SUPPLEMENT DATED APRIL 4, 2003
TO
PROXY STATEMENT
ABERDEEN AUSTRALIA EQUITY FUND, INC.
GATEWAY CENTER 3
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 2003
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This Supplement is being circulated to stockholders entitled to vote at the
April 15, 2003 Annual Meeting of Stockholders ("Annual Meeting") of Aberdeen
Australia Equity Fund, Inc., a Maryland corporation ("Fund"), to provide
information in addition to that contained in the Proxy Statement for the Annual
Meeting that was mailed to stockholders on or about March 7, 2003.
The Fund's Board of Directors ("Board") has continuously availed itself of
methods specifically provided by, or consistent with, Maryland law and the
Investment Company Act of 1940, as amended, to protect the Fund and its
stockholders. The Fund is also subject to certain Maryland law provisions,
including those which have been enacted since the inception of the Fund, that
make it more difficult for challengers to gain control of the Board. Earlier
this year, the Fund's Board adopted an amended and restated bylaws. In doing so,
the Board consulted with counsel to the Fund, Maryland counsel to the Fund, and
counsel to the independent directors. The amendments to the bylaws were adopted,
among other things: to assure that directors elected to serve on the Fund's
Board are well qualified; to develop the Fund's procedures with respect to
meetings of stockholders; and to resist efforts by well-organized minority
stockholders to subvert the objective and purposes of the Fund.
The following is a summary of the amendments to the bylaws which are set forth
in the Amended and Restated Bylaws as of January 16, 2003. Some of the bylaw
amendments have been under consideration for several years, while others are
modifications or expansions of existing bylaws. This summary is qualified in its
entirety by reference to the complete bylaws. The bylaw amendments:
1. Establish procedures for stockholder-requested special meetings, including
procedures for setting the record date for the stockholders making the
request, the record date for the meeting and the time, place and date of
the meeting. Consistent with the Maryland General Corporation Law,
stockholders requesting a meeting would be required to
disclose the purpose of the meeting and the matters to be proposed to be
acted on at the meeting.
2. Provide that the Board of Directors may appoint the chair of the meeting of
stockholders and provide for chairmanship in the absence of such an
appointment. The amendments provide that the rules for conduct of the
meeting are established by the chair of the meeting.
3. Enhance already existing bylaw provisions that require a stockholder to
give written advance notice and other information to the Fund of the
stockholder's nominees for directors and other proposals for business at
stockholders meetings.
4. Disclose that the Board has elected on behalf of the Fund to be subject to
the Maryland Control Share Acquisition Act, which provides that control
shares acquired in a control share acquisition may not be voted except to
the extent approved by a vote of two-thirds of the votes entitled to be
cast on the matter. Generally, control shares are voting shares of stock
which would entitle the acquiror of the shares to exercise voting power
within one of the following ranges of voting power: (1) one-tenth or more
but less than one-third, (2) one-third or more but less than a majority, or
(3) a majority or more of all voting power. This limitation does not apply
to matters for which the Investment Company Act of 1940, as amended,
requires the vote of a majority of the Fund's outstanding voting securities
(as defined in that Act.)
5. Establish qualifications for Fund directors. These qualifications are
designed to assure that individuals have the type of background and
experience necessary to provide competent service as directors of a
closed-end fund that invests in Australian equity securities. They also
require incumbent directors and nominees to comply with the Fund's conflict
of interest policy. Current directors are exempted from these requirements
(except compliance with the Fund's conflict of interest policy) because
they have become qualified through past experience as directors of the
Fund. Nevertheless, almost all current directors satisfy the new
qualification requirements.
6. Require that directors be elected by the affirmative vote of the holders of
a majority of the Fund's outstanding shares. (The bylaws previously
required the affirmative vote of the holders of a majority of shares
present at the meeting and entitled to vote.)
7. Establish supermajority Board vote requirements for certain actions,
including mergers, dissolution, election of officers, officer and director
compensation, and the amendment of the director term and qualification
requirements.
8. Require that any proposed advisory, sub-advisory or management contract
with an affiliate of an independent Fund director be approved by 75% of the
Fund's independent directors who are not so affiliated. If such a contract
is approved, the bylaws would provide automatic liquidity to dissatisfied
shareholders by requiring the Fund to
commence a tender offer for at least 50 percent of its outstanding shares
at a price of at least 98% of the Fund's per share net asset value. These
provisions cannot be changed except by 75% of the directors who were in
office January 16, 2003 or who were recommended by, or elected or nominated
to succeed such a director by a majority of such directors then on the
Board.
9. Reserve to the Board the power to adopt, alter, or repeal the bylaws or any
provision of the bylaws.
Any stockholder who would like a copy of the Fund's bylaws may obtain a copy
from the Securities and Exchange Commission ("SEC") by calling the SEC at (202)
942-8090 or e-mailing the SEC at publicinfo@sec.gov, or from the Fund.
PLEASE TAKE A MOMENT
AND CAST YOUR VOTE!
IMPORTANT NOTICE REGARDING
ABERDEEN AUSTRALIA EQUITY FUND, INC.
ANNUAL MEETING OF STOCKHOLDERS
SCHEDULED FOR TUESDAY, APRIL 15, 2003 AT 1:00 P.M. EASTERN TIME
Dear Stockholder:
WE ARE VERY PLEASED TO REPORT THAT, IN CONNECTION WITH THE FUND'S ANNUAL
MEETING, INSTITUTIONAL SHAREHOLDER SERVICES, INC., THE NATION'S LEADING
INDEPENDENT PROXY ADVISORY FIRM, HAS RECOMMENDED TO ITS CLIENTS THAT FUND
STOCKHOLDERS VOTE:
o FOR Proposal 1: Election of Directors
o FOR Proposal 2: Amendment of the Fund's Charter
o FOR Proposal 3: Amendment of the Fund's fundamental borrowing policy
o FOR Proposal 4: Amendment of the Fund's Management Agreement and
Investment Advisory Agreement
o AGAINST Proposal 5: Stockholder proposal
These recommendations are the same as those unanimously approved by the Fund's
Board of Directors.
According to our latest records, your voting instructions for this meeting have
not yet been received. We are writing to urge you to vote your shares today in
accordance with the recommendations of the Board of Directors. REGARDLESS OF THE
NUMBER OF SHARES YOU MAY OWN, IT IS IMPORTANT THEY BE REPRESENTED AT THE
MEETING. HERE IS A REMINDER OF THE CONVENIENT CHOICES YOU HAVE TO VOTE YOUR
SHARES:
--> BY TOUCH-TONE PHONE:
Dial the toll-free number found on your proxy card and follow the simple
instructions.
--> BY INTERNET:
Visit WWW.PROXYVOTE.COM and enter the 12-digit control number located on your
proxy card.
--> BY MAIL:
Simply sign, date and return your executed proxy card in the enclosed postage
paid envelope. PLEASE TRY TO UTILIZE ONE OF THE ABOVE OPTIONS TO REGISTER
YOUR VOTE, SO IT MAY BE RECEIVED IN TIME FOR THE MEETING.
The Fund has retained a professional proxy solicitation firm, Georgeson
Shareholder Communications Inc. to assist you with the voting process. If you
have any questions regarding the voting of your shares, PLEASE CALL TOLL-FREE AT
1-866-216-0268.
Thank you for your support. Your prompt voting may save the Fund the necessity
and expense of further solicitations.
INSTRUCTIONS FOR AUTHORIZING YOUR PROXY
Aberdeen Australia Equity Fund, Inc. offers shareholders of record four
alternative ways of authorizing proxies:
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TELEPHONE Available only until 5:00 p.m. Eastern Daylight Time April 14,
------------- 2003.
o On a touch-tone telephone, call TOLL FREE 1-877-260-0388, 24 hours a
day, 7 days a week
o You will be asked to enter ONLY the Control Number shown below
o Have your proxy card ready, then follow the prerecorded instructions
o Your voting instructions will be confirmed and cast as you directed
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FAX
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o Simply fax your completed and signed proxy card (both front and back
sides) to 1-212-440-9009
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INTERNET Available only until 5:00 p.m. Eastern Daylight Time April 14,
------------- 2003.
o Visit the Internet voting Website at http://proxy.georgeson.com
o Enter the COMPANY NUMBER AND CONTROL NUMBER shown below and follow the
instructions on your screen
o You will incur only your usual Internet charges
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MAIL
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o Simply sign and date your proxy card and return it in the postage-paid
envelope
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COMPANY NUMBER CONTROL NUMBER
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TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
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PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE FUND'S STOCLHOLDERS VOTE "FOR"
PROPOSALS 1,2,3,4(A) AND 4(B), EACH AS MORE FULLY DESCRIBED IN THE PROXY
STATEMENT.
1. Election of the following four nominees to FOR WITHHOLD
serve as Class III Directors for three-year
terms and until their successors are
duly elected and qualify: Laurence / / / /
S. Freedman, David L. Elsum, Peter
J. O'Connell and William J. Potter
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE OR NOMINEES BY
MARKING THE FOR BOX AND STRIKING OUT THE NAME OF ANY SUCH NOMINEE. YOUR SHARES
WILL BE VOTED FOR THE REMAINING NOMINEE(S).
2. Proposal to amend the Fund's charter to FOR AGAINST ABSTAIN
increase the number of authorized shares
of stock, to authorize an undesignated / / / / / /
class of preferred stock and to authorize
the Board of Directors to classify and
reclassify any unissued shares of preferred
stock into one or more classes or series of
preferred stock or common stock
3. Proposal to amend the Fund's fundamental / / / / / /
borrowing policy
FOR AGAINST ABSTAIN
4(A). Proposal to amend the Fund's Management
Agreement to provide that fees paid / / / / / /
thereunder to the Investment Manager
will be based on all managed assets
4(B). Proposal to amend the Fund's Investment
Advisory Agreement to provide that fees / / / / / /
paid thereunder to the Investment Adviser
will be based on all managed assets
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 5, AS MORE FULLY
DESCRIBED IN THE PROXY STATEMENT.
5. Stockholder proposal that the stockholders
of the Fund ask the Board of Directors to
consider taking the steps necessary to / / / / / /
convert the Fund to an open-end fund or
otherwise permit stockholders to realize
net asset value for their shares
The undersigned authorizes the Proxy holder to vote and otherwise represent the
undersigned on any other matter that may properly come before the meeting or any
adjournment or postponement thereof in the discretion of the Proxy holder.
NOTE: PLEASE SIGN AS NAME APPEARS HEREIN. JOINT
OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, OFFICER OF CORPORATION
OR OTHER ENTITY OR IN ANOTHER REPRESENTATIVE CAPACITY,
PLEASE GIVE THE FULL TITLE UNDER THE SIGNATURE.
SIGNATURE
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SIGNATURE (IF HELD JOINTLY)
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DATE
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TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
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PROXY
ABERDEEN AUSTRALIA EQUITY FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- APRIL 15, 2003
The undersigned stockholder of Aberdeen Australia Equity Fund, Inc., a
Maryland corporation (the "Fund"), hereby appoints Beverley Hendry, William
J. Potter, and Timothy Sullivan, or any of them, with full power of
P substitution in each of them, to attend the Annual Meeting of Stockholders
of the Fund to be held at Dryden Hall, 7th Floor, Plaza Building, 751 Broad
Street, Newark, New Jersey on Tuesday April 15, 2003, at 1:00 p.m. (Eastern
R time), and any adjournment or postponement thereof, to cast on behalf of
the undersigned all votes that the undersigned is entitled to cast at such
meeting and otherwise to represent the undersigned at the meeting with all
O powers possessed by the undersigned if personally present at the meeting.
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Stockholders and of the accompanying Proxy Statement and revokes
X any proxy heretofore given with respect to such meeting.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS
Y INSTRUCTED ON THE REVERSE SIDE HEREOF. IF THIS PROXY IS EXECUTED BUT NO
INSTRUCTIONS ARE GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED
WILL BE CAST "FOR" EACH OF THE NOMINEES FOR DIRECTOR (PROPOSAL 1), "FOR"
PROPOSALS 2, 3, 4(A) AND 4(B), "AGAINST" PROPOSAL 5 AND IN THE DISCRETION
OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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SEE REVERSE SIDE
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