its fee to
OpCap Advisors at an annual rate of 0.50% of the Fund's average weekly net
assets.
</FN>
A-1
<PAGE>
SBAM serves as an investment adviser, manager or sub-adviser to each SBAM
Fund and to the investment companies listed below which have similar investment
objectives to the SBAM Funds. For purposes of comparison of the information
listed below, The Emerging Markets Income Fund Inc, The Emerging Markets Income
Fund II Inc, The Emerging Markets Floating Rate Fund Inc., Global Partners
Income Fund Inc., Salomon Brothers High Income Fund Inc, Salomon Brothers
Institutional Emerging Markets Debt Fund and Salomon Brothers Worldwide Income
Fund Inc have similar investment objectives; and Municipal Partners Fund Inc.,
Municipal Partners Fund II Inc. and Salomon Brothers National Intermediate
Municipal Fund have similar investment objectives.
<TABLE>
<CAPTION>
INVESTMENT ADVISORY,
MANAGEMENT OR SUB-ADVISORY APPROXIMATE NET ASSETS
FEE (AS A PERCENTAGE OF AS OF JULY 31, 1997
NAME OF FUND AVERAGE WEEKLY NET ASSETS) (IN MILLIONS)
- ------------ -------------------------- -------------
<S> <C> <C>
The Emerging Markets Income Fund Inc 0.70% <F1> $ 77.8
The Emerging Markets Income Fund II Inc 0.70% <F2> 398.1
The Emerging Markets Floating Rate Fund Inc. 0.65% <F2> 73.4
Global Partners Income Fund Inc. 0.65% <F2> 238.2
Salomon Brothers High Income Fund Inc 0.70% 73.8
Salomon Brothers Institutional Emerging Markets Debt Fund 0.70% <F3> 13.8
Salomon Brothers Worldwide Income Fund Inc 0.90% 229.3
Municipal Partners Fund Inc. 0.36% <F2> 84.4
Municipal Partners Fund II Inc. 0.36% <F2> 85.7
Salomon Brothers National Intermediate Municipal Fund 0.50% <F4> 13.8
</TABLE>
- ----------
[FN]
<F1> Fee is paid by the Fund and includes compensation for administrative
services.
<F2> Fee is paid by Advantage (and will be paid by Value Advisors) out of its
management fee and includes compensation for administrative services.
<F3> SBAM has voluntarily agreed to limit the total expenses (including its
advisory fees) of the Fund (exclusive of taxes, interest and extraordinary
expenses, such as litigation and indemnification expenses), on an
annualized basis, to 0.75% of the Fund's average daily net assets.
<F4> For the year ended December 31, 1996, SBAM waived its advisory fee and
voluntarily bore certain expenses.
</FN>
OpCap Advisors serves as an investment adviser to each OpCap Fund.
<TABLE>
<CAPTION>
INVESTMENT ADVISORY FEE (AS A APPROXIMATE NET ASSETS
PERCENTAGE OF AVERAGE AS OF JULY 31, 1997
NAME OF FUND WEEKLY NET ASSETS) (IN MILLIONS)
- ------------ ------------------- -------------
<S> <C> <C>
Municipal Advantage Fund Inc. 0.36% <F1> $161.5
The Czech Republic Fund, Inc. 0.50% <F2> 90.1
</TABLE>
- ----------
[FN]
<F1> Fee is paid by Advantage (and will be paid by Value Advisors) out of its
management fee and includes compensation for administrative services.
<F2> Fee is paid by Advantage (and will be paid by Value Advisors) out of its
management fee.
</FN>
A-2
<PAGE>
2. INFORMATION PERTAINING TO THE MEETING:
The following table sets forth the issued and outstanding shares of each
Fund as of the Record Date.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
OF COMMON STOCK OF PREFERRED STOCK
NAME OF FUND ISSUED AND OUTSTANDING ISSUED AND OUTSTANDING
- ------------ ---------------------- ----------------------
<S> <C> <C>
The Emerging Markets Income Fund Inc 3,512,134 --
The Emerging Markets Income Fund II Inc 21,946,825 --
The Emerging Markets Floating Rate Fund Inc. 4,172,759 --
Global Partners Income Fund Inc. 14,507,134 --
Municipal Advantage Fund Inc. 7,257,093 1,100
Municipal Partners Fund Inc. 5,757,094 800
Municipal Partners Fund II Inc. 6,007,094 900
The Czech Republic Fund, Inc. 5,878,047 --
</TABLE>
3. INFORMATION PERTAINING TO THE EXISTING ADVANTAGE AGREEMENTS, THE EXISTING
SBAM AGREEMENTS AND THE EXISTING OPCAP AGREEMENTS:
The following table provides information regarding the date of each
Existing Advantage Agreement, Existing SBAM Agreement and Existing OpCap
Agreement, the date on which the respective Boards and stockholders of each Fund
last approved such agreements, and the fees paid to Advantage, SBAM and/or OpCap
Advisors, as applicable, pursuant to such agreements for each Fund's most
recently completed fiscal year.*
<TABLE>
<CAPTION>
FEES PAID
AGREEMENT DATE OF DATE OF LAST FEES PAID BY ADVANTAGE
NAME OF FUND DESCRIPTION LAST BOARD SHAREHOLDER BY FUND TO TO SBAM OR
(AND FISCAL YEAR-END) (AND DATE) APPROVAL APPROVAL ADVANTAGE OPCAP ADVISORS
- --------------------- ---------- -------- -------- ---------- --------------
<S> <C> <C> <C> <C> <C>
The Emerging Markets Existing Advantage 2/24/97 12/8/93 $273,497 --
Income Fund Inc (8/31) Agreement (10/22/92)
The Emerging Markets Existing Advantage 2/24/97 6/16/93 $4,048,105 --
Income Fund II Inc (5/31) Agreement (6/18/93)
Existing SBAM 2/24/97 6/16/93 -- $2,361,395<F1>
Agreement (6/18/93)
The Emerging Markets Existing Advantage 2/24/97 3/15/94 $692,817 --
Floating Rate Fund Inc. Agreement (3/17/94)
(2/28)
Existing SBAM 2/24/97 3/15/94 -- $ 409,392<F1>
Agreement (3/17/94)
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
FEES PAID
AGREEMENT DATE OF DATE OF LAST FEES PAID BY ADVANTAGE
NAME OF FUND DESCRIPTION LAST BOARD SHAREHOLDER BY FUND TO TO SBAM OR
(AND FISCAL YEAR-END) (AND DATE) APPROVAL APPROVAL ADVANTAGE OPCAP ADVISORS
- --------------------- ---------- -------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Global Partners Income Existing Advantage 2/24/97 10/20/93 $2,009,026 --
Fund Inc. (8/31) Agreement (10/21/93)
Existing SBAM 2/24/97 10/20/93 -- $1,315,868<F1>
Agreement (10/21/93)
Municipal Advantage Existing Advantage 2/21/97 4/21/93 $ 929,882 --
Fund Inc. (10/31) Agreement (4/22/93)
Existing OpCap 2/21/97 4/21/93 -- $ 557,929<F1>
Agreement (4/22/93)
Municipal Partners Existing Advantage 7/21/97 1/21/93 $ 715,126 --
Fund Inc. (12/31) Agreement (1/21/93)
Existing SBAM 7/21/97 1/21/93 -- $ 429,076<F1>
Agreement (1/21/93)
Municipal Partners Existing Advantage 7/21/97 7/21/93 $ 750,006 --
Fund II Inc. (6/30) Agreement (7/23/93)
Existing SBAM 7/21/97 7/21/93 -- $ 450,004<F1>
Agreement (7/23/93)
The Czech Republic Existing Advantage 9/13/96 9/20/94 $ 755,154<F3> --
Fund, Inc. (8/31) Agreement (9/23/94)
Existing OpCap 9/13/96 11/15/96<F2> -- $ 302,063<F3>
Agreement (11/15/96)
</TABLE>
- ----------
[FN]
* Information provided in the table with respect to The Emerging Markets
Income Fund Inc, Global Partners Income Fund Inc. and The Czech Republic
Fund, Inc. is for each such Fund's fiscal year ended August 31, 1996. For
the six-month period ended February 28, 1997, (i) The Emerging Markets
Income Fund Inc paid $170,700 in fees to Advantage, (ii) Global Partners
Income Fund Inc. paid $1,188,311 in fees to Advantage and Advantage paid
$702,184 in fees to SBAM and (iii) The Czech Republic Fund, Inc. paid
$470,131 in fees to Advantage and Advantage paid $253,380 in fees to OpCap
Advisors.
<F1> Includes payment for administrative services.
<F2> Pursuant to an advisory agreement among Advantage, BAI Fondsberatung GmbH
("BAI") and the Fund, BAI served as regional adviser to the Fund, providing
advice and recommendations to OpCap Advisors regarding the purchase, sale
or holding of particular Czech and other Central European securities, as
well as research and statistical data, commencing with the Fund's
inception. BAI resigned as regional adviser effective as of November 15,
1996. OpCap Advisors and Advantage currently are responsible for providing
to the Fund the services previously provided by BAI. The Existing OpCap
Agreement was last approved by the stockholders at a meeting held on
November 15, 1996 in connection with approval of changes relating to the
assumption by OpCap Advisors of the advisory services previously provided
to the Fund by BAI and a related increase in the advisory fee remitted by
Advantage to OpCap Advisors from 0.40% to 0.50% of the Fund's average
weekly net assets.
<F3> Had the changes described in footnote 2 been effective during the fiscal
year ended August 31, 1996 and the six month period ended February 28,
1997, respectively, OpCap Advisors would have been entitled to receive from
Advantage an additional $75,516 and $19,543 in fees and Advantage would
have retained an additional $75,515 and $19,543 in fees for such fiscal
year and six-month period, respectively.
</FN>
A-4
<PAGE>
4. INFORMATION PERTAINING TO EACH FUND'S DIRECTORS AND OFFICERS:
The following table provides information regarding the directors and
officers of The Emerging Markets Income Fund Inc who currently are also
directors, officers or employees of Advantage.
<TABLE>
<CAPTION>
NAME POSITION WITH THE FUND POSITION WITH ADVANTAGE
- ---- ---------------------- -----------------------
<S> <C> <C>
Alan H. Rappaport President and Member of the Board President and Member of the Board
</TABLE>
The following table provides information regarding the directors and
officers of Municipal Advantage Fund Inc. and/or The Czech Republic Fund, Inc.
who currently are also directors, officers or employees of Advantage or OpCap
Advisors.
<TABLE>
<CAPTION>
POSITION WITH MUNICIPAL POSITION WITH THE CZECH POSITION WITH ADVANTAGE
NAME ADVANTAGE FUND INC. REPUBLIC FUND, INC. OR OPCAP ADVISORS
- ---- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
Alan H. Rappaport -- Chairman of the Board President and Member
of the Board, Advantage
Mark C. Biderman President and Member of -- Executive Vice
the Board President, Advantage
Robert I. Kleinberg Secretary and President, Secretary and Secretary and Member
Member of the Board Member of the Board of the Board, Advantage
Robert A. Blum Assistant Secretary Assistant Secretary Assistant Secretary,
Advantage
</TABLE>
In addition to the foregoing directors and officers, Dennis E. Feeney, the
Treasurer of The Czech Republic Fund, Inc., is Executive Vice President and
Chief Financial Officer of OpCo.
A-5
<PAGE>
The following table provides information regarding the directors and
officers of The Emerging Markets Income Fund II Inc, The Emerging Markets
Floating Rate Fund Inc. and/or Global Partners Income Fund Inc. who currently
are also directors, officers or employees of Advantage or SBAM.
<TABLE>
<CAPTION>
POSITION WITH THE EMERGING
MARKETS INCOME FUND II INC/
THE EMERGING MARKETS POSITION WITH GLOBAL POSITION WITH
NAME FLOATING RATE FUND INC. PARTNERS INCOME FUND INC ADVANTAGE OR SBAM
- ---- --------------------------- ------------------------ -----------------
<S> <C> <C> <C>
Alan H. Rappaport Chairman of the Board President and Member President and Member of
of the Board the Board, Advantage
Michael S. Hyland President and Member Chairman of the Board President, Managing
of the Board Director and Member
of the Board, SBAM
Peter J. Wilby Executive Vice President Executive Vice President Managing Director, SBAM
Thomas K. Flanagan Executive Vice President Executive Vice President Director, SBAM
Beth A. Semmel -- Executive Vice President Director, SBAM
Lawrence H. Kaplan Executive Vice President Executive Vice President Vice President and Chief
and General Counsel and General Counsel Counsel, SBAM
Alan M. Mandel Treasurer Treasurer Vice President, SBAM
Laurie A. Pitti Assistant Treasurer Assistant Treasurer Vice President and
Investment Accounting
Manager, SBAM
Amy W. Yeung Assistant Treasurer<F1> -- Investment Accounting
Manager, SBAM
Noel B. Daugherty Secretary Secretary Employee, SBAM
Jennifer G. Muzzey Assistant Secretary Assistant Secretary Employee, SBAM
</TABLE>
- ----------
[FN]
<F1> Ms. Yeung holds no office with The Emerging Markets Floating Rate Fund Inc.
</FN>
A-6
<PAGE>
The following table provides information regarding the directors and
officers of Municipal Partners Fund Inc. and Municipal Partners Fund II Inc. who
currently are also directors, officers or employees of Advantage or SBAM.
<TABLE>
<CAPTION>
POSITION WITH MUNICIPAL POSITION WITH MUNICIPAL POSITION WITH
NAME PARTNERS FUND INC. PARTNERS FUND II INC. ADVANTAGE OR SBAM
- ---- ----------------------- ----------------------- ------------------
<S> <C> <C> <C>
Mark C. Biderman Chairman of the Board Chairman of the Board Executive
Vice President, Advantage
Michael S. Hyland President and Member President and President, Managing
of the Board Member of the Board Director and Member
of the Board, SBAM
Marybeth Whyte Executive Vice President Executive Vice President Director, SBAM
Lawrence H. Kaplan Executive Vice President Executive Vice President Vice President and
and General Counsel and General Counsel Chief Counsel, SBAM
Alan M. Mandel Treasurer Treasurer Vice President, SBAM
Laurie A. Pitti Assistant Treasurer Assistant Treasurer Vice President and
Investment Accounting
Manager, SBAM
Noel B. Daugherty Secretary Secretary Employee, SBAM
Jennifer G. Muzzey Assistant Secretary Assistant Secretary Employee, SBAM
Robert I. Kleinberg Assistant Secretary Assistant Secretary Secretary and Member
of the Board, Advantage
</TABLE>
In connection with the consummation of the Acquisition, each of Messrs.
Rappaport, Biderman and Kleinberg will resign as a director and/or officer of
each Fund for which he currently serves in such capacity, Mr. Blum will resign
as an officer of Municipal Advantage Fund Inc. and The Czech Republic Fund, Inc.
and Dennis E. Feeney will resign as Treasurer of The Czech Republic Fund, Inc.
It is a condition to such consummation that each Fund's Board of Directors will
have elected one person designated by the PIMCO Parties to join each such Board.
In addition, it is a condition to such consummation that the Board of Directors
of each SBAM Fund and The Emerging Markets Income Fund Inc will have elected
those persons designated by the PIMCO Parties to hold such titles with each such
Fund as are currently held by the foregoing officers who are resigning and also
will have appointed one additional designee of the PIMCO Parties to the office
of Vice President of each such Fund. Moreover, it is a condition to such
consummation that the Board of Directors of Municipal Advantage Fund Inc. and
The Czech Republic Fund, Inc. will have elected additional persons designated by
the PIMCO Parties to hold such offices as may be determined by the PIMCO
Parties.
The PIMCO Parties expect to designate Stephen J. Treadway for election by
the Board of Directors of each Fund to join such Boards and to assume those
offices currently held by Messrs. Rappaport, Biderman and Kleinberg. Mr.
Treadway has served since May 1996 as an Executive Vice President of PIMCO
Advisors and as Director, Chairman and President of PIMCO Funds Distribution
Company. Prior to May 1996, Mr. Treadway was employed by Smith Barney Inc. for
more than 18 years, serving in various senior officer positions.
Each SBAM Fund's directors and executive officers own, individually and in
the aggregate, directly or indirectly, less than 1% of the outstanding shares of
Salomon Inc, the indirect parent of SBAM.
A-7
<PAGE>
5. INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS:
The following table provides information regarding the number and
percentage of outstanding shares of common stock of each of Municipal Partners
Fund Inc. and Municipal Partners Fund II Inc. owned beneficially by each
director and executive officer of such Funds, and all directors and executive
officers of each such Fund as a group, in each case as of July 31, 1997.
MUNICIPAL PARTNERS MUNICIPAL PARTNERS
NAME FUND INC. FUND II INC.
- ---- ------------------ ------------------
Charles F. Barber 1,000 1,000
Mark C. Biderman -0- -0-
Michael S. Hyland 1,000 1,000
Riordan Roett -0- -0-
Robert L. Rosen -0- -0-
Marybeth Whyte -0- -0-
Lawrence H. Kaplan -0- -0-
Alan M. Mandel -0- -0-
Noel B. Daugherty -0- -0-
All Directors and 2,000 2,000
Executive Officers
(as a group)
The following table provides information regarding the number and
percentage of outstanding shares of common stock of each of The Emerging Markets
Income Fund Inc, The Emerging Markets Income Fund II Inc, The Emerging Markets
Floating Rate Fund Inc. and Global Partners Income Fund Inc. owned beneficially
by each director and executive officer of such Funds, and all directors and
executive officers of each such Fund as a group, in each case as of July 31,
1997.
<TABLE>
<CAPTION>
THE EMERGING THE EMERGING THE EMERGING GLOBAL PARTNERS
MARKETS INCOME MARKETS INCOME MARKETS FLOATING INCOME
NAME FUND INC FUND II INC RATE FUND INC. FUND INC.
- ---- -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Charles F. Barber 2,367 4,088 500 1,000
Leslie H. Gelb -0- -0- -0- -0-
Michael S. Hyland 1,200 1,500 1,000 1,000
Alan H. Rappaport 1,517<F1> 1,000 1,000 1,000
Riordan Roett -0- -0- -0- -0-
Jeswald W. Salacuse 200 200 200 200
Peter J. Wilby -0- 500 -0- 500
Beth A. Semmel -- -- -- -0-
Thomas K. Flanagan 302<F2> 591 -0- -0-
Lawrence H. Kaplan -0- -0- -0- -0-
</TABLE>
A-8
<PAGE>
<TABLE>
<CAPTION>
THE EMERGING THE EMERGING THE EMERGING GLOBAL PARTNERS
MARKETS INCOME MARKETS INCOME MARKETS FLOATING INCOME
NAME FUND INC FUND II INC RATE FUND INC. FUND INC.
- ---- -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Alan M. Mandel -0- -0- -0- -0-
Noel B. Daugherty -0- -0- -0- -0-
All Directors and 5,586 7,879 2,700 3,700
Executive Officers
(as a group)
</TABLE>
- ----------
[FN]
<F1> 508 of such shares are owned by Mr. Rappaport's wife. Mr. Rappaport
disclaims beneficial ownership of such shares for purposes of the
Securities Exchange Act of 1934, as amended (the "1934 Act").
<F2> Shares are owned by Mr. Flanagan's wife. Mr. Flanagan disclaims beneficial
ownership of such shares for purposes of the 1934 Act.
</FN>
The following table provides information regarding the number and
percentage of outstanding shares of common stock of each of Municipal Advantage
Fund Inc. and The Czech Republic Fund, Inc. owned beneficially by each director
and executive officer of such Funds, and all directors and executive officers of
each such Fund as a group, in each case as of July 31, 1997.
<TABLE>
<CAPTION>
MUNICIPAL
ADVANTAGE
NAME FUND INC.
---- ---------
<S> <C>
Mark C. Biderman 6,002
Raymond D. Horton -0-
Robert I. Kleinberg -0-
Robert L. Rosen -0-
Jeswald W. Salacuse 222
All Directors and 6,224
Executive Officers
(as a group)
<CAPTION>
THE CZECH
REPUBLIC
NAME FUND, INC.
---- ----------
<S> <C>
Paul Belica 500
Leslie H. Gelb 100
Robert I. Kleinberg 1,402
Wendy W. Luers 500
Alan H. Rappaport 1,370
Luis Rubio 1,000
Dennis E. Feeney -0-
All Directors and 4,872
Executive Officers
(as a group)
</TABLE>
For each of the Funds, the holdings of no director or executive officer,
nor the directors and executive officers of such Fund as a group, represented
more than 1% of the outstanding shares of such Fund's common stock as of July
31, 1997. Except as otherwise noted above, each director and executive officer
has sole voting and investment power with respect to the listed shares. No
director or executive officer held any shares of preferred stock of any Fund as
of July 31, 1997.
6. INFORMATION PERTAINING TO CERTAIN ARRANGEMENTS:
OpCo serves as a broker-dealer participating in periodic auctions of
preferred stock by Municipal Advantage Fund Inc., Municipal Partners Fund Inc.
and Municipal Partners Fund II Inc. During the most recently completed fiscal
years of such Funds, the aggregate amount of fees received by OpCo for such
services was $139,779, $111,473 and $122,574, respectively. It is expected that
such services will continue to be provided by OpCo following consummation of the
Acquisition.
A-9
<PAGE>
7. OTHER INFORMATION:
Any proposals which stockholders of a Fund plan to submit at the next
annual meeting of such Fund, to be held in 1997 or 1998, must be or have been
received by SBAM or OpCap Advisors and Value Advisors on the date set forth in
the following table if the proposals are to be included in the notice of meeting
and the proxy statement relating to such annual meetings.
NAME OF FUND DATE
- ------------ ----
The Emerging Markets Income Fund Inc June 20, 1997
The Emerging Markets Income Fund II Inc May 7, 1998
The Emerging Markets Floating Rate Fund Inc. <F1>
Global Partners Income Fund Inc. June 20, 1997
Municipal Advantage Fund Inc. September 12, 1997
Municipal Partners Fund Inc. <F1>
Municipal Partners Fund II Inc. May 7, 1998
The Czech Republic Fund, Inc. June 9, 1997
- ----------
[FN]
<F1> Any proposals which stockholders of The Emerging Markets Floating Rate Fund
Inc. or Municipal Partners Fund Inc. plan to submit at the next annual
meeting of either such Fund, to be held in 1998, must be received a
reasonable time before such Fund's solicitation of proxies for that
meeting.
</FN>
B. Specific Fund Information. The following information relates
specifically to The Emerging Markets Income Fund II Inc, The Emerging Markets
Floating Rate Fund Inc., Municipal Partners Fund Inc. and Municipal Partners
Fund II Inc. and is provided in connection with the proposals in the proxy
statement relating to such Funds.
THE EMERGING MARKETS INCOME FUND II INC AND THE EMERGING MARKETS FLOATING RATE
FUND INC.
1. INFORMATION PERTAINING TO THE ELECTION OF DIRECTORS:
In accordance with each such Fund's Charter, the Fund's Board of Directors
is divided into three classes: Class I, Class II and Class III.
The Emerging Markets Income Fund II Inc
At the Meeting of The Emerging Markets Income Fund II Inc, stockholders
will be asked to elect two Class III Directors to hold office until the year
2000 Annual Meeting of Stockholders, or thereafter when their respective
successors are elected and qualified. The terms of office of the Class I and
Class II Directors expire at the Annual Meetings of Stockholders in 1998 and
1999, respectively, or thereafter in each case when their respective successors
are elected and qualified. The effect of these staggered terms is to limit the
ability of other entities or persons to acquire control of the Fund by delaying
the replacement of a majority of the Board of Directors.
A-10
<PAGE>
The following table provides information concerning each Nominee for
election as a director.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEES AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- ------------------------------------------------------------- -------- ---
NOMINEES TO SERVE UNTIL 2000 ANNUAL MEETING OF STOCKHOLDERS
CLASS III DIRECTORS
<S> <C> <C>
Alan H. Rappaport*, Chairman; Executive Vice President, 1993 44
Oppenheimer & Co., Inc.; President and Member of
the Board, Advantage Advisers, Inc.
Charles F. Barber, Member of Audit Committee; 1993 80
Consultant; formerly Chairman of the Board,
ASARCO Incorporated.
</TABLE>
The following table provides information concerning the remaining directors
of the Fund.
<TABLE>
<CAPTION>
DIRECTOR
DIRECTORS AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- -------------------------------------------------------------- -------- ---
DIRECTORS SERVING UNTIL 1998 ANNUAL MEETING OF STOCKHOLDERS
CLASS I DIRECTORS
<S> <C> <C>
Dr. Riordan Roett, Member of Audit Committee; 1995<F1> 58
Professor and Director, Latin American Studies Program,
Paul H. Nitze School of Advanced International
Studies, Johns Hopkins University.
Leslie H. Gelb, Member of the Audit Committee; 1994 60
President, The Council on Foreign Relations;
formerly, Columnist, Deputy Editorial Page
Editor and Editor, Op-Ed Page, The New York Times.
DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF STOCKHOLDERS
CLASS II DIRECTORS
Jeswald W. Salacuse, Member of Audit Committee; 1993 59
Henry J. Braker Professor of Commercial Law and
formerly Dean, The Fletcher School of Law &
Diplomacy, Tufts University.
Michael S. Hyland*, President; President and 1993 51
Managing Director, Salomon Brothers Asset
Management Inc and Managing Director,
Salomon Brothers Inc.
</TABLE>
- ----------
[FN]
* "Interested person," as defined in the 1940 Act. Messrs. Rappaport and
Hyland are employees of Advantage and SBAM, respectively.
<F1> Dr. Roett also served as a director of the Fund from May 1993 through June
1994.
</FN>
A-11
<PAGE>
The Emerging Markets Floating Rate Fund Inc.
At the Meeting of The Emerging Markets Floating Rate Fund Inc.,
stockholders will be asked to elect two Class II Directors to hold office until
the year 2000 Annual Meeting of Stockholders, or thereafter when their
respective successors are elected and qualified. The terms of office of the
Class III and Class I Directors expire at the Annual Meetings of Stockholders in
1998 and 1999, respectively, or thereafter in each case when their respective
successors are elected and qualified. The effect of these staggered terms is to
limit the ability of other entities or persons to acquire control of the Fund by
delaying the replacement of a majority of the Board of Directors.
The following table provides information concerning each Nominee for
election as a director.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEES AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- ------------------------------------------------------------- -------- ---
NOMINEES SERVING UNTIL 2000 ANNUAL MEETING OF STOCKHOLDERS
CLASS II DIRECTORS
<S> <C> <C>
Leslie H. Gelb, Member of the Audit Committee; 1994 60
President, The Council on Foreign Relations;
formerly, Columnist, Deputy Editorial Page Editor
and Editor, Op-Ed Page, The New York Times.
Michael S. Hyland*, President; President and 1994 51
Managing Director, Salomon Brothers Asset
Management Inc and Managing Director,
Salomon Brothers Inc.
</TABLE>
The following table provides information concerning the remaining directors
of the Fund.
<TABLE>
<CAPTION>
DIRECTOR
DIRECTORS AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- -------------------------------------------------------------- -------- ---
DIRECTORS SERVING UNTIL 1998 ANNUAL MEETING OF STOCKHOLDERS
CLASS III DIRECTORS
<S> <C> <C>
Alan H. Rappaport*, Chairman; Executive 1994 44
Vice President, Oppenheimer & Co., Inc.;
President and Member of the Board,
Advantage Advisers, Inc.
Charles F. Barber, Member of Audit Committee; 1994 80
Consultant; formerly Chairman
of the Board, ASARCO Incorporated.
DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF STOCKHOLDERS
CLASS I DIRECTORS
Jeswald W. Salacuse, Member of Audit Committee; 1994 59
Henry J. Braker Professor of Commercial Law
and formerly Dean, The Fletcher School of Law
& Diplomacy, Tufts University.
Dr. Riodan Roett, Member of Audit Commitee; Professor and Director, 1995<F1> 58
Latin American Studies Program, Paul H. Nitze School of
advanced International Studies, John Hopkins University
</TABLE>
- ----------
[FN]
* "Interested person," as defined in the 1940 Act. Messrs. Rappaport and
Hyland are employees of Advantage and SBAM, respectively.
<F1> Dr. Roett also served as a director of the Fund from February 1994 through
June 1994.
</FN>
A-12
<PAGE>
The Emerging Markets Income Fund II Inc and The Emerging Markets Floating
Rate Fund Inc.
In addition to serving as a director of The Emerging Markets Income Fund II
Inc and The Emerging Markets Floating Rate Fund Inc., each of the directors also
serves as a director for certain other registered investment companies, as
described below. Messrs. Hyland and Barber each serve as a director for four
other investment companies co-advised by Advantage and SBAM and eight additional
investment companies advised by SBAM. Mr. Barber also serves as a director for
two additional investment companies advised by Advantage. Messrs. Rappaport,
Gelb and Salacuse each serve as a director for two other investment companies
advised by both Advantage and SBAM. Mr. Rappaport also serves as a director for
four other investment companies advised by Advantage. Messrs. Salacuse and Gelb
also serve as directors for three other investment companies advised by
Advantage. Mr. Salacuse also serves as a director for three other investment
companies advised by SBAM. Dr. Roett serves as a director for four other
investment companies advised by both Advantage and SBAM and as a director for
three other investment companies advised by SBAM.
Each Fund's executive officers are elected each year at the first meeting
of the Fund's Board of Directors following the Annual Meeting of Stockholders,
to hold office until the meeting of the Board following the next Annual Meeting
of Stockholders and until their successors are duly elected and qualified. In
addition to Messrs. Rappaport and Hyland, the present executive officers of each
Fund are:
<TABLE>
<CAPTION>
OFFICER
NAME OFFICE AGE SINCE
- ---- ------ --- -------
<S> <C> <C> <C>
Peter J. Wilby Executive Vice President 38 1994
Thomas K. Flanagan Executive Vice President 43 1994
Lawrence H. Kaplan Executive Vice President
and General Counsel 40 1995
Alan M. Mandel Treasurer 39 1995
Noel B. Daugherty Secretary 32 1997
</TABLE>
Mr. Wilby has also been a Managing Director of SBAM and Salomon Brothers
Inc ("SBI") since January 1996. Prior to January 1996, he was a Director of SBAM
and SBI. Mr. Flanagan has also been a Director of SBAM and SBI since July 1991.
Mr. Kaplan has also been a Vice President and Chief Counsel of SBAM and a Vice
President of SBI since May 1995. Prior to May 1995, he was Senior Vice
President, Director and General Counsel of Kidder Peabody Asset Management, Inc.
and a Senior Vice President of Kidder, Peabody & Co. Incorporated. Mr. Mandel
has also been a Vice President of SBAM and SBI since January 1, 1995. From
October 1991 through December 1994, he was Chief Financial Officer of Hyperion
Capital Management Inc., and prior to October 1991, he was Vice President of
Mitchell Hutchins Asset Management, Inc. Mr. Daugherty has also been an employee
of SBAM since November 1996. From August 1993 to October 1996, he was an
employee of Chancellor LGT Asset Management and an employee of The Dreyfus
Corporation prior to August 1993.
Each Fund's Audit Committee is composed of Messrs. Barber, Gelb, Roett and
Salacuse. The principal functions of the Audit Committee for each Fund are: (i)
to recommend to the Board the appointment of the Fund's independent accountants;
(ii) to review with the independent accountants the scope and anticipated
A-13
<PAGE>
costs of their audit; and (iii) to receive and consider a report from the
independent accountants concerning their conduct of the audit, including any
comments or recommendations they might want to make in that connection. The
Audit Committees of The Emerging Markets Income Fund II Inc and The Emerging
Markets Floating Rate Fund Inc. each met one time during the fiscal years ended
May 31, 1997 and February 28, 1997, respectively. Neither Fund has a nominating
or compensation committee.
During the fiscal year ended May 31, 1997, the Board of Directors of The
Emerging Markets Income Fund II Inc met ten times. During the fiscal year ended
February 28, 1997, the Board of Directors of The Emerging Markets Floating Rate
Fund Inc. met eight times. Each director of each Fund attended in the aggregate
at least 75% of the meetings of the Board and the Committee of the Board on
which he served.
Under the federal securities laws, each Fund is required to provide to
stockholders in connection with the Meeting information regarding compensation
paid by the Fund to each director and each of the three highest-paid executive
officers, as well as compensation paid to such individuals by the various other
investment companies advised by Advantage and/or SBAM. The following tables
provide information concerning the compensation paid during each Fund's most
recently completed fiscal year to each director and Nominee of the Fund. Each of
the directors listed below is a member of the Audit Committee of each Fund and
audit and other committees of certain other investment companies advised by
Advantage and/or SBAM, and, accordingly, the amounts provided in the table
include compensation for service on such committees. Neither Fund (i) paid
compensation during its most recently completed fiscal year to any of its
non-director executive officers or (ii) provided any pension or retirement
benefits to directors or executive officers. In addition, no remuneration was
paid during such fiscal years by either Fund or any other investment company
advised by Advantage and/or SBAM to Messrs. Rappaport or Hyland who, as
employees of Advantage and SBAM, respectively, are "interested persons," as
defined in the 1940 Act.
The Emerging Markets Income Fund II Inc
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM OTHER FUNDS TOTAL COMPENSATION TOTAL COMPENSATION
COMPENSATION CO-ADVISED BY FROM OTHER FUNDS FROM OTHER FUNDS TOTAL
NAME OF DIRECTOR FROM FUND ADVANTAGE AND SBAM ADVISED BY ADVANTAGE ADVISED BY SBAM COMPENSATION
- ---------------- --------- ------------------ -------------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Directorships (A) Directorships(A) Directorships(A) Directorships(A)
Charles F. Barber $9,900 $45,000(5) $ 6,600(2) $67,050(8) $128,550(16)
Leslie H. Gelb $9,900 $28,000(3) $ 9,300(3) $ 0 $ 47,200(7)
Jeswald W. Salacuse $9,200 $25,900(3) $11,000(3) $26,300(3) $ 72,400(10)
Riordan Roett $9,900 $28,100(5) $ 0 $26,300(3) $ 64,300(9)
</TABLE>
- ----------
[FN]
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
</FN>
A-14
<PAGE>
The Emerging Markets Floating Rate Fund Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM OTHER FUNDS TOTAL COMPENSATION TOTAL COMPENSATION
COMPENSATION CO-ADVISED BY FROM OTHER FUNDS FROM OTHER FUNDS TOTAL
NAME OF DIRECTOR FROM FUND ADVANTAGE AND SBAM ADVISED BY ADVANTAGE ADVISED BY SBAM COMPENSATION
- ---------------- --------- ------------------ -------------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Directorships(A) Directorships(A) Directorships(A) Directorships(A)
Charles F. Barber $8,000 $43,600(5) $17,600(2) $70,300(8) $139,500(16)
Leslie H. Gelb $8,000 $26,600(3) $23,900(3) $ 0 $ 58,500(7)
Jeswald W. Salacuse $8,000 $26,600(3) $23,900(3) $26,300(3) $ 84,800(10)
Riordan Roett $8,000 $26,600(5) $ 0 $26,300(3) $ 60,900(9)
- ----------
<FN>
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
</FN>
</TABLE>
2. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE:
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Section 30(f) of the 1940 Act in combination require each
Fund's directors and officers, persons who own more than ten percent of the
Fund's common stock, Advantage and SBAM and their respective directors and
officers to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange, Inc. Each
Fund believes that all relevant persons have complied with applicable filing
requirements during its most recently completed fiscal year, except that
Lawrence H. Kaplan, Jennifer G. Muzzey, Alan M. Mandel, Thomas K. Flanagan,
Rodney B. Berens and Vilas V. Gadkari have inadvertently failed to timely file
their Initial Reports on Form 3 with respect to each Fund and Leslie H. Gelb and
Robert I. Kleinberg have inadvertently failed to timely file their Initial
Reports on Form 3 with respect to The Emerging Markets Income Fund II Inc.
3. INFORMATION PERTAINING TO THE RATIFICATION OF THE SELECTION OF THE
INDEPENDENT ACCOUNTANTS:
The Boards of Directors of The Emerging Markets Income Fund II Inc and The
Emerging Markets Floating Rate Fund Inc. have selected Price Waterhouse LLP as
independent accountants of the Fund for the fiscal years ending May 31, 1998 and
February 28, 1998, respectively. Price Waterhouse LLP also served as independent
accountants of each Fund for such Fund's most recently completed fiscal year.
A-15
<PAGE>
MUNICIPAL PARTNERS FUND INC. AND MUNICIPAL PARTNERS FUND II INC.
1. INFORMATION PERTAINING TO THE ELECTION OF DIRECTORS:
In accordance with each Fund's Charter, the Board of Directors is divided
into three classes: Class I, Class II and Class III. At the Meeting of Municipal
Partners Fund Inc., stockholders will be asked to elect two Class I Directors
for such Fund, to hold office until the year 2000 Annual Meeting of
Stockholders, or thereafter when their respective successors are elected and
qualified. The terms of the office of the Class III and Class II Directors of
Municipal Partners Fund Inc. expire at the Annual Meeting of Stockholders in
1998 and 1999, respectively, or thereafter in each case when their respective
successors are elected and qualified. At the Meeting of Municipal Partners Fund
II Inc., stockholders will be asked to elect two Class III Directors for such
Fund, to hold office until the year 2000 Annual Meeting of Stockholders, or
thereafter when their respective successors are elected or qualified. The terms
of office of the Class I and Class II Directors of Municipal Partners Fund II
Inc. expire at the Annual Meeting of Stockholders in 1998 and 1999,
respectively, or thereafter in each case when their respective successors are
elected and qualified. With respect to each Fund, the effect of these staggered
terms is to limit the ability of other entities or persons to acquire control of
the Fund by delaying the replacement of a majority of the Board of Directors.
In addition, the preferred stockholders of Municipal Partners Fund Inc. and
Municipal Partners Fund II Inc. will be asked to elect one Class III and one
Class I Director, respectively, to fill a vacancy created by the resignation of
Mr. Allan C. Hamilton on July 23, 1997. In the case of each Fund, the Nominee to
fill such vacancy has, in accordance with such Funds' respective Charters and
By-Laws, been appointed a director to serve as such from July 23, 1997 until
such proposal is voted on by the preferred stockholders of such Funds. If
elected by such stockholders, such Nominee will hold office until the year 1998
Annual Meeting of Stockholders, or thereafter when his successor is elected and
qualified.
The following table provides information concerning each Nominee for election as
a director.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEES AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- ------------------------------------------------------------- -------- ---
NOMINEES TO SERVE UNTIL 2000 ANNUAL MEETING OF STOCKHOLDERS
CLASS I DIRECTORS (MUNICIPAL PARTNERS FUND INC.); CLASS III DIRECTORS
(MUNICIPAL PARTNERS FUND II INC.)
<S> <C> <C>
Mark C. Biderman*, Chairman; Managing Director, 1994 51
Oppenheimer & Co., Inc., Executive Vice President,
Advantage Advisers, Inc.
Robert L. Rosen, Member of Audit Committee; 1993 50
Chief Executive Officer, RLR Partners L.L.C.
(general partner of private investment fund);
Chairman, Damon Corporation (1989-1993).
NOMINEE TO SERVE UNTIL 1998 ANNUAL MEETING OF STOCKHOLDERS
CLASS III DIRECTOR (MUNICIPAL PARTNERS FUND INC.); CLASS I DIRECTOR
(MUNICIPAL PARTNERS FUND II INC.)
Dr. Riordan Roett, Member of Audit Committee; 1997 58
Professor and Director, Latin American Studies
Program, Paul H. Nitze School of Advanced
International Studies, Johns Hopkins University.
</TABLE>
A-16
<PAGE>
The following table provides information concerning the remaining directors
to the Funds.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEES AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS SINCE AGE
- ------------------------------------------------------------- -------- ---
DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF STOCKHOLDERS
CLASS II DIRECTORS (MUNICIPAL PARTNERS FUND INC. AND
MUNICIPAL PARTNERS FUND II INC.)
<S> <C> <C>
Charles F. Barber, Member of Audit Committee; 1993 80
Consultant; formerly Chairman of the
Board, ASARCO Incorporated.
Michael S. Hyland*, President; President and 1993 51
Managing Director, Salomon Brothers Asset
Management Inc and Managing Director,
Salomon Brothers Inc.
</TABLE>
- ----------
[FN]
* "Interested person," as defined in the 1940 Act. Messrs. Biderman and
Hyland are employees of Advantage and SBAM, respectively.
</FN>
In addition to serving as a director of Municipal Partners Fund Inc. and
Municipal Partners Fund II Inc., each of the directors serves as a director for
certain other registered investment companies, as described below. Messrs.
Hyland and Barber each serve as a director for four other investment companies
co-advised by Advantage and SBAM and eight additional investment companies
advised by SBAM. Mr. Barber also serves as a director for two additional
investment companies advised by Advantage. Messrs. Rosen and Biderman each serve
as a director for one additional investment company advised by Advantage. Mr.
Rosen also serves as a director of Samsonite Corporation, AFP Imaging Corp. and
Culligan Water Technologies, Inc. Dr. Roett serves as a director for four other
investment companies advised by both Advantage and SBAM and as a director for
three other investment companies advised by SBAM.
Each Fund's executive officers are elected each year at the first meeting
of the Fund's Board of Directors following the Annual Meeting of Stockholders,
to hold office until the meeting of the Board following the next Annual Meeting
of Stockholders and until their successors are duly elected and qualified. In
addition to Messrs. Biderman and Hyland, the present executive officers of each
Fund are:
<TABLE>
<CAPTION>
OFFICER
NAME OFFICE AGE SINCE
- ---- ------ --- -------
<S> <C> <C> <C>
Marybeth Whyte Executive Vice President 40 1994
Lawrence H. Kaplan Executive Vice President 40 1995
and General Counsel
Alan M. Mandel Treasurer 39 1995
Noel B. Daugherty Secretary 32 1997
</TABLE>
A-17
<PAGE>
Ms. Whyte has also been a Director of SBAM and Salomon Brothers Inc ("SBI")
since January 1995. Prior to January 1995, she was a Vice President of SBAM and
SBI. Prior to July 1994, Ms. Whyte was a Senior Vice President and head of the
Municipal Bond area at Fiduciary Trust Company International. Mr. Kaplan has
also been a Vice President and Chief Counsel of SBAM and a Vice President of SBI
since May 1995. Prior to May 1995, he was Senior Vice President, Director and
General Counsel of Kidder Peabody Asset Management, Inc. and a Senior Vice
President of Kidder, Peabody & Co. Incorporated. Mr. Mandel has also been a Vice
President of SBAM and SBI since January 1, 1995. From October 1991 through
December 1994, he was Chief Financial Officer of Hyperion Capital Management
Inc., and prior to October 1991, he was Vice President of Mitchell Hutchins
Asset Management, Inc. Mr. Daugherty has also been an employee of SBAM since
November 1996. From August 1993 to October 1996, he was an employee of
Chancellor LGT Asset Management and an employee of The Dreyfus Corporation prior
to August 1993.
Each Fund's Audit Committee is composed of Messrs. Barber, Rosen and Roett.
The principal functions of the Audit Committee for each Fund are: (i) to
recommend to the Board the appointment of the Fund's independent accountants;
(ii) to review with the independent accountants the scope and anticipated cost
of their audit; and (iii) to receive and consider a report from the independent
accountants concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. The Audit Committees
of Municipal Partners Fund Inc. and Municipal Partners Fund II Inc. each met one
time during the fiscal years ended December 31, 1996 and June 30, 1997,
respectively. Neither Fund has a nominating or compensation committee.
During the fiscal year ended December 31, 1996, the Board of Directors of
Municipal Partners Fund Inc. met six times. During the fiscal year ended June
30, 1997, the Board of Directors of Municipal Partners Fund II Inc. met seven
times. Each director of each Fund attended in the aggregate at least 75% of the
meetings of the Board and the Committee of the Board on which he served.
Under the federal securities laws, each Fund is required to provide to
stockholders in connection with the Meeting information regarding compensation
paid by the Fund to each director and each of the three highest-paid executive
officers, as well as compensation paid to such individuals by the various other
investment companies advised by Advantage and/or SBAM. The following tables
provide information concerning the approximate compensation paid during each
Fund's most recently completed fiscal year to each director and Nominee of the
Fund. Each of the directors listed below is a member of the Audit Committee of
each Fund and audit and other committees of certain other investment companies
advised by Advantage and/or SBAM, and accordingly, the amounts provided in the
table include compensation for service on such committees. Neither Fund (i) paid
compensation during its most recently completed fiscal year to any of its
non-executive officers or (ii) provided any pension or retirement benefits to
directors or executive officers. In addition, no remuneration was paid during
such fiscal years by either Fund or any other investment company advised by
Advantage and/or SBAM to Messrs. Biderman or Hyland, who as employees of
Advantage and SBAM, respectively, are "interested persons," as defined in the
1940 Act.
A-18
<PAGE>
Municipal Partners Fund Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM OTHER FUNDS TOTAL COMPENSATION TOTAL COMPENSATION
COMPENSATION CO-ADVISED BY FROM OTHER FUNDS FROM OTHER FUNDS TOTAL
NAME OF DIRECTOR FROM FUND ADVANTAGE AND SBAM ADVISED BY ADVANTAGE ADVISED BY SBAM COMPENSATION
- ---------------- --------- ------------------ -------------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Directorships(A) Directorships(A) Directorships(A) Directorships(A)
Charles F. Barber $8,500 $40,600(5) $19,600(2) $61,633(8) $130,333(16)
Allan C. Hamilton(B) $8,500 $ 8,500(1) $ 0 $26,300(3) $ 43,300(5)
Riordan Roett $ 0 $32,100(5) $ 0 $26,300(3) $ 58,400(9)
Robert L. Rosen $6,400 $ 6,400(1) $ 3,150(1) $ 0 $ 15,950(3)
</TABLE>
- ----------
[FN]
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
(B) Mr. Hamilton resigned as a Director of the Fund on July 23, 1997.
</FN>
Municipal Partners Fund II Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM OTHER FUNDS TOTAL COMPENSATION TOTAL COMPENSATION
COMPENSATION CO-ADVISED BY FROM OTHER FUNDS FROM OTHER FUNDS TOTAL
NAME OF DIRECTOR FROM FUND ADVANTAGE AND SBAM ADVISED BY ADVANTAGE ADVISED BY SBAM COMPENSATION
- ---------------- --------- ------------------ -------------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Directorships(A) Directorships(A) Directorships(A) Directorships(A)
Charles F. Barber $8,500 $42,100(5) $6,700(2) $73,050(8) $ 130,350(16)
Allan C. Hamilton(B) $8,500 $ 8,500(1) $ 0 $27,550(3) $ 44,550(5)
Riordan Roett $ 0 $33,800(5) $ 0 $27,550(3) $ 61,350(9)
Robert L. Rosen $6,400 $ 7,100(1) $2,100(1) $ 0 $ 15,600(3)
</TABLE>
- ----------
[FN]
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
(B) Mr. Hamilton resigned as a Director of the Fund on July 23, 1997.
</FN>
2. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE:
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Section 30(f) of the 1940 Act in combination require each
Fund's directors and officers, persons who own more than ten percent of the
Fund's common stock, Advantage and SBAM, and their respective directors and
officers to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange, Inc. Each
Fund believes that all relevant persons have complied with applicable filing
requirements during its most recently completed fiscal year, except that Riordan
Roett, Lawrence H. Kaplan, Jennifer G. Muzzey, Alan M. Mandel, Rodney B. Berens
and Vilas V. Gadkari have inadvertantly failed to timely file their Initial
Reports on Form 3 with respect to each Fund.
3. INFORMATION PERTAINING TO THE RATIFICATION OF THE SELECTION OF THE
INDEPENDENT ACCOUNTANTS:
The Boards of Directors of Municipal Partners Fund Inc. and Municipal
Partners Fund II Inc. have selected Price Waterhouse LLP as independent
accountants of the Fund for the fiscal years ending December 31, 1997 and June
30, 1998, respectively. Price Waterhouse LLP also serves as independent
accountants of each Fund for such Fund's most recently completed fiscal year.
A-19
<PAGE>
[This page intentionally left blank]
<PAGE>
EXHIBIT B
FORM OF NEW VALUE AGREEMENT 1/
Agreement dated and effective as of ___________ between ___________2/ a
Maryland corporation (herein referred to as the "Fund"), and Value Advisors LLC,
a Delaware limited liability company (the "Investment Manager 3/").
4/ 1. Appointment of Investment Manager. The Investment Manager hereby
undertakes and agrees, upon the terms and conditions herein set forth, to (i)
supervise the Fund's investment program, including advising
- ----------
[FN]
1/ This form is a composite of the eight New Advantage Agreements.
2/ Each of The Emerging Markets Income Fund Inc ("EMD"), The Emerging Markets
Income Fund II Inc ("EDF"), The Emerging Markets Floating Rate Fund Inc.
("EFL"), Global Partners Income Fund Inc. ("GDF"), Municipal Advantage Fund
Inc. ("MAF"), Municipal Partners Fund Inc. ("MNP"), Municipal Partners Fund
II Inc. ("MPT") or The Czech Republic Fund, Inc. ("CRF"), as applicable.
3/ EMD agreement substitutes "Adviser" for "Investment Manager" throughout
such agreement.
4/ EMD agreement substitutes the following for all of paragraph 1:
"1. Appointment of Adviser. The Adviser hereby undertakes and agrees, upon
the terms and conditions herein set forth, (i) to furnish to the Fund's
investment manager, Salomon Brothers Asset Management Inc (hereinafter the
"Investment Manager") and the Fund such research and assistance as the
Investment Manager and the Fund shall from time to time reasonably request;
(ii) to furnish to the Investment Manager and the Fund international
economic information and analysis with particular emphasis on macroeconomic
issues within the international economic community, particularly issues
relating to emerging market country entities; (iii) to consult with the
Investment Manager and the Fund with respect to emerging trends and
developments in the international community with particular emphasis on
opportunities for emerging market country entities; (iv) to consult with
the Investment Manager and the Fund with respect to international
political, financial and social developments, particularly those relating
to emerging market countries; and (v) to pay the salaries, fees and
expenses of such of the Fund's officers, directors or employees as are
directors, officers or employees of the Adviser or any of its affiliates."
CRF agreement substitutes the following for all of paragraph 1:
"1. Appointment of Investment Manager. The Investment Manager hereby
undertakes and agrees, upon the terms and conditions herein set forth, to
provide overall investment management services for the Fund, and in
connection therewith to (i) supervise the Fund's investment program,
including advising and consulting with the Fund's Board of Directors
regarding the Fund's overall investment strategy; (ii) make, in
consultation with the Fund's Board of Directors, investment strategy
decisions for the Fund; (iii) manage the investing and reinvesting of the
Fund's assets; (iv) place purchase and sale orders on behalf of the Fund;
(v) advise the Fund with respect to all matters relating to the Fund's use
of leveraging techniques; (vi) provide or procure the provision of research
and statistical data to the Fund in relation to investing and other matters
within the scope of the investment objective and limitations of the Fund;
(vii) monitor the performance of the Fund's outside service providers,
including the Fund's administrator, transfer agent and custodian; (viii) be
responsible for compliance by the Fund with U.S. Federal, State and other
applicable laws and regulations, and (ix) pay the salaries, fees and
expenses of such of the Fund's directors, officers or employees who are
directors, officers or employees of the Investment Manager or any of its
affiliates, except that the Fund will bear travel expenses or an
appropriate portion thereof of directors and officers of the Fund who are
directors, officers or employees of the Investment Manager, to the extent
that such expenses relate to attendance at meetings of the Board of
Directors or any committees thereof. The Investment Manager may delegate
any of the foregoing responsibilities to a third party with the consent of
the Fund."
</FN>
B-1
<PAGE>
and consulting with the Fund's board of directors and Salomon Brothers Asset
Management Inc5/ (the "Investment Adviser") regarding the Fund's overall
investment strategy, (ii) advise the Fund and the Investment Adviser with
respect to all matters relating to the Fund's use of leveraging techniques,
including the extent and timing of the Fund's use of such techniques, (iii)
consult with the Investment Adviser on [at least a weekly]6/ basis regarding the
Investment Adviser's [specific]7/ decisions concerning the purchase, sale or
holding of particular securities, (iv) provide access on a continuous basis to
economic, financial and political information, research and assistance, (v)8/
[monitor the performance of the Fund's outside service providers, including the
Fund's administrator, transfer agent and custodian]9/ and (vi) [pay the
salaries, fees and expenses of such of the Fund's officers, directors or
employees as are directors, officers or employees of the Investment Manager or
any of its affiliates]10/. In addition, the Investment Manager hereby undertakes
and agrees to appoint Salomon Brothers Asset Management Inc as investment
adviser to (a) make, in consultation with the Investment Manager and the Fund's
Board of Directors, investment strategy decisions for the Fund, (b) manage the
investing and reinvesting of the Fund's assets, (c) place purchase and sale
orders on behalf of the Fund, (d) provide research and statistical data to the
Fund in relation to investing and other matters within the scope of the
investment objectives and limitations of the Fund and (e) provide the following
services: (i) compliance with [the rules and regulations of the Securities and
Exchange Commission]11/, including record keeping, reporting requirements and
preparation of registration statements and proxies, (ii) supervision of Fund
operations, including coordination of functions of the transfer agent,
custodian, accountants, counsel and other parties performing services or
operational functions for the Fund, (iii) administrative and clerical services,
including accounting services and maintenance of books and records and (iv)
services to Fund shareholders, including responding to shareholder inquiries and
maintaining a flow of information to shareholders. The Investment Adviser shall
have the sole ultimate discretion over investment decisions for the Fund.
- ----------
[FN]
5/ MAF agreement substitutes "OpCap Advisors" for "Salomon Brothers Asset
Management Inc" throughout such agreement.
6/ EDF, EFL, GDF and MPT agreements substitute "a regular" for the bracketed
language.
7/ EDF, EFL, GDF and MPT agreements omit the bracketed language.
8/ EDF, EFL and GDF agreements add "consult with the Investment Adviser and
the Fund with respect to emerging trends and developments in the
international community with particular emphasis on opportunities for
emerging market country entities, (vi) consult with the Investment Adviser
and the Fund with respect to international political, financial and social
developments, particularly those relating to emerging market countries,
(vii)" where indicated, and MAF agreement adds "be responsible for matters
related to the corporate existence of the Fund, (vi)" where indicated.
9/ EDF agreement omits the bracketed language.
10/ MPT agreement substitutes "pay the reasonable salaries and expenses of such
of the Fund's officers and employees and any fees and expenses of such of
the Fund's directors who are directors, officers or employees of the
Investment Manager, except that the Fund will bear travel expenses or an
appropriate portion thereof of directors and officers of the Fund who are
directors, officers or employees of the Investment Manager, to the extent
that such expenses relate to attendance at meetings of the Board of
Directors or any committees thereof" for the bracketed language.
11/ EFL and GDF agreements substitute "U.S. federal, state and other applicable
laws and regulations" for the bracketed language.
</FN>
B-2
<PAGE>
2. In connection herewith, the Investment Manager agrees to maintain a
staff within its organization to furnish the above services to the Fund [and to
the Investment Adviser] 12/. The Investment Manager shall bear all expenses
arising out of its duties hereunder13/.
Except as provided in Section 1 [hereof and subparagraph 3(a) of the
Advisory Agreement (as defined below)]14/, the Fund shall be responsible for all
of the Fund's expenses and liabilities, including organizational [and
offering]15/ expenses (which include out-of-pocket expenses, but not overhead or
employee costs of the Investment Manager [and the Investment Adviser]16/);
expenses for legal, accounting and auditing services; taxes and governmental
fees; dues and expenses incurred in connection with membership in investment
company organizations; fees and expenses incurred in connection with listing the
Fund's shares on any stock exchange;17/ costs of printing and distributing
shareholder reports, proxy materials, prospectuses, stock certificates and
distribution of dividends; charges of the Fund's custodians, sub-custodians,
[administrators and sub-administrators,]18/ registrars, transfer agents,
dividend disbursing agents and dividend reinvestment plan agents; payment for
portfolio pricing services to a pricing agent, if any; registration and filing
fees of the Securities and Exchange Commission; expenses of registering or
qualifying securities of the Fund for sale in the various states; freight and
other charges in connection with the shipment of the Fund's portfolio
securities; fees and expenses of non-interested directors19/; travel expenses or
an appropriate portion thereof of directors and officers of the Fund [who are
directors, officers or employees of the Investment Manager or the Investment
Adviser]20/ to the extent that such expenses relate to attendance at
- ----------
[FN]
12/ CRF agreement omits the bracketed language and MAF agreement adds "and
provide the Fund with persons satisfactory to the Fund's Board of Directors
to serve as officers and employees of the Fund" where indicated.
13/ MAF agreement adds ", except that the Board of Directors may approve
reimbursement for the time spent on Fund operations of personnel who spend
substantial time on the operations (other than the provision of investment
advice) of the Fund or other investment companies advised by the Investment
Manager" where indicated.
14/ EDF, EFL and GDF agreements substitute "hereof and subparagraph 3(a) of the
Investment Advisory and Administration Agreement among the Investment
Adviser, the Investment Manager and with respect to certain sections, the
Fund (the "Advisory and Administration Agreement")" for the bracketed
language, and EMD and CRF agreements omit the bracketed language.
15/ EMD agreement omits the bracketed language.
16/ EFL, GDF and CRF agreements omit the bracketed language.
17/ EDF, EFL and GDF agreements add "expenses of leverage;" where indicated.
18/ MAF agreement omits the bracketed language.
19/ CRF agreement adds "or non-interested members of any advisory of investment
board, committee or panel of the Fund" where indicated.
20/ CRF agreement substitutes ", or members of any advisory or investment
board, committee or panel of the Fund," for the bracketed language.
</FN>
B-3
<PAGE>
meetings of the Board of Directors or any committee thereof21/; [salaries of
shareholder relations personnel;]22/ costs of shareholders meetings;23/
insurance; interest; brokerage costs24/; litigation and other extraordinary or
non-recurring expenses.
25/3. Remuneration. In consideration of the services to be rendered by the
Investment Manager under this agreement, the Fund shall pay the Investment
Manager a monthly fee in United States dollars on the [fifth]26/
- ----------
[FN]
21/ CRF agreement adds ", or of any such advisory or investment board,
committee or panel" where indicated.
22/ MAF agreement omits the bracketed language.
23/ EDF, EFL and GDF agreements add "the fees of any rating agencies retained
to rate any preferred stock or debt securities issued by the Fund;" where
indicated.
24/ MNP and MPT agreements add "expenses in connection with the offering and
issuance of and, if applicable, auctions of shares of preferred stock
proposed to be issued by the Fund;" and MAF agreement adds "expenses in
connection with the offering and issuance of and, if applicable, auctions
of shares of any preferred stock issued by the Fund;" where indicated.
25/ CRF agreement adds the following two paragraphs where indicated:
"3. Transactions with Affiliates. The Investment Manager is authorized on
behalf of the Fund, from time to time when deemed to be in the best
interests of the Fund and to the extent permitted by applicable law, to
purchase and/or sell securities in which the Investment Manager or any of
its affiliates underwrites, deals in and/or makes a market and/or may
perform or seek to perform investment banking services for issuers of such
securities. The Investment Manager is further authorized, to the extent
permitted by applicable law, to select brokers (including any brokers
affiliated with the Investment Manager) for the execution of trades for the
Fund.
4. Best Execution; Research Services. The Investment Manager is authorized,
for the purchase and sale of the Fund's portfolio securities, to employ
such dealers and brokers as may, in the judgment of the Investment Manager,
implement the policy of the Fund to obtain the best results taking into
account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Investment Manager is authorized
to direct the execution of the Fund's portfolio transactions to dealers and
brokers furnishing statistical information or research deemed by the
Investment Manager to be useful or valuable to the performance of its
investment advisory functions for the Fund. It is understood that in these
circumstances, as contemplated by Section 28(e) of the Securities Exchange
Act of 1934, the commissions paid may be higher than those which the Fund
might otherwise have paid to another broker if those services had not been
provided. Information so received will be in addition to and not in lieu of
the services required to be performed by the Investment Manager. It is
understood that the expenses of the Investment Manager will not necessarily
be reduced as a result of the receipt of such information or research.
Research services furnished to the Investment Manager by brokers who effect
securities transactions for the Fund may be used by the Investment Manager
in servicing other investment companies and accounts which it manages.
Similarly, research services furnished to the Investment Manager by brokers
who effect securities transactions for other investment companies and
accounts which the Investment Manager manages may be used by the Investment
Manager in servicing the Fund. It is understood that not all of these
research services are used by the Investment Manager in managing any
particular account, including the Fund."
EMD agreement adds the following paragraph where indicated:
"3. Relationship with Investment Manager. In connection with the rendering
of the services required under Section 1, the Fund has entered into an
agreement dated the date hereof with the Investment Manager, which is to
furnish certain services to the Fund pursuant to such agreement.
Furthermore, it is agreed and acknowledged that the Adviser will provide
advice and consultation to the Investment Manager regarding the Fund's
overall investment strategy; however, the Investment Manager will have sole
discretion over investment decisions for the Fund."
26/ EMD agreement substitutes "first" for the bracketed language.
</FN>
B-4
<PAGE>
business day of each month for the previous month at an annual rate of
[0.60%]27/ of the Fund's average weekly net assets28/. If the fee payable to the
Investment Manager pursuant to this paragraph 3 begins to accrue before the end
of any month or if this agreement terminates before the end of any month, the
fee for the period from such date to the end of such month or from the beginning
of such month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs.
For purposes of calculating each such monthly fee, the value of the Fund's
net assets shall be computed at the time and in the manner specified in the
Registration Statement. [Compensation of the Investment Adviser for services
provided under the Advisory29/ Agreement is the sole responsibility of the
Investment Manager.]30/
4. Representations and Warranties. The Investment Manager represents and
warrants that it is duly registered and authorized as an investment adviser
under the Investment Advisers Act of 1940, as amended, and the Investment
Manager agrees to maintain effective all requisite registrations, authorizations
and licenses, as the case may be, until the termination of this agreement.
5. Services Not Deemed Exclusive. The services provided hereunder by the
Investment Manager are not to be deemed exclusive and the Investment Manager and
any of its affiliates or related persons are free to render similar services to
others and to use the research developed in connection with this agreement for
other clients or affiliates. Nothing herein shall be construed as constituting
the Investment Manager an agent of the [Investment Adviser or of the]31/ Fund.
6. Limit of Liability. The Investment Manager shall exercise its best
judgment in rendering the services in accordance with the terms of this
agreement. The Investment Manager shall not be liable for any error of judgment
or mistake of law or for any act or omission or any loss suffered by the Fund in
connection with the matters to which this agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Investment
Manager against any liability to the Fund or its shareholders to which the
Investment Manager would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence32/ in the performance of its duties or from
reckless disregard33/ of its obligations and duties under this agreement
("disabling conduct"). The Fund will indemnify the Investment Manager against,
and hold it harmless from, any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses), including any amounts
paid in satisfaction of judgments, in compromise or as fines or penalties, not
resulting
- ----------
[FN]
27/ EMD agreement substitutes "0.50%", EFL and GDF agreements substitute
"1.10%", EDF agreement substitutes "1.20%", and CRF agreement substitutes
"1.00%" for the bracketed language.
28/ MNP and MPT agreements add "(i.e. the average weekly value of the Fund's
assets less its liabilities, exclusive of capital stock and surplus)" and
MAF agreement adds "(i.e. the average weekly value of the Fund's assets
less its liabilities, exclusive of common and preferred stock and surplus)"
where indicated.
29/ EDF, EFL, and GDF agreements add "and Administration" where indicated.
30/ EMD and CRF agreements omit the bracketed language.
31/ CRF agreement omits the bracketed language.
32/ EMD, EDF, EFL, GDF and CRF agreements add "on its part" where indicated.
33/ EMD, EDF, EFL, GDF and CRF agreements add "by it" where indicated.
</FN>
B-5
<PAGE>
from disabling conduct34/. Indemnification shall be made only following: (i) a
final decision on the merits by a court or other body before whom the proceeding
was brought that the Investment Manager was not liable by reason of disabling
conduct or (ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the Investment Manager was not liable by
reason of disabling conduct by (a) the vote of a majority of a quorum of
directors of the Fund who are neither "interested persons" of the Fund nor
parties to the proceeding ("disinterested non-party directors") or (b) an
independent legal counsel in a written opinion. The Investment Manager shall be
entitled to advances from the Fund for payment of the reasonable expenses35/
incurred by it in connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent permissible under law.
[Prior to any such advance, the Investment Manager]36/ shall provide to the Fund
a written affirmation of its good faith belief that the standard of conduct
necessary for indemnification by the Fund has been met and a written undertaking
to repay any such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the following
additional conditions shall be met: (a) the Investment Manager shall provide a
security in form and amount acceptable to the Fund for its undertaking; (b) the
Fund is insured against losses arising by reason of the advance; or (c) a
majority of a quorum of disinterested non-party directors, or independent legal
counsel, in a written opinion, shall have determined, based on a review of facts
readily available to the Fund at the time the advance is proposed to be made,
that there is reason to believe that the Investment Manager will ultimately be
found to be entitled to indemnification.
7. Duration and Termination. This agreement shall remain in effect until
_____________ and shall continue in effect thereafter for successive annual
periods, but only so long as such continuance is specifically approved at least
annually by the affirmative vote of (i) a majority of the members of the Fund's
Board of Directors who are not parties to this Agreement or "interested persons"
(as defined in the Investment Company Act of 1940, as amended (the "1940 Act"))
of any such party, cast in person at a meeting called for the purpose of voting
on such approval and (ii) a majority of the Fund's Board of Directors or the
holders of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Fund.
Notwithstanding the above, this agreement (a) may nevertheless be
terminated at any time, without penalty, by the Fund's Board of Directors, by
vote of holders of a majority of the outstanding voting securities (as defined
in the 1940 Act) of the Fund or by the Investment Manager, upon 60 days' written
notice delivered to each party hereto, and (b) shall automatically be terminated
in the event of its assignment (as defined in the 1940 Act). Any such notice
shall be deemed given when received by the addressee.
8. Governing Law. This Agreement shall be governed, construed and
interpreted in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being inconsistent with the
1940 Act.
9. Notices. Any notice hereunder shall be in writing and shall be delivered
in person or by telex or facsimile (followed by delivery in person) to the
parties at the addresses set forth below.
- ----------
[FN]
34/ EDF, EFL, GDF and CRF agreements add "by the Investment Manager" and EMD
agreement adds "by the Adviser" where indicated.
35/ CRF agreement adds "(including reasonable counsel fees and expenses)" where
indicated.
36/ EMD agreement substitutes "The Adviser" for the bracketed language.
</FN>
B-6
<PAGE>
If to the Fund:
[Name of Fund]
[Seven World Trade Center
New York, New York 10048]37/
Tel:
Fax:
Attn: [name of Fund Secretary]
If to the Investment Manager:
Value Advisors LLC
800 Newport Center Drive, Suite 100
Newport Beach, California 92660
Tel:
Fax:
Attn:
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by telex or facsimile and mail, on the date on which such
telex or facsimile is sent.
10. Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto caused their duly authorized
signatories to execute this agreement as of the day and year first written
above.
[NAME OF FUND]
By:________________________________________
Name:
Title:
VALUE ADVISORS LLC
By:________________________________________
Name:
Title:
- ----------
[FN]
37/ MAF and CRF agreements substitute "One World Financial Center, New York,
New York 10281" for the bracketed language.
</FN>
B-7
<PAGE>
[This page intentionally left blank]
<PAGE>
EXHIBIT C
FORM OF NEW SBAM AGREEMENT1/
Value Advisors LLC
800 Newport Center Drive, Suite 100
Newport Beach, California 92660
__________
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
This will confirm the agreement between the undersigned (the "Investment
Manager") [and you (the "Investment Adviser")]2/ as follows:
1. The Investment Manager has been employed by _______________3/ (the
"Fund") pursuant to a management agreement dated _______________ between you and
the Investment Manager (the "Management Agreement"). The Fund is a closed-end,
[diversified]4/ management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Fund engages in the
business of investing and reinvesting its assets in the manner and in accordance
with the investment objectives and limitations specified in the Fund's Articles
of Incorporation, as amended from time to time (the "Articles"), in the
Registration Statement on Form N-2, as in effect from time to time (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "SEC") by the Fund under the 1940 Act and the Securities Act of 1933, as
amended, and in such manner and to such extent as may from time to time be
authorized by the Board of Directors of the Fund. Copies of the documents
referred to in the preceding sentence have been furnished to the Investment
Adviser. Any amendments to these documents shall be furnished to the Investment
Adviser.
- ----------
[FN]
1/ This form is a composite of the five New SBAM Agreements.
2/ EDF, EFL and GDF agreements substitute ", you (the "Investment Adviser")
and the Fund (but only with respect to subparagraph 3(b) and paragraphs 6,
7, 10 and 11 of this agreement)" for the bracketed language.
3/ Each of the Emerging Markets Income Fund Inc. ("EMD"), a Maryland
Corporation, The Emerging Markets Floating Rate Fund Inc. ("EDF"), a
Maryland Corporation, Global Partners Income Fund Inc. ("GDF"), a Maryland
Corporation, Municipal Partners Fund Inc. ("MNP"), a Maryland Corporation,
or Municipal Partners Fund II Inc. ("MPT"), a Maryland Corporation, as
applicable.
4/ EDF, EFL and GDF agreements substitute "non-diversified" for the bracketed
language.
</FN>
C-1
<PAGE>
2. The Investment Manager employs the Investment Adviser, subject to the
direction and control of the directors of the Fund, including without limitation
any approval of the directors of the Fund required by the 1940 Act, to (a) make,
in consultation with the Investment Manager and the Fund's Board of Directors,
investment strategy decisions for the Fund, (b) manage the investing and
reinvesting of the Fund's assets as specified in paragraph 1, (c) place purchase
and sale orders on behalf of the Fund, (d) provide research and statistical data
to the Fund in relation to investing and other matters within the scope of the
investment objectives and limitations of the Fund and (e) provide the following
services for the Fund: (A) compliance with [the rules and regulations of the
SEC]5/, including record keeping, reporting requirements and preparation of
registration statements and proxies; (B) supervision of Fund operations,
including coordination of functions of the transfer agent, custodian,
accountants, counsel and other parties performing services or operational
functions for the Fund; (C) administrative and clerical services, including
accounting services and maintenance of books and records; and (D) services to
Fund shareholders, including responding to shareholder inquiries and maintaining
a flow of information to shareholders. The Investment Adviser shall have the
sole ultimate discretion over investment decisions for the Fund.
3. (a) The Investment Adviser shall, at its expense, (i) provide the Fund
with office space, office facilities and personnel reasonably necessary for
performance of the services to be provided by the Investment Adviser pursuant to
this Agreement [and (ii) provide the Fund with persons satisfactory to the
Fund's Board of Directors to serve as officers and employees of the Fund]6/.
(b) Except as provided in subparagraph 3(a) hereof and Section 1 of the
Management Agreement, the Fund shall be responsible for all of the Fund's
expenses and liabilities, including organizational and offering expenses (which
include out-of-pocket expenses, but not overhead or employee costs of the
Investment Adviser); expenses for legal, accounting and auditing services; taxes
and governmental fees; dues and expenses incurred in connection with membership
in investment company organizations; fees and expenses incurred in connection
with listing the Fund's shares on any stock exchange;7/ costs of printing and
distributing shareholder reports, proxy materials, prospectuses, stock
certificates and distribution of dividends; charges of the Fund's custodians,
sub-custodians, administrators and sub-administrators, registrars, transfer
agents, dividend disbursing agents and dividend reinvestment plan agents;
payment for portfolio pricing services to a pricing agent, if any; registration
and filing fees of the SEC; expenses of registering or qualifying securities of
the Fund for sale in the various states; freight and other charges in connection
with the shipment of the Fund's portfolio securities; fees and expenses of
non-interested directors; travel expenses or an appropriate portion thereof of
directors and officers of the Fund who are directors, officers or employees of
the Investment Adviser [or the Investment Manager]8/ to the extent that such
expenses relate to attendance at meetings of the Board of Directors or any
committee thereof; salaries of shareholder relations personnel; costs of
shareholders meetings;9/ insurance; interest; brokerage costs; [expenses in
connection with the offering
- ----------
[FN]
5/ EFL and GDF agreements substitute "U.S. federal, state and other applicable
laws and regulations" for the bracketed language.
6/ EDF, EFL and GDF agreements omit the bracketed language.
7/ EDF, EFL and GDF agreements add "expenses of leverage;" where indicated.
8/ EFL and GDF agreements omit the bracketed language.
9/ EDF, EFL and GDF agreements add "the fees of any rating agencies retained
to rate any preferred stock or debt securities issued by the Fund;" where
indicated.
</FN>
C-2
<PAGE>
and issuance of and, if applicable, auctions of shares of preferred stock
proposed to be issued by the Fund;]10/ litigation and other extraordinary or
non-recurring expenses.
4. The Investment Adviser shall make investments for the Fund's account in
accordance with the investment objectives11/ and limitations set forth in the
Articles, the Registration Statement, the 1940 Act, the provisions of the
Internal Revenue Code of 1986, as amended, relating to regulated investment
companies and policy decisions adopted by the Fund's Board of Directors from
time to time. The Investment Adviser shall advise the Fund's officers and Board
of Directors, at such times as the Fund's Board of Directors may specify, of
investments made for the Fund's account and shall, when requested by the Fund's
officers or Board of Directors, supply the reasons for making such investments.
5. The Investment Adviser may contract with or consult with such banks,
other securities firms, brokers or other parties, without additional expense to
the Fund, as it may deem appropriate regarding investment advice, research and
statistical data, clerical assistance[, accounting services]12/ or otherwise.
6. The Investment Adviser is authorized on behalf of the Fund, from time to
time when deemed to be in the best interests of the Fund and to the extent
permitted by applicable law, to purchase and/or sell securities in which the
Investment Adviser or the Investment Manager or any of their affiliates
underwrites, deals in and/or makes a market and/or may perform or seek to
perform investment banking services for issuers of such securities. The
Investment Adviser is further authorized, to the extent permitted by applicable
law, to select brokers [affiliated with the Investment Adviser or the Investment
Manager]13/ for the execution of trades for the Fund.
7. The Investment Adviser is authorized, for the purchase and sale of the
Fund's portfolio securities, to employ such dealers and brokers as may, in the
judgment of the Investment Adviser, implement the policy of the Fund to obtain
the best [net]14/ results taking into account such factors as price, including
dealer spread, the size, type and difficulty of the transaction involved, the
firm's general execution and operational facilities and the firm's risk in
positioning the securities involved. Consistent with this policy, the Investment
Adviser is authorized to direct the execution of the Fund's portfolio
transactions to dealers and brokers furnishing statistical information or
research deemed by the Investment Adviser to be useful or valuable to the
performance of its investment advisory function s for the Fund. Information so
received will be in addition to and not in lieu of the services required to be
performed by the Investment Adviser. It is understood that the expenses of the
Investment Adviser will not necessarily be reduced as a result of the receipt of
such information or research.
8. In consideration of the services to be rendered by the Investment
Adviser under this agreement, the Investment Manager shall pay the Investment
Adviser a monthly fee in United States dollars on the fifth busi-
- ----------
[FN]
10/ EDF, EFL and GDF agreements omit the bracketed language.
11/ EFL agreement adds ", policies" where indicated.
12/ EDF, EFL and GDF agreements omit the bracketed language.
13/ EFL and GDF agreements substitute "(including Salomon Brothers Inc or any
other brokers affiliated with the Investment Adviser or the Investment
Manager)" for the bracketed language, and EDF agreement substitutes
"(including brokers affiliated with the Investment Adviser or Investment
Manager)" for the bracketed language.
14/ EFL and GDF agreements omit the bracketed language.
</FN>
C-3
<PAGE>
ness day of each month for the previous month at an annual rate of [0.36%]15/ of
the Fund's average weekly net assets (i.e. the average weekly value of the
Fund's assets less its liabilities exclusive of capital stock and surplus). If
the fee payable to the Investment Adviser pursuant to this paragraph 8 begins to
accrue before the end of any month or if this agreement terminates before the
end of any month, the fee for the period from such date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs. For purposes of
calculating each such monthly fee, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the Registration Statement.
9. The Investment Adviser represents and warrants that it is duly
registered and authorized as an investment adviser under the [1940 Act]16/, the
Investment Adviser agrees to maintain effective all requisite registrations,
authorizations and licenses, as the case may be, until the termination of this
Agreement.
10. The Investment Adviser shall exercise its best judgment in rendering
the services in accordance with the terms of this agreement. The Investment
Adviser shall not be liable for any error of judgment or mistake of law or for
any act or omission or any loss suffered by the Fund [or the Investment
Manager]17/ in connection with the matters to which this agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Investment Adviser against any liability to the Fund or [the Investment
Manager]18/ to which the Investment Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this agreement ("disabling conduct"). The Fund will indemnify
the Investment Adviser against, and hold it harmless from, any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses), including any amounts paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct by the
Investment Adviser. Indemnification pursuant to the foregoing sentence shall be
made only following: (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the Investment Adviser was not
liable by reason of disabling conduct, or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Adviser was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding ("disinterested non-party
directors") or (b) an independent legal counsel in a written opinion. The
Investment Adviser shall be entitled to advances from the Fund for payment of
the reasonable expenses incurred by it in connection with the matter as to which
it is seeking indemnification in the manner and to the fullest extent
permissible under law. [Prior to any such advance, the]19/ Investment Adviser
shall provide to the Fund a written affirmation of its good faith belief that
the standard of conduct necessary for indemnification by the Fund has been met
and a written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (a) the Investment
Adviser shall provide security in form and amount acceptable to the Fund for its
undertaking; (b) the Fund is insured against losses
- ----------
[FN]
15/ EFL and GDF agreements substitute ".65%" and EDF agreement substitutes
".70%" for the bracketed language.
16/ EDF, EFL and GDF agreement substitute "Investment Advisers Act of 1940, as
amended" for the bracketed language.
17/ EDF, EFL and GDF agreements omit the bracketed language.
18/ EDF, EFL and GDF agreements substitute "its shareholders" for the bracketed
language.
19/ EDF, EFL and GDF agreements substitute "The" for the bracketed language.
</FN>
C-4
<PAGE>
arising by reason of the advance; or (c) a majority of a quorum of disinterested
non-party directors, or independent legal counsel, in a written opinion, shall
have determined, based on a review of facts readily available to the Fund at the
time the advance is proposed to be made, that there is reason to believe that
the Investment Adviser will ultimately be found to be entitled to
indemnification.
11. This agreement shall continue in effect until ____________ and
thereafter for successive annual periods, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Fund's outstanding voting securities (as defined in the 1940 Act) or by the
Fund's Board of Directors and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Fund's directors who are not
parties to this agreement or "interested persons" (as defined in the 1940 Act)
of any such party. This agreement may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act) or by a vote of a majority of the Fund's
entire Board of Directors on 60 days' written notice to the Investment Adviser
or by the Investment Adviser on 60 days' written notice to the Investment
Manager. This agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act). This agreement may only be terminated
in accordance with the provisions of this paragraph 11; provided, however, that
nothing contained in this agreement shall prohibit the ability of the Investment
Manager, in the exercise of its fiduciary duty, to recommend to the Fund that
the Fund take action to terminate this agreement as provided in this paragraph
11.
12. Nothing herein shall be deemed to limit or restrict the right of the
Investment Adviser, or any affiliate of the Investment Adviser, or any employee
of the Investment Adviser, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association. Nothing herein shall be construed
as constituting the Investment Adviser an agent of the Investment Manager or the
Fund.
13. This Agreement shall be governed by the laws of the State of New York;
provided, however, that nothing herein shall be construed as being inconsistent
with the 1940 Act.
14. Notices. Any notice hereunder shall be in writing and shall be
delivered in person or by telex or facsimile (followed by delivery in person) to
the parties at the addresses set forth below.
C-5
<PAGE>
If to the Investment Adviser:
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
Tel: (212) 783-7416
Fax: (212) 783-3601
Attn: President
If to the Investment Manager:
Value Advisors LLC
800 Newport Center Drive, Suite 100
Newport Beach, California 92660
Tel:
Fax:
Attn:
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by telex or facsimile and mail, on the date on which such
telex or facsimile is sent.
15. Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth the agreement between the Investment
Manager and the Investment Adviser, please so indicate by signing and returning
to the Investment Manager the enclosed copy hereof.
Very truly yours,
VALUE ADVISORS LLC
By:________________________________________
Name:
Title:
C-6
<PAGE>
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:________________________________________
Name:
Title:
________________________________________hereby
acknowledges and agrees to the
provisions of subparagraph 3.(b)
and [paragraph 10]20/ of this agreement.
___________________________________________
By:________________________________________
Name:
Title:
- ----------
[FN]
20/ EDF, EFL and GDF agreements substitute "paragraphs 6, 7, 10 and 11" for the
bracketed language.
</FN>
C-7
<PAGE>
[This page intentionally left blank]
<PAGE>
EXHIBIT D
FORM OF NEW OPCAP AGREEMENT1/
Value Advisors LLC
800 Newport Center Drive, Suite 100
Newport Beach, California 92660
__________
OpCap Advisors
Oppenheimer Tower
One World Financial Center
200 Liberty Street
New York, New York 10281
Dear Sirs:
This will confirm the agreement between the undersigned (the "Investment
Manager") [and you (the "Investment Adviser")]2/ as follows:
1. The Investment Manager has been employed by _______________3/ (the
"Fund") pursuant to a management agreement dated as of _______________ between
the Fund and the Investment Manager (the "Management Agreement"). The Fund is a
closed-end, [diversified]4/ management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund engages in
the business of investing and reinvesting its assets in the manner and in
accordance with the investment objective and limitations specified in the Fund's
Articles of Incorporation, as amended from time to time (the "Articles5/"), in
the Registration Statement on Form N-2, as in effect from time to time (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "SEC") by the Fund under the 1940 Act and the Securities Act of 1933, as
amended, and in such manner and to such extent as may from time to time be
authorized by the Board of Directors of the Fund. Copies of the documents
referred to in the preceding
- ----------
[FN]
1/ This form is a composite of the two New OpCap Agreements.
2/ CRF agreement substitutes ", you (the "Investment Advisor") and the Fund
(but only with respect to paragraph 2, subparagraph 3(b) and paragraphs 6,
7, 10 and 11 of this agreement)" for the bracketed language.
3/ Each of Municipal Advantage Fund Inc. ("MAF"), a Maryland Corporation, or
The Czech Republic Fund, Inc. ("CRF"), a Maryland Corporation, as
applicable.
4/ CRF agreement substitutes "non-diversified" for the bracketed language.
5/ CRF agreement substitutes "Charter" for "Articles" throughout such
agreement.
</FN>
D-1
<PAGE>
sentence have been furnished to the Investment Adviser. Any amendments to these
documents shall be furnished to the Investment Adviser.
2. The Investment Manager employs the Investment Adviser, subject to the
direction and control of the directors of the Fund, including without limitation
any approval of the directors of the Fund required by the 1940 Act, to (a) make,
in consultation with the Investment Manager and the Fund's Board of Directors,
investment strategy decisions for the Fund, (b) manage the investing and
reinvesting of the Fund's assets as specified in paragraph 1, (c) place purchase
and sale orders on behalf of the Fund, (d) provide6/ research and statistical
data to the Fund in relation to investing and other matters within the scope of
the investment objective and limitations of the Fund and (e) [provide the
following services for the Fund: (A) compliance with the rules and regulations
of the SEC, including record keeping, reporting requirements and preparation of
registration statements and proxies; (B) supervision of Fund operations,
including coordination of functions of the transfer agent, custodian,
accountants, counsel and other parties performing services or operational
functions for the Fund, (C) administrative and clerical services, including
accounting services and maintenance of books and records; and (D) services to
Fund shareholders, including responding to shareholder inquiries and maintaining
a flow of information to shareholders. The Investment Adviser shall have the
sole ultimate discretion over investment decisions for the Fund]7/.
3. (a) The Investment Adviser shall, at its expense, provide the Fund with
office space, office facilities and personnel reasonably necessary for
performance of the services to be provided by the Investment Adviser pursuant to
this Agreement.
(b) Except as provided in subparagraph 3(a) hereof and Section 1 of the
Management Agreement, the Fund shall be responsible for all of the Fund's
expenses and liabilities, including organizational and offering expenses (which
include out-of-pocket expenses, but not overhead or employee costs of the
Investment Adviser); expenses for legal, accounting and auditing services; taxes
and governmental fees; dues and expenses incurred in connection with membership
in investment company organizations; fees and expenses incurred in connection
with listing the Fund's shares on any stock exchange; costs of printing and
distributing shareholder reports, proxy materials, prospectuses, stock
certificates and distribution of dividends; charges of the Fund's custodians,
sub-custodians,8/ registrars, transfer agents, dividend-paying agents and
dividend reinvestment plan agents; payment for portfolio pricing services to a
pricing agent, if any; registration and filing fees of the SEC; expenses of
registering or qualifying securities of the Fund for sale in the various states;
freight and other charges in connection with the shipment of the Fund's
portfolio securities; fees and expenses of non-interested directors; travel
expenses or an appropriate portion thereof of directors and officers of the Fund
- ----------
[FN]
6/ CRF agreement adds "or procure the provision of" where indicated.
7/ CRF agreement substitutes "be responsible for compliance by the Fund with
U.S. federal, state and other applicable laws and regulations with respect
to regulating the composition of the Fund's portfolio and (f) pay the
salaries, fees and expenses of such of the Fund's directors, officers or
employees who are directors, officers or employees of the Investment
Adviser or any of its affiliates, except that the Fund will bear travel
expenses or an appropriate portion thereof 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 or any committees thereof" for the bracketed language.
8/ CRF agreements adds "administrators and sub-administrators," where
indicated.
</FN>
D-2
<PAGE>
[who are directors, officers or employees of the Investment Adviser or the
Investment Manager]9/ to the extent that such expenses relate to attendance at
meetings of the Board of Directors or any committee thereof10/; costs of
shareholders meetings; insurance; interest; brokerage costs; [expenses in
connection with the offering and issuance of and, if applicable, auctions of any
shares of preferred stock issued by the Fund;]11/ and litigation and other
extraordinary or non-recurring expenses.
4. The Investment Adviser shall12/ make investments for the Fund's account
in accordance with the investment objective and limitations set forth in the
Articles, the Registration Statement, the 1940 Act, the provisions of the
Internal Revenue Code of 1986, as amended, relating to regulated investment
companies, and policy decisions adopted by the Fund's Board of Directors13/ from
time to time. The Investment Adviser shall advise the Fund's officers and Board
of Directors,14/ at such times as the Fund's Board of Directors15/ may specify,
of investments made for the Fund's account and shall, when requested by the
Fund's officers or Board of Directors16/, supply the reasons for making such
investments.
5. The Investment Adviser may contract with or consult with such banks,
other securities firms, brokers or other parties, without additional expense to
the Fund, as it may deem appropriate regarding investment advice, research and
statistical data [, clerical assistance, accounting services]17/ or otherwise.
6. The Investment Adviser is authorized on behalf of the Fund, from time to
time when deemed to be in the best interests of the Fund and to the extent
permitted by applicable law, to purchase and/or sell securities in which the
Investment Adviser or the Investment Manager or any of their affiliates
underwrites, deals in and/or makes a market and/or may perform or seek to
perform investment banking services for issuers of such securities. The
Investment Adviser is further authorized, to the extent permitted by applicable
law, to select brokers [affiliated with the Investment Adviser or the Investment
Manager]18/ for the execution of trades for the Fund.
7. The Investment Adviser is authorized, for the purchase and sale of the
Fund's portfolio securities, to employ such dealers and brokers as may, in the
judgment of the Investment Adviser, implement the policy of
- ----------
[FN]
9/ CRF agreement omits the bracketed language and adds ", or members of any
advisory or investment board or committee of the Fund," where indicated.
10/ CRF agreement adds ", or of any such advisory or investment board or
committee of the Fund; salaries of shareholder relations personnel" where
indicated.
11/ CRF agreement omits the bracketed language.
12/ CRF agreement adds "have discretion over investment decisions for the Fund
and shall" where indicated.
13/ CRF agreement adds "or the Investment Manager" where indicated.
14/ CRF agreement adds "and the Investment Manager," where indicated.
15/ CRF agreement adds "or the Investment Manager" where indicated.
16/ CRF agreement adds "or the Investment Manager" where indicated.
17/ CRF agreement omits bracketed language.
18/ CRF agreement substitutes "(including any brokers affiliated with the
Investment Adviser or the Investment Manager)" for the bracketed language.
</FN>
D-3
<PAGE>
the Fund to obtain the best [net]19/ results taking into account such factors as
price, including dealer spread, the size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities and the firm's
risk in positioning the securities involved. Consistent with this policy, the
Investment Adviser is authorized to direct the execution of the Fund's portfolio
transactions to dealers and brokers furnishing statistical information or
research deemed by the Investment Adviser to be useful or valuable to the
performance of its investment advisory functions for the Fund. [It is understood
that in these circumstances, as contemplated by Section 28(e) of the Securities
Exchange Act of 1934, the commissions paid may be higher than those which the
Fund might otherwise have paid to another broker if those services had not been
provided.]20/ Information so received will be in addition to and not in lieu of
the services required to be performed by the Investment Adviser. It is
understood that the expenses of the Investment Adviser will not necessarily be
reduced as a result of the receipt of such information or research. [Research
services furnished to the Investment Adviser by brokers who effect securities
transactions for the Fund may be used by the Investment Adviser in servicing
other investment companies and accounts which it manages. Similarly, research
services furnished to the Investment Adviser by brokers who effect securities
transactions for other investment companies and accounts which the Investment
Adviser manages may be used by the Investment Adviser in servicing the Fund. It
is understood that not all of these research services are used by the Investment
Adviser in managing any particular account, including the Fund.]21/
8. In consideration of the services to be rendered by the Investment
Adviser under this agreement, the Investment Manager shall pay the Investment
Adviser a monthly fee in United States dollars on the fifth business day of each
month for the previous month at an annual rate of [0.36%]22/ of the Fund's
average weekly net assets (i.e. the average weekly value of the Fund's assets
less its liabilities exclusive of common and preferred stock and surplus). If
the fee payable to the Investment Adviser pursuant to this paragraph 8 begins to
accrue before the end of any month or if this agreement terminates before the
end of any month, the fee for the period from such date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs. For purposes of
calculating each such monthly fee, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the Registration Statement.
9. The Investment Adviser represents and warrants that it is duly
registered and authorized as an investment adviser under the [1940 Act]23/, and
the Investment Adviser agrees to maintain effective all requisite registrations,
authorizations and licenses, as the case may be, until the termination of this
Agreement.
10. The Investment Adviser shall exercise its best judgment in rendering
the services in accordance with the terms of this agreement. The Investment
Adviser shall not be liable for any error of judgment or mistake of law or for
any act or omission or any loss suffered by the Fund [or the Investment
Manager]24/ in connection with the matters to which this agreement relates,
provided that nothing herein shall be deemed to pro-
- ----------
[FN]
19/ CRF Agreement omits the bracketed language.
20/ MAF Agreement omits the bracketed language.
21/ MAF agreement omits the bracketed language.
22/ CRF agreement substitutes "0.50%" for the bracketed language.
23/ CRF agreement substitutes "Investment Advisers Act of 1940, as amended" for
the bracketed language.
24/ CRF agreement omits the bracketed language.
</FN>
D-4
<PAGE>
tect or purport to protect the Investment Adviser against any liability to the
Fund or [the Investment Manager]25/ to which the Investment Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this agreement ("disabling
conduct"). The Fund will indemnify the Investment Adviser against, and hold it
harmless from, any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses), including any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, not resulting
from disabling conduct by the Investment Adviser. Indemnification pursuant to
the foregoing sentence shall be made only following: (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
Investment Adviser was not liable by reason of disabling conduct, or (ii) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the Investment Adviser was not liable by reason of disabling
conduct by (a) the vote of a majority of a quorum of directors of the Fund who
are neither "interested persons" of the Fund26/ nor parties to the proceeding
("disinterested non-party directors"), or (b) an independent legal counsel in a
written opinion. The Investment Adviser shall be entitled to advances from the
Fund for payment of the reasonable expenses27/ incurred by it in connection with
the matter as to which it is seeking indemnification in the manner and to the
fullest extent permissible under law. [Prior to any such advance, the]28/
Investment Adviser shall provide to the Fund a written affirmation of its good
faith belief that the standard of conduct necessary for indemnification by the
Fund has been met and a written undertaking to repay any such advance if it
should ultimately be determined that the standard of conduct has not been met.
In addition, at least one of the following additional conditions shall be met:
(a) the Investment Adviser shall provide security in form and amount acceptable
to the Fund for its undertaking; (b) the Fund is insured against losses arising
by reason of the advance; or (c) a majority of a quorum of disinterested
non-party directors, or independent legal counsel, in a written opinion, shall
have determined, based on a review of facts readily available to the Fund at the
time the advance is proposed to be made, that there is reason to believe that
the Investment Adviser will ultimately be found to be entitled to
indemnification.
11. This agreement shall continue in effect until ________________ and
thereafter for successive annual periods, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Fund's outstanding voting securities (as defined in the 1940 Act) or by the
Fund's Board of Directors and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Fund's directors who are not
parties to this agreement or "interested persons" (as defined in the 1940 Act)
of any such party. [Notwithstanding the above, this]29/ Agreement (a) may
[nevertheless]30/ be terminated at any time, without penalty, by a vote of
holders of a majority of the Fund's outstanding voting securities (as defined in
the 1940 Act) or by a vote of a majority of the Fund's entire Board of Directors
or by the Investment Manager [or the Investment Adviser]31/ on 60 days' written
notice delivered to each party hereto, and (b) shall terminate automatically in
the event of its assignment (as defined in the 1940 Act). [This agreement may
only be terminated
- ----------
[FN]
25/ CRF agreement substitutes "its shareholders" for the bracketed language.
26/ CRF agreement adds "(as defined in the 1940 Act)" where indicated.
27/ CRF agreement adds "(including reasonable counsel fees and expenses)" where
indicated.
28/ CRF agreement substitutes "The" for the bracketed language.
29/ MAF agreement substitutes "This" for the bracketed language.
30/ MAF agreement omits the bracketed language.
31/ CRF agreement omits the bracketed language.
</FN>
D-5
<PAGE>
in accordance with the provisions of this paragraph 11; provided, however, that
nothing contained in this agreement shall prohibit the ability of the Investment
Manager, in the exercise of its fiduciary duty, to recommend to the Fund that
the Fund take action to terminate this agreement as provided in this paragraph
11.]32/
12. Nothing herein shall be deemed to limit or restrict the right of the
Investment Adviser, or any affiliate of the Investment Adviser, or any employee
of the Investment Adviser, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association. Nothing herein shall be construed
as constituting the Investment Adviser an agent of the Investment Manager or the
Fund.
13. This Agreement shall be governed by the laws of the State of New York;
provided, however, that nothing herein shall be construed as being inconsistent
with the 1940 Act.
14. Notices. Any notice hereunder shall be in writing and shall be
delivered in person or by telex or facsimile (followed by delivery in person) to
the parties at the addresses set forth below.
If to the Investment Adviser:
OpCap Advisors
Oppenheimer Tower
One World Financial Center
200 Liberty Street
New York, New York 10281
Tel:
Fax:
Attn:
If to the Investment Manager:
Value Advisors LLC
800 Newport Center Drive, Suite 100
Newport Beach, California 92660
Tel:
Fax:
Attn:
or to such other address as to which the recipient shall have informed the other
party in writing.
- ----------
[FN]
32/ CRF agreement omits the bracketed language and adds "Any such Notice shall
be deemed given when received by the addressee." where indicated.
</FN>
D-6
<PAGE>
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by telex or facsimile and mail, on the date on which such
telex or facsimile is sent.
15. Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth the agreement between the Investment
Manager and the Investment Adviser, please so indicate by signing and returning
to the Investment Manager the enclosed copy hereof.
Very truly yours,
VALUE ADVISORS LLC
By:____________________________________
Name:
Title:
ACCEPTED:
OPCAP ADVISORS
By:________________________________________
Name:
Title:
________________________________________hereby
acknowledges and agrees to the
provisions of 33/ subparagraph 3.(b)
and [paragraph 10]34/ of this agreement.
___________________________________________
By:________________________________________
Name:
Title:
- ----------
[FN]
33/ CRF agreement adds "paragraph 2," where indicated.
34/ CRF agreement substitutes "paragraphs 6, 7, 10 and 11" for the bracketed
language.
</FN>
D-7
<PAGE>
FORMS OF PROXY
Please date, sign and mail your
proxy card back as soon as possible!
Special Meeting of Stockholders
THE EMERGING MARKETS INCOME FUND INC
October 14, 1997
<PAGE>
THE EMERGING MARKETS INCOME FUND INC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of The Emerging Markets Income Fund Inc which the
undersigned is entitled to receive and vote proxies at the Special Meeting of
Stockholders of The Emerging Markets Fund Inc to be held at Oppenheimer Tower,
200 Liberty Street, One World Financial Center, New York, New York on the 40th
Floor on Tuesday, October 14, 1997, at 10:00 a.m., Eastern time, and at any
adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEM 1
LISTED ON THE OPPOSITE SIDE.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1.
1. The approval of a new advisory agreement between Value Advisors LLC and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
The Proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
I will be attending the meeting. |_| Change of Address and/ |_|
or Comments Mark Here
Date __________________________, 1997
_____________________________________
_____________________________________
Signature(s), Title(s), if applicable
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. |X|
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
FORMS OF PROXY
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
THE EMERGING MARKETS INCOME FUND II INC
October 14, 1997
<PAGE>
THE EMERGING MARKETS INCOME FUND II INC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of The Emerging Markets Income Fund II Inc which
the undersigned is entitled to receive, and to vote proxies at the Annual
Meeting of Stockholders of The Emerging Markets Income Fund II Inc to be held at
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York on the 40th Floor on Tuesday, October 14, 1997, at 10:30 a.m., Eastern
time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE OPPOSITE SIDE.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR the nominees WITHHOLD AUTHORITY
listed below |_| to vote for the nominees |_|
(except as marked listed below
to the contrary below)
Directors to serve until 2000 Annual Meeting: Alan H. Rappaport, Charles F.
Barber.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE "FOR" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME ABOVE).
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending May 31, 1998.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
I will be attending the meeting. |_| Change of Address and/ |_|
or Comments Mark Here
Date __________________________, 1997
_____________________________________
_____________________________________
Signature(s), Title(s), if applicable
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. |X|
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
THE EMERGING MARKETS FLOATING RATE FUND INC.
October 14, 1997
<PAGE>
THE EMERGING MARKETS FLOATING RATE FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of The Emerging Markets Floating Rate Fund Inc.
which the undersigned is entitled to receive, and to vote proxies at the Annual
Meeting of Stockholders of The Emerging Markets Floating Rate Fund Inc. to be
held at Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New
York, New York on the 40th Floor on Tuesday, October 14, 1997, at 11:00 a.m.,
Eastern time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE OPPOSITE SIDE.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR the nominees WITHHOLD AUTHORITY
listed below |_| to vote for the nominees |_|
(except as marked listed below
to the contrary below)
Directors to serve until 2000 Annual Meeting: Leslie H. Gelb, Michael S.
Hyland.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE "FOR" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME ABOVE).
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending February 28, 1998.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
I will be attending the meeting. |_| Change of Address and/ |_|
or Comments Mark Here
Date __________________________, 1997
_____________________________________
_____________________________________
Signature(s), Title(s), if applicable
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. |X|
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Special Meeting of Stockholders
GLOBAL PARTNERS INCOME FUND INC.
October 14, 1997
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of Global Partners Income Fund Inc. which the
undersigned is entitled to receive, and to vote proxies at the Special Meeting
of Stockholders of Global Partners Income Fund Inc. to be held at Oppenheimer
Tower, 200 Liberty Street, One World Financial Center, New York, New York on the
40th Floor on Tuesday, October 14, 1997, at 11:30 a.m., Eastern time, and at any
adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1
AND 2 LISTED ON THE OPPOSITE SIDE.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
1. The approval a new management agreement between Value Advisors LLC and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
I will be attending the meeting. |_| Change of Address and/ |_|
or Comments Mark Here
Date __________________________, 1997
_____________________________________
_____________________________________
Signature(s), Title(s), if applicable
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. |X|
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Robert I. Kleinberg, Robert A. Blum and
Charles J. DeMarco, and each of them, the proxies for the undersigned, with full
power of substitution and revocation to each of them, to represent and vote all
shares of Municipal Advantage Fund Inc. which the undersigned is entitled to
receive, and to vote proxies at the Special Meeting of Stockholders of Municipal
Advantage Fund Inc. to be held at Oppenheimer Tower, 200 Liberty Street, One
World Financial Center, New York, New York on the 40th Floor on Tuesday, October
14, 1997, at 12:00 p.m., Eastern time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1
AND 3 LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 3.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
3. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, OpCap Advisors and the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this Proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK VOTES AS IN THIS EXAMPLE. |X|
<PAGE>
MUNICIPAL PARTNERS FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of Common Stock of Municipal Partners Fund Inc.
which the undersigned is entitled to receive, and to vote proxies at the Annual
Meeting of Stockholders of Municipal Partners Fund Inc. to be held at
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York on the 40th Floor on Tuesday, October 14, 1997, at 12:30 p.m., Eastern
time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
MUNICIPAL PARTNERS FUND INC.
COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR All Nominees |_| WITHHOLD |_| FOR ALL EXCEPT |_|
Directors to serve until 2000 Annual Meeting: Mark C. Biderman, Robert L.
Rosen.
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE.
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE.
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending December 31, 1997.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK VOTES AS IN THIS EXAMPLE. |X|
<PAGE>
MUNICIPAL PARTNERS FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of Preferred Stock of Municipal Partners Fund Inc.
which the undersigned is entitled to receive, and to vote proxies at the Annual
Meeting of Stockholders of Municipal Partners Fund Inc. to be held at
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York on the 40th Floor on Tuesday, October 14, 1997, at 12:30 p.m., Eastern
time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
MUNICIPAL PARTNERS FUND INC.
PREFERRED STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR All Nominees |_| WITHHOLD |_| FOR ALL EXCEPT |_|
Directors to serve until 2000 Annual Meeting: Mark C. Biderman, Robert L.
Rosen. Director to serve until 1998 Annual Meeting: Dr. Riordan Roett.
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE.
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending December 31, 1997.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK VOTES AS IN THIS EXAMPLE. |X|
<PAGE>
MUNICIPAL PARTNERS FUND II INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of Common Stock of Municipal Partners Fund II Inc.
which the undersigned is entitled to receive, and to vote proxies at the Annual
Meeting of Stockholders of Municipal Partners Fund II Inc. to be held at
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York on the 40th Floor on Tuesday, October 14, 1997, at 1:00 p.m., Eastern time,
and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
MUNICIPAL PARTNERS FUND II INC.
COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR All Nominees |_| WITHHOLD |_| FOR ALL EXCEPT |_|
Directors to serve until 2000 Annual Meeting: Mark C. Biderman, Robert L.
Rosen.
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE.
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE.
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending June 30, 1998.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK VOTES AS IN THIS EXAMPLE. |X|
<PAGE>
MUNICIPAL PARTNERS FUND II INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Alan M. Mandel, Noel B. Daugherty, Jennifer
G. Muzzey and Charles J. DeMarco, and each of them, the proxies for the
undersigned, with full power of substitution and revocation to each of them, to
represent and vote all shares of Preferred Stock of Municipal Partners Fund II
Inc. which the undersigned is entitled to receive, and to vote proxies at the
Annual Meeting of Stockholders of Municipal Partners Fund II Inc. to be held at
Oppenheimer Tower, 200 Liberty Street, One World Financial Center, New York, New
York on the 40th Floor on Tuesday, October 14, 1997, at 1:00 p.m., Eastern time,
and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 4 AND 5 LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
MUNICIPAL PARTNERS FUND II INC.
PREFERRED STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 4 and 5.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
2. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and the
Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
4. The election of directors to the Board of Directors, to hold office until
their successors are duly elected and qualified.
FOR All Nominees |_| WITHHOLD |_| FOR ALL EXCEPT |_|
Directors to serve until 2000 Annual Meeting: Mark C. Biderman, Robert L.
Rosen. Director to serve until 1998 Annual Meeting: Dr. Riordan Roett.
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE.
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
5. The ratification of the selection of Price Waterhouse LLP as the Fund's
independent accountants for the year ending June 30, 1998.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK VOTES AS IN THIS EXAMPLE. |X|
<PAGE>
THE CZECH REPUBLIC FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- OCTOBER 14, 1997
The undersigned hereby appoints Robert I. Kleinberg, Robert A. Blum and
Charles J. DeMarco, and each of them, the proxies for the undersigned, with full
power of substitution and revocation to each of them, to represent and vote all
shares of The Czech Republic Fund, Inc. which the undersigned is entitled to
receive, and to vote proxies at the Special Meeting of Stockholders of The Czech
Republic Fund, Inc. to be held at Oppenheimer Tower, 200 Liberty Street, One
World Financial Center, New York, New York on the 40th Floor on Tuesday, October
14, 1997, at 1:30 p.m., Eastern time, and at any adjournments thereof.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 3
LISTED ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
THE CZECH REPUBLIC FUND, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 3.
1. The approval of a new management agreement between Value Advisors LLC and
the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
3. The approval of a new investment advisory agreement among Value Advisors
LLC, OpCap Advisors and the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
The proxies are authorized to vote in their discretion on any other
business as may properly come before the meeting or any adjournments
thereof.
Mark box at right if you |_| Mark box at right if an |_| RECORD DATE SHARES:
plan to attend the meeting. address change or comment
has been noted on the
reverse side of this card.
Please be sure to sign and date this Proxy.
Date _________________________________
______________________________________
Stockholder sign here
______________________________________
Co-owner sign here
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. |X|
