-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CD6NZgfaxqo16CKugyB1CxWsi4D0lnepaEltS20ZZDJZvPNTIJ0/psqUOJA/V+vY MNZ3mjJGdUpmvelr+mkH3w== 0000889812-96-000537.txt : 19960522 0000889812-96-000537.hdr.sgml : 19960522 ACCESSION NUMBER: 0000889812-96-000537 CONFORMED SUBMISSION TYPE: PRES14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960628 FILED AS OF DATE: 19960521 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANCE GROWTH FUND INC CENTRAL INDEX KEY: 0000860743 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRES14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-05994 FILM NUMBER: 96570528 BUSINESS ADDRESS: STREET 1: 1285 AVENUE OF THE AMERICAS STREET 2: C/O MITCHELL HUTCHINS ASSET MANAGEMENT CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127134046 MAIL ADDRESS: STREET 1: 1285 AVE OF THE AME STREET 2: C/O MITCHELL HUTCHINS ASSET MANAGEMENT CITY: NEW YORK STATE: NY ZIP: 10019 PRES14A 1 PRELIMINARY PROXY MATERIALS As filed with the Securities and Exchange Commission on May 21, 1996. SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ____) Filed by the registrant /X/ Check the appropriate box: /X/ Preliminary proxy statement / / Definitive proxy statement THE FRANCE GROWTH FUND, INC. (Name of Registrant as Specified in Its Charter) THE FRANCE GROWTH FUND, INC. (Name of Person(s) Filing Proxy Statement) Payment of filing fee (Check the appropriate box): /X/ $125 per Rule 14a-6(h) and Item 22(a)(2) under the Securities Exchange Act of 1934 (Previously transmitted by wire transfer) THE FRANCE GROWTH FUND, INC. 1211 Avenue of the Americas New York, New York 10036 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS JUNE 28, 1996 ------------ To our Stockholders: Notice is hereby given that a Special Meeting of Stockholders of The France Growth Fund, Inc. (the "Fund") will be held at 10:00 a.m., New York City time, on Friday, June 28, 1996, at the offices of Banque Indosuez, 1211 Avenue of the Americas, New York, New York 10036, for the following purposes: 1. To approve a new Investment Advisory Agreement between the Fund and Indosuez International Investment Services, Inc. Only holders of record of the Fund's common stock at the close of business on May 21, 1996 are entitled to notice of and to vote at this meeting or any adjournments thereof. Steven M. Cancro Secretary Dated: May , 1996 IMPORTANT WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK FOR YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. THE FRANCE GROWTH FUND, INC. 1211 Avenue of the Americas New York, New York 10036 ------------ Special Meeting of Stockholders June 28, 1996 ------------ PROXY STATEMENT ------------ This proxy statement is furnished on behalf of the Board of Directors of The France Growth Fund, Inc. (the "Fund") in connection with the solicitation of proxies to be voted at the Special Meeting of Stockholders (the "Meeting") to be held at 10:00 a.m., New York City time, on Friday, June 28, 1996, at the offices of Banque Indosuez, 1211 Avenue of the Americas, New York, New York 10036, and any adjournments thereof. As discussed in greater detail under Proposal 1, the principal purpose of the meeting is to approve a new investment advisory contract between the Fund and Indosuez International Investment Services (the "Adviser"). The new agreement will permit the Adviser to continue to act as investment advisor to the Fund following a change in control of a parent company of the Adviser. No change in the management or investment approach of the Adviser or the Fund is expected to result from such change in control and the terms of the new investment advisory agreement, including the fee, are identical to the current agreement. It is expected that this Proxy Statement and form of proxy will first be mailed to stockholders on or about May __, 1996. The Fund's Annual Report for the fiscal year ended December 31, 1995, was previously mailed to stockholders on February 29, 1996. Copies of the Fund's such Annual Report are available without charge upon request made in writing to PNC Bank, National Association at P.O. Box 8905, Wilmington, Delaware 19809, or by telephone to the Fund's transfer agent at 1-800-852-4750. If the accompanying form of proxy is executed properly and returned, shares of the Fund's common stock, par value $.01 per share (the "Common Stock"), represented by such proxy will be voted at the Meeting in accordance with the instructions on the form of proxy. However, if no instructions are specified, shares will be voted FOR the approval of a new Investment Advisory Agreement between the Fund and Indosuez International Investment Services. A stockholder may revoke a proxy at any time prior to the time it is voted by written notice to the Secretary of the Fund at the Fund's address set forth above or by signing and returning another proxy of a later date or by personally casting a vote at the Meeting. The vote of the lesser of (i) 67% or more of the shares of the Fund represented at the Meeting, if at least 50% of all outstanding shares of the Fund are represented at the Meeting, or (ii) more than 50% of the Fund's outstanding shares, is required for the approval of the Investment Advisory Agreement. Abstentions and broker non-votes will not be considered votes cast for the foregoing purposes but are considered as present for the purpose of determining whether a quorum has been achieved at the Meeting. Because broker non-votes are considered outstanding shares, a broker non-vote has the same effect as a vote against the proposal to approve a new Investment Advisory Agreement. The close of business on May 21, 1996 has been fixed as the record date for the determination of stockholders entitled to notice of, and to vote at, the Meeting. On this date, the Fund had ________ shares of Common stock outstanding and entitled to vote. Each share will be entitled to one vote at the Meeting. The Fund's Articles of Incorporation and Amended and Restated By-Laws (the "By-Laws") provide that the presence in person or by proxy of 33 1/3% of the shares of Common Stock issued and outstanding and entitled to vote at the Meeting shall constitute a quorum for the transaction of business. The cost of preparing, assembling and mailing materials in connection with this solicitation will be borne by the Adviser or an affiliate. In addition to the use of the mails, proxies may be solicited personally, or by telephone or -2- telegraph, by officers of the Fund or by employees of Mitchell Hutchins Asset Management, Inc., the Fund's Administrator, whose principal address is 1285 Avenue of the Americas, New York, New York 10019. In addition, the Fund has retained Shareholder Communications Corporation to aid in the solicitation of proxies, for whose services the Adviser will pay an estimated fee of $7,500 including reasonable out-of-pocket expenses. Brokerage houses, banks and other fiduciaries may also be requested to forward proxy solicitation material to their principals to obtain authorization for the execution of proxies and will be reimbursed by the Fund for out-of-pocket expenses incurred in this connection. APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Proposal 1) Indosuez International Investment Services (the "Adviser"), with its principal office at 44 rue de Courcelles, 75008 Paris, France, and an office at 1211 Avenue of the Americas, New York, New York 10036, serves as the Fund's investment adviser pursuant to the terms of an Investment Advisory Agreement between the Fund and the Adviser dated as of May 10, 1990 (the "Existing Advisory Agreement"). The Existing Advisory Agreement was initially approved by the Board of Directors of the Fund and the initial sole shareholder of the Fund on May 7, 1990. The Existing Advisory Agreement was most recently approved by the Directors on March 12, 1996. Compagnie de Suez, through 100% ownership of Banque Indosuez (the "Bank"), is currently the Adviser's parent company. Compagnie de Suez has agreed to sell a 51% interest in the Bank to a French banking institution, the Caisse Nationale de Credit Agricole ("Credit Agricole"), 91-93 boulevard Pasteur, 75015 Paris, France. As a result of the transfer of a majority of the shares of the Bank, an indirect change in control of the Adviser will occur. No change in the Fund's portfolio managers or in the management of the Adviser are expected to occur. Under the Investment Company Act of 1940 Act, as amended (the "1940 Act"), the transfer of a 51% interest in the Bank (because it is an indirect parent company of the Adviser) constitutes an assignment of the Existing Advisory Agreement. The Existing Advisory Agreement automatically terminates upon assignment according to its terms and the terms of the 1940 Act. In order for the Adviser to continue providing advisory services to the Fund after the sale, therefore, a new investment advisory agreement must be adopted by the Fund's shareholders. At a meeting of the Board of Directors held on May 21, 1996, a majority of the Directors, including a majority of the Directors who are not "interested persons" (as defined by the 1940 Act) of the Fund (the "Independent Directors"), approved and voted to recommend to shareholders of the Fund that they approve a new investment advisory agreement (the "Proposed Advisory Agreement") by and between the Fund and the Adviser. The terms of the Proposed Advisory Agreement are identical, including the fees payable to the Adviser, to the terms of the Existing Advisory Agreement. A copy of the Proposed Advisory Agreement is attached hereto as Exhibit A. The Existing Advisory Agreement provides, as will the new advisory agreement, that the Fund pay the Adviser an advisory fee at the annual rate of 0.90% of the Fund's average weekly net assets up to $100 million and 0.80% of such assets in excess of $100 million, based upon the net asset value calculated at the end of each month and payable at the end of each calendar month in French Francs. During the last fiscal year of the Fund ended December 31, 1995, the Fund paid the Adviser a total of $1,569,156 in advisory fees. The Adviser is a wholly-owned subsidiary of Indosuez Asset Management ("IAM"), 44 rue de Courcelles, 75008, Paris, France, which is currently a wholly-owned subsidiary of the Bank, 96 boulevard Haussmann, 75008, Paris, France. The Bank is currently a wholly-owned subsidiary of Compagnie de Suez, 1 rue d'Astorg, 750008, Paris, France. -3- The Sale Compagnie de Suez and Credit Agricole have entered into an agreement pursuant to which Compagnie de Suez will sell 51% of its ownership interest in the Bank to Credit Agricole for a purchase price of approximately 6.3 billion French Francs (approximately $1.22 billion U.S. Dollars)(1) subject to certain adjustments. Although final terms have not been arranged, it is expected that Credit Agricole will have the right to acquire, and Compagnie de Suez will have the right to sell, an additional 29% ownership interest in the Bank as of July 1, 1997, which would bring Credit Agricole's ownership interest in the Bank to 80%. The completion of the transaction between Compagnie de Suez and Credit Agricole is subject to a number of conditions, including necessary regulatory approvals. The closing is expected to occur as soon as practicable after such approvals are obtained. In the event that such transaction is not consummated, the Existing Advisory Agreement will not terminate and the Adviser will continue to act as Adviser to the Fund. Credit Agricole acts as the central clearinghouse and coordinating body for a group of 60 banks which operate throughout France. Credit Agricole is owned by these banks, which in turn are mutually owned agricultural credit cooperatives. Credit Agricole is responsible for the liquidity and solvency of the banks under French law. Credit Agricole is the largest banking institution in France, providing retail banking, asset and fund management, insurance and investment banking services. Credit Agricole had as of December 31, 1994, assets of approximately 1,754 billion French Francs (approximately $328 billion U.S. Dollars).(2) The Board of Directors recommends a vote FOR Proposal 1. The Board of Directors believes that it will be beneficial to the Fund to continue to receive the high quality of advisory services provided by the Adviser on the same terms as they are currently provided. The Directors considered the fact that the Proposed Advisory Agreement is identical to the Existing Advisory Agreement and provision of advisory services to the Fund, therefore, will not change as a result of the change in control of the Bank. The Directors believe that the Proposed Advisory Agreement is reasonable, fair and in the best interests of the Fund's shareholders. Additional Information About the Adviser The following table provides information with respect to the principal executive officer and the directors of the Adviser: Name and Address Principal Occupation ---------------- -------------------- Jean-Claude Kaltenbach Chairman and Chief Executive Officer, the 3 boulevard Emile Augier Adviser; Chief Investment Officer, Indosuez Paris, France 75116 Asset Management (investment advisor) (since February 1994). - ---------- (1) Based on the exchange rate as of the close of business on May 8, 1996. (2) Based on the exchange rate as of the close of business on December 31, 1994. -4- Name and Address Principal Occupation ---------------- -------------------- Ian Gerald McEvatt Director, the Adviser; Director, Indosuez Asia 5 Pacific View, 22 Cape Road Advisers Ltd. (investment management) (since Chung Hom Kok, Hong Kong January 1994); Chairman, Indosuez Asia Strategic Growth Fund, Inc. (investment company) (since January 1994); Managing Director and Chief Investment Officer, Indosuez Asset Management Asia Ltd. (investment management) (since October 1992); Chairman, Indosuez Asset Management (Singapore) Ltd. (investment management) (since October 1992); Director, Indosuez Asset Management (Japan) Ltd. (investment management) (since October 1992). Rene Claude Dominic Director, the Adviser; Chairman, Societe de Port 48 rue Jacob de Tanger (investment company) (since June 1989). Paris, France 75006 Pierre Armand Cardon Director, the Adviser; Member of Advisory 108 boulevard de Courcelles Committee, Banque Indosuez Luxemborg (since Paris, France 75017 January 1987). Charles Dennis Jules Vergnot Director, the Adviser; Chairman, Danubexsa 13 avenue Lulli (international trade) (since February 1986). Sceaux, France 92300 Eric Harrison Jostrom Director, the Adviser; Chief Executive Officer 3 Brookwood Road and Chief Operating Officer, Constitution Manchester-by-the-Sea, Management Company, Inc. (investment advisor) MA 01944 (since October 1992); Director, Indosuez Asia Advisers Ltd. (investment management); President, Indosuez Asia Strategic Growth Fund, Inc. (investment company) (since March 1994). Information Regarding Ownership of the Common Stock The following table sets forth information, as of May 21, 1996, regarding the ownership of the Fund's Common Stock by (i) each Director of the Fund, (ii) each officer of the Fund, (iii) all Directors and officers of the Fund as a group and (iv) the only persons know by the Fund to own more than five percent of the outstanding shares. Shares of the Common Stock of the Fund Beneficially Owned Percentage of Common Stock (directly or indirectly) Stock Outstanding Name of Beneficial Owner on May 21, 1996 on May 21, 1996 - ------------------------ --------------- --------------- Directors Marc de F. de Logeres -0- -0- Michel Longchampt 98 * -5- Shares of the Common Stock of the Fund Beneficially Owned Percentage of Common Stock (directly or indirectly) Stock Outstanding Name of Beneficial Owner on May 21, 1996 on May 21, 1996 - ------------------------ --------------- --------------- Michel A. Rapaccioli 1,914 * Michel Somnolet -0- -0- Jean A. Arvis 4,460 * Thomas C. Barry 1,333 * John A. Bult -0- -0- Walter J.P. Curley 1,094 * Pierre H.R. Daviron -0- -0- Jacques Regniez -0- -0- Bernard Simon-Barboux -0- -0- John W. Spurdle, Jr. -0- -0- Officers Gerard Jeannin, President -0- -0- Steven M. Cancro, Vice President and Secretary 4,000 * Frederick J. Schmidt, Vice President and Treasurer -0- -0- Officers and Directors as a Group 12,749 * 5% Shareholder Cede & Co., as nominee for The Depository Trust Company P.O. Box 20 Bowling Green Station New York, NY 10004 [15,073,445] [98.2%] - --------- * Denotes ownership of less than 1% of the Fund's outstanding shares. -6- OTHER MATTERS No business other than as set forth herein is expected to come before the Meeting, but should any other matter requiring a vote of stockholders arise, including any question as to an adjournment of the Meeting, the persons named in the enclosed proxy will vote thereon according to their best judgment in the interests of the Fund. For the year ended December 31, 1995, certain direct and indirect subsidiaries of the Bank, CPR Actions (formerly Schelcher Prince), Cheuvreux de Virieu and Indosuez Carr futures received $20,682, $76,223 and $275,529, respectively, in brokerage commissions as a result of executing agency transactions on portfolio securities and future contracts on behalf of the Fund. In addition, the Bank earned fees of approximately $54,500 in its capacity as subcustodian for the Fund of which approximately $13,300 was unpaid at December 31, 1995. For the year ended December 31, 1995, the Fund earned approximately $722,297 in interest income from call account deposits held with the Bank. The Fund had $14,165,087 of such deposits at December 31, 1995. Mr. Arvis has indicated ownership of Directors' qualifying shares (less than 1% of the outstanding shares) of Banque Indosuez. Messrs. Arvis and Simon-Barboux have indicated ownership of ordinary shares and subscription rights (less than 1% of the outstanding shares) of Compagnie de Suez. In addition, Mr. Simon-Barboux has indicated ownership of one share of stock of Indosuez Asset Management International, which is a subsidiary of Banque Indosuez. ------------ Dated May __, 1996 WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT TO THE FUND IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK FOR YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. -7- THE FRANCE GROWTH FUND, INC. 1211 Avenue of the Americas, New York, New York 10036 SPECIAL MEETING OF SHAREHOLDERS JUNE 28, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Frederick J. Schmidt and Steven M. Cancro as proxies, each with full power of substitution, and hereby authorizes each of them, with authority in each to act in the absence of the other, to represent and to vote, as designated below, all the shares of Common Stock of The France Growth Fund, Inc. (the "Fund") held of record by the undersigned on May 21, 1996 at the Special Meeting of Shareholders of the Fund to be held on June 28, 1996, or any adjournments thereof. The Board of Directors recommends a vote FOR Proposal 1. 1. TO APPROVE THE TERMS OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE COMPANY AND INDOSUEZ INTERNATIONAL INVESTMENT SERVICES, INC. FOR / / AGAINST / / ABSTAIN / / 2. In their discretion, the proxies are authorized to consider and act upon such other business as may properly come before the meeting or any adjournments thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. Please sign exactly as name appears below. If shares are held jointly, each Shareholder named should sign. If only one signs, his or her signature will be binding. If the Shareholder is a corporation, the President or a Vice President should sign in his or her own name, indicating title. If the Shareholder is a Partnership, a partner should sign in his or her own name, indicating that he or she is a "Partner." Dated: _______________________, 1996 Name of Corporation (if applicable): ____________________________________ (By)________________________________ Signature (By)________________________________ Signature PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE EXHIBIT A FORM OF INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AGREEMENT dated as of between The France Growth Fund, Inc., a Maryland corporation (the "Fund"), and Indosuez International Investment Services, a French corporation (the "Investment Adviser"). WHEREAS, the Fund is a diversified, closed-end management investment company registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"); WHEREAS, the Investment Adviser is a wholly owned subsidiary of Banque Indosuez, a French financial institution ("BI"), and the Investment Adviser has, pursuant to a Succession Agreement dated April 16, 1990, succeeded to the rights, obligations and duties of BI as a registered investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is thereby deemed to be registered under the Advisers Act subject to its filing an application with the SEC for registration under the Advisers Act within 30 days after such succession; and WHEREAS, the Fund desires to retain the Investment Adviser to render certain investment advisory and management services to the Fund and the Investment Adviser is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties as follows: 1. Appointment of the Adviser. The Fund hereby appoints the Investment Adviser to act as investment adviser and manager to the Fund for the period and on the terms set forth in this Agreement. The Investment Adviser hereby accepts such appointment and agrees to furnish the services herein set forth for the compensation provided. 2. Investment Advisory and Management Services. The Investment Adviser undertakes and agrees: 2.1. To make investment decisions on behalf of the Fund as to the structure of the Fund's investment portfolio and the acquisition and disposition of securities by the Fund, all in accordance with the Fund's stated investment objective and policies and subject to the direction and control of the Board of Directors of the Fund; to provide or obtain such research and statistical data as may be necessary in connection with the foregoing services; and to decide on the selection of, and to place purchase and sale orders with, brokers and dealers to execute portfolio transactions on behalf of the Fund; 2.2. To provide office facilities and personnel adequate to perform the services undertaken by the Investment Adviser pursuant to this Agreement, together with those clerical and bookkeeping services which are not being furnished by the Fund's administrator, custodians or transfer, dividend paying agent and registrar, and to arrange for the provision of administrative services for the Fund; 2.3. To provide periodic reports to the Fund with respect to portfolio transactions for the Fund; to provide to the Board of Directors such other reports relating to the investments of the Fund as are necessary for the members of the Board of Directors to fulfill their fiduciary responsibilities; and to maintain the books and records of the Fund required under Rule 31a-1 under the 1940 Act (other than those being maintained by the Fund's administrator, custodians and transfer, dividend paying agent and registrar); and 2.4. To comply with any and all provisions of the 1940 Act and the Advisers Act and all provisions of any rules, regulations and orders of the SEC which are now or may, from time to time, be applicable to the Investment Adviser and to its directors, officers, employees and interested persons (as such term is defined in the 1940 Act) and to comply with any and all provisions of French law which are now or may, from time to time, be applicable to the Investment Adviser and to its directors, offices and employees. 3. Fees. In consideration of the services described herein, the Fund will pay to the Investment Adviser, at the end of each calendar month and in French Francs, a management and advisory fee computed at the annual rate of .90% of the Fund's average weekly net assets up to U.S. $100 million and .80% of such assets in excess of U.S. $100 million, based upon the net asset value of the Fund calculated at the end of each week. For the month and year in which this Agreement becomes effective or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement is in effect during the month and year, respectively. The net asset value of the Fund shall be calculated in accordance with the provisions of the Fund's prospectus or at such other time or times as the Board of Directors of the Fund may determine in accordance with the provisions of the 1940 Act. For each day on which net asset value of the Fund is not calculated, the net asset value of a share of the Fund's common stock shall be deemed to be the net asset value per share as of the close of business on the last day on which such calculation was made for the purpose of the foregoing computations. -2- 4. Expenses. 4.1. The Investment Adviser shall bear all expenses of its employees 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 also directors, officers or employees of the Investment Adviser, except that the Fund will bear travel and certain other expenses of directors and officers of the Fund who are directors, officers or employees of the Investment Adviser to the extent that such expenses relate to attendance at meetings of the Fund's Board of Directors or any committees thereof. 4.2. The Fund will bear all of its other expenses, including, among others: directors' and officers' liability insurance; organizational expenses (which shall include out-of-pocket expenses and reasonable attorneys' fees, but not overhead or employee costs of the Investment Adviser); legal expenses; auditing and accounting expenses; taxes and governmental fees; stock exchange listing fees; dues and expenses incurred in connection with membership in investment company organizations; fees and expenses of the Fund's custodians, transfer agent, dividend paying agent and registrar; payment for portfolio pricing services to a pricing agent, if any; expenses of preparing share certificates and other expenses in connection with the issuance, offering or underwriting of securities issued by the Fund; expenses relating to investor relations; expenses of registering or qualifying securities of the Fund for sale; freight, insurance and other charges in connection with the shipment of the Fund's portfolio securities, if any; brokerage commissions or other costs of acquiring or disposing of any portfolio securities of the Fund; expenses of preparing and distributing reports, notices and dividends to shareholders; expenses of the Dividend Reinvestment Plan (except for brokerage expenses paid by participants in such plan); costs of stationery; any litigation expenses; and costs of shareholders' and other meetings. 5. Liability. 5.1. Neither the Investment Adviser nor any of its shareholders, officers, directors, employees or agents shall be liable for any act or omission, error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except (i) that the Investment Adviser shall be under a fiduciary duty with respect to receipt of compensation for services pursuant to Section 36 of the 1940 Act and shall therefore be liable for a loss resulting from a breach of such fiduciary duty (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 (ii) for any loss -3- resulting from willful misfeasance, bad faith or gross negligence in the performance of, or from reckless disregard of, the Investment Adviser's obligations and duties under this Agreement. 5.2. To the extent permitted by the 1940 Act, the Advisers Act and the rules and regulations promulgated thereunder and by other applicable law, the Fund shall indemnify and hold harmless the Investment Adviser and its shareholders, officers, directors, employees or agents from and against any Liability for and any damages, expenses or losses incurred in connection with any act or omission in the course of, connected with or arising out of any services to be rendered hereunder, except by reason of willful malfeasance, bad faith or gross negligence in the performance of, or by reason of reckless disregard of, the Investment Adviser's obligations and duties under this Agreement. 5.3. The Investment Adviser shall not be liable for any losses caused by disturbances of its operations by virtue of force majeure, riot or damage caused by nature or due to other events for which it is not responsible (e.g., strikes, lock-outs or acts of domestic or foreign authorities). 5.4. The Investment Adviser may rely on information reasonably believed by it to be accurate and reliable. 5.5. The Investment Adviser does not assume responsibility for the acts or omissions of any other person. 6. Services Not Exclusive. It is understood that the services of the Investment Adviser are not deemed to be exclusive, and nothing in this Agreement shall prevent the Investment Adviser or any of its affiliates from providing investment advisory and asset management 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 Adviser desire to purchase or sell a security at the same time such security is purchased or sold for the Fund, it is understood that such purchases and sales will, to the extent feasible, be allocated among the Fund and such clients in a manner believed by the Investment Adviser to be equitable to the Fund and such other clients. If two or more of the Investment Adviser's clients purchase or sell the same security on a given day from the same broker-dealer, such transactions may be averaged as to price. 7. Further Agreements. The Investment Adviser further undertakes and agrees: 7.1. To file or cause to be filed with the SEC on or before May 16, 1990, a Form ADV and such other documents and information, -4- and to take such other action, as may be necessary to effectuate its registration as a successor investment adviser pursuant to Section 203(g) of the Adviser's Act, to maintain such registration under the Adviser Act in effect during the term hereof and any continuation thereof, and to comply with the requirements of the Advisers Act and the 1940 Act as they relate to the Investment Adviser's services hereunder. The Investment Adviser hereby represents and warrants to the Fund that, pending and subject to the timely filing of such Form ADV, the Investment Adviser is deemed to be a registered investment adviser under the Advisers Act pursuant to Section 203(g) thereof; 7.2. Not to discuss investment decisions or positions of the Fund with personnel of BI or its affiliates who are involved in the securities underwriting or broker-dealer activities of BI, except, as to broker-dealers, for discussions relating generally to research provided to the Investment Adviser by such broker-dealers; 7.3. Not to purchase securities for the Fund in any primary public offering where, to the Investment Adviser's knowledge, the proceeds will be used to retire indebtedness to BI or its affiliates; nor to knowingly cause the Fund to make investments which are designed to benefit the commercial interests of BI or its affiliates; and 7.4. Not to permit its employees to obtain or use material inside information in the possession of employees of BI or its affiliates who are not employees of the Investment Adviser nor disclose to such persons any material inside information. 8. Notices. Any notice or other communication required to be given pursuant to this Agreement shall be in writing and shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (i) to the Fund, c/o Banque Indosuez, 1230 Avenue of the Americas, New York, New York 10020, U.S.A., Attention: Francine Marx, Esq., Secretary; and (ii) to the Investment Adviser, at 65 rue d'Anjou, 75008, Paris, France, Attention: Chairman and Chief Executive Officer; or to such other address, or to the attention of such other person or officer, as either party may from time to time designate to the other party by written notice given in accordance with this Section 8. 9. Duration and Termination. This Agreement shall become effective as of May 10, 1990 and shall, unless sooner terminated pursuant hereto, continue in effect, until the first annual meeting of the Fund's shareholders after the date hereof and, if approved thereat by the vote of a majority of the outstanding voting securities (as defined in the 1940 Act), for the remainder of an initial term of two years ending May 9, 1992 and shall -5- continue in effect thereafter for successive periods of twelve months each; provided that such continuance beyond the initial two-year term shall be specifically approved, at least annually, by a vote of a majority of the members of the Board of Directors of the Fund who are not interested persons (as defined in the 1940 Act) of either party to the Agreement, cast in person at a meeting called for the purpose of voting on such approval, and by a vote of either (i) the Fund's Board of Directors or (ii) a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act); provided, further, that if the continuation of this Agreement is not so approved, the Investment Adviser may, at the Fund's request, continue to serve in such capacity in the manner and to the extent permitted by the 1940 Act and the rules and regulations thereunder. The annual approval of the continuance of this Agreement shall be confirmed to the Investment Adviser by the Fund in writing. Notwithstanding any of the foregoing, this Agreement may be terminated by the Fund in the manner prescribed by the 1940 Act, without the payment of any penalty, at any time upon no less than sixty days' prior written notice to the Investment Adviser, or by the Investment Adviser upon not less than sixty days' prior written notice to the Fund. This Agreement shall automatically terminate in the event of its assignment (as defined under the 1940 Act) by either party. Termination of this Agreement shall not affect the right of the Investment Adviser to receive payment of any unpaid balance of the compensation described in Section 3 earned prior to such termination. 10. Governing Law. 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, the Advisers Act, applicable French laws and any rules, regulations and orders of the SEC. 11. Miscellaneous. 11.1. Subject to the policy of obtaining best execution and to the other requirements of the 1940 Act and subject, further, to the supervision and control of the Board of Directors of the Fund, the Investment Adviser may place brokerage orders for the Fund with, and obtain research from, affiliates of the Investment Adviser and of BI; provided, however, that any commissions paid to such affiliates shall be reasonable and fair in comparison to commissions received by other brokers in connection with comparable transactions involving similar securities. Any research provided to the Investment Adviser by third parties shall be in addition to and not in lieu of the services to be provided herein and shall not reduce the Investment Adviser's fees hereunder. -6- 11.2. The captions in this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. 11.3. If any provisions of this Agreement shall be held or made invalid in whole or in part, the other provisions of this Agreement shall remain in force. Invalid provisions shall, in accordance with the intent and purpose of this Agreement, be replaced by such valid provisions which in their economic effect come as close as legally possible to such invalid provisions. 11.4. The Investment Adviser shall for all purposes herein provided be deemed to be an independent contractor, and nothing herein shall be construed as constituting the Investment Adviser an agent of the Fund. 11.5. The Investment Adviser shall be entitled to rely on any notice or communication believed by it to be genuine and correct and to have been sent to it by or on behalf of the Fund. 11.6. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. THE FRANCE GROWTH FUND, INC. BY: ------------------------------- Name: Title: INDOSUEZ INTERNATIONAL INVESTMENT SERVICES BY: ------------------------------- Name: Title: -7- -----END PRIVACY-ENHANCED MESSAGE-----