SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENTS
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Malaysia Fund, Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified in Its Charter)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Total fee paid: . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Draft of March 13, 1997
THE MALAYSIA FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of The
Malaysia Fund, Inc. (the "Fund") will be held on Wednesday, April 30, 1997, at
9:45 a.m. (New York time), in Conference Room 2 at 1221 Avenue of the Americas,
22nd Floor, New York, New York 10020, for the following purposes:
1. To elect two Class II Directors for a term of three years.
2. To ratify or reject the selection by the Board of Directors of
Price Waterhouse LLP as independent accountants of the Fund for the
fiscal year ending December 31, 1997.
3. To approve or disapprove an Investment Advisory and Management
Agreement between the Fund and Morgan Stanley Asset Management Inc.
4. To approve or disapprove a Research and Advisory Agreement among
the Fund, Morgan Stanley Asset Management Inc. and Arab-Malaysian
Consultant Sdn Bhd.
5. To consider and act upon any other business as may properly come
before the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 24, 1997
are entitled to notice of, and to vote at, this Meeting or any adjournment
thereof.
VALERIE Y. LEWIS
SECRETARY
Dated: March [<circle>], 1997
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
PAGE
THE MALAYSIA FUND, INC.
C/O MORGAN STANLEY ASSET MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
---------------
PROXY STATEMENT
---------------
This statement is furnished by the Board of Directors of The Malaysia
Fund, Inc. (the "Fund") in connection with the solicitation of Proxies for use
at the Annual Meeting of Stockholders (the "Meeting") to be held on Wednesday,
April 30, 1997, at 9:45 a.m. (New York time), in Conference Room 2 at the
principal executive office of Morgan Stanley Asset Management Inc. (hereinafter
"MSAM" or the "Manager"), 1221 Avenue of the Americas, 22nd Floor, New York,
New York 10020. It is expected that the Notice of Annual Meeting, Proxy
Statement and form of Proxy will first be mailed to stockholders on or about
March 27, 1997.
The purpose of the Meeting and the matters to be acted upon are set forth
in the accompanying Notice of Annual Meeting of Stockholders. At the Meeting,
the Fund's stockholders will consider New Advisory Agreements (defined below)
to take effect following the consummation of the transactions contemplated by
an Agreement and Plan of Merger, dated as of February 4, 1997 (the "Merger
Agreement"), between Dean Witter, Discover & Co. ("Dean Witter Discover") and
Morgan Stanley Group Inc. ("MS Group"), the direct parent of MSAM, the Fund's
investment manager. Pursuant to the Merger Agreement, the Fund's investment
manager will become a direct subsidiary of the merged company, which will be
called Morgan Stanley, Dean Witter, Discover & Co. The Fund's New Advisory
Agreements are substantially identical to the Fund's Current Advisory
Agreements (defined below), except for the dates of execution.
If the accompanying form of Proxy is executed properly and returned,
shares represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. A Proxy may be revoked at any time prior to the time
it is voted by written notice to the Secretary of the Fund or by attendance at
the Meeting. If no instructions are specified, shares will be voted FOR the
election of the nominees for Directors, FOR ratification of Price Waterhouse
LLP as independent accountants of the Fund for the fiscal year ending December
31, 1997, FOR the approval of the New Management Agreement (defined below) and
FOR the approval of the New Research Agreement (defined below). Abstentions
and broker non-votes are each included in the determination of the number of
shares present and voting at the Meeting.
The Board has fixed the close of business on March 24, 1997 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. On that date, the Fund had
[<circle>] shares of Common Stock outstanding and entitled to vote. Each share
will be entitled to one vote at the Meeting.
The expense of solicitation will be borne by the Fund and will include
reimbursement to brokerage firms and others for expenses in forwarding proxy
solicitation materials to beneficial owners. The solicitation of Proxies will
be largely by mail, but may include, without cost to the Fund, telephonic,
telegraphic or oral communications by regular employees of the Manager. The
solicitation of Proxies is also expected to include communications by employees
of Shareholder Communications Corporation, a proxy solicitation firm expected
to be engaged by the Fund at a cost not expected to exceed $[<circle>] plus
expenses.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR
ITS FISCAL YEAR ENDED DECEMBER 31, 1996, TO ANY STOCKHOLDER REQUESTING SUCH
REPORT. REQUESTS FOR THE ANNUAL REPORT SHOULD BE MADE IN WRITING TO THE
MALAYSIA FUND, INC., C/O CHASE GLOBAL FUNDS SERVICES COMPANY, P.O. BOX 2798,
BOSTON, MASSACHUSETTS 02108-2798, OR BY CALLING 1-800-221-6726.
Chase Global Funds Services Company is an affiliate of the Fund's
administrator, The Chase Manhattan Bank ("Chase Bank"), and provides
administrative services to the Fund. The business address of Chase Bank and
Chase Global Funds Services Company is 73 Tremont Street, Boston, Massachusetts
02108.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF EACH OF THE
MATTERS MENTIONED IN ITEMS 1, 2, 3 AND 4 OF THE NOTICE OF ANNUAL MEETING.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, two Directors will be elected to hold office for a term
of three years and until their successors are duly elected and qualified. It
is the intention of the persons named in the accompanying form of Proxy to
vote, on behalf of the stockholders, for the election of John W. Croghan and
Graham E. Jones as Class II Directors.
On or about the same date as the Meeting, each of the other closed-end,
U.S. registered investment companies advised by MSAM (except Morgan Stanley
India Investment Fund, Inc.) also is holding a meeting of stockholders at
which, among other things, such stockholders are considering a proposal to
elect as directors of such other investment companies the same people nominated
to be Directors of the Fund. Accordingly, if elected, all of the nominees for
Directors of the Fund also will act as directors of: The Brazilian Investment
Fund, Inc., The Latin American Discovery Fund, Inc., Morgan Stanley Africa
Investment Fund, Inc., Morgan Stanley Asia-Pacific Fund, Inc., Morgan Stanley
Emerging Markets Debt Fund, Inc., Morgan Stanley Emerging Markets Fund, Inc.,
Morgan Stanley Global Opportunity Bond Fund, Inc., The Morgan Stanley High
Yield Fund, Inc., Morgan Stanley Russia & New Europe Fund, Inc., The Pakistan
Investment Fund, Inc., The Thai Fund, Inc. and The Turkish Investment Fund,
Inc. (collectively, with the Fund, the "MSAM closed-end funds"). The Board
believes that this arrangement enhances the ability of the Directors to deal
expeditiously with administrative matters common to the MSAM closed-end funds,
such as evaluating the performance of common service providers, including MSAM
and the administrators, transfer agents, custodians and accountants of the MSAM
closed-end funds.
Pursuant to the Fund's By-laws, the terms of office of the Directors are
staggered. The Board of Directors is divided into three classes, designated
Class I, Class II and Class III, with each class having a term of three years.
Each year the term of one class expires. Class I currently consists of Peter J.
Chase, David B. Gill and Warren J. Olsen. Class II currently consists of John
W. Croghan and Graham E. Jones. Class III currently consists of Barton M.
Biggs, John A. Levin, Dat<o'> Malek Merican and William G. Morton, Jr. Only
the Directors in Class II are being considered for election at this Meeting.
Pursuant to the Fund's By-Laws, each Director holds office until (i) the
expiration of his term and until his successor has been elected and qualified,
(ii) his death, (iii) his resignation, (iv) December 31 of the year in which he
reaches seventy-three years of age, or (v) his removal as provided by statute
or the Articles of Incorporation.
The Board of Directors has an Audit Committee. The Audit Committee makes
recommendations to the full Board of Directors with respect to the engagement
of independent accountants and reviews with the independent accountants the
plan and results of the audit engagement and matters having a material effect
on the Fund's financial operations. The members of the Audit Committee are
currently John W. Croghan, John A. Levin and William G. Morton, Jr., none of
whom is an "interested person," as defined under the Investment Company Act of
1940, as amended (the "1940 Act"). The Chairman of the Audit Committee is Mr.
Levin. After the Meeting, the Audit Committee will continue to consist of
Directors of the Fund who are not "interested persons." The Audit Committee
met twice during the fiscal year ended December 31, 1996. The Board of
Directors does not have nominating or compensation committees or other
committees performing similar functions.
There were four meetings of the Board of Directors held during the fiscal
year ended December 31, 1996. For the fiscal year ended December 31, 1996,
each current Director, during his tenure, attended at least seventy-five
2
percent of the aggregate number of meetings of the Board and of any committee
on which he served, except Mr. Biggs, who attended two of the four meetings of
the Board.
Each of the nominees for Director has consented to be named in this Proxy
Statement and to serve as a director of the Fund if elected. The Board of
Directors has no reason to believe that any of the nominees named above will
become unavailable for election as a director, but if that should occur before
the Meeting, Proxies will be voted for such persons as the Board of Directors
may recommend.
Certain information regarding the Directors and officers of the Fund is
set forth below:
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND MARCH <circle> DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- --------------- -------------------- ----------
Barton M. Biggs* Director and Chairman, Director and 64 [<circle>] - ***
1221 Avenue of the Americas Chairman of the Managing Director of Morgan
New York, New York 10020 Board since Stanley Asset Management Inc.
1995 and Chairman and Director of
Morgan Stanley Asset
Management Limited; Managing
Director of Morgan Stanley &
Co. Incorporated; Director of
Morgan Stanley Group Inc.;
Member of the Investment
Advisory Council of The
Thailand Fund; Director of
the Rand McNally Company;
Member of the Yale
Development Board; Director
and Chairman of the Board of
seventeen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
Peter J. Chase Director Chairman and Chief Financial 64 [<circle>] - ***
1441 Paseo De Peralta since 1987 Officer, High Mesa
Santa Fe, New Mexico 87501 Technologies, LLC; Chairman
of CGL, Inc.; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management, Inc.
John W. Croghan Nominee; Chairman of Lincoln Capital 66 [<circle>] 336 ***
200 South Wacker Drive Director Management Company; Director
Chicago, Illinois 60606 since 1995 of St. Paul Bancorp, Inc. and
Lindsay Manufacturing Co.;
Director of thirteen U.S.
registered investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously Director of
Blockbuster Entertainment
Corporation.
3
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND MARCH <CIRCLE> DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- --------------- -------------------- ----------
David B. Gill Director Director of thirteen U.S. 70 [<circle>] - ***
26210 Ingleton Circle since 1995 registered investment
Easton, Maryland 21601 companies managed by Morgan
Stanley Asset Management
Inc.; Director of the
Mauritius Fund Limited;
Director of Moneda Chile Fund
Limited; Director of First
NIS Regional Fund SIAC;
Director of Commonwealth
Africa Investment Fund Ltd.;
Chairman of the Advisory
Board of Advent Latin
American Private Equity Fund;
Chairman and Director of
Norinvest Bank; Director of
Surinvest International
Limited; Director of National
Registry Company; Previously
Director of Capital Markets
Department of the
International Finance
Corporation; Trustee,
Batterymarch Finance
Management; Chairman and
Director of Equity Fund of
Latin America S.A.; Director
of Commonwealth Equity Fund
Limited; and Director of
Global Securities, Inc.
Graham E. Jones Nominee; Senior Vice President of BGK 64 [<circle>] 676 ***
330 Garfield Street Director Properties; Trustee of nine
Suite 200 since 1987 investment companies managed
Santa Fe, New Mexico 87501 by Weiss, Peck & Greer,
Trustee of eleven investment
companies managed by Morgan
Grenfell Capital Management
Incorporated; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.; Previously
Chief Financial Officer of
Practice Management Systems,
Inc.
John A. Levin Director President of John A. Levin & 58 [<circle>] 230 ***
One Rockefeller Plaza since 1995 Co., Inc.; Director of
New York, New York 10020 fourteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
4
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND MARCH <CIRCLE> DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- --------------- -------------------- ----------
Dat<o'> Malek Merican* Director Director and Advisor, Arab- 63 [<circle>] - ***
15 Jalan Chempenai since 1988 Malaysian Merchant Bank
Damansara Heights Berhad; Director, AMMB
50490 Kuala Lumpur Holdings Sdn Bhd; Arab-
Malaysia Malaysian Consultant Sdn Bhd;
Arab-Malaysian Securities
Holdings Sdn Bhd; Arab-
Malaysian Securities Sdn Bhd;
AMSEC Nominees (Tempatan) Sdn
Bhd; AMSEC Nominees (Asing)
Sdn Bhd; Arab-Malaysian Unit
Trusts Bhd; Arab-Malaysian
Nominees (Tempatan) Sdn Bhd;
Arab-Malaysian Nominess
(Asing) Sdn Bhd; Arab-
Malaysian Property Trust
Management Bhd; Arab-
Malaysian Bank Bhd; Arab-
Malaysian Trustee Bhd;
Employees Provident Fund;
Frasers Securities Pte Ltd,
Singapore; Frasers
International Pte Ltd,
Singapore; Malaysian Emerging
Companies Growth Fund Ltd;
Isetan of Japan Sdn Bhd;
Kumpualan Kseena Sdn Bhd and
its group of companies; Pheim
Asset Management (Asia) Pte
Ltd, Singapore; Asian
Emerging Companies Growth
Fund Ltd; and AMMB
International (L) Ltd;
Chairman, AMMB Labuan (L)
Ltd; Trustee, Tun Abdul Razak
Foundation; and Member,
Investment Advisory Counsel
of the Malaysian Growth Fund
and Court of Fellows of the
Malaysian Institute of
Management.
William G. Morton, Jr. Director Chairman and Chief Executive 60 [<circle>] - ***
1 Boston Place since 1994 Officer of Boston Stock
Boston, Massachusetts 02108 Exchange; Director of Tandy
Corporation; Director of
thirteen U.S. registered
investment companies managed
by Morgan Stanley Asset
Management Inc.
Warren J. Olsen* Director Principal of Morgan Stanley & 40 [<circle>] - ***
1221 Avenue of the Americas since 1994 Co. Incorporated and Morgan
New York, New York 10020 and President Stanley Asset Management
since 1989 Inc.; Director of Sixteen and
President of seventeen U.S.
registered investment
companies managed by Morgan
Stanley Asset Management Inc.
5
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND MARCH <CIRCLE> DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- --------------- -------------------- ----------
James W. Grisham* Vice Principal of Morgan Stanley & 55 [<circle>] - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 [<circle>] Stanley Asset Management
Inc.; Officer of various
investment companies managed
by Morgan Stanley Asset
Management Inc.
Michael F. Klein* Vice Principal of Morgan Stanley & 37 [<circle>] - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1992 Stanley Asset Management Inc.
and previously a Vice
President thereof; Officer of
various investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously practiced law with
the New York law firm of
Rogers & Wells.
Harold J. Schaaff, Jr.* Vice Principal of Morgan Stanley & 36 [<circle>] - ***
1221 Avenue of the Americas President since Co. Incorporated and Morgan
New York, New York 10020 1992 Stanley Asset Management
Inc.; General Counsel and
Secretary of Morgan Stanley
Asset Management Inc.;
Officer of various investment
companies managed by Morgan
Stanley Asset Management Inc.
Joseph P. Stadler* Vice Vice President of Morgan 42 [<circle>] - ***
1221 Avenue of the Americas President since Stanley & Co. Incorporated
New York, New York 10020 1994 and Morgan Stanley Asset
Management Inc.; Officer of
various investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously with Price
Waterhouse LLP.
Valerie Y. Lewis* Secretary since Vice President of Morgan 41 [<circle>] - ***
1221 Avenue of the Americas 1990 Stanley & Co. Incorporated
New York, New York 10020 and Morgan Stanley Asset
Management Inc.; Officer of
various investment companies
managed by Morgan Stanley
Asset Management Inc.;
Previously with Citicorp.
James M. Rooney Treasurer since Assistant Vice President and 38 [<circle>] - ***
73 Tremont Street 1994 Manager of Fund
Boston, Massachusetts 02108 Administration, Chase Global
Funds Services Company;
Officer of various investment
companies managed by Morgan
Stanley Asset Management
Inc.; Previously Assistant
Vice President and Manager of
Fund Compliance and Control,
Scudder Stevens & Clark Inc.
and Audit Manager, Ernst &
Young LLP.
6
COMMON
STOCK SHARE
BENEFICIALLY EQUIVALENTS
POSITION OWNED AS OF OWNED UNDER
WITH THE PRINCIPAL OCCUPATIONS AND MARCH <CIRCLE> DEFERRED FEE
NAME AND ADDRESS FUND OTHER AFFILIATIONS AGE 1997** ARRANGEMENTS<DAGGER> PERCENTAGE
- ---------------- ---------- ----------------------------- --- --------------- -------------------- ----------
Belinda Brady Assistant Manager, Fund Administration, 28 [<circle>] - ***
73 Tremont Street Treasurer since Chase Global Funds Services
Boston, Massachusetts 02108 1996 Company; Officer of various
investment companies managed
by Morgan Stanley Asset
Management Inc.;
Previously with Price
Waterhouse LLP.
All Directors and Officers as a Group [<circle>] 1,242 ***
========== ===== ===
- --------------------
* "Interested person" within the meaning of the 1940 Act. Mr. Biggs is chairman, director and managing director of the Manager,
and Messrs. Olsen, Grisham, Klein, Schaaff and Stadler and Ms. Lewis are officers of the Manager.
** This information has been furnished by each nominee and officer.
*** Less than 1%.
<dagger> Indicates share equivalents owned by the Directors and held in cash accounts by the Fund on behalf of the Directors in
connection with the deferred fee arrangements described below.
Each officer of the Fund will hold such office until a successor has been
duly elected and qualified.
The Fund pays each of its Directors who is not a director, officer or
employee of MSAM or its affiliates, in addition to certain out-of-pocket
expenses, an annual fee of $[<circle>] plus certain out-of-pocket expenses.
Each of the members of the Fund's Audit Committee, which will consist of the
Fund's Directors who are not "interested persons" of the Fund as defined in the
1940 Act, as amended, will receive an additional fee of $[<circle>] for serving
on such committee. Aggregate fees and expenses paid or payable to the Board of
Directors for the fiscal year ended December 31, 1996 were approximately
$[<circle>].
Each of the Directors who is not an "affiliated person" of MSAM within
the meaning of the 1940 Act may enter into a deferred fee arrangement (the "Fee
Arrangement") with the Fund, pursuant to which such Director may defer to a
later date the receipt of his Director's fees. The deferred fees owed by the
Fund are credited to a bookkeeping account maintained by the Fund on behalf of
such Director and accrue income from and after the date of credit in an amount
equal to the amount that would have been earned had such fees (and all income
earned thereon) been invested and reinvested either (i) in shares of the Fund
or (ii) at a rate equal to the prevailing rate applicable to 90-day United
States Treasury Bills at the beginning of each calendar quarter for which this
rate is in effect, whichever method is elected by the Director.
Under the Fee Arrangement, deferred Director's fees (including the return
accrued thereon) will become payable in cash upon such Director's resignation
from the Board of Directors in generally equal annual installments over a
period of five years (unless the Fund has agreed to a longer or shorter payment
period) beginning on the first day of the year following the year in which such
Director's resignation occurred. In the event of a Director's death, remaining
amounts payable to him under the Fee Arrangement will thereafter be payable to
his designated beneficiary; in all other events, a Director's right to receive
payments is non-transferable. Under the Fee Arrangement, the Board of
Directors of the Fund, in its sole discretion, has reserved the right, at the
request of a Director or otherwise, to accelerate or extend the payment of
amounts in the deferred fee account at any time after the termination of such
Director's service as a director. In addition, in the event of liquidation,
dissolution or winding up of the Fund or the distribution of all or
substantially all of the Fund's assets and property to its stockholders (other
than in connection with a reorganization or merger into another fund advised by
MSAM), all unpaid amounts in the deferred fee account maintained by the Fund
will be paid in a lump sum to the Directors participating in the Fee
Arrangement on the effective date thereof.
7
Currently, Messrs. Croghan, Jones and Levin are the only Directors who
have entered into the Fee Arrangement with the Fund.
Set forth below is a table showing the aggregate compensation paid by the
Fund to each of its Directors, as well as the total compensation paid to each
Director of the Fund by the Fund and by other U.S. registered investment
companies advised by MSAM or its affiliates, (collectively, the "Fund Complex")
for their services as Directors of such investment companies for the fiscal
year ended December 31, 1996.
PENSION OR NUMBER OF
RETIREMENT TOTAL COMPENSATION FUNDS IN
AGGREGATE BENEFITS ACCRUED FROM FUND AND FUND COMPLEX
COMPENSATION AS PART OF THE FUND COMPLEX PAID FOR WHICH
NAME OF DIRECTORS FROM FUND(2)(3) FUND'S EXPENSES TO DIRECTORS(2)(4) DIRECTOR SERVES(5)
- ------------------------------ ----------------- ---------------- ------------------ ------------------
Barton M. Biggs(1) $ 0 None $ 0 17
Peter J. Chase 4,135 None 57,691 13
John W. Croghan 5,539 None 73,925 13
David B. Gill 4,135 None 59,910 13
Graham E. Jones 5,791 None 60,546 13
John A. Levin 5,278 None 77,539 14
Dat<o'> Malek Merican 0 None 0 1
William G. Morton, Jr. 4,885 None 67,893 13
Warren J. Olsen(1) 0 None 0 17
Frederick B. Whittemore(1)(6) 0 None 0 16
- --------------------
(1) "Interested persons" of the Fund within the meaning of the 1940 Act. Messrs. Biggs and Olsen do not receive any compensation
from the Fund or any other investment company in the Fund Complex for their services as a director of such investment
companies.
(2) The amounts reflected in this table include amounts payable by the Fund and the Fund Complex for services rendered during the
fiscal year ended December 31, 1996, regardless of whether such amounts were actually received by the Directors during such
fiscal year.
(3) Mr. Croghan earned $5,539, Mr. Jones earned $4,657 and Mr. Levin earned $4,730 in deferred compensation from the Fund,
pursuant to the deferred fee arrangements described above, including any capital gains or losses or interest associated
therewith, during the fiscal year ended December 31, 1996. Such amounts are included in these Directors' respective
aggregate compensation from the Fund reported in this table.
(4) Mr. Croghan earned $72,671, Mr. Gill earned $21,027, Mr. Jones earned $21,605 and Mr. Levin earned $70,597 in deferred
compensation from the Fund and the Fund Complex, pursuant to the deferred fee arrangements described above, including any
capital gains or losses or interest associated therewith, during the fiscal year ended December 31, 1996. Such amounts are
included in these Directors' respective compensations from the Fund and the Fund Complex reported in this table.
(5) Indicates the total number of boards of directors of investment companies in the Fund Complex, including the Fund, on which
the Director served at any time during the fiscal year ended December 31, 1996.
(6) Mr. Whittemore resigned as a Director of the Fund effective March [<circle>], 1997.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Fund's officers and directors, and persons who own more than ten
percent of a registered class of the Fund's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission") and the New York Stock Exchange, Inc. The Fund
believes that its officers and Directors complied with all applicable filing
requirements for the fiscal year ended December 31, 1996.
The election of Messrs. Croghan and Jones requires the affirmative vote
of a majority of the votes cast at a meeting at which a quorum is present.
Under the Fund's By-laws, the presence in person or by proxy of stockholders
entitled to cast a majority of the votes entitled to be cast thereat shall
constitute a quorum. For this purpose, abstentions and broker non-votes will be
counted in determining whether a quorum is present at the Meeting, but will not
be counted as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE TWO NOMINEES AS DIRECTORS.
8
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected Price Waterhouse LLP
as independent accountants for the Fund for the fiscal year ending December 31,
1997. The ratification of the selection of independent accountants is to be
voted on at the Meeting, and it is intended that the persons named in the
accompanying Proxy will vote for Price Waterhouse LLP. Price Waterhouse LLP
acts as the independent accountants for certain of the other investment
companies advised by MSAM. Although it is not expected that a representative of
Price Waterhouse LLP will attend the Meeting, a representative will be
available by telephone to respond to stockholder questions, if any.
The Board's policy regarding engaging independent accountants' services
is that management may engage the Fund's principal independent accountants to
perform any services normally provided by independent accounting firms,
provided that such services meet any and all of the independence requirements
of the American Institute of Certified Public Accountants and the Securities
and Exchange Commission. In accordance with this policy, the Audit Committee
reviews and approves all services provided by the independent accountants prior
to their being rendered. The Board of Directors also receives a report from its
Audit Committee relating to all services that have been performed by the Fund's
independent accountants.
The ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at a meeting at which a quorum
is present. For this purpose, abstentions and broker non-votes will be counted
in determining whether a quorum is present at the Meeting, but will not be
counted as votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THIS
PROPOSAL NO. 2.
APPROVAL OF NEW ADVISORY CONTRACTS
(PROPOSALS NO. 3 AND NO. 4)
THE MANAGER
MSAM acts as investment manager for the Fund. The Manager has acted as
investment manager for the Fund since the Fund commenced its investment
operations.
The Manager currently is a wholly-owned subsidiary of MS Group and is
registered under the U.S. Investment Advisers Act of 1940, as amended. The
Manager provides portfolio management and named fiduciary services to various
closed-end and open-end investment companies, taxable and nontaxable
institutions, international organizations and individuals investing in United
States and international equities and fixed income securities. At December 31,
1996, MSAM had, together with its affiliated investment management companies
(which include Van Kampen American Capital, Inc. and Miller Anderson &
Sherrerd, LLP), assets under management (including assets under fiduciary
advisory control) totaling approximately $[<circle>] billion.
As an investment adviser, MSAM emphasizes a global investment strategy
and benefits from research coverage of a broad spectrum of investment
opportunities worldwide. MSAM draws upon the capabilities of its asset
management specialists located in its various offices throughout the world. It
also draws upon the research capabilities of MS Group and its other affiliates,
as well as the research and investment ideas of other companies whose brokerage
services MSAM utilizes. For the fiscal year ended December 31, 1996, the Fund
paid approximately $[<circle>] in brokerage commissions, of which approximately
$[<circle>] was paid by the Fund to affiliates of the Manager, including Morgan
Stanley & Co., and $[<circle>] was paid by the Fund to affiliates of the
Malaysian Adviser (defined below).
9
The address of the Manager is 1221 Avenue of the Americas, New York, New
York 10020. The principal address of MS Group is 1585 Broadway, New York, New
York 10036.
Certain information regarding the directors and the principal executive
officers of the Manager is set forth below.
PRINCIPAL OCCUPATION AND
NAME AND ADDRESS POSITION WITH MSAM OTHER INFORMATION
- ---------------- ------------------ -------------------------------------------
Barton M. Biggs* Chairman, Director and Managing Chairman and Director of Morgan Stanley
Director Asset Management Limited; Managing Director
of Morgan Stanley & Co. Incorporated;
Director of Morgan Stanley Group Inc.
Peter A. Nadosy* Vice Chairman, Director and Managing Managing Director of Morgan Stanley & Co.
Director Incorporated; Director of Morgan Stanley
Asset Management Limited
James M. Allwin* President, Director and Managing Managing Director of Morgan Stanley & Co.
Director Incorporated; President of Morgan Stanley
Realty Inc.
Gordon S. Gray* Director and Managing Director Managing Director of Morgan Stanley & Co.
Incorporated; Director of Morgan Stanley
Asset Management Limited
Dennis G. Sherva* Director and Managing Director Managing Director of Morgan Stanley & Co.
Incorporated
- --------------------
* Business Address: 1221 Avenue of the Americas, New York, New York 10020
THE MALAYSIAN ADVISER
Arab-Malaysian Consultant Sdn Bhd (the "Malaysian Adviser"), acts as
Malaysian Adviser to the Fund and has acted in this capacity for the Fund since
the Fund commenced its investment operations. The Malaysian Adviser is a
Malaysian corporation and a wholly-owned subsidiary of Arab-Malaysian Merchant
Bank Berhad ("AMMB"), the largest merchant bank in Malaysia and the principal
operating entity of the Arab-Malaysian Merchant Bank Group, which is controlled
by Arab-Malaysian Development Berhad ("AMDB"). The mailing address of the
Malaysian Adviser is Bangunan Arab-Malaysian, Jalan Raja Chulan, P.O. Box
10233, 50708 Kuala Lumpur, Malaysia. The mailing address of AMMB is Bangunan
Arab-Malaysian, Jalan Raja Chulan, P.O. Box 12402, 50776 Kuala Lumpur,
Malaysia. The mailing address of AMDB is Bangunan Arab-Malaysian, 9th Floor, 55
Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia.
Certain information regarding the directors and the principal executive
officers of the Malaysian Adviser is set forth below.
PRINCIPAL OCCUPATION AND
NAME AND ADDRESS POSITION WITH COMPANY OTHER INFORMATION
- ---------------- --------------------- -------------------------------------------
Dat<o'> Malek Merican{*} Director Managing Director of Arab-Malaysian Merchant
Bank Berhad; Member of East-West Center Board
of Governors
Azlan Hashim{*} Director Chairman of Arab-Malaysian Merchant Bank Bhd;
Executive Chairman of Arab-Malaysian
Development Bhd.
10
PRINCIPAL OCCUPATION AND
NAME AND ADDRESS POSITION WITH COMPANY OTHER INFORMATION
- ---------------- --------------------- -------------------------------------------
Tan Chong Koay{*} Director Investment Sr. Manager of Arab-Malaysian Bank
Bhd.
- --------------------
* Business Address: P.O. Box 10233, 50708 Kuala Lumpur, Malaysia.
INFORMATION CONCERNING MORGAN STANLEY GROUP INC.
MS Group and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and Morgan Stanley & Co.
International provide a wide range of financial services on a global basis.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring, real estate, project finance and
other corporate finance advisory activities; merchant banking and other
principal investment activities; stock brokerage and research services; asset
management; the trading of foreign exchange and commodities as well as
derivatives on a broad range or asset categories, rates and indices; real
estate advice, financing and investing; and global custody, securities
clearance services and securities lending.
INFORMATION CONCERNING DEAN WITTER, DISCOVER & CO.
Dean Witter Discover is a diversified financial services company offering
a broad range of nationally marketed credit and investment products with a
primary focus on individual customers. Dean Witter Discover has two principal
lines of business: credit services and securities. Its credit services
business consists primarily of the issuance, marketing and servicing of general
purpose credit cards and the provision of transaction processing services,
private-label credit cards services and real estate secured loans. It is the
largest single issuer of general purpose credit cards in the United States as
measured by number of accounts and cardmembers and the third largest originator
and servicer of credit card receivables, as measured by managed loans. Dean
Witter Discover's securities business is conducted primarily through its wholly
owned subsidiaries, Dean Witter Reynolds Inc. ("DWR") and Dean Witter
InterCapital Inc. ("Intercapital"). DWR is a full-service securities firm
offering a wide variety of securities products, with a particular focus on
serving the investment needs of its individual clients through over 9,100
professional account executives located in 361 branch offices. DWR is among
the largest members NYSE members and is a member of other major securities,
futures and options exchanges. Intercapital is a registered investment adviser
that, along with its subsidiaries, services investment companies, individual
accounts and institutional portfolios.
THE MERGER
Pursuant to the Merger Agreement, MS Group will be merged (the "Merger")
with and into Dean Witter Discover and the surviving corporation will be named
Morgan Stanley, Dean Witter, Discover & Co. Following the Merger, the Manager
will be a direct subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Under the terms of the Merger Agreement, each of MS Group's common shares
will be converted into the right to receive 1.65 shares of Morgan Stanley, Dean
Witter, Discover & Co. common stock and each issued and outstanding share of
Dean Witter Discover common stock will remain outstanding and will thereafter
represent one share of Morgan Stanley, Dean Witter, Discover & Co. common
stock. Following the Merger, MS Group's former shareholders will own
approximately 45% and Dean Witter Discover's former shareholders will own
approximately 55% of the outstanding shares of common stock of Morgan Stanley,
Dean Witter, Discover & Co.
The Merger is expected to be consummated in mid-1997 and is subject to
certain closing conditions, including certain regulatory approvals and the
approval of shareholders of both MS Group and Dean Witter Discover.
11
The Board of Directors of Morgan Stanley, Dean Witter, Discovery & Co.
will consist of fourteen members, two of whom will be MS Group insiders and two
of whom will be Dean Witter Discover insiders. The remaining ten directors
will be independent directors, with MS Group and Dean Witter Discover each
nominating five of the ten. The Chairman and Chief Executive Officer of Morgan
Stanley, Dean Witter, Discovery & Co. will be the current Chairman and Chief
Executive Officer of Dean Witter Discover, Phillip Purcell. The President and
Chief Operating Officer of Morgan Stanley, Dean Witter, Discover & Co. will be
the current President of MS Group, John Mack.
The Manager does not anticipate any reduction in the quality of services
now provided to the Fund and does not expect that the Merger will result in any
material changes in the business of the Manager or in the manner in which the
Manager renders services to the Fund. Nor does the Manager anticipate that the
Merger or any ancillary transactions will have any adverse effect on its
ability to fulfill its obligations under the New Advisory Agreement (as defined
below) with the Fund or to operate its business in a manner consistent with
past business practice.
THE ADVISORY AGREEMENTS
In anticipation of the Merger, a majority of the Directors of the Fund
who are not parties to the New Advisory Agreements or interested persons of any
such party ("Disinterested Directors") approved a new investment advisory and
management agreement (the "New Management Agreement") between the Fund and the
Manager, as well as a new research and advisory agreement (the "New Research
Agreement") among the Fund, the Manager and the Malaysian Advisor. The New
Management Agreement and the New Research Agreement are herein referred to
collectively as the "New Advisory Agreements". The forms of the New Advisory
Agreements are substantially identical to the Fund's Current Advisory
Agreements, except for the dates of execution. The holders of a majority of
the outstanding voting securities (within the meaning of the 1940 Act) of the
Fund are being asked to approve the New Advisory Agreements. See "The New
Advisory Agreements" below.
The following is a summary of the Current Advisory Agreements and the New
Advisory Agreements. The description of the New Advisory Agreements is
qualified by reference to Annex A.
THE CURRENT ADVISORY AGREEMENT.
The current investment advisory and management agreement, dated as of
May 1, 1987 (the "Current Management Agreement"), between the Fund and the
Manager and the current research and advisory agreement, dated as of May 1,
1987 (the "Current Research Agreement"), among the Fund, the Manager and the
Malaysian Advisor, were last approved by stockholders of the Fund at a meeting
held on March 31, 1988. The Current Management Agreement and the Current
Research Agreement are herein referred to collectively as the "Current Advisory
Agreements".
Under the Current Management Agreement, the Manager is responsible for
the investment and reinvestment of the assets of the Fund, subject to the
supervision of the Fund's Directors. The Manager also administers the business
affairs of the Fund, furnishes offices, necessary facilities and equipment,
provides administrative services, and permits its officers and employees to
serve without compensation as Directors and officers of the Fund if duly
elected to such positions. The Fund pays the Manager for services performed a
monthly fee at an annual rate of 0.90% of the first $50 million of the Fund's
average weekly net assets, 0.70% of such assets in excess of $50 million up to
and including $100 million and 0.50% of the excess over $100 million. As of
December 31, 1996, the Fund's net assets were valued at $[<circle>].
Under the terms of the Current Research Agreement, the Malaysian Adviser
provides such investment advice, research and assistance as the Manager may
reasonably request. Such information will be evaluated by the Manager's
research department and portfolio managers in light of their own expertise and
their information from other sources, as part of their overall determination of
investment decisions for the Fund.
For its services, the Malaysian Adviser will receive from the Fund a
monthly fee at the annual rate of 0.25% of the first $50 million of the Fund's
average weekly net assets, 0.15% of such assets in excess of $50 million up to
12
and including $100 million and 0.10% of the excess over $100 million of such
assets. The aggregate fee paid to the Malaysian Adviser for the fiscal year
ended December 31, 1996 was U.S. $[<circle>]. The aggregate fees paid by the
Fund to the Manager and the Malaysian Adviser are higher than advisory fees
paid by most other investment companies, primarily because of the Fund's
objective of investing in Malaysian securities, and the additional time and
expense required of the Manager and the Malaysian Adviser in pursuing such
objective. The aggregate fee paid to the Manager for the fiscal year ended
December 31, 1996 was U.S. $[<circle>].
The Current Advisory Agreements provide that neither the Manager nor the
Malaysian Adviser shall be liable for any error of judgment or of law, or for
any loss suffered by the Fund in connection with the matters to which the
Current Advisory Agreements relate except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of their
obligations or duties.
The Current Advisory Agreements may be terminated by any party thereto,
at any time, without penalty, on 60 days' written notice, or upon such shorter
notice as may be mutually agreed upon, and will automatically terminate in the
event of their assignment.
Under the Current Advisory Agreements, the Manager and the Malaysian
Adviser are permitted to provide investment advisory services to other clients,
including clients who may invest in securities in which the Fund may invest.
THE NEW ADVISORY AGREEMENTS. The Board approved the proposed new
advisory agreements on March 13, 1997, the forms of which are attached as Annex
A (the "New Advisory Agreements"). The forms of the proposed New Advisory
Agreements are substantially identical to the Current Advisory Agreements,
except for the dates of execution.
The investment advisory fees as a percentage of net assets payable by the
Fund to the Manager and the Malaysian Adviser will be the same under the New
Advisory Agreements as under the Current Advisory Agreements. If the
investment advisory fee under the New Advisory Agreements had been in effect
for the Fund's most recently completed fiscal year, advisory fees paid to the
Manager and the Malaysian Adviser by the Fund would have been identical to
those paid under the Current Advisory Agreements.
The Board of the Fund held a meeting on March 13, 1997, at which meeting
the Directors, including the Disinterested Directors, unanimously approved the
New Advisory Agreements for the Fund and recommended the Agreements for
approval by the stockholders of the Fund. The New Advisory Agreements would
take effect upon the later to occur of (i) the obtaining of stockholder
approval or (ii) the closing of the Merger. The New Advisory Agreements will
continue in effect for an initial two year term and thereafter for successive
annual periods as long as such continuance is approved in accordance with the
1940 Act.
In evaluating the New Advisory Agreements, the Board took into account
that the Fund's Current Advisory Agreements and the New Advisory Agreements,
including their terms relating to the services to be provided thereunder by the
Manager and the Malaysian Adviser and the fees and expenses payable by the
Fund, are substantially identical, except for the dates of execution. The
Board also considered other possible benefits to the Manager and Morgan
Stanley, Dean Witter, Discover & Co. that may result from the Merger including
the continued use of Morgan Stanley & Co. and Dean Witter Discover brokers and
its affiliates, to the extent permitted by law, for brokerage services.
The Board also examined the terms of the Merger Agreement and the
possible effects of the Merger upon the Manager's organization and upon the
ability of the Manager to provide advisory services to the Fund. The Board
also considered the skills and capabilities of the Manager. In this regard,
the Board was informed of the resources of Morgan Stanley, Dean Witter,
Discover & Co. to be made available to the Manager.
The Board also weighed the effect on the Fund of the Manager becoming an
affiliated person of Morgan Stanley, Dean Witter, Discover & Co. Following the
Merger, the 1940 Act will prohibit or impose certain conditions on the ability
of the Fund to engage in certain transactions with Morgan Stanley, Dean Witter,
Discover & Co. and its affiliates. For example, absent exemptive relief the
13
Fund will be prohibited from purchasing securities from Morgan Stanley & Co.
and DWR in transactions in which Morgan Stanley & Co. and/or DWR act as
principal. Currently the Fund is prohibited from making such purchases in only
those transactions in which Morgan Stanley & Co. or an affiliate acts as
principal. The Fund will also have to satisfy certain conditions in order to
engage in securities transactions in which Morgan Stanley & Co. or DWR is
acting as an underwriter. The Fund is already required to satisfy such
conditions when engaging in transactions in which Morgan Stanley & Co. or an
affiliate is acting as an underwriter. In this connection, management of the
Manager represented to the Board that they do not believe these prohibitions or
conditions will have a material effect on the management or performance of the
Fund.
After consideration of the above factors and such other factors and
information that the Board deemed relevant, the Directors, and the
Disinterested Directors voting separately, unanimously approved the New
Advisory Agreements and voted to recommend their approval to the stockholders
of the Fund.
In the event that stockholders of the Fund do not approve either or both
of the New Advisory Agreements, the respective current agreements will remain
in effect and the Board will take such action as it deems in the best interest
of the Fund and its stockholders, which may include proposing that stockholders
approve agreements in lieu of the New Advisory Agreements. In the event the
Merger is not consummated, the Manager and the Malaysian Adviser would continue
to serve in their respective capacities to the Fund pursuant to the terms of
the Current Advisory Agreements.
STOCKHOLDER APPROVAL
To become effective, the New Advisory Agreements must be approved by a
vote of a majority of the outstanding voting securities of the Fund. The "vote
of a majority of the outstanding voting securities" is defined under the 1940
Act as the lesser of the vote of (i) 67% or more of the shares of the Fund
entitled to vote thereon present at the Meeting if the holders of more than 50%
of such outstanding shares of the Fund are present in person or represented by
proxy, or (ii) more than 50% of such outstanding shares of the Fund entitled to
vote thereon. The New Advisory Agreements were unanimously approved by the
Board after consideration of all factors which they determined to be relevant
to their deliberations, including those discussed above. The Board also
unanimously determined to submit the New Advisory Agreements for consideration
by the stockholders of the Fund.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL OF THE NEW MANAGEMENT AGREEMENT AND "FOR" THE APPROVAL OF THE NEW
RESEARCH AGREEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Fund's management, the following person owned
beneficially more than 5% of the Fund's outstanding shares at March [<circle>],
1997:
14
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- -------------------------------------------------------- -------------------------------- ----------------
President and Fellows* 760,319 7.8%
of Harvard College
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
- --------------------
* Based on a Schedule 13G filed with the Commission on February 14, 1997. The Harvard University Master Trust Fund
holds an additional 21,500 shares.
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders arise,
including any question as to an adjournment of the Meeting, the persons named
in the enclosed Proxy will vote thereon according to their best judgment in the
interests of the Fund.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A stockholders' proposal intended to be presented at the Fund's Annual
Meeting of Stockholders in 1998 must be received by the Fund on or before
November 27, 1997, in order to be included in the Fund's proxy statement and
form of proxy relating to that meeting.
VALERIE Y. LEWIS
SECRETARY
Dated: March [<circle>], 1997
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH
TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
15
ANNEX B
The following table indicates the size of each U.S. investment company
advised or sub-advised by the Manager, the amount of advisory fees or sub-
advisory fees paid to the Manager for the last fiscal year of such investment
company, the amount of other material fees paid to the Manager for such fiscal
year and the advisory fee rate. Average net assets are calculated on a daily
basis for open-end funds and on a weekly basis for closed-end funds.
INVESTMENT COMPANY Net Assets as of Aggregate amount of Amount of Other Asset Management Fee as
FEBRUARY 28, 1997 Advisory / Material Payments to Percent
Subadvisory the Manager for of Average Net Assets
Fee for Last THE LAST FISCAL YEAR (ANNUAL RATE OF MSAM'S
FISCAL YEAR COMPENSATION)
Morgan Stanley Institutional Fund,
Inc. (1)
- -Active Country Allocation Portfolio $ 187,031,777 $ 1,168,571 $0 0.65% of average daily net
assets
- -Aggressive Equity Portfolio 121,791,751 400,006 0 0.80% of average daily net
assets
- -Asian Equity Portfolio 365,212,440 3,378,056 0 0.80% of average daily net
assets
- -Balanced Portfolio 7,573,877 74,832 0 0.50% of average daily net
assets
- -China Growth Portfolio (2) 0 0 0 1.00% of average daily net
assets
- -Emerging Growth Portfolio 82,677,378 1,024,956 0 1.00% of average daily net
assets
- -Emerging Markets Debt Portfolio 162,883,938 1,887,155 0 1.00% of average daily net
assets
- -Emerging Markets Portfolio 1,557,680,866 15,367,651 0 1.25% of average daily net
assets
- -Equity Growth Portfolio 467,132,622 1,192,888 0 0.60% of average daily net
assets
- -European Equity Portfolio 215,681,709 1,034,869 0 1.00% of average daily net
assets
- -Fixed Income Portfolio 122,195,042 559,304 0 0.35% of average daily net
assets
- -Global Equity Portfolio 87,115,900 630,346 0 0.80% of average daily net
assets
- -Global Fixed Income Portfolio 116,017,909 437,198 0 0.40% of average daily net
assets
- -Gold Portfolio(3) 38,303,227 274,000 0 1.00% of average daily net
assets
- -Growth and Income Fund (2) 0 0 0 0.75% of average daily net
assets
- -High Yield Portfolio 123,820,445 438,512 0 0.50% of average daily net
assets
- -International Equity Portfolio 2,412,774,091 15,860,657 0 0.80% of average daily net
assets
- -International Magnum Portfolio 124,710,803 381,756 0 0.80% of average daily net
assets
- -International Small Cap Portfolio 239,291,131 2,092,097 0 0.95% of average daily net
assets
- -Japanese Equity Portfolio 156,667,861 1,642,268 0 0.80% of average daily net
assets
- -Latin American Portfolio 55,950,497 287,055 0 1.10% of average daily net
assets
- -Money Market Portfolio 1,278,773,524 3,343,176 0 0.30% of average daily net
assets
- -Mortgaged-Backed Securities 0 0 0 0.30% of average daily net
Portfolio (2) assets
- -Municipal Bond Portfolio 43,819,386 134,963 0 0.30% of average daily net
assets
- -Municipal Money Market Portfolio 721,197,094 1,932,187 0 0.30% of average daily net
assets
- -Small Cap Value Equity Portfolio 29,921,023 345,122 0 0.85% of average daily net
assets
- -Technology Portfolio(4) 5,504,680 12,699 0 1.00% of average daily net
assets
- -U.S. Real Estate Portfolio 246,501,294 1,017,980 0 0.80% of average daily net
assets
- -Value Equity Portfolio 109,811,808 655,516 0 0.50% of average daily net
assets
Morgan Stanley Fund, Inc. (5)
- -American Value Fund 54,190,478 363,998 0 0.85% of average daily net
assets
- -Aggressive Equity Fund 30,105,256 31,323 0 0.90% of average daily net
assets
- -Asian Growth Fund 394,810,098 3,762,252 0 1.00% of average daily net
assets
- -Emerging Markets Fund 174,767,303 1,081,943 0 1.25% of average daily net
assets
- -Global Equity Allocation Fund 161,349,524 1,047,751 0 1.00% of average daily net
assets
- -Global Fixed Income Fund 9,525,078 121,568 0 0.75% of average daily net
assets
- -Government Obligations Money Market 122,965,353 0 0 0.45% of the first $250
(6) million
0.40% of the next $250
million
0.35% of the excess over
$500 million
- -High Yield Fund 16,444,430 12,710 0 0.75% of average daily net
assets
- -Japanese Equity Fund (2) 0 0 0 1.00% of average daily net
assets
- -International Magnum Fund 24,529,959 0 0 1.00% of average daily net
assets
- -Latin America Fund 53,413,053 218,502 0 1.25% of average daily net
assets
- -Money Market Fund (6) 153,358,157 0 0 0.45% of the first $250
million
0.40% of the next $250
million
0.35% of the excess over
$500 million
- -U.S. Real Estate Fund 21,362,116 8,641 0 1.00% of average daily net
asset
- -Worldwide High Income Fund 164,403,651 527,214 0 0.75% of average daily net
assets
Morgan Stanley Universal Funds, Inc.
- -Asian Equity (7) 0 0 0 0.80% of the first $500
million
0.75% of the next $500
million
0.70% of the excess over $1
billion
- -Balanced (2) 0 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% of the excess over $1
billion
- -Core Equity (2) 0 0 0 0.55% of the first $500
million
0.50% of the next $500
million
0.45% of the excess over $1
billion
- -Emerging Markets Debt (2) 0 0 0 0.75% of the first $500
million
0.70% of the next $500
million
0.65% of the excess over $1
billion
- -Emerging Markets Equity 15,607,752 32,000 0 1.25% of the first $500
million
1.20% of the next $500
million
1.15% of the excess over $1
billion
- -Fixed Income (8) 8,126,150 0 0 0.40% of the first $500
million
0.35% of the next $500
million
0.30% of the excess over $1
billion
- -Global Equity (8) 5,225,659 0 0 0.80% of the first $500
million
0.75% of the next $500
million
0.70% of the excess over $1
billion
- -Growth (8) 2,843,221 0 0 0.55% of the first $500
million
0.50% of the next $500
million
0.45% of the excess over $1
billion
- -High Yield (8) 8,228,296 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% of the excess over $1
billion
- -International Fixed Income (2) 0 0 0 0.50% of the first $500
million
0.45% of the next $500
million
0.40% of the excess over $1
billion
- -International Magnum (8) 10,283,605 0 0 0.80% of the first $500
million
0.75% of the next $500
million
0.70% of the excess over $1
billion
- -Mid-Cap Growth (2) 0 0 0 0.75% of the first $500
million
0.70% of the next $500
million
0.65% of the excess over $1
billion
- -Mid-Cap Value (8) 3,126,150 0 0 0.75% of the first $500
million
0.70% of the next $500
million
0.65% of the excess over $1
billion
- -Money Market (2) 0 0 0 0.30% of the first $500
million
0.25% of the next $500
million
0.20% of the excess over $1
billion
- -Multi-Asset Class (2) 0 0 0 0.65% of the first $500
million
0.60% of the next $500
million
0.55% of the excess over $1
billion
- -U.S. Real Estate (7) 0 0 0 0.80% of the first $500
million
0.75% of the next $500
million
0.70% of the excess over $1
billion
- -Value (8) 3,167,098 0 0 0.55% of the first $500
million
0.50% of the next $500
million
0.45% of the excess over $1
billion
The Brazilian Investment Fund, Inc. 58,816,028 425,000 0 0.90% of the first 50
million
0.70% of the next 50 million
0.50% of the excess over 100
million
The Latin American Discovery Fund, 204,346,643 1,899,000 0 1.15% of average weekly net
Inc. assets
The Malaysia Fund, Inc. 192,501,967 1,330,000 0 0.90% of the first 50
million
0.70% of the next 50 million
0.50% of the excess over 100
million
Morgan Stanley Africa Investment 310,803,693 3,106,000 0 1.20% of average weekly net
Fund,Inc. assets
Morgan Stanley Asia-Pacific Fund, 854,649,586 8,796,000 0 1.00% of average weekly net
Inc.. assets
Morgan Stanley Emerging Markets Debt 321,966,172 3,125,000 0 1.00% of average weekly net
Fund, Inc. assets
Morgan Stanley Emerging Markets 407,981,941 4,713,000 0 1.25% of average weekly net
Fund, Inc. assets
Morgan Stanley Global Opportunity 65,384,292 585,000 0 1.00% of average weekly net
Bond Fund, Inc. assets
Morgan Stanley High Yield Fund, Inc. 129,972,796 842,000 0 0.70% of average weekly net
assets
Morgan Stanley India Investment 341,625,451 3,812,000 0 1.10% of average weekly net
Fund, Inc. assets
Morgan Stanley Russia & New Europe 142,333,723 400,000 0 1.60% of average weekly net
Fund, Inc. assets
The Pakistan Investment Fund, Inc. 67,931,758 743,000 0 1.00% of average weekly net
assets
The Thai Fund, Inc. 183,531,329 1,812,000 0 0.90% of the first 50
million
0.70% of the next 50 million
0.50% of the excess over 100
million
The Turkish Investment Fund, Inc. 51,846,955 359,000 0 0.95% of the first 50
million
0.75% of the next 50 million
0.55% of the excess over 100
million
(1) Includes Class A and Class B shares.
(2) Currently Inactive.
(3) Management fee includes a 0.40% sub-advisory fee payable by the Manager.
(4) Commenced operations March 16, 1996.
(5) Includes Class A, Class B and Class C shares. Fiscal year end June 30, 1996.
(6) Formerly, a portfolio of PCS Cash Fund, which was merged with and into Morgan Stanley Fund, Inc. on September 27, 1996.
(7) Commenced operations March 3, 1997.
(8) Commenced operations January 2, 1997.