Schedule 14A Information
(Rule 14A-101)
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
/X/ Filed by the Registrant
/_/ Filed by a Party other than the Registrant
Check the appropriate box:
/X/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Municipal Partners 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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it is determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/_/ Fee paid previously with preliminary materials.
/_/ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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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.
November [11], 2002
Dear Stockholder:
We are pleased to enclose the notice and proxy statement for the
Special Joint Meetings of Stockholders (the "Special 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., and
the Annual Joint Meetings of Stockholders of The Emerging Markets Income Fund
Inc and Global Partners Income Fund Inc. (the "Annual Meetings" and, together
with the "Special Meetings," the "Meetings") to be held on December 11, 2002.
Each Fund is referred to in this notice and proxy statement as a "Fund," and
collectively as the "Funds."
On October 22, 2002, PIMCO Advisors Fund Management LLC (formerly
known as PIMCO Funds Advisors LLC) ("PIMCO Advisors") and Salomon Brothers
Asset Management Inc ("SBAM") entered into a purchase agreement pursuant to
which SBAM agreed to acquire the investment management and advisory business
of PIMCO Advisors with respect to the Funds, (the "Transactions"). Upon
consummation of the Transactions, PIMCO Advisors will cease to act as
investment manager or adviser to the Funds and SBAM will become the sole
investment manager to the Funds. As such, SBAM will continue to be responsible
for the day-to-day management of each Fund's portfolio and will assume full
responsibility for the overall investment programs of the Funds. In addition,
SBAM will continue to provide the high level of portfolio investment services
to which the Funds are accustomed. The closing of the Transactions is subject
to a number of conditions, including approval by the Board of Directors and
stockholders of each Fund of a new investment advisory and administration
agreement with SBAM. The Board of Directors of each Fund approved each new
investment advisory and administration agreement with SBAM at a meeting of the
Board of Directors of each Fund on October 23, 2002.
At the Meetings, stockholders of each of the Funds will be asked to
approve a new investment advisory and administration agreement which will
combine the services currently provided pursuant to separate agreements
between the Fund and PIMCO Advisors, PIMCO Advisors and SBAM and/or the Fund
and SBAM, into one agreement for each Fund between the Fund and SBAM whereby
SBAM will perform all management, advisory and administrative services for the
Fund and receive the total fees (reduced, as described below) currently paid
by the Funds to PIMCO Advisors and SBAM. Pursuant to the new proposed
investment advisory and administration agreement for The Emerging Markets
Income Fund Inc and The Emerging Markets Income Fund II Inc, services will be
provided by SBAM for a fee at a rate equal to 0.15% less than the combined fee
rate currently paid by the respective Fund. Pursuant to the new proposed
investment advisory and administration agreement for The Emerging Markets
Floating Rate Fund Inc., Global Partners Income Fund Inc., Municipal Partners
Fund Inc. and Municipal Partners Fund II Inc., services will be provided by
SBAM for a fee at a rate equal to 0.05% less than the combined fee rate
currently paid by the respective Fund.
In addition, the stockholders of The Emerging Markets Income Fund
Inc and Global Partners Income Fund Inc. will be asked to vote on the election
of Directors for those two Funds.
Because the Funds are affected similarly by the Transactions, 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. If you are a stockholder of more than one
Fund, you will receive the combined notice of meetings, a proxy statement for
all of the Funds and a proxy card only for the Funds in which you are a
stockholder. 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 proxy statement describes which
Funds' stockholders are being asked to vote on each proposal, and the enclosed
proxy card(s) provide(s) for voting only with respect to the proposals relating
to the Fund(s) in which you are a stockholder.
After careful consideration, each Fund's Board of Directors,
including its independent Directors, unanimously approved each proposal
relating to the Fund and recommends that its stockholders vote "FOR" each such
proposal.
We urge you to review the enclosed materials for all of the details
of the proposals described above. It is very important that you complete and
return the enclosed proxy card(s).
We thought that it would be helpful to provide the following
questions and answers regarding the approval of the new investment advisory
and administration agreement(s). They are designed to help you 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
review carefully.
Please feel free to contact [_______] to answer any questions you
may have regarding the voting of your shares. If we have not received your
proxy card(s) prior to the date of the Meetings, you may receive a telephone
call from [______] encouraging you to exercise your right to vote. As always,
we thank you for your confidence and support.
Sincerely,
R. Jay Gerken and
Stephen J. Treadway
Co-Chairmen 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 Partners Fund Inc., and
Municipal Partners Fund II Inc.
QUESTIONS & ANSWERS
Q: UNDER THE NEW INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT, WHO
WILL BE THE NEW INVESTMENT ADVISER FOR EACH FUND?
A: SBAM, which is currently responsible for the day-to-day management
of each Fund's portfolio, will take over all investment management,
advisory and administration responsibilities on behalf of each Fund
for which a new investment advisory and administration agreement is
approved. SBAM will be responsible for the overall investment
programs of the Funds. In addition, SBAM will continue to provide the
high level of portfolio investment services to which the Funds are
accustomed.
Q: WHY AM I BEING ASKED TO VOTE ON THESE PROPOSALS?
A: On October 22, 2002, PIMCO Advisors and SBAM entered into a purchase
agreement whereby the two entities mutually agreed that SBAM would
acquire the investment management and advisory business of PIMCO
Advisors with respect to each of the Funds subject to certain
conditions. One of the conditions to the closing of the transactions
contemplated by the purchase agreement with respect to a particular
Fund is the approval of a new investment advisory and administration
agreement by the Board of Directors and stockholders of that Fund.
The Board of Directors of each Fund approved each new investment
advisory and administration agreement with SBAM at a meeting of the
Board of Directors of each Fund on October 23, 2002.
Q: HOW WILL THE NEW INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
AFFECT ME AS A FUND STOCKHOLDER?
A: Under the new investment advisory and administration
agreements, the overall cost of investment management, advisory and
administrative services will decrease. Under the new investment
advisory and administration agreement for The Emerging Markets
Income Fund Inc and The Emerging Markets Income Fund II Inc, the fee
rate paid to SBAM, will be 0.15% lower than the combined fee rate
currently received by PIMCO Advisors and SBAM under the existing
agreements. Under the new investment advisory and administration
agreement for The Emerging Markets Floating Rate Fund Inc., Global
Partners Income Fund Inc., Municipal Partners Fund Inc. and Municipal
Partners Fund II Inc., the fee rate paid to SBAM, will be 0.05% lower
than the combined fee rate currently received by PIMCO Advisors and
SBAM under the existing agreements. Although SBAM will receive an
increased fee rate in return for the increased services it will
provide, the overall fee rate payable by each Fund will be lower than
the combined fee rate currently paid by the Fund, and indirectly by
the stockholders of the Fund, for advisory and administrative
services.
Q: WILL THERE BE ANY OTHER CHANGES TO THE FUND?
A: Upon the closing of the transactions contemplated by the purchase
agreement, Stephen J. Treadway will resign from each of the Fund's
Board of Directors and from all positions as an officer of each of
the Funds. Newton B. Schott, Jr. and Brian S. Shlissel will also
resign their positions as officers of each of the Funds. Messrs.
Treadway, Schott and Shlissel are affiliated with PIMCO Advisors.
Q: HOW DO THE BOARDS RECOMMEND THAT I VOTE?
A: After careful consideration, each of the Fund's Boards of Directors,
including its independent Directors, unanimously recommends that
stockholders vote "FOR" approval of the new investment advisory and
administration agreement and, with respect to the Funds holding
Annual Meetings, "FOR" the election of Directors.
Q: WHOM DO I CALL IF I HAVE QUESTIONS?
A: Please feel free to call [_____], at [______]to answer any questions
you may have regarding the voting of your shares.
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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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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.
NOTICE OF ANNUAL AND SPECIAL JOINT MEETINGS OF STOCKHOLDERS
November [11], 2002
To the Stockholders:
The Special Joint Meetings of Stockholders (the "Special 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.,
and the Annual Joint Meetings of Stockholders (the "Annual Meetings" and,
together with the "Special Meetings," the "Meetings") of The Emerging Markets
Income Fund Inc and Global Partners Income Fund Inc. will be held at Citigroup
Center, 153 East 53rd Street, 14th Floor, Conference Room K, New York, New
York, on Wednesday, December 11, 2002, at [3 p.m.], New York time.
The Meetings will be held for the purposes of considering and voting
upon the following:
The following Proposal relates to each Fund:
1. The approval of a new investment advisory and administration
agreement between Salomon Brothers Asset Management Inc ("SBAM") and each 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 Partners Fund Inc. and Municipal Partners Fund II Inc. (each
individually, a "Fund" and collectively, the "Funds").
The following Proposal relates to The Emerging Markets Income Fund Inc and
Global Partners Income Fund Inc. only:
2. The election of Directors.
The following relates to each Fund:
3. Any other business that may properly come before the Meetings
or any adjournment(s) thereof.
The close of business on November 4, 2002 has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meetings.
By Order of the Boards of Directors,
Christina T. Sydor
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. and
Municipal Partners Fund II Inc.
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TO AVOID FURTHER SOLICITATION, WE URGE YOU to indicate voting
instructions on the enclosed proxy, date and sign it and return it promptly in
the envelope provided, no matter how large or how small your holdings may be.
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Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in
the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing
the proxy card should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
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Corporate Accounts
(1) ABC Corp....................... ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp....................... John Doe, Treasurer
(3) ABC Corp., c/o
John Doe, Treasurer............ John Doe
(4) ABC Corp. Profit Sharing Plan.. John Doe, Trustee
Trust Accounts
(1) ABC Trust...................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee,
u/t/d 12/28/78................. Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.,
f/b/o John B. Smith, Jr. UGMA.. John B. Smith
(2) John B. Smith.................. John B. Smith, Jr., Executor
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.
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COMBINED PROXY STATEMENT
ANNUAL AND SPECIAL JOINT MEETINGS OF STOCKHOLDERS
This combined proxy statement (the "Proxy Statement") is furnished
in connection with a solicitation by the Boards of Directors 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. of proxies to
be used at the Special Joint Meetings of Stockholders (the "Special Meetings")
of those Funds, and by the Boards of Directors of The Emerging Markets Income
Fund Inc and Global Partners Income Fund Inc. of proxies to be used at the
Annual Joint Meetings of Stockholders (the "Annual Meetings" and, together
with the "Special Meetings," the "Meetings"), to be held at Citigroup Center,
153 East 53rd Street, 14th Floor, Conference Room K, New York, New York, on
Wednesday, December 11, 2002, at [3 p.m.], New York time (and at any
adjournment or adjournments thereof) for the purposes set forth in the
accompanying Notice of Annual and Special Joint Meetings of Stockholders. This
Proxy Statement and the accompanying form of proxy are first being mailed to
stockholders on or about November [11], 2002.
At the Meetings, stockholders of each 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 Partners
Fund Inc. and Municipal Partners Fund II Inc. (each individually, a "Fund" and
collectively, the "Funds") will be asked to approve a new investment advisory
and administration agreement which will combine the services currently
provided pursuant to separate agreements by PIMCO Advisors Fund Management LLC
(formerly known as PIMCO Funds Advisors LLC) ("PIMCO Advisors") and Salomon
Brothers Asset Management Inc ("SBAM"), into one agreement between the Funds
and SBAM whereby SBAM will perform all management, advisory and administrative
services for the Fund. Although the particular terms of each existing contract
between PIMCO Advisors and each Fund, PIMCO Advisors and SBAM or, in the case
of The Emerging Markets Income Fund Inc, SBAM and the Fund may vary, currently
PIMCO Advisors, as investment adviser or investment manager to each Fund,
supervises the Fund's investment program, including advising and consulting
with SBAM regarding the Fund's overall investment strategy. SBAM which has
served as investment manager or investment adviser since each Fund's inception
is responsible, among other things, for the day-to-day management of the
Fund's portfolio.
In addition, the stockholders of The Emerging Markets Income
Fund Inc and Global Partners Income Fund Inc. will be asked to vote on the
election of Directors for those two Funds.
Stockholders who execute proxies retain the right to revoke them
in person at the Meetings or by written notice received by the Secretary of
the 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 the approval of the new investment advisory and
administration agreement, and, with respect to The Emerging Markets Income
Fund Inc and Global Partners Income Fund Inc., will be voted FOR the election
of the Directors. The close of business on November 4, 2002 has been fixed as
the record date for the determination of stockholders entitled to notice of
and to vote at the Meetings and any adjournments thereof (the
"Record Date"). For purposes of the Meetings, each holder of each Fund's stock
is entitled to one vote for each full share and an appropriate fraction of a
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
will vote separately from stockholders of the other Funds voting on the
Proposals, and all of the outstanding capital stock of each Fund will vote
together as a single class with respect to the Proposals.
The Proposals to be voted on by stockholders of the Funds are as follows:
Funds to which each
Proposals Proposal Applies
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1. Approval of a new investment All Funds
advisory and administration agreement
between SBAM and the Fund.
2. Election of Directors to the The Emerging Markets Income Fund
Board of Directors. Inc and Global Partners Income
Fund Inc.
Abstention and Broker Non-Votes (reflected by signed but unvoted
proxies), as defined below, do not count as votes cast with respect to the
Proposals. With respect to Proposal 1 which requires the affirmative vote of a
"majority of the outstanding voting securities" of a fund (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) (see "Required
Vote" on page __), the effect of abstentions and Broker Non-Votes is the same
as a vote against the Proposal. With respect to Proposal 2 which requires a
plurality of the votes cast by the holders of shares of common stock of each
Fund present or represented by proxy at the Meetings at which a quorum is
present, abstentions and Broker Non-Votes will not be considered votes cast
and have no effect on the outcome of the 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 Proposals 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 each Fund entitled to vote at the Meetings. 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 a Proposal of any
Fund is not received, the persons named as proxies may propose one or more
adjournments of the Meetings 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 adjournment will require the affirmative vote of a majority
of those shares voting on the adjournment matter at the Meetings in person or
by proxy. The persons named as proxies will vote those proxies which they are
entitled to vote FOR or AGAINST any adjournment proposal in their discretion.
A stockholder vote may be taken on a Proposal for one or more of the Funds
prior to any such adjournment if sufficient votes have been received for
approval of that Proposal.
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PIMCO Advisors, whose principal business address is 1345 Avenue of
the Americas, New York, New York 10105, is currently the investment manager
for 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. and acts as the investment adviser for The
Emerging Markets Income Fund Inc. PIMCO Advisors is an indirect majority-owned
subsidiary of Allianz AG.
SBAM, whose principal business address is 388 Greenwich Street, New
York, New York 10013, is currently the investment adviser for 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. and the investment manager for The Emerging Markets
Income Fund Inc. SBAM is an indirect wholly-owned subsidiary of Citigroup Inc.
The principal business address of each of the Funds is 125 Broad
Street, New York, New York, 10004. Each of the Funds is a closed-end
management investment company, registered under the 1940 Act.
PROPOSAL 1: APPROVAL OF NEW INVESTMENT ADVISORY AND
ADMINISTRATION AGREEMENT
Stockholders of each of the Funds will vote on this Proposal.
Introduction
SBAM has served as investment adviser to each of the Funds (except
for The Emerging Markets Income Fund Inc for which SBAM has served as
investment manager) since each Fund's inception. PIMCO Advisors has served as
investment manager to each of the Funds (except for The Emerging Markets
Income Fund Inc for which it has served as investment adviser) by itself and
through its affiliates since October 1997. Over the years, each organization's
asset management business has developed significantly and begun to compete
more directly with each other. Given the focus of the growth of the asset
management businesses of the organizations and SBAM's comprehensive
involvement in the day-to-day operations of the Funds, PIMCO Advisors and SBAM
mutually agreed that it would be more effective and efficient for the Funds if
SBAM were to take over all management, advisory and administrative operations
of the Funds at a lower cost to the Funds.
On October 22, 2002, PIMCO Advisors and SBAM entered into a
purchase agreement, (the "Purchase Agreement") whereby the two parties agreed
that SBAM would acquire the investment management and advisory business of
PIMCO Advisors with respect to each of the Funds. Under the Purchase
Agreement, SBAM will pay PIMCO Advisors $12.5 million over five years provided
the transactions contemplated by the Purchase Agreement closes with respect to
all of the Funds (for each Fund, a "Transaction" and, collectively, the
"Transactions"). As a condition to the closing of the Transaction with respect
to a Fund, a new investment advisory and administration agreement (the "New
Investment Advisory and Administration Agreement") must be approved by the
Board of Directors and stockholders of that Fund. The Board of Directors of
each Fund approved each New Investment Advisory and Administration Agreement
with SBAM at a meeting of the Board of Directors of each Fund on October 23,
2002.
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In addition, the New Investment Advisory and Administration Agreement for each
Fund will not become effective by its terms until the Transaction closes with
respect to that Fund. Upon obtaining stockholder approval of a New Investment
Advisory and Administration Agreement for a Fund, SBAM may elect to close the
Transaction with respect to that Fund. If SBAM so elects, SBAM is required to
close all other Transactions for which stockholder approval has been obtained.
If stockholder approval is obtained for every Fund, SBAM has agreed to close
the Transactions for all of the Funds. Upon the closing of a Transaction,
Stephen J. Treadway will resign from that Fund's Boards of Directors and from
all positions as an officer of that Fund. Newton B. Schott, Jr. and Brian S.
Shlissel will also resign their positions as officers of each of the Funds in
the same manner. Messrs. Treadway, Schott and Shlissel are affiliated with
PIMCO Advisors. If a Transaction closes with respect to a Fund, SBAM has
agreed to use commercially reasonable efforts to honor their obligations to
indemnify Stephen J. Treadway in his role as Director of the Funds, and to
cause the Funds to maintain in effect the current policies of Directors' and
Officers' insurance maintained by that Fund for the benefit of Stephen J.
Treadway, Newton B. Schott, Jr. and Brian S. Shlissel.
The Boards of Directors of the Funds are proposing that
stockholders approve the New Investment Advisory and Administration Agreement
to be entered into between each of the Funds and SBAM. PIMCO Advisors
currently serves as the investment manager 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.
pursuant to the current management agreement between each Fund and PIMCO
Advisors (the "Existing PIMCO Management Agreements") and as the investment
adviser for The Emerging Markets Income Fund Inc under the current investment
advisory agreement between the Fund and PIMCO Advisors (the "Existing PIMCO
Investment Advisory Agreement," and, together with the Existing PIMCO
Management Agreements, the "Existing PIMCO Agreements"). As such PIMCO
Advisors supervises the Fund's investment program. SBAM currently serves as
the investment adviser 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. under the
current investment advisory and administration agreements between PIMCO
Advisors and SBAM (together the "Existing SBAM Investment Advisory and
Administration Agreements") for each Fund, except for The Emerging Markets
Income Fund Inc, where SBAM serves as the investment manager for the Fund
under the current management agreement between SBAM and the Fund (the
"Existing SBAM Management Agreement," and, together with the Existing SBAM
Investment Advisory and Administration Agreements, the "Existing SBAM
Agreements," and, together with the Existing PIMCO Agreements, the "Existing
Agreements"). As such SBAM is responsible for the day-to-day management of the
Fund's portfolio. The dates of each of these agreements, as well as 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 ("Interested Persons") of such Fund, PIMCO Advisors or
SBAM, as applicable, most recently approved each agreement are set forth in
the Fund Exhibit on page [___].
At a joint meeting of the Boards of Directors of the Funds held on
October 23, 2002, the Board of each of the Funds unanimously approved a New
Investment Advisory and Administration Agreement between each Fund and SBAM
subject to stockholder approval. Each New Investment Advisory and
Administration Agreement provides that SBAM will perform services
substantially identical in nature to those currently performed by SBAM under
the Existing SBAM Agreements as well as those services currently performed by
PIMCO Advisors under the Existing PIMCO Agreements. Although SBAM will receive
an increased fee rate in return for the increased services it will provide,
the proposed overall fee rate payable by each Fund and indirectly by the
stockholders will be lower than the fee rate currently paid by the Funds.
Pursuant to the New Investment Advisory and Administration Agreement for The
Emerging Markets Income Fund Inc and The Emerging Markets Income Fund II Inc,
services will be provided by SBAM for a fee rate equal to 0.15% less than the
combined fee rate currently paid by the Funds. Pursuant to the New Investment
Advisory and Administration Agreement for The Emerging Markets Floating Rate
Fund Inc., Global Partners Income Fund Inc., Municipal Partners Fund Inc. and
Municipal Partners Fund II Inc., services will be provided by SBAM for a fee
rate equal to 0.05% less than the combined fee rate currently paid by the
Funds.
At the joint meeting of the Board of Directors of each Fund, the
Boards also unanimously approved the continuation
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of the Existing Agreements (except for the Existing SBAM Management Agreement
between Emerging Markets Income Fund Inc and SBAM, which is not due to expire
until February 2004) until the earlier of (1) the closing of the Transaction
with respect to the applicable Fund and (2) October 31, 2003.
A form of the proposed New Investment Advisory and Administration
Agreement is attached as Exhibit B and substantially combines the terms of the
Existing PIMCO Agreements and the Existing SBAM Agreements. The following
descriptions are qualified in their entirety by reference to the form of the
proposed New Investment Advisory and Administration Agreement.
Board Consideration and Recommendation
During the course of their deliberations, the Directors (including
the non-interested Directors) considered with respect to each Fund (1) the
nature, quality and scope of the management and investment advisory services
and personnel that would be provided to the Funds by SBAM, (2) the amount of
investment advisory fees that would be paid to SBAM and the fees paid by
comparable funds, (3) the compensation (in addition to investment advisory
fees) and other benefits received by SBAM and its affiliates in respect of the
Funds, (4) SBAM's cost in providing services, (5) economies of scale realized
by SBAM, (6) possible alternatives to the proposed New Investment Advisory and
Administration Agreements with SBAM, (7) the operating expenses of the Funds,
and (8) the policies and practices of SBAM with respect to the portfolio
transactions for the Funds. The non-interested Directors of each Fund also met
separately to review the information provided by SBAM and were assisted in
their review by independent counsel to the non-interested Directors.
Specifically, the Boards considered, in addition to the above
information, (1) the fact that SBAM has been involved in the day-to-day
operations of each Fund since its inception and the level of services SBAM has
provided to each Fund, (2) the ability of SBAM, in light of its current
involvement in the day-to-day operation of the Funds, to provide all services
to the Funds in an effective and efficient manner, (3) the rates of
compensation to be received by SBAM under the New Investment Advisory and
Administration Agreements, which are lower than the rates paid to SBAM and
PIMCO Advisors under the Existing Agreements, (4) the performance of the Funds
relative to that of other funds with similar investment objectives, (5) the
commonality of the terms and provisions of the New Investment Advisory and
Administration Agreements and the Existing Agreements, and (6) SBAM's general
reputation and commitment to the investment advisory industry.
Description of SBAM
SBAM is registered as an investment adviser with the Securities and
Exchange Commission ("SEC") under the Investment Advisers Act of 1940, as
amended, ("Advisers Act"), and has its principal place of business at 388
Greenwich Street, New York, New York 10013. SBAM was organized as a Delaware
corporation in 1987. SBAM is an indirect wholly-owned subsidiary of Citigroup
Inc. ("Citigroup") which is located at 1 Citicorp Center, 153 East 53rd
-5-
Street, New York, New York 10022. As of [June 30], 2002, SBAM had
approximately $[34] billion of assets under management.
SBAM provides discretionary and non-discretionary portfolio
management services to a wide variety of individual and institutional
accounts, including, but not limited to, banks or thrift institutions,
retirement plans, pension and profit-sharing trusts, estates, charitable
organizations, corporations, and other business entities, registered
investment companies and unregistered domestic and offshore funds.
The names, titles and principal occupations of the current Directors
and executive officers of SBAM are set forth in the Fund Exhibit on page
[___].
Description of Portfolio Management Team
The SBAM portfolio management team that is currently responsible for
the day-to-day management of each of the Funds will continue to act in that
capacity. The team of investment professionals currently manages other closed-
end and open-end management investment companies. If the stockholders approve
the New Investment Advisory and Administration Agreement, the SBAM team will
continue to manage each Fund in accordance with each Fund's respective
investment objective.
Description of the Existing PIMCO Agreements
Under the Existing PIMCO Management Agreements with each applicable
Fund, PIMCO Advisors is responsible for supervising the Funds' investment
programs, including advising and consulting with the Funds' investment manager
regarding the Funds' overall investment strategy. PIMCO Advisors also advises
the Funds on the use of leveraging techniques and provides access to economic
information, research and assistance to the Funds. Under the Existing PIMCO
Management Agreements with each Fund (other than Municipal Partners Fund Inc.
and Municipal Partners Fund II Inc.), PIMCO Advisors is responsible for
consulting with SBAM and the Fund with respect to emerging trends and
developments in the international community with particular emphasis on
opportunities for emerging market country entities.
Under the Existing PIMCO Investment Advisory Agreement, PIMCO
Advisors supervises The Emerging Markets Income Fund Inc's investment program,
including advising and consulting with SBAM regarding the Fund's overall
investment strategy. PIMCO Advisors also provides access to economic
information, research and assistance to the Fund. Under the Existing PIMCO
Agreements, the Funds are responsible for all of their expenses and
liabilities, except that PIMCO Advisors is responsible for the expenses in
connection with maintaining a staff within its organization to furnish the
above services to the Funds and, in the case of the Existing PIMCO Management
Agreements, the Funds' investment advisers.
Under the Existing PIMCO Agreements, the Funds pay PIMCO Advisors an
annual fee in monthly installments at the fee rates set forth in the Fund
Exhibit on page [___]. The
-6-
aggregate amount of investment management fees paid by each Fund to PIMCO
Advisors for the Fund's most recent fiscal year under the Existing PIMCO
Agreements is set forth in the Fund Exhibit on page [___]. Under the Existing
PIMCO Management Agreements, PIMCO Advisors remits a certain percentage of such
fees to SBAM pursuant to the Existing SBAM Investment Advisory and
Administration Agreements.
Each Existing PIMCO Agreement provides that, in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard for its
obligations thereunder ("disabling conduct"), PIMCO 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 Existing PIMCO Agreement provides that the Fund, under certain
circumstances, will indemnify PIMCO Advisors against any losses or expenses
incurred, including amounts paid in satisfaction of judgments and reasonable
legal costs, not resulting from disabling conduct.
Each Existing PIMCO Agreement had an initial term of two years, and
thereafter can 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
Existing PIMCO Agreement, and who are not Interested Persons of any such
party, and (ii) a majority of each Fund's Board of Directors or the holders of
a "majority of the outstanding voting securities" (as defined in the 1940 Act)
of each Fund. Each Existing PIMCO Agreement may be terminated, without
penalty, on 60 days' notice, by the respective Fund's Board of Directors, by a
vote of the holders of a "majority of the outstanding voting securities" of
the Fund (as defined in the 1940 Act), or by PIMCO Advisors, and each Existing
PIMCO Agreement will terminate automatically in the event of its "assignment"
(as defined in the 1940 Act).
Description of the Existing SBAM Agreements
Under the Existing SBAM Investment Advisory and Administration
Agreements with PIMCO Advisors for each applicable Fund subject to the
direction and control of the Directors of the Fund and in consultation with
PIMCO Advisors, SBAM is responsible for making investment strategy decisions
for the Fund, managing and investing and reinvesting the assets of the Fund in
accordance with its stated policies, placing purchase and sale orders for the
Fund, as well as providing financial research and data to the Fund. SBAM is
also responsible for administrative and stockholder services for the Fund.
Under the Existing SBAM Management Agreement between SBAM and The
Emerging Markets Income Fund Inc, SBAM is responsible for managing and
supervising the Fund's investment program and provides certain compliance,
administrative and clerical services to the Fund. In particular, the Existing
SBAM Management Agreement provides that SBAM will make investment strategy
decisions for the Fund, manage the investing and reinvesting of the Fund's
assets, place purchase and sale orders on behalf of the Fund, provide
continuous supervision of the Fund's investment portfolio and provide or
procure the provision of research and statistical data in relation to
investing and other matters within the scope of the investment objective and
limitations of the Fund. In addition, under the Existing SBAM Management
Agreement, SBAM is responsible for providing administrative services to the
Fund, including compliance, record-keeping, reporting and
-7-
preparation of proxies and stockholder reports, coordination of the functions
of the transfer agent, custodian, accountants, counsel and other parties,
clerical services, such as accounting services, and stockholder services,
including responding to stockholder inquiries.
Under the Existing SBAM Agreements each 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
Fund. Under the Existing SBAM Agreements, SBAM is paid for its services with
respect to the Funds (in the case of the SBAM Investment Advisory and
Administration Agreement, by PIMCO Advisors, and in the case of the SBAM
Management Agreement, by the Fund) an annual fee in monthly installments at
the rates listed in the Fund Exhibit on page [____].
Each Existing 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 a
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
Existing SBAM Agreement provides that a 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.
Each Existing SBAM Agreement had an initial term of two years, and
thereafter can 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
Existing SBAM Agreement, and who are not Interested Persons of any such party,
and (ii) a majority of each 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. Each Existing SBAM Agreement may be terminated, without penalty,
on 60 days' notice, by the respective Fund's Board of Directors, by a vote of
the holders of a "majority of the outstanding voting securities" of the Fund
(as defined in the 1940 Act), or by SBAM, and each Existing SBAM Agreement
will terminate automatically in the event of its "assignment" (as defined in
the 1940 Act).
The Proposed New Investment Advisory and Administration Agreement
The proposed New Investment Advisory and Administration Agreement
incorporates substantially the same terms as the Existing Agreements. Under
the proposed New Investment Advisory and Administration Agreement, SBAM will
make investment strategy decisions for each Fund, supervise each Fund's
investment program and investment portfolio, provide and procure the provision
of relevant research and statistical data in relation to investing and other
matters within the scope of the investment objective and limitations of each
Fund, and provide administrative services for each Fund, among other things.
Under the proposed New Investment Advisory and Administration
Agreement for each of The Emerging Markets Income Fund Inc and The Emerging
Markets Income Fund II Inc, the rate of fees, all of which will be paid to
SBAM, will be 0.15% lower than the combined advisory and administrative fee
rate currently payable by the Fund to PIMCO Advisors and SBAM under the
Existing Agreements. With respect to The Emerging
-8-
Markets Floating Rate Fund Inc., Global Partners Income Fund Inc., Municipal
Partners Fund Inc. and Municipal Partners Fund II Inc., the rate of fees to be
paid to SBAM will be 0.05% lower than the fees currently received by PIMCO
Advisors and SBAM under the Existing Agreements. Under the proposed New
Investment Advisory and Administration Agreement, SBAM would be paid for its
services by each Fund an annual fee in monthly installments at the rates
listed in the Fund Exhibit on page [____].
Under the proposed New Investment Advisory and Administration
Agreement, each Fund would be responsible for all of its expenses and
liabilities, except that SBAM would be 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 each Fund.
The New Investment Advisory and Administration Agreement will be in
effect for an initial term of two years, and thereafter can continue in effect
for successive annual periods provided such continuance is specifically
approved at least annually by (i) a majority of the members of each Fund's
Board of Directors who are not parties to the New Investment Advisory and
Administration Agreement, and who are not Interested Persons of any such
party, and (ii) a majority of each Fund's Board of Directors or the holders of
a "majority of the outstanding voting securities" (as defined in the 1940 Act)
of each Fund. The New Investment Advisory and Administration Agreement may be
terminated, without penalty, on 60 days' notice, by that Fund's Board of
Directors, by a vote of the holders of a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Fund, or by SBAM, and the New
Investment Advisory and Administration Agreement will terminate automatically
in the event of its "assignment" (as defined in the 1940 Act).
Required Vote
As provided in the 1940 Act, approval of the New Investment
Advisory and Administration Agreement for a Fund will require the affirmative
vote of a "majority of the outstanding voting securities" of that 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
Meetings, 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 Meetings for quorum purposes but not voting and will have the
same effect as votes cast against the Proposal.
Section 15(f) of the 1940 Act
PIMCO Advisors and SBAM have structured the Transactions
contemplated by the Purchase Agreement and SBAM has agreed to use commercially
reasonable efforts to comply with the "safe harbor" provisions afforded by
Section 15(f) of the 1940 Act. Section 15(f) provides in substance that when a
sale of an interest in an investment advisory business occurs, the investment
adviser or its affiliates may receive any amount or benefit in connection with
the sale as long as two conditions are satisfied. First, an "unfair burden"
must not be imposed on investment company clients of the adviser as a result
of the transaction, or any express or implied terms, conditions, or
understandings applicable to the transaction. The term "unfair burden" (as
defined
-9-
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 of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from such an
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any other person in connection
with the purchase or sale of securities or other property to, from or on
behalf of such investment company (other than bona fide ordinary compensation
as principal underwriter for such company). The Board of Directors of each
Fund is aware of no circumstances arising from the change in advisory services
proposed herein that might result in an unfair burden being imposed on any
Fund.
The second condition of Section 15(f) is that during the three-year
period after the transaction, at least 75% of each investment company's board
of directors must not be Interested Persons of the investment adviser (or
predecessor or successor adviser).
Upon consummation of each of the Transactions contemplated by the
Purchase Agreement, Mr. Treadway has agreed to resign from the respective
Board and at that point each Board will be in compliance with the requirement
that the Board of each Fund be comprised of Directors at least 75% of whom are
not Interested Persons of either SBAM and PIMCO Advisors. It is expected that
the Board of Directors of each Fund will continue to satisfy that condition of
Section 15(f) for the requisite three-year period.
THE DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT INTERESTED
PERSONS, UNANIMOUSLY RECOMMEND THAT EACH FUND'S STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE NEW INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT FOR EACH
FUND.
Proposal 2: Election of Directors
Stockholders of only The Emerging Markets Income Fund Inc and Global
Partners Income Fund Inc. will vote on this proposal.
The Meeting for each of The Emerging Markets Income Fund Inc and
Global Partners Income Fund Inc. will also serve as Annual Meeting of
Stockholders, and stockholders of those Funds are being asked to consider for
election as Directors the nominees listed in the Fund Exhibit on pages
[_____]. As described in the Fund Exhibit on pages [_____], each Fund's Board
of Directors is divided into three classes. Consequently, the stockholders of
The Emerging Markets Income Fund Inc will be electing two Directors to hold
office until the year 2005 Annual Meeting of Stockholders, and the
stockholders of Global Partners Income Fund Inc. will be electing one Director
to hold office until the year 2003 Annual Meeting of Stockholders and two
Directors to hold office until the year 2005 Annual Meeting of Stockholders,
at their respective Meetings.
Biographical information about the nominees and other Directors and
executive officers of the Funds, and other information relating to, among
other things, compensation of these individuals, is set forth in the Fund
Exhibit on pages [_____] under the heading "B. Specific Fund Information."
The persons named in the form of proxy accompanying this Proxy
Statement intend to vote at the Meetings (unless directed not to vote) FOR the
election of the nominees. The nominees for election are currently members of
the Fund's Board of Directors, and have previously been elected as Directors
by the Fund's stockholders, with the exception of Mr. Gerken in the case of
The Emerging Markets Income Fund Inc. Except as provided below in the case of
Mr.
-10-
Treadway, the nominees have indicated that they will serve if elected, but if
they 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. In the event that the Transactions contemplated by the Purchase
Agreement between PIMCO Advisors and SBAM described in Proposal 1 above are
consummated, Mr. Treadway has agreed to resign from the Boards of Directors of
the Funds and as officer of the Funds, as applicable. Otherwise, Mr. Treadway
would retain his current positions. As of April 20, 2001, Charles F. Barber
became a Director emeritus of the Funds. In September 2002 Heath B. McLendon
resigned as Co-Chairman and a Director of the Funds in order to serve as
Chairman of the Equity Research Policy Committee at Salomon Smith Barney Inc.
Required Vote
Directors are elected by a plurality of the votes cast by the
holders of shares of common stock of each Fund present or represented by proxy
at the Meetings at which a quorum is present. For purposes of the election of
Directors, abstentions and Broker Non-Votes will not be considered votes cast,
and do not affect the plurality vote required for Directors.
THE DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT INTERESTED
PERSONS, UNANIMOUSLY RECOMMEND THAT EACH FUND'S STOCKHOLDERS VOTE "FOR" THE
NOMINEES FOR DIRECTOR.
ADDITIONAL INFORMATION FOR ALL OF THE FUNDS
The information below pertains to all of the Funds.
Proposals to be Submitted by Stockholders
All proposals by stockholders of each Fund which are intended to be
presented at that Fund's next Annual Meeting of Stockholders to be held in
2003 must be received by that Fund for inclusion in that Fund's proxy
statement and proxy relating to that meeting no later than the date indicated
for that Fund in the table below. Any stockholder who desires to submit a
proposal at that Fund's 2003 Annual Meeting of Stockholders without including
such proposal in that Fund's proxy statement must deliver written notice
thereof to the Secretary of that Fund (at the address listed on page [___] of
this Proxy Statement) during the period indicated for that Fund in the table
below.
Date by which
Name of Fund Proposal must be Period during which written
received notice must be received
- ------------------------------------------------------------------------------
The Emerging Markets
Income Fund Inc [July 14, 2003] September 12, 2003 to
October 12, 2003
The Emerging Markets
Income Fund II Inc April 23, 2003 June 21, 2003 to
July 21, 2003
-11-
The Emerging Markets January 20, 2003 March 22, 2003 to
Floating Rate April 21, 2003
Fund Inc.
Global Partners Income
Fund Inc. [July 14, 2003] September 12, 2003 to
October 12, 2003
Municipal Partners
Fund Inc. November 18, 2002 January 10, 2003 to
February 10, 2003
Municipal Partners
Fund II Inc. May 21, 2003 July 25, 2003 to
August 24, 2003
Other Information
Each Fund's Annual Report containing financial statements for the
fiscal year-end listed in the Fund Exhibit on page [__] for that Fund, and
each Fund's most recent semi-annual report succeeding the Annual Report, if
any, are available free of charge by writing to that Fund c/o Salomon Brothers
Asset Management Inc at 388 Greenwich Street, New York, New York, 10013, or by
calling toll-free 1-888-777-0102.
Expenses of Proxy Solicitation
The costs of preparing, assembling and mailing material in
connection with this solicitation of proxies will be borne equally by SBAM and
PIMCO Advisors. Neither the Fund nor its stockholders shall bear any proxy
preparation or solicitation expenses. Proxies may also be solicited personally
by officers of each Fund and by regular employees of SBAM, PIMCO Advisors or
their affiliates, or other representatives of each Fund, on behalf of that
particular 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 will be reimbursed by the Fund
for whom they provide such services for such out-of-pocket expenses.
Other Business
The Board of Directors of each Fund does not know of any other
matter which may come before the Meetings. If any other matter properly comes
before the Meetings, it is the intention of the persons named in the proxy to
vote the proxies in accordance with their judgment on that matter.
November [11], 2002
-12-
Exhibit A
FUND EXHIBIT
A. General Information.
The following information regarding each of the Funds identified
below is provided in connection with the Proposals in the combined Proxy
Statement relating to each Fund. Terms used herein and not otherwise defined
have the meanings given to them in the combined Proxy Statement.
1. COMPARATIVE FEE INFORMATION:
PIMCO Advisors currently serves as the investment adviser or
manager to each Fund, and to the investment companies listed below which have
similar investment objectives to each Fund. If a New Investment Advisory and
Administration Agreement is approved and the corresponding Transaction is
closed for a Fund, PIMCO Advisors will no longer be the investment adviser or
manager for that Fund, and SBAM will become the sole investment manager for
that Fund. 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.,
PIMCO Emerging Markets Bond Fund and PIMCO Emerging Markets Bond Fund II have
similar investment objectives and Municipal Advantage Fund Inc., Municipal
Partners Fund Inc., Municipal Partners Fund II Inc., PIMCO Municipal Income
Fund, PIMCO Municipal Income Fund II, PIMCO Corporate Income Fund and PIMCO
Municipal Bond Fund have similar investment objectives.
Investment Advisory,
Management or Sub-
Advisory Fee (as Approximate net
(a percentage of assets as of
average weekly September 30, 2002
Name of Fund net assets) (in millions)
- ------------------------------------------------------------------------------
The Emerging Markets
Income Fund Inc................. 1.20%(1) $ 42
The Emerging Markets
Income Fund II Inc.............. 1.20%(1) $ 207
The Emerging Markets
Floating Rate Fund Inc.......... 1.10%(2) $ 37
Global Partners Income
Fund Inc........................ 1.10%(2) $ 120
PIMCO Emerging Markets
Bond Fund....................... 0.90%(3) $ [ ]
PIMCO Emerging Markets
Bond Fund II.................... 0.85%(3) $ [ ]
Municipal Advantage
Fund Inc. ...................... 0.60%(4)(5) $ [ ]
Municipal Partners Fund Inc..... 0.60%(4)(5) $ 89
Municipal Partners Fund
II Inc. ........................ 0.60%(4)(5) $ 91
PIMCO Municipal Income Fund..... 0.65%(3)(5) $ 557
PIMCO Municipal Income Fund II.. 0.65%(3)(5) $ 1,379
PIMCO Corporate Income Fund..... 0.75%(3)(5) $ 740
PIMCO Municipal Bond
Fund............................ 0.50%(3) $ [ ]
(1) PIMCO Advisors remits a portion of its fee to SBAM at an annual rate
of 0.70% of the Fund's average weekly net assets.
(2) PIMCO Advisors remits a portion of its fee to SBAM at an annual rate
of 0.65% of the Fund's average weekly net assets.
(3) Includes compensation for administrative services.
(4) PIMCO Advisors remits a portion of its fee to SBAM at an annual rate
of 0.36% of the Fund's average weekly net assets.
(5) For purposes of calculating the fee, the liquidation value of any
outstanding preferred stock of the Fund is not deducted in
determining the Fund's average weekly net assets.
SBAM serves as an investment adviser, manager or sub-adviser to
each Fund and to the investment companies listed below which have similar
investment objectives to the 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 High Income Fund II Inc, Salomon Brothers Worldwide Income
Fund Inc and Salomon Brothers Institutional Emerging Markets Debt Fund have
similar investment objectives, and Municipal Partners Fund Inc. and Municipal
Partners Fund II Inc. have similar investment objectives.
-2-
Investment Advisory,
Management or Sub-
Advisory Fee (as Approximate net
(a percentage of assets as of
average weekly September 30, 2002
Name of Fund net assets) (in millions)
- ------------------------------------------------------------------------------
The Emerging Markets
Income Fund Inc................. 0.70%(1) $ 42
The Emerging Markets Income
Fund II Inc..................... 0.70%(2) $207
The Emerging Markets Floating
Rate Fund Inc................... 0.65%(2) $ 37
Global Partners Income
Fund Inc. ....................... 0.65%(2) $120
Salomon Brothers High Income
Fund Inc........................ 0.70% $ 43
Salomon Brothers High Income
Fund II Inc..................... 1.00%(4) $608
Salomon Brothers Institutional
Emerging Markets Debt
Fund............................ 0.70%(3) $ 66
Salomon Brothers Worldwide
Income Fund Inc................. 0.90% $130
Municipal Partners Fund Inc..... 0.36%(2)(4) $ 89
Municipal Partners Fund
II Inc. ........................ 0.36%(2)(4) $ 91
(1) Fee is paid by the Fund and includes compensation for administrative
services.
(2) Fee is paid to SBAM by PIMCO Advisors out of its management fee and
includes compensation for administrative services.
(3) SBAM has voluntarily agreed to limit the total expenses (including
its advisory fees) of the Fund (exclusive of taxes, interest and
extraordinary
-3-
expenses, such as litigation and indemnification expenses) on an
annualized basis, to 0.75% of the Fund's average daily net assets.
(4) For purposes of calculating the fee, the liquidation value of any
outstanding preferred stock of the Fund is not deducted in
determining the Fund's average weekly net assets.
Fee Information under the New Investment Advisory and Administration Agreement:
Under the proposed New Investment Advisory and Administration
Agreement, SBAM will serve as investment manager to each Fund.
New
Investment Aggregate
Advisory and Amount of Amount that
Administration Fees paid to SBAM would
Agreement Fee SBAM and PIMCO have received
(as a percentage Advisor's had the Decrease in
of average weekly during the last proposed fees Fees (as a
Name of Fund net assets) fiscal year been in effect percentage)
- -------------------------------------------------------------------------------
The Emerging
Markets Income
Fund Inc........... 1.05% $617,216 $540,064 13%
The Emerging
Markets Income Fund
II Inc............. 1.05% 3,178,344 2,781,051 13%
The Emerging
Markets Floating
Rate Fund Inc...... 1.05% 535,482 511,142 5%
Global Partners
Income Fund Inc..... 1.05% 1,634,460 1,560,166 5%
Municipal Partners
Fund Inc.(1)....... 0.55% 743,941 681,946 8%
Municipal Partners
Fund II Inc. (1).... 0.55% 782,411 717,210 8%
(1) For purposes of calculating the fee, the liquidation value of any
outstanding preferred stock of the Fund is not deducted in
determining the Fund's average weekly net assets.
-4-
Payments to Affiliates of SBAM or PIMCO Advisors by the Fund
As of the date of this Proxy Statement, significant institutional
shareholders of Allianz AG currently include Munich Reinsurance and
HypoVereinsbank. Allianz AG in turn owns more than 95% of Dresdner Bank AG.
Credit Lyonnais, Munich Reinsurance and HypoVereinsbank, as well as
certain broker-dealers that might be controlled by or affiliated with these
entities or Dresdner Bank AG, such as DB Alex. Brown LLC and Dresdner
Kleinwort Benson North America LLC (collectively, the "Affiliated Brokers" (as
defined in the 1940 Act)), may be considered to be affiliated persons of PIMCO
Advisors. Absent an SEC exemption or other relief, each Fund generally is
precluded from effecting principal transactions with the Affiliated Brokers,
and its ability to purchase securities being underwritten by an Affiliated
Broker or a syndicate including an Affiliated Broker is subject to restrictions.
Similarly, each Fund's ability to utilize the affiliated brokers for agency
transactions is subject to the restrictions of Rule 17e-1 under the 1940 Act.
PIMCO does not believe that the restrictions on transactions with the
Affiliated Brokers described above materially adversely affect its ability to
provide services to the Fund, the Fund's ability to take advantage of market
opportunities, or the Fund's overall performance.
There have been no commissions paid to Affiliated Brokers, as
defined in the 1940 Act, of SBAM or PIMCO Advisors during the last fiscal
year.
2. INFORMATION PERTAINING TO THE MEETING:
The following table sets forth the issued and outstanding shares of
capital stock of each Fund as of the Record Date.
Number of Shares of Number of Shares of
Common Stock Preferred Stock
Name of Fund Issued and Outstanding Issued and Outstanding
- ------------------------------------------------------------------------------
The Emerging Markets
Income Fund Inc................. [ ] N/A
The Emerging Markets
Income Fund II Inc.............. [ ] N/A
The Emerging Markets
Floating Rate Fund Inc.......... [ ] N/A
Global Partners Income
Fund Inc. ...................... [ ] N/A
Municipal Partners Fund Inc..... [ ] [ ]
Municipal Partners Fund
II Inc. ........................ [ ] [ ]
-5-
3. INFORMATION PERTAINING TO THE EXISTING PIMCO AGREEMENTS AND THE
EXISTING SBAM AGREEMENTS:
The following table provides information regarding the date of each
of the Existing Agreements (including the novations of the agreements
reflecting the date that PIMCO Advisors acquired responsibility under the
agreements from one of its affiliates), the date on which the respective
Boards and stockholders of each Fund last approved such agreements, and the
fees paid to PIMCO Advisors and/or SBAM, as applicable, pursuant to such
agreements for each Fund's most recently completed fiscal year.
Fees Paid by Fees Paid by
Date of Last Date of Last Fund to PIMCO
Name of Fund Agreement Description Board Stockholder PIMCO Advisors to
(and Fiscal Year-end) (and date) Approval* Approval Advisors(1) SBAM
- --------------------------------------------------------------------------------------------------------------------
The Emerging Markets SBAM Management 12/3/01 2/1/02 N/A $257,173(2)
Income Fund Inc (8/31) Agreement (2/1/02)
PIMCO Investment 10/23/02 2/24/00 $360,043 N/A
Advisory Agreement
(5/5/00) and Novation of
PIMCO Investment
Advisory Agreement
(5/6/02)
The Emerging Markets PIMCO Management 10/23/02 2/24/00 $1,324,310(1) N/A
Income Fund II Inc (8/31) Agreement (5/5/00) and
Novation of PIMCO
Management Agreement
(5/6/02)
SBAM Investment Advisory 10/23/02 2/24/00 N/A $1,854,034
and Administration
Agreement (5/5/00)
-6-
and Novation of SBAM
Investment Advisory and
Administration Agreement
(5/6/02)
The Emerging Markets PIMCO Management 10/23/02 2/24/00 $219,061(1) N/A
Floating Rate Fund Agreement (5/5/00) and
Inc. (2/28) Novation of PIMCO
Management Agreement
(5/6/02)
SBAM Investment Advisory 10/23/02 2/24/00 N/A $316,421
and Administration
Agreement (5/5/00) and
Novation of SBAM
Investment Advisory and
Administration Agreement
(5/6/02)
Global Partners Income PIMCO Management 10/23/02 2/24/00 $668,643(1) N/A
Fund Inc (8/31) Agreement (5/5/00) and
Novation of PIMCO
Management Agreement
(5/6/02)
SBAM Investment Advisory 10/23/02 2/24/00 N/A $965,817
and Administration
Agreement (5/5/00) and
Novation of SBAM
Investment Advisory and
Administration Agreement
(5/6/02)
Municipal Partners Fund PIMCO Management 10/23/02 2/24/00 $297,576(1) N/A
Inc. (12/31) Agreement (5/5/00) and
Novation of
-7-
PIMCO Management Agreement
(5/6/02)
SBAM Investment Advisory 10/23/02 2/24/00 N/A $446,365
and Administration
Agreement (5/5/00) and
Novation of SBAM
Investment Advisory and
Administration Agreement
(5/6/02)
Municipal Partners Fund PIMCO Management 10/23/02 2/24/00 $312,964(1) N/A
II Inc. (12/31) Agreement (5/5/00) and
Novation of PIMCO
Management Agreement
(5/6/02)
SBAM Investment Advisory 10/23/02 2/24/00 N/A $469,447
and Administration
Agreement (5/5/00) and
Novation of SBAM
Investment Advisory and
Administration Agreement
(5/6/02)
* Includes the date on which a majority of the Directors who are not
Interested Persons of such Fund, PIMCO Advisors or SBAM most recently
approved the agreement.
(1) Net of fees paid by PIMCO Advisors to SBAM which are shown in last
column.
(2) Fees paid by Fund directly to SBAM.
4. INFORMATION PERTAINING TO EACH FUND'S DIRECTORS AND OFFICERS:
The following table provides information regarding the Directors
and officers of the Funds who currently are also directors, officers or
employees of PIMCO Advisors or SBAM.
-8-
Principal Occupation(s)
Position(s) Length of During Past 5 Years, Including
Name, Address and Age Held with Fund(1) Time Served Positions with PIMCO Advisors or SBAM
--------------------- ----------------- ----------- -------------------------------------
R. Jay Gerken Director and Co-Chairman Since 2002 Managing Director, Salomon
Salomon Smith Barney Inc. Smith Barney Inc. ("SSB");
125 Broad Street formerly, portfolio manager
New York, NY 10004 Smith Barney Growth and Income Fund
Age: 51 (1994-2000) and Smith Barney
Allocation Series Inc. (1996-2001).
Stephen J. Treadway Director and Since 2000 Managing Director of Allianz
PIMCO Advisors Co-Chairman Dresdner Asset Management of America
Distributors LLC(2) L.P. ("ADAMA") (formerly, PIMCO
2187 Atlantic Street Advisors L.P.); Managing Director
Stamford, CT 06902 and Chief Executive Officer of PIMCO
Age: 55 Advisors Distributors LLC(2) since
May 1996; Managing Director and Chief
Executive Officer, PIMCO Advisors.
Peter J. Wilby President Since 2002 Managing Director of SSB and SBAM
Salomon Smith Barney Inc. since January 1996.
388 Greenwich Street
New York, NY 10013
Age: 43
Lewis E. Daidone Executive Vice President Since 2002 Managing Director of SSB; Chief
Salomon Smith Barney Inc. and Chief Administrative Financial Officer of the Smith
125 Broad Street, 11th Floor Officer Barney Mutual Funds; Director and
New York, NY 10004 Senior Vice President of Smith
Age: 44 Executive Vice President 1998-2002 Barney Fund Management LLC (SBFM)
and Treasurer and Travelers Investment Adviser,
Inc. (TIA).
Irving P. David Chief Financial Officer Since July 2002 Director of SSB
Salomon Smith Barney Inc. and Treasurer
125 Broad Street, 10th Floor
New York, NY 10004 Controller May-July 2002
Age: 41
James E. Craige* Executive Vice President Since [1996] Managing Director of SSB and SBAM
Salomon Smith Barney Inc. since December 1998; Director of SSB
388 Greenwich Street and SBAM since January 1998 and Vice
New York, NY 10013 President of SSB and SBAM from May
Age: 34 1992 to January 1998.
Thomas K. Flanagan* Executive Vice President Since 1994 Managing Director of SSB and SBAM
Salomon Smith Barney Inc. since December 1998; Prior to
388 Greenwich Street December 1998, Director of SSB and
New York, NY 10013 SBAM.
Age: 49
Newton B. Schott, Jr. Executive Vice President Since 1997 Chief Administrative Officer,
PIMCO Advisors Managing Director and General
Distributors LLC(2) Counsel of PIMCO Advisors
2187 Atlantic Street Distributors LLC(2); Managing
Stamford, CT 06902 Director and Chief Legal Officer
Age: 60 of PIMCO Advisors.
-9-
Brian S. Shlissel Executive Vice President Since 2002 Senior Vice President of ADAMA since
PIMCO Advisors Fund July 1999; Vice President of
Management(3) Mitchell Hutchins Asset Management
1345 Avenue of the Americas (1993-1999).
New York, NY 10105
Age: 37
Beth A. Semmel*** Executive Vice President Since [____] [___________]
Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Age: [_____]
Robert E. Amodeo** Executive Vice President Since 1999 Managing Director of SBAM and SSB
Salomon Smith Barney Inc. since December 2001; Director of
388 Greenwich Street SSB and SBAM since December 1998;
New York, NY 10013 Vice President of SSB and SBAM
Age: 37 from January 1996 to December 1998.
Frances M. Guggino Controller Since 2002 Vice President of Citigroup Asset
Salomon Smith Barney Inc. Management.
125 Broad Street, 10th Floor
New York, NY 10004
Age: 40
Christina T. Sydor Secretary Since 1998 Managing Director of SSB; General
Salomon Smith Barney Inc. Counsel and Secretary of SBFM and
300 First Stamford Place TIA.
Stamford, CT 06902
Age: 51
Joseph Valpe Assistant Controller Since 2002 Vice President of Citigroup Asset
Salomon Smith Barney Inc. Management
125 Broad Street, 10th Floor
New York, NY 10004
Age: [_____]
Joseph Genco Assistant Controller Since 2002 Assistant Vice President of Citigroup
Salomon Smith Barney Inc. Asset Management
125 Broad Street, 10th Floor
New York, NY 10004
Age: [_____]
Leslie H. Gelb Director and Member of Since 2000 President, The Council on Foreign
The Council on the Audit Committee Relations; formerly Columnist,
Foreign Relations Deputy Editorial Page Editor and
58 East 68th Street Editor, Op-Ed Page, The New York
New York, NY 10021 Times.
Age: 64
Dr. Riordan Roett Director and Member of Since 1997 Professor and Director, Latin
The Johns Hopkins University the Audit Committee American Studies Program, Paul H.
1740 Massachusetts Ave. NW Nitze School of Advanced
Washington, DC 20036 International Studies, The Johns
Age: 63 Hopkins University.
Jeswald W. Salacuse Director and Member of Since 2000 Henry J. Braker Professor of
Tufts University the Audit Committee Commercial Law and formerly Dean,
The Fletcher School The Fletcher School of Law &
of Law & Diplomacy Diplomacy, Tufts University.
Packard Avenue
Medford, MA 02155
Age: 64
Robert A. Vegliante**** Assistant Secretary Since 1996 Director of SSB.
Citigroup Asset Management
300 First Stamford Place
Stamford, CT 06902
Age: 41
-10-
Robert M. Nelson Assistant Secretary Since 2002 [_____]
Citigroup Asset Management
300 First Stamford Place
Stamford, CT 06902
Age: [_____]
* An officer of only 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.
** An officer of only Municipal Partners Fund Inc. and Municipal Partners
Fund II Inc.
*** An officer of only Global Partners Income Fund Inc.
(1) Each Fund's Board of Directors is divided into three classes: Class I,
Class II and Class III. The terms of office of the Class I, II and III
Directors expire at the Annual Meetings of Stockholders of each Fund in
consecutive years, or thereafter in each case when their respective successors
are duly elected and qualified. Each Fund's executive officers are chosen each
year at the first meeting of each Fund's Board of Directors following their
respective Annual Meeting of Stockholders, to hold office until the meeting of
each Fund's Board following their next respective Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
(2) PIMCO Advisors Distributors LLC was formerly known as PIMCO Funds
Distributors LLC. The name change became effective on October 31, 2002.
(3) PIMCO Advisors Fund Management LLC was formerly known as PIMCO Funds
Advisors LLC. The name change became effective on October 31, 2002.
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 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 the Funds, and all
Directors and executive officers of each the Fund as a group, in each case as
of [September 30], 2002.
The Emerging Markets The Emerging Markets The Emerging Markets Global Partners
Income Fund Inc Income Fund II Inc Floating Rate Fund Inc. Income Fund Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Name and Address Amount and Amount and Amount and Amount and
of Each Nature of Percent Nature of Percent Nature of Percent Nature of Percent
Beneficial Owner* Beneficial of Class Beneficial of Class Beneficial of Class Beneficial of Class
Ownership(3) Owned Ownership(3) Owned Ownership(3) Owned Ownership(3) Owned
Jeswald W.
Salacuse [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Leslie H. Gelb [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
-11-
Dr. Riordan Roett [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Charles F.
Barber** [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
R. Jay Gerken [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Stephen J.
Treadway 0 0% 0 0% 0 0% 0 0%
Peter J. Wilby [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Lewis E. Daidone [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Irving P. David [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
James E. Craige [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
Thomas K.
Flanagan [ ](1) [ ]% [ ](1) [ ]% [ ](1) [ ]% [ ](1) [ ]%
Newton B.
Schott, Jr. 0 0% 0 0% 0 0% 0 0%
Brian S. Shlissel 0 0% 0 0% 0 0% 0 0%
Beth A. Semmel(2) N/A N/A N/A N/A N/A N/A [ ] [ ]%
All Directors
and Executive
Officers (as a
group) [ ] [ ]% [ ] [ ]% [ ] [ ]% [ ] [ ]%
-12-
* Unless otherwise noted, the business address of each person named is
125 Broad Street, New York, New York, 10004.
** As of April 20, 2001, Charles F. Barber became a Director emeritus of the
Fund.
(1) Shares are owned by Mr. Flanagan's wife. Mr. Flanagan disclaims beneficial
ownership of such shares.
(2) An officer of only Global Partners Income Fund Inc.
(3) Of these shares, [__________] has a right to acquire beneficial ownership
of [____] shares.
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 the Funds, and all Directors and executive
officers of each such Fund as a group, in each case as of [September 30], 2002.
Municipal Partners Fund Inc. Municipal Partners Fund II Inc.
- ------------------------------------------------------------------------------------------------------------------
Name and Address of Each Amount and Nature of Amount and Nature of
Beneficial Owner* Beneficial Percent of Beneficial Percent of
Ownership(1) Class Owned Ownership(1) Class Owned
Jeswald W. Salacuse [ ] [ ]% [ ] [ ]%
Leslie H. Gelb [ ] [ ]% [ ] [ ]%
Dr. Riordan Roett [ ] [ ]% [ ] [ ]%
Charles F. Barber** [ ] [ ]% [ ] [ ]%
R. Jay Gerken [ ] [ ]% [ ] [ ]%
Stephen J. Treadway 0 0% 0 0%
Peter J. Wilby [ ] [ ]% [ ] [ ]%
Lewis E. Daidone [ ] [ ]% [ ] [ ]%
Irving P. David
Robert E. Amodeo [ ] [ ]% [ ] [ ]%
Newton B. Schott, Jr. 0 0% 0 0%
Brian S. Shlissel 0 0% 0 0%
-13-
All Directors and Executive
Officers (as a group) [ ] [ ]% [ ] [ ]%
* Unless otherwise noted, the business address of each person named is 125
Broad Street, New York, New York, 10004.
** As of April 20, 2001, Charles F. Barber became a Director emeritus of the
Fund.
(1) Of these shares, [__________] has a right to acquire beneficial ownership
of [____] shares.
For each of the six Funds, the holdings of no Director or executive
officer, nor the Directors and executive officers of the Fund as a group,
represented more than 1% of the outstanding shares of the Fund's common stock
as of [_______], 2002. 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 Municipal Partners Fund Inc. or Municipal Partners Fund II Inc. as of
[_______], 2002.
No person owned of record, or to the knowledge of the management of
each respective Fund, owned beneficially, more than 5% of that Fund's
outstanding shares as of [_______], 2002, except that Cede & Co., a nominee
for participants in Depository Trust Company, held of record as of that date
the number of shares of each Fund listed below:
Percentage of total
Number of Shares of number of Shares
Common Stock of of Common Stock
Name of Fund the Fund of the Fund
held by Cede & Co. Issued and Outstanding
- ------------------------------------------------------------------------------
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.......................... [ ] [ ]%
-14-
6. INFORMATION WITH RESPECT TO SBAM AND PIMCO ADVISORS
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
- ------------------------------------------------------------------------------
Member of the Board of Directors
Ross S. Margolies and Managing Director
Member of the Board of Directors
Peter J. Wilby and Managing Director
Virgil H. Cumming Member of the Board of Directors
Member of the Board of Directors
and Chief Operating
Wendy Murdock Officer for Retail Asset Management
R. Jay Gerken [Managing Director]
Michael Fred Rosenbaum Chief Legal Officer
Jeffrey S. Scott Chief Compliance Officer
The business address of each of the directors and executive
officers listed above is 388 Greenwich Street, New York, New York 10013.
The names, titles and principal occupations of the executive
officers of PIMCO Advisors are set forth in the following table.
Name Title and Principal Occupation
- ------------------------------------------------------------------------------
Managing Director, General Counsel
David C. Flattum and Head of Corporate Functions
Managing Director
Stephen J. Treadway and Chief Executive Officer
James G. Ward Executive Vice President
Stewart A. Smith Vice President and Secretary
-15-
Executive Vice President
John C. Maney and Chief Financial Officer
Senior Vice President and Director
Andrew Bocko of Information Technology
Executive Vice President, Director of
Francis C. Poli Compliance and Assistant Secretary
Vinh T. Nguyen Vice President and Controller
Managing Director, Chief Legal Officer
Newton B. Schott, Jr. and Secretary
Tim Clark Managing Director
[The business address of Messrs. Flattum, Ward, Smith, Bocko, Nguyen
and Maney is 888 San Clemente Drive, Suite 100, Newport Beach, California
92660. The business address of Messrs. Treadway, Poli and Clark is 1345 Avenue
of the Americas, New York, New York. The business address of Mr. Schott is
2187 Atlantic Street, Stamford, Connecticut 06902.]
B. Specific Fund Information.
1. Information pertaining to the election of directors:
In accordance with each Fund's Charter, each Fund's Board of
Directors is divided into three classes: Class I, Class II and Class III.
The Emerging Markets Income Fund Inc
At the Meeting, the Fund's stockholders will be asked to elect two
Class III Directors to hold office until the year 2005 Annual Meeting of
Stockholders or thereafter until their respective successors are duly elected
and qualified. The terms of office of the Class I and Class II Directors
expire at the year 2003 and 2004 Annual Meetings of Stockholders,
respectively, or thereafter in each case when their respective successors are
duly 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 persons named in the form of proxy accompanying the proxy
statement intend to vote at the Meetings (unless directed not to vote) FOR the
election of the nominees named below. The nominees for election are currently
members of the Fund's Board of Directors, and have previously been elected as
Directors by the Fund's stockholders, with the exception of Mr. Gerken. The
nominees have indicated that they will serve if elected, but if they should be
should be unable to serve, the proxy will be voted for any other person
determined by the persons
-16-
named in the proxy in accordance with their judgment. As of April 20, 2001,
Charles F. Barber became a Director emeritus* of the Fund. In September 2002
Heath B. McLendon resigned as Co-Chairman and a Director of the Fund in order
to serve as Chairman of the Equity Research Policy Committee at Salomon Smith
Barney Inc.
In the event that the Transactions contemplated by the Purchase
Agreement between PIMCO Advisors and SBAM are consummated, Mr. Treadway has
agreed to resign from the Board of Directors of the Fund, and as an officer of
the Fund, as described in Proposal 1 in the Proxy Statement. Otherwise, Mr.
Treadway will retain his current positions.
The following table provides information concerning the nominees
for election as Class III Directors of the Fund:
Number of
Portfolios
Advised by
SBAM,(1)
SBAM
and PIMCO
Advisors,(2)
and PIMCO
Advisors(3)
Principal and Overseen
Occupation(s) by Director Other
Name, Address Position(s) Length of During Past (including Directorships
and Age Held with Fund Time Served 5 Years the Fund) Held by Director
------- -------------- ----------- ------- --------- ----------------
Nominees to Serve as Class III Directors until the 2005 Annual Meeting of Stockholders
Non-Interested Director Nominee
Leslie H. Gelb Director and Since President, The Council on [26](1) Britannica.com,
The Council on Member of the 2000 Foreign Relations; formerly [6](2) Director of two
Foreign Relations Audit Columnist, Deputy Editorial [0](3) registered
58 East 68th Street Committee Page Editor and Editor, investment
New York, NY 10021 Op-Ed Page, The New York companies
Age: 64 Times. advised by
Advantage
Advisers,
Inc.,
("Advantage").
Interested Director Nominee
R. Jay Gerken** Director and Since Managing Director, Salomon [221](1) None
Salomon Smith Barney Inc. Co-Chairman 2002 Smith Barney Inc. ("SSB"); [6](2)
125 Broad Street formerly, portfolio manager [0](3)
New York, NY 10004 Smith Barney Growth and
Age: 51 Income Fund (1994-2000) and
Smith Barney Allocation
Series Inc. (1996-2001).
* Upon attainment of age 80, Fund Directors are required to change to
emeritus status. Directors emeritus are entitled to serve in emeritus
status for a maximum of 10 years, during such time they are paid 50% of
the annual retainer fee and meeting fees otherwise applicable to Fund
Directors together with reasonable out-of-pocket expenses for each
meeting attended.
** Mr. Gerken is an Interested Person as defined in the 1940 Act because he
is a Managing Director of SSB, an affiliate of SBAM, the Fund's
investment adviser.
(1) Number of portfolios advised by SBAM or affiliates of SBAM.
-17-
(2) Number of portfolios advised by SBAM or affiliates of SBAM and PIMCO
Advisors or affiliates of PIMCO Advisors.
(3) Number of portfolios advised by PIMCO Advisors or affiliates of PIMCO
Advisors.
The following table provides information concerning the remaining
Directors of the Fund:
Number of
Portfolios
Advised by
SBAM,(1)
SBAM
and PIMCO
Advisors,(2)
and PIMCO
Advisors(3)
Principal and Overseen
Occupation(s) by Director Other
Name, Address Position(s) Length of During Past (including Directorships
and Age Held with Fund Time Served 5 Years the Fund) Held by Director
------- -------------- ----------- ------- --------- ----------------
Class I Directors serving until the 2003 Annual Meeting of Stockholders
Non-Interested Directors
Dr. Riordan Roett Director and Since Professor and Director, [26](1) The Latin
The Johns Hopkins University Member of the 1997 Latin American Studies [6](2) America Equity
1740 Massachusetts Ave. NW Audit Program, Paul H. Nitze [0](3) Fund, Inc.
Washington, DC 20036 Committee School of Advanced
Age: 63 International Studies, The
Johns Hopkins University.
Jeswald W. Salacuse Director and Since Henry J. Braker Professor [26](1) Director of two
Tufts University Member of the 2000 of Commercial Law and [6](2) registered
The Fletcher School Audit formerly Dean, The [1](3) investment
of Law & Diplomacy Committee Fletcher School of Law & companies
Packard Avenue Diplomacy, Tufts advised by
Medford, MA 02155 University. Advantage.
Age: 64
Class II Director serving until the 2004 Annual Meeting of Stockholders
Non-Interested Director
Stephen J. Treadway*** Director and Since Managing Director of [0](1) None
PIMCO Advisors Co-Chairman 2000 Allianz Dresdner Asset [6](2)
Distributors LLC(4) Management of America L.P. [56](3)
2187 Atlantic Street ("ADAMA") (formerly, PIMCO
Stamford, CT 06902 Advisors L.P.); Managing
Age: 55 Director and Chief
Executive Officer of PIMCO
Advisors Distributors LLC(4)
since May 1996; Managing
Director and Chief Executive
Officer, PIMCO Advisors.
-18-
*** Mr. Treadway is an Interested Person as defined in the 1940 Act because
he is a director and/or officer of PIMCO Advisors, the Fund's investment
manager.
(1) Number of portfolios advised by SBAM or affiliates of SBAM.
(2) Number of portfolios advised by SBAM or affiliates of SBAM and PIMCO
Advisors or affiliates of PIMCO Advisors.
(3) Number of portfolios advised by PIMCO Advisors or affiliates of PIMCO
Advisors.
(4) PIMCO Advisors Distributors LLC was formerly known as PIMCO Funds
Distributors LLC. The name change became effective on October 31, 2002.
Global Partners Income Fund Inc.
At the Meeting, the Fund's stockholders will be asked to elect two
Class II Directors to hold office until the year 2005 Annual Meeting of
Stockholders and one Class III Director to hold office until the year 2003
Annual Meeting of Stockholders or thereafter when their respective successors
are duly elected and qualified. The terms of office of the remaining Class I
and Class III Directors expire at the year 2004 and 2003 Annual Meetings of
Stockholders, respectively, or thereafter in each case when their respective
successors are duly 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 persons named in the form of proxy accompanying the proxy
statement intend to vote at the Meetings (unless directed not to vote) FOR the
election of the nominees named below. The nominees for election are currently
members of the Fund's Board of Directors and have previously been elected as
Directors by the Fund's stockholders. Except as described below with respect
to Mr. Treadway, the nominees have indicated that they will serve if elected,
but if they should be 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. In the event that the Transactions contemplated by the
Purchase Agreement between PIMCO Advisers and SBAM described in Proposal 1
above are consummated, Mr. Treadway has agreed to resign from the Boards of
Directors of the Funds and as officer of the Funds, as applicable. Otherwise,
Mr. Treadway will retain his current positions. As of April 20, 2001,Charles
F. Barber became a Director emeritus* of the Fund. In September 2002 Heath B.
McLendon resigned as Co-Chairman and a Director of the Fund in order to serve
as Chairman of the Equity Research Policy Committee at Salomon Smith Barney Inc.
The following table provides information concerning the nominees
for election as Class II and III Directors of the Fund:
-19-
Number of
Portfolios
Advised by
SBAM,(1)
SBAM
and PIMCO
Advisors,(2)
and PIMCO
Advisors(3)
Principal and Overseen
Occupation(s) by Director Other
Name, Address Position(s) Length of During Past (including Directorships
and Age Held with Fund Time Served 5 Years the Fund) Held by Director
------- -------------- ----------- ------- --------- ---------------
Non-Interested Director Nominee
Nominee to serve as Class II Director until the 2005 Annual Meeting of Stockholders
Leslie H. Gelb Director and Since President, The Council on [26](1) Britannica.com,
The Council on Member of the 2000 Foreign Relations; formerly [6](2) Director of two
Foreign Relations Audit Columnist, Deputy Editorial [0](3) registered
58 East 68th Street Committee Page Editor and Editor, investment
New York, NY 10021 Op-Ed Page, The New York companies
Age: 64 Times. advised by
Advantage
Advisers,
Inc.,
("Advantage").
Interested Director Nominees
Nominee to serve as Class III Director until the 2003 Annual Meeting of Stockholders
R. Jay Gerken** Director and Since Managing Director, Salomon [221](1) None
Salomon Smith Barney Inc. Co-Chairman 2002 Smith Barney Inc. ("SSB"); [6](2)
125 Broad Street formerly, portfolio manager [0](3)
New York, NY 10004 Smith Barney Growth and
Age: 51 Income Fund (1994-2000) and
Smith Barney Allocation
Series Inc. (1996-2001).
Nominee to serve as Class II Director until the 2005 Annual Meeting of Stockholders
Stephen J. Treadway*** Director and Since Managing Director of Allianz [0](1) None
PIMCO Advisors Co-Chairman 2000 Dresdner Asset Management of [6](2)
Distributors LLC(4) America L.P. ("ADAMA") [56](3)
2187 Atlantic Street (formerly, PIMCO Advisors
Stamford, CT 06902 L.P.); Managing Director and
Age: 55 Chief Executive Officer of
PIMCO Advisors Distributors
LLC(4) since May 1996; Managing
Director and Chief Executive
Officer, PIMCO Advisors.
* Upon attainment of age 80, Fund Directors are required to change to
emeritus status. Directors emeritus are entitled to serve in emeritus
status for a maximum of 10 years, during such time they are paid 50% of
the annual retainer fee and meeting fees otherwise applicable to Fund
Directors together with reasonable out-of-pocket expenses for each
meeting attended.
-20-
** Mr. Gerken is an Interested Person as defined in the 1940 Act because he
is a Managing Director of SSB, an affiliate of SBAM, the Fund's
investment adviser.
*** Mr. Treadway is an Interested Person as defined in the 1940 Act because
he is a director and/or officer of PIMCO Advisors, the Fund's investment
manager.
(1) Number of portfolios advised by SBAM or affiliates of SBAM.
(2) Number of portfolios advised by SBAM or affiliates of SBAM and PIMCO
Advisors or affiliates of PIMCO Advisors.
(3) Number of portfolios advised by PIMCO Advisors or affiliates of PIMCO
Advisors.
(4) PIMCO Advisors Distributors LLC was formerly known as PIMCO Funds
Distributors LLC. The name change became effective on October 31, 2002.
The following table provides information concerning the remaining
Directors of the Fund:
Number of
Portfolios
Advised by
SBAM,(1)
SBAM
and PIMCO
Advisors,(2)
and PIMCO
Advisors(3)
Principal and Overseen
Occupation(s) by Director Other
Name, Address Position(s) Length of During Past (including Directorships
and Age Held with Fund Time Served 5 Years the Fund) Held by Director
------- -------------- ----------- ------- --------- ---------------_
Non-Interested Directors
Class I Director serving until the 2004 Annual Meeting of Stockholders
Dr. Riordan Roett Director and Since Professor and Director, [26](1) The Latin
The Johns Hopkins Member of the 1997 Latin American Studies [6](2) America Equity
University Audit Program, Paul H. Nitze [0](3) Fund, Inc.
1740 Massachusetts Ave. NW Committee School of Advanced
Washington, DC 20036 International Studies, The
Age: 63 Johns Hopkins University.
Class III Director serving until the 2003 Annual Meeting of Stockholders
Jeswald W. Salacuse Director and Since Henry J. Braker Professor [26](1) Director of two
Tufts University Member of the 2000 of Commercial Law and [6](2) registered
The Fletcher School Audit formerly Dean, The [1](3) investment
of Law & Diplomacy Committee Fletcher School of Law & companies
Packard Avenue Diplomacy, Tufts advised by
Medford, MA 02155 University. Advantage.
Age: 64
-21-
The Emerging Markets Income Fund Inc and Global Partners Income
Fund Inc.
The following table provides information concerning the dollar
range of equity securities owned beneficially by each Director and nominee for
election as Director as of [September 30, 2002]:
Aggregate Dollar Range of
Dollar Range of Equity Equity Securities in All
Securities in The Dollar Range of Equity Funds Overseen by
Emerging Markets Securities in Global Director/Nominee and
Name of Director/Nominee Income Fund Inc Partners Income Fund Inc. Advised by SBAM
------------------------ --------------- ------------------------- ---------------
Non-Interested Directors/Nominees
Leslie H. Gelb [None] [None] None
Dr. Riordan Roett [None] [None] None
Jeswald W. Salacuse [$1 -$10,000] [$1 -$10,000] $10,001 - $50,000
Interested Directors/Nominees
*R. Jay Gerken [None] [None] over $100,000
*Stephen J. Treadway [None] [None] None
* Messrs. Gerken and Treadway are Interested Persons as defined in the 1940
Act.
No Director or nominee for election as Director who is not an
Interested Person of each Fund as defined in the 1940 Act, nor any immediate
family member of such persons, had any interest in SBAM, each Fund's
investment adviser, or PIMCO Advisors, each Fund's investment manager, or any
person or entity (other than the Fund) directly or indirectly controlling,
controlled by, or under common control with SBAM and/or PIMCO Advisors as of
May 1, 2002.
Responsibilities of the Board of Directors
The Board of Directors is responsible for ensuring that each Fund
is managed in the best interest of its stockholders. The Directors oversee
each Fund's business by, among other things, meeting with each Fund's
management and evaluating the performance of each Fund's service providers
including the manager and/or adviser, the custodian, the transfer agent and
the administrator. As part of this process, the Directors consult with each
Fund's independent auditors and with their own separate independent counsel.
The Board of Directors of each Fund has four regularly scheduled
meetings each year and additional meetings are scheduled as needed. In
addition, the Board of each Fund has an audit committee which meets
periodically during the year and whose responsibilities are described below.
The Directors regularly review each Fund's financial statements,
performance and market price as well as the quality of the services being
provided to each Fund. As part of this process, the Directors review each
Fund's fees and expenses to determine if they are reasonable and competitive
in light of the services being received and while also ensuring that each Fund
continues to have access to high quality services in the future. Based on
these reviews, the Directors of each Fund periodically make suggestions to
their respective Fund's management
-22-
and monitor to ensure that responsive action is taken. The Directors of each
Fund also monitor potential conflicts of interest among each Fund, their
respective manager and/or adviser and their affiliates and other funds and
clients managed by the manager and/or adviser to ensure that each Fund is
managed in a manner which is in the best interest of each Fund's stockholders.
At September 30, 2002, Directors and officers of each Fund as a
group owned beneficially less than 1% of the outstanding shares of their
respective Fund's capital stock. To the knowledge of each Fund's management,
no person owned of record, or owned beneficially, more than 5% of their
respective Fund's outstanding shares of capital stock at that date[, except
that Cede & Co., a nominee for participants in Depository Trust Company, held
of record [___] common shares, equal to approximately [___]% of the
outstanding common shares of [____]'s capital stock].
Each Fund's executive officers are chosen each year at the meeting
of the Board of Directors of that Fund immediately 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 respective
successors are duly elected and qualified. In the event that the Transactions
contemplated by the Purchase Agreement between PIMCO Advisors and SBAM
described in Proposal 1 above are consummated, in addition to Mr. Treadway's
resignation, Mr. Schott and Mr. Shlissel, each of whom is affiliated with PIMCO
Advisors, have agreed to resign their respective positions as officers of the
Funds. The executive officers of both The Emerging Markets Income Fund Inc and
Global Partners Income Fund Inc. are listed in the section labeled "Information
Pertaining to each Fund's Directors and Officers" in part "A. General
Information" of this Fund Exhibit on pages [____].
Each Fund's Audit Committee is composed of all of the Directors who
are not Interested Persons of that Fund, its manager and/or adviser or their
affiliates within the meaning of the 1940 Act, and who are "independent" as
defined in the New York Stock Exchange listing standards. Each Fund's Audit
Committee is composed of Messrs. Gelb and Salacuse and Dr. Roett. The
principal functions of each Fund's Audit Committee are: (i) to recommend to
the Board the appointment of that Fund's independent auditors; (ii) to review
with the independent auditors the scope and anticipated cost of their audit;
and (iii) to receive and consider a report from the independent auditors
concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. The Audit
Committee of each Fund met two times during the fiscal year ended August
31, 2002. Neither Fund has nominating or compensation committees. Each Fund
adopted an Audit Committee Charter at a meeting held on May 23, 2000.
Report of the Audit Committee
In connection with a meeting of the Audit Committee of each Fund
held on October [23], 2002, the Audit Committee of each Fund reports with
respect to its Fund that it has: (i) reviewed and discussed each Fund's
audited financial statements with management; (ii) discussed with
PricewaterhouseCoopers LLP ("PwC"), the independent auditors to each Fund, the
matters (such as the quality of the Fund's accounting principals and internal
controls) required to be discussed by Statement on Auditing Standards No. 61;
and (iii) previously received written confirmation from PwC that it is
independent and written disclosures regarding such independence as required
-23-
by Independence Standards Board Standard No. 1, and discussed with PwC the
auditors' independence. Based on the review and discussions referred to in
items (i) through (iii) above, the Audit Committee recommended to the Board of
Directors of each Fund that the audited financial statements be included in
each Fund's annual report for each Fund's fiscal year ended August 31, 2002.
Additional Matters
During the fiscal year ended August 31, 2002, the Board of
Directors of each Fund held four regular meetings. The Board of Directors of
The Emerging Markets Income Fund Inc held one special and two special
telephonic meetings. The Board of Directors of Global Partners Income Fund
Inc. held one special telephonic meeting. Each Director, with the exception of
Mr. Gelb in the case of Global Partners Income Fund Inc., attended at least
75%] of the aggregate number of meetings of the Board of each Fund and the
committee of each Fund for which he was eligible.
A representative of PwC will be available by telephone at the
Meetings to answer appropriate questions and will have an opportunity to make
a statement if he or she chooses to do so.
Under the federal securities laws, each Fund is required to provide
to stockholders in connection with the Meeting information regarding
compensation paid to the Directors by each Fund, as well as by the various
other investment companies advised by PIMCO Advisors and/or SBAM. The
following table provides information concerning the compensation paid from
each Fund to each Director during the fiscal year ended August 31, 2002 and
the total compensation paid to each Director during the calendar year ended
December 31, 2001. Each of the Directors listed below is a member of each
Fund's Audit Committee and other committees of certain other investment
companies advised by PIMCO Advisors and/or SBAM and its affiliates, and
accordingly, the amounts provided in the table include compensation for
service on such committees. Neither Fund provides any pension or retirement
benefits to Directors. In addition, no remuneration was paid during the fiscal
year ended August 31, 2002 by either Fund to Messrs. Gerken and Treadway, who
are Interested Persons of the Funds.
Aggregate
Compensation from Total Compensation from the
Aggregate Compensation Global Partners Fund and Other Funds Advised
from The Emerging Markets Income Fund Inc. by SBAM and its Affiliates
Income Fund Inc for the for the Fiscal Year for the Calendar
Name of Directors Fiscal Year Ended 8/31/02 Ended 8/31/02 Year Ended 12/31/01
----------------- ------------------------- ------------- ------------------
Directorships(A)
Leslie H. Gelb.................. $9,200 $8,500 $51,700(10)
Dr. Riordan Roett............... $9,200 $8,500 $83,600(10)
Jeswald W. Salacuse*............ $9,200 $8,500 $83,600(10)
_________
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that Director.
* Mr. Salacuse also was compensated $8,150 during the calendar year ended
December 31, 2001 for his services as director of Municipal Advantage
Fund Inc., which is managed by PIMCO Advisors.
-24-
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and Section
30(h) of the 1940 Act in combination require the Fund's Directors and
officers, persons who own more than 10% of the Fund's capital stock, PIMCO
Advisors, SBAM, and their respective directors and officers, to file reports
of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange,
Inc. Such persons are required by SEC regulations to furnish the Fund with
copies of all such filings.
Emerging Markets Income Fund Inc
Based solely on its review of the copies of such filings received
by it and certain other information received by it, the Fund believes that,
for the fiscal year ended August 31, 2002, all filing requirements applicable
to such persons were complied with except that timely Form 3 filings may not
have been made by Anthony Pace, William Arnold, Virgil Cumming, Mark Kleinman,
Ross Margolies, Wendy Murdock, and Jeffrey Scott. However, during the Fund's
fiscal year ended August 31, 2002, no purchases and sales were made by any of
the foregoing people and, with the exception of Anthony Pace, who is no longer
employed by SBAM, they have each subsequently filed Forms 3.
Global Partners Income Fund Inc.
Based solely on its review of the copies of such filings received
by it and certain other information received by it, the Fund believes that,
for the fiscal year ended August 31, 2002, all filing requirements applicable
to such persons were complied with except that timely Form 3 filings may not
have been made by Thomas Flanagan, Anthony Pace, Beth Semmel, William Arnold,
Virgil Cumming, Mark Kleinman, Ross Margolies, Wendy Murdock, and Jeffrey
Scott. However, during the Fund's fiscal year ended August 31, 2002, no
purchases and sales were made by any of the foregoing people and, with the
exception of Anthony Pace, who is no longer employed by SBAM, they have each
subsequently filed Forms 3.
Fees Paid to Independent Accountants
Audit Fees. The fees for the annual audit of each Fund's financial
statements by PricewaterhouseCoopers LLP ("PwC") for the fiscal year ended
August 31, 2002 were $[____] for The Emerging Markets Income Fund Inc and
$[_____] for Global Partners Income Fund Inc.
-25-
Financial Information Systems Design and Implementation Fees.
[There were no fees billed for financial information systems design and
implementation services rendered by PwC to each Fund, SBAM, PIMCO Advisors or
entities controlled by or affiliated with SBAM or PIMCO Advisors that provide
services to each Fund for the fiscal year ended August 31, 2002.]
All Other Fees. The aggregate fees billed for all other non-audit
services, including fees for tax-related services, rendered by PwC to each
Fund, SBAM, PIMCO Advisors and entities controlled by or affiliated with SBAM
and/or PIMCO Advisors that provide services to each Fund for the fiscal year
ended August 31, 2002 were $[____] for The Emerging Markets Income Fund Inc
and $[_____] for Global Partners Income Fund Inc. Each Fund's Audit Committee
has determined that provision of these non-audit services is compatible with
maintaining the independence of PwC.
-26-
EXHIBIT B
FORM OF INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
[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./
MUNCIPAL PARTNERS FUND II INC.]
[ ], 2002
Salomon Brothers Asset Management Inc
388 Greenwich Street,
New York, New York 10013
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Fund") and you (the "Investment Manager") as follows:
1. The Fund is a closed-end, [diversified][non-diversified]
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
Manager. Any amendments to these documents shall be furnished to the
Investment Manager.
2. The Fund employs the Investment Manager to (a) make investment
strategy decisions for the Fund, and supervise the Fund's investment program,
including advising and consulting with the Fund's Board of Directors regarding
the Fund's overall investment strategy, (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 continuous
supervision of the Fund's investment portfolio, (e) provide or procure the
provision of research and statistical data in relation to investing and other
matters within the scope of the investment objectives and limitations of the
Fund, including access on a continuous basis to economic, financial and
political information, research and assistance, [(f) provide information with
respect to emerging trends and developments in the international community
with particular emphasis on opportunities for emerging market country
entities, (g) provide information with respect to international political,
financial and social developments, particularly those relating to emerging
market countries, [for 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. (the "Emerging Markets Funds")]] and
[(f)] advise the Fund 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. The Investment Manager shall have the sole ultimate
discretion over investment decisions for the Fund. At the Investment Manager's
own expense and subject to its supervision, the Investment Manager may delegate
the performance of all or a part of its services under this agreement to others.
2
3. (a) The Investment Manager shall, at its expense, (i) provide
the Fund and itself with office space, office facilities and personnel
reasonably necessary for performance of the following services to be provided
by the Investment Manager pursuant to this agreement: (A) SEC compliance,
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, development of new shareholder 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, and (ii) provide the Fund with persons satisfactory to the
Fund's Board of Directors to serve as officers and employees of the Fund.
(b) Except as provided in subparagraph (a), 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 Manager); 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; expenses of leverage; costs of printing
and distributing shareholder reports, proxy materials, prospectuses, stock
certificates and distribution of dividends; charges of the Fund's custodians
and 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;
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 Manager 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; the fees of
any rating agencies retained to rate any preferred stock or debt securities
issued by the fund [for each of Municipal Partners Fund Inc. and Municipal
Partners Fund II Inc. (the "Municipal Funds")]; insurance; interest; brokerage
costs; litigation and other extraordinary or non-recurring expenses.
4. As manager of the Fund's assets, the Investment Manager shall
make investments for the Fund's account in accordance with the investment
objectives 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
Manager shall advise the Fund's officers and Board of Directors, at such times
as the Fund's Board of
3
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 Manager 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 or
otherwise.
6. 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 for
the execution of trades for the Fund, which broker may be an affiliate of the
Investment Manager.
7. 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 net 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.
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.
8. 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 first business day of
each month for the previous month at an annual rate of [1.05% [for each of the
Emerging Markets Funds]] [0.55% [for each of the Municipal Funds]] of the
value of the Fund's average weekly net assets [including the proceeds of any
outstanding borrowings used for leverage [for each of the Municipal Funds]].
If the fee payable to the Investment Manager 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 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
4
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 stockholders to which the Investment
Manager would otherwise be subject by reason of wilful 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 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 from disabling conduct by the Investment Manager.
Indemnification shall be made only following: (i) a final decision on the
merits by a court or other body before which 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 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. The Investment Manager
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 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.
10. This agreement shall continue in effect until two years from
the date hereof and thereafter for successive annual periods, provided that
such continuance is specifically
5
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
Manager or by the Investment Manager on 60 days' written notice to the Fund.
This agreement shall terminate automatically in the event of its assignment
(as defined in the 1940 Act).
11. Except to the extent necessary to perform the Investment
Manager's obligations under this agreement, nothing herein shall be deemed to
limit or restrict the right of the Investment Manager, or any affiliate of the
Investment Manager, or any employee of the Investment Manager, 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.
12. This agreement shall be governed by the laws of the State of
New York.
13. All notices 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).
6
If to the Fund:
[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.]
c/o Salomon Brothers Asset
Management Inc
125 Broad Street,
New York, New York 10004
Attention: President
If to the Investment Manager:
Salomon Brothers Asset
Management Inc
388 Greenwich Street,
New York, New York 10013
Attention: President
or such other name or address as may be given in writing to the other party.
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.
14. This agreement constitutes the entire agreement among the
parties hereto.
15. 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.
7
If the foregoing correctly sets forth the agreement between the
Fund and the Investment Manager, please so indicate by signing and returning
to the Fund the enclosed copy hereof.
Very truly yours,
[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.]
By:________________________
Name:
Title:
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:___________________________
Name:
Title:
- ------------------------------------------------------------------------------
COMMON STOCK COMMON STOCK
MUNICIPAL PARTNERS FUND INC.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints R. Jay Gerken, Christina T. Sydor, Robert
A. Vegliante and Robert M. Nelson, and each of them, attorneys and proxies for
the undersigned, with full power of substitution and revocation to represent
the undersigned and to vote on behalf of the undersigned all shares of Common
Stock of Municipal Partners Fund Inc. (the "Fund") which the undersigned is
entitled to vote at the Special Joint Meeting of Stockholders of the Fund to
be held at Citigroup Center, 153 East 53rd Street, 14th Floor, Conference Room
K, New York, New York on Wednesday, December 11, 2002, at [3 p.m.], and at any
adjournments thereof. The undersigned hereby acknowledges receipt of the
Notice of Annual and Special Joint Meetings of Stockholders and accompanying
Proxy Statement and hereby instructs said attorneys and proxies to vote said
shares as indicated hereon. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Meeting. A
majority of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
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 Proposal 1.
Please refer to the Proxy Statement for a discussion of the Proposal.
(continued on reverse side)
- ------------------------------------------------------------------------------
Please date, sign and mail your
proxy card back as soon as possible!
Special Joint Meeting of Stockholders
MUNICIPAL PARTNERS FUND INC.
December 11, 2002
Please Detach and Mail in the Envelope Provided
- ------------------------------------------------------------------------------
A /X/ Please mark your
votes as in this
example.
1. APPROVAL OF NEW INVESTMENT
ADVISORY AND ADMINISTRATION
AGREEMENT BETWEEN SALOMON
BROTHERS ASSET MANAGEMENT INC
AND THE FUND. FOR /_/ AGAINST /_/ ABSTAIN /_/
3. Any other business that may
properly come before the
Meeting.
4. I will be attending the
Meeting. /_/
Please Complete, Sign and Date
hereon and Mail in Accompanying
Postpaid Envelope.
Common Stock
SIGNATURE ____________________________ DATE______________, 2002
SIGNATURE ____________________________ DATE______________, 2002
IF JOINTLY HELD
NOTE: Please sign this proxy exactly as your name appears on this proxy. If
joint owners. EITHER may sign this proxy. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer, please
give your full title.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PREFERRED STOCK PREFERRED STOCK
MUNICIPAL PARTNERS FUND INC.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints R. Jay Gerken, Christina T. Sydor, Robert
A. Vegliante and Robert M. Nelson, and each of them, attorneys and proxies for
the undersigned, with full power of substitution and revocation to represent
the undersigned and to vote on behalf of the undersigned all shares of
Preferred Stock of Municipal Partners Fund Inc. (the "Fund") which the
undersigned is entitled to vote at the Special Joint Meeting of Stockholders
of the Fund to be held at Citigroup Center, 153 East 53rd Street, 14th Floor,
Conference Room K, New York, New York on Wednesday, December 11, 2002, at [3
p.m.], and at any adjournments thereof. The undersigned hereby acknowledges
receipt of the Notice of Annual and Special Joint Meetings of Stockholders and
accompanying Proxy Statement and hereby instructs said attorneys and proxies
to vote said shares as indicated hereon. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one) shall
have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.
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 Proposal 1.
Please refer to the Proxy Statement for a discussion of the Proposal.
(continued on reverse side)
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Please date, sign and mail your
proxy card back as soon as possible!
Special Joint Meeting of Stockholders
MUNICIPAL PARTNERS FUND INC.
December 11, 2002
Please Detach and Mail in the Envelope Provided
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A /X/ Please mark your
votes as in this
example.
1. APPROVAL OF NEW INVESTMENT
ADVISORY AND ADMINISTRATION
AGREEMENT BETWEEN SALOMON
BROTHERS ASSET MANAGEMENT INC
AND THE FUND. FOR /_/ AGAINST /_/ ABSTAIN /_/
3. Any other business that may
properly come before the
Meeting.
4. I will be attending the
Meeting. /_/
Please Complete, Sign and Date
hereon and Mail in Accompanying
Postpaid Envelope.
Preferred Stock
SIGNATURE ____________________________ DATE______________, 2002
SIGNATURE ____________________________ DATE______________, 2002
IF JOINTLY HELD
NOTE: Please sign this proxy exactly as your name appears on this proxy. If
joint owners. EITHER may sign this proxy. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer, please
give your full title.
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