Total Return Securities Fund — Proxy Solicitation & Information Statement 2000

Apr 19, 2000

SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 [X] Filed by the Registrant [ ] 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 ss.240.14a-11(c) or ss.240.14a-12 - -------------------------------------------------------------------------------- THE SWISS HELVETIA FUND, INC. (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement if other than the Registrant) NOT APPLICABLE Payment of Filing Fee (Check the Appropriate Box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1. Title of each class of securities to which transaction applies: Not Applicable 2. Aggregate number of securities to which transaction applies: Not Applicable 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): Not Applicable 4. Proposed maximum aggregate value of transaction: Not Applicable 5. Total fee paid: Not Applicable [ ] 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 No.: 3. Filing Party: 4. Date Filed: THE SWISS HELVETIA FUND, INC. 630 Fifth Avenue Suite 915 New York, New York 10111 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS MAY 19, 2000 ---------------------------------------- To our Stockholders: Notice is hereby given that the Annual Meeting of Stockholders (the "Meeting") of The Swiss Helvetia Fund, Inc. (the "Fund") will be held at 11:30 a.m. on May 19, 2000 at The Drake Swissotel, 440 Park Avenue, Manhattan East and West Suites, New York, New York 10022, for the following purposes: 1. To elect three Class III Directors to serve for a three-year term. 2. To ratify the selection by the Board of Directors of Deloitte & Touche LLP as the Fund's independent public auditor for the year ending December 31, 2000. 3. To consider a stockholder advisory proposal. 4. To consider and act upon any other business as may properly come before the Meeting or any adjournment thereof. The Board of Directors has fixed the close of business on April 12, 2000 as the record date for the determination of stockholders entitled to notice of and to vote at the Meeting or any adjournments or postponements thereof. A list of stockholders of record as of April 12, 2000 will be available for inspection for any purposes germane to the Meeting during ordinary business hours at the offices of the Fund, 630 Fifth Avenue, New York, New York 10111 from May 9, 2000 to the date of the Meeting. You are cordially invited to attend the Meeting. Stockholders who do not expect to attend the Meeting in person are requested to complete, date and sign the enclosed form of Proxy and return it promptly in the envelope provided for that purpose or, if no envelope is provided, please send to PFPC, P.O. Box 8950, Wilmington, Delaware 19899, Attention: The Swiss Helvetia Fund, Inc. The enclosed Proxy is being solicited by the Board of Directors of the Fund. By order of the Board of Directors. Paul R. Brenner Dated: April 19, 2000 Secretary WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT TO THE FUND. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. THE SWISS HELVETIA FUND, INC. 630 Fifth Avenue Suite 915 New York, New York 10111 Annual Meeting of Stockholders May 19, 2000 PROXY STATEMENT Dated: April 19, 2000 INTRODUCTION This Proxy Statement is furnished by the Board of Directors of The Swiss Helvetia Fund, Inc. (the "Fund") in connection with the solicitation of proxies for use at the Annual Meeting of Stockholders (the "Meeting") to be held at 11:30 a.m. on May 19, 2000 at The Drake Swissotel, 440 Park Avenue, Manhattan East and West Suites, New York, New York 10022. The purpose of the Meeting and the matters to be acted upon are set forth in the accompanying Notice of Annual Meeting of Stockholders. If the accompanying form of Proxy is executed properly and returned, the shares represented by it will be voted at the Meeting in accordance with the instructions on the Proxy. However, if no instructions are specified, the shares will be voted FOR the Election of Directors, FOR the ratification of the Fund's independent public auditor, and AGAINST the stockholder proposal. A Proxy may be revoked at any time prior to the time it is voted by written notice to the Secretary of the Fund revoking it, by submitting a properly executed proxy bearing a later date, or by attending the Meeting and voting in person. Attending the Meeting will not automatically revoke a previously executed proxy. Shares represented by a Proxy marked to withhold authority to vote, and shares represented by a Proxy that indicates that the broker or nominee Stockholder thereof does not have discretionary authority to vote them will be counted to determine the existence of a quorum at the Meeting and will not affect the plurality vote required for the election of directors or the vote on the stockholder proposal. However, they will have an adverse effect on the vote for the ratification of the appointment of the auditors, which requires a majority vote of the shares present, since they are not votes cast for the matter. To the extent any stockholder owns shares of the Fund in violation of applicable law, including the Investment Company Act of 1940, the Fund may determine that the vote attributable to such shares shall not be counted, or that such shares will not be counted for quorum purposes, or both. The Board of Directors has fixed the close of business on April 12, 2000 as the record date for the determination of Stockholders entitled to notice of, and to vote at, the Meeting and at any adjournment thereof. On that date, the Fund had 24,353,936.51 shares of Common Stock outstanding and entitled to vote. Each share will be entitled to one vote at the Meeting. It is expected that the Notice of Annual Meeting of Stockholders, Proxy Statement and form of Proxy will first be mailed to Stockholders on or about April 19, 2000. 1 Management of the Fund knows of no business other than that mentioned in Proposals 1, 2 and 3 of the Notice of Annual Meeting of Stockholders which will be presented for consideration at the Meeting. If any other matter is properly presented, it is the intention of the persons named in the enclosed Proxy to vote in accordance with their best judgment. The Fund will furnish, without charge, a copy of its Annual Report for its year ended December 31, 1999 to any stockholder requesting such Report. Requests for the Annual Report should be made in writing to The Swiss Helvetia Fund, Inc., 630 Fifth Avenue, Suite 915, New York, New York 10111, Attention: Rudolf Millisits, or by telephoning the Fund's toll free telephone number: 1-888-794-7700. ELECTION OF DIRECTORS (Proposal 1) The Fund's Certificate of Incorporation provides for three classes of Directors with overlapping three-year terms. The number of Directors is currently nine and is divided into three classes of three Directors each. Paul Hottinguer, Claude Mosseri-Marlio and Stephen K. West, Esq. were elected as Class III Directors in 1997 to serve until the Annual Meeting of Stockholders in 2000. The Class III nominees, Paul Hottinguer, Claude Mosseri-Marlio and Stephen K. West, Esq., are the only nominees to be considered for election at the Meeting and, if elected, each will serve a three-year term of office until the Annual Meeting of Stockholders in 2003, or until his respective successor shall be elected and shall qualify. Unless authority is withheld, it is the intention of the persons named in the accompanying form of Proxy to vote each Proxy FOR the election of the three Class III nominees listed below. Each Class III nominee has indicated he will serve, if elected, but if any such nominee should be unable to serve, proxies will be voted for an alternate nominee, if any, designated by the Board of Directors. The Board of Directors has no reason to believe that any nominee will be unable to serve as a Director. Each of the Class III nominees is currently a member of the Board of Directors. Required Vote In accordance with Delaware law and the Fund's Certificate of Incorporation and By-Laws, Directors are elected by a plurality of the votes cast at the Meeting by the stockholders entitled to vote. Abstentions and broker non-votes will not be included in determining the number of votes cast in a Director's favor. A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular matter because the broker does not have discretionary voting power with respect to that matter and has not received instructions from the beneficial owner. THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 1 TO ELECT THE THREE NOMINEES AS CLASS III DIRECTORS. 2 Certain Information Concerning Directors and Executive Officers The following table sets forth certain information about each person nominated for election, each person currently serving or continuing as a Director and each person who currently serves as an Executive Officer of the Fund, including his beneficial ownership of Common Stock of the Fund. Except as otherwise indicated, all of the information is as of December 31, 1999.

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• ----------- (1) All Directors and Executive Officers as a group (15 persons) owned 202,959 shares which constitutes less than 1% of the outstanding Common Stock of the Fund. Share numbers in this proxy statement have been rounded to the nearest whole share. (2) Indicates "Interested Person", as defined in the Investment Company Act of 1940, as amended (the "1940 Act"). Paul Hottinguer and The Baron Hottinger are brothers and Rodolphe E. Hottinger is the son of The Baron. Paul Hottinguer, The Baron Hottinger and Rodolphe E. Hottinger are "Interested Persons" because of their affiliation with Hottinger & Cie (Zurich) and Hottinger U.S., Inc., controlling persons of Hottinger Capital Corp. ("HCC"), the Fund's Investment Advisor; Rodolphe E. Hottinger is also an "Interested Person" because he is President of the Fund; Alexandre de Takacsy is an "Interested Person" because of his affiliation with HCC; Rudolf S. Millisits is an "Interested Person" because he is Vice President of the Fund and because of his affiliation with HCC; Edward J. Veilleux is an "Interested Person" because he is Vice President and Treasurer of the Fund; James L. Knell is an "Interested Person" because he is an Assistant Treasurer of the Fund; Charles A. Rizzo is an "Interested Person" because he is an Assistant Treasurer of the Fund; and Paul R. Brenner is an "Interested Person" because he is Secretary of and Counsel to the Fund, Counsel to HCC and Of Counsel to Salans Hertzfeld Heilbronn Christy & Viener, which serves as General Counsel for the Fund. 7 The Executive Officers of the Fund are elected annually by the Board of Directors at its Annual Meeting following the Annual Meeting of Stockholders. The Board of Directors has an Audit Committee whose current members are Messrs. Pineau-Valencienne, West and Witt. The Audit Committee makes recommendations to the full Board with respect to the engagement of the independent public auditor and reviews with the independent public auditor the plan and results of the audit engagement. The Audit Committee held four meetings during the year ended December 31, 1999. The Board of Directors also has a Nominating Committee whose current members are Messrs. Frey, Gabus and Mosseri-Marlio. The principal function of the Nominating Committee is to recommend to the Board nominees for election as Directors. The Nominating Committee held a meeting on March 16, 2000 to recommend to the Board of Directors the nominees for the Class III Directors to be elected at this Meeting. The Nominating Committee held one meeting during the year ended December 31, 1999. The Nominating Committee will consider nominees recommended by a stockholder if such recommendation is in writing and received by the Fund by the deadline specified below under "Stockholder Proposal" and otherwise complies with the requirements for such proposals contained in the Fund's By-laws. Any such recommendations should be submitted to: Secretary, The Swiss Helvetia Fund, Inc., 630 Fifth Avenue, Suite 915, New York, New York 10111. The Board of Directors does not have a Compensation Committee. During year ended December 31, 1999, the Board of Directors met five times, of which four were regularly scheduled meetings and one was a special meeting. Each incumbent Director attended at least 75% of the aggregate of (i) the total number of Meetings of the Board of Directors and (ii) the total number of Meetings held by all Committees of the Board on which he served. Each Director who is not an interested person (as such term is defined in the 1940 Act) of the Fund or its Investment Advisor, Hottinger Capital Corp., (each, a "non-interested Director") is currently paid an annual fee of approximately $8,413, plus $750 for each meeting of the Board of Directors attended and $750 for each committee meeting attended, if held separately. The Chairman of the Audit Committee receives an annual fee of approximately $9,254 (in lieu of the approximate $8,413 annual fee paid to other non-interested Directors), plus the same $750 meeting fee paid to the other non-interested Directors. The annual fee of non-interested Directors (including the annual fee paid to the Chairman of the Audit Committee) is adjusted annually, as of each October 1, by the adjustment in the Consumer Price Index "All Items Price Index - -- National", for the preceding twelve month period. In addition, the Fund reimburses such Directors for certain out-of-pocket expenses, such as travel expenses in connection with board meetings. During the year ended December 31, 1999, all incumbent non-interested Directors as a group were entitled to receive from the Fund aggregate remuneration amounting to $101,133.55 and individual remuneration (exclusive of reimbursed expenses), as follows: - --------------- (3) Hottinger & Cie (Zurich), a partnership, owns 108,710 shares of the Fund, Hottinger Capital Corp., the Fund's Investment Advisor, owns 49,201 shares of the Fund, Hottinger Finanz AG owns 2,250 shares of the Fund and Hottinger Treuhand AG owns 2,250 shares of the Fund. Paul Hottinguer and The Baron Hottinger are brothers, and Rodolphe E. Hottinger is the son of The Baron. Paul Hottinguer, The Baron Hottinger and Rodolphe E. Hottinger are controlling partners of Hottinger & Cie (Zurich) and controlling shareholders and directors of Hottinger Capital Corp., Hottinger Finanz AG and Hottinger Treuhand AG and therefore share voting and investment power over the 162,411 shares of the Fund owned by Hottinger & Cie (Zurich), Hottinger Capital Corp., Hottinger Finanz AG and Hottinger Treuhand AG. In addition, Mr. Rodolphe E. Hottinger directly owns 10,690 shares. 8

Retired March 18, 1999 No other Director of the Fund received compensation from the Fund. No Executive Officer of the Fund received aggregate compensation from the Fund for the most recently completed fiscal year in excess of $60,000. Accordingly, no other persons have been included in the compensation table set forth above. Section 16(a) Beneficial Ownership Reporting Compliance Under the securities laws of the United States, the Fund's Directors, its Executive (and certain other) Officers, its Investment Advisor and affiliated persons of its Investment Advisor and any other persons beneficially owning more than ten percent of the Fund's Common Stock are required to report their ownership of the Fund's Common Stock and any changes in that ownership to the Fund, the Securities and Exchange Commission and The New York Stock Exchange. Specific due dates for these reports have been established, and the Fund is required to report in this proxy statement any failure to file by these dates during 1999. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Fund during its most recent fiscal year, Forms 5 and amendments thereto furnished to the Fund with respect to its most recent fiscal year and written representations received from such persons, all of these requirements appear to have been satisfied by such persons during the year ended December 31, 1999. 9 Security Ownership of Certain Beneficial Owners As of December 31, 1999, no stockholder, to the knowledge of Management, other than the President and Fellows of Harvard College and Lazard Freres & Co. LLC, beneficially owned more than five percent of the Fund's outstanding shares of Common Stock. The President and Fellows of Harvard College, through its endowment fund and its pension fund, filed on February 14, 2000 an amendment to its beneficial ownership report on Schedule 13G with the Securities and Exchange Commission stating that as of December 31, 1999 it beneficially owned 2,185,900 shares of Common Stock and Lazard Freres & Co. LLC, on behalf of its advisory clients, filed on February 2, 2000 an amendment to its beneficial ownership report on Schedule 13G with the Securities and Exchange Commission stating that as of December 31, 1999 it beneficially owned 1,646,100 shares of Common Stock. Based on such filings, these holdings represented approximately 8.90 percent and 6.68 percent of the Fund's outstanding shares, respectively, as of December 31, 1999. SELECTION OF INDEPENDENT PUBLIC AUDITOR (Proposal 2) At a Meeting held on March 16, 2000 and based upon the unanimous recommendation of the Audit Committee, the Board of Directors of the Fund, including a majority of the Directors who are non-interested Directors, selected Deloitte & Touche LLP (the "Firm" or "D&T") to act as the independent public auditor for the Fund for the year ending December 31, 2000. Based principally on representations from the Firm, the Fund knows of no direct financial or material indirect financial interest of such Firm in the Fund. That Firm, or a predecessor firm, has served as the independent public auditor for the Fund since 1987. One or more representatives of D&T are expected to be present at the Meeting to answer appropriate questions concerning the Fund's financial statements and will have an opportunity to make a statement if they choose to do so. It is intended that the persons named in the accompanying Proxy will vote FOR ratification of the selection of D&T as the Fund's independent public auditor. Although the submission of this matter to the stockholders is not required by law, if this appointment is not ratified by the stockholders, the Board of Directors will reconsider its selection of the Fund's independent public auditor. Required Vote The selection of the Fund's independent public auditor will be ratified if approved by a majority of shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will not be included in determining the number of votes cast but will be counted for purposes of determining the number of shares present in person or represented by proxy. As a result, since they are not votes cast "for" this proposal, they have the same effect as negative votes or votes "against" the proposal. A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular matter because the broker does not have discretionary voting power with respect to that matter and has not received instructions from the beneficial owner. THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2 TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE FUND'S INDEPENDENT PUBLIC AUDITOR FOR THE YEAR ENDING DECEMBER 31, 2000. 10 STOCKHOLDER PROPOSAL (Proposal 3) An owner (the "proponent") of shares of the Fund has informed the Fund that it intends to present the proposal set forth below (the "Stockholder Proposal") for action at the Meeting. The proponent's name, mailing or e-mail address and the number of shares owned by the proponent will be promptly furnished to any stockholder by the Secretary of the Fund upon oral or written request directed to the Secretary. This Proposal is advisory and does not involve any minimum number of votes. The Stockholder Proposal and Supporting Statement are as follows: RESOLVED: The stockholders of The Swiss Helvetia Fund (the "Fund") request the Board of Directors to take the steps necessary to convert the Fund to an open-end fund. Supporting Statement We have been a shareholder of the Fund since August 1995. Its shares have long traded at a double-digit discount to net asset value since August 1995. Despite some commendable measures that the Board of Directors has taken to address the discount including a sizable share repurchase program, our opinion is that the discount has remained too wide for too long. As of December 3, 1999, the Fund's discount was 20.6%. That means that the total difference between the Fund's market value and its NAV was about $90 million on that date. The time has come to convert the Fund to an open-end fund. Converting it to an open-end fund will give stockholders a tangible benefit, i.e. elimination of the discount that we believe far outweighs whatever theoretical advantages the closed-end structure supposedly offers. Although this proposal, if approved, is not binding on the directors, it is hoped that it will send a message to them that the shareholders want the discount eliminated. THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" PROPOSAL 3 FOR THE REASONS STATED BELOW. OPPOSING STATEMENT OF YOUR BOARD Your Board of Directors is opposed to Proposal 3 and unanimously recommends that you vote AGAINST this proposal for the following reasons: 11 o Open-ending your Fund will likely burden your Fund's long-term investors with dilution, lower performance, higher expenses and adverse tax consequences, and could even lead to the complete liquidation of your Fund. o Your Fund's relative investment performance has been outstanding with its existing closed-end format. o Open-ending your Fund will deprive investors of the closed-end format's advantages, including the investment leverage effect of the market discount. 1. Dilution and Performance Impairment. Management has advised the Board of Directors that open-ending would almost certainly result in heavy stockholder withdrawals within a few weeks. These could initially shrink the size of the Fund by one quarter or more. To raise the needed cash, the portfolio would have to be partially liquidated in a short period of time. Management has advised the Board of Directors that, because of the limited liquidity of the Swiss equity markets, these sales could decrease prices and reduce the net asset value of the shares held by the remaining stockholders of the Fund. Moreover, the Fund would thereafter be required to maintain substantial cash reserves to meet further redemptions. As a practical matter, your Fund's portfolio managers would be severely constrained in their ability to add value through appropriate diversification, sector allocation and investment in medium and smaller capitalization companies in a manner consistent with the Fund's past and anticipated future practice and investor expectations. Management has advised the Board of Directors that under these circumstances it is highly unlikely that the Fund could continue its outstanding relative performance of the past several years. Indeed, Management believes that massive withdrawals, coupled with subsequent distributions to remaining stockholders of the resulting taxable realized capital gains (see "4" below), could reduce the Fund's assets to the point that the Fund would be too small to be economically viable, in which case your Board of Directors may be obliged to recommend that the Fund be liquidated. The freedom of your Fund's portfolio managers to focus on investing with appropriate asset diversification, sector allocation and investment in medium and smaller capitalization companies has caused your Fund's investment performance over the last three years to exceed its benchmark index, the Swiss Performance Index, in each year. In addition, Management has advised the Board of Directors that your Fund outperformed its peer group of Swiss equity funds managed by major Swiss banks as follows. 12 Peer Group Performance Comparisons Total Return Based Upon Net Asset Value in Swiss Franc Terms - -------------------------------------------------------------------------------- 1999 1998 1997 - -------------------------------------------------------------------------------- The Swiss Helvetia Fund, Inc. 14.70% 15.89% 55.38% - -------------------------------------------------------------------------------- Swiss Performance Index** 11.69% 15.36% 55.19% - -------------------------------------------------------------------------------- Pictet Valsuisse 9.36% 11.02% 55.67% - -------------------------------------------------------------------------------- CS Equity Swiss Blue Chips 7.60% 14.30% 59.60% - -------------------------------------------------------------------------------- Saraswiss (Bank Sarasin) 6.87% 12.75% 53.62% - -------------------------------------------------------------------------------- Swiss Baer (Julius Baer) 1.73% 13.04% 55.94% - -------------------------------------------------------------------------------- UBS Equity Inv. Switzerland 1.00% 12.00% 56.00% - -------------------------------------------------------------------------------- * In each case except for Saraswiss, total return is calculated assuming reinvestment of all distributions. Fund's listed, other than the Fund, are not registered with the Securities and Exchange Commission. Performance information for such funds is derived from their published investor reports. ** The Swiss Performance Index is unmanaged and reflects no expenses, whereas the Fund has outperformed the Index even after taking into account its expenses. Further, your Fund received the 1998 and 1999 Lipper Performance Achievement Certificate ranking it as the "Number One" fund in the Lipper Closed-End Fund Performance Analysis for Western European Funds for the ten year periods ending December 31, 1998 and 1999. As of December 31, 1999, the Fund had five investments that through either market appreciation or merger have each grown to represent 5% or more of the net assets of the Fund as of such date. Together, these investments, which Management believes are desirable to maintain, constituted approximately 57% of the market value of the Fund's net assets as of December 31, 1999. Under U.S. tax law, regulated investment companies such as the Fund are limited in their ability to establish positions over 5% through purchases. If the Fund were to open-end, Management believes that it would probably have to sell many of these positions to raise cash for redemptions and may not be able to re-establish them at current levels even if cash became available from new investors. Moreover, disposition of these larger investments would likely cause the Fund's performance to suffer. For each of the years ending 1999, 1998 and 1997, at least two of the Fund's over 5% investments have consistently ranked among the Fund's ten investments experiencing the greatest appreciation over the prior year-end. 2. Higher Expenses. Open-ending would also be likely to substantially increase the Fund's expense ratio. First, the Fund's fixed expenses would be spread over a substantially smaller asset base, increasing their per-share affect. Fixed expenses are those that tend not to decrease proportionately with the Fund's size. Unlike open-end funds that are part of a family of funds, your Fund does not have a ready means to attract new investors, so withdrawals will likely continue at higher levels than new investor purchases. This will shrink the Fund. 13 Second, open-ending would probably involve new ongoing expenses, such as an annual distribution (12b-1) fee of at least 0.25% (25 basis points) and additional stockholder servicing fees. For example, a 50% decrease in the Fund's net assets and the addition of a 25 basis point 12b-1 fee, would increase the Fund's per-share expense ratio from the current level of 1.11% to approximately 1.71% (not including at least an estimated $350,000 one-time cost for conversion to open-end form). o Your Fund's expense ratio has for many years been among the lowest of European closed-end country funds. Open-end funds typically have higher expense ratios because of their need to provide additional shareholder services and to make distribution (12b-1) payments. 3. Loss of Investment Leverage from Market Discount. Your Fund's shares have traded at a discount to their net asset value in recent years. Your Board of Directors believes there may be some misunderstandings about the market discount of your Fund and other closed-end funds. Market discounts (and possible premiums) are an inherent consequence of the closed-end fund format. They are affected by supply and demand for Fund shares, but their exact cause has not been adequately explained by financial analysts or academic studies. In any event, discounts can vary widely over time. Indeed, a market discount can be an investment advantage. For example, a discount of 18% presents the opportunity to buy $100 worth of working investment assets for $82. Your Fund instituted a share buy-back program in early 1999, which continues as of this date. The principal purpose of the program is to enhance stockholder value by increasing the Fund's net asset value without a meaningful adverse effect upon the Fund's expense ratio. While some may suggest that a buy-back program does not have a lasting effect on the discount, your Board recognizes that some stockholders strongly favor buy-back programs. In 1999, buy backs added 0.67%, or $2,802,736.60, to year-end net asset value. This program continues as of this date. 4. Adverse Tax Consequences to Stockholders. If the anticipated stockholder withdrawals occur following open-ending, significant sales of appreciated portfolio securities would be required. These sales would result in the Fund's realization of significant additional capital gains which must be distributed to stockholders and would be taxable to the stockholders receiving them. For example, the Fund estimates that if it were required to sell 50% of each of its holdings at their March 31, 2000 prices to raise cash, net undistributed realized capital gains would amount to $9.62 per remaining share (55.52% of net asset value). Outgoing stockholders would capture the value of these gains through redemption but without having to pay tax on the Fund's capital gains distributions. Remaining stockholders would receive and pay tax on the $9.62 per share taxable capital gains distributions. Thus, these distributions and the associated tax liabilities would disproportionately impact long-term stockholders who remain in the Fund after the stockholders seeking short-term gain had redeemed their shares. 5. Conclusion. For all the above reasons, your Board of Directors strongly believes that the overall interests of the Fund would not be well served by open-ending. 14 THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" PROPOSAL 3. OTHER MATTERS The Fund's investment advisor and administrator are Hottinger Capital Corp., 630 Fifth Avenue, Suite 915, New York, New York 10111 and Investment Company Capital Corp., One South Street, Baltimore, Maryland 21202, respectively. The Fund currently does not have a principal underwriter. No business other than as set forth herein is expected to come before the Meeting, but should any other matter requiring a vote of Stockholders properly arise, including any question as to an adjournment of the Meeting, the persons named in the enclosed Proxy will vote thereon according to their best judgment in the interest of the Fund. STOCKHOLDER PROPOSALS Stockholder proposals (other than director nominations) intended to be presented at the Fund's Annual Meeting of Stockholders in 2001 must be received by the Fund on or before December 21, 2000 in order to be included in the Fund's proxy statement and form of proxy relating to that Meeting. Except as otherwise provided by the rules and regulations of the Securities and Exchange Commission, any director nominations or other stockholder proposals intended to be presented at the Fund's Annual Meeting of Stockholders in 2001 must be received by the Fund not less than 90 nor more than 120 days prior to May 19, 2001 and must otherwise comply with the requirements of the Fund's By-laws relating to such nominations and proposals. Any such proposals should be submitted in writing to: Secretary, The Swiss Helvetia Fund, Inc., 630 Fifth Avenue, Suite 915, New York, New York 10111. EXPENSES OF PROXY SOLICITATION The cost of preparing, assembling and mailing material in connection with this solicitation will be borne by the Fund. In addition to the use of mails, proxies may be solicited personally by regular employees of the Fund or HCC or by agents of the Fund or by telephone or telegraph. The Fund has also retained Georgeson Shareholder Communications, Inc. to assist in the solicitation of proxies and will receive a fee of approximately $15,000 for its services, plus expenses. Brokerage houses, banks and other fiduciaries may be requested to forward proxy solicitation material to their customers to obtain authorization for the execution of proxies, and they will be reimbursed by the Fund for out-of-pocket expenses incurred in this connection. 15 VOTING RESULTS The Fund will advise the stockholders of the voting results of the matters voted upon at the Annual Meeting in the 2000 Semi-Annual Report to Stockholders. ANNUAL REPORT The Fund will furnish, without charge, a copy of the 1999 Annual Report and the most recent Quarterly Report to any Stockholder upon request addressed to Rudolf S. Millisits, Vice President, The Swiss Helvetia Fund, Inc., 630 Fifth Avenue, Suite 915, New York, New York 10111 (toll free telephone number: 1-888-794-7700). STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT TO THE FUND. Paul R. Brenner Secretary Dated: April 19, 2000 16 [SIDE ONE] THE SWISS HELVETIA FUND, INC. 630 Fifth Avenue New York, New York 10111-0001 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE SWISS HELVETIA FUND, INC. PURSUANT TO A SEPARATE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT, DATED APRIL 19, 2000, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED The undersigned hereby appoints Paul R. Brenner and Edward J. Veilleux, and each of them, the true and lawful attorneys and proxies, each with the power of substitution, for and in the name, place and stead of the undersigned and hereby authorizes each of them to represent and to vote, as designated below, all the shares of Common Stock of The Swiss Helvetia Fund, Inc. held of record by the undersigned on April 12, 2000 at the Annual Meeting of Stockholders to be held at The Drake Swissotel, 440 Park Avenue, Manhattan East and West Suites, New York, New York 10022 on May 19, 2000 or any adjournment or adjournments or postponement thereof. 1. Election of Directors. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES.

(INSTRUCTION: To withhold authority for any individual nominee strike a line through the nominee's name on the list below). Nominees for Class III Directors: Paul Hottinguer, Claude Mosseri-Marlio and Stephen K. West, Esq. 2. To ratify the selection by the Board of Directors of Deloitte & Touche LLP as the Fund's independent public auditor for the year ending December 31, 2000. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL. [ ] FOR [ ] AGAINST [ ] ABSTAIN 3. To act upon the stockholder advisory proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" THE PROPOSAL. [ ] FOR [ ] AGAINST [ ] ABSTAIN (Continued, and to be signed, on the reverse side) [SIDE TWO] (Continued from other side) This proxy, when properly executed and returned to the Fund, will be voted in the manner directed herein by the undersigned stockholder. If no direction is given, this proxy will be voted FOR Proposals 1 and 2 and AGAINST Proposal 3 and will be voted in the discretion of the proxies upon such other matters as may properly come before the Meeting. The undersigned hereby revokes any proxy or proxies heretofore given and ratifies and confirms all that the proxies appointed hereby, or either one of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Both of said proxies or their substitutes who shall be present and act at the Meeting, or if only one is present and acts, then that one, shall have and may exercise all of the powers hereby granted to such proxies. ______ Your signature should appear the same as your name appears hereon. When signing as attorney, executor, administrator, trustee, guardian, or other similar capacity, please give full title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a corporation, please provide the full name of the corporation and the signature of the authorized officer signing on its behalf and the corporate seal affixed. If the signature is by a partnership, a partner should sign the full partnership name. Dated: , 2000 Name of Corporation (if applicable): By:_____ (Signature) By:__________ (Signature) PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY TO THE FUND.