(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for use of the Commission only (Rule 14a-6(e)(2))
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
(Name of Registrant as Specified In Its Charter)
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2)or Item 22(a)(2)of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / 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 filling fee is calculated and state
how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/X/ 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 of 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>
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on July 25, 1996
Notice is hereby given that a Special Meeting of the Shareholders
(the "Meeting") of The Rodney Square International Securities
Fund, Inc. (the "Fund"), a Maryland corporation, will be held on
July 25, 1996 at 10:00 a.m. Eastern time at 1105 North Market
Street, Wilmington, DE 19890, for the following purposes:
I. To approve or disapprove the liquidation and dissolution of
the Fund.
II. To transact such other business as may be properly brought
before the meeting.
Shareholders of record at the close of business on June 28, 1996,
are entitled to notice of, and to vote at, the Meeting or any
adjournment thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING,
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED
PROXY CARD IN THE POSTAGE PAID RETURN ENVELOPE ENCLOSED, SO THAT
A QUORUM WILL BE PRESENT AND A MAXIMUM NUMBER OF SHARES MAY BE
VOTED. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO SIGN
YOUR PROXY CARD AND RETURN IT. THE PROXY IS REVOCABLE AT ANY
TIME PRIOR TO ITS USE.
By Order of the Board of
Directors,
Louis C. Schwartz
Assistant Secretary
The date of this Notice is July 5, 1996
<PAGE>
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JULY 25, 1996
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of The Rodney
Square International Securities Fund, Inc. (the "Fund"), a
Maryland corporation, for use at a Special Meeting of
Shareholders (the "Meeting") to be held on July 25, 1996 at 10:00
a.m. Eastern time at 1105 North Market Street, Wilmington, DE
19890, and at any adjournment thereof, and was first mailed to
shareholders on or about July 5, 1996. A notice of the Meeting
and a proxy card accompany this Proxy Statement.
At the Meeting, shareholders will be asked to approve the
liquidation and dissolution of the Fund. The Board of Directors
recommends that you vote "For" the liquidation and dissolution of
the Fund.
The individuals named as proxies on the enclosed proxy card will
vote in accordance with your direction as indicated thereon if
your proxy card is received properly executed by you or by your
duly appointed agent or attorney-in-fact. If you sign, date and
return the proxy card, but give no voting instructions, the duly
appointed proxies will vote your shares in favor of the proposal
described in this proxy statement, and they may, in their
discretion, vote upon such other matters as may come before the
Meeting. Any person giving a proxy may revoke it at any time
prior to its use by giving written notice of such revocation to
the Fund prior to the Meeting, by delivering a subsequently dated
proxy to the Fund prior to the Meeting, or by attending and
voting at the Meeting in person. Proxies will be solicited
principally by mail, but officers of the Fund or agents appointed
by the Fund may also solicit proxies by telephone, telegraph or
personal interview.
The Board of Directors has fixed the close of business on June
28, 1996 as the record date ("Record Date") for the determination
of the shareholders entitled to notice of and to vote at the
Meeting or any adjournment thereof. As of that date, there were
approximately 1,068,004 outstanding shares of The Rodney Square
International Equity Fund, the only series of the Fund (the
"Portfolio")with net assets of approximately $13,966,335. Each
shareholder is entitled to one vote for each share of the Fund
held on the Record Date. The presence at the Meeting, in person
or by proxy, of the holders of at least one-third of the Fund's
outstanding shares as of the Record Date is required to
constitute a quorum for the purpose of transacting business at
the Meeting. The affirmative vote of the holders of at least two-
thirds of the Fund's outstanding shares as of the Record Date is
required to approve the liquidation and dissolution of the Fund.
The Fund's Annual Report for the year ended October 31, 1995,
including financial statements, has been sent to all shareholders
of record on or about December 28, 1995. A COPY OF THE FUND'S
ANNUAL REPORT AND SEMI-ANNUAL REPORT TO SHAREHOLDERS DATED APRIL
30, 1996 WILL BE AVAILABLE TO ANY SHAREHOLDER, WITHOUT CHARGE,
UPON WRITTEN REQUEST TO: RODNEY SQUARE MANAGEMENT CORPORATION,
1100 NORTH MARKET STREET, WILMINGTON, DE 19890-0001 OR BY PHONE,
TOLL-FREE AT 800-336-9970.
1
In the event that a quorum is not represented at the Meeting or
at any adjournment thereof, or, even if a quorum is so
represented, in the event that sufficient votes in favor of any
of the proposals set forth in the Notice of the Meeting are not
received, the persons named as proxies may propose and vote for
one or more adjournments of the Meeting to be held within a
reasonable time after the date originally set for the Meeting
(but not more than 120 days after the original record date for
the Meeting), and further solicitation of proxies may be made
without the necessity of further notice. The persons named as
proxies will vote in favor of any such adjournment if such
proxies instruct them to vote in favor of any of the proposals to
be considered at the adjourned meeting, and will vote against any
such adjournment if such proxies instruct them to vote against or
to abstain from voting on all of the proposals to be considered
at the adjournment meetings.
PROPOSAL I
PROPOSAL TO LIQUIDATE THE ASSETS AND DISSOLVE THE FUND
INTRODUCTION AND BACKGROUND. The Rodney Square International
Equity Fund ("Portfolio"), is the only series of the Fund, a
corporation organized under Maryland law and registered under the
Investment Company Act of 1940 ("Investment Company Act"). The
Portfolio commenced operations on November 2, 1987. Since it
commenced operations, Wilmington Trust Company ("WTC"), the
Fund's investment adviser, has waived a significant portion of
the fees or reimbursed the Portfolio monthly to the extent that
the Portfolio's expenses (excluding taxes, extraordinary
expenses, brokerage commissions and interest) exceeded 1.75% of
the Portfolio's average daily net assets. Notwithstanding the
expense reduction measures taken by the Fund's investment
adviser, the Portfolio experienced limited asset growth and has
experienced net asset losses over the last several years. WTC and
Rodney Square Distributors, Inc. ("RSD") the Fund's distributor
have come to believe it unlikely that the Portfolio will
experience material growth in assets in the foreseeable future.
In light of the inefficiencies and higher costs of managing the
Portfolio's small asset base, WTC and RSD submitted to the Fund's
Board of Directors ("Directors") a proposal to liquidate the
Portfolio and dissolve the Fund. In anticipation of the
Directors' consideration of that proposal, WTC and RSD suspended
sales of Fund shares as of May 1, 1996.
At a meeting held on May 20, 1996, the Directors considered and
unanimously approved, subject to shareholder approval, the
liquidation and dissolution of the Fund. Under Maryland law, the
liquidation and dissolution of the Fund may be effected only with
the approval of the Fund's shareholders. A copy of a plan for
the liquidation and dissolution of the Fund ("Plan") is attached
to this Proxy Statement as Exhibit A. The Plan calls for the
complete liquidation of all of the assets of the Portfolio and
the Fund, and the pro rata distribution of the resulting
proceeds, less liabilities and expenses, to the Fund's
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL I.
CONSIDERATION BY THE DIRECTORS. In evaluating the proposed
liquidation and dissolution of the Fund, the Trustees considered
a number of factors, including the amount of the Portfolio's
2
total assets, its expense ratio (absent the waiver and assumption
of expenses described above) and the likelihood that additional
sales of the shares could enable the Fund to attain an asset
level that would sustain an acceptable expense ratio. The
Directors also considered WTC's representation that it is not
prepared to continue to waive its advisory fee and absorb the
expenses associated with managing the Portfolio at its current
low level of assets indefinitely, but will do so pending the
liquidation of the Fund. Based on consideration of the
foregoing, and other factors they deemed relevant, the Directors
approved, subject to shareholder approval, the liquidation and
dissolution of the Fund.
If the liquidation and dissolution of the Fund is not approved by
the Fund's shareholders, the Fund will not be liquidated and will
continue to operate and be managed in accordance with the
investment objective and policies of the Fund as currently in
effect, pending a determination by the Directors as to what, if
any alternative action should be taken.
DESCRIPTION OF THE PLAN. Under the Plan the interest of each
shareholder in the assets of the Fund shall be fixed on the date
on which the Plan is approved by the Fund's shareholders
("Effective Date."). On such date, the books of the Fund will be
closed. Thereafter, all securities and other assets held by the
Fund not already held in cash or cash equivalents will be
liquidated. The Plan further provides that the distribution of
the Fund's assets will be made in one or two cash payments. The
first distribution of the Fund's assets (the "First
Distribution") is expected to consist of cash representing
substantially all of the assets of the Fund, less the amount
reserved to pay liabilities and expenses of the Fund. A second
distribution (the "Second Distribution") (the First Distribution
and the Second Distribution are sometimes collectively referred
to as the "Liquidation Distribution"), if necessary, is
anticipated to be made within 90 days after the First
Distribution and will consist of cash from any assets remaining
after payment of liabilities and expenses, the proceeds of any
sale of assets of the Fund under the Plan not sold prior to the
First Distribution and any other miscellaneous income to the
Fund.
At present, the date or dates on which the Fund will pay the
Liquidation Distribution to its shareholders and on which the
Fund will be liquidated have not been determined, but it is
anticipated that, if the Plan is adopted by the shareholders such
First Distribution would occur within seven days following the
Effective Date and their Second Distribution, if any, as soon
thereafter as reasonably practical. Shareholders will receive
their First and Second Distributions without any further action
on their part.
The Plan will not affect the right of a shareholder to redeem his
or her shares of the Fund. Therefore, a shareholder may redeem in
accordance with the redemption procedure set forth in the Fund's
current prospectus without the necessity of waiting for the Fund
to take any action. The Plan also provides that the Directors
shall have the authority to authorize such variations from or
amendments of the provisions of the Plan as may be necessary or
appropriate to carry out the purposes of the Plan. None of the
shareholders of the Portfolio will be entitled to exercise any
dissenter's rights or appraisal rights with respect to the
liquidation or dissolution of the Portfolio either under the Plan
or relevant provisions of Maryland law.
3
Under the Plan, the Fund will bear all expenses ("Plan Expenses")
incurred by it in connection with carrying out the Plan,
including the cost of soliciting proxies, liquidation and
deregistration. However, because WTC has agreed to reimburse the
Fund to the extent that the Fund's operating expenses exceed
1.75% of its average daily net assets and because expenses have
been, and are expected to continue to be, in excess of 1.75%, it
is anticipated that WTC will bear all Plan Expenses, other than
brokerage expenses.
FEDERAL INCOME TAX CONSEQUENCES. The following summary provides
general information with regard to the federal income tax
consequences to shareholders on receipt of the Liquidation
Distribution from the Fund pursuant to the provisions of the
Plan. This summary also discusses the effect of federal income
tax provisions on the Fund resulting from its liquidation and
dissolution; however, the Fund has not sought a ruling from the
Internal Revenue Service (the "Service") with respect to the
liquidation of the Fund.
This summary of the federal income tax consequences is generally
applicable to shareholders who are individual United States
citizens (other than dealers in securities) and does not address
the particular federal income tax consequences that may apply to
shareholders that are, for example, corporations, trusts,
estates, tax exempt organizations or non-resident aliens. Nor
does this summary address state or local tax consequences. The
tax consequences discussed herein may affect shareholders
differently depending upon their particular tax situations
unrelated to the Liquidation Distribution, and accordingly, this
summary is not a substitute for careful tax planning on an
individual basis. Shareholders may wish to consult their
personal tax advisers concerning their particular tax situations
and the impact thereon of receiving the Liquidation Distribution.
As discussed above, pursuant to the Plan, the Fund will sell its
assets and distribute the proceeds to its shareholders. The Fund
anticipates that it will retain its qualification as a regulated
investment company under the Internal Revenue Code of 1986, as
amended during the liquidation period and will not be taxed on
any of its net income realized from the sale of its assets.
A shareholder's receipt of the Liquidation Distribution will be a
taxable event in which the shareholder will be treated as having
sold his or her shares of the Fund in exchange for an amount
equal to the Liquidation Distribution that he or she receives.
Each shareholder will recognize gain or loss measured by the
difference between the adjusted tax basis in the shares and the
Liquidation Distribution received from the Fund. Assuming the
shares are held as capital assets, the gain or loss will be
characterized as a capital gain or loss. A capital gain or loss
attributable to shares held for more than one year will
constitute a long-term capital gain or loss, while a capital gain
or loss attributable to shares held for not more than one year
will constitute a short-term capital gain or loss. Shareholders
should also be aware that the Fund is required to withhold 31% of
Liquidation Distribution proceeds payable to any individual and
certain other noncorporate shareholders who do not provide the
Fund with a correct taxpayer identification number.
The receipt of a portion of the Liquidation Distribution by an
Individual Retirement Account ("IRA") which holds Fund shares
4
generally will not be treated as a taxable event to the IRA
beneficiary. However, some IRAs that hold Fund shares may have
been established with custodians who may not reinvest the
Liquidation Distribution proceeds, but instead must immediately
distribute such amounts to the IRA beneficiary. Such
distributions could have adverse tax consequences for the
beneficiaries of such IRAs, who are urged to consult with their
own tax advisers regarding the tax consequences of such
distributions.
FUND ACTIVITY FOLLOWING THE LIQUIDATION. Following liquidation,
the Fund intends to file an application with the Securities and
Exchange Commission to deregister as a investment company under
the Investment Company Act. The Fund will also file articles of
dissolution in accordance with applicable provisions of Maryland
law.
OTHER MATTERS
The Directors are not aware of any matters to be presented at the
Meeting other than those set forth in this proxy statement. If
any other business should come before the meeting, the persons
named in the accompanying proxy will vote thereon in accordance
with their best judgment.
PRINCIPAL STOCKHOLDERS
As of the Record Date, no shareholder, other than WTC owned of
record or beneficially more than 5% of the outstanding shares of
the Fund. As of that date, WTC owned of record 89.7% of the
shares, including 81.8% owned beneficially, all on behalf of
its customer accounts. It is anticipated that Wilmington Trust
Company will vote those shares with respect to which it has
investment discretion and proxy power in favor of Proposal I.
ADDITIONAL INFORMATION
The Fund will incur expenses in connection with preparing and
mailing the enclosed form of proxy and accompanying Notice and
Proxy Statement. The Fund will also reimburse banks, brokers and
others for their reasonable expenses in forwarding proxy
solicitation material to the beneficial owners of the shares of
the Fund. As noted above, however, it is anticipated that WTC
will reimburse the Fund for these and other Plan Expenses. Broker
dealer firms holding Fund shares in "street name" for the benefit
of their customers and clients will request the instructions of
such customers and clients on how to vote their shares on
Proposal I before the Meeting. The Fund will include shares held
of record by broker dealers as to which such authority has been
granted in its tabulation of the total number of votes present
for purposes of determining whether the necessary quorum of
shareholders exists. Proxies which are returned but which are
marked "abstain" or on which a broker dealer has declined to vote
on any proposal ("broker non votes") will be counted as present
for purposes of a quorum. Abstentions and broker non votes will
not be counted as votes cast and therefore will have the same
effect as a "NO" vote on Proposal I. It is not expected that
representatives of the Fund's independent auditors will be
present at the Meeting.
In the event that the Fund is not liquidated and dissolved, any
proposals of security holders intended to be presented at the
next meeting of shareholders should be presented to the Fund a
reasonable time prior to the mailing of the proxy materials sent
5
in connection with that meeting, for inclusion in the proxy
statement for that meeting.
FUND MANAGEMENT
The Fund's investment adviser is Wilmington Trust Company, whose
office is located at 1100 North Market Street, Wilmington, DE
19890-0001. The Fund's subadvisers are Scudder, Stevens & Clark,
Inc., located at 345 Park Avenue, New York, NY 10154, and
Clemente Capital, Inc., located at 152 West 57th Street, 25th
floor, New York, NY 10019, respectively. The Fund's
administrator is Rodney Square Management Corporation and the
Fund's distributor is Rodney Square Distributors, Inc., both of
which are located at 1100 North Market Street, Wilmington, DE
19890-0001.
By Order of the Board of Directors
Louis C. Schwartz
Assistant Secretary
6
<PAGE>
EXHIBIT A
PLAN OF LIQUIDATION AND DISSOLUTION
FOR
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
This Plan of Liquidation and Dissolution (the "Plan") of The
Rodney Square International Securities Fund, Inc. (the "Fund"), a
corporation organized and existing under the laws of the State of
Maryland and registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), is intended to accomplish the complete
liquidation and dissolution of the Fund in conformity with the
provisions of the Fund's Articles of Incorporation, By-Laws and
Maryland law.
1. Effective Date of Plan. The Plan shall become
effective only upon shareholder approval of the liquidation and
dissolution of the Fund. The date of such approval is hereinafter
called the "Effective Date."
2. Cessation of Business. After the Effective Date, the
Fund shall cease its operations and thereafter shall not engage
in any business activities except for the purposes of liquidating
and preserving the value of its assets and distributing its
assets to shareholders in accordance with the provisions of the
Plan after the payment to (or reservation of assets for payment
to) all creditors of the Fund.
3. Restriction of Transfer and Redemption of Shares. The
interests of shareholders in the assets of the Fund shall be
fixed on the basis of their shareholdings at the close of
business on the Effective Date. On the Effective Date, the books
of the Fund shall be closed.
4. Liquidation of Assets. As soon as it is reasonable and
practicable after the Effective Date, all portfolio securities of
the Fund not already converted to cash or cash equivalents shall
be converted to cash or cash equivalents.
A-1
5. Payments of Debts. As soon as practicable after the
Effective Date, the Fund shall determine and shall pay (or
reserve sufficient amounts to pay) the amount of all known or
reasonable ascertainable liabilities of the Fund incurred or
expected to be incurred prior to the date of the liquidating
distributions provided for in Section 6 below.
6. Liquidating Distribution. The Fund's assets will be
distributed ratably among the shareholders of record in one or
two cash payments. The first distribution of the Fund's assets
(the "First Distribution") is expected to consist of cash
representing substantially all the assets of the fund, less the
amount reserved to pay creditors of the Fund. A second
distribution (the "Second Distribution"), if necessary, is
anticipated to be made within 90 days after the First
Distribution and will consist of cash from any assets remaining
after payment of creditors, the proceeds of any sale of assets of
the Fund under the Plan not sold prior to the First Distribution
and any other miscellaneous income to the Fund.
7. Deregistratiion and Dissolution. As soon as
practicable after the liguidation and dissolution provided for
in Section 6 above, the Fund will be deregistered as an
investment company under the Investment Company Act and dissolved
as a corporation pursuant to applicable provisions of Maryland
law.
8. Expenses of the Liquidation and Dissolution. All of
the expenses incurred by the Fund in carrying out this Plan will
be borne by the Fund.
9. Power of Board of Directors. The Board of Directors
and, subject to the direction of the Board of Directors, the
officers of the Fund, shall have authority to do or authorize any
or all acts and things as provided for in the Plan and any and
all such further acts and things as they may consider necessary
or desirable to carry out the purposes of the Plan, including,
without limitation, the execution and filing of all certificates,
documents, information returns, tax returns, forms and other
papers which may be necessary or appropriate to implement the
Plan or which may be required by the provisions of the Investment
Company Act or any other applicable laws. The death, resignation
or other disability of any director or any officer of the Fund
shall not impair the authority of the surviving or remaining
directors or officers to exercise any of the powers provided for
in the Plan.
10. Amendment of Plan. The Board shall have the authority
to authorize such variations from or amendments of the provisions
of the Plan (other than the terms of the Liquidation
Distribution) as may be necessary or appropriate to effect the
dissolution, complete liquidation and termination of the
existence of the Fund, and the distribution of assets to
shareholders in accordance with the purposes to be accomplished
by the Plan.
A-2
THE RODNEY SQUARE INTERNATIONAL SECURITIES FUND, INC.
FORM OF PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of The Rodney
Square International Securities Fund, Inc. (the "Fund"), for use
at a Special Meeting of Shareholders to be held at 1105 North
Market Street, Wilmington, DE 19890-0001, on July 25, 1996 at
10:00 a.m. Eastern Time.
The undersigned hereby appoints Martin L. Klopping and Molly
Graham with full power of substitution, as proxies of the
undersigned to vote at the above- stated Special Meeting, and at
all adjournments thereof, all shares of common stock of the Fund
that are held of record by the undersigned on the record date for
the Special Meeting, upon the following matters:
PLEASE MARK YOUR RESPONSE IN BLUE OR BLACK INK.
I. To approve the liquidation and dissolution of the Fund.
FOR--- AGAINST--- ABSTAIN---
II. In their discretion, the proxies named above are authorized
to vote upon such other business as may properly come before the
Special Meeting.
Every properly signed proxy will be voted in the manner specified
thereon and, in the absence of specification, will be treated as
GRANTING authority to vote FOR Proposal I.
Receipt of the Notice of Special Meeting and Proxy Statement is
hereby acknowledged.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
_________________________________________________
Sign here exactly as name(s) appears hereon
_________________________________________________
Dated: _____________________, 1996
IMPORTANT: Joint owners must EACH sign.
When signing as attorney, executor,
administrator, trustee, guardian or
corporate officer, please give your full
title as such.
