<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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] 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:
-----------------------------------------------------------------------
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):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
REVISED PRELIMINARY COPY
CLEMENTE GLOBAL GROWTH FUND, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 23, 1998
------------------------
The Annual Meeting of Stockholders of Clemente Global Growth Fund, Inc.
(the "Fund"), a Maryland corporation, will be held at The Essex House Hotel, 160
Central Park South, New York, New York, on September 23, 1998 at 9:30 a.m., New
York time, for the following purposes:
1. To elect Lilia C. Clemente and Baron J.G.A. Sirtema van Grovestins
as Class I directors for terms of three years (expiring in 2001) and until
their successors are duly elected and qualified;
2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the Fund's independent accountants for the
year ending December 31, 1998;
3. To approve or disapprove a shareholder proposal recommending that
the Board take the steps necessary to convert the Fund into an open-end
fund within 60 days of stockholder approval, which proposal the Board of
Directors opposes because of its recent approval of a repurchase program
and for other reasons, all as discussed herein;
4. To approve or disapprove a shareholder proposal providing that the
advisory contract between the Fund and Clemente Capital, Inc. be
terminated, which proposal the Board of Directors opposes, as discussed
herein;
5. To approve or disapprove a shareholder proposal stating that the
resignation of the Fund's Class II and Class III Directors would be in best
interests of the Fund and its shareholders, which proposal the Board of
Directors opposes;
6. To approve or disapprove a shareholder proposal recommending that
the Board authorize and direct the Fund's officers to reimburse Phillip
Goldstein for his solicitation expenses, which proposal the Board of
Directors opposes;
7. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed July 29, 1998 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,
1997 has been previously mailed to stockholders.
By order of the Board of Directors,
William H. Bohnett
Secretary
Dated: August 25, 1998
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
PRELIMINARY COPY
CLEMENTE GLOBAL GROWTH FUND, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 23, 1998
------------------------
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 The Essex House Hotel, 160 Central Park South, New
York, New York, on September 23, 1998, at 9:30 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 August 24,
1998. 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 agreement 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 Common Stock on the record
date, incurred in mailing copies of this Notice of Meeting and Proxy Statement
and the enclosed form of proxy to the beneficial owners of the Fund's Common
Stock.
Only holders of issued and outstanding shares of the Fund's Common Stock of
record at the close of business on July 29, 1998 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 July
29, 1998 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 (212) 765-0700.
<PAGE> 4
PROPOSAL NO. 1
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 I) whose term will
expire at the 1998 Annual Meeting consists of two present directors: Lilia C.
Clemente and Baron J.G.A. Sirtema van Grovestins, who are each nominated for
election for a term of three years and until their successors are duly elected
and qualified.
Each of the Class I 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.
2
<PAGE> 5
NOMINEES WHOSE TERMS EXPIRE IN 1998
(CLASS I)
<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 JULY 29, 1998
---------------- --- ------------------------------------------- ---------------
<S> <C> <C> <C>
*Lilia C. Clemente 57 Chairman and Director of the Fund since June 1,000(1)
152 West 57th Street 1987; Chairman and Chief Executive Officer
New York, NY 10019 of Clemente Capital, Inc. since 1986;
Director of The First Philippine Fund Inc.,
Philippine Strategic Investment (Holdings)
Limited and Canadian Tire Corporation.
Baron J.G.A. Sirtema 73 Director of the Fund since June 1987; Retired 500
van Grovestins since September 1988; Chief General Manager
Middenduinendaalseweg 25 of Algemene Bank Nederland N.V. Amsterdam
2061 AP Bloemendaal office from 1975 to September 1988.
The Netherlands
</TABLE>
3
<PAGE> 6
DIRECTORS WHOSE TERMS EXPIRE 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 JULY 29, 1998
---------------- --- ------------------------------------------- ---------------
<S> <C> <C> <C>
Adrian C. Cassidy 82 Director of the Fund since June 1987; 1,000
924 Country Rim Court Retired; Former Chief Financial Officer,
Roseville, CA 95747 Pacific Telephone; Director of Datron
Systems, Inc. and The First Philippine Fund
Inc.
*Robert J. Christian 49 Director of the Fund since April 1, 1997; 0
1100 North Market Street Senior Vice President and Chief Investment
Wilmington, DE 19890 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 The Rodney Square Fund, The
Rodney Square Tax-Exempt Fund, The Rodney
Square Strategic Income Fund and The Rodney
Square Strategic Equity Fund.
*Leopoldo M. Clemente, Jr. 59 President and Director of the Fund since June 1,000(1)
152 West 57th Street 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.
</TABLE>
4
<PAGE> 7
DIRECTORS WHOSE TERMS EXPIRE IN 2000
(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 JULY 29, 1998
---------------- --- ------------------------------------------- --------------
<S> <C> <C> <C>
*Thomas H. Lenagh 77 Director of the Fund since June 1987; 1,000
Greenwich Office Park independent financial adviser since 1984;
Greenwich, CT 06831 Director of CML Group, Inc., Gintel Funds,
Adams Express, ASB Group, ICN Pharmaceuticals,
Franklin Quest and V-Band Corp.
Sam Nakagama 72 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 73 Director of the Fund since June 1987; Executive 3,000
15 Pilot Rock Lane Vice President and Treasurer of the Fund from
Riverside, CT 06878 June 1987 through December 1989; President and
Chief Operating Officer of Clemente Capital,
Inc. from March 1986 through December 1988.
All Directors and 8,500
Officers as a Group (10
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 (the "1940 Act"), by reason of such person's positions with
the Fund, Clemente Capital, Inc. or Wilmington Trust Company.
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 50 Secretary of the Fund since June 1987; Partner of the
666 Fifth Avenue law firm of Fulbright & Jaworski L.L.P.
New York, NY 10103
Thomas J. Prapas 59 Treasurer of the Fund since January 1990; Portfolio
152 West 57th Street Manager of the Fund effective April 30, 1997;
New York, NY 10019 Economist and Managing Director at Clemente Capital,
Inc. since June 1986.
</TABLE>
The Board of Directors of the Fund held four regular meetings and four
special meetings during 1997. All directors attended at least 75% of such
meetings. The Audit Committee, presently consisting of Messrs. Schieferdecker
and Nakagama, met once during 1997. The purpose of the Audit Committee is to
advise the full Board with respect to accounting, auditing and financial matters
affecting the Fund.
5
<PAGE> 8
Directors who are not affiliated with Clemente Capital, Inc. ("Clemente
Capital" or the "Adviser") or Wilmington Trust Company ("Wilmington" or the
"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, 1997, 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>
Adrian C. Cassidy......................................... $11,000 $21,250
Robert J. Christian....................................... -- --
Leopoldo M. Clemente, Jr. ................................ -- --
Lilia C. Clemente......................................... -- --
Thomas H. Lenagh.......................................... $11,000 $11,000
Sam Nakagama.............................................. $10,500 $10,500
Robert B. Oxnam........................................... $11,500 $20,750
G. Peter Schieferdecker................................... $11,500 $11,500
Baron J.G.A. Sirtema van Grovestins....................... $10,500 $10,500
</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.
Election of the two Class I Directors requires the vote of a plurality of
the shares voting at the Meeting.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE ELECTION OF DIRECTORS
PURSUANT TO PROPOSAL NO. 1.
6
<PAGE> 9
PROPOSAL NO. 2
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 PricewaterhouseCoopers LLP has been selected as the
Fund's independent accountants for the year ending December 31, 1998. Such
selection is being submitted to the stockholders for ratification. The
employment of PricewaterhouseCoopers is conditioned on the right of the Fund, by
majority vote of its stockholders, to terminate such employment.
PricewaterhouseCoopers has acted as the Fund's independent accountants from its
inception through December 31, 1997.
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 PricewaterhouseCoopers 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. 2 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
PRICEWATERHOUSECOOPERS LLP AS THE FUND'S INDEPENDENT ACCOUNTANTS.
7
<PAGE> 10
PROPOSAL NO. 3
SHAREHOLDER PROPOSAL
A shareholder has submitted the following proposal for inclusion in this
Proxy Statement. Such shareholder claims beneficial ownership of 100 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 recommended that the Board take the steps necessary to
convert The Clemente Global Growth Fund Inc. into an open-end fund within
60 days of stockholder approval.
EFFECT OF PASSAGE OF THE PROPOSAL
Passage of the Proposal will constitute a recommendation only to the Board
of Directors. Any actual conversion of the Fund will require that the Board of
Directors decide to pursue such a course of action, followed by an additional
vote of the Fund's shareholders. The 1940 Act requires that any conversion of a
closed-end investment company to an open-end investment company be by a vote of
"a majority of the Fund's outstanding voting securities." The term "a majority
of the Fund's outstanding voting securities" is defined by the 1940 Act to mean
"the vote, at the annual or a special meeting of the security holders of such
company duly called (A) of 67 per centum or more of the voting securities
present at such meeting, if the holders of more than 50 per centum of the
outstanding voting securities of such company are present or represented by
proxy; or (B) of more than 50 per centum of the outstanding voting securities of
such company, whichever is the less."
BOARD OF DIRECTORS' POSITION ON THE PROPOSAL
Background and summary
On August 6, 1998 the Fund's trading price on the New York Stock Exchange
(the "NYSE") closed at a discount to NAV of 10.58%. While it is true that
conversion would provide each shareholder with an opportunity to redeem his
shares at NAV, for the reasons described below, THE BOARD OF DIRECTORS
RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST PROPOSAL NO. 3.
At meetings held on May 29, 1998, July 22, 1998 and August 10, 1998 the
Board of Directors of the Fund reviewed the recent structural changes that the
Fund has made, information concerning the legal, operational and practical
differences between closed-end and open-end investment companies, the Fund's
performance to date as a closed-end fund, the historical relationship between
the market price of the shares and NAV, the possible effects of conversion on
the Fund and various other possible strategies for dealing with the Fund's
current discount to NAV. At those meetings the Board, including a majority of
the directors who are not "interested persons" (as defined in the 1940 Act) of
the Fund, and a majority of the entire Board, concluded that it is in the best
interests of the Fund and the shareholders that the Fund remain a closed-end
investment company.
One of the primary reasons the Board of Directors recommends that
shareholders vote against Proposal No. 3 is that the Board of Directors has
approved a policy whereby the Fund will commence repurchases of the Fund's
Common Stock on the New York Stock Exchange, in an attempt to reduce the Fund's
discount to NAV. While the Board of Directors' intention is to reduce the
discount to no greater than 5% below NAV and maintain it at or below that level,
the Fund reserves the right to make share repurchases
8
<PAGE> 11
at such times and in such amounts as it deems appropriate and there can be no
assurance that the Fund will be successful in maintaining the discount at a
level at or below the intended range. All share repurchases are required to be
carried out in accordance with the 1940 Act, the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder. The Board of Directors
anticipates that the first such share repurchases will take place in late
September, promptly following the Annual Meeting should Proposal Nos. 3 and 4 be
rejected the Fund's shareholders. Such a continuing repurchase program may be
expected to result in a smaller Fund size and consequently higher expense ratio,
but this alternative is viewed by the Board as more favorable to shareholders
than previously announced proposals for tender offers and a future open-end
vote, which will not be implemented.
In addition, the Board of Directors and the Fund's investment advisers
believe that conversion to an open-end investment company could adversely affect
the functioning of the Fund's investment operations and its investment
performance, as described below under "Effect of Conversion on the
Fund -- Portfolio Management." They also believe that conversion could expose
the Fund to the risk of a substantial reduction in its size and a corresponding
loss of economies of scale and increase in its expenses as a percentage of NAV,
as described below under "Effect of Conversion on the Fund -- Potential Increase
in Expense Ratio and Decrease in Size."
The Board of Directors believes that eliminating the possibility of a
discount would not justify the fundamental changes that conversion would entail
to the Fund's portfolio management and operations, the risk of reduced size and
the potential adverse effect on the Fund's investment performance. As stated
above, in order to reduce or eliminate the discount without impairing the Fund's
closed-end format and the benefits it derives therefrom, the Board of Directors
is instituting a share repurchase program, as described above. Additionally, the
Fund has sought to increase awareness about the Fund through shareholder and
market communications and meetings with securities analysts and market
professionals in the investment community specializing in the closed-end fund
sector. While the Fund's efforts in this respect have not eliminated the shares'
tendency to trade at a discount to NAV, the Board of Directors believes that
such efforts have been beneficial.
As described below under "Measures to be Adopted if the Fund Becomes an
Open-end Fund -- Redemption Fee," if the shareholders vote to convert the Fund
into an open-end fund, the Board of Directors may cause the Fund to impose a fee
payable to the Fund on all redemptions of up to 2% of redemption proceeds for a
period of six months from the conversion date.
Differences between open-end and closed-end investment companies
1. Fluctuation of Capital; Redeemability of Shares; Elimination of
Discount and Premium. Closed-end investment companies generally do not redeem
their outstanding shares or engage in the continuous sale of new securities, and
thus operate with a relatively fixed capitalization. The shares of closed-end
investment companies are normally bought and sold in the securities market at
prevailing market prices, which may be equal to, less than or more than NAV.
By contrast, open-end investment companies, commonly referred to as mutual
funds, issue redeemable securities with respect to which no secondary trading
market is permitted to develop. Except during periods when the NYSE is closed or
trading thereon is restricted, or when redemptions may otherwise be suspended in
an emergency as permitted by the 1940 Act, the holders of these redeemable
securities have the right to surrender them to the mutual fund and obtain in
return their proportionate share of the mutual fund's NAV at
9
<PAGE> 12
the time of the redemption (less any redemption fee charged by the fund or
contingent deferred sales charge imposed by the fund's distributor).
Most mutual funds also continuously issue new shares to investors at a
price based upon their shares' NAV at the time of issuance. Accordingly, an
open-end fund experiences continuing inflows and outflows of cash and may
experience net sales or net redemptions of its shares. Upon conversion of the
Fund into an open-end investment company, shareholders who wished to realize the
value of their shares would be able to do so by redeeming their shares at NAV
(less the redemption fee discussed below under "Measures to be Adopted if the
Fund becomes an Open-end Fund -- Redemption Fee"). The trading market for the
shares would be eliminated (as would the Fund's listing with the NYSE), and with
it the discount from NAV at which the shares have typically traded on the NYSE.
Conversion also would eliminate, however, any possibility that the shares could
trade at a premium over NAV.
2. Cash Reserves; Raising Capital. Most open-end investment companies
maintain cash reserves adequate to meet anticipated redemptions without
prematurely liquidating their portfolio securities. The maintenance of larger
cash reserves required to operate prudently as an open-end investment company
when net redemptions are anticipated may reduce an open-end investment company's
ability to achieve its investment objective by limiting its investment
flexibility and the scope of its investment opportunities. In addition, open-end
investment companies are subject to a requirement that no more than 15% of their
net assets may be invested in securities that are not readily marketable or are
otherwise considered to be illiquid.
Closed-end investment companies may not issue new shares at a price below
NAV except in rights offerings to existing shareholders, in payment of
distributions and in certain other limited circumstances. Accordingly, the
ability of closed-end funds to raise new capital is restricted, particularly at
times when their shares are trading at a discount to NAV. The shares of open-end
investment companies, on the other hand, are offered by such companies (in most
cases continuously) at NAV, or at NAV plus a sales charge, and the absence of a
secondary trading market generally makes it impossible to acquire such shares in
any other way.
3. NYSE Delisting; State and Federal Fees on Sales of Shares. If the Fund
is converted to an open-end fund, the shares would immediately be delisted from
the NYSE. The Board of Directors believes that the listing of an investment
company on a U.S. stock exchange, particularly the NYSE, represents a valuable
asset, especially in terms of attracting non-U.S. investors. In addition,
certain investors, such as pension funds, have internal restrictions on the
amount of their portfolio that can be invested in non-listed securities.
Delisting would save the Fund annual NYSE fees of approximately $16,000; but the
absence of a stock exchange listing, combined with the need to issue new shares
when investors wish to increase their holdings, would have the effect of
requiring the Fund to pay federal and state fees on sales of shares, except to
the extent that the underwriter of such sales paid some or all of such fees.
4. Underwriting; Brokerage Commissions or Sales Charges on Purchases and
Sales. Open-end investment companies typically seek to sell new shares on a
continuous basis in order to offset redemptions and avoid shrinkage in size.
Shares of "load" open-end investment companies normally are offered and sold
through a principal underwriter, which deducts a sales charge from the purchase
price at the time of purchase or from the redemption proceeds at the time of
redemption, or receives a distribution fee from the fund, or both, to compensate
it and securities dealers for sales and marketing services (see "Measures to be
Adopted if the Fund Becomes an Open-end Fund -- Underwriting and Distribution"
below). Shares of "no-load" open-end investment companies are sold at NAV,
without a sales charge, with the fund's investment adviser or an affiliate
normally bearing the cost of sales and marketing from its own resources. Shares
of closed-end investment companies, on the other hand, are bought and sold in
secondary market transactions at prevailing
10
<PAGE> 13
market prices subject to the brokerage commissions charged by the broker-dealer
firms executing such transactions.
5. Shareholder Services. Open-end investment companies typically find it
necessary to provide more services to shareholders and incur correspondingly
higher shareholder servicing expenses. One service that is generally offered by
open-end funds is enabling shareholders to transfer their investment from one
fund into another fund that is part of the same "family" of open-end funds at
little or no cost to the shareholders. There can be no assurance that the Fund
would be able to make such an arrangement if the shareholders voted to convert
the Fund to an open-end fund. The Board of Directors would weigh the cost of any
particular service against the anticipated benefit of such service. The Board of
Directors has no current view as to which, if any, shareholder services it would
seek to make available to shareholders and implement as part of the Fund's
joining a family of funds or otherwise.
6. Leverage. Open-end investment companies are prohibited by the 1940 Act
from issuing "senior securities" representing indebtedness (i.e., bonds,
debentures, notes and other similar securities), other than indebtedness to
banks with respect to which there is asset coverage of at least 300% for all
borrowings, and may not issue preferred stock. Closed-end investment companies,
on the other hand, are permitted to issue senior securities representing
indebtedness when the 300% asset coverage test is met, may issue preferred stock
(subject to various limitations) and are not limited to borrowings from banks.
This greater ability to issue senior securities gives closed-end investment
companies more flexibility in "leveraging" their shareholders' investments than
is available to open-end investment companies. The Fund does not have any
immediate plan to make use of its ability to leverage but may do so in the
future.
7. Reinvestment of Dividends and Distributions. Like the plans of many
other closed-end funds, the Fund's Dividend Reinvestment Plan (the "Plan")
permits shareholders to elect to reinvest their dividends and distributions on a
different basis than would be the case if the Fund converted to an open-end
investment company. Currently, if the shares are trading at a discount, the
agent for the Plan will attempt to buy as many of the shares as are needed for
this purpose on the NYSE or elsewhere. This permits a reinvesting shareholder to
benefit by purchasing additional shares at a discount, and this buying activity
may tend to lessen any discount. If shares are trading at a premium, reinvesting
shareholders are issued shares at the higher of NAV or 95% of the market price.
As an open-end investment company, all dividends and distributions would be
required to be reinvested at NAV, rather than at a discounted price as is
currently the case.
8. Capital Gains. The realization of capital gains required under the
Internal Revenue Code (the "Code") to be distributed can result in a significant
tax burden to non-redeeming shareholders of an open-end fund that has been
recently converted. To raise cash to satisfy redeeming shareholders, a mutual
fund may be required to sell portfolio securities. If the fund's basis in the
portfolio securities sold is less than the sale price obtained, net capital gain
may be realized. The Code imposes both an income tax and an excise tax on a
regulated investment company's net capital gain unless the gain is distributed
to all stockholders, including non-redeeming stockholders. Furthermore, in order
to make a capital gain distribution, a fund may need to sell additional
portfolio securities, thereby reducing further its size and, possibly, creating
additional capital gain.
Effect of conversion on the Fund
In addition to the inherent characteristics of open-end investment
companies described above, the Fund's conversion to an open-end investment
company potentially would have the consequences described below:
1. Abandonment of Recent Structural Changes. As described above, the Fund
has adopted a policy pursuant to which it will make repurchases of its Common
Stock on the open market in an attempt to reduce
11
<PAGE> 14
the Fund's discount to NAV to a maximum of 5%. While there can be no assurance
of success, the proposed repurchases are intended to eliminate or reduce the
discount to a lower level while maintaining the benefits of a closed-end fund
structure. The Board of Directors has decided to pursue this course of action
after careful consideration of the merits of the plan and its alternatives,
including immediate open-ending. The Board believes that this step, while
significant, is less disruptive to the Fund's operations and will provide for an
orderly method of reducing or eliminating the discount. Additionally, this more
orderly approach allows the Board of Directors to consider additional
alternatives that may serve the interests of all shareholders and allow for
continued evaluation of the structural change approved at last year's annual
meeting where Wilmington Trust Company was hired as the U.S. Adviser to the
Fund. Since the hiring of Wilmington, the Fund has delivered strong returns to
shareholders. The Board of Directors believes that the addition of Wilmington
has been a success and desires to allow shareholders who believe in the Fund's
global investment strategy to continue to reap the benefits of this move.
2. Portfolio Management. As noted above, a closed-end investment company
operates with a relatively fixed capitalization while the capitalization of an
open-end investment company fluctuates depending upon whether it experiences net
sales or net redemptions of its shares. Although the data on the subject are
unclear, some observers believe that open-end funds tend to have larger net
sales near market highs and larger net redemptions near market lows. To the
extent that this is true, if the Fund were to convert to an open-end investment
company, the Fund's investment advisers could be required to invest new monies
near market highs and to sell portfolio securities in a falling market when they
might otherwise wish to invest. Because the Fund is a closed-end fund, however,
its advisers currently are not required to invest new monies or liquidate
portfolio holdings at what may be inopportune times, and can manage the Fund's
portfolio with a greater emphasis on long-term considerations.
The Board of Directors also believes that the closed-end format is better
suited than the open-end format to the Fund's investment objective of achieving
long-term capital appreciation through publicly traded equity securities of both
U.S. and non-U.S. issuers. The Board of Directors believes that, notwithstanding
developments in foreign countries that have had the effect of liberalizing
restrictions on investment by foreign investors in such securities markets,
investor psychology towards international investing, particularly in developing
countries, remains susceptible to rapid and extreme swings that would be likely
to have a material and unpredictable impact on inflows and outflows from the
Fund if it were open-end. The Board of Directors believes that Clemente Capital
and Wilmington can better pursue the Fund's long-term investment objective
without short-term pressures to invest new monies or liquidate portfolio
holdings at times when its advisers' investment styles would dictate doing
otherwise. Furthermore, the Board of Directors believes that a need for the Fund
to maintain some level of cash reserves to fund redemptions could restrict the
Fund's ability to remain fully invested in equity securities in circumstances in
which Clemente Capital and Wilmington otherwise thought it advantageous to be so
invested.
3. Potential Increase in Expense Ratio and Decrease in Size. Conversion
to an open-end investment company would raise the possibility of the Fund
suffering substantial redemptions of shares, particularly in the period
immediately following the conversion. Unless the Fund's principal underwriter,
if any, were able to generate sales of new shares sufficient to offset these
redemptions, the size of the Fund would be expected to shrink. (See "Measures to
be Adopted if the Fund Becomes an Open-end Fund -- Underwriting and
Distribution.") Because certain of the Fund's operating expenses are fixed and
others (including the fees paid by the Fund to the Adviser) decline as a
percentage of the Fund's NAV as the NAV increases, a decrease in the Fund's
asset size would likely increase the ratio of its operating expenses to net
assets. Such a decrease in size would also result in a reduction in the amount
of fees paid by the Fund to the Adviser and could result in a
12
<PAGE> 15
decision by the Board of Directors to terminate and liquidate the Fund (or by
either of the Fund's investment advisers not to continue to act as such) if the
amount of the Fund's assets were reduced such that it was no longer considered
economically feasible for the Fund to continue to carry on its business.
4. Possible Sales of Portfolio Securities. If the Fund were to experience
substantial redemptions of shares following its conversion to an open-end
investment company, it would probably not have sufficient cash reserves to fund
such redemptions and therefore could be required to sell portfolio securities
and incur increased transaction costs in order to raise cash to meet such
redemptions. Any net gains resulting from sales of portfolio securities effected
to fund cash redemption obligations normally would be distributed to all
shareholders, thereby further reducing the size of the Fund, and would be
taxable to them. See "Differences Between Open-end and Closed-end Investment
Companies -- Capital Gains" above.
5. Conversion Costs. The process of converting the Fund to an open-end
investment company would involve legal and other expenses to the Fund, including
the preparation of a registration statement under the Securities Act of 1933
(see "Measures to be Adopted if the Fund Becomes an Open-end Fund -- Timing"
below) and the payment of necessary fees with respect to such registration
statement and the sale of shares in various states. The Board of Directors has
been advised that these conversion expenses, which would be paid by the Fund and
would result in a one-time increase in the Fund's current expense ratio, could
be expected to total at least $150,000. Because the Fund is unable to determine
at this time the actual costs that would be involved, it is possible that the
conversion expenses could be higher.
Measures to be adopted if the Fund becomes an open-end fund
If the shareholders voted to convert the Fund to an open-end fund, the
Board of Directors may take the following actions.
1. Redemption Fee. In order to reduce the number of redemptions of the
shares immediately following conversion (thereby reducing any disruption of the
Fund's normal portfolio management), and to offset the brokerage and other costs
of such redemptions, for a period of six months following the Fund's conversion
to an open-end investment company, the Board of Directors reserves the right to
impose a fee, to be retained by the Fund, of up to 2% of the redemption proceeds
payable by the Fund on all redemptions. Such a fee would be similar to fees that
have been proposed by other funds considering a conversion from closed-end to
open-end status.
2. Underwriting and Distribution. If the shareholders voted to convert
the Fund to an open-end investment company, the Board of Directors would
consider whether to select a principal underwriter of the shares. The shares
could be offered and sold directly by the Fund itself, and by other
broker-dealers who enter into selling agreements with the principal underwriter.
The Fund has engaged in no discussions with prospective principal underwriters,
and there can be no assurance regarding whether satisfactory arrangements with a
principal underwriter could be achieved. The Board of Directors reserves the
right to cause the Fund to enter into an underwriting agreement with a principal
underwriter in such form and subject to such conditions as the Board of
Directors deems desirable. If a principal underwriter were selected, there could
be no assurance that any such broker-dealer firms would be able to generate
sufficient sales of shares to offset redemptions, particularly in the initial
months following conversion.
3. Possible Effect on the Fund's Certificate of Incorporation. If the
Fund becomes an open-end investment company and is no longer required by stock
exchange rules to hold annual meetings for the election of directors, the Board
of Directors may submit a proposal, which may be adopted by vote of a majority
of the Fund's outstanding shares, that the Fund cease to hold annual meetings of
its shareholders and that it
13
<PAGE> 16
eliminate its staggered Board of Directors. These actions would have the
consequence of requiring shareholders' meetings to be held only when required by
the 1940 Act, either for the election of directors (if a majority of the
directors in office were not elected by the shareholders) or to approve specific
matters in accordance with the 1940 Act's requirements.
* * * * * *
Proposal No. 3 requires the affirmative vote of a majority of shares voting
at the Meeting for passage. Passage of the Proposal will constitute a
recommendation only to the Board of Directors. Any actual conversion of the Fund
will require that the Board of Directors decide to pursue such a course of
action, followed by an additional vote of the Fund's shareholders. The 1940 Act
requires that any conversion of a closed-end investment company to an open-end
investment company be by a vote of "a majority of the Fund's outstanding voting
securities." The term "a majority of the Fund's outstanding voting securities"
is defined by the 1940 Act to mean "the vote, at the annual or a special meeting
of the security holders of such company duly called (A) of 67 per centum or more
of the voting securities present at such meeting, if the holders of more than 50
per centum of the outstanding voting securities of such company are present or
represented by proxy; or (B) of more than 50 per centum of the outstanding
voting securities of such company, whichever is the less."
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS
VOTE "AGAINST" PROPOSAL NO. 3.
14
<PAGE> 17
PROPOSAL NO. 4
SHAREHOLDER PROPOSAL
A shareholder has submitted the following proposal for inclusion in this
Proxy Statement. Such shareholder claims beneficial ownership of over 100,000
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: The investment advisory agreement between Clemente Capital,
Inc. and the Fund shall be terminated.
The shareholder has requested that the following statement be included in
the Proxy Statement in support of the proposal:
The surest way to enable stockholders of the Fund to realize net asset
value ("NAV") for their shares is to convert the Fund to an open-end fund (or to
merge it into an existing open-end fund). If the Fund is open-ended, every
shareholder will benefit. For example, based upon the reported NAV of $13.42 and
market price of $11.625 as of the close of business on May 8, 1998, 1,000 shares
of the Fund will be worth $1,795 more if it open-ends than if it remains a
closed-end fund.
We believe that the current investment advisor is the main impediment to
open-ending because of its fear that its management fees may decline if
shareholders are able to redeem their shares at NAV. Last year the Fund's
stockholders approved a proposal recommending that the Board of Directors
seriously consider soliciting proposals for a new investment advisor, but no
proposals were ever solicited. Now we need to issue a mandate for change.
Fortunately, the Fund's prospectus states that "the advisory agreement . . . may
be terminated without penalty on 60 days' written notice . . . by a vote of the
shareholders of the Fund." While passage of this proposal would not result in
the open-ending of the Fund, it will encourage the Board of Directors to seek a
new investment advisor who is committed to enhancing shareholder value. The
shareholders deserve nothing less.
Your vote to terminate the advisory agreement is a vote for increasing the
value of your shares.
THE BOARD OF DIRECTORS' POSITION ON THE SHAREHOLDER PROPOSAL
The Board of Directors votes annually on whether to renew the Fund's
advisory contract with the Adviser. To do so, the Board reviews extensive
documentation, including comparative performance and fee information for other
advisers managing registered investment companies having investment objectives
and policies similar to those of the Fund. AS A RESULT OF THIS REVIEW AND FOR
THE REASONS SET FORTH BELOW, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
AGAINST PROPOSAL NO. 4.
1. Recent Performance. In the Board's opinion, the Fund's recent
performance weighs heavily against terminating the advisory agreement with
Clemente Capital. The Board of Directors currently reviews the Fund's
performance at each quarterly Board meeting and in connection with its annual
review of the Fund's agreement with the Adviser. While the Board has, in the
past, expressed its concern with the Adviser's performance, the Board has been
impressed with the Fund's strong performance over the past 16 months. The Board
considers the Fund's 1997 and 1998 performance to be particularly impressive
given the recent crisis in
15
<PAGE> 18
Asia, which has been marked by huge declines in many of the Asian markets in
which the Fund ordinarily invests, and recent periods of market turmoil.
Additionally, in order to address its concern with what the Board
considered to be historically substandard performance in the U.S. portion of the
Fund's portfolio, upon shareholder approval in May 1997, the Board hired
Wilmington Trust Company to manage the U.S. portion of the Fund's portfolio. The
Board considers this move to have been a success and looks forward to the
continuing benefits to shareholders resulting from the ongoing involvement of
Wilmington in the management of the Fund's portfolio. It is the Board's opinion
that the highest probability of sustaining the Fund's recent strong performance
lies in continuing with the strategy of making use of Clemente Capital's and
Wilmington's respective talents. The Board is also of the opinion that this
strategy is far superior to the uncertainties inherent in a process of
terminating the existing advisory agreement with the Adviser and seeking out an
adviser who will be unfamiliar with the Fund's portfolio and stated investment
objectives. Any change in the Fund's fundamental investment objectives which
would be required to necessitate such a move could exacerbate these
uncertainties and could result in additional delay and substandard performance
during the resulting transition period.
2. Recent and Currently Proposed Structural Changes. As noted above, the
Fund last year hired Wilmington Trust Company to manage the U.S. portion of the
Fund's portfolio and believes it to be in the best interest of shareholders to
continue to reap the benefits of this significant move. Additionally, as
described above, the Fund has adopted a policy under which it will make
repurchases of its shares on the open market in an attempt to reduce the
discount to NAV to no greater than 5% should Proposal Nos. 3 and 4 be rejected.
While there can be no assurance of success, the proposed repurchases are
intended to eliminate or reduce the discount to a lower level while maintaining
the benefits of a closed-end fund structure.
These changes should, in the Board's opinion, be given time to bear fruit.
Should the Fund terminate its existing advisory agreement, there can be no
assurance that any investment adviser ultimately retained to take the place of
Clemente Capital would be willing to serve a fund with such potentially
asset-depleting mechanisms in place or that it would not charge an investment
management fee in excess of that which it might require in the absence of such
mechanisms. Therefore, in the Board's judgment, the orderly approach being
proposed reduces this uncertainty.
3. Favorable Terms of Existing Advisory Agreement and Costs Associated
with Termination. The Board of Directors is particularly cognizant of the fact
that the Fund's existing contract with Clemente Capital, which provides for a
fee based on the Fund's performance relative to the FT 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 advisory agreement aligns the Adviser's compensation with
the interests of the Fund's shareholders in maximizing performance in a way that
few other contracts do historically has been an important part of the Board's
deliberations on renewal. In the Board's opinion, there is a likelihood that a
replacement investment adviser would not be willing to serve pursuant to an
agreement which provides for such a performance based fee.
Additionally, it is worth noting that the search for and costs associated
with the hiring of a new investment adviser would be costs borne by the Fund and
the shareholders. It is expected that such costs would include costs of
consultants and third party information providers to quantify and analyze
relevant information, the holding of a special shareholders meeting to approve
any new advisory agreement, potentially amending certain of the Fund's existing
investment objectives and policies to align with those required by a
16
<PAGE> 19
new adviser and increased charges by existing service providers associated with
the transition. It is not expected that such costs will be material relative to
the asset size of the Fund, however.
4. Alternatives Unattractive. As an alternative to hiring a new
investment adviser upon termination of the existing advisory agreement, the
Board of Directors could, among other choices, decide to liquidate the Fund,
merge the Fund with another fund or open-end the Fund. Any of these alternatives
would also require shareholder approval. The Board does not consider any of
these alternatives to be consistent with the purpose of the Fund. While
liquidating or merging the Fund will indeed eliminate the Fund's discount to
NAV, as noted above, the Fund's recent performance has staged a noteworthy
turnaround. Liquidation or merger, by definition, would mean that shareholders
who seek the benefits of global investing and the recent successes of the Fund's
investment strategy would be deprived of the Fund as a vehicle for enjoying
these benefits. While there are other funds in which a shareholder might invest
its money, the fact remains that the Fund recently has been a strong performer.
The Board of Directors feels it would be ignoring its duty to these shareholders
who have shared in the recent success of the Fund solely to satisfy the desire
of those shareholders who desire to realize the one-time gains that would result
from liquidation or merger of the Fund. The consequences of open-ending the Fund
are discussed in great detail under Proposal No. 3.
* * * * * *
As required by the 1940 Act and the Fund's contract with Clemente Capital,
Proposal No. 4 requires the affirmative vote of "a majority of the Fund's
outstanding voting securities" for passage. The term "a majority of the Fund's
outstanding voting securities" is defined by the 1940 Act to mean "the vote, at
the annual or a special meeting of the security holders of such company duly
called (A) of 67 per centum or more of the voting securities present at such
meeting, if the holders of more than 50 per centum of the outstanding voting
securities of such company are present or represented by proxy; or (B) of more
than 50 per centum of the outstanding voting securities of such company,
whichever is the less."
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS
VOTE "AGAINST" PROPOSAL NO. 4.
17
<PAGE> 20
PROPOSAL NO. 5
SHAREHOLDER PROPOSAL
A shareholder has submitted a preliminary proxy statement to the Securities
and Exchange Commission for its review in which the shareholder is soliciting
proxies for a proposal stating that the resignation of the Fund's Class II and
Class III Directors would be in the best interests of the Fund and its
shareholders. In his preliminary proxy statement, the shareholder makes clear
that the purpose of the proposal is to gain control of the Board of Directors in
order to implement measures that he deems to be in the best interest of the
Fund.
THE BOARD OF DIRECTORS OPPOSES PROPOSAL NO. 5
The Board of Directors opposes Proposal No. 5 and urges shareholders to
vote against the proposal. The full Board of Directors believes the background
and experience of each of the Class II and Class III Directors is impressive and
that each of them through the years has provided the Fund with a balanced view
on the various issues that have faced the Fund. Biographical information for
each of these individuals is set forth under Proposal No. 1 to this Proxy
Statement. The shareholder proponent, in his preliminary proxy statement,
proposes to elect himself a director, along with one other named individual, and
then proposes to nominate a third individual at some point in the future. The
shareholder's biographical information indicates that he does not have any
experience in serving as a director of a registered investment company; rather
he has been "an advocate for stockholders' rights since 1996." Additionally, the
proponent's preliminary proxy material offers no information as to the
experience, qualifications or identity of the third director to be named later.
Most recently, as described elsewhere in this Proxy Statement, the Board of
Directors (including those Directors whom the proponent would like to see
resign) passed a resolution authorizing the repurchase of the Fund's Common
Stock on the open market, a move intended to reduce the Fund's discount to NAV.
The Directors the proponent would like to see resign also were Directors when
the Fund hired Wilmington Trust Company in 1997 as the U.S. Adviser, a move that
has rewarded shareholders with excellent recent returns.
The proponent states in his preliminary proxy statement that a Board of
Directors he controls would "take action to eliminate or reduce the discount
from NAV at which shares of the Fund trade." While the proponent does not offer
a concrete plan which his directors would consider, the Fund believes it to be
unlikely to be one that materially differs from the alternatives described in
this Proxy Statement. In particular, such a board might consider open-ending,
share repurchases or liquidation of the Fund. The Fund's position on open-ending
is set forth at length elsewhere in this Proxy Statement and the Fund already
has adopted a share repurchase program, assuming the open-ending (Proposal No.
3) and contract termination (Proposal No. 4) proposals fail to pass. The Board
of Directors does not believe liquidation of the Fund is warranted or in the
shareholders' best interests.
The Board believes this proposal is simply an attempt, which it strenuously
opposes, to gain majority representation on the Board without having to nominate
additional qualified candidates and without giving shareholders an opportunity
to vote on such candidates.
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
18
<PAGE> 21
PROPOSAL NO. 6
SHAREHOLDER PROPOSAL
A shareholder has submitted a preliminary proxy statement to the Securities
and Exchange Commission for its review in which the shareholder states that he
is soliciting proxies for a proposal recommending that the Board of Directors
authorize and direct the Fund's officers to reimburse Phillip Goldstein for his
fees and expenses incurred in connection with his solicitation of proxies to be
voted at the Meeting.
THE BOARD OF DIRECTORS OPPOSES PROPOSAL NO. 6
The Board of Directors opposes Proposal No. 6 and urges shareholders to
vote against the proposal. The Board of Directors opposes the proposals with
respect to which Mr. Goldstein is soliciting and cannot, in good conscience,
recommend reimbursement of the costs of his solicitation. In the Board of
Directors' view, the Fund already has incurred significant extraordinary costs
in the last 18 months directly due to Mr. Goldstein's actions and requests and
does not support his request, which would only further increase the Fund's
expenses.
Proposal No. 6 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. 6
19
<PAGE> 22
THE INVESTMENT ADVISER, THE 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 U.S. ADVISER
Wilmington Trust Company is a Delaware corporation with principal offices
at 1100 North Market Street, Wilmington, Delaware 19890. Wilmington 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 July
31, 1998 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................... 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
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
NAME OF DIRECTOR OCCUPATION
---------------- ----------
<S> <C>
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
Hugh E. Miller.......................... Retired
Thomas P. Sweeney....................... Partner in the law firm of Richards,
Layton & Finger, P.A.
H. Stewart Dunn, Jr..................... Partner in the law firm of Ivins,
Phillips & Barker
R. Keith Elliot......................... Chairman of the Board and Chief
Executive Officer of Hercules
Incorporated
Robert C. Forney........................ Retired
Rex L. Mears............................ President of Ray S. Mears and Sons, Inc.
Robert W. Tunnell, Jr................... Managing Partner of Tunnell Companies,
L.P.
H. Rodney Sharp, III.................... Retired
</TABLE>
Each of the above persons may be reached c/o Wilmington Trust Company, 1100
North Market Street, Wilmington, Delaware 19890.
THE ADMINISTRATOR
PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware, serves as Administrator
of the Fund.
MISCELLANEOUS
As of the date of this Proxy Statement, management does not know of any
other matters that will come before the meeting. The Fund is aware that a
shareholder could attempt to introduce certain proposals for consideration at
the Annual Meeting. If an attempt is made to bring proposals not described in
this Proxy Statement before the Annual Meeting or any adjournment thereof, the
proxy holders will, if necessary, use their discretionary authority to vote
against such proposals. 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 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
21
<PAGE> 24
of determining the presence of a quorum for transacting business at the Meeting,
abstentions and 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.
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 any or
all 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.
The vote required for passage of each of the proposals listed herein and
for the election of the two Class I directors is listed at the end of each
section describing said proposal or election.
ADDITIONAL INFORMATION
Wilmington or its affiliate, Rodney Square Management Corp. ("RSMC"), also
serves as the adviser to the following registered investment companies:
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS ANNUAL RATE OF
NAME OF AS OF COMPENSATION
INVESTMENT ADVISER INVESTMENT COMPANY JULY 31, 1998 (BEFORE EFFECT OF ANY WAIVERS)
------------------ ------------------ -------------- ------------------------------
<S> <C> <C> <C>
RSMC Rodney Square Fund $2,079,000,000 47 basis points (.47%)
RSMC Rodney Square Tax Exempt Fund $ 388,000,000 47 basis points (.47%)
Wilmington Rodney Square Strategic $ 193,000,000 35 basis points (.35%)
Fixed-Income Fund
Wilmington Rodney Square Strategic Equity $ 451,000,000 55 basis points (.55%)
Fund to 65 basis points (.65%)
</TABLE>
As of July 29, 1998, Ron Olin Investment Management Company and Deep
Discount Advisers, Inc., both located at One West Pack Square, Suite 777,
Asheville, North Carolina 28801, together owned approximately 19.4% 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.
22
<PAGE> 25
1999 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 1999 Annual Meeting of Stockholders (expected to be held in late
April, 1999) must be received by the Fund on or before December 31, 1998 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: August 25, 1998
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD NOW
23
<PAGE> 26
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 Clemente Global Growth Fund
Board nominees and "AGAINST" the shareholder proposals.
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.
24
<PAGE> 27
PROXY
CLEMENTE GLOBAL GROWTH FUND, INC.
The undersigned stockholder of Clemente Global Growth Fund, Inc. (the
"Fund") hereby constitutes and appoints Leopoldo M. Clemente, G. Peter
Schieferdecker 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 Wednesday, September 23, 1998 at 9:30 A.M., New York time, at the
Essex House Hotel Nikko, 160 Central Park South, 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 (a) the election of two Class I Directors, (b) the ratification of the
selection by the Board of Directors of the Fund's independent accountants, and
(c) the approval or disapproval of four shareholder proposals described in the
Fund's Proxy Statement (Proposal Nos. 3-6), but, if no such specification is
made, (i) to vote for the election of the two directors nominated by the Fund
into Class I (expiring 2001), (ii) to vote for the ratification of the selection
by the Board of Directors of the Fund's independent accountants, (iii) to vote
against the four shareholder proposals, and (iv) 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 - SEPTEMBER 23, 1998
(TO BE DATED AND SIGNED ON REVERSE SIDE)
-----------
SEE REVERSE
SIDE
-----------
<PAGE> 28
/X/ PLEASE MARK
YOUR VOTE AS IN
THIS EXAMPLE.
FOR All WITHHOLD
NOMINEES LISTED AUTHORITY
(except as indicated to to vote for all
the contrary below) nominees listed
(1) Election of two
Directors for the / / / /
terms specified
below and until their successors are duly elected and qualified.
Class I (expiring 2001) - Lilia C. Clemente and
Baron J.G.A. Sirtema van Grovestins
(INSTRUCTION: To withhold authority to vote for an individual, write that
nominee's name in the space provided below.)
- ------------------------------------------------------------------------
FOR AGAINST ABSTAIN
(2) To ratify the selection / / / / / /
by the Board of Directors of
PricewaterhouseCoopers LLP as the
Fund's independent accountants for
the year ending December 31, 1998;
FOR AGAINST ABSTAIN
(3) To approve or disapprove a shareholder / / / / / /
proposal to recommend that the Board
of Directors take the steps necessary
to convert the Fund into an open-end
fund within 60 days of stockholder
approval;
FOR AGAINST ABSTAIN
(4) To approve or disapprove a shareholder / / / / / /
proposal providing that the Advisory
Contract between the Fund and Clemente
Capital, Inc. be terminated;
FOR AGAINST ABSTAIN
(5) To approve or disapprove a shareholder / / / / / /
proposal stating that the resignation of
the Fund's Class II and Class III
Directors would be in the best interests
of the Fund and its shareholders;
(6) To approve or disapprove a shareholder FOR AGAINST ABSTAIN
proposal recommending that the Board of / / / / / /
Directors authorize and direct the
Fund's officers to reimburse Phillip
Goldstein for his solicitation expenses;
(7) To transact such other business as may properly come before the Meeting or
any adjournment or adjournments thereof; all as set forth in the Notice of
Annual Meeting, dated September 23, 1998, and the accompanying Proxy
Statement, receipt of which is hereby acknowledged.
Signature(s) Dated: , 1998
----------------------------------- -----------------
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.
