<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant / /
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 Rule 14a-11(c) or Rule 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)(1) 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
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 May 21, 1999
---------------
The Annual Meeting of Stockholders of Clemente Global Growth Fund, Inc.
(the "Fund"), a Maryland corporation, will be held at the offices of Clemente
Capital, Inc., 152 West 57th Street, New York, New York, on May 21, 1999 at 9:30
a.m., New York time, for the following purposes:
1. To elect seven Fund directors to serve until their successors are
duly elected and qualified;
2. To amend the Fund's Articles of Incorporation to change the name of
the Fund to Clemente Strategic Value Fund, Inc.;
3. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the Fund's independent accountants for
the year ending December 31, 1999;
4. To consider a proposal to eliminate the fundamental investment
policy of the Fund that prohibits investments in other investment
companies except in connection with a merger, consolidation,
acquisition or reorganization, which proposal the Board of Directors
favors;
5. To consider a shareholder proposal recommending that the Board take
the steps necessary to open-end the Fund or otherwise provide full net
asset value to shareholders, which proposal the Board of Directors
opposes;
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed March 2, 1999 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, 1998 has been previously mailed to stockholders.
By order of the Board of Directors,
William H. Bohnett
Secretary
Dated: April 15, 1999
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>
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 21, 1999
---------------
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 offices of Clemente Capital, Inc., 152 West 57th
Street, New York, New York, on May 21, 1999, 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 April
__, 1999. 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 $6,000, 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 March 2, 1999 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 2, 1999 was 5,262,700.
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.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At its November 20, 1998 special meeting, the Board of Directors of the
Fund voted to amend the Fund's by-laws to eliminate staggered terms for
directors, thus providing that all directors shall be elected annually. Also,
the Board voted to further amend the by-laws to fix the size of the Board at
seven and voted to recommend the seven nominees named herein for election by the
shareholders. If elected, each nominee has consented to serve as a director of
the Fund until their successors are duly elected and qualified. 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 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.
3
<PAGE>
NOMINEES
<TABLE>
<CAPTION>
Number and Percentage
(if over 1%) of Shares of
Common Stock
Principal Occupation Beneficially Owned as of
Name and Address Age During Past Five Years March 31, 1999
----------------------------- ------ ----------------------------------------- ---------------------------
<S> <C> <C> <C> <C>
*Ronald G. Olin 53 Chairman and Director of the Fund since 125,800
One West Pack Square, September 1998; President and Chief
Suite 777 Executive Officer of Deep Discount
Asheville, NC 28801 Advisors, Inc., an investment advisory
firm; General Partner of Ron Olin
Investment Management Co.; Director of
The Austria Fund, Inc.
Gary A. Bentz 42 Director of the Fund since September 4,600
One West Pack Square, 1998; Chief Financial Officer and
Suite 777 Treasurer of Deep Discount Advisors,
Asheville, NC 28801 Inc., an investment advisory firm;
Director of The Austria Fund, Inc.
Ralph W. Bradshaw 48 Director of the Fund since September 600
One West Pack Square, 1998; Treasurer of the Fund since
Suite 777 January 1999; Vice President and
Asheville, NC 28801 Secretary of Deep Discount Advisors,
Inc., an investment advisory firm;
Director of The Austria Fund, Inc.
William Clark 53 Director of Research for Deep Discount 1,600
One West Pack Square, Advisors, Inc., an investment advisory
Suite 777 firm; Director of The Austria Fund, Inc.
Asheville, NC 28801
Phillip Goldstein 54 Director of the Fund since September 1,776
60 Heritage Drive 1998; President of the General Partner
Pleasantville, NY 10570 of Opportunity Partners, L.P., a
private investment partnership.
Gerald Hellerman 61 Director of the Fund since September 0
10965 Eight Bells Lane 1998; Managing Director of Hellerman
Columbia, MD 21044 Associates, a financial consulting
firm; Trustee of Third Avenue Value
Trust.
</TABLE>
4
<PAGE>
NOMINEES
<TABLE>
<CAPTION>
Number and Percentage
(if over 1%) of Shares of
Common Stock
Principal Occupation Beneficially Owned as of
Name and Address Age During Past Five Years March 31, 1999
----------------------------- ------ ----------------------------------------- ---------------------------
<S> <C> <C> <C>
Thomas H. Lenagh 77 Director of the Fund since June 1987; 1,000
Greenwich Office Park Independent Financial Adviser; Director
Greenwich, CT 06831 of Gintel Funds, Adams Express, ASD
Group, ICN Pharmaceuticals, Inrad Corp.
and V-Band Corp.
All Directors and Officers 136,376
as a Group (9 persons)
</TABLE>
- ----------
* "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 ownership and/or
control of Fund shares.
+ Deep Discount Advisors, Inc. and Ron Olin Investment Management Co., which are
registered investment advisers controlled by Mr. Olin, are the beneficial
owners of 1,642,253 shares. Mr. Olin disclaims beneficial ownership of
1,516,453 of said shares.
In addition to Mr. Bradshaw, Leopoldo M. Clemente, Jr. and William H.
Bohnett 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>
Leopoldo M. Clemente, Jr. 60 President of the Fund since June 1987; President
152 West 57th Street and Chief Executive Officer of Clemente Capital,
New York, NY 10019 Inc. since January 1989; Director of The First
Philippine Fund Inc. and Philippine Strategic
Investment (Holdings) Limited.
William H. Bohnett 50 Secretary of the Fund since June 1987; Partner of
666 Fifth Avenue the law firm of Fulbright & Jaworski L.L.P.
New York, NY 10103
</TABLE>
The Board of Directors of the Fund held four regular meetings and five
special meetings during 1998. All directors attended at least 75% of such
meetings. The Audit Committee met twice during 1998. 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>
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, 1998, 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
the Fund and The First
Name of Director Compensation from the Fund Philippine Fund Inc.
---------------- -------------------------- --------------------
<S> <C> <C>
Gary A. Bentz.............................. $1000 $1000
Ralph W. Bradshaw.......................... $1000 $1000
Adrian C. Cassidy........................... $8500 $18,250
Robert J. Christian......................... - -
Leopoldo M. Clemente, Jr.................... - -
Lilia C. Clemente........................... - -
Phillip Goldstein........................... $1500 $1500
Gerald Hellerman............................ $1000 $1000
Thomas H. Lenagh............................ $9500 $9500
Sam Nakagama................................ $9500 $9500
Ronald G. Olin.............................. $2000 $2000
G. Peter Schieferdecker..................... $8500 $8500
Baron J.G.A. Sirtema van Grovestins......... $7500 $7500
</TABLE>
The Adviser, which pays the compensation and certain expenses of its
personnel who may 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 NO. 1.
6
<PAGE>
PROPOSAL NO. 2
AMENDMENT OF THE ARTICLES OF INCORPORATION
TO CHANGE THE NAME OF THE FUND
The Fund seeks shareholder approval to amend the Fund's Articles of
Incorporation to change the name of the Fund to "Clemente Strategic Value Fund,
Inc." When it was organized twelve years ago, the focus of the Fund was on the
unique investment opportunity to exploit "global growth" through substantial
investments outside the United States. Since then, major changes have occurred
in world markets and in the nature of the investment opportunities available.
The Board of Directors believes that greater flexibility in investment selection
would benefit shareholders. The fundamental, stated objective of the Fund is to
maximize long-term capital appreciation. "Strategic" decisions to add "value"
through repurchases of the Fund's own shares when trading at a discount, a
recent and fortuitous shift of the portfolio out of Asia and into the United
States market, and seeking approval of the shareholders to purchase other
closed-end funds selling at large discounts, are all examples of efforts to
improve shareholder results. Furthermore, the Fund's investment advisers have
proved very adept at taking advantage of many investment opportunities outside
of the "global growth" category. For all these reasons the Board feels that a
change of the Fund's name to "Clemente Strategic Value Fund, Inc." would be
appropriate and better reflect the diverse investment opportunities being
pursued by the Fund. A form of the Fund's Amended and Restated Articles of
Incorporation are attached to this Proxy Statement as Exhibit A.
The proposed name change would not change the Fund's fundamental
investment objective of seeking long-term capital appreciation, which may only
be changed by shareholder vote. As stated above, the new name is intended to
signify greater latitude in investing the Fund's assets whether inside or
outside the United States. The Fund will retain the flexibility to invest in
non-U.S. stocks and various non-U.S. markets whenever conditions and
opportunities so warrant. As of March 30, 1999 the Fund's assets were
approximately 50% invested in the U.S. and Canada, 36% in Europe and 14% in the
rest of the world.
Proposal No. 2 requires for passage the affirmative vote of two-thirds
of all votes entitled to be cast on the matter.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE AMENDMENT OF THE FUND'S
ARTICLES OF INCORPORATION.
7
<PAGE>
PROPOSAL NO. 3
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,
1999. 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, 1998.
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. 3 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.
8
<PAGE>
PROPOSAL NO. 4
CONSIDERATION OF THE PROPOSAL TO ELIMINATE
THE FUNDAMENTAL INVESTMENT POLICY OF THE FUND
PROHIBITING INVESTMENTS IN OTHER INVESTMENT COMPANIES
Currently, the Fund's fundamental investment policies provide that the
Fund may not purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization. The
Board of Directors proposes that this fundamental policy be eliminated. While
approval of the proposal would permit the Fund to invest in the securities of
other investment companies, the Fund would remain subject to the limits
prescribed by the Investment Company Act of 1940, as amended from time to time
(the "1940 Act"). Section 12(d)(1) of the 1940 Act effectively prohibits the
Fund from acquiring the securities of another investment company if, after the
acquisition, the Fund would own: (i) more than 3% of the outstanding voting
stock of the acquired investment company, (ii) securities issued by the acquired
investment company having a value in excess of 5% of the Fund's total assets,
and (iii) securities issued by the acquired investment company and all other
investment companies having a value in excess of 10% of the Fund's total assets.
Section 12(d) provides for certain limited exceptions to these restrictions.
The Adviser believes that the flexibility to invest in other investment
companies could enhance the Fund's ability to achieve its investment objective
of long-term growth of capital. Within this type of investment, it is the Fund's
current intention to invest primarily in closed-end investment companies trading
at discounts to their net asset value. Furthermore, the Fund may enhance its
exposure to foreign securities through such investments. In certain markets,
direct access by foreign investors (such as the Fund) may be prohibited or
restricted, in which case investment through another investment company may be
the sole means by which the Fund could gain market exposure in a particular
country. By investing in foreign markets via other investment companies, the
Fund may also be able to avoid significant transactional or custodial costs.
Investment in another investment company may involve the payment of a
premium above the value of the issuer's portfolio securities, and is subject to
market availability. In the case of a purchase of shares of such a company in a
public offering, the purchase price may include an underwriting spread. As
discussed above, the Fund intends to invest principally in closed-end funds
which trade at a discount from such fund's net asset value. The Fund does not
intend to invest in any investment company that does not meet this criteria
unless, in the judgment of the Adviser, the potential benefits of such
investment justify the payment of any applicable premium. As a shareholder in
another investment company, the Fund would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Fund would continue to pay its own management fees and
other expenses.
The Board of Directors believes that the proposed elimination of this
fundamental investment policy of the Fund is in the best interests of the Fund
and its shareholders, and recommends that
9
<PAGE>
shareholders vote FOR the proposal. If the proposal is not approved by the
Fund's shareholders, the Fund's fundamental investment policies will continue to
prohibit investments in other investment companies, except in connection with a
merger, consolidation, acquisition or reorganization.
The 1940 Act requires that any change in the Fund's fundamental
investment policies be made only 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 THAT
SHAREHOLDERS VOTE "FOR" THE ELIMINATION OF THIS
FUNDAMENTAL INVESTMENT POLICY.
10
<PAGE>
PROPOSAL NO. 5
SHAREHOLDER PROPOSAL
A shareholder has submitted the following proposal for inclusion in
this Proxy Statement. Such shareholder claims beneficial ownership of more than
$2,000 worth of the Fund's 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 Ronald G. Olin, c/o
Clemente Global Growth Fund, Inc., 152 West 57th Street, New York, New York
10019, telephone number 212-765-0700.
RESOLVED: The board of directors should take steps to open-end the fund
or provide some other means for shareholders to get net asset value for their
shares.
Supporting Statement
Like many shareholders, we bought shares of the fund because Phil
Goldstein was trying to get net asset value for shareholders. We were pleased
when Goldstein and Ron Olin, another shareholder activist, joined the board. At
the time, Olin said, "I believe there is no reason for any closed-end fund to
tolerate more than a nominal discount in the price of its shares. Shareholders
have a right to demand that their investment returns be placed ahead of all
other considerations. That is going to happen through the joint efforts of the
major shareholders, the newly reconstituted board and Clemente Capital."
We have been waiting for some announcement about getting shareholders
net asset value but have heard nothing. Olin's promise that things would change
has not been fulfilled and the fund still trades at a big discount (recently
almost 14%) just like many other closed-end funds. That is a lot more than
"nominal." Either Goldstein and Olin have been unable to convince the rest of
the board to take the steps needed to get shareholders net asset value or they
are not the advocates for shareholders that we thought that they were.
Either way, shareholders who want net asset value should vote FOR this
proposal.
Board of Directors' Position on the Proposal
The shareholder proposal asks that open-ending or some other means be
taken to provide full Net Asset Value (NAV) to those shareholders wishing to
leave the Fund. Most of the Directors believe that this is not the most
effective means to deliver long-term added value to a majority of shareholders.
With two of the nine current directors dissenting, the Board opposes the
proposal and agrees with the majority of shareholders who voted in the 1998
annual meeting that open-ending should be rejected in favor of other means of
maximizing shareholder value within the closed-end structure. They believe that
somewhat more patience is justified in an attempt to reap potentially
11
<PAGE>
greater rewards. The goal of this Board is not to pit one shareholder against
another, but to establish a balance that satisfies the greatest number of
shareholders.
Different types of investors have their own agendas and their own
beliefs. The closed-end structure is fundamentally different from an open-end
structure or one that provides NAV on demand. Attempts to deliver NAV
immediately to a minority of shareholders who wish to exit the Fund may well
destroy or diminish the advantages otherwise enjoyed by the remaining
shareholders. For the time being, a majority of the current Board is committed
to realizing the potential of the Fund without changing its fundamental nature.
The major benefits of the closed-end structure to long-term
shareholders are threefold: flexibility in managing fund assets, lower expenses,
and performance enhancement through profiting from the discount.
Flexibility in managing fund assets. Unlike open-end funds, closed-end
funds are not subject to cash flow disruptions caused by inflows or outflows of
capital when shareholders buy new shares or redeem shares. This permits fund
management to take a more long-term perspective on investments and may permit a
more effective investment strategy. This may in turn produce higher long-term
portfolio returns. In addition, cash can be raised to take advantage of
anticipated market declines without fear that it will instead have to be used to
satisfy the shareholder redemptions in open-end funds that normally accompany
market reversals. Less liquid securities, such as other closed-end funds selling
at discounts, can be placed in the fund's portfolio without fear that
redemptions will require untimely sales to raise capital.
Lower expenses. Because closed-end funds need not engage in many of the
shareholders services normally required of open-end funds and do not have the
same marketing and communication activities, costs can be kept to a minimum.
Since the Board changed last September, the Directors have found many ways to
reduce expenses and are pursuing many more. The Board remains convinced that
closed-end funds can be run more cost effectively than open-end funds and that
these savings, along with the additional flexibility in managing fund assets,
may well permit substantial additional returns to be realized over time as
compared with equivalent open-end funds.
Profiting from the discount. Closed-end funds often sell at discounts,
at least part of the time. A fund that purchases its own shares at a discount
benefits loyal, long-term shareholders in two ways. First, the net asset value
is automatically increased at no additional risk. Second, the supply of shares
available for sale at a discount is reduced and this creates price pressure
which is likely to reduce the discount (recently as low as 4%) and enhance share
value. While the extra liquidity may benefit shareholders who choose to sell
their shares, the greatest value of an ongoing buyback program accrues to
long-term shareholders. Shareholders who view the fund as a long-term, tax
efficient investment may be better off in a closed-end structure at a nominal or
moderate discount which fluctuates.
12
<PAGE>
For all these reasons, a majority of the current Board recommends that
shareholders vote AGAINST this shareholder proposal.
Note: The two directors who were elected at the 1998 Annual Meeting of
Stockholders support measures designed to benefit long-term shareholders.
Nevertheless, because there can be no assurance that such measures will lead to
the permanent elimination of the discount, they believe that those shareholders
who would like to dispose of their shares at this time should be afforded an
opportunity to do so at a price equal to (or close to) net asset value.
Therefore, these directors respectfully dissent from the Board's recommendation
to oppose this proposal.
Effect of Passage of the Proposal
Proposal No. 5 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. 5.
13
<PAGE>
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 is Chairman and Chief Executive Officer of the Adviser. Leopoldo M.
Clemente, Jr., President 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% of the outstanding Common Stock of the Adviser.
The U.S. Adviser
Wilmington Trust Company is a Delaware bank and trust company 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
March 23, 1999 were as follows:
Name of Director Occupation
Ted T. Cecala................... Chief Executive Officer and Chairman of the
Board of Wilmington Trust
Andrew B. Kirkpatrick, Jr....... 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
14
<PAGE>
Name of Director Occupation
Charles S. Crompton, Jr......... Partner in 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
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
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.
15
<PAGE>
MISCELLANEOUS
As of the date of this Proxy Statement, management does not know of any
other matters that will come before the 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 on 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 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 directors is listed at the end of each section
describing said proposal or election.
16
<PAGE>
ADDITIONAL INFORMATION
As of March 31, 1999, 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 31% 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.
17
<PAGE>
2000 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 2000 Annual Meeting of Stockholders (expected to be held
in late April, 2000) must be received by the Fund on or before December 16, 1999
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. Pursuant to the Fund's advance notice provision contained in its
by-laws, proposed matters other than those governed by the foregoing rules must
be submitted to the Fund no later than 60 days prior to the meeting.
CLEMENTE GLOBAL GROWTH FUND, INC.
WILLIAM H. BOHNETT
Secretary
Dated: April 15, 1999
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD NOW
18
<PAGE>
RESULTS OF THE 1998 ANNUAL MEETING
The Fund held its Annual Meeting on September 23, 1998. At the meeting,
the shareholders voted on the election of Fund directors, the ratification of
PricewaterhouseCoopers LLP as the Fund's independent accountants for the year
ending December 31, 1998, and four shareholder proposals, the results of which
were as follows:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST WITHHELD NON-VOTES
--- ------- -------- ---------
<S> <C> <C> <C> <C>
PROPOSAL ONE
Election of Directors
Lila C. Clemente 1,044,282 179,021
Baron J.G.A. Sirtema van Grovestins 1,041,277 182,026
Gerald Hellerman 2,523,086 32,547
Philip Goldstein 2,515,314 40,319
PROPOSAL TWO
Ratification of Independent 2,867,281 50,937 860,716
Accountants
PROPOSAL THREE
Shareholder Proposal to
convert the Fund to an
open-end fund. 1,567,582 2,110,180 97,577
PROPOSAL FOUR
Shareholder Proposal providing that
the advisory contract with Clemente
Capital, Inc. be terminated. 1,362,015 2,274,534 138,791
PROPOSAL FIVE
Shareholder Proposal
requesting that
the remaining directors resign. 1,368,601 2,243,435 163,304
PROPOSAL SIX
Shareholder Proposal
that Phillip Goldstein's proxy
solicitation expenses be
reimbursed. 2,540,704 1,067,425 167,212
19
<PAGE>
PROXY
CLEMENTE GLOBAL GROWTH FUND, INC.
The undersigned stockholder of Clemente Global Growth Fund, Inc. (the
"Fund") hereby constitutes and appoints Ralph Bradshaw and William H. Bohnett,
or either 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 Friday, May 21, 1999 at
9:30 A.M., New York time, at the offices of Clemente Capital, Inc., 152 West
57th Street, 25th Floor, 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 seven Directors, (b) the amendment of the Articles of
Incorporation, (c) the ratification of the selection by the Board of Directors
of the Fund's independent accountants, (d) the approval of disapproval of a
Board proposal, and (e) the approval or disapproval of a shareholder proposal,
but, if no such specification is made, (i) to vote for the election of the seven
directors nominated by the Fund, (ii) to vote for the amendment of the Articles
of Incorporation, (iii) to vote for the ratification of the selection by the
Board of Directors of the Fund's independent accountants, (iv) to vote for the
Board proposal, (v) to vote against the shareholders 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 21, 1999
(To be dated and signed on reverse side)
<PAGE>
/ /
Please mark boxes / / or /X/ in blue or black ink.
(A) Election of seven Directors, as set forth below, until their successors are
duly elected and qualified:
Gary A. Bentz, Ralph W. Bradshaw, William Clark, Phillip Goldstein,
Gerald Hellerman, Thomas H. Lenagh and Ronald G. Olin
</TABLE>
<TABLE>
<S> <C> <C>
FOR ALL NOMINEES LISTED ABOVE WITHHOLD AUTHORITY
(except as indicated to the contrary below) / / to vote for all nominees listed above / /
(INSTRUCTION: To withhold authority to vote for an individual, write that
nominee's name in the space provided below.)
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(B) To amend the Articles of FOR AGAINST ABSTAIN (F) To transact such other business
Incorporation to change the / / / / / / may properly come before the
name of the Fund to Clemente Meeting or any adjournment or
Strategic Value Fund, Inc.; adjournment thereof; all set forth
in the Notice of Annual Meeting,
dated April 15, 1999, and the
(C) To ratify the selection by the Board FOR AGAINST ABSTAIN accompanying Proxy Statement,
of Directors of PricewaterhouseCoopers / / / / / / receipt of which is hereby
LLP as the Fund's independent accountants acknowledged.
for the year ending December 31, 1999;
(D) To approve or disapprove a Board FOR AGAINST ABSTAIN
proposal to eliminate a fundamental / / / / / /
investment policy of the Fund
prohibiting investments in other
investing companies except in
connection with a merger,
consolidation, acquisition or
reorganization;
(E) To approve or disapprove a shareholder FOR AGAINST ABSTAIN IMPORTANT: Signature(s) should
proposal to recommend the Board of Directors / / / / / / correspond with the stencilled
take the steps necessary to open-end the Fund name appearing hereon.
or otherwise provide full net asset value to When signing in a fiduciary or
shareholders; representative capacity, give
full title as such. When more
than one owner, each should
sign.
Dated:____________________,1999
_______________________________
_______________________________
_______
</TABLE>
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
<PAGE>
EXHIBIT A
Form of Articles of Amendment and Restatement
CLEMENTE STRATEGIC VALUE FUND, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
Clemente Strategic Value Fund, Inc., a Maryland corporation (which is
hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland that:
FIRST
The Corporation desires to amend and restate its Charter as currently
in effect pursuant to these Articles of Amendment and Restatement. These
Articles of Amendment and Restatement set forth every Charter provision
currently in effect.
SECOND
The Charter of the Corporation is hereby amended by striking in their
entirety Articles FIRST through NINTH, inclusive, and by submitting in lieu
thereof the following:
FIRST: Name.
The name of the corporation (which is hereinafter referred to as the
"Corporation") is
Clemente Strategic Value Fund, Inc.
SECOND: Corporate Purposes.
The purpose for which the Corporation is formed and the business or
objects to be carried on and promoted by it are as follows:
(1) To operate as and carry on the business of an investment
company, and to exercise all the powers necessary or appropriate to the conduct
of such operations.
(2) To invest in, hold for investment, or reinvest in,
securities, including common and preferred stocks; warrants; bonds, debentures,
bills, time notes and all other evidences of indebtedness; negotiable or
non-negotiable instruments; government securities, including securities of any
state, municipality or other political subdivision thereof, or any governmental
or quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper, bankers
acceptances and
<PAGE>
all kinds of repurchase agreements, of any corporation, company, trust,
association, firm or other business organization however established, and of any
country, state, municipality or other political subdivision, or any governmental
or quasi-governmental agency or instrumentality.
(3) To acquire (by purchase, subscription or otherwise), to
hold, to trade in and deal in, to acquire any rights or options to purchase or
sell, to sell or otherwise dispose of, to lend and to pledge any such
securities, and to enter into repurchase agreements and forward foreign currency
exchange contracts, to purchase and sell futures contracts and options on
futures contracts of all descriptions and to engage in all types of hedging and
risk management transactions.
(4) To exercise all rights, powers and privileges of ownership
or interest in all securities, repurchase agreements and other types and kinds
of other investments held by the Corporation, including the right to vote
thereon and otherwise act with respect thereto, and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
securities and repurchase agreements.
(5) To acquire (by purchase, lease or otherwise) and to hold,
use, maintain, develop and dispose of (by sale or otherwise) any property, real
or personal, including cash, and any interest therein.
(6) To borrow money or otherwise obtain credit and in this
connection issue notes or other evidences of indebtedness; to secure borrowings
by mortgaging, pledging or otherwise subjecting as security the Corporation's
property; and to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other person and to lend the
Corporation's property.
(7) To aid by further investment any corporation, company,
trust, association, partnership, firm or other person, any obligation of or
interest in which is held by the Corporation or in the affairs of which the
Corporation has any direct or indirect interest; to do all acts and things
designed to protect, preserve, improve or enhance the value of such obligation
or interest; and to guarantee or become surety on any or all of the contracts,
stocks, bonds, notes, debentures and other obligations of any such corporation,
company, trust, association, partnership, firm or other person.
(8) In general, to carry on any other business in connection
with or incidental to any of the foregoing objects and purposes; to have and
exercise all the powers conferred upon corporations by the laws of the State of
Maryland as in force from time to time; to do everything necessary, suitable or
proper for the accomplishment of any purpose or the attainment of any object or
the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
-2-
<PAGE>
The Corporation shall have the power to conduct and carry on its
business, or any part thereof, and to have one or more offices, and to exercise
any or all of its corporate powers and rights, in the State of Maryland, in any
other states, territories, districts, colonies and dependencies of the United
States, and in any or all foreign countries.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Corporation.
THIRD: Address and Resident Agent.
The post office address of the principal office of the Corporation in
the State of Maryland is:
c/o The Corporation Trust Incorporated
300 East Lombard Street
Suite 1400
Baltimore, Maryland 21202
The name and post office address of the resident agent of the Corporation in the
State of Maryland is:
The Corporation Trust Incorporated
300 East Lombard Street
Suite 1400
Baltimore, Maryland 21202
Such resident agent is a Maryland corporation.
FOURTH: Capital Stock.
The total number of shares of capital stock that the Corporation shall
have authority to issue is Twenty-Five Million (25,000,000) shares of Common
Stock (the "Common Stock") par value of one cent ($0.01) per share, all of which
shall be of a single class, such shares having an aggregate par value of Two
Hundred and Fifty Thousand Dollars ($250,000).
(1) The Board of Directors shall have authority by resolution
to classify and reclassify any authorized but unissued shares of capital stock
from time to time by setting or changing in any one or more respects the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of redemption
of the capital stock.
-3-
<PAGE>
(2) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation.
(a) Each share of Common Stock shall have one
vote, and, except as otherwise provided in
respect of any class of stock hereafter
classified or reclassified, the exclusive
voting power for all purposes shall be
vested in the holders of the Common Stock.
(b) Subject to the provisions of law and any
preferences of any class of stock hereafter
classified or reclassified, dividends may be
paid on the Common Stock of the Corporation
at such time and in such amounts as the
Board of Directors may deem advisable.
(c) In the event of any liquidation, dissolution
or winding up of the Corporation, whether
voluntary or involuntary, the holders of the
Common Stock shall be entitled, after
payment or provision for payment of the
debts and other liabilities of the
Corporation and the amount to which the
holders of any class of stock hereafter
classified or reclassified having a
preference on distributions in the
liquidation, dissolution or winding up of
the Corporation shall be entitled, together
with the holders of any other class of stock
hereafter classified or reclassified not
having a preference on distributions in the
liquidation, dissolution or winding up of
the Corporation, to share ratably in the
remaining net assets of the Corporation.
(3) The Corporation may issue fractional shares. Any
fractional share shall carry proportionately the rights of a whole share
including, without limitation, the right to vote and the right to receive
dividends. A fractional share shall not, however, have the right to receive a
certificate evidencing it.
(4) All persons who shall acquire stock in the Corporation
shall acquire the same subject to the provisions of the Charter and the By-Laws
of the Corporation.
(5) No holder of stock of the Corporation by virtue of being
such a holder shall have any right to purchase or subscribe for any shares of
the Corporation's capital stock or any other security that the Corporation may
issue or sell (whether out of the number of shares authorized by the Charter of
the Corporation or out of any shares of the Corporation's capital stock that the
Corporation may acquire) other than a right that the Board of Directors in its
discretion may determine to grant.
-4-
<PAGE>
(6) Notwithstanding any provision of law requiring any action
to be taken or authorized by the affirmative vote of the holders of a designated
proportion of the votes of all classes or of any class of stock of the
Corporation, such action shall be effective and valid if taken or authorized by
the affirmative vote of a majority of the total number of votes entitled to be
cast thereon, except as otherwise provided in the Charter of the Corporation.
FIFTH: Board of Directors.
(1) The number of Directors of the Corporation shall be three,
or such other number as may from time to time be fixed in the manner provided in
the By-laws of the Corporation, provided that the number of Directors shall not
be less than three nor more than fifteen. Except as provided in the By-Laws, the
election of Directors may be conducted in any way approved at the meeting
(whether of stockholders or Directors) at which the election is held, provided
that such election shall be by ballot whenever requested by any person entitled
to vote. The names of the Directors who shall act as such until their successors
are duly elected and qualified are as follows:
RONALD G. OLIN
GARY A. BENTZ
RALPH W. BRADSHAW
WILLIAM CLARK
PHILLIP GOLDSTEIN
GERALD HELLERMAN
THOMAS H. LENAGH
(2) In furtherance, and not in limitation, of the powers
conferred by the laws of the State of Maryland, the Board of Directors is
expressly authorized:
(a) To make, alter or repeal the By-Laws of the
Corporation, except where such power is
reserved by the By-Laws to the stockholders,
and except as otherwise required by the
Investment Company Act of 1940.
(b) From time to time to determine whether and
to what extent and at what times and places
and under what conditions and regulations
the books and accounts of the Corporation,
or any of them other than the stock ledger,
shall be open to the inspection of the
stockholders. No stockholder shall have any
right to inspect any account or book or
document of the Corporation, except as
conferred by law or authorized by resolution
of the Board of Directors or of the
stockholders.
-5-
<PAGE>
(c) Without the assent or vote of the
stockholders, to authorize the issuance from
time to time of shares of the stock of any
class of the Corporation, whether now or
hereafter authorized, and securities
convertible into shares of stock of the
Corporation of any class or classes, whether
now or hereafter authorized, for such
consideration as the Board of Directors may
deem advisable.
(d) Without the assent or vote of the
stockholders, to authorize and issue
obligations of the Corporation, secured and
unsecured, as the Board of Directors may
determine, and to authorize and cause to be
executed mortgages and liens upon the real
or personal property of the Corporation.
(e) Notwithstanding anything in the Charter of
the Corporation to the contrary, to
establish in its absolute discretion the
basis or method for determining the value of
the assets belonging to any class, the value
of the liabilities belonging to any class
and the net asset value of each share of any
class of the Corporation's capital stock.
(f) To determine in accordance with generally
accepted accounting principles and practices
what constitutes net profits, earnings,
surplus or net assets in excess of capital,
and to determine what accounting periods
shall be used by the Corporation for any
purpose, whether annual or any other period;
to set apart out of any funds of the
Corporation reserves for such purposes as it
shall determine and to abolish the same; to
declare and pay any dividends and
distributions in cash, securities or other
property from surplus or any funds legally
available therefor, at such intervals or on
such other periodic basis, as it shall
determine; to declare dividends or
distributions by means of a formula or other
method of determination, at meetings held
less frequently than the frequency of the
effectiveness of such declarations; to
establish payment dates for dividends or any
other distributions on any basis, including
dates occurring less frequently than the
effectiveness of declarations thereof.
(g) In addition to the powers and authorities
granted herein and by statute expressly
conferred upon it, the Board of Directors is
authorized to exercise all powers and do all
acts that maybe exercised or done by the
Corporation pursuant to the provisions of
the laws of the State of Maryland, the
Charter and the By-Laws of the Corporation.
-6-
<PAGE>
SIXTH: Certain Transactions.
(1) Notwithstanding any other provision of the Charter of the
Corporation, and subject to the exceptions provided in Paragraph (4) of this
Article, the types of transactions described in Paragraph (3) of this Article
shall require the affirmative vote or consent of the holders of sixty-six and
two-thirds percent (66 2/3%) of the outstanding shares of each class of stock of
the Corporation normally entitled to vote in elections of Directors voting for
the purposes of this Article as separate classes, when a Principal Shareholder
(as defined in Paragraph (2) of this Article) is a party to the transaction.
Such affirmative vote or consent shall be in addition to the vote or consent of
the holders of the stock of the Corporation otherwise required by law or by the
terms of any class or series of preferred stock, whether now or hereafter
authorized, or any agreement between the Corporation and any national securities
exchange.
(2) The term "Principal Shareholder" shall mean any
corporation, person or other entity which is the beneficial owner, directly or
indirectly, of more than five percent (5%) of the outstanding shares of any
class of stock of the Corporation and shall include any affiliate or associate,
as such terms are defined in clause (ii) below, of a Principal Shareholder. For
the purposes of this Article, in addition to the shares of stock which a
corporation, person or other entity beneficially owns directly, (a) any
corporation, person or other entity shall be deemed to be the beneficial owner
of any shares of stock of the Corporation (i) which it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warranties,
or otherwise (but excluding stock options granted by the Corporation), or (ii)
which are beneficially owned, directly or indirectly (including shares deemed
owned through application of clause (i) above), by any other corporation, person
or entity with which it or its "affiliate" or "associate" (as defined below) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of stock of the Corporation, or which is its
"affiliate", or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect on April 15, 1987, and (b) the outstanding shares of any class of stock
of the Corporation shall include shares deemed owned through application of
clauses (i) and (ii) above but shall not include any other shares which may be
issuable pursuant to any agreement, or upon exercise of conversion rights or
warrants, or otherwise.
(3) This Article shall apply to the following transactions:
(i) The merger or consolidation of the
Corporation or any subsidiary of the
Corporation with or into any Principal
Shareholder.
(ii) The issuance of any securities of the
Corporation to any Principal Shareholder for
cash.
(iii) The sale, lease or exchange of all or any
substantial part of the assets of the
Corporation to any Principal Shareholder
(except assets having an aggregate fair
market value of less than
-7-
<PAGE>
$1,000,000, aggregating for the purpose of
such computation all assets sold, leased or
exchanged in any series of similar
transactions within a twelve-month period).
(iv) The sale, lease or exchange to the
Corporation or any subsidiary thereof, in
exchange for securities of the Corporation,
of any assets of any Principal Shareholder
(except assets having an aggregate fair
market value of less than $1,000,000,
aggregating for the purposes of such
computation all assets sold, leased or
exchanged in any series of similar
transactions with a twelve-month period).
(4) The provisions of this Article shall not be applicable to
(i) any of the transactions described in Paragraph (3) of this Article if the
Board of Directors of the Corporation shall by resolution have approved a
memorandum of understanding with such Principal Shareholder with respect to and
substantially consistent with such transaction, or (ii) any such transaction
with any corporation of which a majority of the outstanding shares of all
classes of stock normally entitled to vote in elections of Directors is owned of
record or beneficially by the Corporation and its subsidiaries.
(5) The Board of Directors shall have the power and duty to
determine for the purposes of this Article on the basis of information known to
the Corporation, whether (i) a corporation, person or entity beneficially owns
more than five percent (5%) of the outstanding shares of any class of stock of
the Corporation, (ii) a corporation, person or entity is an "affiliate" or
"associate" (as defined above) of another, (iii) the assets being acquired or
leased to or by the Corporation, or any subsidiary thereof, constitute a
substantial part of the assets of the Corporation and have an aggregate fair
market value of less than $1,000,000, and (iv) the memorandum of understanding
referred to the Paragraph (4) hereof is substantially consistent with the
transaction covered thereby. Any such determination shall be conclusive and
binding for all purposes of this Article.
SEVENTH: Amendments.
(1) The Corporation reserves the right from time to time to
make any amendment to the Charter of the Corporation, now or hereafter
authorized by law, including any amendment that alters the contract rights, as
expressly set forth in the Charter, of any outstanding stock.
(2) Notwithstanding Paragraph (1) of this Article or any other
provision of the Charter of the Corporation, no amendment to the Charter shall
amend, alter, change or repeal any of the provisions of Articles VII, VIII and
IX unless the amendment effecting such amendment, alteration, change or repeal
shall receive the affirmative vote or consent of sixty-six and two-thirds
percent (66 2/3%) of the outstanding shares of each class of stock of the
Corporation normally entitled to vote in elections of Directors, voting for the
purposes of this Article as
-8-
<PAGE>
separate classes. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of the stock of the Corporation otherwise
required by law or by the terms of any class or series of preferred stock,
whether now or hereafter authorized, or any agreement between the Corporation
and any national securities exchange.
EIGHTH: Contracts.
The Corporation may enter into any contract with any corporation, firm,
partnership, trust or association, although one or more of the Board of
Directors or officers of the Corporation may be an officer, director, partner,
trustee, shareholder or member of, or have an interest in, such other party to
the contract, and no such contract shall be invalidated or rendered voidable by
reason of the existence of any such relationship or interest, nor shall any
person holding such relationship be liable merely by reason of such relationship
or interest for any loss or expense to the Corporation under or by reason of
said contract or accountable for any profit realized directly or indirectly
therefrom, provided that the contract when entered into was reasonable and fair
to the corporation.
IN WITNESS WHEREOF, Clemente Strategic Value Fund, Inc. has caused
these Articles of Amendment to be signed in its name and on its behalf by its
President and attested to by its Secretary on this day of May ___, 1999; and its
President acknowledges that, as to all matters or facts set forth herein which
are required to be verified under oath, such matters and facts are true in all
material respects to the best of his or her knowledge, information, and belief,
and that this statement is made under the penalties for perjury.
ATTEST: CLEMENTE STRATEGIC VALUE FUND, INC.
______________________________ By:________________________________ (SEAL)
William H. Bohnett, Secretary Leopoldo M. Clemente, Jr., President
-9-
