IMPORTANT NEWS
THE FIRST AUSTRALIA FUND, INC.
THE FIRST AUSTRALIA PRIME INCOME FUND, INC
THE FIRST COMMONWEALTH FUND, INC.
1. The EquitiLink group, the founder and current manager and adviser of your
Fund, is being acquired by Aberdeen Asset Management, PLC.
2. Aberdeen is a publicly listed company based in the United Kingdom. It has
offices in the United States, United Kingdom, Ireland, Luxembourg, Singapore
and Hong Kong. With the acquisition of the EquitiLink Group, it will have
offices in Australia and Jersey, Channel Islands. Aberdeen has total assets
under management of approximately US$33 billion as of September 30, 2000.
3. Aberdeen's investment philosophy is similar to that of the EquitiLink group
and it is expected that the EquitiLink investment team will remain under thee
new Aberdeen structure. Your Fund will therefore continue to benefit from the
skills and expertise of the current portfolio management and administrative
team, thereby ensuring continuity and consistency of investment strategy,
within a greater global structure brought by Aberdeen.
4. As a result of the change in ownership, you are being asked to approve new
management and advisory contracts, which will remain substantially the same
as those currently in effect.
5. The Board of Directors of your Fund has approved the new management and
advisory contracts. Your Board recommends that you vote in favor of the new
management and advisory contracts.
YOUR FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NEW ADVISORY
AND MANAGEMENT CONTRACTS. SIMPLY FILL IN THE ATTACHED PROXY CARD AND MAIL IT IN
THE ENCLOSED ENVELOPE.
PLEASE READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT.
IMPORTANT DATES:
RECORD DATE: OCTOBER 26, 2000
MEETING DATE: NOVEMBER 29, 2000 AT 2.00 pm Eastern Time
Prudential Securities Inc.
One Seaport Plaza, 34th Floor
New York, NY
FOR MORE INFORMATION, PLEASE CONTACT:
Investor Relations: EquitiLink USA, Inc.
1 800 522 5465
1 212 968 8800
InvestorRelations@equitilinkny.com
----------------------------------
45 Broadway,, 31st Floor
New York, NY 10006
Proxy Solicitor: Innisfree M&A Incorporated
1 877 750 9499
[LOGO]
The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
The First Commonwealth Fund, Inc.
IMPORTANT NEWS
OCTOBER [____], 2000
FOR SHAREHOLDERS OF
The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
The First Commonwealth Fund, Inc.
(each, a "Fund," collectively, the "Funds")
While we encourage you to read the full text of the enclosed Proxy
Statement, here is a brief overview of some changes affecting the Funds which
require a vote of shareholders.
Q&A: QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. The investment manager of the Funds, EquitiLink International Management
Limited (the "Manager"), and the investment adviser of the Funds,
EquitiLink Australia Limited (the "Adviser"), are part of The EquitiLink
Group ("EquitiLink"). On October [ ], 2000, EquitiLink announced it is
being acquired by Aberdeen Asset Management PLC ("Aberdeen").
Q. WHO IS ABERDEEN?
A. Aberdeen is a globally diversified investment management firm with
approximately US$33 billion as of September 30, 2000, under management for
individuals, unit trusts, institutional funds, investment trusts and
offshore funds. Aberdeen is a publicly listed company in the United
Kingdom and is a premier UK listed investment management specialist that
will bring to shareholders its extensive experience in the management of
closed-end funds. In addition to its UK offices, Aberdeen has offices in
Ireland, Luxembourg, Singapore, Hong Kong, Fort Lauderdale, and Chicago.
Its acquisition of EquitiLink will add offices in Australia and Jersey,
Channel Islands, and will give it additional presence in North America,
where EquitiLink has a New York City Office and a representative office in
Toronto, Canada. Aberdeen also has a joint operating agreement with
Phoenix Home Life Mutual Insurance Co. of Hartford, Connecticut .
Q. WHAT ARE SHAREHOLDERS BEING ASKED TO VOTE ON?
A. Under applicable law, the Funds' management agreements with the Manager
and their investment advisory agreements with the Adviser will
automatically terminate at the time of the Aberdeen acquisition of
EquitiLink (the "Transaction"). In order for the Manager and the Adviser
to continue to provide services to the Funds, shareholders of each Fund
must approve a new management agreement and advisory agreement.
Q. WILL THERE BE CHANGES IN THE AGREEMENTS?
A. Each agreement will be substantially the same in all respects, except for
the two year terms and the effective dates of the New Agreements. There
will be no changes in the rates of fees charged to the Funds under the
agreements.
Q. WILL THE TRANSACTION AFFECT THE DAY TO DAY OPERATIONS OF MY FUND?
A. Aberdeen's investment philosophy is similar to that of the EquitiLink
Group, and there will be no change in a Fund's investment objective and
policies. It is anticipated that the portfolio management personnel
responsible for each Fund will remain substantially the same.
Q. HOW WILL THE TRANSACTION AFFECT ME AS A FUND SHAREHOLDER?
A. Assuming shareholders of each Fund approve the new management and
investment advisory agreements, the Transaction will not cause any change
in the way a Fund is managed. Although Laurence Freedman and Brian
Sherman, the two managing directors of the Adviser and directors of the
Manager will resign, this change is not expected to affect the Funds or
their shareholders. Messrs. Freedman and Sherman are expected to continue
as officers and Directors of the Funds. Therefore, each Fund will continue
to benefit from the skills and expertise of the current team, thereby
ensuring continuity and consistency of investment strategy, within a
greater global structure brought by Aberdeen. Similarly, the Transaction
will not affect the Funds' contractual relationships with its other
service providers.
Q. WILL THERE BE ANY BENEFITS TO SHAREHOLDERS FROM THE TRANSACTION?
A. Aberdeen is committed to the Funds and will bring to shareholders the
benefit of its extensive experience in the management of closed-end funds,
as well as Aberdeen's global facilities.
Q. HOW DO THE FUNDS' BOARD MEMBERS RECOMMEND THAT I VOTE?
A. After careful consideration, and with the assistance of investigation of
the Transaction by a Due Diligence Committee, each Fund's Board of
Directors, including those directors who are not affiliated with the
Funds, EquitiLink or Aberdeen, recommend that you vote in favor of the
proposal on the enclosed postage pre-paid proxy card. Shareholders of the
Funds may also vote by phone or via internet. Simply follow the
instructions on your proxy card.
Q. HOW DO I GET MORE INFORMATION?
A. For more information, please call Innisfree M&A Incorporated, the Funds'
proxy solicitor, at 1-(877) 750-9499, or EquitiLink USA, Inc. Investor
Relations at 1-(800)-522-5465 or (212) 968-8800.
Q. WILL THE FUNDS PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS
ASSOCIATED WITH THIS TRANSACTION?
A. No, EquitiLink and Aberdeen will bear these costs.
[FUND LOGOS] The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
The First Commonwealth Fund, Inc.
800 Scudders Mill Road
Plainsboro, NJ 08536
Dear Shareholder:
As explained in the preceding "Question & Answer" statement, Aberdeen
Asset Management PLC has entered into an agreement to acquire EquitiLink,
comprising the Manager and Adviser. It is necessary, in conjunction with the
change in control of EquitiLink, for the shareholders of each Fund to approve
new management and investment advisory agreements with the Manager and Adviser.
Aberdeen is a premier UK listed investment management specialist with
approximately US$33 billion as of September 30, 2000, of funds under management.
Aberdeen's investment philosophy is similar to that of EquitiLink and it is
expected that the EquitiLink investment team will remain under the new Aberdeen
structure, thereby ensuring continuity of investment strategy. Aberdeen is
committed to the Funds and will bring to shareholders the benefit of its
extensive experience in the management of closed-end funds, as well as
Aberdeen's global facilities.
The following outlines important facts about the Transaction that apply to
the Funds:
- The new investment advisory and management agreements that you are
being asked to approve are substantially the same as those currently
in effect, except for the two year terms and the effective dates of
the New Agreements.
- The Transaction is not intended to affect EquitiLink's day-to-day
operations, its investment process, or its portfolio management
team.
- The Transaction will not affect the number of shares you own or the
value of those shares.
- The advisory fees and expenses paid by the Funds will not increase
as a result of the Transaction.
- The investment objective of each Fund will remain the same.
- The Funds' contractual relationships with its other service
providers, including the Funds' transfer agent and custodian, will
not be affected.
- Each Fund's Board of Directors, including those directors who are
not affiliated with EquitiLink, Aberdeen or the Fund, have carefully
reviewed the Transaction, and have concluded that the Transaction
should cause no reduction in the quality of services provided to the
Fund.
EACH FUND'S BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL SET FORTH IN THE
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS FOR THE FUND IS IMPORTANT AND
RECOMMENDS THAT YOU READ THE ENCLOSED MATERIALS CAREFULLY AND THEN VOTE FOR THE
PROPOSAL.
Your vote is important, regardless of the number of shares you own. PLEASE
TAKE A MOMENT NOW TO SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE
PRE-PAID RETURN ENVELOPE, OR VOTE BY PHONE OR OVER THE INTERNET. TO VOTE BY
PHONE OR VIA INTERNET, SHAREHOLDERS SHOULD FOLLOW THE INFORMATION CONTAINED ON
THEIR PROXY CARDS. If we do not receive your executed proxy after a reasonable
amount of time you may receive a telephone call from our proxy solicitor,
Innisfree M&A Incorporated ("Innisfree"), who will assist you in voting your
shares.
Your Directors recommend that you vote in favor of the proposals and
approve the new management and investment advisory agreements.
Respectfully,
[SIGNATURE] [SIGNATURE]
[--------------------] [--------------------]
Laurence S. Freedman Brian M. Sherman
Chairman President
The First Australia Fund, Inc. The First Australia Fund, Inc.
The First Australia Prime Income The First Australia Prime Income
Fund, Inc. Fund, Inc.
[SIGNATURE] [SIGNATURE]
[--------------------] [--------------------]
Brian M. Sherman Laurence S. Freedman
Chairman President
The First Commonwealth Fund, Inc. The First Commonwealth Fund, Inc.
SHAREHOLDERS ARE URGED TO PROMPTLY COMPLETE THEIR PROXY BY MAIL, BY PHONE OR
OVER THE INTERNET, SO AS TO ENSURE A QUORUM AT THE MEETING. YOUR VOTE IS
IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
The First Australia Fund, Inc. The First Commonwealth Fund,
The First Australia Prime Income Fund, Inc. Inc.
Gateway Center 3 800 Scudders Mill Road
100 Mulberry Street Plainsboro, NJ 08536
Newark, New Jersey 07102
- --------------------------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
November 29, 2000
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
The First Commonwealth Fund, Inc.
(each a "Fund," and collectively, the "Funds")
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the Funds will be held at Prudential Securities Incorporated, One
Seaport Plaza, 34th Floor, New York, New York on November 29, 2000, at 2:00
p.m., Eastern Time, for the following purpose:
The shareholders of each Fund will be asked to approve a new
management agreement with EquitiLink International Management
Limited and a new investment advisory agreement with EquitiLink
Australia Limited.
The Boards of Directors of the Funds have fixed the close of business on
October 26, 2000 as the record date for the determination of shareholders
entitled to vote at the meeting or any adjournment or postponement thereof.
In the event that the necessary quorum to transact business at the Meeting
is not obtained or a quorum is present at the Meeting but sufficient votes to
approve the proposal are not received, the proxy holders may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
adjournment will require the affirmative vote of a majority of those shares
present at the Meeting in person or by proxy. If the necessary quorum is not
obtained, the persons named as proxies will vote in favor of the adjournment. If
a quorum is present, the proxy holders will vote those proxies required to be
voted for any proposal with respect to which insufficient votes for approval
have been received, in favor of such
adjournment, and will vote those proxies required to be voted against such a
proposal at such an adjournment, against adjournment.
By order of the Boards of Directors,
[SIGNATURE]
Roy M. Randall, Secretary
The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
The First Commonwealth Fund, Inc.
Plainsboro, New Jersey
Newark, New Jersey
October [__], 2000
IMPORTANT: You are cordially invited to attend the meeting. Shareholders
who do not expect to attend the meeting in person are requested to complete,
date and sign the enclosed proxy card and return it promptly in the addressed
envelope which requires no postage and is intended for your convenience. Your
prompt return of the enclosed proxy card may save EquitiLink the necessity and
expense of further solicitations to assure a quorum at the meeting. The enclosed
proxy is being solicited on behalf of the Boards of Directors of the Funds.
PROXY STATEMENT
The First Australia Fund, Inc. The First Commonwealth Fund,
The First Australia Prime Income Fund, Inc. Inc.
Gateway Center 3 800 Scudders Mill Road
100 Mulberry Street Plainsboro, NJ 08536
Newark, New Jersey 07102
---------------
Special Meeting of Shareholders
November 29, 2000
---------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Boards of Directors (the "Boards") of The First Australia Fund,
Inc., The First Australia Prime Income Fund, Inc. and The First Commonwealth
Fund, Inc., each a Maryland corporation (each a "Fund," and collectively, the
"Funds"). The proxies will be voted at a joint Special Meeting of Shareholders
(the "Meeting"), to be held at Prudential Securities Incorporated, One Seaport
Plaza, 34th Floor, New York, New York, on November 29, 2000, at 2:00 p.m.,
Eastern Time, and at any adjournment thereof. The sole purpose of the meeting is
consideration of the following proposal (the "Proposal"):
The shareholders of each Fund will be asked to approve a new
management agreement with EquitiLink International Management
Limited (the "Manager") and a new investment advisory agreement with
EquitiLink Australia Limited (the "Adviser").
This Proxy Statement, the Notice of Special Meeting, the Question & Answer
Statement, and the proxy card are first being mailed to shareholders on or about
October [ ], 2000 or as soon as practicable thereafter. Any shareholder giving a
proxy has the power to revoke it in person at the Meeting, by mail (addressed to
the Secretary at the principal office of The First Australia Fund, Inc. or The
First Australia Prime Income Fund, Inc. at Gateway 3, 100 Mulberry Street,
Newark, New Jersey 07102; or The First Commonwealth Fund, Inc. at 800 Scudders
Mill Road, Plainsboro, New Jersey 08536); or by submitting a notice of
revocation to the particular Fund. All properly executed proxies received in
time for the Meeting will be voted as specified in the proxy or, if no
specification is made, in favor of the proposal referred to in the Proxy
Statement.
Shareholders may vote using the enclosed pre-paid proxy card. Shareholders
of the Funds may also vote by phone or via internet. To vote by phone or via
internet, shareholders should follow the information contained on their proxy
cards.
The presence at any shareholders meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of each Fund entitled to be cast
shall be necessary and sufficient to constitute a quorum for the transaction of
business with respect to that Fund. In the event that the necessary quorum to
transact business at the Meeting is not obtained or a quorum is present at the
Meeting but sufficient votes to approve any of the proposals are not received,
the proxy holders may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any adjournment will require the affirmative
vote of a majority of those shares present at the Meeting in person or by proxy.
If the necessary quorum is not obtained, the persons named as proxies will vote
in favor of the adjournment. If a quorum is present, the proxy holders will vote
those proxies required to be voted for any proposal with respect to which
insufficient votes for approval have been received, in favor of such
adjournment, and will vote those proxies required to be voted against such a
proposal against adjournment. For purposes of determining the presence of a
quorum for transacting business at the Meeting and at any adjournment,
abstentions and broker non-votes (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present but which have not been voted. Abstentions
and broker non-votes will have the effect of a vote against the proposal.
Accordingly, shareholders are urged to forward their voting instructions
promptly. In the proposal, shareholders of each Fund are asked to approve a new
management agreement with the Manager and a new investment advisory agreement
with the Adviser.
For approval with respect to a Fund, the proposal requires the affirmative
vote of a "majority of the outstanding shares" of that Fund. The term "majority
of outstanding shares," as defined by the Investment Company Act of 1940, as
amended (the "1940 Act") and as used in this Proxy Statement, means: the
affirmative vote of the lesser of (1) 67% of the voting securities of a Fund
present at the Meeting if more than 50% of the outstanding shares of that Fund
are present in person or by proxy or (2) more than 50% of the outstanding shares
of the Fund.
Holders of record of the shares of a Fund at the close of business on
October 26, 2000 (the "Record Date"), will be entitled to one vote per share on
all business to be conducted at the Meeting. The number of shares outstanding as
of October 26, 2000 for each Fund was: The First Australia Fund, Inc.,
[17,189,998]; The First Australia Prime Income Fund, Inc., [267,377,298]; and
The First Commonwealth Fund, Inc., [9,266,209].
Each Fund provides periodic reports to all of its shareholders which
highlight relevant information including investment results and a review of
portfolio changes. You may receive an additional copy of the annual report of a
Fund for the period ended October 31, 1999 and the semi-annual report for the
six-month period ended April 30, 2000, without charge, by calling EquitiLink USA
at 1-800-522-5645 or 1-212-968-8800, or write to EquitiLink USA, Inc. at 45
Broadway, 31st Floor, New York, NY 10006 email:
InvestorRelations@equitilinkny.com.; shareholders may also contact Innisfree M&A
Incorporated at 1-877-750-9499.
PROPOSAL: APPROVAL OF NEW MANAGEMENT AGREEMENTS
AND INVESTMENT ADVISORY AGREEMENTS
INTRODUCTION
The Manager and Adviser provide management and investment advisory
services, respectively, to each Fund pursuant to a management agreement and
advisory agreement (the "Agreements"). The current Agreements (the "Current
Agreements") for each Fund are as follows:
The First Australia Fund, Inc.:
o Management Agreement dated February 1, 1990
o Advisory Agreement dated February 1, 1990
The First Australia Prime Income Fund, Inc.:
o Management Agreement dated June 1, 1996
o Advisory Agreement dated September 9, 1999
The First Commonwealth Fund, Inc.:
o Management Agreement dated September 9, 1999
o Advisory Agreement dated February 20, 1992
The terms and conditions of the proposed new Agreements ("New Agreements")
are substantially the same as each of the Current Agreements, except for the new
initial two-year terms and the effective dates of the New Agreements.
BACKGROUND INFORMATION
The EquitiLink Group ("EquitiLink"), comprising the Funds' Manager and
Adviser, is being acquired by Aberdeen Asset Management PLC ("Aberdeen"). Under
applicable law, the Funds' management agreements with the Manager and their
investment advisory agreements with the Adviser will automatically terminate at
the time of the Aberdeen acquisition of EquitiLink (the "Transaction").
Established in 1981, the EquitiLink Group has grown into one of largest
independently owned funds management companies in Australia and a specialist in
Australian stocks and Australian and Asian bonds.
In an increasingly globalized environment, EquitiLink is of the view that
an association with a major company with greater global capabilities and reach
represents a natural growth evolution. This will ensure that your Funds not only
continue to benefit from the expertise and experience of the existing investment
staff but also gain from greater capabilities brought by the global structure of
an eminent investment group such as Aberdeen.
Aberdeen Asset Management, PLC
Aberdeen is an international fund management company managing unit trusts,
institutional funds, investment trusts and offshore funds for private
individuals and institutions around the world. The group has a global presence
with offices in the United States, Singapore, Hong Kong, the United Kingdom,
Ireland and Luxembourg. With the acquisition of the EquitiLink group, this
coverage will extend to Australia and New Zealand. Additionally Aberdeen also
has a joint operating agreement with Phoenix Home Life Mutual Insurance Co. of
Hartford, Connecticut.
Aberdeen's shares are publicly held. Shareholders holding more than 5% of
its outstanding shares are The Scottish Provident Institution (37.8%). Phoenix
Home Life Mutual Insurance Co. (20.44%) and Shell Pension Fund (5.51%).
The Aberdeen group has experienced substantial growth in recent years. It
has expanded at an annual rate of 56.2% since 1995, through a combination of
acquisitions and organic growth. As of September 30, 2000, Aberdeen had
approximately US$33 billion in assets under management.
Positive Implications for the shareholders
The New Agreements for the Funds are substantially the same as the Current
Agreements. With the existing investment management personnel remaining
substantially in place, the current investment strategy will continue, thus
ensuring consistency of investment management.
In addition, Aberdeen will bring to the Funds the benefits of greater
resources, an extensive global coverage and great depth of experience in asset
management. In particular, Aberdeen manages some 27 closed-end funds around the
world. The synergy between the EquitiLink and Aberdeen groups should enhance the
research capabilities and management skills available to each Fund.
The Transaction
The Transaction involves the sale of all shares of the Manager, of
EquitiLink Limited ("EL," parent of the Adviser) and of EquitiLink International
(Channel Islands) Limited ("EICIL") with the result that all the Australian,
United States and Canadian investment management business of the EquitiLink
complex will be transferred to Aberdeen. This includes the Adviser's Australian
funds management operation consisting of 12 wholesale unit trusts, 2 closed end
funds and several wholesale mandates, the Funds' Agreements and certain other
services agreements relating to the Funds (the Manager's administrative services
agreements with Trident Fund Services (Jersey) Limited and EICIL, and the Funds'
investor relations agreement with the Manager's subsidiary, EquitiLink USA). The
sale will be effected pursuant to a Share Sale Agreement between Aberdeen on the
one side and EquitiLink Holdings Limited ("EHL") (parent of EL), EIML Australia
Pty Limited (parent of the Manager) and the shareholders of EICIL on the other
side. Total consideration for the sale is US$80 million, subject to certain
adjustments. This consideration is payable in a combination of cash and
preference shares to be issued by Aberdeen.
The Transaction is contingent on approval of the New Agreements with the
Manager and the Adviser by the Funds' Boards of Directors and shareholders, as
well as by the directors and trustee of certain non-US funds. Approval must be
received with respect to the foregoing funds representing at least 75% of the
combined revenue estimated for those funds for the year ending June 30, 2000 for
the sale to proceed. The Transaction is also contingent upon: Jersey (Channel
Islands) regulatory approval of the sale of the Manager and consent of the
Australian Foreign Investment Review Board for the purchase by Aberdeen of EL.
Additionally, certain assets held by the EquitiLink entities being sold are not
included in the sale and must be transferred out of the relevant company prior
to the Transaction closing. This includes shares of two Funds (15.8% of The
First Australia Fund, Inc. and 4.8% of The First Commonwealth Fund, Inc.) that
are beneficially owned by EL and EUSA. These parcels will be transferred to EHL
(or an affiliate). Other conditions include repayment of certain indebtedness by
the Manager and EL and cancellation of an EquitiLink employee stock option plan.
The Share Sale agreement requires Messrs. Sherman and Freedman to sign one-year
non-compete agreements and claims releases. Finally, Aberdeen's shareholders
must approve the purchase. The Share Sale Agreement also specifically provides
that insurance covering liabilities of directors and officers, including the
Funds' Directors and officers, must be maintained, for all directors and
officers holding office up to and including the closing date, for 6 years after
the closing. The closing is to occur three business days following approval of
the Proposal by each of the Fund's shareholders. If the Proposal is not approved
by all Funds, the closing may be delayed to determine an adjustment to the
purchase price.
The Transaction will not affect the day-to-day operations of the Funds or
of their portfolio management teams. Laurence Freedman and Brian Sherman will
resign as Managing Directors of the Adviser and as Directors of the Manager.
Richard Fabricius of Aberdeen will be transferred to Sydney and will be
appointed a Director of EL and the Adviser. These changes are not expected to
have a material effect on the Funds or the Manager or the Adviser. Messrs.
Freedman and Sherman are expected to continue as officers and Directors of the
Funds. As noted earlier, the investment objective of each Fund will remain the
same, and the transaction will have no effect on the number of shares
outstanding or the net asset value of the Funds. The management and advisory
fees and expenses paid by the Funds will not increase as a result of the
Transaction.
Consummation of the Transaction would constitute an "assignment," as that
term is defined in the 1940 Act, of each Fund's Current Agreements. As required
by the 1940 Act, each Current Agreement provides for its automatic termination
in the event of its assignment. In anticipation of the Transaction, shareholders
of each Fund must approve the New Agreements to permit the Manager and Adviser
to continue to provide services to the Funds. Copies of the forms of the New
Agreements are attached hereto as Exhibit A - F. EACH NEW AGREEMENT FOR A FUND
IS THE SAME IN EVERY MATERIAL RESPECT AS THE FUND'S CURRENT AGREEMENTS, EXCEPT
FOR THE NEW INITIAL TWO-YEAR TERMS AND THE EFFECTIVE DATES OF THE NEW
AGREEMENTS.
The material terms of the Current and New Agreements are described under
"Description of the Current and New Agreements" below.
BOARDS OF DIRECTORS' RECOMMENDATION
On October 10, 2000, the Boards of Directors of the Funds, including the
directors who are not "interested persons" (as defined under the 1940 Act) of
the Funds, Aberdeen or EquitiLink ("Non-interested Directors"), voted to approve
the New Agreements for each Fund and to recommend its approval to Fund
shareholders.
For information about the Board's deliberations and the reasons for its
recommendation, please see "Board of Directors Evaluation" below.
THE BOARD OF DIRECTORS OF EACH FUND RECOMMENDS THAT SHAREHOLDERS OF THE
FUND VOTE IN FAVOR OF THE APPROVAL OF THE NEW AGREEMENTS.
BOARD OF DIRECTORS' EVALUATION
At a telephonic meeting of the Boards held on September 7, 2000,
representatives of EquitiLink described the proposed Transaction to the Boards
and the anticipated effect and benefits for the Funds and their shareholders.
The Boards appointed a Due Diligence Committee ("Committee"), including members
of each Fund's Board, to investigate the Transaction in detail and provide a
report to the Boards. The Committee held telephonic meetings on September 10,
and September 26, 2000, at which information about the Transaction developed in
advance of the meeting and distributed to the Committee was discussed. At the
direction of the Committee, Fund counsel and a Committee member met on two
separate occasions with Aberdeen representatives in the United Kingdom to
discuss matters of particular concern to the Committee. Additionally, a board
member met with an Aberdeen representative in Sydney, and Mr. Richard Fabricius,
the Aberdeen representative who will be transferred to Sydney, met with Fund
representatives in the United States. Finally, a video conference on October 2,
2000, that included Committee members, Fund counsel and Aberdeen
representatives, provided an opportunity for further discussion of important
issues. Thereafter, the Committee prepared a report concerning its
investigations which was distributed to the full Boards.
At an in-person meeting of the Boards held on October 10, 2000, in
addition to the Committee report, the Boards were provided with information
concerning the Transaction and the New Agreements and were informed of the
standards they should apply in determining whether to approve the New
Agreements. The additional information provided by the Manager and Adviser to
the Boards included a description of the Transaction and a discussion of how the
Transaction would affect the ability of the Manager and Adviser to perform their
duties as set forth in the New Agreements. The Board was also provided
information comparing the fees to be charged under the New Agreement with those
paid by comparable funds.
The Boards, including the Non-Interested Directors, considered all of the
information presented at the October 10, 2000 meeting concerning the terms of
the Transaction and the effect the Transaction would likely have on the duties
of the Manager and Adviser to each Fund under the New Agreements.
In the course of these discussions, the Manager and Adviser advised the
Non-Interested Directors that they did not expect that the Transaction would
have a material effect on the operations of the Funds or their shareholders. The
Manager and Adviser also noted that the Transaction did not contemplate any
changes in the operations of any Funds. The Manager and Adviser assured the
Boards that they would continue to provide the high quality of service they have
provided in the past. The Adviser and Manager emphasized that the Transaction,
if consummated, would provide them with access to Aberdeen's expertise in Asian
securities and to Aberdeen's international investment management and operational
facilities.
During the course of their deliberations, the Non-Interested Directors
considered the information provided by the Committee and by the Manager and
Adviser. The Boards also considered a variety of other factors, including the
effect that the Transaction may have on the ability of the Manager and Adviser
to perform their duties to each Fund under the New Agreements; the nature,
quality and extent of the services furnished by the Manager and Adviser to each
Fund; the investment record of the Manager and Adviser in managing each Fund;
comparative data as to investment performance, advisory fees and other fees,
including expense ratios; possible benefits to the Manager and Adviser and their
affiliates from their services to the Funds; the financial resources of the
Manager and Adviser before and after the Transaction; and the presence of
appropriate incentives to assure that the Manager and Adviser will continue to
furnish high quality services to the Fund and that current investment management
personnel will be retained.
In addition to the foregoing factors, the Non-Interested Directors gave
careful consideration to the likely impact of the Transaction on the EquitiLink
organization. In this regard, the Non-Interested Directors considered, among
other things, the structure of the Transaction, whether there were appropriate
assurances that Fund fees and expenses would not be increased, directly or
indirectly, the anticipated effects of the Transaction on EquitiLink's
continuing financial strength and on the effectiveness of the Manager's and
Adviser's operations. They considered evidence regarding Aberdeen's business and
performance history and also information regarding Aberdeen's treatment of
acquired entities. It noted that Aberdeen had built its business both internally
and through acquisitions. The Board was informed that Aberdeen's acquisition of
EquitiLink was consistent with Aberdeen's long-term growth strategy for
expansion into Australia and to broaden its U.S. presence. It considered
information bearing on the seriousness of Aberdeen's continued support for the
Funds, noting consistencies between the investment philosophy of Aberdeen and
EquitiLink as well as Aberdeen's experience with closed-end funds and issues
related to that type of fund. In particular, they noted Aberdeen's assurances
that attention would be paid to measures to support each Fund's share price.
They also received assurances from Aberdeen that the Auction Market Preferred
Stock ("AMPS") of The First Australia Prime Income Fund, Inc. and The First
Commonwealth Fund, Inc. would continue to be monitored and that while the
Manager and Adviser would make recommendations to the respective Funds' Boards,
any decisions regarding the AMPS would be left to the Boards.
Based on the foregoing, the Non-Interested Directors concluded that the
Transaction should cause no reduction in the quality of services provided to the
Funds and that certain benefits might flow to the Funds. Thus, the Directors of
each Fund, including the Non-Interested Directors, approved the New Agreements.
The Board was advised that EquitiLink intends to rely on Section 15(f) of
the 1940 Act, which provides a non-exclusive safe harbor for an investment
adviser to an investment company or any of the investment adviser's affiliated
persons (as defined under the 1940 Act) to receive any amount or benefit in
connection with a change in control of the investment adviser so long as two
conditions are met. First, for a period of three years after the transaction, at
least 75% of the board members of the investment company must not be "interested
persons" of the investment company's investment adviser or its predecessor
adviser. On or prior to the consummation of the Transaction, each Board would be
in compliance with this provision of Section 15(f). Second, an "unfair burden"
must not be imposed upon the investment company as a result of such transaction
or any express or implied terms, conditions or understandings applicable
thereto. The term "unfair burden" is defined in Section 15(f) to include any
arrangement during the two year period after the transaction whereby the
investment adviser, or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from the
investment company or its shareholders (other than fees for bona fide investment
advisory or other services) or from any person in connection with the purchase
or sale of securities or other property to, from or on behalf of the investment
company (other than bona fide ordinary compensation as principal underwriter for
such investment company). No such compensation agreements are contemplated in
connection with the Transaction.
EquitiLink and Aberdeen have undertaken to pay the costs of preparing and
distributing proxy materials to, and of holding the Meeting of, the Funds'
shareholders as well as other fees and expenses in connection with the
Transaction, including the fees and expenses of legal counsel to the Funds.
DESCRIPTION OF THE CURRENT AND NEW AGREEMENTS
The Advisory and Management Agreements for The First Australia Fund, Inc.
and the Management Agreement for The First Australia Prime Income Fund, Inc.
were last submitted to shareholders at a meeting held on March 15, 1990. At that
meeting shareholders were asked to approve the Advisory and Management
Agreements in order to restructure the then-existing contractual arrangements to
better reflect the business relationships among the parties. The Advisory
Agreement for The First Australia Prime Income Fund, Inc. was last submitted to
shareholders at a meeting held on March 15, 1993. At that meeting shareholders
were asked to approve amendments to the agreement in order to scale back the fee
paid by the Adviser to the Manager with respect to Fund assets in excess of $1.2
billion. The Advisory and Management Agreements for The First Commonwealth Fund,
Inc. were last submitted to shareholders at a meeting held March 15, 1993. At
that meeting shareholders were asked to initially approve the Advisory and the
Management Agreements.
The following discussion is qualified in its entirety by reference to the
forms of the New Agreements provided in Exhibits A-F.
Each New Agreement for a Fund is substantially the same as the Current
Agreement for that Fund, except for the new initial two-year terms and the
effective dates of the New Agreements.
The Management Agreements
Each Management Agreement provides that the Manager will manage the Fund's
investments and make investment decisions for the Fund in accordance with the
Fund's investment objective, policies and limitations. The Manager will also
select brokers and dealers to effect each Fund's portfolio transactions. The
Management Agreement authorizes the Manager, at its own expense, to retain
others to assist in performing its obligations, subject to compliance with
applicable legal requirements.
The Manager agrees to pay the salaries and expenses of all of its
personnel and all expenses incurred by it arising out of its duties under the
Management Agreement. Each Fund bears its own expenses, as specified in the
Agreement. In addition, certain expenses incurred by the Manager's employees who
serve as officers and directors of a Fund may be reimbursed by that Fund under
the Fund's policy governing reimbursement of Fund-related expenses. In return
for the services provided by the Manager to each Fund, and the expenses it
assumes under the Management Agreement, the Funds pay the Manager fees at the
following annual rates, computed on the basis of each Fund's net asset value at
the end of each week and payable at the end of each calendar month (first day of
each calendar month for The First Commonwealth Fund, Inc.):
The First Australia Fund, Inc. -- 1.10% of net assets up to $50 million;
0.90% of net assets between $50 million and $100 million; and 0.70% of net
assets in excess of $100 million.
The First Australia Prime Income Fund, Inc. -- 0.65% of net assets related
to both common and preferred shares up to $200 million; 0.60% of such net assets
between $200 million and $500 million; 0.55% of such net assets between $500
million and $900 million; and 0.50% of such net assets between $900 million and
$1,750 million and 0.45% of such assets in excess of $1,750 million.
The First Commonwealth Fund, Inc. -- 0.65% of net assets related to both
common and preferred shares up to $200 million; 0.60% of net assets between $200
million and $500 million; and 0.55% of assets in excess of $500 million.
Each Management Agreement has an initial term of two years, with
continuation thereafter subject to yearly approval by the Board or Fund
shareholders, as well as by the Non-Interested Directors. Each Management
Agreement may be terminated at any time, without payment of penalty, on 60 days'
written notice by the Board or by vote of holders of a majority of the
outstanding voting securities of the Fund, or by the Manager upon 90 days'
written notice. The Agreement automatically terminates in the event of its
assignment (as defined in the 1940 Act).
Each Management Agreement provides that the Manager is not liable for any
error of judgment or any loss suffered by the Fund, in connection with matters
to which the Agreement relates, except a loss resulting from breach of fiduciary
duty with respect to the receipt of compensation (subject to applicable legal
limits) or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Manager in the performance of its duties or from
reckless disregard by the Manager of its obligations and duties under the
Management Agreement.
Each Management Agreement provides that the Manager and its affiliates may
provide similar services to other funds and clients and may engage in other
activities. It also provides that investment opportunities shall be allocated
among the particular Fund and other clients in a fair and equitable manner.
The Management Agreement for The First Commonwealth, Inc. provides that
the Fund may, on 60 days' notice, limit the scope of the Manager's engagement to
managing only investments denominated in stipulated currencies, and that the
Manager's fees under the Management Agreement would be with respect to only the
assets under its Management.
During the fiscal year ended October 31, 1999, the fees paid to the
Manager by each Fund under its Current Management Agreement amounted to: The
First Australia Fund, Inc., US$ 1,402,955; The First Australia Prime Income
Fund, Inc., US$ 12,366,523; and The First Commonwealth Fund, Inc., US$ 972,558.
The Advisory Agreements
The Advisory Agreements for The First Australia Fund, Inc. and The First
Australia Prime Income Fund, Inc. each provide that the Adviser will make
recommendations to the Manager as to specific portfolio securities to be
purchased, retained or sold by the Fund and that the Adviser will obtain related
research and statistical data. In the case of The First Australia Fund, Inc.,
the Adviser's recommendations are limited to securities denominated in
Australian or New Zealand dollars.
For these services, the Adviser receives the following fees from the
Manager, calculated on the basis of the Fund's assets at the end of each week
and paid at the end of each calendar month:
The First Australia Fund, Inc. -- 0.30% of such net assets up to $50
million; 0.25% of such net assets between $50 million and $100 million; and
0.15% of such net assets in excess of $100 million.
The First Australia Prime Income Fund, Inc. -- 0.25% of such net assets
(including both common and preferred stock) up to $1.2 billion and 0.20% of such
assets in excess of $1.2 billion.
The Advisory Agreement for The First Commonwealth Fund, Inc. provides
that, to the extent requested by the Manager, the Adviser will make
recommendations as to the overall structure of the Fund's portfolio, including
asset allocation and general investment strategy in light of the Fund's
investment objective. For this portion of the Adviser's services, the Manager
pays the Adviser fees at an annual rate of 0.15% of the Fund's net assets
related to both common and preferred shares at the end of each week and payable
on the first business day of each calendar month. The Advisory Agreement also
provides that, to the extent requested by the Manager, the Adviser will make
recommendations regarding specific portfolio securities to be purchased,
retained or sold by the Fund, and will provide related research and statistical
data. For these services, the Manager pays the Adviser fees at an annual rate of
up to 0.10% of the Fund's average net assets related to both common and
preferred shares at the end of each week and payable on the first business day
of each calendar month. These fees may be reduced to the extent the Manager pays
other entities for such services.
The Advisory Agreements for each Fund also provide that the Adviser agrees
to pay the salaries and expenses of all of its personnel and all expenses
incurred by it arising out of its duties under the agreement. However, certain
expenses incurred by the Adviser's employees who serve as officers and directors
of a Fund may be reimbursed by that Fund under the Fund's policy governing
reimbursement of Fund-related expenses.
During the fiscal year ended October 31, 1999, the fees paid to the
Adviser by the Manager in respect of each Fund under its Current Advisory
Agreement amounted to: The First Australia Fund, Inc., US$ 363,548; The First
Australia Prime Income Fund, Inc., US$ 5,352,389; and The First Commonwealth
Fund, Inc., US$ 360,358.
The provisions of the Advisory Agreements regarding liability,
non-exclusivity of services, allocation of investment opportunities, duration
and termination are comparable to those of the Management Agreements.
In the event the shareholders of the Fund do not approve the New
Agreements, Aberdeen may terminate the Transaction and the Current Agreements
will remain in full force and effect until such time as the Board, subject to
applicable law determines that some other course of action is appropriate for
the Funds and their shareholders.
INVESTMENT MANAGER AND ADVISER
The Manager, a Jersey, Channel Islands corporation, was established in
October 1985, and the Adviser, a New South Wales, Australia corporation, was
established in April 1981. The principal source of income to both the Manager
and the Adviser is professional fees received from providing continuing
investment advice. The Manager and Adviser provide investment advice to the
Funds and to certain other funds that are not registered in the United States.
Laurence Freedman and Brian Sherman are joint Managing Directors of the
Adviser, Directors of the Manager, as well as directors and officers of the
Funds. Each of them will resign as Managing Directors of the Adviser and as
directors of the Manager, but each is expected to continue his positions as
officer and director of the Funds.
The ultimate beneficial owners of approximately 85% of EquitiLink are
interests associated with Laurence Freedman and Brian Sherman; associates of
Laurence Freedman and Brian Sherman hold the remaining 15%.
ADMINISTRATOR
The Administrator for The First Australia Fund, Inc. and The First
Australia Prime Income Fund, Inc. is Prudential Investments Fund Management LLC:
Gateway Center 3, 100 Mulberry Street, Newark, NJ 07102, (800) 451-6788.
The Administrator for The First Commonwealth Fund, Inc. is Princeton
Administrators LLP: 500 College Road East, Princeton, NJ 08540, (800) 543-6217.
REQUIRED VOTE
Approval of the proposal requires the affirmative vote of a "majority of
the outstanding voting securities of each Fund," as defined herein on page
[___]. THE BOARDS OF DIRECTORS RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE
IN FAVOR OF THE PROPOSAL.
ADDITIONAL INFORMATION
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and Proxy Statement and all other costs incurred in
connection with the solicitation of proxies, including any additional
solicitation made by letter, telephone or telegraph, will be paid by EquitiLink
and Aberdeen. In addition to solicitation by mailing of this proxy statement,
Innisfree M&A Incorporated ("Innisfree") is engaged to assist in the
solicitation of proxies. As the meeting date approaches, certain shareholders of
the Funds may receive a phone call from an Innisfree representative if a Fund
has not yet received their vote. Innisfree may obtain authorization from
shareholders by telephonic or electronically transmitted instructions to execute
proxies on their behalf. Proxies that are obtained telephonically will be
recorded in accordance with the procedures set forth below. Management of the
Funds believes that these procedures are reasonably designed to ensure that the
identity of the shareholder casting the vote is accurately determined and that
the voting instructions of the shareholder are accurately determined.
If the shareholder wishes to participate in the Meeting, but does not wish
to give his or her proxy, the shareholder may still submit the proxy card
originally sent with the Proxy Statement or attend in person. Any proxy given by
a shareholder, whether in writing or by telephone, is revocable. A shareholder
may revoke the accompanying proxy or a proxy given telephonically, or
electronically at any time prior to its use by filing with the Fund a written
revocation or duly executed proxy bearing a later date. In addition, any
shareholder who attends the Meeting in person may vote by ballot at the Meeting,
thereby canceling any proxy previously given.
Beneficial Ownership. To the best of the Funds' knowledge, based on filings made
with the Securities and Exchange Commission, the following shareholders are
beneficial holders of 5% or more of that particular Fund's outstanding voting
securities, as of September 30, 2000:
The First Australia Fund, Inc.
Percentage of
Name and Address of Number of Shares Shares
Beneficial Owner Beneficially Owned Beneficially Owned
------------------- ------------------ ------------------
Laurence S. Freedman* 2,750,461 16.00%
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
Brian M. Sherman* 2,750,461 16.00%
Level 3
190 George Street
Sydney, N.S.W 2000
Australia
EquitiLink Limited* 1,068,950 6.22%
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
EquitiLink U.S.A* 1,624,627 9.45%
45 Broadway, 31st Floor
New York, NY 10006
Mira, L.P.+ 2,714,500 15.79%
One Chase Manhattan Plaza
42nd Floor
New York, NY 07102-4007
Zurich Capital Markets,
Inc.+
One Chase Manhattan Plaza
42nd Floor
New York, NY 07102-4007
________________________
* As controlling shareholders of the Manager, Messrs. Freedman and
Sherman share voting and investing power for 2,750,461 shares of the
Fund owned by the Manager, EquitiLink Limited, and EquitiLink USA.
+ Both entities share both voting and dispositive power.
The First Commonwealth Fund, Inc.
Percentage of
Name and Address of Number of Shares Shares
Beneficial Owner Beneficially Owned Beneficially Owned
------------------- ------------------ ------------------
First Union Capital 1,319,395 5.22%
Management Group
One First Union Center
Charlotte, NC 28288-0137
The First Australia Prime Income Fund, Inc. does not have beneficial
holders of 5% or more of its outstanding voting securities, as of September 30,
2000.
The table below sets forth the number of shares of each Fund owned
directly or beneficially by the directors and executive Officers of that Fund as
of September 30, 2000 and the percentage of the Fund that this amount
represents. (Directors who do not own any shares have been omitted from the
table.)
The First Australia Fund, Inc.
Shares of Common
Stock Beneficially
Owned and % of Total
Name of Directors and Executive Outstanding on
Officers September 30, 2000 (1)
- -------------------------------- ----------------------
Anthony E. Aaronson++ 1,500
116 South Anita Avenue
Los Angeles, CA 90049
David Lindsay Elsum, A.M. + 2,000
9 May Grove
South Yarra, Victoria 3141
Australia
Laurence S. Freedman * 2,750,461
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
Michael R. Horsburgh 2,000
Suite 2213, Kyobo Building
1, 1-ka, Chongro, Chongro-ku
Seoul 110-714
South Korea
Harry A. Jacobs, Jr. * 3,979
One New York Plaza
New York, NY 10292
Howard A. Knight 2,500
36 Ives Street
London SW3 2ND
United Kingdom
Richard H. McCoy++* 1,000
P.O. Box 1
Toronto Dominion Centre
Toronto, Ontario
M5K 1A2 Canada
Neville J. Miles + 2,000
23 Regent Street
Paddington, N.S.W. 2021
Australia
William J. Potter + 1,000
236 West 27th Street
New York, NY 10001
Peter D. Sacks 250
33 Yonge Street, Suite 706
Toronto, Ontario M5E 1GE
Canada
John T. Sheehy++ 5,000
235 Montgomery Street, Suite 300
San Francisco, CA 94104
Brian M. Sherman * 2,750,461
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
The First Australia Prime Income Fund, Inc.
Shares of Common
Stock Beneficially
Owned and % of Total
Name of Directors and Executive Outstanding on
Officers September 30, 2000 (2)
- -------------------------------- ----------------------
Anthony E. Aaronson++ 500
116 South Anita Avenue
Los Angeles, CA 90049
David Lindsay Elsum, A.M. + 1,000
9 May Grove
South Yarra, Victoria 3141
Australia
Laurence S. Freedman * 88,139
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
Harry A. Jacobs, Jr. * [o] 11,136
One New York Plaza
New York, NY 10292
William J. Potter + 236
236 West 27th Street
New York, NY 10001
Peter D. Sacks++ 250
33 Yonge Street, Suite 706
Toronto, Ontario M5E 1GE
Canada
Brian M. Sherman * 88,139
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
The First Commonwealth Fund, Inc.
Shares of Common
Stock Beneficially
Owned and % of
Name of Directors and Executive Total Outstanding
Officers on September 30, 2000 (3)
------------------------------- -------------------------
David Lindsay Elsum, A.M. + 650
9 May Grove
South Yarra, Victoria 3141
Australia
Laurence S. Freedman * 417,534
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
Michael Gleeson-White, A.O. 1,000
9A Wellington Street
Woollahra, N.S.W. 2025
Australia
Peter D. Sacks + 250
33 Yonge Street, Suite 706
Toronto, Ontario M5E 1GE
Canada
E. Duff Scott++ 5,000
70 University Avenue
Toronto, Ontario M4N 3J6
Canada
Brian M. Sherman * 417,534
Level 3
190 George Street
Sydney, N.S.W. 2000
Australia
Warren C. Smith 6,800
1002 Sherbrooke Street West
Suite 1600
Montreal, Quebec
Canada H3A 3L6
____________________
1 As controlling shareholders of the Manager, Messrs. Freedman and
Sherman share voting and investing power for 2,750,461 shares of the
Fund owned by the Manager, EquitiLink Limited, and EquitiLink USA.
With the exception of those 2,750,461 shares, which constitute
approximately 16.00% of the outstanding shares of the Fund as of
September 30, 2000, all shares listed in this table are owned with
sole voting and investment power. In the aggregate, all the shares
in the table represent approximately 16.10% of the total shares
outstanding as of September 30, 2000. Excluding shares owned by
Messrs. Freedman and Sherman, the directors of the Fund, as a group,
own approximately 0.09% of the total shares outstanding as of
September 30, 2000.
2 As controlling shareholders of the Manager, Messrs. Freedman and
Sherman share voting and investment power for 88,139 shares of the
Fund's common stock owned by the Manager. With the exception of
those 88,139 shares, which constitute .03% of the outstanding shares
of common stock of the Fund, all shares listed in this table are
owned with sole voting and investment power. In the aggregate, all
the shares in the table represent approximately .04% of the total
shares of common stock outstanding as of September 30, 2000.
3 As controlling shareholders of the Manager and EquitiLink Limited,
Messrs. Freedman and Sherman share voting and investment power for
417,534 shares of the Fund's common stock owned by the Manager,
EquitiLink Limited and EquitiLink USA, Inc. With the exception of
those 417,534 shares, which constituted approximately 4.50% of the
outstanding shares of common stock of the Fund as of September 30,
2000, all shares listed in this table were owned with sole voting
and investment power. In the aggregate, all of the shares in the
table represented approximately 4.60% of the total shares of common
stock outstanding as of September 30, 2000. Excluding the shares
owned by Messrs. Freedman and Sherman, the directors of the Fund
representing the common stock, as a group, owned approximately 0.10%
of the total shares of common stock outstanding as of September 30,
2000.
* Directors considered by the Fund and its counsel to be persons who
are "interested persons" (which as used in this Proxy Statement is
as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Fund or of the Fund's investment manager or
investment adviser. Mr. Jacobs is deemed to be an interested person
of the Fund because of his affiliation with Prudential Securities
Incorporated, a broker-dealer registered under the Securities
Exchange Act of 1934 (the "1934 Act"). Mr. McCoy is deemed to be an
interested person of the Fund because of his affiliation with TD
Securities, Inc., which has an affiliate that is a broker-dealer
registered under the 1934 Act. Messrs. Freedman and Sherman are
deemed to be interested persons because of their affiliation with
the Fund's investment manager and investment adviser, or because
they are officers of the Fund or both.
+ A member of the Contract Review Committee.
++ A member of the Audit Committee.
o Harry A. Jacobs, Jr.'s 11,136 shares are held in two Trusts for the
benefit of his children. Mr. Jacobs disclaims any beneficial
interest with respect to these shares.
+ No other director or executive officer owns 1% or greater of the
outstanding shares of the Funds.
++ No director or executive officer of The First Australia Prime Income
Fund, Inc. or The First Commonwealth Fund, Inc., own any preferred
stock.
+++ The information provided as of September 30, 2000 is based on
statements furnished to the Funds by the directors and officers.
Proposals of Shareholders
The deadline for the shareholders of The First Australia Fund, Inc. for
submitting proposals to be included with the Fund's proxy materials for the 2001
Annual Meeting of Shareholders of the Fund was August 25, 2000. Shareholders
wishing to present proposals at the 2001 Annual Meeting of Shareholders of the
Fund which would not be included in the Fund's proxy materials should send
written notice of such proposals to the Secretary of the Fund by December 22,
2000, but no earlier than November 22, 2000, in the form prescribed in the
Fund's By-Laws.
The deadline for the shareholders of The First Australia Prime Income
Fund, Inc. for submitting proposals to be included with the Fund's proxy
materials for the 2001 Annual Meeting of Shareholders of the Fund was September
1, 2000. Shareholders wishing to present proposals at the 2001 Annual Meeting of
Shareholders of the Fund which would not be included in the Fund's proxy
materials should send written notice of such proposals to the Secretary of the
Fund by December 22, 2000, but no earlier than November 22, 2000, in the form
prescribed in the Fund's By-Laws.
The deadline for the shareholders of The First Commonwealth Fund, Inc. for
submitting proposals to be included with the Fund's proxy materials for the 2001
Annual Meeting of Shareholders of the Fund is October 28, 2000. Shareholders
wishing to present proposals at the 2001 Annual Meeting of Shareholders of the
Fund which would not be included in the Fund's proxy materials should send
written notice of such proposals to the Secretary of the Fund by December 22,
2000, but no earlier than November 22, 2000, in the form prescribed in the
Fund's By-Laws.
PLEASE TAKE A FEW MOMENTS TO COMPLETE YOUR PROXY PROMPTLY. YOU MAY DO SO
BY MAILING THE PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
By order of the Boards of Directors,
[SIGNATURE]
Roy M. Randall, Secretary
The First Australia Fund, Inc.
The First Australia Prime Income Fund, Inc.
The First Commonwealth Fund, Inc.
EXHIBIT A
THE FIRST AUSTRALIA FUND, INC.
MANAGEMENT AGREEMENT
AGREEMENT executed this [_____] day of [_______________, 2000],
First Australia Fund, Inc. (the "Fund"), a Maryland corporation registered under
the Investment Company Act of 1940 Act"), and EquitiLink International
Management Limited, a Jersey Channel Islands corporation (the "Investment
Manager").
WHEREAS, the Fund is a closed-end management investment company; and
WHEREAS, the Fund engages in the business of investing its assets in
the manner and in accordance with its stated investment objective and
restrictions;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Obligations.
------------
1.1 The Investment Manager will manage, in accordance with the
Fund's stated investment objective, policies and limitations and subject to the
supervision of the Fund's Board of Directors, the Fund's investments and will
make investment decisions on behalf of the Fund including the selection of and
placing of orders with brokers and dealers to execute portfolio transactions on
behalf of the Fund. The Investment Manager shall give the Fund the benefit of
the Investment Manager's best judgment and efforts in rendering services under
this Agreement.
1.2 The Fund will pay the Investment Manager a fee at the annual
rate of 1.10% of the Fund's average weekly net assets up to $50 million, 0.90%
of such assets between $50 million and $100 million and 0.70% of such assets in
excess of $100 million, computed based upon net asset value at the end of each
week and payable at the end of each calendar month.
1.3 In rendering the services required under this Agreement, the
Investment Manager may, at its expense, employ, consult or associate with itself
such person or persons as it believes necessary to assist it in carrying out its
obligations under this Agreement. However, the Investment Manager may not retain
any person or company that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Fund unless (i) the Fund is a party to the
contract with such person or company and (ii) such contract is approved by a
majority of the Fund's Board of Directors and a majority of Directors who are
not parties to any agreement or contract with such company and who are not
"interested persons," as defined in the 1940 Act, of the Fund, the Investment
Manager, or any such person or company retained by the Investment Manager, and
is approved by the vote of a majority of the outstanding voting securities of
the Fund to the extent required by the 1940 Act.
2. Expenses. The Investment Manager shall bear all expenses of its
employees, except as provided in the following sentence, and overhead incurred
in connection with its duties under this Agreement and shall pay all salaries
and fees of the Fund's Directors and officers who are interested persons (as
defined in the 1940 Act) of the Investment Manager. The Fund will bear all of
its own expenses, including: expenses of organizing the Fund; fees of the Fund's
Directors who are not interested persons (as defined in the 1940 Act) of any
other party; out-of-pocket expenses for all Directors and officers of the Fund,
including expenses incurred by the Manager's employees, who serve as Directors
and officers of the Fund, which may be reimbursed by the Fund under the Fund's
policy governing reimbursement of Fund-related expenses; and other expenses
incurred by the Fund in connection with meetings of Directors and shareholders;
interest expense; taxes and governmental fees including any original issue taxes
or transfer taxes applicable to the sale or delivery of shares or certificates
therefor; brokerage commissions and other expenses incurred in acquiring or
disposing of the Fund's portfolio securities; expenses in connection with the
issuance, offering, distribution, sale or underwriting of securities issued by
the Fund; expenses of registering and qualifying the Fund's shares for sale with
the Securities and Exchange commission and in various states and foreign
jurisdictions; auditing, accounting, insurance and legal costs; custodian,
dividend disbursing and transfer agent expenses; and the expenses of
shareholders' meetings and of the preparation and distribution of proxies and
reports to shareholders.
3. Liability. The Investment Manager shall not be liable for any
error of judgment or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to receipt of compensation for services (in which
case any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of, or
from reckless disregard by it of its obligations and duties under, this
Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Investment Manager or any affiliate, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager
desire to purchase or sell a security at the same time such security is
purchased or sold for the Fund, such purchases and sales will be allocated among
the Investment Manager's clients, including the Fund, in a manner that is fair
and equitable in the judgment of the Investment Manager in the exercise of its
fiduciary obligations to the Fund and to such other clients.
5. Duration and Termination. This Agreement shall become effective
upon shareholder approval thereof as required under the 1940 Act and shall
continue in effect for two (2) years from the date of its execution. If not
sooner terminated, this Agreement shall continue in effect with respect to the
Fund for successive periods of twelve months thereafter, provided that each such
continuance shall be specifically approved annually by the vote of a majority of
the Fund's Board of Directors who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and either
(a) the vote of a majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
the Fund at any time, without the payment of any penalty, by a vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Fund upon at least sixty (60) days' written notice to
the Investment Manager or by the Investment Manager upon at least ninety (90)
days' written notice to the Fund. This Agreement shall automatically terminate
in the event of its assignment (as defined in the 1940 Act).
6. Miscellaneous.
-------------
6.1 This Agreement shall be construed in accordance with the laws of
the State of New York, provided that nothing herein shall be construed as being
inconsistent with the 1940 Act and any rules, regulations and orders thereunder.
6.2 The captions in this Agreement are included for convenience only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
6.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to that extent, the provisions of this
Agreement shall be deemed to be severable.
6.4 Nothing herein shall be construed as constituting the Investment
Manager an agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE FIRST AUSTRALIA FUND, INC.
BY:_____________________________
Title:
EQUITILINK INTERNATIONAL MANAGEMENT
LIMITED
BY:_____________________________
Title:
EXHIBIT B
THE FIRST AUSTRALIA FUND, INC.
ADVISORY AGREEMENT
AGREEMENT executed this [___] day of [______________________ 2000],
among The First Australia Fund, Inc. ( the "Fund") a Maryland corporation
registered under the Investment Company Act of 1940 (the "1940 Act"), and
EquitiLink International Management Limited, a Jersey, Channel islands
corporation (the "Investment Manager"), and EquitiLink Australia Limited, a New
South Wales, Australia corporation (the "Investment Adviser").
WHEREAS, the Fund is a closed-end management investment company;
WHEREAS, the Fund engages in the business of investing and
reinvesting its assets in the manner and in accordance with its stated
investment objectives and restrictions;
WHEREAS, the Fund has entered into a management agreement with the
Investment Manager dated [___________, 2000] (the "Management Agreement"),
pursuant to which the Investment Manager will manage the Fund's investments and
will make investment decisions on behalf of the Fund for which the Investment
Manager will receive a monthly fee from the Fund as specified in the Management
Agreement;
WHEREAS, in connection with rendering the services required under
the Management Agreement, the Investment Manager is permitted to retain, at its
expense and in the manner set forth in the Management Agreement, investment
advisers to assist it in carrying out its obligations to the Fund under the
Management Agreement;
WHEREAS, the Investment Manager wishes to retain the Investment
Adviser to assist it in carrying out its obligations to the Fund under the
Management Agreement, and the Investment Adviser is willing to furnish such
assistance to the Investment Manager, in connection with the services specified
below with regard to the Fund; and
WHEREAS, the Fund hereby appoints the Investment Adviser to provide
the investment advisory services specified below with regard to the Fund and the
Investment Adviser hereby accepts such appointment;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:
1. Investment Adviser.
------------------
1.1 The Investment Adviser will make recommendations to the
Investment Manager as to specific portfolio securities, which are denominated in
Australian or New-Zealand dollars, to be purchased, retained or sold by the Fund
and will provide or obtain such research and statistical data as may be
necessary in connection therewith. The Investment Adviser shall give the
Investment Manager (and the Fund) the benefit of the Investment Adviser's best
judgment and efforts in rendering services under this Agreement.
1.2 The Investment Manager will pay the Investment Adviser a
fee computed at the annual rate of 0.30% of the Fund's average weekly net assets
up to $50 million, 0.25% of such assets between $50 million and $100 million and
0.15% of such assets in excess of $100 million based upon net asset value at the
end of each week and payable at the end of each calendar month.
2. Expenses. The Investment Adviser shall bear all expenses of its
respective employees, except certain expenses incurred by the Investment
Advister's employees who serve as officers and directors of the Fund which are
reimbursed by the Fund under the Fund's policy governing reimbursement of
Fund-related expenses. The Investment Adviser shall bear all overhead incurred
in connection with its duties under this Agreement and shall pay all salaries
and fees of the Fund's directors and officers who are interested persons (as
defined in the 1940 Act) of the Investment Adviser but who are not interested
persons of the Investment Manager.
3. Liability. Neither the Investment Manager nor the Investment
Adviser shall be liable for any error of judgment or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from a breach of fiduciary duty with respect to receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Manager or the Investment Adviser, as appropriate, in the
performance of, or from reckless disregard by such party of such party's
obligations and duties under, this Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager and the Investment Adviser are not deemed to be exclusive,
and nothing in this Agreement shall prevent the Investment Manager or the
Investment Adviser, or any affiliate of either of them, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager or
the Investment Adviser desire to purchase or sell a security at the same time
such security is purchased or sold for the Fund, such purchases and sales will
be allocated among the clients of each in a manner that is fair and equitable in
the judgment of the Investment Manager and the Investment Adviser in the
exercise of their fiduciary obligations to the Fund and to such other clients.
5. Duration and Termination. This Agreement is effective upon
shareholder approval thereof as required under the 1940 Act and shall continue
in effect for two (2) years from the date of its execution. If not sooner
terminated, this Agreement shall continue in effect with respect to the Fund for
successive periods of twelve months thereafter, provided that each such
continuance shall be specifically approved annually by the vote of a majority of
the Fund's Board of Directors who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and either
(a) the vote of a majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
the Fund at any time, without the payment of any penalty, by a vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Fund upon at least sixty (60) days' written notice to
the Investment Manager and the Investment Adviser, or by either the Investment
Manager or Investment Adviser upon at least ninety (90) days' written notice to
the Fund and the other party but any such termination shall not affect
continuance of this Agreement as to the remaining parties. This Agreement shall
automatically terminate as to any party in the event of its assignment (as
defined in the 1940 Act).
6. Miscellaneous.
6.1. This Agreement shall be construed in accordance with the
laws of the State of New York, provided that nothing herein shall be construed
as being inconsistent with the 1940 Act and any rules, regulations and orders
thereunder.
6.2. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
6.3. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to that extent, the provisions of
this Agreement shall be deemed to be severable.
6.4. Nothing herein shall be construed as constituting any
party an agent of the Fund or of any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE FIRST AUSTRALIA FUND, INC.
BY:_____________________________
Title:
EQUITILINK INTERNATIONAL MANAGEMENT
LIMITED
BY:_____________________________
Title:
EQUITILINK AUSTRALIA LIMITED
BY:_____________________________
Title:
EXHIBIT C
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
MANAGEMENT AGREEMENT
AGREEMENT executed this ______ day of ____________________, 19__,
between The First Australia Prime Income Fund, Inc. (the "Fund") a Maryland
corporation registered under the Investment Company Act of 1940 (the "1940
Act"), and EquitiLink International Management Limited, a Jersey, Channel
Islands corporation (the "Investment Manager").
WHEREAS, the Fund is a closed-end management investment company; and
WHEREAS, the Fund engages in the business of investing its assets in
the manner and in accordance with its stated current investment objective and
restrictions;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Obligations.
-----------
1.1 The Investment Manager will manage, in accordance with the
Fund's stated investment objective, policies and limitations and subject to the
supervision of the Fund's Board of Directors, the Fund's investments and will
make investment decisions on behalf of the Fund including the selection of and
placing of orders with brokers and dealers to execute portfolio transactions on
behalf of the Fund. The Investment Manager shall give the Fund the benefit of
the Investment Manager's best judgment and efforts in rendering services under
this Agreement.
1.2 The Fund will pay the Investment Manager a fee at the annual
rate of 0.65% of the Fund's average weekly net assets applicable to shares of
common stock and shares of preferred stock up to $200 million, 0.60% of such
assets between $200 million and $500 million, 0.55% of such assets between $500
and $900 million, 0.50% of such assets between $900 million and $1,750 million
and 0.45% of such assets in excess of $1,750 million, computed based upon net
asset value applicable to shares of common stock and shares of preferred stock
at the end of each week and payable at the end of each calendar month.
1.3 In rendering the services required under this Agreement, the
Investment Manager may, at its expense, employ, consult or associate with itself
such person or persons as it believes necessary to assist it in carrying out its
obligations under this Agreement. However, the Investment Manager may not retain
any person or company that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Fund unless (i) the Fund is a party to the
contract with such person or company and (ii) such contract is approved by a
majority of the Fund's Board of Directors and a majority of Directors who are
not parties to any agreement or contract with such company and who are not
"interested persons," as defined in the 1940 Act, of the Fund, the Investment
Manager, or any such person or company retained by the Investment Manager, and
is approved by the vote of a majority of the outstanding voting securities of
the Fund to the extent required by the 1940 Act.
2. Expenses. The Investment Manager shall bear all expenses of its
employees, except as provided in the following sentence, and overhead incurred
in connection with its duties under this Agreement and shall pay all salaries
and fees of the Fund's Directors and officers who are interested persons (as
defined in the 1940 Act) of the Investment Manager. The Fund will bear all of
its own expenses, including: expenses of organizing the Fund; fees of the Fund's
Directors who are not interested persons (as defined in the 1940 Act) of any
other party; out-of-pocket expenses for all Directors and officers of the Fund,
including expenses incurred by the Manager's employees, who serve as Directors
and officers of the Fund, which may be reimbursed by the Fund under the Fund's
policy governing reimbursement of Fund-related expenses; and other expenses
incurred by the Fund in connection with meetings of Directors and shareholders;
interest expense; taxes and governmental fees including any original issue taxes
or transfer taxes applicable to the sale or delivery of shares or certificates
therefor; brokerage commissions and other expenses incurred in acquiring or
disposing of the Fund's portfolio securities; expenses in connection with the
issuance, offering, distribution, sale or underwriting of securities issued by
the Fund; expenses of registering and qualifying the Fund's shares for sale with
the Securities and Exchange Commission and in various states and foreign
jurisdictions; auditing, accounting, insurance and legal costs; custodian,
dividend disbursing and transfer agent expenses; and the expenses of
shareholders' meetings and of the preparation and distribution of proxies and
reports to shareholders.
3. Liability. The Investment Manager shall not be liable for any
error of judgment or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to receipt of compensation for services (in which
case any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of, or
from reckless disregard by it of its obligations and duties under, this
Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Investment Manager or any affiliate, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager
desire to purchase or sell a security at the same time such security is
purchased or sold for the Fund, such purchases and sales will be allocated among
the Investment Manager's clients, including the Fund, in a manner that is fair
and equitable in the judgment of the Investment Manager in the exercise of its
fiduciary obligations to the Fund and to such other clients.
5. Duration and Termination. This Agreement shall become effective
upon shareholder approval thereof as required under the 1940 Act and shall
continue in effect for two (2) years from the date of its execution. If not
sooner terminated, this Agreement shall continue in effect with respect to the
Fund for successive periods of twelve months thereafter, provided that each such
continuance shall be specifically approved annually by the vote of a majority of
the Fund's Board of Directors who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and either
(a) the vote of a majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
the Fund at any time, without the payment of any penalty, by a vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Fund upon at least sixty (60) days' written notice to
the Investment Manager or by the Investment Manager upon at least ninety (90)
days' written notice to the Fund. This Agreement shall automatically terminate
in the event of its assignment (as defined in the 1940 Act).
6. Miscellaneous.
-------------
6.1 This Agreement shall be construed in accordance with the laws of
the State of New York, provided that nothing herein shall be construed as being
inconsistent with the 1940 Act and any rules, regulations and orders thereunder.
6.2 The captions in this Agreement are included for convenience
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
6.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to that extent, the provisions of this
Agreement shall be deemed to be severable.
6.4 Nothing herein shall be construed as constituting the Investment
Manager an agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed effective as of the day and year first above written.
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
By:_______________________________________
Title:
EQUITILINK INTERNATIONAL
MANAGEMENT LIMITED
By:_______________________________________
Title:
EXHIBIT D
AMENDED AND RESTATED
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
ADVISORY AGREEMENT
AGREEMENT executed this [____] day of [_______________] among The First
Australia Prime Income Fund, Inc. (the "Fund") a Maryland corporation registered
under the Investment Company Act of 1940 (the "1940 Act"), and EquitiLink
International Management Limited, a Jersey, Channel Islands corporation (the
"Investment Manager"), and EquitiLink Australia Limited, a New South Wales,
Australia corporation (the "Investment Adviser").
WHEREAS, the Fund is a closed-end management investment company;
WHEREAS, the Fund engages in the business of investing and reinvesting its
assets in the manner and in accordance with its stated investment objectives and
restrictions;
WHEREAS, the Fund has entered into a management agreement with the
Investment Manager dated [_______________], as amended from time to time (the
"Management Agreement"), pursuant to which the Investment Manager will manage
the Fund's investments and will make investment decisions on behalf of the Fund
for which the Investment Manager will receive a monthly fee from the Fund as
specified in the Management Agreement;
WHEREAS, in connection with rendering the services required under the
Management Agreement, the Investment Manager is permitted to retain, at its
expense and in the manner set forth in the Management Agreement, investment
advisers to assist it in carrying out its obligations to the Fund under the
Management Agreement;
WHEREAS, the Investment Manager wishes to retain the Investment Adviser to
assist it in carrying out its obligations to the Fund under the Management
Agreement, and the Investment Adviser is willing to furnish such assistance to
the Investment Manager, in connection with the services specified below with
regard to the Fund; and
WHEREAS, the Fund hereby appoints the Investment Adviser to provide the
investment advisory services specified below with regard to the Fund, and the
Investment Adviser hereby accepts such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
I. Investment Adviser.
------------------
A. The Investment Adviser will make recommendations to the Investment
Manager as to specific portfolio securities to be purchased, retained
or sold by the Fund and will provide or obtain such research and
statistical data as may be necessary connection therewith. The
Investment Adviser shall give the Investment Manager (and the Fund)
the benefit of the Investment Adviser's best judgment and efforts in
rendering services under this Agreement.
B. The Investment Manager will pay the Investment Adviser a fee computed
at the annual rate of 0.25% of the Fund's average weekly net assets
applicable to the shares of common stock and shares of preferred stock
up to $1,200 million and 0.20% of such assets in excess of $1,200
million, computed based upon net asset value applicable to shares of
common stock and shares of preferred stock at the end of each week and
payable at the end of each calendar month.
II. Expenses. The Investment Adviser shall bear all expenses of its respective
employees, except certain expenses incurred by the Investment Adviser's
employees who serve as officers and directors of the Fund which are
reimbursed by the Fund under the Fund's policy governing reimbursement of
Fund-related expenses. The Investment Adviser shall bear all overhead
incurred in connection with its duties under this Agreement and shall pay
all salaries and fees of the Fund's directors and officers who are
interested persons (as defined in the 1940 Act) of the Investment Adviser
but who are not interested persons of the Investment Manager.
III. Liability. Neither the Investment Manager nor the Investment Adviser shall
be liable for any error of judgment or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates, except a
loss resulting from a breach of fiduciary duty with respect to receipt of
compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act) or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Manager or the Investment
Adviser, as appropriate, in the performance of, or from reckless disregard
by such party of such party's obligations and duties under, this
Agreement.
IV. Services Not Exclusive. It is understood that the services of the
Investment Manager and the Investment Adviser are not deemed to be
exclusive, and nothing in this Agreement shall prevent the Investment
Manager or the Investment Adviser, or any affiliate of either of them,
from providing similar services to other investment companies and other
clients (whether or not their investment objectives and policies are
similar to those of the Fund) or from engaging in other activities. When
other clients of the Investment Manager or the Investment Adviser desire
to purchase or sell a security at the same time such security is purchased
or sold for the Fund, such purchases and sales will be allocated among the
clients of each in a manner that is fair and equitable in the judgment of
the Investment Manager and the Investment Adviser in the exercise of their
fiduciary obligations to the Fund and to such other clients.
V. Duration and Termination. This Agreement is effective upon shareholder
approval thereof as required under the 1940 Act and shall continue in
effect until February 1, 1994. If not sooner terminated, this Agreement
shall continue in effect with respect to the Fund for successive periods
of twelve months thereafter, provided that each such continuance shall be
specifically approved annually by the vote of a majority of the Fund's
Board of Directors who are not parties to this Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at
a meeting called for the purpose of voting on such approval and either (a)
the vote of majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with
respect to the Fund at any time, without the payment of any penalty, by a
vote of a majority of the Fund's Board of Directors or a majority of the
outstanding voting securities of the Fund upon at least sixty (60) days'
written notice to the Investment Manager and the Investment Adviser, or by
either the Investment Manager or Investment Adviser upon at least ninety
(90) days' written notice to the Fund and the other party but any such
termination shall not affect continuance of this Agreement as to the
remaining parties. This Agreement shall automatically terminate as to any
party in the event of its assignment (as defined in the 1940 Act).
VI. Miscellaneous.
-------------
A. This Agreement shall be construed in accordance with the laws of the
State of New York, provided that nothing herein shall be construed as
being inconsistent with the 1940 Act and any rules, regulations and
orders thereunder.
B. The captions in this Agreement are included for convenience only and
in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
C. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to that extent, the
provisions of this Agreement shall be deemed to be severable.
D. Nothing herein shall be construed as constituting any party an agent
of the Fund or of any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
By:--------------------------------------------
Title:
EQUITILINK INTERNATIONAL MANAGEMENT LIMITED
By:--------------------------------------------
Title:
EQUITILINK AUSTRALIA LIMITED
By:--------------------------------------------
Title:
EXHIBIT E
AMENDED AND RESTATED
THE FIRST COMMONWEALTH FUND, INC.
MANAGEMENT AGREEMENT
AGREEMENT executed this [______] day of [______________], between
The First Commonwealth Fund, Inc. (the "Fund"), a Maryland corporation
registered under the Investment Company Act of 1940 (the "1940 Act"), and
EquitiLink International Management Limited, a Jersey, Channel Islands
corporation (the "Investment Manager").
WHEREAS, the Fund is a closed-end management investment company; and
WHEREAS, the Fund engages in the business of investing its assets in
the manner and in accordance with its stated current investment objective and
restrictions;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Obligations.
1.1 The Investment Manager will manage, in accordance with the
Fund's stated investment objective, policies and limitations and subject to the
supervision of the Fund's Board of Directors, the Fund's investments. The
Investment Manager will make investment decisions on behalf of the Fund
including the selection of and placing of orders with brokers and dealers to
execute portfolio transactions on behalf of the Fund. The Investment Manager
shall give the Fund the benefit of the Investment Manager's best judgment and
efforts in rendering services under this Agreement.
1.2 The Fund will pay the Investment Manager a fee at the
annual rate of 0.65% of the Fund's average weekly net assets applicable to
shares of common stock and shares of preferred stock up to $200 million, 0.60%
of such amounts between $200 million and $500 million and 0.55% of such assets
in excess of $500 million, computed based upon net asset value applicable to
shares of common stock and shares of preferred stock determined weekly and
payable on the first business day of each calendar month it being understood
that the portion of the fee which is equal to the percentage of the Fund's net
assets, measured at the end of each week, held in securities (or cash)
denominated in the currencies of Australia and New Zealand, Canada, and the
United Kingdom shall be paid to the Investment Manager in, respectively, the
currencies of Australia, Canada and the United Kingdom. For the purpose of
determining the fees payable to the Investment Manager hereunder, the value of
the Fund's net assets shall be computed initially at the times and in the manner
specified in the Fund's registration statement on Form N-2, as such times and
manner may be amended from time to time by action of the Fund's Board.
1.3 In rendering the services required under this Agreement,
the Investment Manager may, at its expense, employ, consult or associate with
itself such person or persons as it believes necessary to assist it in carrying
out its obligations under this Agreement. However, the Investment Manager may
not retain any person or company that would be an "investment adviser," as that
term is defined in the 1940 Act, to the Fund unless (i) the Fund is a party to
the contract with such person or company and (ii) such contract is approved by a
majority of the Fund's Board of Directors and a majority of Directors who are
not parties to any agreement or contract with such company and who are not
"interested persons," as defined in the 1940 Act, of the Fund, the Investment
Manager, or any such person or company retained by the Investment Manager, and
is approved by the vote of a majority of the outstanding voting securities of
the Fund to the extent required by the 1940 Act.
2. Expenses. The Investment Manager shall bear all expenses of its
employees, except as provided in the following sentence, and overhead incurred
in connection with its duties under this Agreement and shall pay all salaries
and fees of the Fund's Directors and officers who are interested persons (as
defined in the 1940 Act) of the Investment Manager. The Fund will bear all of
its own expenses, including: expenses of organizing the Fund; fees of the Fund's
Directors who are not interested persons (as defined in the 1940 Act) of any
other party; out-of-pocket expenses for all Officers and Directors of the Fund,
including expenses incurred by the Manager's employees, who serve as Directors
and officers of the Fund, which may be reimbursed by the Fund under the Fund's
policy governing reimbursement of Fund-related expenses; and other expenses
incurred by the Fund in connection with meetings of Directors and shareholders;
interest expense; taxes and governmental fees including any original issue taxes
or transfer taxes applicable to the sale or delivery of shares or certificates
therefor; brokerage commissions and other expenses incurred in acquiring or
disposing of the Fund's portfolio securities; expenses in connection with the
issuance, offering, distribution, sale or underwriting of securities issued by
the Fund; expenses of registering and qualifying the Fund's shares for sale with
the Securities and Exchange Commission and in various states and foreign
jurisdictions; auditing, accounting, insurance and legal costs; custodian,
dividend disbursing and transfer agent expenses; and the expenses of
shareholders' meetings and of the preparation and distribution of proxies and
reports to shareholders.
3. Liability. The Investment Manager shall not be liable for any
error of judgment or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to receipt of compensation for services (in which
case any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of, or
from reckless disregard by it of its obligations and duties under, this
Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Investment Manager or any affiliate, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager
desire to purchase or sell a security at the same time such security is
purchased or sold for the Fund, such purchases and sales will be allocated among
the Investment Manager's clients, including the Fund, in a manner that is fair
and equitable in the judgment of the Investment Manager in the exercise of its
fiduciary obligations to the Fund and to such other clients.
5. Scope of Engagement. The Investment Manager hereby agrees that
the Fund, may, at any time, upon at least 60 days' notice, advise the Investment
Manager that it wishes to limit the scope of the Investment Manager's engagement
hereunder to that of managing the Fund's investments solely with respect to
securities denominated in certain stipulated currencies, in which case the fee
otherwise payable to the Investment Manager as provided in Paragraph 1.2 hereof
shall be reduced to reflect the proportion of the Fund's aggregate net assets
measured at the end of each week which are denominated in the stipulated
currencies.
6. Duration and Termination. This Agreement shall become effective
upon shareholder approval thereof as required under the 1940 Act and shall
continue in effect for two (2) years from the date of its execution. If not
sooner terminated, this Agreement shall continue in effect with respect to the
Fund for successive periods of twelve months thereafter, provided that each such
continuance shall be specifically approved annually by the vote of a majority of
the Fund's Board of Directors who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and either
(a) the vote of a majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
the Fund at any time, without the payment of any penalty, by a vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Fund upon at least sixty (60) days' written notice to
the Investment Manager or by the Investment Manager upon at least ninety (90)
days' written notice to the Fund. This Agreement shall automatically terminate
in the event of its assignment (as defined in the 1940 Act).
7. Miscellaneous.
7.1 This Agreement shall be construed in accordance with the
laws of the State of New York, provided that nothing herein shall be construed
as being inconsistent with the 1940 Act and any rules, regulations and orders
thereunder.
7.2 The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
7.3 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to that extent, the provisions of
this Agreement shall be deemed to be severable.
7.4 Nothing herein shall be construed as constituting the
Investment Manager an agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE FIRST COMMONWEALTH FUND, INC.
By:_________________________________
Title: President
EQUITILINK INTERNATIONAL
MANAGEMENT LIMITED
By:_________________________________
Title: Director
EXHIBIT F
THE FIRST COMMONWEALTH FUND, INC.
INVESTMENT ADVISER AGREEMENT
AGREEMENT executed this [____] day of [__________] among The First
Commonwealth Fund, Inc. (the "Fund") a Maryland corporation registered under the
Investment Company Act of 1940 (the "1940 Act"), and EquitiLink International
Management Limited, a Jersey, Channel Islands corporation (the "Investment
Manager") and EquitiLink Australia Limited, a New South Wales, Australia
corporation (the "Investment Adviser").
WHEREAS, the Fund is a closed-end management investment company;
WHEREAS, the Fund engages in the business of investing and
reinvesting its assets in the manner and in accordance with its stated
investment objectives and restrictions;
WHEREAS, the Fund has entered into a management agreement with the
Investment Manager dated [ ________________] (the "Management Agreement") ,
pursuant to which the Investment Manager will manage the Fund's investments and
will make investment decisions on behalf of the Fund for which the Investment
Manager will receive a monthly fee from the Fund as specified in the Management
Agreement;
WHEREAS, in connection with rendering the services required under
the Management Agreement, the Investment Manager is permitted to retain, at its
expense and in the manner set forth in the Management Agreement, investment
advisers and others to assist it in carrying out its obligations to the Fund
under the Management Agreement;
WHEREAS, the Investment Manager wishes to retain the Investment
Adviser to assist it in carrying out certain of its obligations to the Fund
under the Management Agreement, and the Investment Adviser is willing to furnish
such assistance to the Investment Manager in connection with the services
specified below with regard to the Fund; and
WHEREAS, the Fund hereby appoints the Investment Adviser to provide
the investment advisory services specified below with regard to the Fund, and
the Investment Adviser hereby accepts such appointment;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:
1. Investment Adviser.
------------------
1.1 To the extent requested by the Investment Manager, the
Investment Adviser will make recommendations to the Investment Manager as to
the-overall structure of the Fund's portfolio, including asset allocation advice
and general advice on investment strategy relating to the Fund's overall
investment objectives. The Investment Adviser shall give the Investment Manager
(and the Fund) the benefit of the Investment Adviser's best judgment and efforts
in rendering services under this Agreement.
1.2 For the services rendered to the Investment Manager under
Section 1.1 hereof, the Investment Manager will pay the Investment Adviser a fee
computed at the annual rate of 0.15% of the Fund's average weekly net assets,
computed based upon net asset value applicable to shares of common stock and
shares of preferred stock determined weekly and payable on the first business
day of each calendar month.
1.3 To the extent requested by the Investment Manager, the
Investment Adviser will make recommendations to the Investment Manager as to
specific portfolio securities to be purchased, retained or sold by the Fund and
will provide or obtain such research and statistical data as may be necessary in
connection therewith. The Investment Adviser shall give the Investment Manager
(and the Fund) the benefit of the Investment Adviser's best judgment and efforts
in rendering services under this Agreement.
1.4 For the services rendered to the Investment Manager under
Section 1.3 hereof, the Investment Manager will pay the Investment Adviser a fee
computed at the annual rate of up to 0.10% of the Fund's average weekly net
assets computed based upon net asset value applicable to shares of common stock
and shares of preferred stock determined weekly and payable on the first
business day of each calendar month; it being understood that any such fee shall
be reduced by the amount, if any, that the Investment Manager may pay other
entities for rendering any of the services contemplated by Section 1.3 hereof.
1.5 For the purpose of determining the fees payable to the
Investment Adviser hereunder, the value of the Fund's net assets shall be
computed initially at the times and in the manner specified in the Fund's
Registration Statement an Form N-2, as such times and manner may be amended from
time to time by action of the Fund's Board.
2. Expenses. The Investment Adviser shall bear all expenses of its
respective employees, except certain expenses incurred by the Investment
Adviser's employees who serve as officers and directors of the Fund which are
reimbursed by the Fund under the Fund's policy governing reimbursement of
Fund-related expenses. The Investment Adviser shall bear all overhead incurred
in connection with its duties under this Agreement and shall pay all salaries
and fees of the Fund's directors and officers who are interested persons (as
defined in the 1940 Act) of the Investment Adviser but who are not interested
persons of the Investment Manager.
3. Liability. Neither the Investment Manager nor the Investment
Adviser shall be liable for any error of judgment or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from a breach of fiduciary duty with respect to receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Manager or the Investment Adviser, as appropriate, in the
performance of, or from reckless disregard by such party of such party's
obligations and duties under, this Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager and the Investment Adviser are not deemed to be exclusive,
and nothing in this Agreement shall prevent the Investment Manager or the
Investment Adviser, or any affiliate of either of them, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager or
the Investment Adviser desire to purchase or sell a security at the same time
such security is purchased or sold for the Fund, such purchases and sales will
be allocated among the clients of each in a manner that is fair and equitable in
the judgment of the Investment Manager and the Investment Adviser in the
exercise of their fiduciary obligations to the Fund and to such other clients.
5. Duration and Termination. This Agreement is effective upon
shareholder approval thereof as required under the 1940 Act and shall continue
in effect for two (2) years from the date of its execution. If not sooner
terminated, this Agreement shall continue in effect with respect to the Fund for
successive periods of twelve months thereafter, provided that each such
continuance shall be specifically approved annually by the vote of a majority of
the Fund's Board of Directors who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and either
(a) the vote of a majority of the outstanding voting securities of the Fund, or
(b) the vote of a majority of the Fund's entire Board of Directors.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
the Fund at any time, without the payment of any penalty, by a vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Fund upon at least sixty (60) days' written notice to
the Investment Manager and the Investment Adviser, or by either the Manager or
the Investment Adviser upon at least ninety (90) days' written notice to the
Fund and the other party but any such termination shall not affect continuance
of this Agreement as to the remaining parties. This Agreement shall
automatically terminate as to any party in the event of its assignment (as
defined in the 1940 Act).
6. Miscellaneous.
6.1 This Agreement shall be construed in accordance with the
laws of the State of New York, provided that nothing herein shall be construed
as being inconsistent with the 1940 Act and any rules, regulations and orders
thereunder.
6.2 The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
6.3 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to that extent, the provisions of
this Agreement shall be deemed to be severable.
6.4 Nothing herein shall be construed as constituting any
party an agent of the Fund or of any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
THE FIRST COMMONWEALTH FUND. INC.
By:_________________________________
Title: President
EQUITILINK INTERNATIONAL MANAGEMENT
LIMITED
By:_________________________________
Title: Director
EQUITILINK AUSTRALIA LIMITED
By:_________________________________
Title: Director
PROXY THE FIRST COMMONWEALTH FUND, INC. PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Shareholders -- November 29, 2000
The undersigned hereby appoints Laurence S. Freedman, William J. Potter, and
Brian M. Sherman, and each of them, the proxies of the undersigned, with power
of substitution to each of them, to vote all shares of the common stock and the
Auction Market Preferred Stock Series W-7 of The First Commonwealth Fund, Inc.
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of The First Commonwealth Fund, Inc. to be held at Prudential Securities
Incorporated, One Seaport Plaza, New York, New York on November 29, 2000 at 2:00
p.m. (Eastern time) and at any adjournment or postponement thereof. By signing
this proxy card on the reverse side, the undersigned authorizes the appointed
proxies to vote in their discretion on any other business which may properly
come before the meeting or any adjournments or postponements thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
(X) PLEASE MARK VOTE
AS IN THIS EXAMPLE
This proxy, when properly executed, will be voted in the manner directed. If no
direction is made, this proxy will be voted FOR the Proposal.
- --------------------------------------------------------------------------------
THE FIRST COMMONWEALTH FUND, INC.
- --------------------------------------------------------------------------------
COMMON STOCK AND THE AUCTION MARKET PREFERRED STOCK SERIES W-7
Mark box at right if address change or comment has been noted
on the reverse side of this card. / /
To approve a new management agreement with For Against Abstain
EquitiLink International Management Limited / / / / / /
and a new investment advisory agreement
with EquitiLink Australia Limited.
Control Number:
Date _____________________________
Please be sure to sign and date this Voting Instruction Card.
Shareholder sign here ___________________ Co-owner sign here________________
Please sign exactly as name(s) appear(s) on this proxy card. If signing for a
corporation or partnership or as an agent or attorney, indicate the capacity in
which you are signing. If signing as trustee, custodian or other fiduciary,
please state your title.
- --------------------------------------------------------------------------------
RECORD DATE SHARES:
PROXY THE FIRST AUSTRALIA PRIME INCOME FUND, INC. PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Shareholders -- November 29, 2000
The undersigned hereby appoints Laurence S. Freedman, William J. Potter, and
Brian M. Sherman, and each of them, the proxies of the undersigned, with power
of substitution to each of them, to vote all shares of the common stock and the
Auction Market Preferred Stock Series A-I of The First Australia Prime Income
Fund, Inc. which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of The First Australia Prime Income Fund, Inc. to be held at One
Seaport Plaza, New York, New York on November 29, 2000 at 2:00 p.m., (Eastern
time), and at any adjournment or postponement thereof. By signing this proxy
card on the reverse side, the undersigned authorizes the appointed proxies to
vote in their discretion on any other business which may properly come before
the meeting or any adjournments or postponements thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
(X) PLEASE MARK VOTE
AS IN THIS EXAMPLE
This proxy, when properly executed, will be voted in the manner directed. If no
direction is made, this proxy will be voted FOR the Proposal.
- --------------------------------------------------------------------------------
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
- --------------------------------------------------------------------------------
COMMON STOCK AND THE AUCTION MARKET PREFERRED STOCK SERIES W-I
Mark box at right if an address change or comment has been noted on
the reverse side of this card. / /
To approve a new management agreement with For Against Abstain
EquitiLink International Management Limited / / / / / /
and a new investment advisory agreement
with EquitiLink Australia Limited.
CONTROL NUMBER:
Date __________________________
Please be sure to sign and date this Voting Instruction Card.
Shareholder sign here _____________ Co-owner sign here______________
Please sign exactly as name(s) appear(s) on this proxy card. If signing for a
corporation or partnership or as an agent or attorney, indicate the capacity in
which you are signing. If signing as trustee, custodian or other fiduciary,
please state your title.
- --------------------------------------------------------------------------------
RECORD DATE SHARES:
PROXY THE FIRST AUSTRALIA FUND, INC. PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Shareholders - November 29, 2000
The undersigned hereby appoints Laurence S. Freedman, William J. Potter, and
Brian M. Sherman, and each of them, the proxies of the undersigned, with power
of substitution to each of them, to vote all shares of the common stock of The
First Australia Fund, Inc. which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of The First Australia Fund, Inc. to be held at
One Seaport Plaza, New York, New York on November 29, 2000 at 2:00 p.m. (Eastern
time) and at any adjournment or postponement thereof. By signing this proxy card
on the reverse side, the undersigned authorizes the appointed proxies to vote in
their discretion on any other business which may properly come before the
meeting or any adjournments or postponements thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
(X) PLEASE MARK VOTE
AS IN THIS EXAMPLE
This proxy, when properly executed, will be voted in the manner directed. If no
direction is made, this proxy will be voted FOR the Proposal.
- --------------------------------------------------------------------------------
THE FIRST AUSTRALIA FUND, INC.
- --------------------------------------------------------------------------------
COMMON STOCK
Mark box at right if address change or comment has been noted
on the reverse side of this card. / /
To approve a new management agreement with For Against Abstain
EquitiLink International Management Limited / / / / / /
and a new investment advisory agreement
with EquitiLink Australia Limited.
Control Number:
Date _____________________________
Please be sure to sign and date this Voting Instruction Card.
Shareholder sign here ___________________ Co-owner sign here________________
Please sign exactly as name(s) appear(s) on this proxy card. If signing for a
corporation or partnership or as an agent or attorney, indicate the capacity in
which you are signing. If signing as trustee, custodian or other fiduciary,
please state your title.
- --------------------------------------------------------------------------------
RECORD DATE SHARES: