SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
The Spain Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ X / No fee required
/ / Fee computed on table below per Exchange Act Rule 14a6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials. / /
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO] (SM) THE SPAIN FUND, INC.
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1345 Avenue of the Americas, New York, New York 10105
Toll Free (800) 221-5672
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 30, 2004
To the Stockholders of The Spain Fund, Inc.:
Notice is hereby given that the Annual Meeting of
Stockholders (the "Meeting") of The Spain Fund, Inc., a Maryland
corporation (the "Fund"), will be held at the offices of the
Fund, 1345 Avenue of the Americas, 41st Floor, New York, New York
10105, on Wednesday, June 30, 2004 at 11:00 a.m., for the
following purposes, which are more fully described in the
accompanying Proxy Statement dated June 3, 2004:
1. To elect five Directors of the Fund to hold office for a
term of either one, two or three years, each such Director to
hold office until his or her successor is duly elected and
qualifies; and
2. To transact such other business as may properly come
before the Meeting.
The Board of Directors has fixed the close of business on
May 14, 2004 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
or any postponement or adjournment thereof. The enclosed proxy is
being solicited on behalf of the Board of Directors of the Fund.
Each stockholder who does not expect to attend the Meeting in
person is requested to complete, date, sign and promptly return
the enclosed proxy card.
By Order of the Board of Directors,
Mark R. Manley
Secretary
New York, New York
June 3, 2004
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YOUR VOTE IS IMPORTANT
Please indicate your voting directions on the enclosed Proxy
Card, sign and date it, and return it in the envelope provided,
which needs no postage if mailed in the United States. Your vote
is very important no matter how many shares you own. Please mark
and mail your proxy card promptly in order to save the Fund any
additional expense of further proxy solicitation and in order for
the Meeting to be held as scheduled.
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(SM) This registered service mark used under license from the
owner.
PROXY STATEMENT
THE SPAIN FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
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ANNUAL MEETING OF STOCKHOLDERS
June 30, 2004
-------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
The Spain Fund, Inc., a Maryland corporation (the "Fund"), to be
voted at the Annual Meeting of Stockholders of the Fund (the
"Meeting"), to be held at the offices of the Fund, 1345 Avenue of
the Americas, 41st Floor, New York, New York 10105, on Wednesday,
June 30, 2004 at 11:00 a.m. The solicitation will be made by mail
and the cost will be borne by the Fund. The Notice of Meeting,
this Proxy Statement and the accompanying Proxy Card are being
mailed to stockholders on or about June 3, 2004.
The Board of Directors has fixed the close of business on
May 14, 2004 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
and at any postponement or adjournment thereof (the "Record
Date"). The outstanding voting shares of the Fund as of the
Record Date consisted of 8,680,966 shares of common stock, each
share being entitled to one vote. All properly executed and
timely received proxies will be voted at the Meeting in
accordance with the instructions marked thereon or otherwise
provided therein. Accordingly, unless instructions to the
contrary are marked, proxies solicited on behalf of the Board of
Directors will be voted for the election of five Directors
(Proposal One). Any stockholder may revoke that stockholder's
proxy at any time prior to the exercise thereof by giving written
notice to the Secretary of the Fund at 1345 Avenue of the
Americas, New York, New York 10105, by signing and delivering to
the Secretary another proxy of a later date or by personally
voting at the Meeting.
Properly executed proxies may be returned with instructions
to abstain from voting or to withhold authority to vote (an
"abstention"). The shares represented by abstentions will be
considered present for purposes of determining the existence of a
quorum for the transaction of business. With respect to Proposal
One, which is a matter to be determined by an affirmative vote of
the holders of a majority of the outstanding shares of common
stock of the Fund, an abstention will have the effect of a vote
against the Proposal. If any proposal, other than Proposal One,
properly comes before the Meeting, shares represented by proxies
will be voted on all such proposals in the discretion of the
person or persons holding the proxies.
A quorum for the Meeting will consist of the presence in
person or by proxy of the holders of a majority of the shares
entitled to vote at the Meeting. Whether or not a quorum is
present at the Meeting, if sufficient votes in favor of the
position recommended by the Board of Directors on Proposal One
are not timely received, the persons named as proxies may, but
are under no obligation to, with no other notice than
announcement at the Meeting, propose and vote for one or more
adjournments of the Meeting for up to 120 days after the Record
Date to permit further solicitation of proxies. Shares
represented by proxies indicating a vote contrary to the position
recommended by the Board of Directors on Proposal One will be
voted against adjournment as to that proposal.
The Fund will bear the cost of this Proxy Statement. The
Fund has engaged Mutual Fund Investor Connect, 60 East 42nd
Street, New York, New York 10165, to assist the Fund in
soliciting proxies for the Meeting. The Fund will pay Mutual Fund
Investor Connect a fee of $2,000 for its services plus
reimbursement of out-of-pocket expenses.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, five Directors will be elected to serve for
terms of one, two and three years, as the case may be, and until
his or her successor is duly elected and qualifies. The
affirmative vote of the holders of a majority of the outstanding
shares of common stock of the Fund is required to elect a
Director. It is the intention of the persons named in the
enclosed proxy card to nominate and vote in favor of election of
the nominees listed below.
Pursuant to the Charter and Amended and Restated Bylaws of
the Fund (the "Bylaws"), the Board of Directors is divided into
three classes. The terms of the members of Class Three will
expire as of the Meeting and when their successors are duly
elected and qualify, the terms of the members of Class One will
expire as of the annual meeting of stockholders for 2005 and when
their successors are duly elected and qualify, and the terms of
the members of Class Two will expire as of the annual meeting of
stockholders for 2006 and when their successors are duly elected
and qualify. Upon expiration of the terms of office of the
members of each class as set forth above, the terms of their
successors in that class will continue until the end of their
terms and until their successors are duly elected and qualify.
Messrs. Norman S. Bergel, Daniel de Fernando Garcia and Ignacio
Gomez-Acebo are currently the Directors constituting Class One;
Messrs. Antonio Eraso and William H. Foulk, Jr. are currently the
Directors constituting Class Two; and Messrs. Francisco Gomez
Roldan and Juan Manuel Sainz de Vicuna and Ms. Inmaculada de
Habsburgo-Lorena are currently the Directors constituting Class
Three.
Under this classified Board structure, only those Directors
in a single class may be replaced in any one year. It would
require two years to replace a majority of the Board of
Directors, although Maryland law provides that stockholders may
remove Directors under certain circumstances, even if they are
not then standing for re-election and, under regulations of the
Securities and Exchange Commission (the "Commission"),
appropriate stockholder proposals may be included in the Fund's
annual proxy statement. This classified Board structure, which
may be regarded as an "anti-takeover" provision, may make it more
difficult for the Fund's stockholders to change the majority of
Directors and, thus, has the effect of maintaining the continuity
of management.
The Board of Directors at meetings held on August 6, 2003
and January 8, 2004, elected Messrs. Daniel de Fernando Garcia
and William H. Foulk, Jr., respectively, to fill vacancies
created by resignations. Under the Bylaws of the Fund, Messrs. de
Fernando Garcia and Foulk must stand for election at the Meeting,
which is the first meeting of stockholders after their election
as Directors by the Board of Directors.
The Board of Directors has nominated each of Ms. Inmaculada
de Habsburgo-Lorena and Messrs. Francisco Gomez Roldan and Juan
Manuel Sainz de Vicuna for re-election as a Director in Class
Three; Mr. William H. Foulk, Jr. for election as a Director in
Class Two; and Mr. Daniel de Fernando Garcia for election as a
Director in Class One. Each nominee has consented to serve as a
Director. The Board of Directors knows of no reason why any of
the nominees will be unable to serve, but in the event any
nominee is unable to serve or for good cause will not serve, the
proxies received indicating a vote in favor of such nominee will
be voted for a substitute nominee as the Board of Directors may
recommend.
A provision of the Fund's Bylaws (the "Qualification Bylaw")
requires, among other things, that to be eligible for nomination
as a Director, an individual must have either (i) a substantial
Spanish connection of a type specified, or (ii) be, or previously
have been, connected in a specified manner with the investment
adviser or subadviser (or any of their affiliates). The
Nominating Committee of the Board of Directors determines whether
an individual so qualifies and has determined that each of the
nominees named above satisfies the Bylaw requirements.
Although the Fund is a Maryland corporation, certain of the
Fund's Directors and officers are residents of Spain, Italy or
the United Kingdom, and substantially all of the assets of such
persons may be located outside of the United States. As a result,
it may be difficult for United States investors to effect service
upon such Directors or officers within the United States or to
realize judgments of courts of the United States predicated upon
civil liabilities of such Directors or officers under the federal
securities laws of the United States. The Fund has been advised
that there is substantial doubt as to the enforceability in
Spain, Italy and the United Kingdom of the civil remedies and
criminal penalties afforded by the federal securities laws of the
United States. Also, it is unclear if extradition treaties now in
effect between the United States and each of Spain, Italy and the
United Kingdom would subject Directors and officers residing in
those countries to effective enforcement of the criminal
penalties of the federal securities laws.
Certain information concerning the Fund's Directors,
including the nominees for election as Directors, is set forth
below.
Name, Address and Age Year Term Years of Principal Occupation(s), Including Number of Other
--------------------- as a Service* Directorships Held, During Past 5 Years Portfolios in Director-
Director -------- --------------------------------------- Fund Complex ships
Will Overseen by Held by
Expire Director Director
------ -------- or
Nominee
-------
INTERESTED
DIRECTORS **
Daniel de Fernando Garcia, 38 Class One 8 months Director, Private Banking and Asset 1 None
BBVA, Padilla, 17 (2005##) Management BBVA since October 2002.
28006 Madrid, Spain Since prior to 1998 he was associated
with J.P. Morgan in the following
capacities: Director, Asset Management
JP Morgan Private Banking; Head of
Asset Management & Private Banking
(Europe, Africa and The Orient);
Co-Head of AMS, Head of Investments and
Chairman & CEO of Morgan Gestion, S.A.
(JPM Madrid); Member of AMS European
Mgmt. Group, Member of PCG Europe
Management Team, Member of JPM Madrid
Management Committee, Member of AMS
European Mgmt Group, Equity Portfolio
Manager in the International Investment
Group (JPMIM London), Fixed Income
Portfolio Manager, Equity Portfolio
Manager and Director of Morgan Gestion,
S.A. (Mutual Fund Management Company).
Ignacio Gomez-Acebo, 72 Class One 9 years He is Senior Partner of Gomez-Acebo & 1 None
Gomez-Acebo & Pombo (2005) Pombo (law firm); Chairman of the Board
Paseo de la of Clarke, Modet & Co. and NOKIA Spain.
Castellana 246 12th Fl.
28046 Madrid, Spain
DISINTERESTED
DIRECTORS
Chairman of the Board Class Two 4 months He is an investment adviser and an 116 None
William H. Foulk, Jr., 71***# (2006##) independent consultant. He was formerly
2 Sound View Drive, Suite 100 Senior Manager of Barrett Associates,
Greenwich, Connecticut 06830 Inc., a registered investment adviser,
with which he had been associated since
prior to 1999. He was formerly Deputy
Comptroller and Chief Investment
Officer of the State of New York and,
prior thereto, Chief Investment Officer
of the New York Bank for Savings.
Norman S. Bergel, 54***# Class One 3 years He is an international consultant. He 1 The
S. Corrado 15 (2005) is Director of The Southern Africa Southern
Lido di Noto Fund, Inc. He was formerly Director of Africa
Noto BBV-Privanza, Deputy Chairman of Fund,
Prov. of Syracuse Alliance Capital Management (Pty.) Inc.
Italy Ltd., Deputy Chairman of Alliance MBCA,
Senior Vice President of Alliance
Capital Management Corporation
("ACMC"), Director of Alliance Capital
Ltd. ("ACL"), Managing Director of
Alliance Capital Management
International and Managing Director of
White Williams Private Equity Partners
GmbH.
Antonio Eraso, 63***# Class Two 2 years He is Non-executive Director of Mapfre, 1 None
Latinver, S.A. (2006) Heron, Santander Central Hispano
Paseo de la Castellana Activos Inmobiliarios, Advisor CEO
28046 Madrid, Spain Iberdrola. President of Heron Espana;
Advisor of CB Richard Ellis (Spain &
Portugal); Advisor of Bansa Leasing;
Advisor of Transolver (finance);
Advisor of Grupo Tecnobit S.A.
(defense); Advisor of Equifax Iberica;
President's Assessor of Iberdrola;
President's Assessor of Grupo Berge;
Assessor of Tishman & Speyer Espana
S.A.; Board's Assessor of Young &
Rubican Espana; Board's Assessor of
Gleeds Iberica (project management);
Member of the National Assembly and
Permanent Commission of ASNEF (National
Association of Financial Entities);
Spanish Representative of EURO-FINAS
(European Association of Finance);
formerly Advisor of Sedgwick Group
Espana.
Inmaculada de Habsburgo-Lorena, 58***# Class Three 16 years She is President and Chief Executive 1 None
Spanish Institute (2007##) Officer of The Spanish Institute;
684 Park Avenue Trustee of Samuel H. Kress Foundation;
New York, NY 10021 Founder and Trustee of the King Juan
Carlos International Center of New York
University Foundation; and member of
the Board of World Monuments Fund
Espana. She has received a Master of
Arts and a Master of Philosophy degree
from Columbia University and a Bachelor
of Arts degree from George Washington
University.
Francisco Gomez Roldan, 50***# Class Three 15 years He is Chief Financial Officer of 1 None
Santander Central Hispano (2007##) Santander Central Hispano. He was
Sevilla 3, 2A pl. formerly Chief Executive Officer of
28014 Madrid, Spain Banesto S.A.; Chief Executive Officer
of Argenteria, Caja Postal y Banco
Hipotecario; Deputy General Manager of
Banco Bilbao-Vizcaya, S.A., the parent
of Privanza; General Manager of BBV
Interactivos, S.A.; and General Manager
of Banca Catalana, S.A.
Juan Manuel Sainz de Vicuna, 76***# Class Three 16 years He is Honorary Chairman of Coca-Cola 1 None
Coca Cola International (2007##) Espana; President of the Fundacion
Josefa Valcarcel 36 Coca-Cola Espana, Director of Rendelsur
28027 Madrid, Spain (Coca-Cola franchise, Southern Spain);
member of the Fundacion de Amigos de
Museo del Prado, the Board of World
Monuments Fund Espana, Notre Dame
University Joan B. Kroc Institute for
International Peace Studies and the
Patronato of Universidad Pontificia de
Salamanca.
--------
* "Years of Service" refers to the total number of months or
years the Director has served as a Director.
** "Interested person," as defined in the Section 2(a)(19) of
the Investment Company Act, as amended (the "Act") of the
Fund because of an affiliation with either the Fund's
investment adviser, Alliance Capital Management L.P. or with
BBVA Privanza Gestora, S.G.I.I.C., S.A., the Fund's
sub-adviser ("Privanza").
*** Member of the Audit Committee of the Board of Directors of
the Fund.
# Member of the Nominating Committee of the Board of Directors
of the Fund.
## If elected/re-elected at the Meeting.
The dollar range of the Fund's securities owned by each
Director and the aggregate dollar range of securities owned in
the AllianceBernstein Fund Complex is set forth below.
Aggregate Dollar Range of
Equity Securities in the
Dollar Range of Equity Funds in the
Securities of the Fund as of AllianceBernstein Fund
May 30, 2004 Complex as of May 30, 2004
------------ --------------------------
Daniel de Fernando None None
Garcia
Ignacio Gomez-Acebo $1 - $10,000 $1 - $10,000
William H. Foulk, Jr. $1 - $10,000 Over $100,000
Norman S. Bergel None None
Antonio Eraso None None
Inmaculada de $1 - $10,000 $1 - $10,000
Habsburgo-Lorena
Francisco Gomez None None
Roldan
Juan Manuel Sainz de $1 - $10,000 $1 - $10,000
Vicuna
As of the Record Date, the Directors and officers of the
Fund as a group owned less than 1% of the Fund's common stock.
During the Fund's most recently completed fiscal year, the Fund's
Directors as a group did not engage in the purchase or sale of
securities of the Adviser or of any of its parents or
subsidiaries in an amount exceeding 1% of the relevant class of
securities.
During the fiscal year ended November 30, 2003, the Board of
Directors met 5 times. The Fund does not have a policy that
requires a Director to attend the Fund's annual meeting of
stockholders, and no Director attended the Fund's prior year's
annual meeting of stockholders.
The Fund's Board of Directors has two standing committees,
the Audit Committee and the Nominating Committee. The members of
the Audit and Nominating Committees are identified above in the
table listing Directors of the Fund. The Audit Committee is
established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934 and meets during the fiscal year
for the purposes set forth in the Audit Committee Charter. The
members of the Audit Committee are "independent" as required by
the applicable listing standards of the New York Stock Exchange.
The Audit Committee met 5 times during the Fund's most recently
completed fiscal year and the Nominating Committee met 2 times
during the Fund's most recently completed fiscal year. Mr.
Francisco Gomez Roldan attended fewer than 75% of the meetings of
the Nominating Committee.
The Fund's Board of Directors has recently adopted a charter
for its Nominating Committee, a copy of which is attached as
Exhibit A. Pursuant to the charter, the Nominating Committee
identifies, evaluates and selects and nominates, or recommends to
the Board of Directors, candidates for the Board. It also may set
standards or qualifications for Directors. The Nominating
Committee may consider candidates as Directors submitted by
current Directors, the Fund's investment adviser, Fund
stockholders and other appropriate sources.
The Nominating Committee will consider candidates submitted
by a stockholder or group of stockholders who have owned at least
5% of the Fund's outstanding common stock for at least two years
at the time of submission and who timely provide specified
information about the candidates and the nominating stockholder
or group. To be timely for consideration by the Nominating
Committee, the submission, including all required information,
must be submitted in writing to the attention of the Secretary at
the principal executive offices of the Fund not less than 120
calendar days before the date of the proxy statement for the
previous year's annual meeting of stockholders. The Nominating
Committee will consider only one candidate submitted by such a
stockholder or group for nomination for election at an annual
meeting of stockholders. The Nominating Committee will not
consider self-nominated candidates.
The Nominating Committee will consider and evaluate
candidates submitted by stockholders on the basis of the same
criteria as those used to consider and evaluate candidates
submitted from other sources. These criteria include the
candidate's relevant knowledge, experience, and expertise, the
candidate's satisfaction of the Qualification Bylaw, the
candidate's ability to carry out his or her duties in the best
interests of the Fund and the candidate's ability to qualify as a
disinterested Director. A detailed description of the criteria
used by the Nominating Committee as well as information required
to be provided by stockholders submitting candidates for
consideration by the Nominating Committee are included in Exhibit
A.
The Board of Directors has adopted a process for
stockholders to send communications to the Board. To communicate
with the Board of Directors or an individual Director of the
Fund, a stockholder must send a written communication to the
Fund's principal office at the address listed in the Notice of
Annual Meeting of Stockholders accompanying this Proxy Statement,
addressed to the Board of Directors or the individual Director,
c/o Mr. Mark R. Manley. All stockholder communications received
in accordance with this process will be forwarded to the Board
of Directors or the individual Director.
The Fund does not pay any fees to, or reimburse expenses of,
its Directors who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Directors during its fiscal year ended November 30, 2003, the
aggregate compensation paid to each of the Directors during the
fiscal year 2003 by all of the investment companies in the
AllianceBernstein Fund Complex and the total number of investment
companies in the AllianceBernstein Fund Complex with respect to
which each of the Directors serves as a director or trustee are
set forth below. Neither the Fund nor any other investment
company in the AllianceBernstein Fund Complex provides
compensation in the form of pension or retirement benefits to any
of its directors or trustees.
Number of Investment Number of Investment
Companies in the Portfolios within the
AllianceBernstein Fund AllianceBernstein Fund
Compensation from the Complex, including the Complex, including the
Compensation from AllianceBernstein Fund Fund, as to which the Fund, as to which the
the Fund during its Complex, including the Director is a Director Director is a Director
Name of Director Fiscal Year Fund, during 2003 or Trustee or Trustee
---------------- ----------- ----------------- ---------- ----------
Daniel de Fernando Garcia $-0 $-0 1 1
Ignacio Gomez-Acebo $-0 $-0 1 1
Norman S. Bergel* $11,000 $12,000 1 1
Antonio Eraso $12,000 $13,000 1 1
William H. Foulk, Jr. $-0 $ 241,739.50 51 116
Inmaculada de Habsburgo-Lorena $11,500 $12,500 1 1
Francisco Gomez Roldan $11,000 $11,500 1 1
Juan Manuel Sainz de Vicuna $12,000 $13,000 1 1
_______________________
* During 2003, Mr. Bergel also received $6,500 as compensation
from the AllianceBernstein Fund Complex for his service as director
of The Southern Africa Fund, Inc., which is no longer part of the
AllianceBernstein Fund Complex.
The Board of Directors recommends that the stockholders vote
FOR the election of each of the foregoing nominees to serve as a
Director of the Fund.
Officer Information
Certain information concerning the Fund's officers is set
forth below. The Fund's officers are elected annually by the
Board of Directors to serve until his or her successor is duly
elected and qualifies.
Position(s) -
Name, Address and Age (Month and Year First Elected) Principal Occupation during the past 5 years
------------------------------ ------------------------------ --------------------------------------------
Marc O. Mayer (46) President (1/04) Executive Vice President of ACMC since 2001;
1345 Avenue of the Americas, prior thereto, Chief Executive Officer of
New York, NY 10105 Sanford C. Bernstein & Co., LLC and its
predecessor since prior to 1999.
Edward D. Baker III (53) Senior Vice President (5/03) Senior Vice President and Chief Investment
Alliance Capital Management Officer - Emerging Markets of ACMC, with
International which he has been associated since prior to
53 Stratton Street 1999.
London, W1X 6JJ
Russel Brody (37) Vice President (2/98) A Vice President of ACMC, with which he has
Alliance Capital Management been associated since prior to 1999.
International
53 Stratton Street
London, W1X 6JJ
Cristina Fernandez-Alepuz (34) Vice President (10/97) Consultant to ACMC and the Fund, with which
Alliance Capital Management she has been associated since prior to 1999.
International
53 Stratton Street
London, W1X 6JJ
Mark D. Gersten (53) Treasurer and Chief Financial A Senior Vice President of Alliance Global
Alliance Global Investor Officer (6/88) Investor Services, Inc. ("AGIS") and Vice
Services, Inc. President of AllianceBernstein Investment
500 Plaza Drive Research and Management, Inc., with which he
Secaucus, New Jersey 07094 has been associated since prior to 1999.
Vincent S. Noto (39) Controller (7/97) A Vice President of AGIS, with which he has
Alliance Global Investor been associated since prior to 1999.
Services, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
Mark R. Manley (41) Secretary (12/03) Senior Vice President and Acting General
1345 Avenue of the Americas Counsel of ACMC,** with which he has been
New York, NY 10105 associated since prior to 1999.
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Audit Committee Report
The following Audit Committee Report was adopted by the
Audit Committee of the Fund.
The Audit Committee operates pursuant to a written charter
that was last amended and restated by the Fund's Board of
Directors on May 6, 2004, a copy of which is attached as Exhibit
B to this Proxy Statement. The purposes of the Audit Committee
are to 1) assist the Board of Directors in its oversight of (i)
the integrity of the Fund's financial statements and the
independent audit thereof; (ii) the Fund's compliance with legal
and regulatory requirements; (iii) the independent accountants'
independence, qualifications and performance; and (iv) the Fund's
compliance with applicable laws by receiving reports from counsel
who believe they have credible evidence of a material violation
of law by the Fund or by someone owing a fiduciary or other duty
to the Fund; and 2) to prepare this report. As set forth in the
Audit Committee Charter, management of the Fund is responsible
for the preparation, presentation and integrity of the Fund's
financial statements, the Fund's accounting and financial
reporting principles and internal controls and procedures
designed to assure compliance with accounting standards and
applicable laws and regulations. The independent accountants are
responsible for auditing the Fund's financial statements and
expressing an opinion as to their conformity with generally
accepted accounting principles.
In the performance of its oversight function, the Audit
Committee has considered and discussed the audited financial
statements with management and the independent accountants of the
Fund. The Audit Committee has also discussed with the independent
accountants the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees,
as currently in effect. The Audit Committee has also considered
whether the provision of any non-audit services not pre-approved
by the Audit Committee provided by the Fund's independent
accountants to the Adviser and to any entity controlling,
controlled by or under common control with the Adviser that
provides ongoing services to the Fund is compatible with
maintaining the accountants' independence. Finally, the Audit
Committee has received the written disclosures and the letter
from the independent accountants required by Independence
Standards Board Standard No. 1, Independence Discussions with
Audit Committees, as currently in effect, and has discussed with
the accountants the accountants' independence.
The members of the Audit Committee are not full-time
employees of the Fund and are not performing the functions of
auditors or accountants. As such, it is not the duty or
responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or
procedures or to set auditor independence standards. Members of
the Audit Committee necessarily rely on the information provided
to them by management and the independent accountants.
Accordingly, the Audit Committee's considerations and discussions
referred to above do not assure that the audit of the Fund's
financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted
accounting principles or that the Fund's accountants are in fact
"independent."
Based upon the reports and discussions described in this
report, and subject to the limitations on the role and
responsibilities of the Audit Committee referred to above and in
the Audit Committee Charter, the Audit Committee recommended to
the Board of Directors of the Fund that the audited financial
statements of the Fund be included in the Fund's annual report to
stockholders for the most recent fiscal period.
Submitted by the Audit Committee of the Fund's Board of Directors
Juan Manuel Sainz de Vicuna Antonio Eraso
Norman S. Bergel William H. Foulk, Jr.
Inmaculada de Habsburgo-Lorena Francisco Gomez Roldan
Independent Accountants
The Board of Directors, including a majority of the
Directors who are not "interested persons" of the Fund, as
defined by the Act, at a meeting held on November 19, 2003,
selected PricewaterhouseCoopers LLP, independent accountants, to
audit the Fund's accounts for the fiscal year ending November 30,
2004. PricewaterhouseCoopers LLP has audited the Fund's accounts
since the Fund's commencement of operations and has represented
that it does not have any direct financial interest or any
material indirect financial interest in the Fund. In reliance on
Rule 32a-4 under the Act, the Fund is not seeking stockholder
ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants. Representatives of
PricewaterhouseCoopers LLP are expected to attend the Meeting and
to have the opportunity to make a statement and respond to
appropriate questions from stockholders.
Independent Accountants' Fees
The following table sets forth the aggregate fees billed by
the independent accountants for the Fund's last two fiscal years for
professional services rendered for: (i) the audit of the Fund's
annual financial statements included in the Fund's annual reports
to stockholders; (ii) assurance and related services that are
reasonably related to the performance of the audit of the Fund's
financial statements and are not reported under (i), which
include advice and education on accounting and auditing issues,
quarterly press release reviews and preferred stock maintenance
testing; (iii) tax compliance, tax advice and tax return
preparation; and (iv) aggregate non-audit services provided to
the Fund, the Fund's Adviser and entities that control, are
controlled by or under common control with the Adviser that
provide ongoing services to the Fund ("Service Affiliates"),
which include conducting an annual internal control report
pursuant to Statement on Auditing Standards No. 70. No other
services were provided to any Fund during this period.
All Fees for
Non-Audit
Services
Provided to
the Fund, the
Adviser and
Audit Related Service
Audit Fees Fees* Tax Fees Affiliates
---------- ----- -------- ----------
2002 $60,000 $12,000 $14,000 $1,087,763
2003 $60,000 $14,500 $16,500 $732,291
*Audit related fees include $10,000 per year for
sub-custodial security counts, paid by the Adviser.
Beginning with audit and non-audit service contracts entered
into on or after May 6, 2003, the Fund's Audit Committee policies
and procedures require the pre-approval of all audit and
non-audit services provided to the Fund by the Fund's independent
accountants. The Fund's Audit Committee policies and procedures
also require pre-approval of all audit and non-audit services
provided to the Adviser and Service Affiliates to the extent that
these services are directly related to the operations or
financial reporting of the Fund. Accordingly, all of the amounts
in the table for Audit Fees, Audit Related Fees and Tax Fees for
2003 are for services pre-approved by the Fund's Audit Committee.
The amounts of the Fees for Non-Audit Services provided to the
Fund, the Adviser and Service Affiliates in the table for the
Fund that were subject to pre-approval by the Audit Committee for
2003 were $31,000 (comprising $14,500 of audit related fees and
$16,500 of tax fees). The Audit Committee of the Fund has
considered whether the provision of any non-audit services not
pre-approved by the Audit Committee provided by the Fund's
independent accountants to the Adviser and Service Affiliates is
compatible with maintaining the accountants' independence.
INFORMATION AS TO THE FUND'S
INVESTMENT ADVISER,
SUB-ADVISER AND ADMINISTRATOR
The Fund's investment adviser and administrator is Alliance
Capital Management L.P., with principal offices at 1345 Avenue of
the Americas, New York, New York 10105. The Fund's sub-adviser is
BBVA Privanza Gestora, S.G.I.I.C., S.A., with principal offices
at 17 Padilla, Madrid, Spain 28006.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 30(h) of the Act and the rules under Section 16 of
the Securities Exchange Act of 1934, as amended, require that the
Directors and officers of the Fund and the Directors of ACMC,
among others, file with the Commission and the New York Stock
Exchange, Inc. initial reports of ownership and reports of
changes in ownership of shares of the Fund. During the fiscal
year ended November 30, 2003, all such reports were timely filed.
OTHER MATTERS
Management of the Fund does not know of any matters to be
presented at the Meeting other than those mentioned in this Proxy
Statement. Therefore, the only other matters that may properly
come before the Meeting in accordance with the Amended and
Restated Bylaws are those presented by or at the direction of the
Board of Directors. If any such matter were properly to come
before the Meeting, the shares represented by proxies will be
voted with respect thereto in the discretion of the person or
persons holding the proxies.
According to information filed with the Commission, the
following persons were the beneficial owners of more than 5% of
the Fund's outstanding common stock as of the Record Date.
Percent of
Amount of Common Stock
Name and Address Beneficial Based on Shares
of Beneficial Owner Ownership Outstanding
------------------- --------- -----------
Banco Bilbao-Vizcaya, S.A. 1,500,000 shares 17.52%
Plaza de San Nicholas 4
48005 Bilbao, Spain
SUBMISSION OF PROPOSALS FOR THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended for inclusion in the
Fund's proxy statement and form of proxy relating to the annual
meeting of stockholders of the Fund for 2005 (the "2005 Annual
Meeting") must be received by the Fund by February 3, 2005. The
submission by a stockholder of a proposal for inclusion in the
proxy statement does not guarantee that it will be included.
Stockholder proposals are subject to certain regulations under
the federal securities laws and the Maryland General Corporation
Law and must be submitted in accordance with the Fund's Amended
and Restated Bylaws. For a stockholder proposal to be presented
at that meeting in accordance with the Fund's Amended and
Restated Bylaws, the proposal must be delivered by a stockholder
of record to the Secretary of the Fund not earlier than January
4, 2005 and not later than 5:00 p.m., Eastern Time, on February
3, 2005.
The persons named as proxies for the 2005 Annual Meeting
will with respect to proxies in effect at that meeting have
discretionary authority to vote on any matter presented for
action at that meeting unless the Fund receives notice of the
matter within the period specified by the advance notice
provision in the Fund's Amended and Restated Bylaws, described
above. If the Fund receives such timely notice, these persons
will not have this authority except as provided in the applicable
rules of the Commission.
REPORTS TO STOCKHOLDERS
The Fund will furnish each person to whom this Proxy
Statement is delivered with a copy of the Fund's latest annual
report to stockholders and its subsequent semi-annual report to
stockholders, if any, upon request and without charge. To request
a copy, please call AllianceBernstein at (800) 227-4618 or write
to Gary Beckham at Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, New York 10105.
By Order of the Board of Directors,
Mark R. Manley
Secretary
June 3, 2004
New York, New York
Exhibit A
The Spain Fund, Inc.
Nominating Committee Charter
(Adopted as of May 6, 2004)
The Board of Directors ("Board") of The Spain Fund, Inc.
("Fund"), has adopted this Charter to govern the activities of
the Nominating Committee (the "Committee") of the Board.
Statement of Purposes and Responsibilities
The primary purposes and responsibilities of the Committee are
(i) to identify individuals qualified to become members of the
Board in the event that a position is vacated or created, (ii) to
consider all candidates proposed to become members of the Board,
subject to the procedures and policies set forth in this Charter,
the Fund's Bylaws or resolutions of the Board, (iii) to select
and nominate, or recommend for nomination by the Board,
candidates for election as Directors, (iv) to determine whether
candidates satisfy the qualifications set forth in Article III,
Section 1(c) of the Fund's Bylaws ("Qualification Bylaw") and (v)
to set any other necessary standards or qualifications for
service on the Board.
Organization and Governance
The Committee shall be composed of as many Directors as the Board
shall determine in accordance with the Fund's Bylaws, but in any
event not less than two Directors. The Committee must consist
entirely of Board members ("Independent Directors") who are not
"interested persons" of the Fund, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended. The Board may
remove or replace any member of the Committee at any time in its
sole discretion.
One or more members of the Committee may be designated by the
Board as the Committee's chairman or co-chairman, as the case may
be.
Committee meetings shall be held in accordance with the Fund's
Bylaws as and when the Committee or the Board determines
necessary or appropriate. Except as may be otherwise set forth in
the Fund's Bylaws, the chairman, a co-chairman or any two members
of the Committee may set the time and place of its meeting unless
the Board shall otherwise provide.
Criteria for Director Nominees
The Committee may take into account a wide variety of criteria in
considering Director candidates, including (but not limited to):
(i) the candidate's knowledge in matters relating to the
investment company industry; (ii) any experience possessed by the
candidate as a director or senior officer of other public
companies; (iii) the candidate's educational background; (iv) the
candidate's reputation for high ethical standards and personal
and professional integrity; (v) any specific financial, technical
or other expertise possessed by the candidate, and the extent to
which such expertise would complement the Board's existing mix of
skills and qualifications; (vi) the candidate's perceived ability
to contribute to the ongoing functions of the Board, including
the candidate's ability and commitment to attend meetings
regularly, work collaboratively with other members of the Board
and carry out his or her duties in the best interests of the
Fund; (vii) the candidate's ability to qualify as an Independent
Director for purposes of the Investment Company Act of 1940, as
amended; (viii) the candidate's satisfaction of the Qualification
Bylaw; and (ix) such other criteria as the Nominating Committee
determines to be relevant in light of the existing composition of
the Board and any anticipated vacancies or other factors. It is
the Board's policy that Directors of the Fund normally may not
serve in a similar capacity on the board of a registered
investment company that is not sponsored by the Fund's investment
adviser or its affiliates.
Identification of Nominees
In identifying potential nominees for the Board, the Committee
may consider candidates recommended by one or more of the
following sources: (i) the Fund's current Directors, (ii) the
Fund's officers, (iii) the Fund's investment adviser(s), (iv) the
Fund's stockholders (see below) and (v) any other source the
Committee deems to be appropriate. The Committee will not
consider self-nominated candidates. The Committee may, but is not
required to, retain a third party search firm at the Fund's
expense to identify potential candidates.
Consideration of Candidates Recommended by Stockholders
The Committee will consider and evaluate nominee candidates
properly submitted by stockholders on the basis of the same
criteria used to consider and evaluate candidates recommended by
other sources. Nominee candidates proposed by stockholders will
be properly submitted for consideration by the Committee only if
the qualifications and procedures set forth in Appendix A of this
Charter, as it may be amended from time to time by the Committee
or the Board, are met and followed (recommendations not properly
submitted will not be considered by the Committee).
Appendix A
Procedures for the Nominating Committee's
Consideration of Candidates Submitted
by Stockholders
-----------------------------------------
(As of May 6, 2004)
A candidate for nomination as a Director submitted by a
stockholder will not be deemed to be properly submitted to the
Committee for the Committee's consideration unless the following
qualifications have been met and procedures followed:
1. A stockholder or group of stockholders (referred to in
either case as a "Nominating Stockholder") that,
individually or as a group, has beneficially owned at least
5% of the Fund's common stock for at least two years prior
to the date the Nominating Stockholder submits a candidate
for nomination as a Director may submit one candidate to the
Committee for consideration at an annual meeting of
stockholders.
2. The Nominating Stockholder must submit any such
recommendation (a "Stockholder Recommendation") in writing
to the Fund, to the attention of the Secretary, at the
address of the principal executive offices of the Fund.
3. The Stockholder Recommendation must be delivered to or
mailed and received at the principal executive offices of
the Fund not less than 120 calendar days before the date of
the Fund's proxy statement released to stockholders in
connection with the previous years' annual meeting.
4. The Stockholder Recommendation must include: (i) a statement
in writing setting forth
(A) the name, date of birth, business address and
residence address of the person recommended by the
Nominating Stockholder (the "candidate"); (B) any
position or business relationship of the candidate,
currently or within the preceding five years, with the
Nominating Stockholder or an Associated Person of the
Nominating Stockholder (as defined below); (C) the
class or series and number of all shares of the Fund
owned of record or beneficially by the candidate, as
reported to such Nominating Stockholder by the
candidate; (D) any other information regarding the
candidate that is required to be disclosed about a
nominee in a proxy statement or other filing required
to be made in connection with the solicitation of
proxies for election of Directors pursuant to Section
20 of the Investment Company Act of 1940, as amended
(the "1940 Act") and the rules and regulations
promulgated thereunder; (E) whether the Nominating
Stockholder believes that the candidate is or will be
an "interested person" of the Fund (as defined in the
1940 Act) and, if believed not to be an "interested
person," information regarding the candidate that will
be sufficient for the Fund to make such determination;
(F) information sufficient for the Committee to
determine that the candidate satisfies the
Qualification Bylaw, and (G) information as to the
candidate's knowledge of the investment company
industry, experience as a director or senior officer of
public companies, directorships on the boards of other
registered investment companies and educational
background ; (ii) the written and signed consent of the
candidate to be named as a nominee and to serve as a
Director if elected; (iii) the written and signed
agreement of the candidate to complete a directors' and
officers' questionnaire if elected; (iv) the Nominating
Stockholder's consent to be named as such by the Fund;
(v) the class or series and number of all shares of the
Fund owned beneficially and of record by the Nominating
Stockholder and any Associated Person of the Nominating
Stockholder and the dates on which such shares were
acquired, specifying the number of shares owned
beneficially but not of record by each, and stating the
names of each as they appear on the Fund's record books
and the names of any nominee holders for each; and (vi)
a description of all arrangements or understandings
between the Nominating Stockholder, the candidate
and/or any other person or persons (including their
names) pursuant to which the recommendation is being
made by the Nominating Stockholder. "Associated Person
of the Nominating Stockholder" as used in this
paragraph 4 means any person required to be identified
pursuant to clause (vi) and any other person
controlling, controlled by or under common control
with, directly or indirectly, (a) the Nominating
Stockholder or (b) any person required to be identified
pursuant to clause (vi).
5. The Committee may require the Nominating Stockholder to
furnish such other information as it may reasonably require
or deem necessary to verify any information furnished
pursuant to paragraph 4 above or to determine the
qualifications and eligibility of the candidate proposed by
the Nominating Stockholder to serve on the Board. If the
Nominating Stockholder fails to provide such other
information in writing within seven days of receipt of
written request from the Committee, the recommendation of
such candidate as a nominee will be deemed not properly
submitted for consideration, and will not be considered, by
the Committee.
Exhibit B
Audit Committee Charter
For
Registered Investment Companies in the Alliance Complex
(each, a "Company")
I. Committee Membership:
The Audit Committee shall be composed of at least three
directors and shall satisfy the independence requirements of
Rule 10A-3 under the Securities Exchange Act of 1934 (the
"1934 Act").(1) The terms "directors" and "Board of
Directors" shall mean "trustees" and "Trustees" in the case
of Companies that are organized as trusts.
--------
(1) In order to satisfy Rule 10A-3 of the 1934 Act, a member of
the Audit Committee may not (1) accept directly or
indirectly any consulting, advisory or other compensatory
fee from the Company other than (a) director's fees and (b)
any other regular benefits that other directors receive, or
(2) be an "interested person" of the Company as such term is
defined in section 2(a)(19) of the Investment Company Act of
1940.
The Board of Directors (the "Board") shall determine that
each Audit Committee member is "financially literate," and
that one member of the Audit Committee has "accounting or
related financial management expertise," as such
qualifications are interpreted by the Board in its business
judgment, and whether any member of the Audit Committee is
an "audit committee financial expert," as defined by the
Securities and Exchange Commission (the "SEC"). If the Board
has determined that a member of the Audit Committee is an
audit committee financial expert, it may presume that such
member has accounting or related financial management
expertise.
No director may serve as a member of the Audit Committee if
such director serves on the audit committees of more than
two other public companies unless the Board determines that
such simultaneous service would not impair the ability of
such director to serve effectively on the Audit Committee.
The Board has determined that service on the Audit Committee
of the Company and the audit committees of any other
registered investment company in the Alliance Complex should
be considered service on a single public company audit
committee for purpose of the three-audit committee
limitation.
Members of the Audit Committee shall be appointed by the
Board and shall serve at the pleasure of the Board and for
such term or terms as the Board may determine. The Audit
Committee shall designate one member of the Audit Committee
as its chairman.
II. Committee Purposes:
The purposes of the Audit Committee are to:
1. assist the Board in its oversight of:
(i) the integrity of Company's financial statements
and the independent audit thereof;
(ii) the Company's compliance with legal and regulatory
requirements;
(iii) the independence, qualifications and performance
of the independent accountants; and
(iv) the Company's compliance with applicable laws by
receiving reports from counsel who believe they
have credible evidence of a material violation of
law by the Company or by someone owing a fiduciary
or other duty to the Company (or that such a
violation is occurring or is about to occur),
including reports made pursuant to the SEC's
Standards of Professional Conduct for Attorneys.
2. prepare an audit committee report for inclusion in the
Company's annual proxy statement, if such proxy
statement is required by applicable SEC rules.
The function of the Audit Committee is oversight. The
management of the Company, including contractually obligated
service providers, are responsible for the preparation,
presentation and integrity of the Company's financial
statements. Management and applicable service providers are
responsible for maintaining appropriate accounting and
financial reporting principles and policies and internal
control over financial reporting and other procedures that
provide for compliance with accounting standards and
applicable laws and regulations. The independent accountants
are responsible for planning and carrying out a proper audit
of the Company's annual financial statements, and providing
such other services to the Company as may be agreed to from
time to time. In fulfilling their responsibilities
hereunder, it is recognized that the members of the Audit
Committee are not full-time employees of the Company, and
are not and do not represent themselves to be performing the
functions of accountants or auditors, including in respect
of auditor independence. As such, in fulfilling their
oversight duties under this Charter, it is neither the duty
nor the responsibility of the Audit Committee or its members
to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor
independence standards, and each member of the Audit
Committee shall be entitled to rely on (i) the integrity of
those persons and organizations within and outside the
Company from which it receives information, (ii) the
accuracy of the financial and other information provided to
the Audit Committee by such persons or organizations absent
actual knowledge to the contrary (which shall be promptly
reported to the Board) and (iii) representations made by
management or the independent accountants as to any
non-audit services provided by the independent accountants
to the Company, Alliance Capital Management L.P., the
Company's investment adviser (the "Adviser"), and any entity
controlling, controlled by or under common control with the
Adviser which provides services to the Company
(collectively, the "Adviser Entities").
The independent accountants for the Company shall report
directly to the Audit Committee.
The independent accountants shall submit to the Audit
Committee annually a formal written statement (the
"Auditors' Statement") describing: the independent
accountants' internal quality-control procedures; any
material issues raised by the most recent internal
quality-control review or peer review of the independent
accountants, or by any inquiry or investigation by
governmental or professional authorities, within the
preceding five years, respecting one or more independent
audits carried out by the independent accountants, and any
steps taken to deal with any such issues; and (to assess the
auditors' independence) all relationships between the
independent accountants and (a) the Company, (b) the
Adviser, and (c) any entity in a control relationship with
the Adviser, whether or not it provides services to the
Company, including at least the matters set forth in
Independence Standards Board No. 1 and any other required
information, including information required by relevant
Public Company Accounting Oversight Board rules, standards
and pronouncements. The description of the relationships
should include a description of the non-audit services
including the fees associated therewith, that were not
pre-approved by the Company's Audit Committee. The Auditors'
Statement may be in more than one document, and a portion of
the required information may be provided by the Adviser to
the extent permitted by applicable law and other
requirements.
The independent accountants shall submit to the Audit
Committee annually a formal written statement of the fees
billed in each of the last two fiscal years for each of the
following categories of services rendered by the independent
accountants: (i) the audit of the Company's annual financial
statements and any reviews of the financial statements
included in any regulatory filings of the Company or
services that are normally provided by the independent
accountants in connection with statutory and regulatory
filings or engagements; (ii) assurance and related services
not included in clause (i) that are reasonably related to
the performance of the audit or review of the Company's
financial statements, in the aggregate and by each service;
(iii) tax compliance, tax advice and tax planning services,
in the aggregate and by each service; and (iv) all other
products and services rendered by the independent
accountants to the Company, the Adviser or the Adviser
Entities, in the aggregate and by each service. The
statement as to (ii), (iii) and (iv) should include (and
separately disclose) fees billed in each of the last two
fiscal years for the indicated services to (a) the Company,
(b) the Adviser, and (c) the Adviser Entities.
III. Committee Structure and Operations:
The Audit Committee shall meet semi-annually, or more
frequently if circumstances dictate, to discuss with
management and the independent accountants the annual
audited financial statements and to address the matters set
forth in Article IV. The Audit Committee should meet
separately at least annually with each of management and the
independent accountants to discuss any matters that the
Audit Committee or any of these persons or firms believes
should be discussed privately. The Audit Committee may
request any officer or employee of the Company or of any
service provider, outside counsel to the Company or to the
independent directors, or representatives of the Company's
independent accountants to attend a meeting of the Audit
Committee or to meet with any members of, or consultants to,
the Audit Committee. Members of the Audit Committee may
participate in a meeting of the Audit Committee by means of
conference call or similar communications equipment by which
all persons participating in the meeting can hear each
other.
IV. Committee Duties and Powers:
To carry out its purposes, the Audit Committee shall have
the following duties and responsibilities:
1. with respect to the independent accountants,
(v) to be directly responsible for the appointment,
compensation, retention and oversight of the work
of the independent accountants (including the
resolution of disagreements between management and
the independent accountants regarding financial
reporting) and, in connection therewith, to review
and evaluate matters potentially affecting the
independence and capabilities of the independent
accountants;(2)
--------
(2) Note that this requirement does not preclude the Audit
Committee from obtaining the input of management, but these
responsibilities must not be delegated to management. The
Investment Company Act of 1940 requires that the appointment
of independent accountants be approved by the vote in person
of a majority of the independent directors. This can be
accomplished by Board ratification of the appointment by the
Audit Committee.
(vi) to be directly responsible for the appointment,
compensation, retention and oversight of the work
of any other registered public accounting firm
engaged for the purpose of preparing or issuing an
audit report or to perform audit, review or
attestation services, which firm shall also report
directly to the Audit Committee;
(vii) to pre-approve, in accordance with the Policies
and Procedures for the Pre-Approval of Services to
be Performed by the Company's Independent
Accountant (the "Pre-Approval Policies and
Procedures") attached hereto as Annex A, all audit
and non-audit services provided by the independent
accountants to the Company as well as any
applicable non-audit services provided by the
independent accountants to the Adviser or any
Adviser Entities that provide ongoing services to
the Company that relate directly to the operations
and financial reporting of the Company (the
"Related Services");
(viii) to obtain assurances from the independent
accountants that the audit was conducted in a
manner consistent with Section 10A of the 1934
Act;
(ix) to obtain from the independent accountants in
connection with any audit a timely report relating
to the Company's annual audited financial
statements describing all critical accounting
policies and practices used, all alternative
treatments within accounting principles generally
accepted in the United States ("GAAP") for
policies and practices related to material items
that have been discussed with management,
ramifications of the use of such alternative
disclosures and treatments, and the treatment
preferred by the independent accountants, and any
material written communications between the
independent accountants and management, such as
any "management" letter or schedule of unadjusted
differences;
(x) to ensure that the independent accountants prepare
and deliver annually an Auditors' Statement (it
being understood that the independent accountants
are responsible for the accuracy and completeness
of this Statement), and to discuss with the
independent accountants any relationships or
services disclosed in this Statement that may
impact the objectivity and independence of the
Company's independent accountants;
(xi) to review and evaluate the qualifications,
performance and independence of the independent
accountants, as well as the lead partner of the
independent accountants;
(xii) to discuss with management the timing and process
for implementing the rotation of the lead audit
partner, the concurring partner and any other
active audit engagement team partner and consider
whether there should be a regular rotation of the
audit firm itself; and
(xiii) to take into account the opinions of management
in assessing the independent accountants'
qualifications, performance and independence.
2. with respect to accounting principles and policies,
financial reporting and internal control over financial
reporting,
(i) to advise management, the relevant service
providers and the independent accountants that
they are expected to provide or cause to be
provided to the Audit Committee a timely analysis
of significant issues and practices relating to
accounting principles and policies, financial
reporting and internal control over financial
reporting, including, without limitation,
significant issues discussed with the national
office respecting auditing or accounting issues
presented by the engagement;
(ii) to consider any reports or communications (and
management's and/or applicable service providers'
responses thereto) submitted to the Audit
Committee by the independent accountants required
by auditing standards generally accepted in the
United States ("GAAS"), as they may be modified or
supplemented, including reports and communications
related to:
o deficiencies, including significant
deficiencies or material weaknesses, in
internal control identified during the audit
or other matters relating to internal control
over financial reporting;
o consideration of fraud in a financial
statement audit;
o detection of illegal acts;
o the independent accountants' responsibility
under GAAS;
o any restrictions on audit scope;
o significant accounting policies;
o management judgments and accounting
estimates;
o any accounting adjustments arising from the
audit that were noted or proposed by the
accountants but were passed (as immaterial or
otherwise);
o the responsibility of the independent
accountants for other information in
documents containing audited financial
statements;
o disagreements with management;
o consultation by management with other
independent accountants;
o major issues discussed with management prior
to retention of the independent accountants;
o difficulties encountered with management in
performing the audit;
o the independent accountants' judgments about
the quality of the Company's accounting
principles, and of any changes thereto; and
o reviews, if any, of interim financial
information conducted in accordance with GAAS
by the independent accountants; and
(iii) to meet with management, the independent
accountants and, if appropriate, the relevant
service providers:
o to discuss the scope of the annual audit or
any audit or review of interim financial
statements;
o to discuss the audited financial statements
and other periodic reports, if any, including
any Company disclosure relating to
management's discussion of fund performance;
o to review the following disclosures required
to be made to the Audit Committee by the
independent accountants in accordance with
Item 9(e) of Schedule 14A of the 1934 Act:
(a) the percentage of audit-related
services, tax services and all other
services that were approved by the Audit
Committee pursuant to the Pre-Approval
Policies and Procedures;
(b) the aggregate non-audit fees billed by
the Company's accountant for services
rendered to the Company, the Adviser and
the Adviser Entities for the last two
fiscal years of the Company;
(c) fees billed for services rendered to the
Company and, separately, fees for
Related Services;
o to discuss any significant matters arising
from any audit or report or communication
referred to in item 2(ii) above, whether
raised by management or the independent
accountants, relating to the Company's
financial statements;
o to review the effects of alternative GAAP
methods on the financial statements;
o to discuss any problems or difficulties the
independent accountants encountered in the
course of the audit, including any
restrictions on their activities or access to
requested information and management's
response to such problems or difficulties,
and to resolve significant disagreements
between management and the independent
accountants;
o to discuss any "management" or "internal
control" letter issued, or proposed to be
issued, by the independent accountants to the
Company;
o to review the opinion rendered, or the form
of opinion the independent accountants
propose to render, to the Board and
shareholders;
o to discuss any significant communications
between the audit team and the independent
accountant's national office respecting
auditing or accounting issues presented by
the engagement;
o to discuss, as appropriate: (a) any major
issues regarding accounting principles and
financial statement presentations, including
any significant changes in the Company's
selection or application of accounting
principles, and major issues as to the
adequacy of the Company's internal controls
and any special audit steps adopted in light
of material control deficiencies; (b)
analyses prepared by management and/or the
independent accountants setting forth
significant financial reporting issues and
judgments made in connection with the
preparation of the financial statements,
including analyses of the effects of
alternative GAAP methods on the financial
statements; and (c) the effect of regulatory
and accounting initiatives on the financial
statements of the Company;
o to discuss allocations of expenses between
the Company and other entities and, if
applicable, among different series of the
Company and among different classes of shares
of the Company;
o to discuss the Company's compliance with
Subchapter M and, if applicable, Subchapter
L, of the Internal Revenue Code of 1986, as
amended;
o to discuss the Company's compliance with Rule
2a-7 of the Investment Company Act of 1940,
to the extent that such Rule applies to the
Company;
o to discuss with management and the
independent accountants their respective
procedures to assess the appropriateness of
securities prices provided by external
pricing services;
o to discuss with independent accountants their
conclusions as to the reasonableness of
procedures employed to determine the fair
value of securities for which market
quotations are not readily available,
management's adherence to such procedures and
the adequacy of supporting documentation;
o to discuss with management and the
independent accountants any reports issued by
independent accountants regarding the
Company's transfer, custody and accounting
agents;
o to discuss the report of the independent
accountants on the Company's system of
internal accounting controls required to be
filed with the Company's Form N-SAR;
o to discuss significant changes to the
Company's accounting principles, policies,
controls, procedures and practices proposed
or contemplated by management;
o to discuss significant changes to auditing
principles and to auditing policies,
controls, procedures and practices
implemented or expected to be implemented by
the independent accountants; and
o to inquire about significant risks and
exposures, if any, and the steps taken to
monitor, manage and minimize such risks; and
(iv) to discuss with the Company and its legal advisors
any significant legal matters that may have a
material effect on the Company's business,
financial statements or compliance policies,
including material notices to any inquiries
received from governmental agencies; and
3. with respect to authority and responsibilities of the
Audit Committee upon receipt of a report from counsel
to Company or to the independent directors concerning
(i) a material violation of law by the Company or by
someone with a fiduciary or other duty to the Company
or (ii) a material violation of the Code of Ethics (the
"Code") by the Company's Principal Executive Officer,
Principal Financial and Accounting Officer and
Controller ("Covered Officers"),
(i) to initiate a reasonable inquiry into the evidence
presented to determine whether a material
violation of law or of the Code in fact has
occurred, is occurring or is about to occur, which
may include an investigation by the Company's
chief legal officer or outside attorneys;
(ii) if the Audit Committee upon investigation
reasonably determines that no violation of law or
of the Code exists, to notify the reporting
counsel of the basis for that determination;
(iii) if the Audit Committee determines upon
investigation that a violation of law does or may
exist, to take all reasonable steps to adopt an
appropriate response (which may include referral
of the matter to the Board) and to advise the
reporting counsel (and, to the extent the Audit
Committee believes appropriate or required,
others, such as the chief legal officer and chief
executive officer) of that response;
(iv) if the Audit Committee determines upon
investigation that a violation of the Code does or
may exist, to inform and make a recommendation to
the Board, who will consider appropriate action;
(v) to make the determinations required by the
foregoing by majority vote and to ensure that no
member shall act in contravention of any such
majority determination; and
(vi) to consult with the Company's chief legal officer
in fulfilling their responsibilities hereunder
(unless the circumstances reasonably dictate that
such consultation would not be appropriate) and to
have reasonable access at the Company's expense to
consult or retain legal counsel or other expert
assistance; and
4. with respect to reporting, recommendations and other
matters,
(i) to provide advice to the Board in electing the
principal accounting officer of the Company;
(ii) to review with the Company's principal executive
officer and/or principal financial officer, in
connection with their certifications on Form
N-CSR, any significant deficiencies or material
weaknesses in the design or operation of internal
control over financial reporting which are
reasonably likely to adversely affect the
Company's ability to record, process and summarize
and report financial information and as to the
existence of any fraud, whether or not material,
that involves management or other employees who
have a significant role in the Company's internal
control over financial reporting;
(iii) to establish procedures for the receipt,
retention and treatment of complaints received by
the Company regarding accounting, internal
accounting controls, or auditing matters, and for
the confidential, anonymous submission by
employees of the Company or the Adviser or
employees of any service provider that provides
accounting related services to the Company, of
concerns regarding questionable accounting or
auditing matters, and to address reports from
attorneys or accountants about possible breaches
of federal or state securities laws or fiduciary
duty;
(iv) to investigate or initiate an investigation of
reports of improprieties or suspected
improprieties in connection with the Company's
accounting or financial reporting and to retain
independent counsel, accountants or others to
advise the Audit Committee or assist in the
conduct of an investigation, as it deems necessary
or appropriate, without seeking approval of the
Board or management;
(v) to prepare any report or other disclosures
required by the SEC to be included in the
Company's annual proxy statement;(3)
--------
(3) Closed-end investment companies must include in their proxy
statements relating to the election of directors a signed
report of the Audit Committee in which the Audit Committee
states whether it has (i) reviewed and discussed the audited
financial statements, (ii) discussed the matters to be
discussed under SAS 61 and (iii) received from and discussed
with the independent accountants their Statement as to
whether, based on these three items, the Audit Committee
recommended to the Board of Directors the inclusion of the
audited financial statements in the Company's annual report
required by ss.30(e) of the Investment Company Act of 1940.
(vi) to grant waivers, as appropriate, to the Code
sought by Covered Officers;
(vii) to prepare and issue the evaluation required
under "Performance Evaluation" below;
(viii) to advise the Board with respect to the
Company's policies and procedures regarding
compliance with applicable laws and regulations
and with the Company's Code of Business Conduct
and Ethics;
(ix) to review the reports submitted by the Adviser
relating to issues arising under the Adviser's
Code of Ethics that relate to the Adviser's
investment company business, including all
violations of the Code, which reports are to be
provided at least quarterly (more frequently if
the Audit Committee so instructs);
(x) to review the quality reports submitted by the
Adviser's Internal Compliance Controls Committee
relating to internal compliance matters, which
reports are to be provided at least quarterly
(more frequently if the Audit Committee so
instructs);
(xi) to review policies of the Adviser, the Adviser
Affiliates and any other entity within the
Company's Investment Company Complex, as such term
is defined in Rule 2-01(f)(14) of Regulation S-X,
for hiring employees or former employees of the
independent accountants whose responsibilities are
to include an accounting role or financial
reporting oversight role with respect to the
Company;
(xii) to report its activities to the full Board on a
regular basis and to make such recommendations
with respect to the above and other matters as the
Audit Committee may deem necessary or appropriate;
and
(xiii) to perform such other functions and to have such
powers as may be necessary or appropriate in the
efficient and lawful discharge of the foregoing.
V. Delegation to Subcommittee:
The Audit Committee may, in its discretion, delegate all or
a portion of its duties and responsibilities to a
subcommittee of the Audit Committee. The Board and the Audit
Committee have authorized the Chairman of the Audit
Committee (or any other Audit Committee member to whom this
responsibility has been delegated) to pre-approve any audit
or non-audit services to be performed by the independent
accountants, provided that such approvals do not exceed the
limit set forth in the Audit Committee preapproval
procedures and are presented to the Audit Committee at its
next scheduled meeting.
VI. Performance Evaluation:
The Audit Committee shall prepare and review with the Board
of Directors an annual performance evaluation of the Audit
Committee, which evaluation shall compare the performance of
the Audit Committee with the requirements of this charter.
The performance evaluation shall also recommend to the Board
any improvements to the Audit Committee's charter deemed
necessary or desirable by the Audit Committee. The
performance evaluation by the Audit Committee shall be
conducted in such manner as the Audit Committee deems
appropriate. The report to the Board may take the form of an
oral report by the chairman of the Audit Committee or any
other member of the Audit Committee designated by the Audit
Committee to make the report.
VII. Resources and Authority of the Audit Committee:
The Audit Committee shall have the resources and authority
appropriate to discharge its duties and responsibilities,
including the authority to select, retain, terminate, and
approve the fees and other retention terms of special or
independent counsel, accountants or other experts and
advisors, as it deems necessary or appropriate, without
seeking approval of the Board or management.
The Company shall provide for appropriate funding, as
determined by the Audit Committee, in its capacity as a
committee of the Board, for payment of:
1. Compensation to the independent accountants and any
other public accounting firm engaged for the purpose of
preparing or issuing an audit report or performing
other audit, review or attest services for the Company;
2. Compensation to any advisors employed by the Audit
Committee; and
3. Ordinary administrative expenses of the Audit Committee
that are necessary or appropriate in carrying out its
duties.
Approved as Amended and Restated on May 6, 2004
TABLE OF CONTENTS
Page
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INTRODUCTION....................................................1
PROPOSAL ONE ELECTION OF DIRECTORS.............................2
INFORMATION AS TO THE FUND'S INVESTMENT ADVISER, SUB-ADVISER
AND ADMINISTRATOR...............................................9
OTHER MATTERS...................................................9
SUBMISSION OF PROPOSALS FOR THE NEXT ANNUAL MEETING OF
STOCKHOLDERS...................................................10
Exhibit A:
Nominating Committee Charter...............................A-1
Exhibit B:
Audit Committee Charter....................................B-1
The Spain Fund, Inc.
--------------------------------
LOGO
Alliance Capital Management L.P.
--------------------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
June 3, 2004
THE SPAIN FUND, INC.
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON JUNE 30, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE SPAIN FUND, INC.
The undersigned stockholder of The Spain Fund, Inc., a
Maryland corporation (the "Fund"), hereby appoints Christina A.
Morse and Carol H. Rappa, or either of them, as proxies for the
undersigned, each with full power of substitution, to attend the
Annual Meeting of Stockholders of the Fund (the "Annual Meeting")
to be held at 11:00 a.m., Eastern Time, on June 30, 2004 at the
offices of the Fund, 1345 Avenue of the Americas, 33rd Floor, New
York, New York 10105, and any postponement or adjournment
thereof, to cast on behalf of the undersigned all votes that the
undersigned is entitled to cast at the Annual Meeting and
otherwise to represent the undersigned at the Annual Meeting with
all powers possessed by the undersigned if personally present at
such Annual Meeting. The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting and accompanying Proxy Statement,
revokes any proxy heretofore given with respect to such Annual
Meeting and hereby instructs said proxies to vote said shares as
indicated on the reverse side hereof.
The Board of Directors knows of no reason why any of the
nominees for the Board of Directors would be unable to serve, but
in the event any nominee is unable to serve or for good cause
will not serve, the proxies received indicating a vote in favor
of such nominee will be voted for a substitute nominee as the
Board of Directors may recommend.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE
CAST BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON
THE REVERSE SIDE HEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT
NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF EACH OF THE
NOMINEES REFERRED TO IN PROPOSAL ONE AS DIRECTORS, AND IN THE
DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN
THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign this Proxy exactly as your name(s) appear(s) on
the records of the Fund. Joint owners should each sign
personally. Trustees and other representatives should indicate
the capacity in which they sign, and where more than one name
appears, a majority must sign. If the stockholder is a
corporation or another entity, the signature should be that of an
authorized officer who should state his or her full title.
THE SPAIN FUND, INC.
/X/ Please mark votes as in this example.
Your Board of Directors recommends a vote "FOR" the election of
all Nominees.
1. Election of Directors.
Class Three Director (Term expireS 2007):
(01) Inmaculada de Habsburgo-Lorena,
(02) Francisco Gomez Roldan
(03) Juan Manuel Sainz de Vicuna
Class Two Director (Term expires 2006)
(04) William H. Foulk, Jr.
Class One Director (Term expires 2005)
(05) Daniel de Fernando Garcia
FOR / / / / WITHELD
ALL FROM ALL
NOMINEES NOMINEES
/ / ---------------------------------------
For all nominees except as noted above
2. To vote and otherwise represent the undersigned on any other
matter that may properly come before the meeting or any
postponement or adjournment thereof in the discretion of the
Proxy holder(s).
Please be sure to sign your name(s) exactly as it appears on this Proxy
Signature: ___________ Date:________ Signature: ____________ Date: ________
00250.0031 #484727