<PAGE> 1
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
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Clemente Global Growth Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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 Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
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.:
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4) Date Filed:
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<PAGE> 2
CLEMENTE GLOBAL GROWTH FUND, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
------------------------
The Annual Meeting of Stockholders of Clemente Global Growth Fund, Inc.
(the "Fund"), a Maryland corporation, will be held at Le Parker Meridien, 119
West 56th Street, New York, New York, on May 29, 1997 at 9:00 a.m., New York
time, for the following purposes:
1. A proposal to approve a U.S. Advisory Agreement among the Fund,
Clemente Capital, Inc. and Wilmington Trust Company pursuant to which
Wilmington Trust Company will manage the U.S. portion of the Fund's
portfolio, which proposal the Board of Directors favors;
2. To elect Robert J. Christian as a Class II director for a term of
two years (expiring in 1999) and until his successor is duly elected and
qualified;
3. To elect Thomas H. Lenagh, Sam Nakagama and G. Peter Schieferdecker
as Class III directors for terms of three years (expiring in 2000) and
until their successors are duly elected and qualified;
4. To ratify the selection by the Board of Directors of Price
Waterhouse LLP as the Fund's independent accountants for the year ending
December 31, 1997;
5. To approve or disapprove a shareholder proposal to request the
Board of Directors to seriously consider soliciting competitive proposals
for a new investment adviser for the Fund, which proposal the Board of
Directors opposes; and
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed March 10, 1997 as the record date for the
meeting. Only holders of record of the Fund's Common Stock at the close of
business on such date will be entitled to notice of, and to vote at, such
meeting. The stock transfer books will not be closed.
A copy of the Fund's Annual Report for the fiscal year ended December 31,
1996 has been previously mailed to stockholders.
By order of the Board of Directors,
William H. Bohnett
Secretary
Dated: April 30, 1997
IMPORTANT
UNLESS YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN
AND MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED REPLY ENVELOPE. YOUR PROMPT
RESPONSE WILL ASSURE A QUORUM AT THE MEETING.
<PAGE> 3
CLEMENTE GLOBAL GROWTH FUND, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
------------------------
GENERAL INFORMATION
The Board of Directors of the Fund solicits the proxies of the holders of
the Fund's Common Stock for use at the Annual Meeting of Stockholders (the
"Meeting") to be held at Le Parker Meridien, 119 West 56th Street, New York, New
York 10019, on May 29, 1997, at 9:00 a.m., New York time, and at any and all
adjournments thereof. A form of proxy is enclosed herewith. The Proxy Statement
and the form of proxy were first sent to stockholders on April 30, 1997. Any
stockholder who executes and delivers a proxy may revoke it by written
communication at any time prior to its use or by voting in person at the Annual
Meeting.
The cost of soliciting the proxies will be borne by the Fund. Directors,
officers and regular employees of the Fund may solicit proxies by telephone,
facsimile or personal interview. In addition, the Fund has engaged the services
of Georgeson & Company Inc., a professional proxy solicitation firm, to solicit
proxies from its stockholders. The contract between the parties provides for
solicitation services at an estimated cost of $20,000, plus expenses. The Fund
will, upon request, bear the reasonable expenses of brokers, banks and their
nominees who are holders of record of the Fund's shares of Common Stock on the
record date, incurred in mailing copies of the Annual Report, this Notice of
Meeting and Proxy Statement and the enclosed form of proxy to the beneficial
owners of the Fund's shares of Common Stock.
Only holders of issued and outstanding shares of the Fund's Common Stock of
record at the close of business on March 10, 1997 are entitled to notice of, and
to vote at, the meeting. Each such holder is entitled to one vote per share of
Common Stock so held. The number of shares of Common Stock outstanding on March
10, 1997 was 5,892,400.
COPIES OF THE FUND'S ANNUAL REPORT ARE AVAILABLE FREE OF CHARGE TO ANY
STOCKHOLDER. REPORTS MAY BE ORDERED BY WRITING CLEMENTE CAPITAL, INC., 152 WEST
57TH STREET, NEW YORK, NEW YORK 10019 OR CALLING (800) 937-5449.
<PAGE> 4
PROPOSAL NO. 1
APPROVAL OF A NEW U.S. ADVISORY AGREEMENT
REASONS FOR THE PROPOSAL. Clemente Capital, Inc. ("Clemente Capital" or the
"Adviser") has served as the Fund's investment adviser since the Fund's
inception in 1987 under an investment advisory agreement dated June 19, 1987
(the "Fund Advisory Agreement"). Such agreement was approved by the Fund's
stockholders on June 19, 1987 and April 27, 1988 and annually by the Fund's
Board of Directors, most recently on April 23, 1997. From its inception, the
Fund has characterized itself as a "global" fund, which invests in securities of
issuers around the world and in the United States, and not an "international"
fund which seeks investments only in non-U.S. markets. The distinction is a
critical one since, if a fund seeks to maintain a portfolio loosely based on the
relative capitalizations of the world's equity markets, the U.S. equity market
weighs heavily in such a portfolio -- approximately 30% to 40% historically and
approximately 45% at the end of 1996. At the time of the Fund's inception, the
Board believed Clemente Capital brought a strong global performance record to
the Fund.
More recently, however, while Clemente Capital's performance in
international markets has generated competitive returns for the Fund, the Fund's
portfolio has generally been underweighted in U.S. securities relative to the
Fund's benchmark index. Consequently, in a period of strongly rising U.S. equity
prices, the Fund has underperformed in the last three years.
In the last year, the Board and the Adviser have explored various
alternatives to address this underperformance while preserving the benefits of
Clemente Capital's expertise and its contract with the Fund. In this regard, the
Board has noted that the Fund Advisory Agreement is highly favorable to
stockholders on a cost of advisory services basis, in that the Adviser's
compensation is tied to the Fund's performance versus that of the FT-Actuaries
World Index, its benchmark, on a rolling three-year basis. The Board believes
that the advisory fees paid by the Fund have ranked among the lowest in the
relevant statistical peer group, according to Lipper Analytical Services, Inc.
While improving the Fund's recent performance has been the Board's paramount
concern, the Board continues to believe that Clemente Capital has the expertise
and demonstrated capacity in global markets that are crucial to achievement of
the Fund's investment objective of long-term capital appreciation through
investing in global growth stocks.
During 1996, Wilmington Trust Company ("Wilmington Trust") purchased a
24.9% stake in Clemente Capital and an affiliate of Wilmington Trust was
subsequently hired as the Fund's administrator. Wilmington Trust currently has a
total of approximately $100 billion in assets under trust, custody and
investment management and ranks as the eighth largest personal trust company in
the United States. Wilmington Trust has been in the asset management business
for over 90 years and acts as the investment adviser to the Rodney Square family
of registered funds. Significantly, Wilmington Trust predominantly focuses on
investment in U.S. securities and has extensive research capabilities in U.S.
stocks. After being approached by Clemente Capital and by the Board of
Directors, Wilmington Trust expressed a willingness to act as the investment
adviser with respect to the U.S. portion of the Fund's portfolio in return for a
portion of the existing advisory fee charged by Clemente Capital to the Fund
under the Fund Advisory Agreement.
At a meeting held April 1, 1997, the Board of Directors, including a
majority of the "disinterested" directors within the meaning of the Investment
Company Act of 1940 (the "1940 Act"), reviewed and approved the proposed U.S.
Advisory Agreement, a copy of which is attached hereto as Exhibit A, by and
among the Fund, Clemente Capital and Wilmington Trust (the "New Agreement") and
voted to submit the New Agreement to the Fund's stockholders for their approval.
In connection with their consideration, the Board of Directors considered: (1)
the underperformance of the Fund in recent years; (2) the expertise of
2
<PAGE> 5
Clemente Capital in international equity markets; (3) the capacity and
experience of Wilmington Trust in the U.S. equity markets; (4) the fact that
investment advisory fees payable by the Fund's stockholders under the Fund
Advisory Agreement would remain unchanged by the New Agreement and the fact that
such fees rank among the lowest in the Fund's relevant peer group; and (5) the
importance of an effective investment program with respect to U.S. equity
markets for a global fund. The Directors also conducted a review of various
documents, reports and other materials submitted to them by Clemente Capital and
Wilmington Trust and information from independent sources such as Lipper
Analytical Services, Inc.
TERMS OF THE AGREEMENT. The New Agreement provides that, subject to the
supervision of the Board of Directors, Wilmington Trust will assist Clemente
Capital in providing a continuous investment program for the U.S. portion of the
Fund's portfolio (the "U.S. Portfolio"), including research and selection with
respect to all U.S. securities, investments and cash equivalents. Securities of
any company whose primary trading market is located in the United States are
eligible for inclusion in the U.S. Portfolio. Pursuant to the New Agreement,
Wilmington Trust: (a) will determine from time to time what securities and other
investments will be purchased, retained or sold for the U.S. Portfolio; (b) will
manage in consultation with the Adviser the U.S. Portfolio's temporary
investments in securities; (c) will place orders pursuant to its investment
determinations for the U.S. Portfolio, at its option either directly or through
the Adviser, and either directly with the issuer or with any broker or dealer;
(d) will not purchase shares of the Fund for itself or for accounts with respect
to which it exercises sole investment discretion in connection with such
transactions except as permitted by the Fund's Board of Directors; (e) will
consult with the Adviser on a continuous basis as to the portion of the Fund's
total assets which shall be invested in the U.S. Portfolio; (f) will attend
regular business and investment-related meetings with the Fund's Board of
Directors and the Adviser if requested to do so by the Fund and/or the Adviser;
and (g) will maintain books and records with respect to the securities
transactions for the U.S. Portfolio, furnish to the Adviser and the Fund's Board
of Directors such periodic and special reports as they may request with respect
to the U.S. Portfolio, and provide in advance to the Adviser all reports to the
Board of Directors for examination and review within a reasonable time prior to
the Fund's Board meetings.
Should the New Agreement be approved, the parties have expressed to the
Board their intention to increase over time the U.S. portion of the Fund's
portfolio to a range of between 30% and 40% of the total portfolio, subject to
market conditions. Such a range more nearly matches the U.S. weighting in the
FT-Index, the Fund's benchmark as defined below. The New Agreement requires that
the U.S. Adviser consult with Clemente Capital on a continuous basis as to the
portion of the Fund's total assets which shall be invested in the U.S.
Portfolio, though there is no required range.
THE MAXIMUM ADVISORY FEES PAYABLE BY THE FUND WILL NOT CHANGE AS A RESULT
OF APPROVAL OF THE NEW AGREEMENT. The annual advisory fee rate payable by the
Fund to Clemente Capital under the Fund Advisory Agreement is comprised of a
basic fee of 1% (on an annual basis) of the month-end net assets of the Fund,
that is subject to adjustment to a maximum of 1.5% (on an annual basis) and a
minimum of .5% (on an annual basis) based upon the performance of the Fund
relative to the FT-Actuaries World Index (the "FT Index") on a rolling 36-month
basis. Under the New Agreement, Wilmington Trust is entitled to be paid by the
Adviser 25% of the fees payable to the Adviser under the Fund Advisory
Agreement. The advisory fees payable by Clemente Capital to Wilmington Trust
under the New Agreement are the responsibility of Clemente Capital and do not
represent an additional charge to the Fund.
The aggregate investment advisory fees paid under the Fund Advisory
Agreement for the fiscal year ended December 31, 1996 were $319,763, and the
corresponding effective rate of the advisory fees paid by the Fund during the
fiscal year ended December 31, 1996 was .50% of the Fund's month-end net assets.
If the
3
<PAGE> 6
New Agreement had been in effect during the Fund's fiscal year ended December
31, 1996, Wilmington Trust would have earned $79,440 in fees and Clemente
Capital's compensation would have been reduced to $240,323 (a total of
$319,763).
The New Agreement provides that Wilmington Trust will pay all expenses
incurred by it in connection with its activities under the New Agreement other
than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Fund. The New Agreement also provides that Wilmington Trust will exercise due
care and diligence and use the same skill and care in providing services under
the New Agreement as it uses in providing services to other investment companies
and accounts it manages, but that Wilmington Trust shall not be liable for any
action taken or omitted by it in the absence of bad faith, willful misconduct,
gross negligence or reckless disregard of its duties.
Under the New Agreement, Wilmington Trust agrees that either Clemente
Capital or itself, at its option, will place orders for the purchase and sale of
portfolio securities for the U.S. Portfolio and will solicit broker-dealers to
execute transactions in accordance with the Fund's policies and restrictions
regarding brokerage allocations. Should Wilmington Trust be responsible for
executing portfolio transactions and selecting brokers or dealers, it will use
its reasonable best efforts to seek the most favorable execution of orders,
after taking into consideration all factors that Wilmington Trust deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with their obligation,
Wilmington Trust may, to the extent permitted by law, purchase and sell
portfolio securities to and from brokers and dealers that provide brokerage
and/or research services. These brokerage and/or research services might consist
of reports and statistics on specific companies or industries, general summaries
of groups of stocks or bonds and their comparative earnings and yields, or broad
overviews of the securities markets and the economy. Commissions paid to brokers
or dealers providing these services may be higher than those which other
qualified brokers or dealers would charge for effecting the same transactions,
provided that Wilmington Trust determines in good faith that such commissions
are reasonable in relation to the value of the brokerage and/or research
services provided by such broker or dealer, viewed in terms of either a
particular transaction or Wilmington Trust's overall responsibility to the Fund.
Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by Clemente Capital and Wilmington
Trust, and does not reduce the advisory fees payable to Clemente Capital by the
Fund. It is possible that certain of the supplementary research or other
services received will primarily benefit one or more other investment companies
or other accounts for which Clemente Capital or Wilmington Trust exercises
investment discretion. Conversely, the Fund may be the primary beneficiary of
the research or services received as a result of portfolio transactions effected
for such other investment companies or accounts.
Investment decisions for the Fund and for other investment accounts managed
by Wilmington Trust will be made independently of each other in light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then allocated in a manner believed by
Wilmington Trust to be equitable to each such account. To the extent permitted
by law, Wilmington Trust may aggregate the securities to be sold or purchased
for the Fund with those to be sold or purchased for other investment companies
or accounts in executing transactions. Fund securities will not be purchased
from or sold to Wilmington Trust or any affiliated person thereof, except as
permitted by law.
4
<PAGE> 7
If ratified and approved by the stockholders of the Fund, the New Agreement
will continue in effect until May 29, 1999. Thereafter, the New Agreement will
continue in effect with respect to the Fund for successive annual periods,
provided that its continuance is approved at least annually (a) by the vote of a
majority of those members of the Board of Directors who are not "interested
persons" (as that term is defined by the 1940 Act) of any party to the New
Agreement cast in person at a meeting called for the purpose of voting on such
approval and (b) by the whole Board of Directors, or by vote of a "majority of
the outstanding shares" of the Fund (as such term is defined by the 1940 Act as
set forth below).
The New Agreement provides that it will terminate automatically in the
event of its "assignment" (as that term is defined by the 1940 Act). The New
Agreement also provides that it is terminable without penalty by the Fund (by
vote of the Board of Directors of the Fund or by vote of a majority of the
outstanding shares of the Fund) or by Clemente Capital or Wilmington Trust on 60
days' written notice.
The approval of the New Agreement requires the affirmative vote of the
holders of a "majority of the outstanding shares" of the Fund (as defined by the
1940 Act), which means the lesser of (i) the holders of 67% or more of the
shares of the Fund present at the Meeting if the holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or (ii) more
than 50% of the outstanding shares of the Fund.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE NEW AGREEMENT
5
<PAGE> 8
PROPOSAL NOS. 2 AND 3
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes in accordance with the
Fund's Charter and By-Laws. The class of directors (Class III) whose term will
expire at the 1997 Annual Meeting consists of three present directors: Thomas H.
Lenagh, Sam Nakagama and G. Peter Schieferdecker, who are each nominated for
election for a term of three years and until their successors are duly elected
and qualified.
In addition, Robert J. Christian of Wilmington Trust Company, the Fund's
proposed U.S. Adviser, is nominated as a Class II director for a term to expire
at the 1999 Annual Meeting and until his successor is duly elected and
qualified. The Board of Directors believes that the addition of Mr. Christian,
Chief Investment Officer of Wilmington Trust Company, will be of significant
benefit to the Fund as he brings over 20 years of investment experience. Mr.
Christian is also a director of Rodney Square Management Corporation, the Fund's
administrator, and a director of The Rodney Square family of mutual funds.
Each of the Class III nominees is currently a director and has served since
the commencement of the Fund's operations. Each nominee has consented to serve
as a director of the Fund if elected. In the event that any of the nominees
should become unavailable for election for any presently unforeseen reason, the
persons named in the form of proxy will vote for any nominee who shall be
designated by the present Board of Directors. Directors shall be elected by a
plurality of the shares voting at the Meeting.
The information set forth below as to the ages and principal occupations of
these nominees and the other members of the Board of Directors, and the number
of shares of Common Stock of the Fund beneficially owned by them, directly or
indirectly, has been furnished to the Fund by such nominees or directors.
6
<PAGE> 9
NOMINEE WHOSE TERM EXPIRES IN 1999
(CLASS II)
<TABLE>
<CAPTION>
NUMBER AND
PERCENTAGE (IF
OVER 1%) OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED AS OF
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION DURING PAST FIVE YEARS MARCH 10, 1997
- -------------------------- ---- ---------------------------------------------- ---------------
<S> <C> <C> <C>
*Robert J. Christian 48 Director of the Fund since April 1, 1997; 0
Chief Investment Officer of Wilmington Trust
Company and Chairman and Director of Rodney
Square Management Corp. since February 1996;
Chairman and Director of PNC Equity Advisors
Company and Director, President and Chief
Investment Officer of PNC Asset Management
Group, Inc. from September 1994 through
February 1996; Director of Provident Capital
Management, Inc. from December 1993 through
February 1996; Chief Investment Officer of PNC
Bank, N.A. from October 1992 through February
1996; Director of Investment Strategy of PNC
Bank, N.A. from April 1989 through October
1992; Director of The Rodney Square Fund, The
Rodney Square Tax-Exempt Fund, The Rodney
Square Strategic Income Fund and The Rodney
Square Multi- Manager Fund.
</TABLE>
NOMINEES WHOSE TERMS EXPIRE IN 1997
(CLASS III)
<TABLE>
<CAPTION>
NUMBER AND
PERCENTAGE (IF
OVER 1%) OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED AS OF
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION DURING PAST FIVE YEARS MARCH 10, 1997
- -------------------------- ---- ---------------------------------------------- ---------------
<S> <C> <C> <C>
*Thomas H. Lenagh 76 Director of the Fund since June 1987; 1,000
Greenwich Office Park #6 independent financial adviser since 1984;
Greenwich, CT 06830 Director of CML Group, Inc., Gintel Fund,
Adams Express, Irvine Sensors, Inc., ICN
Pharmaceuticals, Franklin Quest and V-Band
Corp.
Sam Nakagama 71 Director of the Fund since June 1987; Chairman 1,000(2)
1650 Route 35 and Chief Economist at Nakagama & Wallace Inc.
Middletown, NJ 07748 (now Nakagama & Company) since February 1983.
G. Peter Schieferdecker 72 Director of the Fund since June 1987; 3,000
15 Pilot Rock Lane Executive Vice President and Treasurer of the
Riverside, CT 06878 Fund from June 1987 through December 1989;
President and Chief Operating Officer of
Clemente Capital, Inc. from March 1986 through
December 1988.
</TABLE>
7
<PAGE> 10
DIRECTORS WHOSE TERMS EXPIRE IN 1998
(CLASS I)
<TABLE>
<CAPTION>
NUMBER AND
PERCENTAGE
(IF
OVER 1%) OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED AS OF
PRINCIPAL OCCUPATION DURING PAST FIVE MARCH 10,
NAME AND ADDRESS AGE YEARS 1997
- --------------------------- --- ------------------------------------------ ------------
<S> <C> <C> <C>
*Lilia C. Clemente 56 Chairman and Director of the Fund since 1,000(1)
152 West 57th Street June, 1987; Chairman and Chief Executive
New York, NY 10019 Officer of Clemente Capital, Inc. since
1986; Director of The First Philippine
Fund Inc. and Philippine Strategic
Investment (Holdings) Limited.
Robert B. Oxnam 54 Director of the Fund since June 1987; 500
630 Fifth Avenue Senior Advisor, Bessemer Securities
New York, NY 10111 Corporation since November 1992;
President, The Asia Society Inc., a
non-profit, non-political educational
institution, from 1981 through 1992;
Director of The First Philippine Fund Inc.
Baron J.G.A. Sirtema 71 Director of the Fund since June 1987; 500
van Grovestins Retired since September 1988; Chief
Middenduinendaalseweg 25 General Manager of Algemene Bank Nederland
2061 AP Bloemendaal N.V. from 1975 to September 1988.
The Netherlands
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 1999
(CLASS II)
<TABLE>
<S> <C> <C> <C>
Adrian C. Cassidy 81 Director of the Fund since June 1987; 1,000
71 Selby Lane Marketing Consultant to Discount
Atherton, CA 94027 Corporation of New York Advisers from
April 1985 through 1989; Director of
Datron Systems, Inc. and The First
Philippine Fund Inc.
*Leopoldo M. Clemente, Jr. 58 President and Director of the Fund since 1,000(1)
152 West 57th Street June 1987; President and Chief Investment
New York, NY 10019 Officer of Clemente Capital, Inc. since
January 1989; Director of The First
Philippine Fund Inc. and Philippine
Strategic Investment (Holdings) Limited.
All Directors and Officers 9,000
as a Group (11 persons)
</TABLE>
- -----------------
(1) Lilia C. Clemente and Leopoldo M. Clemente, Jr. are husband and wife.
(2) Mr. Nakagama holds his shares jointly with his wife.
- "Interested Person" of the Fund, as defined in the Investment Company Act of
1940, as amended, by reason of such person's positions with the Fund, the
Adviser or the proposed U.S. Adviser.
8
<PAGE> 11
In addition to Mr. and Mrs. Clemente, William H. Bohnett and Thomas J.
Prapas serve as executive officers of the Fund, as set forth below. Each of the
executive officers serves at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION DURING PAST FIVE YEARS
- ---------------------------- --- --------------------------------------------------------
<S> <C> <C>
William H. Bohnett 48 Secretary of the Fund since June 1987; Partner of the
666 Fifth Avenue law firm of Fulbright & Jaworski L.L.P. since February
New York, NY 10103 1991.
Thomas J. Prapas 58 Treasurer of the Fund since January 1990; Portfolio
152 West 57th Street Manager of the Fund effective April 30, 1997; Economist
New York, NY 10019 and Managing Director at Clemente Capital, Inc. since
June 1986.
</TABLE>
The Board of Directors of the Fund held four regular meetings during 1996.
All directors attended at least 75% of such meetings. The Audit Committee,
presently consisting of Messrs. Schieferdecker, Nakagama and Oxnam, met once
during 1996. The purpose of the Audit Committee is to advise the full Board with
respect to accounting, auditing and financial matters affecting the Fund.
Directors who are not affiliated with Clemente Capital, Inc. (the
"Adviser") or Wilmington Trust Company, the proposed U.S. Adviser, receive an
annual stipend of $8,000 for serving on the Board and its committees, an
additional $500 for each Board meeting which they attend and reimbursement for
out-of-pocket expenses in connection with their attendance at directors'
meetings. The Fund does not pay any pension or other benefits to its directors.
For the fiscal year ended December 31, 1996, the following table sets forth
compensation received by the Fund's directors from the Fund and The First
Philippine Fund Inc., a registered closed-end investment company for which
Clemente Capital, Inc., acts as investment adviser.
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM
COMPENSATION THE FUND AND THE FIRST
NAME OF DIRECTOR FROM THE FUND PHILIPPINE FUND INC.
- ---------------------------------------------------------- ------------- -----------------------
<S> <C> <C>
Leopoldo M. Clemente, Jr.................................. 0 0
Sam Nakagama.............................................. $10,000 $10,000
Adrian C. Cassidy......................................... 10,000 20,000
G. Peter Schieferdecker................................... 10,000 10,000
Thomas H. Lenagh.......................................... 10,000 10,000
Lilia C. Clemente......................................... 0 0
Baron J.G.A. Sirtema van Grovestins....................... 10,000 10,000
Robert B. Oxnam........................................... 10,500 20,500
</TABLE>
The Adviser, which pays the compensation and certain expenses of its
personnel who serve as directors and officers of the Fund, receives an
investment advisory fee.
Fulbright & Jaworski L.L.P., of which William H. Bohnett, the Secretary of
the Fund, is a partner, acts as legal counsel to the Fund.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE ELECTION OF DIRECTORS
PURSUANT TO PROPOSAL NOS. 2 & 3
9
<PAGE> 12
PROPOSAL NO. 4
RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
By vote of the Board of Directors, including the vote of the non-interested
Directors, the firm of Price Waterhouse LLP has been selected as the Fund's
independent accountants for the year ending December 31, 1997. Such selection is
being submitted to the stockholders for ratification. The employment of Price
Waterhouse LLP is conditioned on the right of the Fund, by majority vote of its
stockholders, to terminate such employment. Price Waterhouse LLP has acted as
the Fund's independent accountants from its inception through December 31, 1996.
The services to be provided by the Fund's independent accountants include
examination of the Fund's annual financial statements and limited review of its
unaudited quarterly statements, assistance and consultation in connection with
Securities and Exchange Commission and New York Stock Exchange filings, and
preparation of the Fund's annual federal and state income tax returns.
A representative of Price Waterhouse LLP is expected to be present at the
meeting and will have the opportunity to make a statement if he or she so
desires. This representative will also be available to respond to appropriate
questions.
Proposal No. 4 requires the affirmative vote of a majority of shares voting
at the Meeting for passage.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF PRICE
WATERHOUSE LLP AS THE FUND'S INDEPENDENT ACCOUNTANTS
10
<PAGE> 13
PROPOSAL NO. 5
SHAREHOLDER PROPOSAL
A shareholder has submitted the following proposal for inclusion in this
Proxy Statement. Such shareholder claims beneficial ownership of 1,501 shares of
Common Stock. The Fund will provide the name and address of the proposing
shareholder to any shareholder of the Fund who so requests such information by
written or oral request to Lilia C. Clemente at Clemente Global Growth Fund,
Inc., 152 West 57th Street, New York, New York 10019, telephone number
212-765-0700.
RESOLVED: It is requested that, as soon as practicable, the Board
shall seriously consider soliciting competitive proposals for a new
investment advisor for the Fund.
The shareholder has requested that the following statement be included in
the Proxy Statement in support of the proposal:
The Fund's objective is long term capital appreciation. Clemente Capital
Inc. ("Clemente"), the current investment advisor has had more than nine years
at the helm to prove that it is up to the task. However, despite an excellent
investment climate over that time period, the Fund's performance has been
disappointing. From its inception on July 1, 1987 through September 30, 1996,
the Fund's market return has averaged less than 3% per year. According to
Lipper, the Fund's annualized market returns for the one-year, three-year and
five-year periods ending September 30, 1996 were 7.5%, 1.2% and 5.4%,
respectively.
In its July 26, 1996 report, Morningstar summed up the Fund's track record
as follows: "CLM's year-to-date return is more than four percentage points
behind the . . .average [return of 180 open-end world stock funds]. Nor is this
underperformance an isolated incident. The Fund's trailing five-year return also
lands near the bottom of the open-end group, in addition to lagging the [MSCI
World] index." Because of this underperformance, the Fund's shares on October
19, 1996 were trading at a discount of 24.8% to their net asset value, the
largest discount of any closed-end fund listed on the New York Stock Exchange.
Nine years of underperformance is enough. There are many highly qualified
investment advisory firms that can be solicited as potential replacements for
Clemente. For example, Putnam Global Growth A Fund, Scudder International Fund,
Fidelity Overseas Fund and Templeton Foreign I Fund are open-end funds with
average annual returns for the ten-year period ending September 30, 1996 of
10.69%, 10.30%, 13.09% and 15.18%, respectively. Proposals can be solicited from
their investment advisors or from other investment advisors with good track
records.
To summarize, the stockholders of the Fund are entitled to better
performance than Clemente has been able to deliver. Therefore, it is time for
the Board to assert its independence from Clemente and, in the best interest of
shareholders, seek a new investment advisor for the Fund. We recommend that the
Board solicit competitive proposals from the best investment advisory firms that
the Board can find, that it evaluate these proposals based upon investment
performance and proposed fees and any other factors the Board deems appropriate
and relevant, and that it enter into an investment advisory contract with the
winning firm.
THE BOARD OF DIRECTORS' POSITION ON THE SHAREHOLDER PROPOSAL
The Fund's Board of Directors votes annually on whether to renew the Fund's
advisory contract with Clemente Capital. To do so, the Board receives and
reviews extensive documentation, including comparative performance and fee
information for other advisers managing registered investment companies having
investment objectives and policies similar to that of the Fund. In that regard,
the Board is cognizant that the
11
<PAGE> 14
existing contract with Clemente Capital, which provides for a fee based on the
Fund's performance relative to that of the FT-Actuaries World Index on a rolling
three year basis, is highly unusual. Very few funds have such a performance fee
to the Board's knowledge and none of the more than 30 funds with which the Fund
is directly compared each year by the Board have such an arrangement. The fact
that the Fund's existing contract aligns the Adviser's compensation with the
interests of the Fund's shareholders in maximizing performance in a way that few
other contracts do has been an important part of the Board's deliberations on
renewal.
In addition to studying quantitative data, the Board looks at a wide
variety of qualitative factors in its annual review. Among other factors, the
Board considers the experience and expertise of the investment personnel of the
Adviser and the investment research techniques used by, and coverage of, the
Adviser. All of these are deemed to be important in forming a collective
judgment. Three year performance statistics, while disappointing and of
significant concern to the Board, are put in a wider context of evaluating an
adviser which produced exceptional total investment returns (as stated in the
Fund's annual reports) for the Fund in 1993 (up 53.55%) and 1989 (up 39.39%),
and which has widely recognized expertise in global markets investing. Also, the
Fund's recent performance has been stronger, with the Fund's NAV up 5.5% in 1997
through April 24, compared with a rise of 0.2% for the FT-Index. The Board
believes it must look at the totality of the circumstances in the exercise of
its fiduciary duties, which is what any fund board must do. No board, consistent
with its fiduciary duty, can choose to focus only on a few highly changeable
statistics as the basis for a decision which must be premised on the balancing
of numerous quantitative and qualitative criteria.
As outlined above and in Proposal No. 1, the Board began a process a year
ago which has now involved seven full Board meetings in the last twelve months,
to exhaustively analyze the performance of Clemente Capital to the Fund. What
has resulted is a recommendation to add Wilmington Trust as the U.S. Adviser,
while preserving the global markets expertise of Clemente Capital and an
advisory contract that the Board believes is highly favorable to shareholders on
a cost of advisory services basis. The Board believes this course of action has
the highest probability of achieving a sustained improvement in investment
performance and is far superior to the uncertainties of a process which might
lead to the approval of an adviser unfamiliar with the Fund's portfolio and a
contract markedly less advantageous to shareholders. For the foregoing reasons,
the Board of Directors opposes Proposal No. 5.
Proposal No. 5 requires the affirmative vote of a majority of shares voting
at the Meeting for passage.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS
VOTE "AGAINST" PROPOSAL NO. 5
12
<PAGE> 15
THE INVESTMENT ADVISER, THE PROPOSED U.S. ADVISER
AND THE ADMINISTRATOR
THE INVESTMENT ADVISER
Clemente Capital, Inc., the Fund's investment adviser, has its principal
office at 152 West 57th Street, New York, New York 10019. Lilia C. Clemente,
Chairman and Director of the Fund, is Chairman, Chief Executive Officer and a
Director of the Adviser. Leopoldo M. Clemente, Jr., President and Director of
the Fund, is President, Chief Investment Officer and a Director of the Adviser.
In addition to Mr. and Mrs. Clemente, the Adviser's Directors are: Salvador
Diaz-Verson, Jr., President of Diaz-Verson Capital Investments, Inc., an
investment advisory firm located in Columbus, Georgia; Robert J. Christian,
Chief Investment Officer, Wilmington Trust Company; Irving L. Gartenberg, Esq.,
general counsel to the Adviser; and Thomas J. Prapas, Managing Director and
Chief Economist for the Adviser. Mrs. Clemente owns approximately 60% of the
outstanding Common Stock of the Adviser. The address for Mr. and Mrs. Clemente
and Mr. Prapas is 152 West 57th Street, New York, New York 10019. The address
for Mr. Diaz-Verson is 1200 Brookstone Centre Parkway, Suite 105, Columbus,
Georgia 31904; the address for Mr. Christian is 1100 North Market Street,
Wilmington, Delaware 19890; and the address for Mr. Gartenberg is 122 East 42nd
Street, 46th Floor, New York, New York 10017. Wilmington Trust Company owns
24.9% of the outstanding Common Stock of the Adviser.
THE PROPOSED U.S. ADVISER
Wilmington Trust Company ("Wilmington Trust") is a Delaware corporation
with principal offices at 1100 North Market Street, Wilmington, Delaware 19890.
Wilmington Trust is a wholly-owned subsidiary of Wilmington Trust Corporation,
1100 North Market Street, Wilmington, Delaware 19890.
Ted T. Cecala is the principal executive officer of Wilmington Trust. The
name and principal occupation of each director of Wilmington Trust as of April
1, 1997 were as follows:
<TABLE>
<CAPTION>
NAME OF DIRECTOR OCCUPATION
--------------------------- -----------------------------------------------------
<S> <C>
Ted T. Cecala.............. Chief Executive Officer and Chairman of the Board of
Wilmington Trust
Andrew B. Kirkpatrick...... Of counsel to the law firm of Morris, Nichols, Arsht
and Tunnell
David P. Roselle........... President of the University of Delaware
Mary Jornlin-Theisen....... Civic leader
Charles S. Crompton, Jr.... Partner of the law firm of Potter, Anderson & Corroon
Edward B. du Pont.......... Private investor
Stacey J. Mobley........... Senior Vice President, external affairs, E.I. Du Pont
de Nemours and Company
Carolyn S. Burger.......... Principal of CB Associates, Inc., a consulting firm
Robert V.A. Harra, Jr...... President, Chief Operating Officer and Treasurer of
Wilmington Trust
Leonard W. Quill........... Retired
Richard R. Collins......... Chairman of Collins, Inc, a consulting firm
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
NAME OF DIRECTOR OCCUPATION
--------------------------- -----------------------------------------------------
<S> <C>
Hugh E. Miller............. Retired
Thomas P. Sweeney.......... Partner of the law firm of Richards, Layton & Finger
Robert H. Bolling, Jr...... Retired
H. Stewart Dunn, Jr........ Partner of the law firm of Ivins, Phillips & Barker
R. Keith Elliot............ Chairman of the Board and Chief Executive Officer of
Hercules Incorporated
Bernard J. Taylor, II...... Retired
Robert C. Forney........... Retired
Rex L. Mears............... President of Ray S. Mears and Sons, Inc.
Robert W. Tunnell, Jr...... Managing Partner of the law firm of Tunnell
Companies, L.P.
</TABLE>
All of the above persons may be reached c/o Wilmington Trust, 1100 North
Market Street, Wilmington, Delaware 19890.
THE ADMINISTRATOR
Rodney Square Management Corporation, a wholly owned subsidiary of
Wilmington Trust, is the Fund's administrator (the "Administrator") and has its
principal office at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890. Pursuant to the Fund's Administration and Accounting Services
Agreement, for rendering administrative and accounting services, the
Administrator is paid a fee at an annual rate of .15% on the first $100 million
in assets, .08% on the next $200 million in assets and .06% on any assets in
excess of $300 million of the Fund's average net assets, subject to a minimum
fee of $65,000 annually.
MISCELLANEOUS
As of the date of this Proxy Statement, management does not know of any
other matters that will come before the meeting. In the event that any other
matter properly comes before the meeting, the persons named in the enclosed form
of proxy intend to vote all proxies in accordance with their best judgment on
such matters.
All shares represented by proxies sent to the Fund to be voted at the
Annual Meeting will be voted if received prior to the meeting. Votes shall be
tabulated by the Fund's transfer agent. Abstentions do not constitute a vote
"for" or "against" a matter and will be disregarded in determining votes cast on
an issue. Broker "non-votes" (i.e., proxies from brokers or nominees indicating
that such persons have not received instructions from the beneficial owner or
other persons entitled to vote the shares on a particular matter with respect to
which the brokers or nominees do not have discretionary power) will be treated
the same as abstentions. Abstentions and broker "non-votes" will have the effect
of a "no" vote for purposes of obtaining the requisite approval of each
proposal.
QUORUM. A quorum is constituted with respect to the Fund by the presence in
person or by proxy of the holders of more than 50% of the outstanding shares of
the Fund entitled to vote at the Meeting. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions, but
not broker "non-votes" (that is, proxies from brokers or nominees indicating
that such persons have not received instructions from the beneficial owners or
other persons entitled to vote shares on a particular matter with respect to
which the brokers or nominees do not have discretionary power), will be treated
as shares that are present at the Meeting but which have not been voted.
14
<PAGE> 17
In the event that a quorum is not present at the Meeting, or in the event
that a quorum is present at the Meeting but sufficient votes to approve either
of the proposals are not received, the persons named as proxies, or their
substitutes, may propose one or more adjournments of the Meeting to permit the
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares affected by the adjournment that
are represented at the Meeting in person or by proxy. If a quorum is present,
the persons named as proxies will vote those proxies which they are entitled to
vote FOR either proposal in favor of such adjournments, and will vote those
proxies required to be voted AGAINST both proposals against any adjournment.
ADDITIONAL INFORMATION
Wilmington Trust or its affiliate, Rodney Square Management Corp. ("RSMC"),
also serves as the adviser to the following registered investment companies:
<TABLE>
<CAPTION>
APPROXIMATE NET
NAME OF ASSETS AS OF ANNUAL RATE OF
INVESTMENT ADVISER INVESTMENT COMPANY APRIL 1, 1997 COMPENSATION
- --------------------- -------------------- --------------- --------------------------
<S> <C> <C> <C>
RSMC Rodney Square Fund $ 1,355,015,301 47 basis points (.47%)
RSMC Rodney Square 290,258,080 47 basis points (.47%)
Tax Exempt Fund
Wilmington Trust Rodney Square 47,749,811 50 basis points (.50%)
Strategic Fixed-
Income Fund
RSMC Rodney Square Multi- 71,943,228 100 basis points (1.0%)
Manager Fund of which 50 basis points
(.50%) are paid to
(unaffiliated)
sub-advisers
RSMC (serves as Emerald Funds Tax 162,327,296 15 basis points (.15%)
sub-adviser) Exempt Portfolio
</TABLE>
As of January 15, 1997, LTB Trust, 6620 W. Broad Street, Richmond, Virginia
23230 owned approximately 5.3% of the outstanding common shares of the Fund. As
of such date, no other person owned of record or, to the knowledge of
management, beneficially owned more than 5% of the outstanding shares of the
Fund.
15
<PAGE> 18
1998 ANNUAL MEETING
Stockholder proposals meeting the requirements contained in the proxy rules
adopted by the Securities and Exchange Commission may, under certain conditions,
be included in the Fund's proxy material for an annual meeting of stockholders.
Pursuant to these rules, proposals of stockholders intended to be presented at
the Fund's 1998 Annual Meeting of Stockholders must be received by the Fund on
or before December 31, 1997 to be considered for inclusion in the Fund's Proxy
Statement and form of proxy relating to that Annual Meeting. Receipt by the Fund
of a stockholder proposal in a timely manner does not insure the inclusion of
such proposal in the Fund's proxy material.
CLEMENTE GLOBAL GROWTH FUND, INC.
WILLIAM H. BOHNETT
Secretary
Dated: April 30, 1997
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD NOW
16
<PAGE> 19
EXHIBIT A
U.S. ADVISORY AGREEMENT
AGREEMENT made as of May 29, 1997 between Clemente Capital, Inc., a New
York corporation (the "Adviser"), Clemente Global Growth Fund, Inc., a Maryland
corporation (the "Fund") and Wilmington Trust Company, a Delaware corporation
(the "U.S. Adviser").
WHEREAS, the Fund is registered as a closed-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to the Fund,
pursuant to an Investment Advisory Agreement dated June 19, 1987, which has been
approved by the Fund's shareholders and by the Fund's Board of Directors, most
recently on April 23, 1997 (the "Advisory Agreement");
WHEREAS, the Adviser and the Fund desire to retain the U.S. Adviser to
assist in the provision of a continuous investment program for the U.S. portion
of the Fund's portfolio (the "U.S. Portfolio") and the U.S. Adviser is willing
to do so; and
WHEREAS, the Board of Directors of the Fund has approved this Agreement,
subject to approval by the shareholders of the Fund, and the U.S. Adviser is
willing to furnish such services upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser and the Fund hereby appoint the U.S. Adviser to
act as adviser to the Fund with respect to the U.S. Portfolio. Intending to be
legally bound, the U.S. Adviser accepts such appointment and agrees to render
the services herein set forth for the compensation herein provided.
2. Advisory Services. Subject to the supervision of the Fund's Board of
Directors, the U.S. Adviser will assist the Adviser by providing a continuous
investment program for the U.S. Portfolio, including investment research and
management with respect to all securities and investments and cash equivalents
comprising the U.S. Portfolio. The parties agree that securities of any company
whose primary trading market is located in the United States are eligible for
inclusion in the U.S. Portfolio. The U.S. Adviser will provide services under
this Agreement in accordance with the Fund's investment objective, policies and
restrictions as stated in the Fund's Prospectus and resolutions of the Fund's
Board of Directors applicable to the Fund.
Without limiting the generality of the foregoing, the U.S. Adviser further
agrees that it:
(a) will determine from time to time what securities and other
investments will be purchased, retained or sold for the U.S. Portfolio;
(b) will manage in consultation with the Adviser the U.S. Portfolio's
temporary investments in securities, cash and cash equivalents;
(c) will place orders pursuant to its investment determinations for
the U.S. Portfolio either directly with the issuer or with any broker or
dealer;
(d) will consult with the Adviser on a continuous basis as to the
portion of the Fund's total assets which shall be invested in the U.S.
Portfolio;
A-1
<PAGE> 20
(e) will attend regular business and investment-related meetings with
the Fund's Board of Directors and the Adviser if requested to do so by the
Fund and/or the Adviser; and
(f) will maintain books and records with respect to the securities
transactions for the U.S. Portfolio, furnish to the Adviser and the Fund's
Board of Directors such periodic and special reports as they may request
with respect to the U.S. Portfolio, and provide in advance to the Adviser
all reports to the Board of Directors for examination and review within a
reasonable time prior to the Fund's Board meetings.
3. Covenants by the U.S. Adviser. The U.S. Adviser agrees with respect to
the services provided to the Fund that it:
(a) will conform with all Rules and Regulations of the Securities and
Exchange Commission;
(b) will telecopy trade information to the Adviser no later than the
first business day following the day of the trade and cause broker
confirmations to be sent directly to the Adviser and adopt such other trade
reporting, settlement and clearance procedures with respect to the Fund as
shall be in accordance with the Fund's existing procedures and as mutually
agreed by the parties hereto; and
(c) will treat confidentially and as proprietary information of the
Fund all records and other information relative to the Fund and prior,
present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder (except after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably withheld, and
may not be withheld and will be deemed granted where the U.S. Adviser may
be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities,
or when so requested by the Fund).
4. Services Not Exclusive. The services furnished by the U.S. Adviser
hereunder are deemed not to be exclusive, and nothing in this Agreement shall
(i) prevent the U.S. Adviser or any affiliated person (as defined in the 1940
Act) of the U.S. Adviser or any affiliated person of such person from acting as
investment adviser or manager for any other person or persons, including other
management investment companies or investment vehicles or accounts of any type
with investment objectives and policies the same as or similar to those of the
Fund or (ii) limit or restrict the U.S. Adviser or any such affiliated person
from buying, selling or trading any securities or other investments (including
any securities or other investments which the Fund is eligible to buy) for its
or their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that the U.S. Adviser agrees that it will not
undertake any activities which, in its reasonable judgment, will adversely
affect the performance of its obligations under this Agreement.
5. U.S. Portfolio Transactions. Investment decisions for the U.S. Portfolio
shall be made by the U.S. Adviser independently from those for any other
investment companies and accounts advised or managed by the U.S. Adviser. The
U.S. Portfolio and such investment companies and accounts may, however, invest
in the same securities. When a purchase or sale of the same security is made at
substantially the same time on behalf of the U.S. Portfolio and/or another
investment company or account, the transaction will be averaged as to price, and
available investments allocated as to amount, in a manner which the U.S. Adviser
believes to be equitable to the Fund and such other investment company or
account. In some instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position obtained or sold
by the Fund. To the extent permitted by law, the U.S. Adviser may aggregate the
securities to be sold or purchased for the U.S. Portfolio with those to be sold
or purchased for other investment companies or accounts in order to obtain best
execution.
A-2
<PAGE> 21
Either the Adviser, or at the U.S. Adviser's option, the U.S. Adviser shall
place orders for the purchase and sale of portfolio securities for the U.S.
Portfolio and will solicit broker-dealers to execute transactions in accordance
with the Fund's policies and restrictions regarding brokerage allocations. If
applicable, the U.S. Adviser shall place orders pursuant to its investment
determinations for the U.S. Portfolio either directly with the issuer or with
any broker or dealer. If it executes portfolio transactions and selects brokers
or dealers, the U.S. Adviser shall use its reasonable best efforts to seek the
most favorable execution of orders, after taking into account all factors the
U.S. Adviser deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. Consistent
with this obligation, the U.S. Adviser may, to the extent permitted by law,
purchase and sell portfolio securities to and from brokers and dealers who
provide brokerage and/or research services (within the meaning of Section 28(e)
of the Securities Exchange Act of 1934) to or for the benefit of the U.S.
Portfolio of the Fund and/or other accounts over which the U.S. Adviser or any
of its affiliates exercises investment discretion. The U.S. Adviser is
authorized to pay to a broker or dealer who provides such brokerage and/or
research services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if the U.S. Adviser determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and/or research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the U.S. Adviser's overall
responsibilities to the Fund. In no instance will portfolio securities be
purchased from or sold to the Adviser or the U.S. Adviser or any affiliated
person of either thereof, except as permitted by Rules and Regulations of the
Securities and Exchange Commission.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the U.S. Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request. The
U.S. Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. Expenses. During the term of this Agreement, the U.S. Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for the Fund. Nothing herein, however, shall be deemed to require the
U.S. Adviser to pay any expenses of the Fund or the Adviser.
8. Compensation. For the services provided and the expenses assumed with
respect to the U.S. Portfolio pursuant to this Agreement, the U.S. Adviser will
be entitled to a fee, computed monthly, from the Adviser equal to 25% of the
fees received by the Adviser from the Fund pursuant to the Advisory Agreement.
9. Standard of Care; Limitation of Liability. The U.S. Adviser shall
exercise due care and diligence and use the same skill and care in providing its
services hereunder as it uses in providing services to other investment
companies, accounts and customers, but shall not be liable for any action taken
or omitted by the U.S. Adviser in the absence of bad faith, willful misconduct,
gross negligence or reckless disregard of its duties.
10. Reference to the U.S. Adviser. Neither the Adviser nor any affiliate or
agent of it shall make reference to or use the name of the U.S. Adviser or any
of its affiliates, or any of their clients, except references concerning the
identity of and services provided by the U.S. Adviser to the Fund, which
references
A-3
<PAGE> 22
shall not differ in substance from those included in the most recent proxy
statement or annual report of the Fund, or the Fund's current registration
statement, this Agreement and the Advisory Agreement between the Adviser and the
Fund, in any advertising or promotional materials without the prior approval of
the U.S. Adviser, which approval shall not be unreasonably withheld or delayed.
The Adviser hereby agrees to make all reasonable efforts to cause the Fund and
any affiliate thereof to satisfy the foregoing obligation.
11. Duration and Termination. Unless sooner terminated, this Agreement
shall continue until May 29, 1999, and thereafter shall continue automatically
for successive annual periods, provided such continuance is specifically
approved at least annually by the Fund's Board of Directors or the vote of a
"majority of the outstanding voting securities of the Fund," defined as the
lesser of (a) 67% of the shares of the Fund represented at a meeting if holders
of more than 50% of the outstanding shares of the Fund are present in person or
by proxy or (b) more than 50% of the outstanding shares of the Fund, provided
that in either event its continuance also is approved by a majority of the
Fund's Directors who are not "interested persons" (as defined in the 1940 Act)
of any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable at any time
without penalty, on 60 days' notice, by the Fund's Board of Directors, by the
Adviser or by the U.S. Adviser or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement will terminate automatically in
the event of its assignment (as defined in the 1940 Act).
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by the vote of the holders of a majority of the
outstanding voting securities of the Fund and by the Board of Directors of the
Fund, including a majority of the Directors who are not interested persons of
the Adviser or the U.S. Adviser, cast in person at a meeting called for the
purpose of voting on such approval.
13. Notice. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To the U.S. Adviser at:
1100 North Market Street
Wilmington, Delaware 19890
Attention: Robert J. Christian
To the Adviser at:
152 West 57th Street
New York, New York 10019
To the Fund at:
152 West 57th Street
New York, New York 10019
with a copy to:
William H. Bohnett
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
A-4
<PAGE> 23
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
This Agreement constitutes the entire agreement of the parties, shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by New York law.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
CLEMENTE GLOBAL GROWTH FUND, INC.
By:
--------------------------------------
Name:
Title:
CLEMENTE CAPITAL, INC.
By:
--------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
By:
--------------------------------------
Name:
Title:
A-5
<PAGE> 24
IMPORTANT
1. Be sure to vote on the WHITE proxy card.
2. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the party responsible for your account and instruct
them to vote on the WHITE proxy card "FOR" the advisory agreement proposal
with Wilmington Trust Company, "FOR" the Clemente Global Growth Fund Board
nominees, and "AGAINST" the shareholder proposal.
If you have any comments or questions please feel free to call Georgeson &
Company, the firm assisting us in the solicitation of proxies, at (800)
223-2064. Banks and brokers, please call (800) 445-1790.
<PAGE> 25
[CLEMENTE GLOBAL GROWTH FUND LOGO]
April 30, 1997
A Q&A WITH LILIA CLEMENTE
1. LILIA, COULD YOU TELL CLEMENTE GLOBAL GROWTH FUND SHAREHOLDERS ABOUT
WILMINGTON TRUST COMPANY?
Wilmington Trust currently has a total of approximately $100 billion in
assets under trust, custody and investment management and ranks as the
eighth largest personal trust company in the United States. Wilmington
Trust has been in the asset management business for over 90 years and
acts as the investment adviser to the Rodney Square family of mutual
funds. Significantly, Wilmington Trust predominantly focuses on
investment in U.S. securities and has extensive research capabilities
in U.S. stocks.
2. PLEASE TELL US ABOUT THE RELATIONSHIP BETWEEN WILMINGTON TRUST AND
CLEMENTE CAPITAL, INC. ("CCI")?
The two companies have worked together since 1987 when CCI was hired as
an adviser for a Wilmington Trust international equity portfolio. In
April 1996, Wilmington Trust acquired a 24.9% interest in CCI and
became a strategic partner providing CCI with financial, business, and
marketing support, and gaining, in return, international expertise.
3. WHAT IS THE NEW RELATIONSHIP BEING PROPOSED IN THE PROXY STATEMENT?
We are proposing that Wilmington Trust become the U.S. Adviser to
Clemente Global Growth Fund (the "Fund"), while Clemente Capital
continues to select the international investments for the Fund.
4. HOW WILL THIS NEW STRUCTURE BENEFIT THE FUND?
The new structure will add to the overall investment management process
the extensive resources possessed by Wilmington for investing in the
U.S. market. A major cause of the Fund's recent underperformance has
been the significant underweighting of the U.S. market, given CCI's
limited coverage of that market. This source of underperformance should
come to an end.
5. WILL THIS NEW STRUCTURE AFFECT THE OVERALL INVESTMENT MANAGEMENT
PROCESS IN OTHER WAYS?
Country allocation decisions will benefit from the unique perspective
of each firm; infrastructure improvements, in both hardware and
software, will make possible the development of screening and
quantitative tools that maximize the investment strengths of the two
firms. Stock selection will remain focused on strict criteria for
growth and fundamental company analysis, but the number of
<PAGE> 26
critical perspectives will grow as the overall team includes more
analysts and greater sector coverage.
6. WHAT PROMPTED THIS RECOMMENDATION BY THE FUND'S BOARD OF DIRECTORS?
The Board is determined to turn around a Fund performance which has
been hurt, in the past couple of years, by CCI not taking full
advantage of a U.S. bull market, and by volatility in the emerging
markets, which represent one of CCI's traditional sources of strength.
Wilmington Trust's investment resources and technology are now
available to CCI, along with a rigorous and extensive research process.
With U.S. investments now easier to come by, the combined team can
adopt a more cautious view toward emerging markets, when risks seem
high relative to expected rewards.
7. WHEN CAN INVESTORS IN THE FUND EXPECT THESE CHANGES TO HAVE AN IMPACT
ON PERFORMANCE?
Even before a formal relationship has begun for the management of the
Fund, which requires shareholder approval, Clemente Capital has been
working informally with Wilmington Trust to strengthen, through the use
of new technology and a more integrated investment process, both
country allocation and stock selection decisions.
The Fund's recent improved performance reflects these changes. The
Fund's net asset value is up 5.5% in 1997 through April 24, compared
with a rise of 0.2% for the Financial Times-Actuaries World Index, the
Fund's benchmark.
8. BY WAY OF SUMMARY, WHY DO YOU BELIEVE THAT A WILMINGTON TRUST AND
CLEMENTE CAPITAL, INC. INVESTMENT MANAGEMENT TEAM IS IN THE SHAREHOLDERS' BEST
INTEREST?
We are adding to CCI's international expertise, significant expertise
in U.S. equities and infrastructure improvements which will greatly
improve the collection, analysis, and presentation of fundamental data
on markets, sectors, and companies. The best investment disciplines of
both firms will be combined to strengthen the investment process, and
create, in my opinion, a very bright future for the Fund.
IMPORTANT
1. Be sure to vote on the WHITE proxy card.
2. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the party responsible for your account and
instruct them to vote on the WHITE proxy card "FOR" the advisory
agreement proposal with Wilmington Trust Company, "FOR" the Clemente
Global Growth Fund Board nominees, and "AGAINST" the shareholder
proposal.
If you have any comments or questions please feel free to call Georgeson &
Company, the firm assisting us in the solicitation of proxies, at (800)
223-2064. Banks and brokers, please call (800) 445-1790.
<PAGE> 27
<TABLE>
<CAPTION>
<S> <C> <C>
PROXY
CLEMENTE GLOBAL GROWTH FUND, INC.
The undersigned stockholder of Clemente Global Growth Fund, Inc. (the "Fund") hereby constitutes
and appoints Lilia C. Clemente, Robert B. Oxnam and William H. Bohnett, or any of them, the
action of a majority of them voting to be controlling, as proxy of the undersigned, with full
power of substitution, to vote all shares of Common Stock of the Fund standing in his name on
the books of the Fund at the Annual Meeting of Stockholders of the Fund to be held on Thursday,
May 29, 1997 at 9:00 A.M., New York time, at Le Parker Meridien, 119 West 56th Street, New York,
New York or at any adjournment thereof, with all the powers which the undersigned would possess
if personally present, as designated on the reverse hereof:
THE UNDERSIGNED HEREBY INSTRUCTS THE SAID PROXIES TO VOTE IN ACCORDANCE WITH THE AFOREMENTIONED
INSTRUCTIONS WITH RESPECT TO THE APPROVAL OR DISAPPROVAL OF THE U.S. ADVISORY AGREEMENT, THE
ELECTION OF DIRECTORS, THE RATIFICATION OF THE SELECTION BY THE BOARD OF DIRECTORS OF THE FUND'S
INDEPENDENT ACCOUNTANTS, AND THE APPROVAL OR DISAPPROVAL OF THE SHAREHOLDER PROPOSAL, BUT, IF NO
SUCH SPECIFICATION IS MADE, (i) TO VOTE FOR THE U.S. ADVISORY AGREEMENT, (ii) TO VOTE FOR THE
ELECTION OF ONE DIRECTOR INTO CLASS II (EXPIRING 1999), (iii) TO VOTE FOR THE ELECTION OF THREE
DIRECTORS INTO CLASS III (EXPIRING 2000), (iv) TO VOTE FOR THE RATIFICATION OF THE SELECTION BY
THE BOARD OF DIRECTORS OF THE FUND'S INDEPENDENT ACCOUNTANTS, (v) TO VOTE AGAINST THE
SHAREHOLDER PROPOSAL, AND (vi) TO VOTE IN THEIR DISCRETION WITH RESPECT TO SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
PROXY SOLICITED ON BEHALF OF CLEMENTE GLOBAL GROWTH FUND, INC.'S BOARD OF DIRECTORS FOR ANNUAL
MEETING OF STOCKHOLDERS -- MAY 29, 1997
(TO BE DATED AND SIGNED ON REVERSE SIDE)
</TABLE>
SEE REVERSE
SIDE
<PAGE> 28
[X] PLEASE MARK BOXES IN BLUE OR BLACK INK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. To approve or disapprove a U.S. Advisory Agreement among the Fund, Clemente
Capital, Inc. and Wilmington Trust Company pursuant to which Wilmington Trust
Company will manage the U.S. portion of the Fund's portfolio:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Election of one director, as set forth below, for the term specified below
and until his successor is duly elected and qualified:
Class II (expiring 1999) -- Robert J. Christian
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Election of three Directors, as set forth below, for the terms specified
below and until their successors are duly elected and qualified:
Class III (expiring 2000) -- Thomas H. Lenagh, Sam Nakagama and G. Peter
Schieferdecker
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Instruction: To withhold authority to vote for an individual, write that
nominee's name in the space provided below.)
4. To ratify the selection by the Board of Directors of Price Waterhouse LLP as
the Fund's independent accountants for the year ending December 31, 1997:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING PROPOSAL:
5. To approve or disapprove a shareholder proposal to request the Board of
Directors to seriously consider soliciting competitive proposals for a new
investment adviser to the Fund:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
DATE , 1997
----------------------------------------------------------------
SIGNATURE OF STOCKHOLDER
-----------------------------------------------------
SIGNATURE OF STOCKHOLDER
-----------------------------------------------------
IMPORTANT: SIGNATURE(S) SHOULD CORRESPOND WITH THE STENCILLED NAME APPEARING
HEREON. WHEN SIGNING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY,
GIVE FULL TITLE AS SUCH. WHEN MORE THAN ONE OWNER, EACH SHOULD SIGN.
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
