As filed with the Securities and Exchange Commission on July 30, 1999
Securities Act File No. 333-______
Investment Company Act File No. 811-5458
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
|X| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|_| Pre-Effective Amendment No.
|_| Post-Effective Amendment No.
|X| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
|X| Amendment No. 5
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC
GLOBAL INCOME FUND, INC.
(Exact name of registrant as specified in its charter)
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(Address of principal executive offices)
(212) 832-2626
(Registrant's telephone number, including area code)
Hal Liebes, Esq.
Senior Vice President
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(Name and address of agent for service)
With Copies to:
Daniel Schloendorn, Esq. Gary S. Schpero, Esq.
Willkie Farr & Gallagher Simpson Thacher & Bartlett
787 Seventh Avenue 425 Lexington Avenue
New York, New York 10019 New York, New York 10017-3954
--------------------------------------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. |_|
If it is proposed that this filing will become effective when declared
effective pursuant to Section 8(c), check the following box. |_|
If appropriate, check the following box:
|_| This amendment designates a new effective date for a previously filed
registration statement.
|_| This Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is ______.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities Being Offering Price per Aggregate Registration
Being Registered Registered Unit(1) Offering Price Fee
================================================================================================================
<S> <C> <C> <C> <C>
Shares of Common Stock, par value
$.001 per share................. 3,522,559 $8.87 $31,262,697.84 $8,691.03
================================================================================================================
</TABLE>
(1) As calculated pursuant to Rule 457(c) under the Securities Act of
1933, as amended. Based on the average of the high and low sales prices
reported on the New York Stock Exchange on June 29, 1999.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
Form N-2
Cross Reference Sheet
Parts A and B of Prospectus
<TABLE>
<CAPTION>
Item No. Caption Location in Prospectus
- -------- ------------------------------------------------ ------------------------------------------------------
<S> <C> <C>
Part A -- Information Required in a Prospectus
1. Outside Front Cover............................. Front Cover Page
2. Inside Front and Outside Back Cover Page........ Front Cover Page
3. Fee Table and Synopsis.......................... Prospectus Summary; Fee Table
4. Financial Highlights............................ Financial Highlights
5. Plan of Distribution............................ Front Cover Page; Prospectus Summary; The Offer;
Distribution Arrangements
6. Selling Shareholders............................ Not Applicable
7. Use of Proceeds................................. Use of Proceeds
8. General Description of the Registrant........... Front Cover Page; Prospectus Summary; The Fund;
Investment Objective and Policies; Risk Factors
and Special Considerations; Common Stock; Net
Asset Value
9. Management...................................... Management; Portfolio Transactions; Transfer Agent,
Dividend-Disbursing Agent, Registrar and Custodian
10. Capital Stock, Long-Term Debt and Other
Securities.................................... The Offer; Common Stock; Dividends and
Distributions; InvestLink(SM) Program; Net Asset
Value; Taxation
11. Defaults and Arrears on Senior Securities....... Not Applicable
12. Legal Proceedings............................... Not Applicable
13. Table of Contents of the Statement of
Additional Information.......................... Table of Contents of the Statement of Additional
Information
Part B -- Information required in a Statement of Additional Information
14. Cover Page...................................... Front Cover Page
15. Table of Contents............................... Front Cover Page
16. General Information and History................. General Information
17. Investment Objectives and Policies.............. Investment Objective and Policies; Investment
Restrictions
18. Management...................................... Management
19. Control Persons and Principal Holders of
Securities.................................... Common Stock
20. Investment Advisory and Other Services.......... Management
21. Brokerage Allocation and Other Practices........ Portfolio Transactions
22. Tax Status...................................... Taxation
23. Financial Statements............................ Financial Statements
</TABLE>
Part C -- Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
<PAGE>
- --------------------------------------------------------------------------------
The information in this Prospectus is not complete and may be changed. A
registration statement relating to the Securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until this
registration statement is effective. This Prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer, solicitation or sale is not permitted.
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- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
Credit Suisse Asset Management Strategic
Global Income Fund, Inc.
2,818,047 Shares of Common Stock
Issuable Upon Exercise of Rights
to Subscribe for Shares
-----------------
Credit Suisse Asset Management Strategic Global Income Fund, Inc. is
issuing to its shareholders rights to purchase additional shares. You will
receive one right for each share of common stock you own on the record date,
which is ___, 1999. You need three rights to purchase one share at the
subscription price per share. The Global Income Fund will not issue fractional
shares upon the exercise of less than three rights. If you exercise all your
rights you will be entitled to subscribe for additional shares not acquired by
other shareholders. The Global Income Fund may increase the number of shares
subject to subscription by up to 25%, or 704,512 shares, for an aggregate total
of 3,522,559 shares. The rights are not transferable; you may not purchase or
sell them and they will not trade on the New York Stock Exchange (the "NYSE") or
any other exchange. The shares to be issued pursuant to the rights will trade on
the NYSE under the symbol "CGF".
The subscription price per share will be ___% of the lower of:
(1) the average of the last reported sales price of a share on the NYSE
on the expiration date of the offer and on the previous four
business days, and
(2) the net asset value per share as of the close of business on the
expiration date of the offer.
You will not know the actual subscription price at the time you exercise
your rights. Once you subscribe for shares and the Global Income Fund receives
payment or a guarantee of payment, you will not be able to change your decision.
The offer will expire at 5:00 P.M., New York City time, on ___, 1999,
unless extended to not later than ___, 1999.
The Global Income Fund is a closed-end, diversified management investment
company. Its investment objective is high current income consistent with the
preservation of capital. The Global Income Fund invests in higher-yielding U.S.
and foreign fixed-income securities, with an emphasis on U.S. high yield ("junk
bonds") and emerging market debt securities. These securities are subject to
high risks and are predominantly speculative. See "Risk Factors and Special
Considerations" beginning on page 21 of this prospectus for a more comprehensive
discussion of risks you may incur when making an investment in the Global Income
Fund. There can be no assurance that the Global Income Fund will achieve its
investment objective.
--------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<TABLE>
<CAPTION>
===========================================================================================
Estimated
Estimated Subscription Estimated Sales Load Proceeds to
Price (1) (2) the Fund (3)(4)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- -------------------------------------------------------------------------------------------
Total Maximum (5) $ $
===========================================================================================
</TABLE>
(Footnotes on the following page)
This prospectus sets forth concisely the information about the Global
Income Fund that a prospective investor should know before investing and should
be retained for future reference. A statement of additional information dated
___, 1999 containing additional information about the Global Income Fund has
been filed with the Commission and legally forms a part of this prospectus. The
table of contents of the statement of additional information appears on page 45
of this prospectus. You may obtain a copy of the statement of additional
information without charge by contacting the information agent.
If you have questions or need further information about the offer, please
call Georgeson Shareholder Communications, Inc., the Global Income Fund's
information agent for the offer, at (800) 223-2064.
-------------
The date of this prospectus is ___, 1999
<PAGE>
------------------
(Footnotes from the previous page)
(1) Estimated on the basis of ___% of the market price per share on ___, 1999.
(2) In connection with the offer, the Global Income Fund will pay ___________
the dealer manager for the offer, a fee for its financial advisory
services and marketing assistance equal to 1.25% of the subscription price
per share. The Global Income Fund will also pay broker-dealers, including
___________, fees for their soliciting efforts equal to 2.50% of the
subscription price per share. The Global Income Fund has agreed to
indemnify ___________ against certain liabilities, including liabilities
under the Securities Act.
(3) Before deduction of offering expenses incurred by the Global Income Fund,
estimated at $475,000 including an aggregate of up to $100,000 to be paid
to ___________ as partial reimbursement for its expenses.
(4) Funds received by check prior to the final due date of this offer will be
deposited into a segregated interest-bearing account pending allocation
and distribution of shares. Interest on subscription moneys will be paid
to the Global Income Fund regardless of whether shares are issued by the
Global Income Fund.
(5) Assumes all rights are exercised at the estimated subscription price. The
Global Income Fund may increase the number of shares subject to
subscription by up to 25% of the shares offered. If the Global Income Fund
increases the number of shares subject to subscription by 25%, the
aggregate maximum estimated subscription price, estimated sales load and
estimated proceeds will be $______, $______ and $_______, respectively.
------------------------
2
<PAGE>
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PROSPECTUS SUMMARY
You should read the entire prospectus, including the statement of
additional information which legally forms part of this prospectus, before you
decide whether to exercise your rights.
Benefits of the Offer
The board of directors has determined that increasing the Global Income
Fund's assets through a rights offering is in your best interest.
In consultation with Credit Suisse Asset Management ("CSAM"), the Global
Income Fund's investment adviser, the board determined that the rights offering
may provide the following benefits:
o additional investment flexibility
o increased ability to take advantage of timely opportunities in the
U.S. and global bond markets as a result of
o the strong economic growth in the U.S. and
o an improving outlook in the emerging and other foreign markets
o lower expense ratios
o improved liquidity of the trading market for shares on the NYSE
o opportunity to purchase additional shares at a price below current
market price
Prior to reaching this conclusion, the board, in consultation with CSAM
and ___________, reviewed the structure, timing and terms of the offer, and its
dilutive effect on both shareholders who exercise their rights and those who
don't. After careful consideration, the board unanimously voted to approve the
offer.
There can be no assurance that the offer will provide any of the benefits
listed above.
The Global Income Fund may choose to make additional rights offerings in
the future for a number of shares and on terms which may or may not be similar
to this offer.
Important Terms of the Offer
Total number of shares available
for primary subscription: 2,818,047
Total number of shares available
to cover over-subscription requests: 704,512
Number of rights you will receive
for each outstanding share you
own on the record date: One right for every one share
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
Number of shares you may purchase
with your rights at the subscription
price per share: One share for every three rights
Subscription price: ___% of the lower of (1) the
average of the last reported
sales price per share on the
NYSE on the expiration date and
on the preceding four business
days and (2) the net asset value
per share on the expiration
date
Important Dates to Remember --
Please note that the dates in the table below may change if the offer is
extended.
Event Date
----- ----
Record date...................................................... ___, 1999
Subscription period.............................................. ___, 1999 to
___, 1999
Payment for shares or notice of guaranteed delivery due.......... ___, 1999
Expiration and pricing date...................................... ___, 1999
Payment for guarantees of delivery due........................... ___, 1999
Confirmation to participants..................................... ___, 1999
Final payment for shares......................................... ___, 1999
Over-Subscription Privilege
If you exercise all your rights, you may subscribe for shares which were
not subscribed for by other shareholders. If sufficient shares are not available
to honor all requests for over-subscriptions, the Global Income Fund may
increase the number of shares available for subscription by up to 25%, or
704,512 shares, in order to satisfy these over-subscription requests. Available
shares will be allocated ratably among those who over-subscribe based on the
number of rights originally issued to them.
Rights May Not Be Purchased or Sold
The rights are non-transferable. You may not purchase or sell them. The
rights will not trade on the NYSE or any other exchange. The shares issued
pursuant to the rights will trade on the NYSE under the symbol "CGF".
How to Exercise Rights
To exercise your rights, please follow the following instructions:
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
o If you do not own your shares through a broker or other nominee, you
should have received a subscription certificate. Please complete and
sign the subscription certificate. Mail it in the envelope provided
or deliver the completed and signed subscription certificate with
payment in full to BankBoston, N.A., the subscription agent for the
offer, at the address indicated on the subscription certificate.
Your completed and signed subscription certificate and payment must
be received by the expiration date, which is __, 1999 (unless
extended). You should calculate the total payment on the basis of an
estimated subscription price of $__ per share. If you do not own
your shares through a broker or other nominee and have not received
a subscription certificate, please contact Georgeson Shareholder
Communications, the information agent for the offer, at (800)
223-2064.
o If you own your shares through a broker or other nominee, please
contact your broker, banker or trust company. It can arrange to
exercise rights on your behalf and to guarantee payment and delivery
of a properly completed and executed subscription certificate
pursuant to a notice of guaranteed delivery by the close of business
on the expiration date. A fee may be charged for this service. The
notice of guaranteed delivery must be received on or before the
expiration date, which is __, 1999 (unless extended).
Restrictions on Foreign Shareholders
The Global Income Fund will not mail subscription certificates to
shareholders whose record addresses are outside the United States. BankBoston
will hold the rights to which subscription certificates relate for foreign
shareholder accounts until instructions are received to exercise the rights. If
no instructions are received prior to the expiration date, these rights will
expire.
Further Information
If you have any questions or inquiries relating to the offer, please
contact the information agent at:
GEORGESON
SHAREHOLDER COMMUNICATIONS, INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
Offering Fees and Expenses
___________ will act as the dealer manager for the offer. The Global
Income Fund will pay ___________ a fee for its financial advisory services and
marketing assistance equal to 1.25% of the subscription price per share. The
Global Income Fund will also pay broker-dealers, including ___________, fees
for their soliciting efforts equal to 2.50% of the subscription price per share.
Other offering expenses incurred by the Global Income Fund are estimated at
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
$________, which includes up to $100,000 that may be paid to ___________ as
partial reimbursement for its expenses relating to the offer.
Use of Proceeds
We estimate the net proceeds of the offer to be approximately $_____. If
the Global Income Fund increases the number of shares subject to subscription by
up to 25% in order to satisfy over-subscription requests, the additional net
proceeds will be approximately $_______.
CSAM anticipates that it will take up to one month for the Global Income
Fund to invest these proceeds in accordance with its investment objective and
policies under current market conditions.
Information Regarding the Global Income Fund
The Global Income Fund has been engaged in business as a closed-end,
diversified management investment company since April 22, 1988. Its investment
objective is high current income consistent with the preservation of capital.
The Global Income Fund invests in higher yielding U.S. and foreign fixed-income
securities, with an emphasis on U.S. high yield (junk bonds) and emerging market
debt securities.
There can be no assurance that the Global Income Fund will achieve its
investment objective. The shares are listed and traded on the New York Stock
Exchange under the symbol "CGF." As of ___, 1999, the net assets were
approximately $_______.
Investment Adviser and Administrator
Credit Suisse Asset Management (formerly known as BEA Associates) is the
investment adviser. CSAM is the institutional asset management and mutual fund
arm of Credit Suisse Group.
Brown Brothers Harriman & Co. is the administrator and custodian.
Advisory Fees
The Global Income Fund pays CSAM aggregate annual fees for investment
advice equal to 0.50% of its average weekly net assets.
Since CSAM receives fees based on net assets, it will benefit from the
increase in assets that will result from the offer. As a result, one director
who is an "interested person" of the Global Income Fund because of his position
as a director and officer of CSAM could benefit indirectly from the offer
because of this affiliation.
Risk Factors and Special Considerations
You will incur immediate dilution in this offer. If you do not exercise
all your rights, after the offer you will own a smaller proportional interest in
the Global Income Fund. In addition, whether or not you exercise your rights,
the net asset value per share of your shares will be reduced as a result of the
offer because:
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
o the shares offered will be sold at less than their then current net
asset value
o you will indirectly bear the expenses of the offer
o the number of shares outstanding after the offer will have increased
proportionately more than the increase in the size of the net assets
You will incur a greater dilution in net asset value per share if you do
not exercise your rights than if you do.
Changes in interest rates may reduce your return on investment. Since the
market price of fixed-income securities generally decreases when interest rates
rise, the net asset value and market price of your shares may decline if
interest rates rise. This risk may or may not be offset by additional income
from new or existing securities carrying higher interest rates. Conversely, if
rates decline, you may over time receive less current income from your
investment, although the net asset value and market price of your shares may
immediately increase.
Market fluctuations may affect the value of your investment. The market
value of fixed-income securities may move up and down, sometimes rapidly and
unpredictably. These fluctuations, which are often referred to as "volatility,"
may cause a security to be worth less than it was worth at an earlier time.
Volatility will affect the net asset value and market price of your shares and
may over time reduce your return on investment.
Your investment is exposed to the credit risk inherent in fixed-income
securities. The issuer of a debt security may fail to make timely payments of
either principal or interest. When holding shares, you indirectly bear this
credit risk.
High yield securities present increased and special risks. These risks
include:
o greater volatility
o greater credit risk
o potential lack of attractive resale opportunities (illiquidity)
As of June 30, 1999, high yield fixed-income securities represented 85.9%
of net assets. Because of this focus on high yield securities, your investment
is directly exposed to all these risks.
Investing outside the U.S presents special risks. The risks which the
Global Income Fund faces when it invests in foreign debt securities include:
o fluctuations in exchange rates between the U.S. dollar and foreign
currencies
o unavailable or deficient key information about an issuer, security
or market
o expropriations, capital or currency controls, punitive taxes or
nationalizations
o economic policy changes, social and political instability, military
action and war
The risks of investing outside the U.S. are compounded for investments in
emerging markets. Because it also invests in emerging markets, the Global Income
Fund incurs greater risks than a fund investing in developed countries since
investing in emerging markets involves special risks not encountered in
developed countries, including:
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7
<PAGE>
- --------------------------------------------------------------------------------
o potentially more limited access to investments or less advantageous
terms for foreign investors
o less-developed securities markets
o economic, political and social problems
o deficiencies in regulatory oversight, market infrastructure,
shareholder protections and company laws
The Fund's shares have traded and may continue to trade at a discount to
net asset value. Shares of closed-end investment companies frequently trade at a
discount to net asset value. Since the commencement of operations, the shares
have generally traded in the market at a discount to net asset value.
The failure of computer systems to be Year 2000 (Y2K) compliant could hurt
the Global Income Fund. Like any other financial business, the Global Income
Fund could be adversely affected if computer systems on which it relies, which
include primarily those used by CSAM and Brown Brothers Harriman & Co. and their
affiliates and suppliers, are unable to correctly process date-related
information on and after January 1, 2000. Since a portion of its investments are
held by subcustodians in foreign or emerging countries, the Global Income Fund
will be exposed to a greater risk of Y2K deficiencies than other investment
companies that do not engage in international investing. There is also a
separate and different risk that Y2K deficiencies may have an adverse effect on
the companies whose securities are held by the Global Income Fund or on global
markets or economies generally.
Other risks may arise from certain investment techniques which the Global
Income Fund may use. These techniques include repurchase agreements, lending of
portfolio securities, short sales, options on U.S. government securities,
interest rate futures and related options, direct placement securities,
restricted and illiquid securities and foreign exchange currency transactions.
For a description of these techniques and the risks associated with them, please
see "Other Investment Techniques" in this prospectus beginning on page 29.
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8
<PAGE>
FEE TABLE
The following table sets forth certain fees and expenses of the Global
Income Fund.
Shareholder Transaction Expenses
Sales load (as a percentage of the subscription price per share)(1).... 3.75%
Annual Expenses (as a percentage of net assets)
Management fees........................................................ 0.50%
Other expenses(2)...................................................... 1.07%
Total Annual Expenses(2)................................................. 1.57%
<TABLE>
<CAPTION>
1 3 5 10
Example Year Years Years Years
------- ---- ----- ----- -----
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming a 5% annual return (3)............................... $ $ $ $
</TABLE>
- ----------
(1) The Global Income Fund will pay ___________ a fee for financial advisory
services and marketing assistance equal to 1.25% of the subscription price
per share. The Global Income Fund will also pay broker-dealers, including
___________, fees for their soliciting efforts equal to 2.50% of the
subscription price per share. As a shareholder, you will indirectly bear
this fee, even if you do not exercise your rights.
(2) Based upon estimated amounts for the current fiscal year and on the net
assets of the Global Income Fund after giving effect to the anticipated
net proceeds of the offer, including proceeds from the issuance of up to
25% of the shares under the over-subscription privilege. This figure does
not include expenses of the Global Income Fund incurred in connection with
the offer, estimated at $475,000. Total annual expenses for the fiscal
year ended December 31, 1998 were 1.17% of average net assets.
(3) The example reflects the sales load and other expenses of the Global
Income Fund incurred in connection with the offer and assumes that all of
the rights are exercised and that all dividends and distributions are
reinvested.
We have prepared the foregoing table and example to assist you in
understanding the various costs and expenses that you bear, directly or
indirectly, but you should not consider it as a representation of past or future
expenses or rate of return. The actual expenses of the Global Income Fund may be
greater or less than those shown. For more complete descriptions of certain of
the Global Income Fund's costs and expenses, see "Management" in this prospectus
and in the statement of additional information.
9
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes selected financial data for a share of
common stock outstanding throughout each period presented. The per share
operating performance and ratios for each of the periods, other than the
six-month period ended June 30, 1999, have been derived from financial
statements audited by PricewaterhouseCoopers LLP, the Global Income Fund's
independent accountants, as stated in their report which legally forms a part of
the statement of additional information. The following information should be
read in conjunction with the financial statements and notes, which legally forms
a part of the prospectus and which is available upon request.
Per Share Operating Performance
For a Fund Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Six Months Year Year Year Year
Ended Ended Ended Ended Ended
06/30/99(1) 12/31/98 12/31/97 12/31/96 12/31/95(2)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .... $ 9.29 $10.79 $10.37 $10.01 $ 9.26
Offering Costs ........................ -- -- -- -- --
Net Investment Income ................. 0.43 0.94 0.89 0.91 0.95
Net Realized and Unrealized Gain (Loss)
on Investments ...................... 0.06 (1.49) 0.41 0.26 0.61
Total from Investment Activities ........ 0.49 (0.55) 1.30 1.17 1.56
Less Distributions:
From Net Investment Income ............ (0.49) (0.95) (0.88) (0.81) (0.76)
In Excess of Net Investment Income .... -- -- -- -- --
From Return of Capital ................ -- -- -- -- (0.05)
------ ------ ------ ------ ------
Total Distributions ..................... (0.49) (0.95) (0.88) (0.81) (0.81)
------ ------ ------ ------ ------
Net Asset Value, End of Period .......... $ 9.29 $ 9.29 $10.79 $10.37 $10.01
====== ====== ====== ====== ======
Per Share Market Value, End of Period ... $ 8.88 $ 8.63 $10.06 $ 9.00 $ 8.88
====== ====== ====== ====== ======
Total Investment Return
Net Asset Value(3) .................... 9.08%(5) (5.13)% 13.82% 13.27% 17.57%
Market Value .......................... 8.30%(5) (5.56)% 22.34% 11.03% 18.16%
<CAPTION>
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .... $10.45 $ 9.80 $ 9.62 $ 8.70 $10.06 $10.86
Offering Costs ........................ -- -- -- -- -- --
Net Investment Income ................. 0.95 1.04 1.22 1.16 1.17 1.27
Net Realized and Unrealized Gain (Loss)
on Investments ...................... (1.33) 0.66 0.01 0.96 (1.33) (0.76)
Total from Investment Activities ........ (0.38) 1.70 1.23 2.12 (0.16) 0.51
Less Distributions:
From Net Investment Income ............ (0.62) (1.04) (1.05) (1.20) (1.20) (1.00)
In Excess of Net Investment Income .... -- (0.01) -- -- -- --
From Return of Capital ................ (0.19) -- -- -- -- (0.31)
------ ------ ------ ------ ------
Total Distributions ..................... (0.81) (1.05) (1.05) (1.20) (1.20) (1.31)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period .......... $ 9.26 $10.45 $ 9.80 $ 9.62 $ 8.70 $10.06
====== ====== ====== ====== ====== ======
Per Share Market Value, End of Period ... $ 8.25 $ 9.50 $ 9.50 $10.38 $ 7.88 $ 9.25
====== ====== ====== ====== ====== ======
Total Investment Return
Net Asset Value(3) .................... (3.80)% 18.29% 13.28% 25.32% (1.66)% 4.99%
Market Value .......................... (4.72)% 10.94% 3.50% 53.35% 0.38% (2.53)%
</TABLE>
Ratios/Supplemental Data
<TABLE>
<CAPTION>
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
06/30/99(1) 12/31/98 12/31/97 12/31/96 12/31/95(2) 12/31/94
----------- -------- -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Assets, End of Period (Thousands) ... $78,525 $78,510 $91,194 $87,656 $84,618 $78,252
Ratio of Expenses to Average Net Assets . 1.06%(4) 1.17% 1.10% 1.11% -- --
Ratio of Net Investment Income to
Average Net Assets .................... 9.34%(4) 9.17% 8.43% 8.99% 9.80% 9.66%
Portfolio Turnover Rate ................. 53%(5) 107.8% 119.1% 65.1% 54.5% 83.1%
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period (Thousands) ... $88,319 $82,450 $80,606 $73,068 $84,488
Ratio of Expenses to Average Net Assets . 1.06% 1.01% 1.00% 1.00% 1.07%
Ratio of Net Investment Income to
Average Net Assets .................... 10.28% 12.34% 12.13% 12.48% 12.13%
Portfolio Turnover Rate ................. 128.5% 107.7% 48.0% 81.0% 105.5%
</TABLE>
- ----------
(1) Unaudited.
(2) CSAM replaced CS First Boston Investment Management ("CSFB Investment
Management") as the fund's investment adviser effective June 13, 1995.
(3) Total investment return based on per share net asset value reflects the
effects of change in net asset value on the performance of the Global
Income Fund during each period, and assumes dividends and capital gains
distributions were reinvested. These percentages are not an indication of
the performance of a shareholder's investment in the Global Income Fund
based on market value because the market value of the stock and the net
asset value of the Global Income Fund differ.
(4) Annualized.
(5) Not Annualized.
10
<PAGE>
THE OFFER
Benefits of the Offer
The board of directors of the Global Income Fund has determined that
increasing its assets through a rights offering is in your best interest.
In consultation with CSAM, the board determined that the rights offering
may provide the following benefits:
o additional investment flexibility
o increased ability to take advantage of timely opportunities in the
U.S. and global bond markets as a result of
o the strong economic growth in the U.S. and
o an improving outlook in the emerging and other foreign markets
o lower expense ratios
o improved liquidity of the trading market for shares on the NYSE
o opportunity to purchase additional shares at a price below current
market price
Prior to reaching this conclusion, the board, in consultation with CSAM
and ___________, reviewed the structure, timing and terms of the offer, and its
dilutive effect on both shareholders who exercise their rights and those who
don't. After careful consideration, the board unanimously voted to approve the
offer.
There can be no assurance that the offer will provide any of the benefits
listed above.
The Global Income Fund may choose to make additional rights offerings from
time to time for a number of shares and on terms which may or may not be similar
to the offer.
Terms of the Offer
The Global Income Fund is issuing to its shareholders rights to purchase
additional shares. You will receive one right for each share you own on the
record date, which is __, 1999. You need three rights to purchase one share at
the subscription price per share. The Global Income Fund will not issue
fractional shares upon the exercise of less than three rights. You may exercise
your rights to acquire shares at any time during the subscription period, which
begins on ___, 1999 and ends at 5.00 p.m., New York City time, on ____, 1999,
unless extended by the Global Income Fund to 5:00 p.m., New York City time, on a
date which will be no later than _____, 1999. The right of a shareholder of
record to acquire one share for every three rights during the subscription
period at the subscription price is called the "primary subscription."
Rights are evidenced by subscription certificates. The Global Income Fund
will send subscription certificates to all persons whose names appear on the
list of shareholders of the Global Income Fund on ____, 1999, the record date of
the offer.
If you exercise all your rights, you may subscribe for additional shares.
Shares available for purchase pursuant to this over-subscription privilege are
subject to allotment and increase. The over-subscription privilege is more fully
described below. For purposes of determining the
11
<PAGE>
maximum number of shares you may acquire pursuant to the offer, if your shares
are held of record by Cede, the nominee for The Depository Trust Company, or by
any other depository or nominee, you will be deemed to be the holder of the
rights that are issued to Cede or such other depository or nominee on your
behalf.
Since the Global Income Fund will not issue fractional shares, if you
receive or have remaining fewer than three rights, you will be unable to
purchase shares upon the exercise of such rights and no cash will be paid to you
in lieu of such rights. You may, however, subscribe for shares pursuant to the
over-subscription privilege provided you have exercised all your rights. Once
you subscribe for shares and the Global Income Fund receives payment or a
guarantee of payment, you will not be able to change your decision.
Important Dates to Remember
Please note that the dates in the table below may change if the offer is
extended.
Event Date
----- ----
Record date....................................................... ___, 1999
Subscription period............................................... ___, 1999 to
___, 1999
Payment for shares or notice of guaranteed delivery due........... ___, 1999
Expiration and pricing date....................................... ___, 1999
Payment for guarantees of delivery due............................ ___, 1999
Confirmation to participants...................................... ___, 1999
Final payment for shares.......................................... ___, 1999
Over-Subscription Privilege
If shares remain available for purchase after all shareholders have had a
chance to exercise their rights pursuant to the primary subscription, the Global
Income Fund will offer such shares to shareholders who have exercised all their
rights and who desire to acquire additional shares. You may subscribe for those
additional shares pursuant to the over-subscription privilege only if you
exercise all your rights pursuant to the primary subscription. If you exercise
all your rights and wish to subscribe for additional shares, please indicate on
the subscription certificate the number of additional shares desired through the
over-subscription privilege.
If sufficient shares remain from unexercised rights, all
over-subscriptions may be honored in full. If sufficient shares are not
available to honor all over-subscription requests, the Global Income Fund may
issue up to an additional 704,512 shares, representing 25% of the shares
available pursuant to the primary subscription, to satisfy over-subscription
requests. Whether or not the Global Income Fund issues these additional shares,
if there are not enough shares available to honor all over-subscriptions, the
available shares will be allocated among you and all the other shareholders who
subscribe for additional shares pursuant to the over-subscription privilege in
proportion to the number of rights issued to you and such shareholders. The
allocation process may involve a series of allocations in order to assure that
the total number of shares available for over-subscriptions is distributed on a
pro rata basis.
12
<PAGE>
The Global Income Fund will not sell any shares that are not subscribed
for under the primary subscription or the over-subscription privilege.
Subscription Price
You may purchase one share for every three rights at the subscription
price. The subscription price is ___% of the lower of:
(1) the average of the last reported sales price of a share on the NYSE
on the expiration date of the offer (____, 1999, unless extended)
and on the four preceding business days; and
(2) the net asset value per share as of the close of business on the
expiration date of the offer (____, 1999, unless extended).
For example, if the average of the last reported sales price on the NYSE
on ____, 1999 and on the four preceding business days of a share of the Global
Income Fund's common stock is $_____, and the net asset value as of the close of
business on the pricing date is $____, the subscription price will be $____
(___% of $____). If, however, the average of the last reported sales price of a
share on that exchange on ____, 1999 and on the four preceding business days
thereof is $____, and the net asset value as of the close of business on __,
1999 is $____, the subscription price will be $_____ (___% of $___).
The Global Income Fund announced the offer on May 11, 1999. The last
reported net asset value per share of common stock at the close of business on
May 11, 1999 and ____, 1999 was $9.53 and $_____, respectively, and the last
reported sales price of a share on the NYSE on those dates was $8 1/2 and
$_____, respectively. The Global Income Fund paid a dividend of $0.0725 per
share on May 17, June 15 and July 15, 1999.
Rights May Not Be Purchased or Sold
The rights are non-transferable. You may not purchase or sell them. The
rights will not trade on the NYSE or any other exchange. The shares to be issued
under the rights, however, will trade on the NYSE under the symbol "CGF".
Expiration of the Offer and Rights
The offer will expire at 5:00 p.m., New York City time, on ___, 1999
unless the Global Income Fund extends it until 5:00 p.m., New York City time, to
a date not later than ___, 1999. Rights will expire at that time and thereafter
you will no longer be able to exercise them. Since the expiration date for
exercise of the rights and the pricing date of the shares subscribed will be the
same date, you will not know the purchase price when you decide to acquire
shares. If the Global Income Fund decides to extend the offer, it will make an
announcement to that effect as promptly as practicable. The Global Income Fund
will not, unless otherwise required by law, have any obligation to publish,
advertise or otherwise communicate any such announcement other than by making a
release to the Dow Jones News Service or such other means of announcement as the
Global Income Fund deems appropriate.
13
<PAGE>
Subscription Agent
The subscription agent, BankBoston, N.A., will receive for its
administrative, processing, invoicing and other services as subscription agent,
a fee estimated to be approximately $15,000. BankBoston will also be reimbursed
for its out-of-pocket expenses related to the offer. The subscription agent is
also the Global Income Fund's transfer agent, dividend-paying agent and
registrar with respect to the common stock. If you have any questions regarding
subscription certificates, please contact Georgeson Shareholder Communications
Inc., the information agent for the offer, at (800) 223-2064. You must send
completed subscription certificates together with payment of the estimated
subscription price to BankBoston by one of the methods described below.
(1) By First Class Mail: By Overnight, Certified or Express Mail:
BankBoston BankBoston
Corporate Reorganization Corporate Reorganization
P.O. Box 9573 40 Campanelli Drive
Boston, MA 02205-9573 Braintree, MA 02184
By Hand:
Securities Transfer & Reporting Services, Inc.
c/o Boston EquiServe
100 William Street
Galleria
New York, NY 10038
(2) By Facsimile (Telecopy):
For Notice Of Guaranteed Delivery Only
(781) 575-4826 with the original Subscription Certificate to be sent
by method (1) above. Confirm facsimile by telephone at (781)
575-4816.
The Global Income Fund will accept only subscription certificates actually
received on a timely basis. Delivery to an address other than those set forth
above does not constitute good delivery.
How to Exercise Rights
Rights will be evidenced by subscription certificates. Except as described
below under "Restrictions on Foreign Shareholders," the Global Income Fund will
mail subscription certificates directly to you if your shares are registered in
your name or, if you own your shares through a broker, depository or nominee, to
Cede or such other depository or nominee. You may exercise your rights by
either:
o completing and signing a subscription certificate and mailing it in
the envelope provided, together with payment for the shares to the
subscription agent
o contacting your broker, banker or trust company, which can guarantee
payment and delivery of a properly completed and executed
subscription certificate before ___, 1999. A fee may be charged for
this service.
14
<PAGE>
Fractional shares will not be issued. Therefore, if you receive, or have
remaining, fewer than three rights, you will not be able to purchase any shares
upon the exercise of rights. You will not be entitled to cash for less than
three rights. You may, however, subscribe for additional shares pursuant to the
over-subscription privilege provided you have exercised all your rights pursuant
to the primary subscription.
The subscription agent must have received at its office indicated above
completed subscription certificates or notices of guaranteed delivery prior to
5:00 p.m., New York City time, on __, 1999.
If You Do Not Own Your Shares Through A Broker Or Other Nominee. As a
record holder, you can choose between two options set forth under "Payment for
Shares" below. If time is of the essence, option (2) will permit delivery of the
completed subscription certificate and payment after ___, 1999.
If You Own Your Shares Through A Broker or Other Nominee. You must contact
that broker or nominee to exercise your rights. In that case, the nominee will
complete the subscription certificate on your behalf and arrange for proper
payment by one of the methods set forth under "Payment for Shares".
If You Are A Nominee. If you hold shares for the account of others, you
should notify the beneficial owners of such shares as soon as possible to obtain
instructions. If the beneficial owner so instructs, you should complete the
subscription certificate and submit it to the subscription agent with proper
payment.
Restrictions on Foreign Shareholders
The Global Income Fund will not mail subscription certificates to
shareholders whose record addresses are outside the United States. For these
purposes, the United States includes its territories and possessions and the
District of Columbia. The rights to which those subscription certificates relate
will be held by BankBoston for foreign shareholders' accounts until instructions
are received to exercise the rights. If no instructions are received prior to
___, 1999, such rights will expire.
Information Agent
If you have any questions or inquiries relating to the offer, please
contact the information agent at:
GEORGESON
SHAREHOLDER COMMUNICATIONS, INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
You may also contact your broker or nominee for information with respect
to the offer.
The Global Income Fund will pay the information agent for its services in
connection with the offer a fee estimated to be approximately $10,000 plus
reimbursement for its out-of-pocket expenses.
15
<PAGE>
Payment for Shares
You may choose between the following methods of payment to exercise your
rights:
(1) You can send the completed subscription certificate together with
payment for shares to the subscription agent. You should calculate
the total payment on the basis of an estimated subscription price of
$____ per share. To be accepted, your payment accompanied by a
properly executed and completed subscription certificate must be
received by the subscription agent prior to 5:00 p.m., New York City
time, on ___, 1999.
If you pay using this method, please make sure that your payment:
o is made in United States dollars by money order or check drawn on a
bank located in the United States
o is made to "Credit Suisse Asset Management Strategic Global Income
Fund, Inc."
o accompanies an executed subscription certificate.
(2) Alternatively, you may contact your broker, bank or trust company
and request that it sends on your behalf a notice of guaranteed
delivery by facsimile or otherwise to the subscription agent. The
subscription agent will accept all notices of guaranteed delivery
received from brokers, banks, trust companies or NYSE members prior
to 5:00 p.m., New York City time, on ___, 1999. The notice must
guarantee delivery to the subscription agent of (a) payment of the
full subscription price for the shares subscribed for pursuant to
the primary subscription and any additional shares subscribed for
pursuant to the over-subscription privilege, and (b) a properly
completed and executed subscription certificate. The subscription
agent will not honor a notice of guaranteed delivery if a properly
completed and executed subscription certificate, together with
payment, is not received by the close of business on ___, 1999.
No later than ___, 1999, the subscription agent will send a confirmation
to each shareholder or, if the shareholder's shares are held by Cede or any
other depository or nominee, to Cede or such depository or nominee. This
confirmation will show:
o the number of shares you acquired pursuant to the primary
subscription;
o the number of shares, if any, you acquired pursuant to the
over-subscription privilege;
o the per share and total purchase price for the shares; and
o any additional amount that you must pay to the Global Income Fund or
any excess to be refunded by the Global Income Fund to you.
You will not receive any other evidence of title unless you have requested
a stock certificate at the time of exercise of the rights. You must ensure that
the subscription agent receives any additional payment required from you before
__, 1999. The subscription agent will mail any excess payment owed to you within
a reasonable time after the expiration date. The Global Income Fund will not pay
interest on any excess payment. All your payments to the Global Income Fund must
be in U.S. Dollars
16
<PAGE>
by money order or check drawn on a bank located in the United States of America
and payable to Credit Suisse Asset Management Strategic Global Income Fund, Inc.
The subscription agent will deposit all checks received by it prior to the
final due date into a segregated interest-bearing account pending distribution
of the shares. Interest will accrue to the benefit of the Global Income Fund
regardless of whether shares are issued or not by the Global Income Fund.
Issuance and delivery of evidence of title for the shares purchased are
subject to collection of checks and actual payment pursuant to any notice of
guaranteed delivery.
You will have no right to rescind your subscription after receipt of your
payment for shares by the subscription agent.
If you subscribe for shares and do not pay any additional amounts due, the
Global Income Fund may:
(1) sell such subscribed and unpaid-for shares to other
shareholders;
(2) apply any payment actually received from you toward the purchase
of the greatest whole number of shares which may be acquired by you;
and/or
(3) exercise any and all other rights or remedies to which it may be
entitled, including, without limitation, set-offs against payments
actually received by it with respect to subscribed shares and/or
enforcement of the relevant guaranty of payment.
You may choose the method of delivery of subscription certificates and
payment of the subscription price from those indicated above. Whichever method
you choose, you will make delivery and payment at your own risk. If you use
mail, subscription certificates and payment should be sent by registered mail
and properly insured, with return receipt requested. Please allow a sufficient
number of days to ensure delivery to the Global Income Fund and clearance of
payment prior to 5:00 p.m., New York City time, on ___, 1999. Because
uncertified personal checks may take at least five business days to clear, you
are strongly urged to pay, or arrange for payment, by means of certified or
cashier's check or money order.
The Global Income Fund will determine all questions concerning the
timeliness, validity, form and eligibility of any exercise of rights. The Global
Income Fund's determinations will be final and binding. The Global Income Fund
may waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine. The Global Income Fund may also
reject the purported exercise of any right. Subscriptions will not be deemed to
have been received or accepted until all irregularities have been waived or
cured within such time as the Global Income Fund determines. The Global Income
Fund will not be under any duty to give notification of any defect or
irregularity related to the submission of subscription certificates. The Global
Income Fund will not incur any liability for failure to give any such
notification.
17
<PAGE>
Delivery of Stock Certificates
The Global Income Fund will issue certificates for shares acquired through
subscription only upon request made at the time of exercise of the rights. If a
request is made, stock certificates will be mailed promptly after __, 1999 and
after payment for the shares subscribed for has cleared. If you are a
participant in the Global Income Fund's dividend reinvestment and cash purchase
plan, your shares will be credited to your account in the plan. The Global
Income Fund will not issue certificates for subscription shares credited to plan
accounts. If your shares are held of record by Cede or by any other depository
or nominee on your behalf or your broker-dealer's behalf, the shares that you
acquire will be credited to the account of Cede or such other depository or
nominee.
Offering Fees and Expenses
___________ will act as the dealer manager for the offer pursuant to a
dealer manager agreement with the Global Income Fund. ___________ will provide
financial advisory services and marketing assistance in connection with the
offer. Together with its associated broker-dealers, ___________ will also
solicit the exercise of rights and participation in the over-subscription
privilege. The Global Income Fund will pay ___________ a fee for its financial
advisory services and marketing assistance equal to 1.25% of the subscription
price for each share issued. The Global Income Fund will also pay
broker-dealers, including ___________, fees for their soliciting efforts equal
to 2.50% of the subscription price for each share issued.
The Global Income Fund and CSAM have agreed to indemnify ___________ or
contribute to losses arising out of certain liabilities, including liabilities
under the Securities Act. ___________ will not be liable to the Global Income
Fund in rendering the services described above except for any act of bad faith,
willful misconduct or gross negligence on its part or reckless disregard of its
obligations and duties.
Other offering expenses incurred by the Global Income Fund are estimated
at $475,000 which includes up to $100,000 that may be paid to ___________ as
partial reimbursement for its expenses related to the offer.
Federal Income Tax Consequences
For United States federal income tax purposes, neither the receipt nor the
exercise of the rights will result in taxable income to you. Moreover, you will
not realize a loss if you do not exercise the rights. The holding period for a
share acquired upon exercise of a right begins with the date of exercise. The
basis for determining gain or loss upon the sale of a share acquired upon the
exercise of a right will be equal to the sum of:
o the subscription price per share,
o any servicing fee charged to you by your broker, bank or trust
company, and
o the basis, if any, in the rights that you exercised.
A gain or loss recognized upon a sale of a share acquired upon the
exercise of a right will be a capital gain or loss assuming the share is held as
a capital asset at the time of sale. This gain or loss
18
<PAGE>
will be a long-term capital gain or loss if the share has been held at the time
of sale for more than one year.
If the fair market value of the rights on the date of distribution is less
than 15% of the fair market value of the shares with respect to which they are
issued, on that date the basis of the rights will be zero unless you elect to
allocate your basis in those shares of the Global Income Fund which you
originally owned between such shares and the rights issued in the offer. This
allocation is based upon the relative fair market value of such shares and the
rights as of the date of distribution of the rights. Thus, if you make such an
election, the basis in the shares you originally owned will be reduced by an
amount equal to the basis you allocated to the rights. This election must be
made in a statement attached to your federal income tax return for the year in
which the offer occurs. If the fair market value of the rights on the date of
distribution is equal to or greater than 15% of the fair market value of the
shares with respect to which they are issued, you will allocate your basis in
those shares of the Global Income Fund which you originally owned between such
shares and the rights issued in the offer based upon their relative fair market
values on the date of distribution. However, if you do not exercise the rights,
you will not be able to recognize a loss or to allocate a portion of your basis
in the shares to the unexercised rights. If you exercise the rights, the basis
of any shares acquired through exercise of the rights will be increased by the
basis allocated to such rights. Accordingly, shareholders should consider the
advisability of making the election described above if the shareholder intends
to exercise the rights.
The foregoing is a general summary of the material United States federal
income tax consequences of the receipt and exercise of rights. The discussion is
based upon applicable provisions of the U.S. Internal Revenue Code of 1986, U.S.
Treasury regulations and other authorities currently in effect, and does not
cover state, local or foreign taxes. The Code and regulations are subject to
change by legislative or administrative action. You should consult your tax
advisors regarding specific questions as to federal, state, local or foreign
taxes. You should also review the discussion of certain tax considerations
affecting yourself and the Global Income Fund set forth under "Taxation."
Tax-Advantaged Accounts
The rules and regulations governing benefit plans are complex and include
penalties for noncompliance. If you hold your shares through an employee benefit
plan that is subject to the Employee Retirement Income Security Act of 1974,
including corporate savings and 401(k) plans, Keogh Plans of self-employed
individuals and Individual Retirement Accounts, please consult counsel and tax
advisors for such plan regarding the consequences under ERISA and the Code of an
exercise of the rights.
Investment Advisory Fees
CSAM will benefit from the offer because the investment advisory fee is
based on the net assets of the Global Income Fund. Assuming all rights are
exercised at the estimated subscription price, including up to an additional 25%
of the shares which may be issued to satisfy over-subscriptions, the annual
compensation to be received by CSAM would be increased by approximately
$__________. Actual compensation paid may vary depending on the number of shares
purchased and investment return. One of the Global Income Fund's directors who
voted to authorize the offer is an "interested person" of the Global Income Fund
within the meaning of the 1940 Act because of his position as a director and an
officer of CSAM. This director could benefit indirectly from the offer
19
<PAGE>
because of his affiliation. The other three directors are not "interested
persons" of the Global Income Fund.
Dividends
The Global Income Fund does not expect to pay dividends or other
distributions with respect to the shares acquired pursuant to rights until
November 1999.
USE OF PROCEEDS
Assuming the Global Income Fund sells all shares offered pursuant to the
primary subscription at the estimated subscription price, the net proceeds of
the offer are estimated to be $________, after payment of the dealer manager's
fees, the soliciting fees and the estimated offering expenses. The Global Income
Fund will pay these expenses, which will reduce the net asset value per share.
If the Global Income Fund increases the number of shares subject to the offer by
25%, or 704,512 shares, in order to satisfy over-subscription requests, the
additional net proceeds will be approximately $_______. CSAM expects that, under
current market conditions, the Global Income Fund will invest substantially all
of the net proceeds of the offer in accordance with its investment objective and
policies approximately within one month from the date of receipt. Pending such
investment, the proceeds will be invested in certain short-term debt
instruments.
20
<PAGE>
THE FUND
The Global Income Fund, incorporated in Maryland on January 27, 1988, is a
diversified, closed-end management investment company registered under the 1940
Act. Its shares are traded on the NYSE under the symbol "CGF."
The Global Income Fund commenced operations on April 22, 1988 after an
initial public offering of 7,250,000 shares of common stock. The net proceeds
were approximately $80,910,000.
The Global Income Fund's investment objective is high current income
consistent with the preservation of capital. The Global Income Fund seeks to
achieve this investment objective by investing in higher-yielding U.S. and
foreign fixed-income securities, with an emphasis on U.S. high yield (junk
bonds) and emerging market debt securities. The Global Income Fund may invest up
to 35% of its net assets in the securities of issuers located in the emerging
markets. Investments in fixed-income securities are not subject to any rating
quality limitation. Accordingly, the Global Income Fund may invest a substantial
portion of its assets in securities rated below investment grade by a nationally
recognized rating service or unrated but in CSAM's opinion of comparable
quality. The Global Income Fund may hold securities deemed to be temporary
investments.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Please consider carefully the matters set forth below. You should read the
entire prospectus and the statement of additional information before you decide
whether to exercise your rights.
You will incur immediate dilution in this offer.
If you do not exercise all your rights, when the offer is over you will
own a smaller proportional interest in the Global Income Fund. In addition,
whether or not you exercise your rights, the per share net asset value of your
shares will be diluted (reduced) immediately as a result of the offer because:
o the shares offered will be sold at less than their then current net
asset value
o you will indirectly bear the expenses of the offer
o the number of shares outstanding after the offer will have increased
proportionately more than the increase in the size of the net
assets.
This dilution may be substantial and will increase if the share price
declines in relation to the net asset value as shown by the following examples:
21
<PAGE>
Scenario 1: Shares trade above per share net asset value (premium)(1)
Stock Price $____
NAV $____
Subscription Price (___.0% of NAV) $____
Reduction in NAV ($)(2) $(___)
Reduction in NAV (%) (___)%
Scenario 2: Shares trade below per share net asset value at the time the offer
expires (discount)(1)
Stock Price $____
NAV $____
5-day average stock price(3) $____
Subscription Price (___.0% of 5-day average stock price) $____
Reduction in NAV ($)(4) $(___)
Reduction in NAV (%) (___)%
(1) Both examples assume full primary and over-subscription privilege
exercised.
(2) Assumes $1,708,568 in estimated offering expenses.
(3) Five days up to expiration date.
(4) Assumes $1,692,523 in estimated offering expenses.
You will incur a greater dilution in net asset value per share if you do
not exercise your rights than if you do.
Changes in interest rates may reduce your return on investment.
Since the market price of fixed-income securities generally decreases when
interest rates rise, the net asset value and market price of your shares may
decline if interest rates rise. The magnitude of the decrease will generally be
greater for securities with longer maturities and securities with higher yields,
which are those in which the Global Income Fund primarily invests. This risk may
or may not be offset by additional income from new or existing securities
carrying higher interest rates. Conversely, if rates decline, you may over time
receive less current income from your investment, although the net asset value
and market price of your shares may immediately increase. No assurance can be
given that the securities purchased by the Global Income Fund will continue to
earn yields comparable to those earned historically.
Market fluctuations may affect the value of your investment.
The market value of fixed-income securities may move up and down,
sometimes rapidly and unpredictably. These fluctuations, which are often
referred to as "volatility," may cause a security to be worth less than it was
worth at an earlier time. Volatility may affect a single issuer, industry,
sector of the economy, or the market as a whole. Volatility affects most
investments -- including bonds, and the funds that invest in them. The risk of
volatility in bond prices can vary significantly depending upon factors such as
issuer and maturity. Volatility will affect the net asset value and market price
of your shares and may reduce your return on investment.
22
<PAGE>
Your investment is exposed to the credit risk inherent in fixed-income
securities.
The issuer of a debt security may fail to make timely payments of either
principal or interest. When holding shares, you indirectly bear this credit
risk. A deterioration in financial or general economic conditions usually
increases credit risk. Even with investment grade securities, differences exist
in credit quality and some investment grade securities may have speculative
characteristics. A security's price may be adversely affected by the market's
opinion of the security's credit quality level even if the issuer or
counterparty has suffered no degradation in its ability to honor the obligation.
In addition, the Global Income Fund may purchase securities that are in default
or not current in the payment of interest or principal. No assurance can be
given that issuers whose obligations the Global Income Fund acquires will make
payments on such obligations as they become due.
High yield securities present increased and special risks.
High yield securities generally pay a premium above the yields of U.S.
government debt securities or mature corporate issuers because they are subject
to greater risks than these securities. Hence, high yield securities usually
carry a medium-grade or below investment grade rating, which reflects their
speculative character and the following risks:
o greater volatility
o greater credit risk
o potentially greater sensitivity to general economic or industry
conditions
o potential lack of attractive resale opportunities (illiquidity)
o additional expenses to seek recovery from issuers who default
The market value of lower-rated securities may be more volatile than the
market value of higher-rated securities and generally tends to reflect the
market's perception of the creditworthiness of the issuer and short-term market
developments to a greater extent than more highly rated securities, which
reflect primarily fluctuations in general levels of interest rates.
Ratings are relative and subjective and not absolute standards of quality.
Securities ratings are based largely on the issuer's historical financial
condition and the rating agencies' analysis at the time of rating. Consequently,
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition.
Investing outside the U.S. presents special risks.
The risks which the Global Income Fund faces when it invests in foreign
debt securities include:
o fluctuations in exchange rates between the U.S. dollar and foreign
currencies
o unavailable or deficient key information about an issuer, security
or market
o expropriations, capital or currency controls, punitive taxes or
nationalizations
o economic policy changes, social and political instability, military
action and war
Additional risks present when investing outside the U.S. include:
o changed circumstances in dealings between nations
o greater volatility and illiquidity of foreign securities
o costs incurred in connection with conversions between various
currencies
o higher foreign brokerage commissions
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<PAGE>
o possible extended settlement periods
The risks of investing outside the U.S. are compounded for investments in
emerging markets.
There are greater risks involved in investing in emerging markets than in
developed foreign markets, including:
o potentially more limited access to investments or less advantageous
terms for foreign investors
o less-developed securities markets
o heightened economic, political and social problems
o deficiencies in regulatory oversight, market infrastructure,
shareholder protections and company laws.
o less rigorous and/or enforced accounting, auditing and financial
reporting standards and requirements
o potential difficulties in enforcing contractual obligations.
Mortgage-backed securities may reduce current income.
Depending on market conditions, mortgage-backed securities may at times
constitute a substantial portion of the Global Income Fund's portfolio.
Mortgage-backed securities are subject to the following risks:
o default on the underlying debt
o substantial decline in value when interest rates rise
o potential lack of attractive resale opportunities (illiquidity)
o loss of income due to prepayments and foreclosures
The Fund's shares have traded and may continue to trade at a discount to net
asset value.
Shares of closed-end investment companies frequently trade at a discount
to net asset value. This characteristic of shares of a closed-end fund is a risk
separate and distinct from the risk that its net asset value may decrease. Since
the commencement of operations, the shares have generally traded in the market
at a discount to net asset value. See "Common Stock." The risk of purchasing
shares of a closed-end fund that might trade at a discount is more pronounced
for investors who wish to sell their shares in a relatively short period of
time. For those investors, realization of a gain or loss on their investments is
likely to be more dependent upon the existence of a premium or discount than
upon portfolio performance.
The failure of computer systems to be Y2K compliant could hurt the Global Income
Fund.
Like other registered investment companies and financial business
organizations worldwide, the Global Income Fund could be adversely affected if
computer systems on which it relies, which include primarily those used by CSAM
and Brown Brothers Harriman & Co. and their affiliates and suppliers, are unable
to correctly process date-related information on and after January 1, 2000.
Since a portion of its investments are held by subcustodians in foreign or
emerging countries, the Global Income Fund will be exposed to a greater risk of
Y2K deficiencies than other investment companies that do not engage in
international investing. There is also a separate and
24
<PAGE>
different risk that Y2K deficiencies may have an adverse effect on the companies
whose securities are held by the Global Income Fund or on global markets or
economies generally.
Other risks may arise from certain investment techniques which the Global Income
Fund may use.
These techniques include repurchase agreements, lending of portfolio
securities, short sales, options on U.S. government securities, interest rate
futures and related options, direct placement securities, restricted and
illiquid securities and foreign exchange currency transactions. For a
description of risks associated with these techniques, please see "Other
Investment Techniques" in this prospectus beginning on page 29.
INVESTMENT OBJECTIVE AND POLICIES
General
The investment objective of the Global Income Fund is high current income
consistent with the preservation of capital. The Global Income Fund seeks to
achieve this objective by investing in higher yielding U.S. and foreign
fixed-income securities, with an emphasis on U.S. high yield (junk bonds) and
emerging market securities. The Global Income Fund may invest up to 35% of its
net assets in the securities of issuers located in the emerging markets.
At least 65% of the Global Income Fund's total assets must be invested in
income-producing securities. CSAM expects that substantially all of the Fund's
assets will be invested in income-producing securities.
The investment objective is a fundamental policy and cannot be changed
without the approval of the holders of a majority of the outstanding voting
securities. As used herein, a "majority of the outstanding voting securities"
means the lesser of (a) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (b) more than 50% of the
outstanding shares. No assurance can be given that the investment objective will
be achieved. For a more detailed discussion of the investment objective and
policies, see "Investment Objective and Policies" in the statement of additional
information.
At June 30, 1999, the portfolio of investments was composed as follows (as
a percentage of net assets):
Corporate Obligations: 68.0%
Government and Agency Securities: 18.6%
Collateralized Securities: 0.3%
Asset Backed Obligations: 1.5%
Common Stocks: 3.8%
Preferred Stocks: 3.9%
Warrants: 1.0%
Rights: 0.0%
Units: 0.0%
At the same date, 85.9% of the net assets were invested in high yield
fixed-income securities.
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<PAGE>
Investments in fixed-income securities are not subject to any rating
quality limitation. Accordingly, the Global Income Fund may invest a substantial
portion of its assets in securities rated below investment grade by a nationally
recognized rating service or unrated but in CSAM's opinion of comparable
quality. The table below sets forth the percentages of assets invested during
the six month period ended June 30, 1999 in the various Standard & Poor's Rating
Group and Moody's Investors Service, Inc. rating categories and in unrated
securities determined by CSAM to be of comparable quality. The percentages are
based on the dollar-weighted average of credit ratings of all securities held
during the six month period ended June 30, 1999, computed on a monthly basis.
For information regarding the various ratings of Moody's and S&P, see the
appendix to this prospectus.
<TABLE>
<CAPTION>
Six Month Period Ended
June 30, 1999
-------------------------------------------------------------
Unrated Securities of
Rated Securities as a Comparable quality as a
percentage of percentage of
Rating Category portfolio value portfolio value Total
--------------- --------------------- ------------------------ -----
<S> <C> <C> <C>
AAA/Aaa............................... 1.2
AA/Aa................................. --
A/A................................... 0.3
BBB/Baa............................... 1.1
BB/Ba................................. 13.7
B/B................................... 56.0
CCC/Caa............................... 9.1
CC/Ca................................. 0.4
C/C................................... 0.1
D..................................... 0.5
Subtotal............................ 82.4
U.S. Government, Equities and Other... 10.1 n/a
Total............................... 92.5 7.5 100.0
</TABLE>
- ----------
n/a: not applicable
The percentage of the assets invested in securities of various grades may
from time to time vary substantially from those set forth above. Under current
market conditions, CSAM anticipates that it will invest a substantial portion of
the net proceeds of the offer in securities rated B or lower by S&P or Moody's
or unrated but deemed of comparable quality by CSAM. This would cause the
percentage of the portfolio invested in securities rated B or lower or unrated
but deemed of comparable quality by CSAM to increase from its current level.
As of June 30, 1999, the assets were invested in the following industries
and financial instruments:
Industry % of Net Assets
----------------------------------------------------- ---------------
Aerospace/Defense 0.4
Automotive 0.5
Broadcasting 7.5
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<PAGE>
Industry % of Net Assets
----------------------------------------------------- ---------------
Business Services 0.6
Cable 7.3
Chemicals 1.6
CMO's & Asset Backed Securities 1.8
Construction & Building Materials 1.0
Consumer Products & Services 3.0
Electronics 1.3
Energy 3.5
Entertainment 3.1
Fin'l Services 0.1
Food & Beverages 2.3
Health Care 0.8
Industrial 3.2
Metals/Mining 0.2
Miscellaneous 2.5
Packaging/Containers 2.9
Paper/Forest Products 1.9
Publ. & Info. Services 3.1
Restaurants, Hotels & Gaming 4.3
Retail 2.4
Rights, Warrants & Other 1.0
Telecommunications 17.5
Textiles/Apparel 0.3
Transport 1.7
Waste Management 0.4
------
Foreign Corporate Obligations 2.0
Foreign Government Obligations 18.6
Time Deposit 1.1
Net Other Assets 1.8
------
100.00%
27
<PAGE>
The ten largest holdings at June 30, 1999 (as a percentage of net assets)
were:
% of
Position Net Assets
------------------------------------------------ ----------
1) Federal Republic of Brazil: Capitalization Bonds
5.00%, 4/15/14 0.02
2) Dr. Pepper Bottling Holdings, Inc.
Class A 0.02
3) Federal Republic of Brazil: Series RG,
Debentures Series E1-L, 6.125%, 4/15/06 0.02
4) Republic of Venezuela, Unsecured bonds,
9.25%, 9/15/27 0.02
5) Republic of Argentina
Debentures 6.188%, 3/31/05 0.01
6) Green Tree Financial Corp.
Manufactured Housing Installment Sales Contracts:
Series 1993-4, Class B-1, 7.20%, 1/15/19 0.01
7) United Mexican States
11.50%, 5/15/26 0.01
8) Banco National De Commercio 7.25%, 2/02/04 0.01
9) Spanish Broadcasting System, Inc, 14.25% 0.01
10) Univision Network Holding, L.P., Sub Notes
Zero Coupon, 12/17/02 0.01
Investment Policies
U.S. Fixed-Income Securities
The Global Income Fund invests primarily in higher-yielding, lower rated
U.S. corporate fixed income securities, including debt securities, convertible
securities and preferred stocks. It may also invest in securities rated single A
or higher by Moody's or by Standard & Poor's and unrated corporate fixed-income
securities. Normally substantially all of the high yield securities in which the
Global Income Fund invests are in the lower-rated categories. Lower-rated
securities generally provide yields superior to those of more highly rated
securities, but involve greater risks and are speculative in nature. The rating
services' descriptions of these rating categories, including the speculative
characteristics of the lower categories, are set forth in appendix A. As of June
30, 1999, U.S. high yield corporate fixed-income securities represented 65.8% of
the net assets of the Global Income Fund.
The Global Income Fund may also invest in debt securities issued or
guaranteed by the U.S. government, or by agencies or instrumentalities
established or sponsored by the U.S. government, including mortgage-backed
securities. Depending on market conditions, the Global Income Fund may invest a
substantial portion of its assets in mortgage-backed securities. Mortgage-backed
securities are collateralized by mortgages or interests in mortgages and may be
28
<PAGE>
issued by government or non-government entities. Mortgage-backed securities
issued by government entities typically provide a monthly payment consisting of
interest and principal payments, and additional payments will be made out of
unscheduled payments of principal. Non-government issued mortgage-backed
securities may offer higher yields than those issued by government entities, but
may be subject to greater price fluctuations. CSAM may take full advantage of
the entire range of maturities of U.S. government securities and may adjust the
average maturity of the investments held in the portfolio from time to time,
depending on its assessment of relative yields of securities of different
maturities and its expectations of future changes in interest rates. To the
extent that the Global Income Fund invests in the mortgage market, CSAM will
evaluate relevant economic, environmental and security-specific variables such
as housing starts, coupon and age trends. As of June 30, 1999, mortgage-backed
securities represented 3.2% of the net assets of the Global Income Fund.
Foreign Fixed-Income Securities
The Global Income Fund invests in debt obligations and other fixed income
securities denominated in non-U.S. currencies or composite currencies including:
o debt obligations issued or guaranteed by foreign national,
provincial, state, municipal or other governments with taxing
authority or by their agencies or instrumentalities
o debt obligations of supranational entities
o debt obligations of the U.S. government issued in non-dollar
securities
o dollar and non-dollar denominated debt obligations and other
fixed-income securities of foreign and U.S. corporate issuers
The Fund may invest up to 35% of its net assets in the securities of
issuers located in the emerging markets.
Other Investment Techniques
To enhance return as market opportunities arise, the Global Income Fund
may use the following investment techniques. Associated risks are indicated for
each technique.
Repurchase agreements. The Global Income Fund may invest in repurchase
agreements collateralized by U.S. government securities, certificates of deposit
and certain bankers' acceptances for the purpose of realizing additional income.
The use of repurchase agreements involves the risk that the counterparty may
default on its obligation to repurchase the underlying securities at the agreed
upon repurchase price at a time when the value of the underlying securities has
declined, thus causing a loss upon their disposition.
Securities lending. The Global Income Fund may lend its portfolio
securities to banks, brokers, dealers and other financial institutions who may
need to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities or completing
arbitrage operations. Securities lending involves the following risks:
o volatility
o credit
29
<PAGE>
Short sales. The Global Income Fund may engage in short sales (the sale of
a security that it does not own). The Global Income Fund will only engage in
short sales when it owns an equal amount of such securities or securities
convertible into or exchangeable, without payment of further consideration, for
securities of the same issue as, and equal in amount to, the securities sold
short ("short sales against the box"), and only if not more than 5% of the net
assets is held as collateral for such sales at any one time.
Options on U.S. government securities. The Global Income Fund may write
covered call options (rights to purchase a security from the Global Income Fund)
and put options (rights to sell a security to the Global Income Fund) with
respect to its U.S. government securities to hedge against price fluctuations
and to increase current income. The Global Income Fund may also purchase put
options (right to sell a security to a third party) or call options (right to
purchase a security from a third party) on U.S. government securities to protect
its portfolio against price fluctuations. These options involve the following
risks:
o volatility
o imperfect correlation between the prices of the option and the
underlying security credit
o illiquidity
o reduced ability to profit from price and interest rate fluctuations
on the securities being hedged
Interest rate futures and related options. The Global Income Fund may
enter into interest rate futures contracts and options that are traded on U.S.
futures exchanges. The Global Income Fund intends to use these techniques only
for bona fide hedging purposes, i.e., for the purpose of protecting its
portfolio against yield and price fluctuations. The Global Income Fund is not
required to hedge its investments. Interest rate futures and related options may
not be available or may be too costly, and, as a result, the Global Income Fund
may not be able to use them when it decides to do so. When used, interest rate
futures contracts and related options involves the following risks:
o volatility
o imperfect correlation between prices
o reduced ability to profit from price and interest rate fluctuations
on the securities being hedged
Restricted and illiquid securities. The Global Income Fund may invest up
to 10% of its total assets in securities that are not readily marketable. These
include securities which are not registered under the Securities Act and not
publicly traded. They are usually considered less liquid than publicly-traded
securities and the Global Income Fund may have to accept a lower price upon a
decision to sell such a security or may not be able to sell the security at all.
Companies whose securities are not publicly traded may not be subject to the
same investor protection requirements as publicly traded securities.
Foreign currency exchange transactions. The Global Income Fund may (but
is not required to) engage in foreign currency exchange transactions to hedge
against fluctuations in future exchange rates. Foreign currency hedging involves
the following risks:
o imperfect correlation between prices
o credit risk
30
<PAGE>
o volatility in currency prices
o illiquidity
o reduced ability to profit from price and interest rate fluctuations
on the securities being hedged
The Global Income Fund will have a limited ability to hedge its portfolio
denominated in currencies of emerging markets against potential devaluations
because of the lack of suitable instruments and even if such instruments are
available may elect not to hedge its currency exposure.
Defensive Strategies
There may be times when, in CSAM's judgment, conditions in the securities
markets would make pursuing the Global Income Fund's basic investment strategy
inconsistent with the best interests of its shareholders. At such times, CSAM
may employ alternative strategies to reduce fluctuations in the value of the
portfolio. In implementing these defensive strategies the Global Income Fund may
temporarily shift its portfolio emphasis to higher rated securities, hedge
currency risks, reduce or suspend its option writing activities or generally
reduce the average maturity of its holdings. Under unusual market conditions the
Global Income Fund could invest for temporary defensive purposes up to 100% of
its total assets in cash or money market instruments. Such money market
instruments include short-term obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, domestic, foreign and non-U.S.
dollar denominated commercial paper, domestic and foreign certificates of
deposit, domestic and foreign bankers' acceptances and other bank obligations.
The Global Income Fund may also hold a portion of its assets in cash or money
market instruments for liquidity purposes. It is impossible to predict when, or
for how long, such alternative strategies will be utilized.
Portfolio Turnover and Short-Term Trading
CSAM will buy and sell securities for the Global Income Fund to accomplish
its investment objective. The investment policies of the Global Income Fund may
lead to frequent changes in investments, particularly in periods of rapidly
fluctuating interest or currency exchange rates. Investments may also be traded
to take advantage of perceived short-term disparities in market values or yields
among securities of comparable quality and maturity. From time to time,
consistent with its investment objective, the Global Income Fund may also trade
securities for the purpose of seeking short-term profits to take advantage of
short-term opportunities during periods of fluctuating markets. Securities may
be sold in anticipation of a market decline or bought in anticipation of a
market rise.
MANAGEMENT
Credit Suisse Asset Management
Credit Suisse Asset Management is the investment adviser pursuant to an
advisory agreement with the Global Income Fund which became effective on June
13, 1995. Prior to that date, CS First Boston Investment Management Corporation
was the investment adviser.
31
<PAGE>
CSAM is a registered investment adviser under the Investment Advisers Act
of 1940. CSAM is the institutional asset management and mutual Fund arm of
Credit Suisse Group. CSAM employs approximately 1,600 people worldwide and has
global assets under management of approximately $175 billion in multiple product
services, including equities, fixed income, derivatives and balanced portfolios.
The principal business address of CSAM is Uetlibergstrasse 231, CH 8045, Zurich,
Switzerland. CSAM's U.S. asset management business, formerly known as BEA
Associates, changed its name to CSAM in January 1999 to more accurately reflect
its integration into Credit Suisse Asset Management. Together with its
predecessor firms, CSAM has been engaged in the investment advisory business in
the United States for over 60 years. In the United States, CSAM is an investment
manager for corporate and state pension funds, endowments and other
institutions, and has assets under management of approximately $58 billion. The
principal business address of CSAM's U.S. operations is 153 East 53rd Street,
New York, New York 10022. CSAM is organized as a limited liability company which
is an indirect wholly owned U.S. subsidiary of Credit Suisse Group.
CSAM has sole investment discretion with respect to the Global Income
Fund's portfolio under the supervision of the board of directors and in
accordance with the Global Income Fund's stated policies. CSAM will select
investments for the Global Income Fund and will place purchase and sale orders
on behalf of the Global Income Fund. For its services, CSAM is paid a quarterly
fee computed at an annual rate of 0.50% of the Global Income Fund's average
weekly net assets.
The Administrator
The Fund employs Brown Brothers Harriman & Co., 40 Water Street, Boston,
MA 02109, under a service agreement dated as of March 1, 1999, to provide
administration and accounting services to the Global Income Fund. The services
provided by Brown Brothers Harriman under the service agreement are subject to
the supervision of the directors and officers of the Global Income Fund, and
include day to day administration of matters related to its corporate existence,
maintenance of its records, preparation of reports and supervision of
arrangements with custodians and the transfer and dividend disbursing agent.
Brown Brothers Harriman is a commercial bank organized as a partnership
under the laws of the states of New York, Pennsylvania and Massachusetts. Brown
Brothers Harriman provides corporate management and administrative services to
investment companies that at April of 1999 had approximately $80 billion of net
assets.
The Global Income Fund pays Brown Brothers Harriman a fee, computed weekly
and payable monthly, of .10% of the first $50 million of its average weekly net
assets, .08% of the next $50 million of its average weekly net assets and .06%
of its average weekly net assets over $100 million.
Brown Brothers Harriman is also the custodian of the Global Income Fund.
Directors and Officers
The business and affairs of the Global Income Fund are managed under the
direction of its board of directors, and day to day operations are conducted
through or under the direction of its
32
<PAGE>
officers. For information regarding the directors and officers, see
"Management--Directors and Officers" in the statement of additional information.
Portfolio Management
Richard Lindquist, who has been a Managing Director of CSAM since 1997, is
primarily responsible for the management of the Global Income Fund's assets. Mr.
Lindquist joined CSAM in May 1995 and became President and Chief Investment
Officer of the Global Income Fund in November 1996. He is also President and
Chief Investment Officer of Credit Suisse Asset Management Income Fund, Inc. Mr.
Lindquist has served the Global Income Fund in various positions since its
inception.
Maryam Ettehadieh, who has been a Vice President of CSAM since January,
1997, is primarily responsible for the management of the Global Income Fund's
investments in emerging markets. Ms. Ettehadieh joined CSAM in 1993. She has
been a portfolio manager of the Global Income Fund since July, 1999.
Estimated Expenses
CSAM and Brown Brothers Harriman are each obligated to pay expenses
associated with providing the services contemplated by the agreements to which
they are parties, including compensation of and office space for their
respective officers and employees connected with investment and economic
research, trading and investment management and administration of the Global
Income Fund, as well as the fees of all directors of the Global Income Fund who
are affiliated with those companies or any of their affiliates.
The Global Income Fund pays all other expenses incurred in its operation
including, among other things:
o fees of legal counsel and independent accountants
o costs of printing proxies, stock certificates and shareholder
reports
o charges of the custodians, any sub-custodians and the transfer and
dividend-paying agent
o expenses in connection with the InvestLink(SM) Program
o Securities and Exchange Commission fees
o fees and expenses of unaffiliated directors
o accounting and pricing costs
o membership fees in trade associations
o fidelity bond coverage for officers and employees
o directors' and officers' errors and omissions insurance coverage
o interest, brokerage costs and stock exchange fees
o taxes, stock exchange listing fees and expenses
o expenses of qualifying the shares for sale in various
states
o litigation and other extraordinary or non-recurring expenses
33
<PAGE>
PORTFOLIO TRANSACTIONS
CSAM will select the brokers or dealers that will execute the purchases
and sales of portfolio securities for the Global Income Fund. In connection with
the selection of brokers and dealers, the primary objective is to seek to obtain
the execution of each investment transaction at a price and commission which
provides the most favorable total cost or proceeds reasonably obtainable under
the circumstances. For a more detailed discussion of the Global Income Fund's
brokerage allocation practice, see the statement of additional information under
"Portfolio Transactions."
DIVIDENDS AND DISTRIBUTIONS; INVESTLINK(SM) PROGRAM
The Global Income Fund distributes monthly to shareholders substantially
all of its net investment income. Net short-term capital gains, if any, are
distributed annually. The board intends to distribute annually any net long-term
realized capital gains (the excess of net long-term capital gains over net
short-term capital losses). See "Taxation."
You may elect to have all dividends and distributions, net of any U.S.
withholding tax, automatically reinvested in additional shares through the
Fund's InvestLink(SM) Program. BankBoston, N.A. c/o EquiServe-Boston is the
administrator for the InvestLink(SM) Program. "InvestLink" is a service mark of
EquiServe.
Purpose of the InvestLink(SM) Program
The purpose of the InvestLink(SM) Program is to provide you with a simple
and convenient way to invest funds and reinvest dividends in shares of Global
Income Fund stock at prevailing prices, with reduced brokerage commissions and
fees.
Eligibility and Participation
You may join the program at any time by completing and signing the
enrollment form and returning it to BankBoston. Enrollment forms may be obtained
at any time by calling the program administrator at one of the telephone numbers
listed below:
o First Time Investors - 1-800-338-1176
o Current Shareholders - 1-800-730-6001
Beneficial owners whose shares are registered in the name of a bank,
broker or other nominee must make arrangements with such bank, broker or nominee
to have the shares transferred into their own names if they wish to have
dividends on such shares paid to the program administrator pursuant to the
program.
Purchases of shares with funds from your cash payment or automatic account
deduction will begin on the next day on which funds are invested. If you select
the dividend reinvestment option, automatic investment of dividends will begin
with the next dividend payable after the program administrator receives your
enrollment form, provided it is received prior to the dividend record date. If
your enrollment form arrives after the record date, automatic investment of
34
<PAGE>
dividends will begin with the following dividend. Once in the program, you will
remain a participant until you terminate your participation or sell all shares
held in your program account, or your account is terminated by the program
administrator.
Program Options
The program offers various investment options, as outlined below:
o "Automatic Bank Account Deduction": Funds in the amount you specify
will be charged to your bank account each month and the program
administrator will invest such funds to purchase additional shares
of the Global Income Fund.
o "Full Dividend Reinvestment": The program administrator will receive
all cash dividends payable on shares held in your program account
and on any other shares registered in your name. In addition, the
program administrator will invest in shares of the Global Income
Fund all of your cash dividends on all of the shares then or
subsequently registered in your name or held in your program
account.
o "Partial Dividend Reinvestment": The program administrator will
receive a portion of cash dividends payable on shares held in your
program account and on any other shares of the Global Income Fund
registered in your name. In addition, the program administrator will
invest that portion of cash dividends on shares held in your program
account and any other shares of the Global Income Fund registered in
your name.
o "Cash Investments": The program administrator will not invest any
portion of cash dividends due you on shares held in your program
account or on shares registered in your name.
You may change your investment options at any time by requesting a new
enrollment form and returning it to the program administrator. The program
administrator must receive notice on or before the 15th calendar day preceding a
dividend payment date in order for a change in your dividend reinvestment option
to be effective for that dividend.
Costs to Participants in Connection with Purchases and Sales under the Program
In connection with the following transactions, participants will be
assessed the following charges:
o First-time investors will be subject to an initial service charge
which will be deducted from the initial cash deposit.
o All optional cash deposit investments will have a service charge
deducted from the cash to be invested.
o Sales processed through the program will have a service fee deducted
from the net proceeds, after brokerage commissions.
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<PAGE>
o Participants are responsible for all commission costs associated
with purchases and sales. In addition to the transaction charges
outlined above, participants will be assessed per share processing
fees which include brokerage commissions.
Purchase of Global Income Fund Shares
The program administrator uses dividends and funds of participants to
purchase shares of Global Income Fund common stock in the open market. Such
purchases will be made by participating brokers as agent for the participants.
Transaction processing will generally occur within 30 days of the receipt of
funds. In the event the program administrator is unable to purchase shares
within 30 days of the receipt of funds, such funds will be returned to you.
Shares offered under the program to participants in certain jurisdictions
may be offered only through broker-dealers registered in these jurisdictions.
The average price of all shares purchased by the program administrator
with all funds received during the time period from two business days preceding
any investment date up to the second business day preceding the next investment
date shall be the price per share allocable to you in connection with the shares
purchased for your account with your funds or dividends received by the program
administrator during such time period. The average price of all shares sold by
the program administrator pursuant to sell orders received during such time
period shall be the price per share allocable to you in connection with the
shares sold for your account pursuant to your sell orders received by the
program administrator during such time period.
Cash Payments and Automatic Bank Account Deductions
If you are not already a registered owner of Global Income Fund common
stock, your initial investment under the program must be at least $250.00. All
other cash payments or bank account deductions must be at least $100.00, up to a
maximum of $250,000.00 annually.
The same amount of cash payment need not be sent each month and you are
under no obligation to make a cash payment in any month. The amount of automatic
bank account deduction must be specified by you on the enrollment form and will
continue until changed by you by notifying the program administrator in writing.
Administration
BankBoston, as program administrator, administers the program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the program. Shares of Global Income Fund
common stock purchased under the program will be registered in the name of the
accounts of the respective participants.
Reports to Participants
Each participant in the program will receive a statement of his or her
account following each purchase of shares. These statements are a record of the
cost of purchase of shares under the program and should be retained for tax
purposes. The statements will also show the amount of dividends credited to such
participant's account (if applicable), as well as the fees paid by the
36
<PAGE>
participant. In addition, each participant will receive copies of the Fund's
annual report to shareholders, proxy statements and, if applicable, dividend
income information for tax reporting purposes.
Certificates for Shares
Unless requested, the Global Income Fund will not issue to participants
certificates for shares of Global Income Fund common stock purchased under the
program. The number of shares purchased for your account under the program will
be shown on your statement of account. This feature protects against loss, theft
or destruction of stock certificates.
Certificates for any number of whole shares credited to your account under
the program will be issued to you at no charge upon your written request to
withdraw such shares from your account. Certificates for fractions of shares
will not be issued.
Withdrawal of Shares in Program Accounts
You may withdraw all or a portion of the shares from your program account
by notifying the program administrator. A withdrawal/termination form is
provided on the account statement for this purpose. This notice should be mailed
to the address on the form.
Within five business days of receipt of your request, certificates for the
whole shares of Global Income Fund common stock so withdrawn will be issued to
you or, if you request, the program administrator will sell the shares for you
and send you the proceeds, less applicable brokerage commissions, fees, and
transfer taxes, if any. Proceeds are normally paid by check and will be
distributed to you within four business days after your shares are sold. In no
case will certificates for fractional shares be issued.
If you withdraw all full and fractional shares in your program account,
your participation in the program will be terminated by the program
administrator.
Rights Offerings, Stock Dividends and Stock Splits
Participation in any rights offering (including the offer), dividend
distribution or stock split will be based upon both the shares of the Global
Income Fund registered in participants' names and the shares (including
fractional shares) credited to participants' program accounts. Any stock
dividend or shares resulting from stock splits with respect to shares of the
Global Income Fund, both full and fractional, which participants hold in their
program accounts and with respect to all shares registered in their names will
be automatically credited to their accounts in book-entry form.
Voting of a Participant's Program Shares at a Meeting of Shareholders
All shares (including any fractional share) credited to your account under
the program will be voted as you direct. If on the record date for a meeting of
shareholders there are shares credited to your account under the program, you
will be sent the proxy materials for such meeting. When you return an executed
proxy, all of such shares will be voted as indicated. Or, if you so elect, you
may vote all of such shares in person at the shareholders' meeting. If you do
not provide instructions or return an executed proxy, the plan will not vote
your shares.
37
<PAGE>
Federal Income Tax Consequences of Participation in the Program
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends does not relieve you of any income tax which may be payable on
dividends. For further information as to tax consequences of participation in
the program, participants should consult with their own tax advisors.
Responsibility of the Program Administrator under the Program
The program administrator in administering the program will not be liable
for any act done in good faith or for any good faith omission to act. However,
the program administrator will be liable for loss or damage due to error caused
by its negligence, bad faith or willful misconduct. Shares held in custody by
the program administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Global Income Fund nor
the program administrator can provide any assurance of a profit or protection
against loss on any shares purchased under the program.
While the program administrator hopes to continue the program
indefinitely, the program administrator reserves the right to suspend or
terminate the program at any time. It also reserves the right to make
modifications to the program. Participants will be notified of any such
suspension, termination or modification. The program administrator also reserves
the right to terminate any participant's participation in the program at any
time.
Any question of interpretation arising under the program will be
determined by the program administrator in good faith and any such determination
will be final.
Contact Information
All correspondence regarding the program should be directed to:
BankBoston, N.A.
"InvestLink" Program
P.O. Box 8040
Boston, MA 02266-8040
Phone: 1-800-730-6001
TAXATION
The following discussion of United States Federal income taxation is based
on the advice of Willkie Farr & Gallagher, counsel to the Global Income Fund.
General. The following information is meant to be a summary. Please see
the statement of additional information for additional information. You should
rely on your own tax advisor for advice about the particular federal, state and
local tax consequences to you of investing in the Global Income Fund.
38
<PAGE>
Although the Global Income Fund intends to operate so that it will not
have to pay federal income or excise tax, if it does have to pay tax, this would
adversely affect investment performance.
The Global Income Fund will distribute substantially all of its income and
gains to shareholders every year, and you will be taxed on distributions you
receive, regardless of whether they are paid in cash or are reinvested in
shares. If the Global Income Fund declares a dividend in October, November or
December but pays it in January, you may be taxed on the dividend as if you
received it in the previous year.
The Global Income Fund will send you a tax report each year. The report
will tell you which dividends and redemptions must be treated as taxable
ordinary income and which, if any, are long-term capital gain. If the Global
Income Fund designates a dividend as a capital gain distribution, you will pay
tax on that dividend at the long-term capital gains tax rate, no matter how long
you have held your shares.
If you hold your shares in a tax-deferred retirement account, such as an
IRA, you generally will not have to pay tax on dividends until they are
distributed from the account. These accounts are subject to complex tax rules,
and you should consult your tax adviser about investment through a tax-deferred
account.
You will generally have a capital gain or loss if you sell your shares.
The amount of the gain or loss and the rate of tax will depend primarily upon
how much you paid for the shares, how much you sell them for, and how long you
held them.
The Global Income Fund may be required to withhold U.S. federal income tax
at the rate of 31% of all taxable distributions payable to you if you fail to
provide your correct taxpayer identification number or to make required
certifications, or if you have been notified by the IRS that you are subject to
backup withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against your U.S federal income tax liability.
Foreign Shareholders. If you are a nonresident alien individual, a foreign
trust or estate, a foreign corporation, or a foreign partnership under U.S.
laws, you will be subject to U.S. withholding tax at the rate of 30% (or
applicable lower treaty rate) except where such distributions are effectively
connected with a trade or business carried on by you in the United States.
Under certain circumstances more fully described in the statement of
additional information, distributions of net long-term capital gains to you and
gains from sales of shares by you may not be subject to U.S. income tax.
If the income from the Global Income Fund is effectively connected with a
trade or business carried on by you, distributions of net investment income and
net long-term capital gains, and any gains realized upon the sale or redemption
of shares, will be subject to U.S. income tax at the graduated rates applicable
to U.S. citizens or domestic corporations.
If you are entitled to claim the benefits of an applicable tax treaty, the
tax consequences to you may be different from those described herein. You are
advised to consult your own tax
39
<PAGE>
adviser with respect to the particular tax consequences to you of an investment
in the Global Income Fund.
Other Taxation. Income received by the Global Income Fund from sources
within foreign countries may be subject to withholding and other taxes imposed
by such countries. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. It is impossible to determine the
effective rate of foreign tax in advance since the amount of assets to be
invested in various countries is not known.
Distributions also may be subject to additional state, local and foreign
taxes depending on your particular situation. You are advised to consult your
own tax adviser with respect to the particular tax consequences to you of an
investment in the Global Income Fund and of the possible impact of proposed
changes in applicable tax laws.
NET ASSET VALUE
The net asset value per share is determined as of the close of business on
the NYSE on the last business day of each week and at month-end, by dividing the
value of the Global Income Fund's net assets (the value of its assets less its
liabilities, exclusive of capital stock and surplus) by the total number of
shares of Common Stock outstanding. Net asset value includes interest on
fixed-income securities which is accrued daily. Market values for fixed-income
securities are valued at the latest quoted bid price in the over-the counter
market. However, fixed-income securities may be valued on the basis of prices
provided by a pricing service which are based primarily on institutional size
trading in similar groups of securities. Other securities listed on an exchange
are valued at the latest quoted sales prices on the day of valuation or, if
there were no sale on such day, the last bid price quoted on such day.
Quotations of foreign currency prices denominated in a foreign currency are
converted to U.S. dollars at the current exchange rate on the valuation date.
Securities purchased with remaining maturities of 60 days or less are valued at
amortized cost, if it approximates market value. Securities for which market
quotations are not readily available (including restricted investments which are
subject to limitations as to their sale) are valued at fair value as determined
in good faith by the board of directors. In determining net asset value,
consideration is given to cost, operating and other financial data.
COMMON STOCK
The authorized capital stock of the Global Income Fund consists of
100,000,000 shares of common stock, $.001 par value. Shares, when issued, will
be fully paid and nonassessable. All shares are equal as to dividends, assets
and voting privileges and have no conversion, preemptive or other subscription
rights. In the event of liquidation, each share of common stock is entitled to
its proportion of the Fund's assets after payment of debts and expenses. As a
holder of shares of common stock, you are entitled to one vote per share and do
not have cumulative voting rights.
Set forth below is information with respect to the common stock as of ___,
1999:
Amount Held by Fund
Amount Authorized for Its Own Account Amount Outstanding
----------------- ------------------- ------------------
100,000,000 Shares 0 Shares 8,454,140 Shares
40
<PAGE>
The number of shares outstanding as of ___, 1999, adjusted to give effect
to the issuance of all the shares pursuant to the offer, including 25% of the
shares available for issuance pursuant to the over-subscription privilege, would
be 11,976,698.
The outstanding shares are listed and traded on the NYSE. The average
weekly trading volume of the common stock on the NYSE during the year ended
December 31, 1998 was 10,960 shares. The following table sets forth for the
quarters indicated the high and low sales prices on the NYSE per share of common
stock and the net asset value and the premium or discount from net asset value
at which the common stock was trading, expressed as a percentage of net asset
value, at each of the high and low sales prices provided.
<TABLE>
<CAPTION>
Discount as % of
Market Price (1) Net Asset Value NAV (2)
---------------------- ------------------ -----------------
Quarter Ended High Low High Low High Low
- ------------------------ ------- -------- ------ ------ ----- ----
<S> <C> <C> <C> <C> <C> <C>
March 31, 1997 ......... 9 1/2 9 $10.51 $10.24 12.11% 8.57%
June 30, 1997 .......... 9 3/4 9 10.58 10.18 11.59 8.03
September 30, 1997...... 10 1/16 9 5/8 10.94 10.65 10.38 8.14
December 31, 1997....... 10 1/4 9 5/8 11.05 10.67 9.96 4.70
March 31, 1998 ......... 10 5/8 10 1/16 11.03 10.64 6.50 3.31
June 30, 1998 .......... 10 1/2 9 15/16 10.99 10.74 7.02 4.28
September 30, 1998...... 10 1/8 8 1/8 10.72 9.24 12.81 4.84
December 31, 1998....... 8 7/8 8 9.42 9.08 11.89 4.26
March 31, 1999 ......... 8 11/16 8 1/16 9.29 9.05 11.20 5.67
June 30, 1999 .......... 8 7/8 8 7/16 9.53 9.19 11.46 5.41
Through __, 1999
</TABLE>
- ----------
(1) As reported by the NYSE.
(2) Based on the Global Income Fund's computations.
The by-laws provide that if the average discount from net asset value at
which shares of the common stock have traded is substantial in the determination
of the board of directors, the board of directors will consider, at its next
regularly scheduled quarterly meeting, taking actions designed to eliminate the
discount, including amendments to the articles of incorporation to convert the
Global Income Fund to an open-end investment company. Any such amendment would
require a favorable vote of a majority of the shares entitled to vote on the
matter and the amendment would have to be declared advisable by the board of
directors prior to its submission to shareholders. Shareholders of an open-end
investment company may require the company to redeem their shares at any time
(except in certain circumstances as authorized by or under the 1940 Act) at
their net asset value, less such redemption charge, if any, as might be in
effect at the time of a redemption.
The board of directors has approved a share repurchase program authorizing
the Global Income Fund from time to time to make open-market purchases of shares
on the NYSE up to 10% of the number of shares that were outstanding as of
December 11, 1990. There were no repurchases of shares during the year ended
December 31, 1998.
41
<PAGE>
TRANSFER AGENT, DIVIDEND DISBURSING AGENT,
REGISTRAR AND CUSTODIAN
The transfer agent, dividend disbursing agent and registrar for the common
stock is BankBoston, N.A., P.O. Box 1865, Mailstop 45-02-62, Boston,
Massachusetts 02105-1865.
The Global Income Fund's securities and cash are held by Brown Brothers
Harriman as custodian.
DISTRIBUTION ARRANGEMENTS
___________, located at ___________, will act as dealer manager for the
offer. Under the terms and subject to the conditions contained in the dealer
manager agreement between the Global Income Fund and ___________, ___________
will provide financial advisory services and marketing assistance in connection
with the offer and will solicit the exercise of rights by record date
shareholders. The offer is not contingent upon any number of rights being
exercised. The Global Income Fund has agreed to pay ___________ a fee for
financial advisory and marketing services equal to 1.25% of the subscription
price per share for shares issued upon exercise of the rights and the
over-subscription privilege and to pay broker-dealers, including ___________,
fees for their soliciting efforts of 2.50% of the subscription price per share
for each share issued upon exercise of the rights and the over-subscription
privilege.
The Global Income Fund has also agreed to reimburse ___________ up to
$100,000 for its reasonable expenses incurred in connection with the offer.
The Global Income Fund and CSAM have agreed to indemnify ___________ or to
contribute for losses arising out of certain liabilities including liabilities
under the Securities Act. The dealer manager agreement also provides that
___________ will not be subject to any liability to the Global Income Fund in
rendering the services contemplated by the agreement except in instances
involving bad faith, willful misfeasance, or gross negligence on its part or the
reckless disregard of its obligations and duties under the agreement.
The Global Income Fund has agreed, subject to certain exceptions,
including automatic reinvestment in additional shares pursuant to the
InvestLink(SM) Program, not to offer or sell, or enter into any agreement to
sell, any equity or equity related securities or securities convertible into
such securities for a period of 180 days after the date of the dealer manager
agreement without the prior consent of ___________.
In connection with the offer, ___________ may, but is not obligated to,
effect transactions designed to keep the market price of the shares higher than
they might otherwise be without such trading. Such transactions may be effected
on the NYSE or elsewhere. Such stabilizing, if commenced, may be discontinued at
any time. There can be no assurance that such transactions, if effected, will be
able to keep the market price of the shares higher than they might otherwise be
without such trading. ___________ may realize profits or losses independent of
any fees described in this prospectus.
42
<PAGE>
LEGAL MATTERS
With respect to matters of United States law, the validity of the shares
offered hereby will be passed on for the Global Income Fund by Willkie Farr &
Gallagher, New York, New York. Certain legal matters will be passed on for the
dealer manager by Simpson Thacher & Bartlett, New York, New York. Counsel for
the Global Income Fund and the dealer manager may rely, as to matters of
Maryland law, on Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
EXPERTS
The financial statements of the Global Income Fund as of December 31, 1998
have been incorporated by reference into the statement of additional information
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting. PricewaterhouseCoopers LLP is located at 1177 Avenue of the
Americas, New York, New York 10036.
43
<PAGE>
FURTHER INFORMATION
Further information concerning these securities and their issuer may be
found in the Registration Statement of which this prospectus constitutes a part
on file with the Securities and Exchange Commission. The Commission maintains a
World Wide Web site on the Internet at http://www.sec.gov. that contains the
prospectus, material incorporated by reference and other information regarding
registrants, such as the Global Income Fund, that file electronically with the
Commission. The Registration Statement may also be inspected without charge at
the Commission's office in Washington, D.C., and copies of all or any part
thereof may be obtained from such office after payment of the fees prescribed by
the Commission.
The Global Income Fund is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act, and in accordance therewith
files reports and other information with the Commission. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549 and
the Commission's regional offices at Seven World Trade Center, New York, New
York 10048. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, NW, Washington, D.C. 20549 at
prescribed rates. Such reports and other information concerning the Global
Income Fund also may be inspected at the offices of the NYSE and are available
on the Commission's World Wide Web site on the Internet at http://www.sec.gov.
44
<PAGE>
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
Page
----
GENERAL INFORMATION......................................................2
INVESTMENT POLICIES......................................................2
INVESTMENT RESTRICTIONS.................................................12
MANAGEMENT..............................................................15
PORTFOLIO TRANSACTIONS..................................................18
TAXATION................................................................19
COMMON STOCK............................................................26
FINANCIAL STATEMENTS....................................................26
45
<PAGE>
Appendix A
Moody's Investors Service's Corporate Bond Ratings
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterize bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers "1", "2" and "3" in each generic
rating classification from Aaa through B in its corporate bond rating system.
The modifier "1" indicates that the security ranks in the higher end of its
generic rating category: the modifier "2" indicates a mid-
A-1
<PAGE>
range ranking; and the modifier "3" indicates that the issue ranks in the lower
end of its generic rating category.
Standard & Poor's Corporate and Municipal Bond Ratings
AAA -- An obligation rated AAA has the highest rating assigned by Standard
& Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA -- An obligation rated AA differs from the highest-rated obligations
only in a small degree. The obligor's capacity to meet its financial commitment
on the obligation is very strong.
A -- An obligation rated A is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB -- An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity to meet its financial commitment on the
obligation. Obligations rated BB, B, CCC and CC and C are regarded as having
significant speculative characteristics. BB indicates the lowest degree of
speculation and C the highest. While such bonds will likely have some quality
and protective characteristics, these may be outweighed by large uncertainties
or major exposures to adverse conditions.
BB - An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions, which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B - An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC - An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.
CC - An obligation rated CC is currently highly vulnerable to nonpayment.
C -- The C rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on this
obligation are being continued.
D -- An obligation rated D is in payment default. The D rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
A-2
<PAGE>
Plus (+) or minus (-)-- The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
r -- This symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk -- such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
A-3
<PAGE>
================================================================================
You should rely only on the information contained in this document or that
the Global Income Fund has referred you to. The Global Income Fund has not
authorized anyone to provide you with information that is different. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer, solicitation or sale
is not permitted. You should not assume that the information herein is correct
as of any time subsequent to the date hereof or that there has been no change in
the affairs of the Global Income Fund since such date.
-----------------
TABLE OF CONTENTS
Page
----
Prospectus Summary ..................................................... 3
Fee Table .............................................................. 9
Financial Highlights ................................................... 10
The Offer .............................................................. 11
Use of Proceeds ........................................................ 19
The Fund ............................................................... 21
Risk Factors and Special Considerations ................................ 21
Investment Objective and Policies ...................................... 25
Management ............................................................. 31
Portfolio Transactions ................................................. 33
Dividends and Distributions; InvestLink(SM) Program .................... 33
Taxation ............................................................... 38
Net Asset Value ........................................................ 40
Common Stock ........................................................... 40
Transfer Agent, Dividend Disbursing Agent, Registrar and Custodian ..... 42
Distribution Arrangements .............................................. 42
Legal Matters .......................................................... 43
Experts ................................................................ 43
Further Information .................................................... 44
Appendix A ............................................................. A-1
================================================================================
2,818,047 Shares
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
Common Stock
($.001 par value)
------------------
PROSPECTUS
------------------
================================================================================
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
-------------------------
STATEMENT OF ADDITIONAL INFORMATION
Credit Suisse Asset Management Strategic Global Income Fund, Inc. is a
diversified, closed-end management investment company seeking high current
income consistent with the preservation of capital. The Global Income Fund seeks
to achieve this objective by investing in higher-yielding U.S. and foreign
securities, with an emphasis on U.S. high yield (junk bonds) and emerging market
securities.
This statement of additional information is not a prospectus, but you
should read it in conjunction with the prospectus for the Global Income Fund
dated ____, 1999. This statement of additional information does not include all
information that you should consider before purchasing shares, and you should
obtain and read the prospectus prior to purchasing shares. You may obtain a copy
of the prospectus without charge, by calling (800) 733-8481, extension 349, and
from outside the United States, by calling (212) 805-7000. This statement of
additional information incorporates by reference the entire prospectus.
-------------------------
TABLE OF CONTENTS
Page
----
GENERAL INFORMATION......................................................2
INVESTMENT POLICIES......................................................2
INVESTMENT RESTRICTIONS.................................................12
MANAGEMENT..............................................................15
PORTFOLIO TRANSACTIONS..................................................18
TAXATION................................................................19
COMMON STOCK............................................................26
FINANCIAL STATEMENTS....................................................26
-------------------------
The prospectus and this statement of additional information omit certain
of the information contained in the registration statement filed with the
Securities and Exchange Commission, Washington, D.C. You may obtain the
registration statement from the Securities and Exchange Commission upon payment
of the fee prescribed, or inspect it at the Securities and Exchange Commission's
office at no charge.
-------------------------
This statement of additional information is dated
____, 1999
1
<PAGE>
GENERAL INFORMATION
The Global Income Fund changed its name from CS First Boston Strategic
Income Fund, Inc. to BEA Strategic Income Fund, Inc. in August 1995, to BEA
Strategic Global Income Fund, Inc. in June of 1997, and to Credit Suisse Asset
Management Strategic Global Income Fund, Inc. in May 1999.
INVESTMENT POLICIES
Investment Policies
U.S. Fixed-Income Securities
High yield fixed-income securities. The Global Income Fund invests
primarily in higher yielding, lower rated U.S. corporate fixed income
securities, including debt securities, convertible securities and preferred
stocks. It may also invest in securities rated single A or higher by Moody's or
by Standard & Poor's and unrated corporate fixed-income securities when CSAM
determines that such securities are offering high yields in relation to risk due
to current market or other conditions.
Differing yields on fixed-income securities of the same maturity are a
function of several factors, including the relative financial strength of the
issuers. Higher yields are generally available from securities in the lower
categories of recognized rating agencies, i.e., Baa or lower by Moody's or BBB
or lower by Standard & Poor's. The Global Income Fund may invest in any security
which is rated by Moody's or by Standard & Poor's or in any unrated security
which CSAM determines is of suitable quality. However, substantially all of the
securities in which the Global Income Fund invests will be in the lower-rated
categories. Lower-rated securities generally provide yields superior to those of
more highly-rated securities, but involve greater risks and are speculative in
nature. Securities in the rating categories below Baa as determined by Moody's
and BBB as determined by Standard & Poor's are considered to be of poor standing
and predominantly speculative. The rating services' descriptions of these rating
categories, including the speculating characteristics of the lower categories,
are set forth in Appendix A to the prospectus.
Securities ratings are based largely on the issuer's historical financial
information and the rating agencies' investment analysis at the time of rating.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better or
worse than the rating would indicate. Although CSAM considers security ratings
when making investment decisions for high yield securities, it performs its own
investment analysis and does not rely principally on the ratings assigned by the
rating services. CSAM's analysis may include consideration of the issuer's
experience and managerial strength, changing financial condition, borrowing
requirements or debt maturity schedules, and its responsiveness to changes in
business conditions and interest rates. It also considers relative values based
on anticipated cash flow, interest or dividend coverage, asset coverage and
earnings prospects.
CSAM bases its investment decisions in high yield securities on the
results of issuer and security-specific credit analysis. CSAM evaluates each
issuer's rating, cash flow, financial structure and business risk. CSAM takes
into account, among other things, the issuer's financial
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resources, its sensitivity to economic conditions and trends, its operating
history, the quality of the issuer's management and regulatory matters. CSAM
evaluates the covenants of each security and pursues a strategy of broad issuer
and industry diversification.
U.S. government fixed-income securities. The Fund may invest in U.S.
government securities and may engage in options, futures contracts and
repurchase transactions with respect to such securities. U.S. government
securities refers to debt securities issued or guaranteed by the U.S.
government, by various of its agencies, or by various instrumentalities
established or sponsored by the U.S. government. These securities may or may not
be supported by the full faith and credit of the United States.
Depending on market conditions, the Global Income Fund may invest a
substantial portion of its assets in mortgage-backed securities. Mortgage-backed
securities are collateralized by mortgages or interests in mortgages and may be
issued by government or non-government entities. Mortgage-backed securities
issued by government entities typically provide a monthly payment consisting of
interest and principal payments, and additional payments will be made out of
unscheduled payments of principal. Non-government issued mortgage-backed
securities may offer higher yields than those issued by government entities, but
may be subject to greater price fluctuations.
Mortgage securities that are government securities include the securities
of GNMA, Federal Home Loan Mortgage Corporation ("FHLMC"), and Federal National
Mortgage Association ("FNMA"). Each of these agencies issue mortgage
pass-through securities. Pass-through securities are bonds backed by pools of
mortgages. These securities include mortgage pass-through Certificates,
collateralized mortgage obligations, including real estate investment conduits
as authorized under the Internal Revenue Code of 1986, as amended ("CMO's"), and
mortgage-backed bonds. Mortgage-related securities may also be issued by
financial institutions such as commercial banks, savings and loan associations,
mortgage bankers and securities broker-dealers (or separate trusts or affiliates
of such institutions established to issue the securities), with the underlying
securities being U.S. Government securities or non-U.S. government issued
securities. Mortgage-related securities issued by financial institutions (or
separate trusts or affiliates of such institutions), even where backed by U.S.
Government securities, are not considered U.S. Government securities and have a
different set of risks and features.
Interests in pools of mortgage-related securities differ from other forms
of debt securities, which normally provide for periodic payment of interest in
fixed amounts and principal payments at maturity or specified call dates.
Instead, mortgage-related securities provide a "pass-through" of monthly
payments of interest and principal made by the borrowers on their residential
mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Additional payments are caused by repayments of principal resulting
from the sale of the underlying residential property, refinancing or
foreclosure, net of fees or costs which may be incurred. Some mortgage-related
securities (such as securities issued by GNMA) are described as "modified
pass-through." These securities entitle the holder to receive timely payment of
all interest and principal payments owed on the mortgages in the pool, net of
certain fees, regardless of whether or not the mortgagors actually make the
payments.
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A CMO series is made up of a group of bonds that together are fully
collateralized directly or indirectly by a pool of mortgages on which the
payments of principal and interest are dedicated to payment of principal and
interest on the bonds in the series. Each class of bonds in the series may have
a different maturity than the other classes of bonds in the series, bear a
different coupon and have a different priority in receiving payments. The
different maturities come from the fact that all principal payments, both
regular principal payments as well as any prepayment of principal, are passed
through first to the holders of the class with the shortest maturity until it is
completely retired. Thereafter, principal payments are passed through to the
next class of bonds in the series, until all the classes have been paid off. As
a result, an acceleration in the rate of prepayments that may be associated with
declining interest rates shortens the expected life of each class, with the
greatest impact on those classes with the shortest maturities. Similarly, should
the rate of prepayments slow down, as may happen in times of rising interest
rates, the expected life of each class lengthens, again with the greatest impact
on those classes with the shortest maturities. In the case of some CMO series,
each class may receive a differing proportion of the monthly interest and
principal repayments on the underlying collateral. In these series, the classes
having proportionally greater interests in principal repayments generally would
be more affected by an acceleration (or slowing) in the rate of prepayments.
Mortgage-backed bonds are general obligations of the issuer fully collateralized
directly or indirectly by a pool of mortgages. The mortgages serve as collateral
for the issuer's payment obligations on the bonds, but interest and principal
payments on the mortgages are not passed through either directly (as with
mortgage pass-through certificates) or on a modified basis (as with CMO's).
Accordingly, a change in the rate of prepayments on the pool of mortgages could
change the effective maturity of a CMO but not that of a mortgage-backed bond
(although, like many bonds, mortgage-backed bonds can provide that they are
callable by the issuer prior to maturity).
In purchasing securities for the U.S. government sector, CSAM may take
full advantage of the entire range of maturities of U.S. government securities
and may adjust the average maturity of the investments held in the portfolio
from time to time, depending on its assessment of relative yields of securities
of different maturities and its expectations of future changes in interest
rates. To the extent that the Global Income Fund invests in the mortgage market,
CSAM evaluates relevant economic, environmental and security-specific variables
such as housing starts, coupon and age trends.
Foreign Fixed-Income Securities
The Global Income Fund invests in debt obligations and other fixed income
securities denominated in non-U.S. currencies or composite currencies including:
o debt obligations issued or guaranteed by foreign national,
provincial, state, municipal or other governments with taxing
authority or by their agencies or instrumentalities
o debt obligations of supranational entities
o debt obligations of the U.S. government issued in non-dollar
securities
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o dollar and non-dollar denominated debt obligations and other
fixed-income securities of foreign and U.S. corporate issuers
The Fund may invest up to 35% of its net assets in the securities of
issuers located in the emerging markets.
In making these investments CSAM considers the relative growth and
inflation rates of different countries. CSAM considers expected changes in
foreign currency exchange rates, including the prospects for central bank
intervention, in determining the anticipated returns of securities denominated
in foreign currencies. CSAM further evaluates, among other things, foreign yield
curves and regulatory and political factors, including the fiscal and monetary
policies of such countries.
In the past, during periods of falling U.S. exchange rates, yields
available from securities denominated in foreign currencies have often been
higher, in U.S. dollar terms, than those of securities denominated in U.S.
dollars. CSAM considers expected changes in foreign currency exchange rates in
determining the anticipated returns of securities denominated in foreign
currencies. The obligations of foreign governmental entities, including
supranational issuers, have various kinds of government support. Obligations of
foreign governmental entities include obligations issued or guaranteed by
national, provincial, state or other governments with taxing power or by their
agencies. These obligations may or may not be supported by the full faith and
credit of a foreign government.
Other Investment Techniques
To enhance return as market opportunities arise, the Global Income Fund
may use the following investment techniques.
Repurchase Agreements.
The Global Income Fund may invest in repurchase agreements collateralized
by U.S. government securities, certificates of deposit and certain bankers'
acceptances for the purpose of realizing additional income. Repurchase
agreements are transactions by which the Global Income Fund purchases a security
and simultaneously commits to resell that security to the seller (a bank or
securities dealer) at an agreed upon price on an agreed upon date (usually
within seven days of purchase). The resale price reflects the purchase price
plus an agreed-upon market rate of interest that is unrelated to the coupon rate
or date of maturity of the purchased security. Use of repurchase agreements can
permit the Global Income Fund to keep its assets at work while retaining
short-term flexibility in pursuit of investments of a longer-term nature. CSAM
will continually monitor the value of the underlying securities to ensure that
their value always equals or exceeds the repurchase price.
Securities Lending.
The Global Income Fund may lend its portfolio securities to banks,
brokers, dealers and other financial institutions who may need to borrow
securities in order to complete certain transactions, such as covering short
sales, avoiding failures to deliver securities or completing arbitrage
operations. By lending its portfolio securities, the Global Income Fund attempts
to increase its income through the receipt of interest on the loan. Any gain or
loss in the market price
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of the securities lent that might occur during the term of the loan would be for
the account of the Global Income Fund.
The Global Income Fund may lend its portfolio securities so long as the
terms and the structure of such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the Securities and Exchange
Commission. The Global Income Fund will not lend portfolio securities if, as a
result, the aggregate of such loans exceeds 33-1/3% of the value of the its
total assets. Loan arrangements made by the Global Income Fund will comply with
all other applicable regulatory requirements, including, if applicable, those of
the rules of the NYSE.
CSAM will consider all relevant facts and circumstances, including the
creditworthiness of the borrower, in making decisions about the lending of
securities, subject to review by the board. The creditworthiness of such bank,
broker, dealer or other financial institution will be monitored by CSAM during
the time any securities are loaned. Voting rights, if any, may pass with the
loaned securities. If a material event were to occur affecting an investment on
loan, however, the loan must be called and the securities voted by the Global
Income Fund.
Short Sales.
The Global Income Fund may engage in short sales (the sale of a security
that it does not own), but only when it owns an equal amount of such securities
or securities convertible into or exchangeable, without payment of further
consideration, for securities of the same issue as, and equal in amount to, the
securities sold short ("short sales against the box"), and only if not more than
5% of the Global Income Fund's net assets is held as collateral for such sales
at any one time.
Options on U.S. Government Securities.
The Global Income Fund may seek to increase its current income by writing
covered call or put options with respect to some or all of the U.S. government
securities held in its portfolio. In addition, the Global Income Fund may at
times, through the writing and purchase of options on U.S. government
securities, seek to reduce fluctuations in net asset value by hedging against a
decline in the value of its U.S. government securities or an increase in the
price of securities which the Global Income Fund plans to purchase.
Significant option writing opportunities generally exist only with respect
to longer term U.S. government securities. The Global Income Fund may only write
covered options, which means that, so long as the Global Income Fund is
obligated as the writer of a call option, it will own the underlying securities
subject to the option (or comparable securities satisfying the cover
requirements of securities exchanges). In the case of put options, the Global
Income Fund will maintain short term U.S. government securities with a value
equal to or greater than the exercise price of the underlying securities. The
Global Income Fund may also write combinations of covered puts and calls on the
same security.
The Global Income Fund receives a premium from writing a put or call
option, which increases return on the underlying security in the event the
option expires unexercised or is closed out at a profit. The amount of premium
reflects, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the remaining term
of the
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option. The Global Income Fund may terminate an option that it has written prior
to its expiration by entering into a closing purchase transaction in which it
purchases an option having the same terms as the option written. The Global
Income Fund realizes a profit or loss from a transaction if the cost of the
transaction is less or more than the premium received from writing the option.
Because increases in the market price of a call option generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option may be offset in whole or in part by
unrealized appreciation of the underlying security.
The Global Income Fund may purchase put options on U.S. government
securities to protect its portfolio holdings in an underlying security against a
substantial decline in market value. Such hedge protection is provided during
the life of the put option since the Global Income Fund, as holder of the put
option, is able to sell the underlying security at the put exercise price
regardless of any decline in the underlying security's market price. In order
for a put option to be profitable, the market price of the underlying security
must decline sufficiently below the exercise price to cover the premium and
transaction costs.
The Global Income Fund may purchase call options on U.S. government
securities to hedge against an increase in prices of securities that the Global
Income Fund ultimately wants to buy. Such hedge protection is provided during
the life of the call option since the Global Income Fund, as holder of the
option, is able to buy the underlying security at the exercise price regardless
of any increase in such security's market price. In order for a call option to
be profitable, the market price of the underlying security must rise
sufficiently above the exercise price to cover the premium and transaction
costs.
The Global Income Fund will not purchase put and call options if as a
result more than 5% of the value of its total assets would at the time be
invested in such options.
Interest Rate Futures and Related Options.
The Global Income Fund may enter into interest rate futures contracts to
purchase or sell U.S. government securities or other interest rate-sensitive
instruments and options thereon that are traded on U.S. futures exchanges. When
the Global Income Fund attempts to hedge its portfolio by selling an interest
rate futures contract, purchasing a put option thereon, or writing a call option
thereon, it will own an amount of U.S. government securities corresponding to
the open futures or option position thereby ensuring that the position is
unleveraged. The Global Income Fund only intends to engage in futures contracts
or options for bona fide hedging purposes. In accordance with the current rules
of the Commodity Futures Trading Commission, the Global Income Fund will not
enter into any interest rate futures contract or option thereon if, immediately
thereafter, the aggregate initial margin and premiums paid for all existing
futures contracts and options thereon not entered into for bona fide hedging
purposes would exceed 5% of its total assets. Positions in interest futures
contracts may be closed out only on the exchange where the contract was made (or
on a linked exchange). The Global Income Fund intends to purchase or sell
interest rate futures contracts only on exchanges or boards of trade where there
appears to be an active market for such contracts.
Interest rate futures contracts are contracts that obligate the buyer to
take and the seller to make delivery at a future date of a specified quantity of
the underlying financial instrument. However, some interest rate futures
contracts provide for settlement in cash rather than by delivery
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of the securities underlying the contract. Each futures contract is traded on a
commodity exchange that has been designated a "contract market" by the
Commodities Futures Trading Commission. Interest rate futures contracts are
currently available on several types of fixed income securities, including U.S.
Treasury Bonds, U.S. Treasury Notes and GNMA securities on The Chicago Board of
Trade, and on U.S. Treasury Bills on the International Monetary Market Division
of The Chicago Mercantile Exchange.
A call option for a futures contract gives the purchaser, in return for a
premium paid, has the right to buy the futures contract underlying the option at
a specified exercise price at any time during the term of the option. The writer
of the call option, who receives the premium, has the obligation, upon exercise
of the option, to deliver the underlying futures contract against payment of the
exercise price. A put option for a futures contract gives the purchaser, in
return for a premium, the right to sell the underlying futures contract at a
specified price during the term of the option. The writer of the put, who
receives the premium, has the obligation to buy the underlying futures contract
upon demand at the exercise price.
In contrast to the purchase or sale of a security, the full purchase price
of the futures contract is not paid or received by the Global Income Fund upon
its purchase or sale. Instead, the Global Income Fund will deposit in a
segregated custodial account as initial margin an amount of cash or U.S.
Treasury bills equal to approximately 5% of the value of the contract. This
amount is known as initial margin. The nature of initial margin in futures
transactions is different from that of margin in security transactions in that
futures contract margin does not involve the borrowing of funds by the customer
to finance the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Global Income Fund upon termination of the futures contract assuming all
contractual obligations have been satisfied. Subsequent payments to and from the
broker, called variation margin, will be made on a daily basis as the price of
the underlying security fluctuates, making the long and short positions in the
futures contract more or less valuable, a process known as "mark to the market."
For example, when the Global Income Fund has purchased an interest rate futures
contract and the price of the underlying security has risen, that position will
have increased in value and the Global Income Fund will receive from the broker
a variation margin payment equal to that increase in value. Conversely, where
the Global Income Fund has purchased an interest rate futures contract and the
price of the underlying security has declined, the position would be less
valuable and the Global Income Fund would be required to make a variation margin
payment to the broker. At any time prior to expiration of the futures contract,
the Global Income Fund may elect to terminate the position by taking an opposite
position. A final determination of variation margin is then made, additional
cash is required to be paid by or released to the Global Income Fund, and the
Global Income Fund realizes a loss or gain. No assurance can be given that the
Global Income Fund will be able to take an opposite position.
The purpose of selling an interest rate futures contract is to protect a
portfolio from fluctuations in asset value resulting from interest rate changes.
Selling a futures contract has an effect similar to selling portfolio
securities. If interest rates were to increase, the value of the securities in
the portfolio would decline, but the value of the Global Income Fund's futures
contracts would increase, thereby keeping the net asset value of the Global
Income Fund from declining as much as it otherwise might have. In this way,
selling futures contracts acts as a hedge
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against the effects of rising interest rates. However, a decline in interest
rates resulting in an increase in the value of portfolio securities tends to be
offset by a decrease in the value of the corresponding futures contracts.
Similarly, when interest rates are expected to decline, futures contracts
may be purchased to hedge against anticipated subsequent purchases of portfolio
securities at higher prices. By buying futures, the Global Income Fund could
effectively hedge against an increase in the price of the securities it intends
to purchase at a later date in order to permit the purchase to be effected in an
orderly manner. At that time, the futures contracts could be liquidated at a
profit if rates had in fact declined as expected, and the Global Income Fund's
cash position could be used to purchase securities.
Although most interest rate futures contracts call for making or taking
delivery of the underlying securities, these obligations are typically canceled
or closed out before the scheduled settlement date. The closing is accomplished
by purchasing (or selling) an identical futures contract to offset a short (or
long) position. Such an offsetting transaction cancels the contractual
obligations established by the original futures transaction. If the price of an
offsetting futures transaction varies from the price of the original futures
transaction, the Global Income Fund will realize a gain or loss corresponding to
the difference. That gain or loss will tend to offset the unrealized loss or
gain on the hedged securities transaction, but may not always or completely do
so.
The selection of futures and options strategies requires skills different
from those needed to select portfolio securities; however, CSAM does have
experience in the use of futures and options.
Restricted and Illiquid Securities.
The Global Income Fund may invest up to 10% of its total assets in
securities that are not readily marketable. These include securities which are
not registered under the Securities Act and not publicly traded. Restricted and
illiquid securities are purchased in placements from the issuer or in the
secondary market. The purchase of these securities will depend on their relative
attractiveness as compared to securities that have been publicly offered.
Restricted and illiquid securities have frequently resulted in higher
yields and restrictive covenants providing greater protection for the purchaser,
such as longer call or refunding protection, than typically would be available
with publicly offered securities of the same type. An issuer is often willing to
create more attractive features in its securities issued privately, because it
has avoided the expense and delay involved in a public offering of its
securities. For various reasons, an issuer may prefer or be required as a
practical matter to obtain private financing. At certain times adverse
conditions in the public securities markets may preclude a public offering of an
issuer's securities.
These securities can only be resold to certain categories of purchasers,
including qualified institutional buyers, and are usually considered less liquid
than publicly-traded securities, which means that the Global Income Fund may
take longer to liquidate them than would be the case for publicly-traded
securities.
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Foreign Currency Exchange Transactions.
The Global Income Fund may engage in foreign currency exchange
transactions to protect against changes in future exchange rates. The Global
Income Fund will only engage in foreign currency exchange transactions for
transaction hedging (in connection with the purchase or sale of portfolio
securities) or position hedging (to protect the value of a specific portfolio
position), although there is no limit on the percentage of its total assets that
may be invested in forward foreign currency transactions. The Global Income Fund
may engage in U.S. dollar-denominated or non-U.S. dollar denominated hedging.
The Global Income Fund's ability to engage in hedging and related option
transactions may be limited by tax considerations. See "Taxation" below.
The Global Income Fund may engage in "transaction hedging" to protect
against a change in the foreign currency exchange rate between the date on which
it contracts to purchase or sell the security and the settlement date, or to
"lock in" the U.S. dollar equivalent of a dividend or interest payment in a
foreign currency. For that purpose, the Global Income Fund may purchase or sell
a foreign currency on a spot (or cash) basis at the prevailing spot rate in
connection with the settlement of transactions in portfolio securities
denominated in that foreign currency. The Global Income Fund may also enter into
forward currency exchange contracts and purchase exchange-listed and
over-the-counter call and put options on foreign currency futures contracts and
on foreign currencies. A foreign currency forward contract is a negotiated
agreement to exchange currency at a future time at a rate or rates that may be
higher or lower than the spot rate. Foreign currency futures contracts are
standardized exchange-traded contracts and have margin requirements.
For transaction hedging purposes, the Global Income Fund may also purchase
exchange-listed and over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives the Global Income Fund the right to assume a short position in the futures
contract until expiration of the option. A put option on currency gives the
Global Income Fund the right to sell a currency at an exercise price until the
expiration of the option. A call option on a futures contract gives the Global
Income Fund the right to assume a long position in the futures contract until
the expiration of the option. A call option on currency gives the Global Income
Fund the right to purchase a currency at the exercise price until the expiration
of the option.
The Global Income Fund may engage in "position hedging" to protect against
the decline in the value relative the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the value of
currency for securities which the portfolio intends to buy, when it holds cash
reserves and short term investments). For position hedging purposes, the Global
Income Fund may purchase or sell foreign currency futures contracts and foreign
currency forward contracts, and may purchase put or call options on foreign
currency futures contracts and on foreign currencies on exchanges or
over-the-counter markets. In connection with position hedging, the Global Income
Fund may also purchase or sell foreign currency on a spot basis.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration or maturity of a forward or futures contract. The
precise matching of the amounts of foreign currency exchange transactions and
the value of the portfolio securities involved will not generally be possible
since the future value of such securities in foreign currencies will change as a
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consequence of market movements in the value of those securities between the
dates the currency exchange transactions are entered into and the dates they
mature or expire. Accordingly, it may be necessary for the Global Income Fund to
purchase additional foreign currency on the spot market (and bear the expense of
such purchase) if the market value of the security or securities being hedged is
less than the amount of foreign currency the Global Income Fund is obligated to
deliver and if a decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be necessary to sell on the
spot market some of the foreign currency received upon the sale of the portfolio
security or securities if the market value of such security or securities
exceeds the amount of foreign currency the Global Income Fund is obligated to
deliver.
Hedging transactions involves costs and may result in losses. The Global
Income Fund may write covered call options on foreign currencies to offset some
of the costs of hedging those currencies. They simply establish a rate of
exchange that one can achieve at some future point in time. The Global Income
Fund engages in over-the-counter transactions only when appropriate
exchange-traded transactions are unavailable and when, in the opinion of CSAM,
the pricing mechanism and liquidity are satisfactory and the participants are
responsible parties likely to meet their contractual obligations.
Positions in foreign currency futures contracts may be closed out only on
an exchange or board of trade that provides a secondary market in such
contracts. The Global Income Fund intends to purchase or sell foreign currency
futures contracts only on exchanges or boards of trade where there appears to be
an active secondary market.
The Global Income Fund may enter into forward foreign currency exchange
contracts (an obligation to purchase or sell a specific currency at a future
date) solely for hedging or other appropriate risk management purposes as
defined in regulations of the Commodities Futures Trading Commission. A forward
foreign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract as agreed by the parties, at a price set at the time of
the contract. In the case of a cancelable forward contract, the holder has the
unilateral right to cancel the contract at maturity by paying a specific fee.
The contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. A foreign currency futures contract is a standardized
contract for the future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract. Foreign currency
futures contracts traded in the United States are designed by and traded on
exchanges regulated by the CFTC, such as the New York Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in any given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A forward
contract generally requires no margin or other deposit.
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At the maturity of a forward or futures contract, the Global Income Fund
may either accept or make delivery of the currency specified in the contract, or
at or prior to maturity enter into a closing transaction involving the purchase
or sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange: a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.
The Global Income Fund may also write or purchase options on foreign
currencies. Options on foreign currencies operate similarly to options on
securities, and are traded primarily in the over-the-counter market, although
options on foreign currencies have recently been listed on several exchanges.
Such options are purchased or written only when CSAM believes that a liquid
secondary market exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at any specific time.
Options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally. If the Global Income
Fund sells call options on foreign currencies, it may cover by holding that
currency or by holding a separate call option on the currency with a strike
price no higher than that of the call option sold.
The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options markets.
INVESTMENT RESTRICTIONS
The Global Income Fund is subject to the following restrictions that may
not be changed without the approval of at least a majority of its outstanding
voting securities, as defined in the Investment Company Act. The Investment
Company Act defines a "majority" as the lesser of (1) 67% of the shares
represented at a meeting of which more than 50% of the outstanding shares are
present in person or represented by proxy, or (2) more than 50% of the
outstanding shares.
The Global Income Fund will not:
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(1) invest more than 5% of the value of its total assets in the securities
of any one issuer, excluding obligations of the U.S. government or any agency or
instrumentality thereof and except that up to 25% of the value of its total
assets may be invested without regard to this limitation;
(2) own more than 10% of the outstanding voting stock or other securities
(other than securities of the U.S. government or any agency or instrumentality
thereof), or both, of any one issuer;
(3) purchase shares of other investment companies except as part of a plan
of reorganization, merger, consolidation or an offer of exchange;
(4) borrow money except as a temporary measure for extraordinary or
emergency purposes, and in no event in excess of 15% of the value of its total
assets, except that for the purpose of this restriction, short-term credits
necessary for settlement of securities transactions are not considered
borrowings (the Global Income Fund will not purchase any securities at any time
while such borrowings exceed 5% of total assets);
(5) purchase securities on margin, except that it may make margin payments
in connection with transactions in future contracts and related options;
(6) sell securities short unless at all times when a short position is
open it owns an equal amount of such securities or securities convertible into
or exchangeable, for, without payment of any further consideration, securities
of the same issue as, and equal in amount to, the securities sold short, and
unless not more than 5% of the value of the Global Income Fund's total assets
are held as collateral for such sales at any one time;
(7) purchase or sell commodities or commodity contracts, except that it
may write, purchase or sell financial futures contracts and related options, and
futures, forward contracts and options on foreign currencies;
(8) invest for the purpose of exercising control over management of any
company;
(9) make loans, except (i) by purchasing bonds, debentures or similar
obligations (including repurchase agreements, subject to the limitation
described in (11) below), which are either publicly distributed or customarily
purchased by institutional investors, and (ii) by lending its securities to
banks, brokers, dealers and other financial institutions so long as such loans
are not inconsistent with the 1940 Act or the rules and regulations or
interpretations of the Securities and Exchange Commission thereunder;
(10) underwrite the securities of other issuers, except to the extent that
in connection with the disposition of portfolio securities the Global Income
Fund may be deemed to be an underwriter;
(11) invest more than 10% of the value of its total assets in securities
subject to legal or contractual restrictions on resale or in securities which
are not readily marketable, including repurchase agreements having maturities of
more than 7 days and restricted and illiquid securities;
(12) purchase real estate, although the Global Income Fund may purchase or
sell securities of companies which deal in real estate or interests therein;
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<PAGE>
(13) pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 20% of the value of its total assets and then only to secure
borrowings permitted by restriction 4 above;
(14) invest directly in interests in oil, gas or other mineral exploration
development programs; or
(15) invest 25% or more of the value of its total assets in any one
industry, except that (i) for purposes of this restriction securities of the
U.S. government, its agencies or instrumentalities are not considered to
represent industries, and (ii) the Global Income Fund may invest 25% or more of
the value of its total assets in securities issued by or backed by the credit of
supranational entities and securities of foreign governments, their agencies or
instrumentalities, provided that it will not invest 25% or more of the value of
its total assets in securities issued or backed by the credit of the national
government of any single country or its agencies or instrumentalities or of any
single supranational entity. The deposit of initial and variation margin and
collateral arrangements in connection with interest rate futures contracts and
related options shall not be deemed to be in violation of any of the foregoing
investment restrictions.
If a percentage restriction on investment or use of assets set forth above
is adhered to at the time a transaction is effected, later changes in
percentages resulting from changing values will not be considered a violation.
Under the Investment Company Act, the Global Income Fund may neither
invest more than 5% of its total assets in the securities of any one investment
company, nor acquire more than 3% of the outstanding voting securities of any
such investment company. In addition, the Global Income Fund may not invest more
than 10% of its total assets in securities issued by all investment companies.
As a shareholder in any investment company, the Global Income Fund will bear its
ratable share of that investment company's expenses, and would remain subject to
payment of the advisory, sub-advisory and administrative fees with respect to
assets so invested.
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MANAGEMENT
Directors and Officers
The names of the directors and principal officers of the Global Income
Fund are set forth below, together with their positions and their principal
occupations during the past five years.
The officers manage day to day operations. The officers are directly
responsible to the board of directors. The directors set broad policies and
choose the officers.
<TABLE>
<CAPTION>
Name, Address and Age Position with the Fund Principal Occupations for the Past Five Years
<S> <C> <C>
William W. Priest (57)* Director and Chairman of the Chairman-Management Committee, Chief Executive
Credit Suisse Asset Management Board since 1997 Officer and Managing Director of CSAM (U.S.)
153 East 53rd Street (12/90-present); Director of TIG Holdings, Inc.;
New York, NY 10022 Director of other CSAM-advised investment companies.
Dr. Enrique R. Arzac (57) Director since 1990 Professor of Finance and Economics, Graduate School
Columbia University of Business, Columbia University (1971-present);
Graduate School of Business Director of The Adams Express Fund and Petroleum
New York, NY 10027 and Resources Corporation. Director of other
CSAM-advised investment companies.
Lawrence J. Fox (56) Director since 1990 Partner of Drinker Biddle & Reath LLP ("DB&R")
1 Logan Square (since 1976); Former Managing Partner of DB&R
18th and Cherry Streets (1990-1998); Visiting Professor of Cornell Law
Philadelphia, PA 19103 School since July, 1999; Director of one other
CSAM-advised investment company.
James S. Pasman, Jr. (68) Director since 1988 Currently retired; President and Chief Operating
29 The Trillium Officer of National InterGroup, Inc. (4/89-3/91);
Pittsburgh, PA 15238 Chairman of Permian Oil Co. (4/89-3/91); Director
of Education Management Corp., Tyco International
Ltd.; Trustee, BT Insurance Funds Trust; Director
of other CSAM-advised investment companies.
Richard J. Lindquist (38) President since 1997 and Managing Director of CSAM (4/95-present); Managing
Credit Suisse Asset Management Chief Investment Officer Director of CS First Boston Investment Management
153 East 53rd Street since 1996 Corporation ("CSFBIM") (3/93-3/95); Director of
New York, NY 10022 CSFBIM (4/92-2/93).
Hal Liebes, Esq. (34) Senior Vice President since Director and General Counsel of CSAM
Credit Suisse Asset Management 1997 (3/97-present); Vice President and Legal Counsel of
153 East 53rd Street CSAM (6/95-3/97); Chief Compliance Officer, CS
New York, NY 10022 First Boston Investment Management (94-95); Staff
Attorney, Division of Enforcement, U.S. Securities
and Exchange Commission (91-94); Associate, Morgan,
Lewis & Bockius (89-91).
Gregg Diliberto (42) Investment Officer since Managing Director of CSAM (5/95-present); Senior
Credit Suisse Asset Management 1997 Vice President of CSAM (1/92-5/95).
153 East 53rd Street
New York, NY 10022
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Suzanne Moran (32) Investment Officer since Vice President of CSAM (1/97-present); Assistant
Credit Suisse Asset Management 1996 Vice President and Fixed Income Trader of CSAM
153 East 53rd Street (5/95-12/96); Assistant Vice President and
New York, NY 10022 Portfolio Analyst at CS First Boston (8/91-4/95).
Michael A. Pignataro (39) Vice President and Chief Vice President of CSAM (12/95-present); Assistant
Credit Suisse Asset Management Financial Officer since 1999 Vice President and Chief Administrative Officer for
153 East 53rd Street and Secretary since 1997 investment companies advised by CSAM (9/89-12/95).
New York, NY 10022
Robert Rizza (33) Vice President and Treasurer Administrative Officer for investment companies
Credit Suisse Asset Management since 1999 advised by CSAM (3/98-present); Assistant
153 East 53rd Street Treasurer, Fund Administration, Bankers Trust Co.
New York, NY 10022 (4/94-3/98).
</TABLE>
- ------------------
* Mr. Priest is an interested person of the Global Income Fund by virtue of
his position as an officer of CSAM.
The Global Income Fund pays each of its directors who is not a director,
officer or employee of CSAM or any affiliate thereof an annual fee of $10,000
plus $500 for each meeting attended. In addition, the Global Income Fund
reimburses those directors for travel and out-of-pocket expenses incurred in
connection with meetings. The aggregate remuneration paid to all such
unaffiliated directors by the Global Income Fund during the fiscal year ended
December 31, 1998 was $51,171.
The following table shows certain compensation information for the
directors for the fiscal year ended December 31, 1998. None of the executive
officers or directors who are also officers or directors of CSAM received any
compensation from the Global Income Fund for such period. The Global Income Fund
has no bonus, profit sharing, pension or retirement plans.
<TABLE>
<CAPTION>
Total
Pension or Compensation From
Aggregate Retirement Benefits Estimated Annual Fund and Fund
Compensation Accrued as Part of Benefits Upon Complex Paid to
Name of Director from Fund Fund Expenses Retirement Directors
- ---------------- ------------ ------------------- ---------------- -----------------
<S> <C> <C> <C> <C>
William W. Priest $0 $0 $0 $0
Enrique R. Arzac $12,000 $0 $0 $92,500
Lawrence J. Fox $12,000 $0 $0 $24,000
James S. Pasman, Jr. $12,000 $0 $0 $24,000
</TABLE>
The Articles of Incorporation and Bylaws of the Global Income Fund provide
that it will indemnify its directors and officers against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of their positions with the Global Income Fund to the fullest extent
permitted by law. In addition, the Articles of Incorporation provide that the
directors and officers will not be liable to the shareholders for money damages,
except in limited instances. However, nothing in the Articles of Incorporation
or the Bylaws protects or indemnifies a director, officer, employee or agent
against any liability to which such person would otherwise be
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<PAGE>
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such person's
office.
Advisory Arrangements
CSAM is the investment adviser pursuant to an Advisory Agreement with the
Global Income Fund (the "Advisory Agreement") which became effective on June 13,
1995. Prior to this date, CS First Boston Investment Management provided
investment advisory services to the Global Income Fund under substantially the
same terms, conditions and fees.
The Advisory Agreement provides that CSAM shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Global
Income Fund in connection with the matters to which the Advisory Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 1940 Act) or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of CSAM in the performance of its duties or from reckless
disregard of its obligations and duties under the Advisory Agreement.
For the fiscal years ended December 31, 1998, 1997 and 1996, CSAM was paid
for advisory services rendered to the Global Income Fund $433,203, $446,640, and
$429,140, respectively.
Administrative Arrangement
Brown Brothers Harriman & Co. is the Global Income Fund's administrator.
The services provided by Brown Brothers Harriman under its Administration
Agreement with the Global Income Fund are subject to the supervision of the
directors and officers, and include day to day administration of matters related
to its corporate existence, maintenance of its records, preparation of reports
and supervision of arrangements with custodians and the transfer and dividend
disbursing agent.
Duration and Termination; Non-Exclusive Services
The Advisory Agreement became effective on June 13, 1995. Unless earlier
terminated as described below, the Advisory Agreement remains in effect if
approved annually (a) by the board of directors or by the holders of a majority
of the outstanding voting securities (as defined in the Investment Company Act)
and (b) by a majority of the directors who are not parties to the Advisory
Agreement or "interested persons" (as defined in the 1940 Act) of any such
party. The Advisory Agreement terminates on its assignment by any party and may
be terminated without penalty on 60 days' written notice at the option of the
board of directors or by the vote of the majority of the holders of the shares,
or upon 90 days' written notice, by CSAM.
The Administration Agreement is terminable upon 60 days' notice by either
party.
The services of CSAM and Brown Brothers Harriman are not deemed to be
exclusive, and nothing in the relevant service agreements will prevent any of
them or their affiliates from
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<PAGE>
providing similar services to other investment companies and other clients
(whether or not such clients' investment objectives and policies are similar to
those of the Global Income Fund) or from engaging in other activities.
Custodian
Brown Brothers Harriman acts as custodian under a Custodian Agreement
dated January 29, 1999.
Foreign securities are held by certain foreign banks and securities
depositories which have been approved by the board of directors upon
recommendation by Brown Brothers Harriman, in accordance with Rule 17f-5 under
the 1940 Act as currently in effect. Approval of a foreign subcustodian is made
by the board following a consideration of a number of factors, including, but
not limited to, the reliability and financial stability of the institution; the
ability of the institution to perform capably custodial services; the reputation
of the institution in its national market; the political and economic stability
of the country or countries in which the subcustodian will be located; and the
risk of potential nationalization or expropriation of the assets.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities are made by CSAM, subject to the
overall review of the board of directors. Portfolio securities transactions are
placed on behalf of the Global Income Fund by persons authorized by CSAM. CSAM
manages other investment companies and accounts that invest in fixed-income
securities. Although investment decisions for the Global Income Fund are made
independently from those of these other accounts, CSAM may make investments of
the type the Global Income Fund makes on behalf of these other accounts. When
the Global Income Fund and one or more other accounts is prepared to invest in,
or desires to dispose of, the same security, CSAM will allocate available
investments or opportunities for each in a manner believed by CSAM to be
equitable to each. In some cases, this procedure may adversely affect the price
paid or received by the Global Income Fund or the size of the position it
obtains or disposes of. The Global Income Fund may utilize CS First Boston
Corporation and other affiliates of Credit Suisse in connection with the
purchase or sale of securities in accordance with rules or exemptive orders
adopted by the Securities and Exchange Commission when CSAM believes that the
charge for the transaction does not exceed usual and customary levels.
Transactions on U.S. and some foreign stock exchanges involve the payment
of negotiated brokerage commissions, which may vary among different brokers. The
cost of securities purchased from underwriters includes an underwriter's
commission or concession, and the prices at which securities are purchased from
and sold to dealers in the over-the-counter markets include a dealer's mark-up
or mark-down, which normally is not disclosed. Fixed-income securities are
generally traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of the security will
likely include a profit to the dealer.
In selecting brokers or dealers to execute portfolio transactions on
behalf of the Global Income Fund, CSAM will seek the best overall terms
available. In addition, unless otherwise directed by the board of directors, the
Advisory Agreement authorizes CSAM, in selecting brokers or dealers to execute a
particular transaction and in evaluating the best overall terms available, to
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<PAGE>
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) and cause the Global
Income Fund to pay a broker-dealer which furnishes such services a higher
commission than that which might be charged by another broker-dealer for
effecting the same transaction, provided that such commission is deemed
reasonable in terms of either that particular transaction or the overall
responsibilities of CSAM to the Global Income Fund. The fees payable under the
Advisory Agreement are not reduced as a result of CSAM's receiving such
brokerage and research services.
Currently, it is the Global Income Fund's policy that CSAM may at times
pay higher commissions than might otherwise be obtainable in recognition of
brokerage services felt necessary for the achievement of best available price
and most favorable execution of certain securities transactions. CSAM will only
pay such higher commissions if it believes this to be in the best interest of
the Global Income Fund. Some brokers or dealers who may receive such higher
commissions in recognition of brokerage services related to execution of
securities transactions are also providers of research information to CSAM
and/or the Global Income Fund. Subject to the primary objective set forth above,
CSAM has informed the Global Income Fund that it may pay higher commission rates
specifically for the purpose of obtaining research services. The Global Income
Fund will not pay to any affiliate of CSAM a higher commission rate specifically
for the purpose of obtaining research services.
The Global Income Fund paid no affiliated brokerage commissions in any of
the fiscal years ended December 31, 1998, 1997 and 1996.
TAXATION
The following is a summary of the material United States federal income
tax considerations, regarding the purchase, ownership and disposition of shares.
You are urged to consult your own tax adviser with respect to the specific
federal, state, local and foreign tax consequences of investing in the Global
Income Fund. The summary is based on the laws in effect on the date of this
statement of additional information, which are subject to change.
United States Federal Income Taxes
The Global Income Fund and its investments. The Global Income Fund has
qualified and continues to qualify and elect to be treated as a regulated
investment company for each taxable year under the Code. To so qualify, the
Global Income Fund must, among other things:
o derive at least 90% of its gross income in each taxable year from:
o dividends
o interest
o payments with respect to securities loans
o gains from the sale or other disposition of stock or
securities or foreign currencies
o other income (including, but not limited to, gains from
options, futures or forward contracts) derived with
respect to its business of investing in such stock,
securities or currencies, and
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<PAGE>
o diversify its holdings so that, at the end of each quarter of the
taxable year:
o at least 50% of the market value of the assets is
represented by cash, securities of other regulated
investment companies, United States government
securities and other securities, with such other
securities limited, in respect of any one issuer, to an
amount not greater than 5% of the Global Income Fund's
assets and not greater than 10% of the outstanding
voting securities of such issuer, and
o not more than 25% of the value of its assets is invested
in the securities (other than United States government
securities or securities of other regulated investment
companies) of any one issuer or any two or more issuers
that the Global Income Fund controls and are determined
to be engaged in the same or similar trades or
businesses or related trades or businesses.
As a regulated investment company, the Global Income Fund is not subject
to United States federal income tax on its net investment income (i.e., income
other than its net realized long- and short-term capital gains) and its net
realized long- and short-term capital gains, if any, that it distributes to its
shareholders, provided that an amount equal to at least 90% of its investment
company taxable income (i.e., its taxable income minus the excess, if any, of
its net realized long-term capital gains over its net realized short-term
capital losses (including any capital loss carryovers), plus or minus certain
other adjustments as specified in section 852 of the Code) and 90% of its net
tax-exempt income for the taxable year is distributed, but is subject to tax at
regular corporate rates on any taxable income or gains that it does not
distribute.
The Code imposes a 4% nondeductible excise tax on the Global Income Fund
to the extent it does not distribute by the end of any calendar year at least
98% of its net investment income for that year and 98% of the net amount of its
capital gains (both long- and short-term) for the one-year period ending, as a
general rule, on October 31 of that year. For this purpose, however, any income
or gain retained by the Global Income Fund that is subject to corporate income
tax will be considered to have been distributed by year-end. In addition, the
minimum amounts that must be distributed in any year to avoid the excise tax
will be increased or decreased to reflect any underdistribution or
overdistribution, as the case may be, from the previous year. The Global Income
Fund anticipates that it will pay such dividends and will make such
distributions as are necessary in order to avoid the application of this tax.
If, in any taxable year, the Global Income Fund fails to qualify as a
regulated investment company under the Code, the Global Income Fund would be
taxed in the same manner as an ordinary corporation and distributions to you
would not be deductible by the Global Income Fund in computing its taxable
income. In addition, in the event of a failure to qualify, the Global Income
Fund's distributions, to the extent derived from current or accumulated earnings
and profits, would constitute dividends (eligible for the corporate
dividends-received deduction) which are taxable to you as ordinary income, even
though those distributions might otherwise (at least in part) have been treated
as long-term capital gains when received by you. If the Global Income Fund fails
to qualify as a regulated investment company in any year, it must pay out its
earnings and profits accumulated in that year in order to qualify again as a
regulated investment company. In addition, if the Global Income Fund failed to
qualify as a regulated investment company for a period greater
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<PAGE>
than one taxable year, it may be required to recognize any net built-in gains
(the excess of the aggregate gains, including items of income, over aggregate
losses that would have been realized if it had been liquidated) in order to
qualify as a regulated investment company in a subsequent year.
The Global Income Fund pays dividends of net investment income monthly and
makes distributions at least annually of any net realized long-term and
short-term capital gains in excess of applicable capital losses, including
capital loss carryforwards. The board of directors determines annually whether
to distribute any net realized long-term capital gains in excess of net realized
short-term capital losses (including any capital loss carryovers). The Global
Income Fund currently expects to distribute any excess annually to you. However,
if the Global Income Fund retains for investment an amount equal to all or a
portion of its net realized long-term capital gains in excess of its net
realized short-term capital losses and capital loss carryovers, it will be
subject to a corporate tax (currently at a rate of 35%) on the amount retained.
In that event, the Global Income Fund expects to designate such retained amounts
as undistributed capital gains in a notice to you and you (a) will be required
to include in income for United States federal income tax purposes, as long-term
capital gains, your proportionate share of the undistributed amount, (b) will be
entitled to credit your proportionate share of the 35% tax paid by the Global
Income Fund on the undistributed amount against you United States federal income
tax liabilities, if any, and to claim refunds to the extent your credits exceed
your liabilities, if any, and (c) will be entitled to increase your tax basis,
for United States federal income tax purposes, in your shares by an amount equal
to 65% of the amount of undistributed capital gains included in your income.
Any dividend declared by the Global Income Fund in October, November or
December of any calendar year and payable to shareholders of record on a
specified date in such a month shall be deemed to have been received by each
shareholder on December 31 of such calendar year and to have been paid by the
Global Income Fund not later than such December 31, provided that such dividend
is actually paid by the Global Income Fund during January of the following
calendar year.
Dividends and Distributions. If you are a U.S. shareholder, dividends of
net investment income and distributions of net realized short-term capital gains
are taxable to you as ordinary income, whether paid in cash or in shares.
Distributions of net long-term capital gains, if any, that the Global Income
Fund designates as capital gains dividends are taxable as long-term capital
gains, whether paid in cash or in shares and regardless of how long you have
held shares. Dividends and distributions paid by the Global Income Fund (except
for the portion thereof, if any, attributable to dividends on stock of U.S.
corporations received by the Global Income Fund) will not qualify for the
deduction for dividends received by corporations. Distributions in excess of the
Global Income Fund's current and accumulated earnings and profits will, as to
you, be treated as a tax-free return of capital, to the extent of your basis in
your shares, and as a capital gain thereafter (if you hold your shares as
capital assets).
If you receive dividends or distributions in the form of additional shares
pursuant to the Dividend Reinvestment and Cash Purchase Plan you should be
treated for United States federal income tax purposes as receiving a
distribution in the amount equal to the amount of money that shareholders
receiving cash dividends or distributions will receive, and should have a cost
basis in the shares received equal to such amount.
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If you are considering buying shares just prior to a dividend or capital
gain distribution you should be aware that, although the price of shares just
purchased at that time may reflect the amount of the forthcoming distribution,
such dividend or distribution may nevertheless be taxable to you.
If the Global Income Fund is the holder of record of any stock on the
record date for any dividends payable with respect to such stock, such dividends
are included in the Global Income Fund's gross income not as of the date
received but as of the later of (a) the date such stock went ex-dividend (i.e.,
the date on which a buyer of the stock would not be entitled to receive the
declared, but unpaid, dividends) or (b) the date the Global Income Fund acquired
such stock. Accordingly, in order to satisfy its income distribution
requirements, the Global Income Fund may be required to pay dividends based on
anticipated earnings, and you may receive dividends in an earlier year than
would otherwise be the case.
Sales of Shares. Upon the sale or exchange of your shares, you will
realize a taxable gain or loss equal to the difference between the amount
realized and the basis in your shares. Such gain or loss will be treated as
capital gain or loss, if the shares are capital assets in your hands, and will
be long-term capital gain or loss if the shares are held for more than one year
and short-term capital gain or loss if the shares are held for one year or less.
Any loss realized on a sale or exchange will be disallowed to the extent the
shares disposed of are replaced, including replacement through the reinvesting
of dividends and capital gains distributions in the Global Income Fund under the
Dividend Reinvestment and Cash Purchase Plan, within a 61-day period beginning
30 days before and ending 30 days after the disposition of the shares. In such a
case, the basis of the shares acquired will be increased to reflect the
disallowed loss. Any loss realized by you on the sale of a share held by you for
six months or less will be treated for United States federal income tax purposes
as a long-term capital loss to the extent of any distributions or deemed
distributions of long-term capital gains received by you with respect to such
share.
Backup Withholding. If you fail to provide the Global Income Fund with
your correct taxpayer identification number or to make required certifications,
or have been notified by the Internal Revenue Service that you are subject to
backup withholding, the Global Income Fund may be required to withhold, for
United States federal income tax purposes, 31% of the dividends and
distributions payable. Corporate shareholders and certain other shareholders are
or may be exempt from backup withholding. Backup withholding is not an
additional tax and any amount withheld may be credited against your United
States federal income tax liabilities. If you are a foreign investor additional
tax withholding requirements which apply are discussed below.
Foreign Shareholders. If you are a foreign investor (such as a nonresident
alien individual, a foreign trust or estate, a foreign corporation or a foreign
partnership) under U.S. laws, taxation depends, in part, on whether your income
from the Global Income Fund is "effectively connected" with a United States
trade or business carried on by you.
If you are not a resident alien and your income from the Global Income
Fund is not effectively connected with a United States trade or business carried
on by the foreign investor, distributions of net investment income and net
realized short-term capital gains will be subject to a 30% (or lower treaty
rate) United States withholding tax. If you are a non-resident alien
distributions of net realized long-term capital gains, amounts retained by the
Global Income Fund
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<PAGE>
which are designated as undistributed capital gains, and gains realized upon the
sale of shares of the Global Income Fund generally will not be subject to United
States tax unless you are physically present in the United States for more than
182 days during the taxable year and, in the case of gain realized upon the sale
of shares, unless (a) such gain is attributable to an office or fixed place of
business in the United States or (b) you have a tax home in the United States
and such gain is not attributable to an office or fixed place of business
located outside the United States. However, a determination by the Global Income
Fund not to distribute long-term capital gains will cause the Global Income Fund
to incur a U.S. federal tax liability with respect to retained long-term capital
gains, thereby reducing the amount of cash held by the Global Income Fund that
is available for investment, and you may not be able to claim a credit or
deduction with respect to such taxes.
In general, if you are a resident alien or if dividends or distributions
from the Global Income Fund are effectively connected with a United States trade
or business carried on by you, then dividends of net investment income,
distributions of net short-term and long-term capital gains, amounts retained by
the Global Income Fund that are designated as undistributed capital gains and
any gains realized upon the sale of shares will be subject to United States
income tax at the rates applicable to United States citizens or domestic
corporations. If you are a corporation, and your income from the Global Income
Fund is effectively connected with a United States trade or business, you may
also be subject to the 30% (or lower treaty rate) branch profits tax. If you are
entitled to claim the benefits of an applicable tax treaty the tax consequences
to you may be different from those described in this section. You may be
required to provide appropriate documentation to establish your entitlement to
the benefits of such a treaty. You are advised to consult your own tax adviser
with respect to (a) whether your income from the Global Income Fund is or is not
effectively connected with a United States trade or business carried on by you,
(b) whether you may claim the benefits of an applicable tax treaty, and (c) any
other tax consequences to you of an investment in the Global Income Fund.
Notices. You will be notified annually by the Global Income Fund as to the
United States federal income tax status of the dividends, distributions and
deemed distributions made by the Global Income Fund to you. Furthermore, you
will also receive, if appropriate, various written notices after the close of
the Global Income Fund's taxable year regarding the United States federal income
tax status of certain dividends, distributions and deemed distributions that
were paid (or that are treated as having been paid) by the Global Income Fund to
you during the preceding taxable year.
Other Taxation. Distributions also may be subject to additional state,
local and foreign taxes depending on your particular situation.
Fund Investments
Market Discount. If the Global Income Fund purchases a debt security at a
price lower than the stated redemption price of such debt security, the excess
of the stated redemption price over the purchase price is "market discount." If
the amount of market discount is more than a de minimis amount, the Global
Income Fund must include a portion of such market discount as ordinary income
(not capital gain) in each taxable year in which the Global Income Fund owns an
interest in such debt security and receives a principal payment on it. In
particular, the Global Income Fund will be required to allocate that principal
payment first to the portion of the market
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<PAGE>
discount on the debt security that has accrued but has not previously been
includable in income. In general, the amount of market discount that must be
included for each period is equal to the lesser of (i) the amount of market
discount accruing during such period (plus any accrued market discount for prior
periods not previously taken into account) or (ii) the amount of the principal
payment with respect to such period. Generally, market discount accrues on a
daily basis for each day the debt security is held by the Global Income Fund at
a constant rate over the time remaining to the debt security's maturity or, at
the election of the Global Income Fund, at a constant yield to maturity which
takes into account the semi-annual compounding of interest. Gain realized on the
disposition of a market discount obligation must be recognized as ordinary
interest income (not capital gain) to the extent of the "accrued market
discount."
Original Issue Discount. Certain debt securities acquired by the Global
Income Fund may be treated as debt securities that were originally issued at a
discount. Generally, original issue discount is defined as the difference
between the price at which a security was issued and its stated redemption price
at maturity. Although no cash income is actually received by the Global Income
Fund, original issue discount that accrues on a debt security in a given year
generally is treated for federal income tax purposes as interest and, therefore,
such income would be subject to the distribution requirements applicable to
regulated investment companies. In order to maintain its status as a regulated
investment company, the Global Income Fund could therefore be required to incur
debt or to dispose of portfolio securities to generate cash for distribution.
Some debt securities may be purchased by the Global Income Fund at a discount
that exceeds the original issue discount on such debt securities, if any. This
additional discount represents market discount for federal income tax purposes
(see above).
Options, Futures and Forward Contracts. The Global Income Fund's
transactions in options and futures contracts will be subject to special
provisions of the Code that, among other things, may affect the character of
gains and losses realized by the Global Income Fund (i.e., it may affect whether
gains or losses are ordinary or capital), accelerate recognition of income and
defer losses. These rules could therefore affect the character, amount and
timing of distributions to you. These provisions also (a) will require the
Global Income Fund to mark-to-market certain types of the positions in its
portfolio (i.e., treat them as if they were closed out) and (b) may cause the
Global Income Fund to recognize income without receiving cash to pay dividends
or make distributions in amounts necessary to satisfy the distribution
requirements for avoiding income and excise taxes. The Global Income Fund will
monitor its transactions, will make the appropriate tax elections and will make
the appropriate entries in its books and records when it acquires any option,
futures contract or hedged investment in order to mitigate the effect of these
rules and prevent its disqualification as a regulated investment company.
Any regulated futures contracts and certain options (namely, nonequity
options and dealer equity options) in which the Global Income Fund may invest
may be "section 1256 contracts." Gains (or losses) on these contracts generally
are considered to be 60% long-term and 40% short-term capital gains or losses.
Also, section 1256 contracts held by the Global Income Fund at the end of each
taxable year (and on certain other dates prescribed in the Code) are "marked to
market" with the result that unrealized gains or losses are treated as though
they were realized.
Transactions in options, futures and forward contracts undertaken by the
Global Income Fund may result in "straddles" for federal income tax purposes.
The straddle rules may affect the
-24-
<PAGE>
character of gains (or losses) realized from such transactions, and losses
realized by the Global Income Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which the losses are
realized. In addition, certain carrying charges (including interest expense)
associated with positions in a straddle may be required to be capitalized rather
than deducted currently. Certain elections that the Global Income Fund may make
with respect to its straddle positions may also affect the amount, character and
timing of the recognition of gains or losses from the affected positions.
Because only a few regulations implementing the straddle rules have been
promulgated, the consequences of such transactions to the Global Income Fund are
not entirely clear. The straddle rules may increase the amount of short-term
capital gain realized by the Global Income Fund, which is taxed as ordinary
income when distributed to you. Because application of the straddle rules may
affect the character of gains or losses, defer losses and/or accelerate the
recognition of gains or losses from the affected straddle positions, the amount
which must be distributed to you as ordinary income or long-term capital gain
may be increased or decreased substantially as compared to a fund that did not
engage in such transactions.
Constructive Sales. Under certain circumstances, the Global Income Fund
may recognize gain from a constructive sale of an "appreciated financial
position" it holds if it enters into a short sale, forward contract or other
transaction that substantially reduces the risk of loss with respect to the
appreciated position. In that event, the Global Income Fund would be treated as
if it had sold and immediately repurchased the property and would be taxed on
any gain (but not loss) from the constructive sale. The character of gain from a
constructive sale would depend upon the Global Income Fund's holding period in
the property. Loss from a constructive sale would be recognized when the
property was subsequently disposed of, and its character would depend on the
Global Income Fund's holding period and the application of various loss deferral
provisions of the code. Constructive sale treatment does not apply to
transactions closed prior to the end of the 30th day after the close of the
taxable year, if certain conditions are met.
Section 988 Gains or Losses. Gains or losses attributable to fluctuations
in exchange rates which occur between the time the Global Income Fund accrues
income or other receivables or accrues expenses or other liabilities denominated
in a foreign currency and the time the Global Income Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, on disposition of some investments, including debt
securities and certain forward contracts denominated in a foreign currency,
gains or losses attributable to fluctuations in the value of the foreign
currency between the acquisition and disposition of the position also are
treated as ordinary gain or loss. These gains and losses, referred to under the
Code as "section 988" gains or losses, increase or decrease the amount of the
Global Income Fund's investment company taxable income available to be
distributed to you as ordinary income. If section 988 losses exceed other
investment company taxable income during a taxable year, the Global Income Fund
would not be able to make any ordinary dividend distributions, or distributions
made before the losses were realized would be recharacterized as a return of
capital to you, rather than as an ordinary dividend, reducing the basis in your
shares.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN MATERIAL TAX CONSEQUENCES
AFFECTING THE GLOBAL INCOME FUND AND YOURSELF. YOU
-25-
<PAGE>
ARE ADVISED TO CONSULT YOUR OWN TAX ADVISER WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES TO YOU OF AN INVESTMENT IN THE GLOBAL INCOME FUND.
COMMON STOCK
The authorized capital stock of the Global Income Fund is 100,000,000
shares of Common Stock. The Fund has no present intention of offering additional
shares other than pursuant to the offer, except that additional shares may be
issued under the Dividend Reinvestment and Cash Purchase Plan. Other offerings
of shares, if made, will require approval of the board of directors. Any
additional offering will be subject to the requirement of the Investment Company
Act that shares not be sold at a price below the then current net asset value
(exclusive of underwriting discounts and commissions) except in connection with
an offering to existing shareholders or with the consent of the holders of a
majority of the outstanding voting securities, as such term is defined under the
Investment Company Act.
Beneficial Ownership
The Global Income Fund does not know of any persons who may be deemed
beneficial owners of 5% or more of the shares because they possessed or shared
voting or investment power with respect to them. The officers and directors of
the Global Income Fund, in the aggregate, own less than 1% of the outstanding
shares.
FINANCIAL STATEMENTS
The annual report for the fiscal year ended December 31, 1998 and the
unaudited semi-annual report for the fiscal period ended June 30, 1999, which
either accompany this statement of additional information or have previously
been provided to you, are incorporated herein by reference with respect to all
information other than the information set forth in the letter to shareholders
included therein. The Global Income Fund will furnish, without charge, a copy of
these reports upon request to Shareholder Relations at Credit Suisse Asset
Management, One Citicorp Center, 153 East 53rd Street, New York, New York 10022,
(800) 293-1232.
-26-
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
1. Financial Statements
Contained in Part A:
(a) Financial Highlights
Incorporated in Part B by reference to Registrant's December 31,
1998 annual report:
(1) Portfolio of Investments as of December 31, 1998
(2) Statement of Assets and Liabilities as of December 31,
1998
(3) Statement of Operations for the year ended December 31,
1998
(4) Statements of Changes in Net Assets for the years ended
December 31, 1998 and December 31, 1997
(5) Notes to Financial Statements
To be filed by amendment:
(1) Portfolio of Investments as of June 30, 1999
(2) Statement of Assets and Liabilities as of June 30, 1999
(3) Statement of Operations for the fiscal period ended June
30, 1999
(4) Statement of Changes in Net Assets for the fiscal period
ended June 30, 1999
(5) Notes to Financial Statements
2. Exhibits
(a) Articles of Incorporation of the Registrant, as amended
(b) By-Laws of the Registrant
(c) Not applicable
(d) (1) Specimen Certificate for Shares of Common Stock of
the Registrant*
(2) Form of Subscription Certificate*
(3) Form of Notice of Guaranteed Delivery*
(4) Form of DTC Participant Over-Subscription
Certificate*
(5) Form of Nominee Holder Over-Subscription
Certificate*
II-1
<PAGE>
(6) Form of Beneficial Listing*
(7) Subscription Agent Agreement between the
Registrant and BankBoston, N.A. dated July 27,
1999
(e) InvestLinkSM Program
(f) Not Applicable
(g) Investment Advisory Agreement between the Registrant and
BEA Associates (now Credit Suisse Asset Management)
dated June 13, 1995
(h) (1) Dealer Manager Agreement between the Registrant,
Credit Suisse Asset Management and ___________ *
(2) Form of Soliciting Dealer Agreement*
(i) Not Applicable
(j) Custody Agreement between the Registrant and Brown
Brothers Harriman & Co. dated January 29, 1999
(k) (1) Registrar, Transfer and Service Agreement between
the Registrant and BankBoston, N.A. dated October
26, 1998
(2) Administrative and Accounting Agency Agreement
between the Registrant and Brown Brothers Harriman
& Co. dated February 27, 1999
(l) (1) Opinion and Consent of Willkie Farr & Gallagher,
counsel of the Registrant*
(2) Opinion of Venable, Baetjer and Howard, LLP*
(m) Not Applicable
(n) Consent of PricewaterhouseCoopers LLP
(o) Not Applicable
(p) Not Applicable
(q) Not Applicable
- -------------------
*To be filed by amendment.
Item 25. Marketing Arrangements
Not Applicable
II-2
<PAGE>
Item 26. Other Expenses of Issuance, Distribution and Organization
Registration Fees.............................................. $9,000
New York Stock Exchange listing fees........................... 44,300
NASD fees...................................................... 4,000
Printing (other than stock certificates)....................... 100,000
Fees and Expenses of qualification under state
securities laws (including fees of counsel).................. 5,000
Legal fees and expenses........................................ 100,000
Dealer Manager's expenses...................................... 100,000
Accounting fees and expenses................................... 40,000
Information Agent's fees and expenses.......................... 11,000
Subscription Agent's fees and expenses......................... 25,000
Postage........................................................ 25,000
Miscellaneous expenses......................................... 10,700
--------
Total................................................. $475,000
========
Item 27. Persons Controlled by or under Common Control with Registrant
Registrant is not controlled by or under common control with any person
and has no subsidiaries
Item 28. Number of Holders of Securities
1,123 as of July 27, 1999
Item 29. Indemnification
Section 2-418 of the Corporation Law of the State of Maryland gives
Registrant the power to indemnify the directors and officers. Section 2-418
provides in pertinent part:
(B)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is proved that:
(I) The act or omission of the director was material to the
cause of action adjudicated in the proceeding; and
(1) Was committed in bad faith; or
(2) Was the result of active and deliberate
dishonesty; or
(II) The director actually received an improper personal
benefit in money, property or services; or
(III) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
II-3
<PAGE>
(2)(I) Indemnification may be against judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding.
(II) However, if the proceeding was one by or in the right of
the corporation, indemnification may be made only against reasonable
expenses and may not be made in respect of any proceeding in which
the director shall have been adjudged to be liable to the
corporation.
(3)(I) The termination of any proceeding by judgment, order,
or settlement does not create a presumption that the director did
not meet the requisite standard of conduct set forth in this
subsection.
(II) The termination of any proceeding by conviction, or a
plea of nolo contendere or its equivalent, or an entry of an order
of probation prior to judgment, creates a rebuttable presumption
that the director did not meet that standard of conduct.
(C) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis
that personal benefit was improperly received.
(D) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise,
in the defense of any proceeding referred to in subsection (B) of this
section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(I) If it determines a director is entitled to reimbursement
under paragraph (1) of this subsection, the court shall order
indemnification, in which case the director shall be entitled to
recover the expenses in securing such reimbursement; or
(II) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director has met the standards of
conduct set forth in Subsection (B) of this section or has been
adjudged liable under the circumstances described in subsection (c)
of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect to
any proceeding by or in the right of the corporation or in
II-4
<PAGE>
which liability shall have been adjudged in the circumstances
described in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(K)(1) A corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted
against and incurred by such person in any such capacity or arising out of
such person's position, whether or not the corporation would have the
power to indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a trust
Fund, letter of credit, or surety bond, not inconsistent with this
section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
In addition, Sections 3, 4 and 5 of Article VIII of the Global Income
Fund's Articles of incorporation provide that:
Section 3. The Corporation shall indemnify its directors and
officers to the fullest extent allowed, and in the manner provided, by
Maryland law, including the advancing of expenses incurred in connection
therewith. Such indemnification shall be in addition to any other right or
claim to which any director or officer may otherwise be entitled. The
Corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the Corporation,
or who, while a director, officer, employee or agent of the Corporation,
is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, other enterprise,
or employee benefit plan, against any liability asserted against and
incurred by such person in any such capacity or arising out of such
person's position, whether or not the Corporation would have had the power
to indemnify such liability.
Section 4. Nothing in this Article protects or purports to protect,
any director or officer against any liability to the Corporation or its
security holders to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
II-5
<PAGE>
Section 5. Each section or portion thereof of this Article shall be
deemed severable from the remainder, and the invalidity of any such
section or portion shall not affect the validity of the remainder of this
Article.
No amendment, modification or repeal of this Article shall adversely
affect any right or protection of a director or officer that exists at the time
of such amendment, modification or repeal.
The Global Income Fund's By-laws provide that the Fund shall indemnify its
directors and officers against judgments, fines, settlements and expenses to the
fullest extent authorized and in the manner permitted, by applicable federal and
state law and the Fund's Articles of incorporation.
The Fund has purchased insurance insuring its officers and directors
against certain liabilities incurred in their capacities as such, and insuring
the Global Income Fund against any payments which it is obligated to make to
such persons under the foregoing indemnification provisions.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Global Income Fund pursuant to the provisions described under Item 29 above,
or otherwise, the Global Income Fund has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Global Income Fund of expenses
incurred or paid by a director, officer or controlling person of the Global
Income Fund in the successful defense of any action, suit or proceeding) is
asserted against the Global Income Fund by such director, officer or controlling
person in connection with the securities being registered, the Global Income
Fund will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 30. Business and Other Connections of Investment Adviser
Registrant is fulfilling the requirements of this Item 30 to provide a
list of the officers and directors of its investment adviser together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by that entity or those of its officers and
directors during the past two years, by incorporating by reference the
information contained in the Form ADV filed with the SEC pursuant to the
Investment Advisers Act of 1940 by Credit Suisse Asset Management (SEC File No.
801-37170).
Item 31. Location of Accounts and Records
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
c/o Credit Suisse Asset Management
One Citicorp Center, 57th Floor
153 East 53rd Street
New York, NY 10022
(Registrant's Articles of Incorporation and By-Laws)
II-6
<PAGE>
Credit Suisse Asset Management
One Citicorp Center, 57th Floor
153 East 53rd Street
New York, NY 10022
(with respect to its services as investment adviser)
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(with respect to its services as Administrator)
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(with respect to its services as Custodian for the Fund's assets)
BankBoston, N.A.
P.O. Box 1865
Mailstop 45-02-62
Boston, MA 02105-1865
(with respect to its services as dividend-paying agent,
transfer agent and registrar)
Item 32. Management Services
Other than the Administrative and Accounting Agency Agreement with Brown
Brothers Harriman & Co. which has been filed as Exhibit (k)(2) and described in
the prospectus contained in Part A, the Registrant is not a party to any
management-related service contract.
Item 33. Undertakings
(a) The Fund undertakes to suspend offering of the shares covered hereby
until it amends its prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than 10 percent from its net asset value per share as of the
effective date of this Registration Statement, or (2) its net asset value
increases to an amount greater than its net proceeds as stated in the prospectus
contained herein.
(b) The Registrant hereby undertakes to send by, first class mail or other
means designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, any statement of additional information.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the Registration Statement on Form N-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and the State
of New York on the 30th day of July, 1999.
Credit Suisse Asset Management Strategic
Global Income Fund, Inc.
By: /s/ William W. Priest
-----------------------------
William W. Priest
(Chairman of the Board)
Each person whose signature appears below hereby constitutes and appoints
Michael A. Pignataro his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on July 30, 1999 by the
following persons in the capacities indicated:
/s/William W. Priest Director and Chairman of the Board
- ---------------------------------
William W. Priest
/s/Richard J. Lindquist President and Chief Investment Officer
- ---------------------------------
Richard J. Lindquist
/s/Michael A. Pignataro Vice President, Chief Financial
- --------------------------------- Officer and Secretary
Michael A. Pignataro
/s/Enrique R. Arzac Director
- ---------------------------------
Enrique R. Arzac
/s/Lawrence J. Fox Director
- ---------------------------------
Lawrence J. Fox
/s/James S. Pasman, Jr. Director
- ---------------------------------
James S. Pasman, Jr.
II-8
<PAGE>
INDEX TO EXHIBITS
Number Exhibit
(a) -- Articles of Incorporation of the Registrant, as amended
(b) -- By-Laws of the Registrant
(d)(7) -- Subscription Agent Agreement between the Registrant and
BankBoston, N.A. dated July 27, 1999
(e) -- InvestLinkSM Program
(g) -- Investment Advisory Agreement between the Registrant and BEA
Associates (now Credit Suisse Asset Management) dated June 13,
1995
(j) -- Custodian Agreement between the Registrant and Brown Brothers
Harriman & Co. dated January 29, 1999
(k)(1) -- Registrar, Transfer Agency and Service Agreement between the
Registrant and BankBoston, N.A. dated October 26, 1999
(2) -- Administrative and Accounting Agency Agreement between the
Registrant and Brown Brothers Harriman & Co. dated February
27, 1999
(n) -- Consent of PricewaterhouseCoopers LLP
ARTICLES OF INCORPORATION
OF
FIRST BOSTON STRATEGIC INCOME FUND, INC.
ARTICLE I.
I, the incorporator, Warren J. Olsen, whose post office address is 250
Park Avenue, New York, New York 10177, being at least eighteen years of age, am,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, forming a corporation.
ARTICLE II.
The name of the corporation (hereinafter called the "Corporation") is
FIRST BOSTON STRATEGIC FUND.
ARTICLE III.
PURPOSES
The purpose for which the Corporation is formed is to act as a
closed-end, diversified investment company of the management type registered as
such with the Securities and Exchange Commission pursuant to the Investment
Company Act of 1940 and to exercise and generally to enjoy all of the powers,
rights and privileges granted to, or conferred upon, corporations by the General
Laws of the State of Maryland now or hereafter in force.
ARTICLE IV.
ADDRESS IN MARYLAND
The post office address of the place at which the principal office of
the Corporation in the State of Maryland is
<PAGE>
located is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202.
The name of the Corporation's resident agent is The Corporation Trust
Incorporated, and its post office address is 32 South Street, Baltimore,
Maryland 21202. Said resident agent is a corporation of the State of Maryland.
ARTICLE V.
COMMON STOCK
Section 1. The total number of shares of stock which the Corporation
has authority to issue is 100,000,000 shares of common stock of the par value of
$0.001 each, all of one class, having an aggregate par value of $100,000.
Section 2. The presence in person or by proxy of the holders of record
of one-third of the shares of common stock issued and outstanding and entitled
to vote thereat shall constitute a quorum for the transaction of any business at
all meetings of the stockholders except as otherwise provided by law or in these
Articles of Incorporation.
Section 3. Notwithstanding any provision of the General Laws of the
State of Maryland requiring action to be taken or authorized by the affirmative
vote of the holders of a designated proportion greater than a majority of the
shares of common stock, such action shall be valid and effective if taken or
authorized by the affirmative vote of the holders of a majority of the total
number of shares of common stock outstanding and entitled to vote thereupon
pursuant to the provisions of these Articles of Incorporation.
-2-
<PAGE>
Section 4. No holder of shares of common stock of the Corporation
shall, as such holder, have any preemptive right to purchase or subscribe for
any shares of the common stock of the Corporation of any class which it may
issue or sell.
Section 5. All persons who shall acquire common stock in the
Corporation shall acquire the same subject to the provisions of these Articles
of Incorporation.
ARTICLE VI.
DIRECTORS
The initial number of directors of the Corporation shall be three, and
the names of those who shall act as such until the first annual meeting and
until their successors are duly elected and qualify are as follows: Michael F.
Holland, Jay T. Roelof and James L. Freeman. However, the By-Laws of the
Corporation may fix the number of directors at a number other than three and may
authorize the Board of Directors, by the vote of a majority of the entire Board
of Directors, to increase or decrease the number of directors within a limit
specified in the By-Laws, provided that in no case shall the number of directors
be less than three, and to fill the vacancies created by any such increase in
the number of directors. Unless otherwise provided by the By-Laws of the
Corporation, the directors of the Corporation need not be stockholders.
The By-Laws of the Corporation may divide the Directors of the
Corporation into classes and prescribe the tenure of office of the several
classes; but no class shall be elected for a period shorter than that from the
time of the election of such
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<PAGE>
class until the next annual meeting and thereafter for a period shorter than the
interval between annual meetings or for a longer period than five years, and the
term of office of at least one class shall expire each year.
ARTICLE VII.
MANAGEMENT OF THE AFFAIRS OF THE CORPORATION
Section 1. All corporate powers and authority of the Corporation
(except as at the time otherwise provided by statute, by these Articles of
Incorporation or by the By-Laws) shall be vested in and exercised by the Board
of Directors.
Section 2. The Board of Directors shall have the power to adopt, alter
or repeal the By-Laws of the Corporation except to the extent that the By-laws
otherwise provide.
Section 3. The Board of Directors shall have the power from time to
time to determine whether and to what extent, and at what times and places and
under what conditions and regulations, the accounts and books of the Corporation
(other than the stock ledger) or any of them shall be open to the inspection of
stockholders; and no stockholder shall have any right to inspect any account,
book or document of the Corporation except to the extent permitted by statute or
the By-Laws.
Section 4. The Board Of Directors shall have the power to determine,
as provided herein, or if provision is not made herein, in accordance with
generally accepted accounting principles, what constitutes net income, total
assets and the net asset value of the shares of Common Stock of the Corporation.
-4-
<PAGE>
Section 5. The Board of Directors shall have the power to distribute
dividends from funds legally available therefor in such amounts, if any, and in
such manner to the stockholders of record as of such date, as the Board of
Directors may determine.
ARTICLE VII.
Section 1. Provided that reasonable care has been exercised in the
selection of the officers, other employees, investment advisers and managers,
distributors, underwriters, selling agents, custodians, dividend disbursing
agents, transfer agents and registrars, legal counsel, auditors, and other
agents of the Corporation, no director of the Corporation shall be responsible
or liable in any event for any neglect or wrong-doing of any of the same, nor
shall any director be responsible or liable for the act or omission to act of
any other director.
Section 2. Each officer or director or member of any committee
designated by the Board of Directors shall, in the performance of his duties, be
fully protected in relying in good faith upon the books of account of or reports
made to the Corporation by any of its officials or by an independent public
accountant or by an appraiser selected with reasonable care by the Board of
Directors or by any such committee and in relying in good faith upon other
records of the Corporation.
Section 3. The Corporation shall indemnify its directors and officers
to the fullest extent allowed, and in the manner provided, by Maryland law,
including the advancing of expenses incurred in connection therewith. Such
indemnification
-5-
<PAGE>
shall be in Addition to any other right or claim to which any director or
officer may otherwise be entitled. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the Corporation, or who, while a director, officer, employee or
agent of the Corporation, is or was serving at the request of the Corporation as
a director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan, against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's position,
whether or not the Corporation would have had the power to indemnify such
liability.
Section 4. Nothing in this Article protects or purports to protect,
any director or officer against any liability to the Corporation or its security
holders to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Section 5. Each section or portion thereof of this Article shall be
deemed severable from the remainder, and the invalidity of any such section or
portion shall not affect the validity of the remainder of this Article.
ARTICLE IX.
The duration of the Corporation shall be perpetual.
-6-
<PAGE>
ARTICLE X.
AMENDMENTS
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed (including any amendment that
changes the terms of any of the outstanding stock by classification,
reclassification or otherwise), and other provisions that may, under the
statutes of the State of Maryland at the time in force, be lawfully contained in
articles of incorporation may be added or inserted, upon the vote of the holders
of a majority of the shares of common stock of the Corporation at the time
outstanding and entitled to vote, and all rights at any time conferred upon the
stockholders of the Corporation by these Articles of Incorporation are subject
to the provisions of this Article X.
---------------------
The term "Articles of Incorporation" as used herein and in the By-Laws
of the Corporation shall be deemed to mean these Articles of Incorporation as
from time to time amended and restated.
---------------------
I acknowledge this document to be my act, and state under the
penalties of perjury that with respect to all matters and facts herein, to the
best of my knowledge, information and belief such matters and facts are true in
all material respects and that this statement is made under the penalties of
perjury.
January 25, 1988.
/s/ Warren J. Olsen
-------------------
Warren J. Olsen
-7-
<PAGE>
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
THIS IS TO CERTIFY that on this 25th day of January, 1988 before me,
the subscriber a Notary Public in and for the State of New York, personally
appeared WARREN J. OLSEN and acknowledged the foregoing Amended Articles of
Incorporation of First Boston Strategic Income Fund, Inc. to be his act and deed
and that the facts therein stated are truly set forth.
WITNESS my hand and Notarial Seal the day and year last above written.
/s/ [Illegible]
---------------
Notary Public
-8-
<PAGE>
FIRST BOSTON STRATEGIC INCOME FUND, INC.
ARTICLES OF AMENDMENT
First Boston Strategic Income Fund, Inc., a Maryland Corporation
having its principal office in Valley Forge, Pennsylvania (hereinafter called
the Corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby amended by striking
out Article III, Section 3 of the Articles of Incorporation in its entirety and
inserting in lieu thereof the following:
Section 3. The Corporation shall indemnify to the fullest extent
permitted by law (including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter be amended, any person
made or threatened to be made a party to any action, suit or proceeding,
whether criminal, civil, administrative or investigative, by reason of the
fact that such person or such person's testator or intestate is or was a
director or officer of the Corporation or serves or served at the request
of the Corporation any other enterprise as a director or officer. To the
fullest extent permitted by law (including the Investment Company Act of
1940) as currently in effect or as the same may hereafter be amended,
expenses incurred by any such person in defending any such action, suit or
proceeding shall be paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay such expenses if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation. The rights provided to any person by this
Section of this Article shall be enforceable against the Corporation by
such person who shall be presumed to have relied upon it in serving or
continuing to serve as a director or officer as provided above. No
amendment of this Section of this Article shall impair the rights of any
person arising at any time with respect to events occurring prior to such
amendment. For purposes of this Section of this Article, the term
"Corporation shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent)
absorbed by the Corporation in a consolidation or merger; the term "other
enterprise" shall include any corporation, partnership, joint venture,
trust
-9-
<PAGE>
or employee benefit plan; service "at the request of the Corporation" shall
include service as a director or officer of the Corporation which imposes
duties on, or involves services by, such director or officer with respect
to an employee benefit plan, its participants or beneficiaries; any excise
taxes assessed on a person with respect to an employee benefit plan shall
be deemed to be indemnifiable expenses and action by a person with respect
to any employee benefit plan which such person reasonably believes to be in
the interest of the participants and beneficiaries of such plan shall be
deemed to be action not opposed to the best interests of the Corporation.
and it is further amended by adding to the Articles of Incorporation a new
Article III, Section 5 which shall be as follows:
Section 5. A director or officer of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director or officer, except to the extent
such exemption from liability or limitation thereof is not permitted by law
(including the Investment Company Act of 1940) as currently in effect or as
the same may hereafter be amended.
No amendment, modification or repeal of this Section of this Article
shall adversely affect any right or protection of a director or officer
that exists at the time of such amendment, modification or repeal.
and it is further amended by renumbering former Article III, Section 5 to be now
Article III, Section 6.
SECOND: The board of directors of the Corporation on April 13, 1988,
duly adopted a resolution in which was set forth the foregoing amendments
to the charter, declaring that the said amendments of the charter as
proposed were advisable.
THIRD: That the sole stockholder of the Corporation, by unanimous
written consent dated April 15, 1988, duly approved and adopted the said
amendments of the charter.
FOURTH: The articles of amendment shall become effective on the 15th
day of April, 1988.
-10-
<PAGE>
IN WITNESS WHEREOF, First Boston Strategic Income Fund, Inc. has
caused these presents to besigned in its name and on its behalf by its Principal
Executive Officer and witnessed by its Secretary on April 15, 1988.
FIRST BOSTON STRATEGIC INCOME
FUND, INC.
By: /s/ Michael F. Holland
----------------------
Chairman of the Board
and Chief Executive Officer
(Michael F. Holland)
Witness:
/s/ Jay T. Roelof
- --------------------------------------------
Secretary
(Jay T. Roelof)
-11-
<PAGE>
THE UNDERSIGNED, Chairman of the Board and Chief Executive Officer of
First Boston Strategic Income Fund, Inc., who executed on behalf of said
corporation the foregoing Articles of Amendment, of which this certificate
is made a part, hereby acknowledges, in the name and on behalf of said
corporation, the foregoing Articles of Amendment to be the corporate act of
said corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under
the penalties of perjury.
/s/ Michael F. Holland
----------------------
(Michael F. Holland)
-12-
<PAGE>
ARTICLES OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
FIRST BOSTON STRATEGIC INCOME FUND, INC.
THIS IS TO CERTIFY that FIRST BOSTON STRATEGIC INCOME FUND, INC., a
Maryland corporation having its principal office in Baltimore City, Maryland
(hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland, that:
FIRST: The Corporation's Articles of Incorporation are hereby
amended as follows:
The name of the Corporation is hereby changed from
"First Boston Strategic Income Fund, Inc." to "CS First
Boston Strategic Income Fund, Inc."
SECOND: The foregoing amendment to the Articles of Incorporation of
the Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporation in the manner required by law and its Articles
of Incorporation.
IN WITNESS WHEREOF, FIRST BOSTON STRATEGIC INCOME FUND, INC., has
caused these Articles of Amendment to Articles of Incorporation to be signed in
its name and on its behalf by its Chairman, John J. Cook, Jr., and witnessed by
its Assistant Secretary: James P. Pappas, and each of said officers of the
Corporation has also acknowledged these Articles of Amendment to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of said officer's knowledge, information and belief the matters and
facts set forth
<PAGE>
with respect to approval are true in all material respects, all
on May 24, 1994.
FIRST BOSTON STRATEGIC INCOME FUND,
INC.
By: /s/ John J. Cook, Jr.
---------------------------
Name: John J. Cook, Jr.
Title: Chairman & President
Witness:
/s/ James P. Pappas
- -------------------
Name: James P. Pappas
Title: Assistant Secretary
-2-
<PAGE>
CS FIRST BOSTON REALTY, INC.
55 E. 52 STREET
NEW YORK, NY 10055
June 8, 1994
Maryland State Department of
Assessments and Taxation
301 West Preston Street
Baltimore, MD 21201
Re: Consent to use of "CS First Boston" name by First Boston Strategic Income
Fund, Inc.
To the Department of Assessments and Taxation:
We have been informed by CT Corporation System that the use by CS First Boston
Realty, Inc. of the "CS First Boston" designation prevents First Boston
Strategic Income Fund, Inc. from adopting a name change in Maryland to CS First
Boston Strategic Income Fund, Inc. without first obtaining the consent of this
company.
CS First Boston Realty, Inc. hereby authorizes First Boston Strategic Income
Fund, Inc. to use, in Maryland, the "CS First Boston" designation so that it may
amend its name to CS First Boston Strategic Income Fund, Inc.
Please call me at (212) 332-7205 if you have any questions regarding this
authorization.
Sincerely,
/s/ Lori M. Russo
- -----------------
Lori M. Russo,
Assistant Secretary
LMR/pt
cc: Charles Griemsman
(CS First Boston Investment
Management Corporation)
Stuart B. Leichenko
(Sullivan & Cromwell)
<PAGE>
ARTICLES OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
CS FIRST BOSTON STRATEGIC INCOME FUND, INC.
THIS IS TO CERTIFY that CS FIRST BOSTON STRATEGIC INCOME FUND, INC., a
Maryland corporation having its principal office in Baltimore City, Maryland
(hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland, that:
FIRST: Article First of the Corporation's Articles of
Incorporation are hereby amended as follows:
The name of the Corporation is "BEA Strategic Income Fund, Inc."
SECOND: The foregoing amendment to the Articles of Incorporation of
the Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporation in the manner required by law and its Articles
of Incorporation.
IN WITNESS WHEREOF, CS FIRST BOSTON STRATEGIC INCOME FUND, INC., has
caused these Articles of Amendment to Articles of Incorporation to be signed in
its name and on its behalf by its President, Robert Moore, and witnessed by its
Secretary, Hal Liebes, and each of said officers of the Corporation has also
acknowledged these Articles of Amendment to be the corporate act of the
Corporation and has stated under penalties of perjury that to the best of said
officer's knowledge, information and belief
<PAGE>
the matters and facts set forth with respect to approval are true in all
material respects, all on June 13, 1995.
CS FIRST BOSTON STRATEGIC INCOME
FUND, INC.
By: /s/ Robert J. Moore
-------------------
Name: Robert J. Moore
Title: President
Witness:
/s/ Hal Liebes
- --------------
Name: Hal Liebes
Title: Secretary
-2-
<PAGE>
ARTICLES OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
BEA STRATEGIC INCOME FUND, INC.
BEA STRATEGIC INCOME FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation, as heretofore amended, is
further amended to change the name of the Corporation to BEA Strategic Global
Income Fund, Inc. and by striking ARTICLE II of the Articles of Incorporation in
its entirety and inserting in lieu thereof the following:
ARTICLE II
The name of the Corporation (hereinafter called the "Corporation") is
"BEA Strategic Global Income Fund, Inc."
SECOND: The foregoing amendment to the Articles of Incorporation of
the Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporation in the manner and by the vote required by law
and its charter.
<PAGE>
IN WITNESS WHEREOF, BEA STRATEGIC INCOME FUND, INC., has caused these
Articles of Amendment to be signed in its name and on its behalf by its Vice
President and witnessed by its Secretary, as of the 12th day of May, 1997.
The undersigned acknowledges these Articles of Amendment to be the
corporate act of the Corporation and states that, to the best of his knowledge,
information and belief, all matters and facts set forth herein with respect to
the authorization and approval of the Articles of Amendment are true and in all
material respects and that this statement is made under penalties of perjury.
BEA STRATEGIC INCOME FUND, INC.
By: /s/ Wendy S. Setnicka
-------------------------
Name: Wendy S. Setnicka
Title: Vice President
Witness:
/s/ Michael A. Pignataro
- ------------------------
Name: Michael A. Pignataro
Title: Secretary
-2-
<PAGE>
CHANGE OF ADDRESS OF RESIDENT AGENT
The Corporation Trust Incorporated hereby submits the following for the purpose
of changing the address of the resident agent for the business entities on the
attached list:
1. The name of the resident agent is The Corporation Trust Incorporated.
2. The new address of the resident agent is:
32 South Street
Baltimore, Maryland 21202
3. The new address of the resident agent is:
300 East Lombard Street
Baltimore, Maryland 21202
4. Notice of the above changes are being sent to the business entities on the
attached list.
5. The above changes are effective when this document is filed with the
Department of Assessments and Taxation.
/s/ Kenneth J. Uva
- ------------------
Kenneth J. Uva
Assistant Secretary
<PAGE>
ARTICLES OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
BEA STRATEGIC GLOBAL INCOME FUND, INC.
BEA Strategic Global Income Fund, Inc., a Maryland corporation having
its principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The charter of the Corporation, as heretofore amended, is
further amended to change the name of the Corporation to Credit Suisse Asset
Management Strategic Global Income Fund, Inc. and by striking ARTICLE II of the
Articles of Incorporation in its entirety and inserting in lieu thereof the
following:
ARTICLE II
The name of the corporation (hereinafter called the "Corporation") is
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
SECOND: The foregoing amendment to the Articles of Incorporation of
the Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporation in the manner and by the vote required by law
and its charter.
IN WITNESS WHEREOF, Credit Suisse Asset Management Strategic Global
Income Fund, Inc. has caused these Articles of Amendment to be signed in its
name and on its behalf by its Senior Vice President and witnessed by its
Secretary as of the 11th day of May, 1999.
The undersigned acknowledges these Articles of Amendment to be the
corporate act of the Corporation and states
<PAGE>
that, to the best of his knowledge, information and belief, all matters and
facts set forth herein with respect to the authorization and approval of the
Articles of Amendment are true and in all material respects and that this
statement is made under penalties of perjury.
BEA STRATEGIC GLOBAL INCOME FUND, INC.
By: /s/ Hal Liebes
--------------
Name: Hal Liebes
Title: Senior Vice President
WITNESS:
/s/ Michael A. Pignataro
- ------------------------
Name: Michael A. Pignataro
Title: Secretary
-2-
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
A MARYLAND CORPORATION
BY-LAWS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Article I. Stockholders...................................................1
Section 1. Place of Meeting.....................................1
Section 2. Annual Meetings......................................1
Section 3. Special or Extraordinary Meetings....................1
Section 4. Notice of Meetings of Stockholders...................2
Section 5. Notice of Stockholder Business.......................3
Section 6. Record Dates.........................................4
Section 7. Quorum, Adjournment of Meetings......................5
Section 8. Voting and Inspectors................................5
Section 9. Proxies..............................................6
Section 10. Conduct of Stockholders' Meetings...................7
Section 11. Concerning Validity of Proxies,
Ballots, etc........................................7
Section 12. Action without Meeting..............................8
Article II. Board of Directors............................................8
Section 1. Number and Tenure of Office..........................8
Section 2. Director Nominations.................................8
Section 3. Vacancies...........................................10
Section 4. Increase or Decrease in Number of Directors.........11
Section 5. Place of Meeting....................................11
Section 6. Regular Meetings....................................11
Section 7. Special Meetings; Waiver of Notice..................12
Section 8. Quorum..............................................12
Section 9. Executive Committee.................................13
Section 10. Audit Committee.....................................13
Section 11. Other Committees....................................14
Section 12. Telephone Meetings..................................14
Section 13. Action Without a Meeting............................15
Section 14. Compensation of Directors...........................15
Article III. Officers....................................................15
Section 1. Executive Officers..................................15
Section 2. Term of Office......................................16
Section 3. Powers and Duties...................................16
Section 4. Surety Bonds........................................17
Article IV. Capital Stock................................................17
Section 1. Certificates for Shares.............................17
Section 2. Transfer of Shares..................................17
Section 3. Stock Ledgers.......................................18
<PAGE>
<CAPTION>
<S> <C>
Section 4. Transfer Agents and Registrars......................18
Section 5. Lost, Stolen or Destroyed Certificates..............18
Article V. Corporate Seal................................................19
Article VI. Fiscal Year and Accountant...................................19
Section 1. Fiscal Year.........................................19
Section 2. Accountant..........................................19
Article VII. Indemnification.............................................20
Article VIII. Custodian..................................................20
Section 1. Designation of Custodian, Subcustodians.............20
Section 2. Termination of Custodian............................20
Article IX. Conversion to an Open-End Investment Company.................21
Article X. Periodic Repurchase of Shares.................................21
Article XI. Amendment of By-Laws.........................................22
</TABLE>
(ii)
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC INCOME FUND, INC.
Amended and Restated By-Laws
Article I.
STOCKHOLDERS
Section 1. PLACE OF MEETING. All meetings of the Stockholders shall be
held at the principal office of the Corporation in the State of Maryland or at
such other place within the United States as may from time to time be designated
by the Board of Directors and stated in the notice of such meeting.
Section 2. ANNUAL MEETINGS. The annual meeting of the Stockholders of
the Corporation shall be held during the month of May of each year on such date
and at such hour as may from time to time be designated by the Board of
Directors and stated in the notice of such meeting, for the purpose of electing
directors for the ensuing year and for the transaction of such other business as
may properly be brought before the meeting.
Section 3. SPECIAL OR EXTRAORDINARY MEETINGS. Special or extraordinary
meetings of the Stockholders for any purpose or purposes may be called by the
Chairman of the Board, the President or a majority of the Board of Directors,
and shall be called by the Secretary upon receipt of the request in writing
signed by Stockholders holding not less than 25% of the common stock issued and
outstanding and entitled to vote thereat. Such request shall state the purpose
or purposes of the proposed meeting. The Secretary shall inform such
Stockholders of the reasonably estimated costs of preparing and mailing such
notice of meeting and upon payment to the Corporation of such costs, the
<PAGE>
Secretary shall give notice stating the purpose or purposes of the meeting as
required in this Article and by-law to all Stockholders entitled to notice of
such meeting. No special meeting need be called upon the request of the holders
of shares entitled to cast less than a majority of all votes entitled to be cast
at such meeting to consider any matter which is substantially the same as a
matter voted upon at any special meeting of Stockholders held during the
preceding twelve months.
Section 4. NOTICE OF MEETINGS OF STOCKHOLDERS. Not less than ten days'
and not more than ninety days' written or printed notice of every meeting of
Stockholders, stating the time and place thereof (and the general nature of the
business proposed to be transacted at any special or extraordinary meeting),
shall be given to each stockholder entitled to vote thereat by leaving the same
with such stockholder or at such stockholder's residence or usual place of
business or by mailing it, postage prepaid, and addressed to such stockholder at
such stockholder's address as it appears upon the books of the Corporation. If
mailed, notice shall be deemed to be given when deposited in the United States
mail addressed to the stockholder as aforesaid.
No notice of the time, place or purpose of any meeting of Stockholders
need be given to any stockholder who attends in person or by proxy or to any
stockholder who, in writing executed
-2-
<PAGE>
and filed with the records of the meeting, either before or after the holding
thereof, waives such notice.
Section 5. NOTICE OF STOCKHOLDER BUSINESS. At any annual or special
meeting of the Stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual or special meeting, the business must be (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (ii) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (iii) otherwise properly brought before
the meeting by a Stockholder.
For business to be properly brought before an annual or special
meeting by a Stockholder, the Stockholders must have given timely notice thereof
in writing to the Secretary of the Company. To be timely, any such notice must
be delivered to or mailed and received at the principal executive offices of the
Company not later than 60 days prior to the date of the meeting; provided,
however that if less than 70 days' notice or prior public disclosure of the date
of the meeting is given or made to Stockholders, any such notice by a
Stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which notice of the date of the
annual or special meeting was given or such public disclosure was made.
Any such notice by a Stockholder shall set forth as to each matter the
Stockholder proposes to bring before the annual
-3-
<PAGE>
or special meeting (i) a brief description of the business desired to be brought
before the annual or special meeting and the reasons for conducting such
business at the annual or special meeting, (ii) the name and address, as they
appear on the Company's books, of the Stockholder proposing such business, (iii)
the class and number of shares of the capital stock of the Company which are
beneficially owned by the Stockholder, and (iv) any material interest of the
Stockholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no business
shall be conducted at any annual or special meeting except in accordance with
the procedures set forth in this Section 5. The chairman of the annual or
special meeting shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 5, and, if he should so determine, he shall
so declare to the meeting that any such business not properly brought before the
meeting shall not be considered or transacted.
Section 6. RECORD DATES. The Board of Directors may fix, in advance, a
date not exceeding ninety days preceding the date of any meeting of
Stockholders, any dividend payment date or any date for the allotment of rights,
as a record date for the determination of the Stockholders entitled to notice of
and to vote at such meeting or entitled to receive such dividends or rights, as
the case may be; and only Stockholders of record on such date shall be entitled
to notice of and to vote at such
-4-
<PAGE>
meeting or to receive such dividends or rights, as the case may be. In the case
of a meeting of Stockholders, such date shall not be less than ten days prior to
the date fixed for such meeting.
Section 7. QUORUM, ADJOURNMENT OF MEETINGS. The presence in person or
by proxy of the holders of record of a majority of the shares of the common
stock of the Corporation issued and outstanding and entitled to vote thereat
shall constitute a quorum at all meetings of the Stockholders except as
otherwise provided in the Articles of Incorporation. If, however, such quorum
shall not be present or represented at any meeting of the Stockholders, the
holders of a majority of the stock present in person or by proxy shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote at such meeting shall be present. At such adjourned meeting at which the
requisite amount of stock entitled to vote thereat shall be represented any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 8. VOTING AND INSPECTORS. At all meetings, Stockholders of
record entitled to vote thereat shall have one vote for each share of common
stock standing in his name on the books of the Corporation (and such
Stockholders of record holding fractional shares, if any, shall have
proportionate voting
-5-
<PAGE>
rights) on the date for the determination of Stockholders entitled to vote at
such meeting, either in person or by proxy.
All questions shall be decided by a majority of the votes cast at a
duly constituted meeting, except for all elections which shall be by a plurality
of votes cast and except as otherwise provided by statute or by the Articles of
Incorporation or by these By-Laws.
At any election of Directors, the Chairman of the meeting may, and
upon the request of the holders of ten per cent (10%) of the stock entitled to
vote at such election shall, appoint two inspectors of election who shall first
subscribe an oath or affirmation to execute faithfully the duties of inspectors
at such election with strict impartiality and according to the best of their
ability, and shall after the election make a certificate of the result of the
vote taken. No candidate for the office of Director shall be appointed such
Inspector.
Section 9. PROXIES. Any stockholder entitled to vote at any meeting of
Stockholders may vote either in person or by proxy. Unless a proxy provides
otherwise, it is not valid more than eleven months after its date. Every proxy
shall be in writing and signed by the stockholder or his authorized agent or be
in such other form as may be permitted by the Maryland General Corporation Law,
including electronic transmissions from the stockholder or his authorized agent.
Authorization may be given
-6-
<PAGE>
orally, in writing, by telephone, by electronic transmission, or by other means
of communication. A copy, facsimile transmission or other reproduction of a
writing or transmission may be substituted for the original writing or
transmission for any purpose for which the original writing or transmission
could be used. Every proxy shall be dated, but need not be sealed, witnessed or
acknowledged. All proxies shall be delivered to the Secretary of the
Corporation, or to the person acting as Secretary of the Meeting being voted. A
proxy purporting to be executed by or on behalf of a stockholder shall be valid
unless challenged at or prior to its exercise;
Section 10. CONDUCT OF STOCKHOLDERS' MEETINGS. The meetings of the
Stockholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President, or if he is not present, by a Vice-President, or
if none of them is present, by a Chairman to be elected at the meeting. The
Secretary of the Corporation, if present, shall act as a Secretary of such
meetings, or if he is not present, an Assistant Secretary shall so act; if
neither the Secretary nor the Assistant Secretary is present, then the meeting
shall elect its Secretary.
Section 11. CONCERNING VALIDITY OF PROXIES, BALLOTS, ETC. At every
meeting of the Stockholders, all proxies shall be received and taken in charge
of and all ballots shall be received and canvassed by the Secretary of the
meeting, who shall decide all questions touching the qualification of voters,
the validity
-7-
<PAGE>
of the proxies and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed by the Chairman of the meeting,
in which event such inspectors of election shall decide all such questions.
Section 12. ACTION WITHOUT MEETING. Any action to be taken by
Stockholders may be taken without a meeting if (1) all Stockholders entitled to
vote on the matter consent to the action in writing, (2) all Stockholders
entitled to notice of the meeting but not entitled to vote at it sign a written
waiver of any right to dissent and (3) said consents and waivers are filed with
the records of the meetings of Stockholders. Such consent shall be treated for
all purposes as a vote at the meeting.
Article II. BOARD OF DIRECTORS
Section 1. NUMBER AND TENURE OF OFFICE. The business and affairs of
the Corporation shall be conducted and managed by a Board of Directors of not
less than three nor more than six Directors, as may be determined from time to
time by vote of a majority of the Directors then in office. Directors need not
be Stockholders.
Section 2. DIRECTOR NOMINATIONS. Only persons who are nominated in
accordance with the procedures set forth in this Section 2 shall be eligible for
election or re-election as Directors. Nominations of persons for election or
re-election to the Board of Directors of the Corporation may be made at a
meeting of Stockholders by or at the direction of the Board of Directors or
-8-
<PAGE>
by any Stockholder of the Corporation who is entitled to vote for the election
of such nominee at the meeting and who complies with the notice procedures set
forth in this Section 2.
Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made pursuant to timely notice delivered in writing
to the Secretary of the Corporation. To be timely, any such notice by a
Stockholder must be delivered to or mailed and received at the principal
executive offices of the Corporation not later than 60 days prior to the
meeting; provided, however, that if less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to Stockholders, any such
notice by a Stockholder to be timely must be so received not later than the
close of business on the 10th day following the day on which notice of the date
of the meeting was given or such public disclosure was made.
Any such notice by a Stockholder shall set forth (i) as to each person
whom the Stockholder proposes to nominate for election or re-election as a
Director, (A) the name, age, business address and residence address of such
person, (B) the principal occupation or employment of such person, (C) the class
and number of shares of the capital stock of the Corporation which are
beneficially owned by such person and (D) any other information relating to such
person that is required to be disclosed in solicitations of proxies for the
election of Directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934 or any successor regulation thereto (including without limitation
such persons' written consent to
-9-
<PAGE>
being named in the proxy statement as a nominee and to serving as a Director if
elected and whether any person intends to seek reimbursement from the
Corporation of the expenses of any solicitation of proxies should such person be
elected a Director of the Corporation); and (ii) as to the Stockholder giving
the notice (A) the name and address, as they appear on the Corporation's books,
of such Stockholder and (B) the class and number of shares of the capital stock
of the Corporation which are beneficially owned by such Stockholder. At the
request of the Board of Directors any person nominated by the Board of Directors
for election as a Director shall furnish to the Secretary of the Corporation
that information required to be set forth in a Stockholder's notice of
nomination which pertains to the nominee.
If a notice by a Stockholder is required to be given pursuant to this
Section 2, no person shall be entitled to receive reimbursement from the
Corporation of the expenses of a solicitation of proxies for the election as a
Director of a person named in such notice unless such notice states that such
reimbursement will be sought from the Corporation. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by the
Bylaws, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded for all purposes.
Section 3. VACANCIES. In case of any vacancy in the Board of Directors
through death, resignation or other cause, other than an increase in the number
of Directors, a majority of
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<PAGE>
the remaining Directors, although a majority is less than a quorum, by an
affirmative vote, may elect a successor to hold office until the next annual
meeting of Stockholders or until his successor is chosen and qualifies.
Section 4. INCREASE OR DECREASE IN NUMBER OF DIRECTORS. The Board of
Directors, by the vote of a majority of the entire Board, may increase the
number of Directors and may elect Directors to fill the vacancies created by any
such increase in the number of Directors until the next annual meeting or until
their successors are duly chosen and qualified. The Board of Directors, by the
vote of a majority of the entire Board, may likewise decrease the number of
Directors to a number not less than three.
Section 5. PLACE OF MEETING. The Directors may hold their meetings,
have one or more offices, and keep the books of the Corporation, inside or
outside the State of Maryland, at any office or offices of the Corporation or at
any other place as they may from time to time by resolution determine, or in the
case of meetings, as they may from time to time by resolution determine or as
shall be specified or fixed in the respective notices or waivers of notice
thereof.
Section 6. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such time and on such notice as the Directors may
from time to time determine.
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<PAGE>
The annual meeting of the Board of Directors shall be held as soon as
practicable after the annual meeting of the Stockholders for the election of
Directors.
Section 7. SPECIAL MEETINGS; WAIVER OF NOTICE. Special meetings of the
Board of Directors may be held from time to time upon call of the Chairman of
the Board, the President, the Secretary or two or more of the Directors, by oral
or telegraphic or written notice duly served on or sent or mailed to each
Director not less than one day before such meeting. No notice need be given to
any Director who attends in person or to any Director who, in writing executed
and filed with the records of the meeting either before or after the holding
thereof, waives such notice. Such notice or waiver of notice need not state the
purpose or purposes of such meeting.
Section 8. QUORUM. One-third of the Directors then in office shall
constitute a quorum for the transaction of business, provided that a quorum
shall in no case be less than two Directors. If at any meeting of the Board
there shall be less than a quorum present, a majority of those present may
adjourn the meeting from time to time until a quorum shall have been obtained.
The act of the majority of the Directors present at any meeting at which there
is a quorum shall be the act of the Directors, except as may be otherwise
specifically provided by statute or by the Articles of Incorporation or by these
By-Laws.
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<PAGE>
Section 9. EXECUTIVE COMMITTEE. The Board of Directors may, by the
affirmative vote of a majority of the whole Board, appoint from the Directors an
Executive Committee to consist of one or more Directors as the Board may from
time to time determine. The Chairman of the Committee shall be elected by the
Board of Directors. The Board of Directors by such affirmative vote shall have
power at any time to change the members of such Committee and may fill vacancies
in the Committee by election from the Directors. When the Board of Directors is
not in session, to the extent permitted by law the Executive Committee shall
have and may exercise any or all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation. The Executive
Committee may fix its own rules of procedure, and may meet when and as provided
by such rules or by resolution of the Board of Directors, the presence of a
majority shall be necessary to constitute a quorum if the Executive Committee
has more than two members. During the absence of a member of the Executive
Committee, the remaining members, whether or not they constitute a quorum, may
appoint a member of the Board of Directors to act in his place.
Section 10. AUDIT COMMITTEE. There shall be an Audit Committee of two
or more Directors who are not "interested persons" of the Company (as defined in
the Investment Company Act of 1940, as amended) appointed by the Board who may
meet at stated times or on notice to all by any of their own number. The
Committee's duties shall include reviewing both the audit and
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<PAGE>
other work of the Company's independent accountants, recommending to the Board
of Directors the independent accountants to be retained, and reviewing generally
the maintenance and safekeeping of the Company's records and documents.
Section 11. OTHER COMMITTEES. The Board of Directors, by the
affirmative vote of a majority of the whole Board, may appoint from the
Directors other committees which shall in each case consist of one or more
Directors and shall have and may exercise such powers as the Board may determine
in the resolution appointing them. A majority of all the members of any such
committee which has more than two members may determine its action and fix the
time and place of its meetings, unless the Board of Directors shall otherwise
provide. The Board of Directors shall have power at any time to change the
members and powers of any such committee, to fill vacancies and to discharge any
such committee.
Section 12. TELEPHONE MEETINGS. Members of the Board of Directors or a
committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Participation
in a meeting by these means constitutes presence in person at the meeting,
except that for purposes of actions required to be made "in person" by the
Investment Company Act of 1940, participation by such means shall not constitute
"in person" participation.
-14-
<PAGE>
Section 13. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting, if a written consent to such action is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of the Board or
such committee.
Section 14. COMPENSATION OF DIRECTORS. No Director shall receive any
stated salary or fees from the Corporation for his services as such if such
Director is, otherwise than by reason of being such Director, an interested
person (as such term is defined by the Investment Company Act of 1940, as
amended) of the Corporation or of its investment manager or principal
underwriter. Except as provided in the preceding sentence, Directors shall be
entitled to receive such compensation from the Corporation for their services as
may from time to time be voted by the Board of Directors.
Article III. Officers
Section 1. EXECUTIVE OFFICERS. The executive officers of the
Corporation shall be chosen by the Board of Directors as soon as may be
practicable after the annual meeting of the Stockholders. These may include a
Chairman of the Board of Directors (who shall be a Director) and shall include a
President, one or more Vice-Presidents (the number thereof to be determined by
the Board of Directors), a Secretary and a Treasurer. The Board of Directors or
the Executive Committee may
-15-
<PAGE>
also in its discretion appoint Assistant Secretaries, Assistant Treasurers and
other officers, agents and employees, who shall have such authority and perform
such duties as the Board or the Executive Committee may determine. The Board of
Directors may fill any vacancy which may occur in any office. Any two offices,
except those of President and Vice-President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more than
one capacity, if such instrument is required by law or these By-Laws to be
executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. The term of office of all officers shall be
one year and until their respective successors are chosen and qualified. Any
officer may be removed from office at any time with or without cause by the vote
of a majority of the whole Board of Directors. Any officer may resign his office
at any time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary, unless otherwise specified
therein, such resignation shall take effect upon delivery.
Section 3. POWERS AND DUTIES. The officers of the Corporation shall
have such powers and duties as generally pertain to their respective offices, as
well as such powers and duties as may from time to time be conferred by the
Board of Directors or the Executive Committee.
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<PAGE>
Section 4. SURETY BONDS. The Board of Directors may require any
officer or agent of the Corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940, as amended,
and the rules and regulations of the Securities and Exchange Commission) to the
Corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his duties
to the Corporation, including responsibility for negligence and for the
accounting of any of the Corporation's property, fund or securities that may
come into his hands.
Article IV. CAPITAL STOCK
Section 1. CERTIFICATES FOR SHARES. Each stockholder of the
Corporation shall be entitled to a certificate or certificates for the full
shares of stock of the Corporation owned by him in such form as the Board may
from time to time prescribe.
Section 2. TRANSFER OF SHARES. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender and
cancellation of certificates, if any, for the same number of shares, duly
endorsed or accompanied by proper instruments of assignment and transfer, with
such proof of the authenticity of the signature as the Corporation or its agents
may reasonably require; in the case
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<PAGE>
of shares not represented by certificates, the same or similar requirements may
be imposed by the Board of Directors.
Section 3. STOCK LEDGERS. The stock ledgers of the Corporation,
containing the names and addresses of the Stockholders and the number of shares
held by them respectively, shall be kept at the principal offices of the
Corporation or, if the Corporation employs a Transfer Agent, at the offices of
the Transfer Agent of the Corporation.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the Corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of
Directors or the Executive Committee may determine the conditions upon which a
new certificate of stock of the Corporation of any class may be issued in place
of a certificate which is alleged to have been lost, stolen or destroyed; and
may, in its discretion, require the owner of such certificate or such
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<PAGE>
owner's legal representative to give bond, with sufficient surety, to the
Corporation and each Transfer Agent, if any, to indemnify it and each such
Transfer Agent against any and all loss or claims which may arise by reason of
the issue of a new certificate in the place of the one so lost, stolen or
destroyed.
Article V. CORPORATE SEAL
The Board of Directors may provide for a suitable corporate seal, in
such form and Credit Suisse Asset Managementring such inscriptions as it may
determine.
Article VI. FISCAL YEAR AND ACCOUNTANT
Section 1. FISCAL YEAR. The fiscal year of the corporation, unless
otherwise ordered by the Board of Directors, shall begin on the first day of
January and shall end on the last day of December in each year.
Section 2. ACCOUNTANT. The Corporation shall employ an independent
public accountant or a firm of independent public accountants as its Accountants
to examine the accounts of the Corporation and to sign and certify financial
statements filed by the Corporation. The employment of the Accountant shall be
conditioned upon the right of the Corporation to terminate the employment
forthwith without any penalty by vote of a majority of the outstanding voting
securities at any Stockholders' meeting called for that purpose.
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<PAGE>
Article VII. INDEMNIFICATION
The Corporation shall indemnify its directors and officers against
judgments, fines, settlements and expenses to the fullest extent authorized and
in the manner permitted, by applicable federal and state law and the Articles of
Incorporation of the Corporation.
Article VIII. CUSTODIAN
Section 1. DESIGNATION OF CUSTODIAN, SUBCUSTODIANS. The Corporation
shall have as custodian or custodians one or more trust companies or banks of
good standing, each having a capital, surplus and undivided profits aggregating
not less than fifty million dollars ($50,000,000), and, to the extent required
by the Investment Company Act of 1940, as amended, the funds and securities held
by the Corporation shall be kept in the custody of one or more such custodians,
provided such custodian or custodians can be found ready and willing to act, and
further provided that the Corporation may use as subcustodians, for the purpose
of holding any foreign securities and related funds of the Corporation, such
foreign banks as the Board of Directors may approve and as shall be permitted by
law.
Section 2. TERMINATION OF CUSTODIAN. The Corporation shall upon the
resignation or inability to serve of its custodian or upon change of the
custodian:
(i) in case of such resignation or inability to serve, use its best
efforts to obtain a successor custodian;
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<PAGE>
(ii) require that the cash and securities owned by the Corporation be
delivered directly to the successor custodian; and
(iii) in the event that no successor custodian can be found, submit to
the Stockholders before permitting delivery of the cash and securities
owned by the Corporation otherwise than to a successor custodian, the
question whether or not this Corporation shall be liquidated or shall
function without a custodian.
Article IX. CONVERSION TO AN OPEN-END INVESTMENT COMPANY
If, for a fiscal quarter during or after January 1, 1994, the average
discount from net asset value at which shares of the Company's Common Stock have
traded is substantial in the determination of the Board of Directors, the Board
of Directors may consider, at its next regularly scheduled quarterly meeting,
taking actions designed to eliminate the discount, including amendments to the
Company's Articles of Incorporation to convert the Company into an open-end
investment company.
Article X. PERIODIC REPURCHASE OF SHARES
If, at any time after the initial public offering of the
Company's shares, the average discount from net asset value at which shares of
the Company's Common Stock have traded is substantial in the Determination of
the Board of Directors, the Board of Directors will consider, at its next
regularly scheduled
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<PAGE>
quarterly meeting, authorizing periodic repurchases of shares designed to
eliminate the discount.
Article XI. AMENDMENT OF BY-LAWS
Except as provided in the next succeeding sentence and in the Articles
of Incorporation, all Bylaws of the Corporation, whether adopted by the Board of
Directors or the Stockholders, shall be subject to amendment, alteration or
repeal, and new Bylaws may be made, by the affirmative vote of a majority of
either: (a) the holders of record of the outstanding shares of stock of the
Corporation entitled to vote, at any annual or special meeting, the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal or new Bylaw; or (b) the Directors, at any regular
or special meeting the notice or waiver of notice of which shall have specified
or summarized the proposed amendment, alteration, repeal or new Bylaw. The
provisions of Article I Section 5, Article II Section 1 and Article III Section
2 of these Bylaws shall be subject to amendment, alteration or repeal by the
affirmative vote of either: (i) the holders of record of 75% of the outstanding
shares of stock of the Corporation entitled to vote, at any annual or special
meeting, the notice or waiver of notice of which shall have specified or
summarized the proposed amendment, alteration or repeal or (ii) 75% of the
Directors then in office at any regular or special meeting the notice or waiver
of notice of which shall have specified or summarized the proposed amendment,
alteration or repeal.
-22-
<PAGE>
As of May 4, 1999.
-23-
BANKBOSTON, N.A.
FEE AGREEMENT
TO SERVE
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
AS
SUBSCRIPTION AGENT
This Agreement sets forth the terms and conditions under which BankBoston, N.A.
("BankBoston") will serve as Subscription Agent, pursuant to the terms and
conditions set forth in the Prospectus of Credit Suisse Asset Management
Strategic Global Income Fund, Inc. with respect to the Rights Offering, as the
same may be amended or supplemented.
A. TERM
The term of this Agreement shall be for a period of six (6) months,
commencing from the effective date of this transaction, ______________.
B. FEES FOR SERVICES
For the services set forth in Section C hereof provided by BankBoston
under this Agreement, Credit Suisse Asset Management Strategic Global
Income Fund, Inc. will be charged as follows:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
$ 10,000.00 Project Management Fee*
$ 2.00 Per subscription form issued and mailed
$ 9.00 Per subscription processed registered and beneficial
$ 12.50 Per defective subscription form received and processed
$ 15.00 Per Notice of Guaranteed Delivery received
$ 1.75 Per refund check issued and mailed
$ 4.50 Per invoice mailed
$ 2.25 Subsequent cash management
$ 2.75 Per sale of right
$ 2.00 Per broker split certificate issued
$ 15.00 Per withdrawal of subscription certificate, if applicable
$ 1,000.00 New York window fee upon expiration
$ 3,000.00 Per offer extension
-----------------------------------------------------------------------
-----------------------------------------------------------------------
*Excludes out-of-pocket expenses as described in Section D, "Items Not Covered"
<PAGE>
C. STANDARD SERVICES
BankBoston agrees to provide the following services to Credit Suisse
Asset Management Strategic Global Income Fund, Inc. at the fees set
forth in Section B:
1. Coordinating all services related to the subscription
2. Coordinating design of subscription form
3. Calculating Rights to be distributed to each shareholder
according to the formula approved by Credit Suisse Asset
Management Strategic Global Income Fund, Inc.
4. Issuing and mailing subscription forms to registered shareholders
5. Tracking and reporting the number of exercises made, as required
6. Processing Rights received and exercised
7. Providing receipt summation of checks received
8. Investing all checks received
9. Affixing legends to appropriate stock certificates, where
applicable
10. Issuing and mailing stock certificates or checks
11. Handling shareholder inquiries related to the offering as
referred by the Information Agent
12. Calculating, issuing and mailing of proration and/or
over-subscription checks if applicable.
D. ITEMS NOT COVERED
- Items not specified in the "Services Covered" section set
forth in this Agreement, including any services associated
with new duties, legislation or regulatory fiat which become
effective after the date of this Agreement (these will be
provided on an appraisal basis)
- All out-of-pocket expenses such as telephone line charges,
overprinting, certificates, checks, postage, stationery, wire
transfers, and excess material disposal (these will be billed
as incurred)
- Reasonable legal review fees if referred to outside counsel;
provided that BankBoston shall notify Fund in writing
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<PAGE>
of its intention to use outside counsel
- Overtime charges assessed in the event of late delivery of
material for mailings unless the target mail date is
rescheduled
- Establishment of escrow services or payment of interest to
fund or shareholders.
E. LIMITATIONS
- Agreement based upon document review and information known at
this time about the transaction
- Significant changes made in the terms or requirements of this
transaction could require modifications to this Agreement
- Agreement must be executed prior to the initial mailing
- Agreement based upon approximately 1,123 shareholders of
record
- Material to be mailed to shareholders must be received no less
than five (5) business days prior to the start of the mailing
project
F. PAYMENT FOR SERVICES
It is agreed that an invoice for the Project Management Fee will be
rendered and payable on the effective date of the transaction. An
invoice for any out-of-pockets and per item fees realized will be
rendered and payable on a monthly basis, except for postage expenses in
excess of $5,000. Funds for such mailing expenses must be received one
(1) business day prior to the scheduled mailing date.
G. CONFIDENTIALITY
The information contained in this Agreement is confidential and
proprietary in nature. By receiving this Agreement, Credit Suisse Asset
Management Strategic Global Income Fund, Inc. agrees that none of its
directors, officers, employees or agents will divulge, furnish or make
accessible to any third party without the prior written consent of
BankBoston, except as permitted by the next sentence, any part of this
Agreement or information in connection therewith which has been or may
be made available to it. In this connection, Credit Suisse Asset
Management Strategic Global Income Fund, Inc. agrees that it will limit
access to the Agreement and such information to only those officers or
employees with responsibilities for analyzing the Agreement and to such
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<PAGE>
independent consultants hired expressly for the purpose of assisting in
such analysis. In addition, Credit Suisse Asset Management Strategic
Global Income Fund, Inc. agrees that any persons to whom such
information is properly disclosed shall be informed of the confidential
nature of the Agreement and the information relating thereto, and shall
be directed to treat the same appropriately.
H. ASSIGNABILITY
BankBoston may, without consent on the part of Credit Suisse Asset
Management Strategic Global Income Fund, Inc. subcontract for the
performance hereof with any entity with which BankBoston is affiliated,
which entity is duly registered as a transfer agent pursuant to Section
17A(c)(1) of the Securities Exchange Act of 1934; provided, however,
that BankBoston shall be as fully responsible to Credit Suisse Asset
Management Strategic Global Income Fund, Inc. for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
I. CONTRACT ACCEPTANCE
In witness whereof, the parties hereto have caused this Agreement to be
executed by their respective officers, hereunto duly agreed and
authorized, as of the effective date of this Agreement.
BANKBOSTON, N.A. CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND,
INC.
By:/s/John J. Regan By:/s/ Michael A. Pignataro
---------------- ------------------------
John J. Regan
Title: Vice President Title: Chief Financial Officer
-------------- -----------------------
Date: JULY 26, 1999 Date: JULY 27, 1999
------------- -------------
-4-
INVESTLINK-SM-*
A STOCK PURCHASE PROGRAM
AVAILABLE TO INVESTORS OF
CREDIT SUISSE ASSET MANAGEMENT
STRATEGIC GLOBAL INCOME FUND, INC.
[YOUR LOGO HERE]
- --------------------------------------------------------------------------------
*THE "INVESTLINK" PROGRAM IS SPONSORED AND ADMINISTERED BY BANKBOSTON, N.A., NOT
BY YOUR CORPORATION (THE "COMPANY").
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC
GLOBAL INCOME FUND, INC.
DESCRIPTION OF "INVESTLINK"-SM-* PROGRAM
BankBoston will act as Program Administrator (the "Program
Administrator") of the InvestLink-SM- Program (the "Program"). The following
questions and answers describe the provisions of the Program, and supplement the
information contained in the Terms and Conditions Section of this brochure for
Credit Suisse Asset Management Income Fund, Inc. (the "Fund").
PURPOSE
1. WHAT IS THE PURPOSE OF THE PROGRAM?
The purpose of the Program is to provide interested investors
with a simple and convenient way to invest funds and reinvest dividends in
Shares of the Funds common stock ("Shares") at prevailing prices, with reduced
brokerage commissions and fees.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PROGRAM?
(a) Participants can acquire Shares at minimal cost.
(b) Participation provides a convenient means of increasing
your holding of the Fund's Shares.
(c) Your account will be credited with both full and
fractional Shares.
(d) Your regular investments give you the long-term investing
advantage of dollar-cost averaging.
(e) Your personal record maintenance is simplified through an
account statement mailed to you by the Program Administrator following each
purchase of your account.
* "INVESTLINK" IS A SERVICE MARK OF EQUISERVE.
<PAGE>
(f) The Program Administrator will issue certificates for full
Shares held in your account on your written instructions.
(g) You may withdraw your Shares at any time or you may
request the Program Administrator to sell your Shares.
(h) The Program provides for convenient monthly deductions
from your checking/savings account.
PARTICIPATION
3. WHO IS ELIGIBLE TO PARTICIPATE?
Any interested investor may participate in the Program.
4. HOW DOES AN INTERESTED INVESTOR PARTICIPATE?
An interested investor may join the Program by reading this
Description and the Terms and Conditions, completing and signing the Enrollment
form and returning it to BankBoston, which is acting as the Program
Administrator. An Enrollment form and a postage-paid envelope are enclosed with
this brochure for that purpose. Additional forms may be obtained at any time by
calling the Program Administrator at one of the telephone numbers listed below:
- - First Time Investors - 1-800-338-1176
- - Current Shareholders - 1-800-730-6001
If you are already a registered shareholder, your account
registration appears on the Enrollment form and you should be sure to sign
exactly as your name appears on your Share certificates. Beneficial owners whose
shares are registered in the name of a bank, broker or other nominee must make
arrangements with such bank, broker or nominee to have the shares transferred
into their own names if they wish to have dividends on such shares paid to the
Program Administrator pursuant to the Program.
As a Program participant, you may deposit your Shares
certificates in your Program account where the certificates will be protected
against loss, theft or damage. Simply send the certificates (via registered
mail) to the Program Administrator. Be sure to include a written request that
the shares be added to your Program account or use the tear-off portion of your
account statement for this purpose. The Program Administrator will hold your
shares in book-entry form until you choose to withdraw shares or terminate your
participation in the Program.
5. WHEN MAY AN INTERESTED INVESTOR JOIN THE PROGRAM?
<PAGE>
An interested investor may join the Program at any time.
Purchases of shares with funds from your cash payment or automatic account
deduction will begin on the next day on which funds are invested as provided in
No. 10 below. If you select the dividend reinvestment option, automatic
investment of dividends will begin with the next dividend payable after the
Program Administrator receives your Enrollment form, provided it is received
prior to the dividend record date. If your Enrollment form arrives after the
record date, automatic investment of dividends will begin with the following
dividend. Once in the Program, you will remain a participant until you terminate
your participation or sell all shares held in your Program account, or your
account is terminated by the Program Administrator as provided in No. 16 below.
6. WHAT DOES THE ENROLLMENT FORM PROVIDE?
The Enrollment form provides space for you to indicate your
election of various investment options, as outlined below:
If you want "AUTOMATIC BANK ACCOUNT DEDUCTION," funds in the amount you
specify will be charged to your bank account each month and the Program
Administrator will invest such funds to purchase additional Shares of the Fund.
Please complete the Automatic Bank Account Deduction section on the form or call
the Program Administrator at one of the telephone numbers listed below to
request an Automatic Bank Account Deduction form:
- - First Time Investors - 1-800-338-1176
- - Current Shareholders - 1-800-730-6001
(a) If you select "FULL DIVIDEND REINVESTMENT," the Program
Administrator will elect to receive all cash dividends payable on Shares held in
your Program account and on any other Shares registered in your name. In
addition, the Program Administrator will invest in Shares of the Fund all of
your cash dividends on all of the Shares then or subsequently registered in your
name or held in your Program account.
(b) If you select "PARTIAL DIVIDEND REINVESTMENT," the Program
Administrator will elect to receive a portion of cash dividends payable on
Shares held in your Program account and on any other Shares of the Fund
registered in your name. In addition, the Program Administrator will invest in
accordance with the Program that portion of cash dividends on Shares held in
your Program account and any other Shares of the Fund registered in your name as
is designated in the appropriate space on the Enrollment form.
(c) If you select "CASH INVESTMENTS," the Program Administrator will
not invest any portion of cash dividends due you on Shares held in your program
account or on Shares registered in your name. Please send your checks for
additional investments to the address on the Enrollment form and note the name
of the Fund on the face of your check.
7. HOW MAY A PARTICIPANT CHANGE OPTIONS UNDER THE PROGRAM?
<PAGE>
As a participant, you may change your investment options at
any time by requesting a new Enrollment form and returning it to the Program
Administrator at the address provided in No.27 below. The Program Administrator
must receive notice on or before the 15th calendar day preceding a dividend
payment date in order for change in your dividend reinvestment option to be
effective for that dividend. If such request is received after the 15th calendar
day preceding a dividend payment date, then your request will not be effective
until after the dividend has been reinvested and all Shares have been allocated
to your account.
<PAGE>
COSTS
8. WHAT ARE THE COSTS TO PARTICIPANTS IN CONNECTION WITH PURCHASES AND
SALES UNDER THE PROGRAM?
In connection with the following transactions, participants
will be assessed the following charges:
/ / First-time investors will be subject to an initial service charge of
$10.00 which will be deducted from your initial cash deposit.
/ / All optional cash deposit investments by check will have a $5.00
service charge deducted from the cash to be invested.
/ / All optional cash deposit investments by ACH (Automatic Bank
Withdrawals) will have a $2.00 service charge.
/ / Sales processed through the Program will have a $15.00 fee deducted
from the net proceeds, after brokerage commissions.
/ / Participants are responsible for all commission costs associated with
purchases and sales. In addition to the transaction charges outlined
above, participants will be assessed per share processing fees which
include brokerage commissions at a rate of:
$0.05 per share purchased
$0.15 per share sold as well as a service fee equal to 5% of the net
proceeds, with a minimum of $1.00 and a maximum of $10.00.
/ / Participants are assessed a $25.00 service charge for any insufficient
funds related to cash purchases as well as automatic debit from the
participant's bank account.
PURCHASES
9. HOW MANY SHARES OF COMPANY COMMON STOCK WILL BE PURCHASED FOR
PARTICIPANTS?
If you become a participant in the Program, the number of
shares to be purchased depends on the amount of your dividends (if applicable),
cash payments or bank account or payroll deductions, less applicable fees and
commissions as stated in No. 8 above and the purchase price of the Company
Common Stock. Your account will be credited with that number of shares,
including fractions, equal to the total amount to be invested.
<PAGE>
10. HOW ARE SHARES OF COMPANY COMMON STOCK ACQUIRED UNDER THE PROGRAM?
The Program Administrator uses dividends and funds of
participants to purchase shares of Company Common Stock in the open market. Such
purchases will be made by participating brokers as agent for the participants.
Cash payments received and automatic bank account deductions debited on your
behalf will be used to purchase Company Common Stock commencing each Wednesday
("Investment Date"), provided the Program Administrator received such cash
payment and or automatic bank account deduction no later than two business days
preceding such Wednesday. If Wednesday does not fall on a day which is a
business day in Massachusetts, then the Investment Date will occur on the next
succeeding business day. In months in which the Company pays a dividend, an
Investment Date will occur, and optional cash investments will commence on the
dividend payment date, which may or may not fall on a Wednesday. In all cases,
transaction processing will occur within 30 days of the receipt of funds, except
where temporary curtailment or suspension of purchases is necessary to comply
with applicable provisions of the Federal Securities laws or when unusual market
conditions make prudent investment impracticable. In the event the Program
Administrator is unable to purchase shares within 30 days of the receipt of
funds, such funds will be returned to you.
TO THE EXTENT REQUIRED BY APPLICABLE LAW, SHARES OFFERED UNDER THE
PROGRAM TO PARTICIPANTS IN CERTAIN JURISDICTIONS MAY BE OFFERED ONLY THROUGH
BROKER-DEALERS REGISTERED IN THESE JURISDICITIONS.
11. AT WHAT PRICE WILL SHARES OF COMPANY STOCK BE PURCHASED OR SOLD UNDER
THE PROGRAM?
The average price of all shares purchased by the Program
Administrator with all funds received during the time period from two business
days preceding any Investment Date up to the second business day preceding the
next Investment Date shall be the price per share allocable to you in connection
with the shares purchased for your account with your funds or dividends received
by the Program Administrator during such time period. The average price of all
shares sold by the Program Administrator pursuant to sell orders received during
such time period shall be the price per share allocable to you in connection
with the shares sold for your account pursuant to your sell orders received by
the Program Administrator during such time period.
CASH PAYMENTS AND AUTOMATIC DEDUCTIONS
12. WHAT ARE THE LIMITATIONS ON THE AMOUNT OF CASH PAYMENTS AND AUTOMATIC
BANK ACCOUNT DEDUCTIONS?
If you are not already a registered owner of Company Common
Stock, your initial investment under the Program must be at least $250.00. All
other cash payments or bank account deductions must be at least $100.00, up to a
maximum of $250,000.00 annually.
<PAGE>
The same amount of cash payment need not be sent each month
and you are under no obligation to make a cash payment in any month. The amount
of automatic bank account deduction must be specified by you on the Enrollment
form and will continue until changed by you by notifying the Program
Administrator in writing as provided in No. 27.
ADMINISTRATION
13. WHO ADMINISTERS THE PROGRAM FOR PARTICIPANTS?
BankBoston, as Program Administrator, administers the Program
for participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Shares of Company Common Stock
purchased under the Program will be registered in the name of the accounts of
the respective participants.
REPORTS TO PARTICIPANTS
14. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PROGRAM?
Each participant in the Program will receive a statement of
his or her account following each purchase of shares. These statements are a
record of the cost of purchase of shares under the Program and should be
retained for tax purposes. The statements will also show the amount of dividends
credited to such participant's account (if applicable), as well as the fees paid
by the participant. In addition, each participant will receive copies of the
Company's Annual Report to shareholders, proxy statements and, if applicable,
dividend income information for tax reporting purposes.
CERTIFICATES FOR SHARES
15. WILL CERTIFICATES BE ISSUED FOR SHARES OF COMPANY COMMON STOCK
PURCHASED UNDER THE PROGRAM?
Unless requested, the Company will not issue to participants
certificates for shares of Company Common Stock purchased under the Program. The
number of shares purchased for your account under the Program will be shown on
your statement of account. This feature protects against loss, theft or
destruction of stock certificates.
Certificates for any number of whole shares credited to your
account under the Program will be issued to you at no charge upon your written
request to withdraw such shares from your account. Certificates for fractions of
shares will not be issued.
The Program Administrator, at its discretion, may terminate
any account which contains less than one share of Company Common Stock. Once
terminated, the Program Administrator will issue a check for the value of any
fractional share in the participant's account. (See No. 18 below regarding
payment for fractions of shares.)
<PAGE>
WITHDRAWAL OF SHARES IN PROGRAM ACCOUNTS
16. HOW MAY A PARTICIPANT WITHDRAW SHARES HELD UNDER THE PROGRAM?
You may withdraw all or a portion of the shares from your
Program account by notifying the Program Administrator. A withdrawal/termination
form is provided on the account statement for this purpose. This notice should
be mailed to the address on the form.
Within five business days of receipt of your request,
cerficates for the whole shares of the Company Common Stock so withdrawn will be
issued to you or, if you request, the Program Administrator will sell the shares
for you and send you the proceeds, less applicable brokerage commissions, fees,
and transfer taxes, if any. Proceeds are normally paid by check and will be
distributed to you within four business days after your shares are sold. In no
case will certificates for fractional shares be issued. For your protection, if
you wish to change the registration of your account, your written request must
be accompanied by a signature medallion. The signature must be medallion
guaranteed by any eligible guarantor, including a federally insured financial
institution, a registered broker-dealer, or a participant in a recognized
medallion guaranty program. A notarization or guarantee by a Notary Public is
not acceptable. A signature "verification" by a savings bank or savings and loan
association is not acceptable.
17. WHAT HAPPENS TO THE FRACTION OF A SHARE WHEN A PARTICIPANT WITHDRAWS
ALL SHARES FROM THE PROGRAM?
If a participant's account contains a fractional share for
which withdrawal is requested (or the account is terminated by the Program
Administrator as provided in No. 16 above), the Program Administrator will make
a cash payment equal to the value of such fractional share calculated at a per
share price which shall be the most recent market price for Company Common Stock
on the securities exchange or in the over-the-counter market in which Company
Common Stock is traded on that date. This cash payment will be mailed directly
to the withdrawing participant by the Program Administrator.
18. WHAT HAPPENS TO A PARTICIPANT'S PROGRAM ACCOUNT IF ALL SHARES OF
COMPANY COMMON STOCK IN THE ACCOUNT ARE WITHDRAWN?
If you withdraw all full and fractional shares in your Program
account, your participation in the Program will be terminated by the Program
Administrator.
<PAGE>
TERMINATION OF PARTICIPATION
19. HOW DOES A PARTICIPANT TERMINATE HIS OR HER PARTICIPATION IN THE
PROGRAM?
You may terminate your participation in the Program without
penalty at any time by following the procedure listed in No. 17 above. Your
termination will be effective as specified in Paragraph 12 of the Terms and
Conditions.
If you terminate your participation in the Program, you will
receive without charge stock certificates issued in your name for all full
shares; or, if you wish, the Program Administrator will sell your shares and
send you the proceeds, less the fees detailed in No. 8 above, and transfer
taxes, if any. The Program Administrator will convert any fractional shares you
hold at the time of your withdrawal to cash at the value detailed in No. 18
above, and send you a check for the proceeds.
OTHER INFORMATION
20. WHAT HAPPENS IF THE COMPANY HAS A COMMON STOCK RIGHTS OFFERING, ISSUES
A STOCK DIVIDEND OR DECLARES A STOCK SPLIT?
Participation in any rights offering, dividend distribution or
stock split will be based upon both the shares of Company Common Stock
registered in participants' names and the shares (including fractional shares)
credited to participants' Program accounts. Any stock dividend or shares
resulting from stock splits with respect to shares of Company Common Stock, both
full and fractional, which participants hold in their Program accounts and with
respect to all shares registered in their names will be automatically credited
to their accounts in book-entry form.
21. HOW WILL A PARTICIPANT'S PROGRAM SHARES BE VOTED AT A MEETING OF
SHAREHOLDERS?
All shares of Company Common Stock (including any fractional
share) credited to your account under the Program will be voted as you direct.
If on the record date for a meeting of shareholders there are shares credited to
your account under the Program, you will be sent the proxy materials for such
meeting. When you return an executed proxy, all of such shares will be voted as
indicated. Or, if you so elect, you may vote all of such shares in person at the
shareholders' meeting. If you do not provide instructions or return an executed
proxy, the plan will not vote your shares.
22. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE
PROGRAM?
You will receive tax information annually for your personal
records and to help you prepare your federal income tax return. The automatic
reinvestment of dividends does not relieve you of any income tax which may be
payable on dividends. For further information as
<PAGE>
to tax consequences of participation in the Program, participants should consult
with their own tax advisors.
23. WHAT IS THE RESPONSIBILITY OF THE PROGRAM ADMINISTRATOR UNDER THE
PROGRAM?
The Program Administrator in administering the Program will
not be liable for any act done in good faith or for any good faith omission to
act. However, the Program Administrator will be liable for loss or damage due to
error caused by its negligence, bad faith or willful misconduct. Shares held in
custody by the Program Administrator are not subject to protection under the
Securities Investors Protection Act of 1970.
The participant should recognize that neither the Company nor
the Program Administrator can provide any assurance of a profit or protection
against loss on any shares purchased under the Program.
24. MAY THE PROGRAM BE CHANGED OR DISCONTINUED?
While the Program Administrator hopes to continue the Program
indefinitely, the Program Administrator reserves the right to suspend or
terminate the Program at any time. It also reserves the right to make
modifications to the Program. Participants will be notified of any such
suspension, termination or modification in accordance with Paragraph 13 of the
Terms and Conditions. The Program Administrator also reserves the right to
terminate any participant's participation in the Program at any time.
25. HOW IS THE PROGRAM TO BE INTERPRETED?
Any question of interpretation arising under the Program will
be determined by the Program Administrator and any such determination will be
final.
26. WHERE SHOULD CORRESPONDENCE REGARDING THE PROGRAM BE DIRECTED?
All correspondence regarding the Program should be directed
to:
BankBoston, N.A.
"InvestLink" Program
P.O. Box 8040
Boston, MA 022668040
Phone 1-800-730-6001
27. WHO BEARS THE RISK OF MARKET FLUCTUATIONS IN THE COMPANY COMMON STOCK?
A participant's investment in shares held in his or her
Program account is no different than his or her investment in directly held
shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his or her shares.
Neither the Company nor the Program Administrator can
guarantee that shares purchased under the Program will, at any particular time,
be worth more or less than their
<PAGE>
purchase price. Each participant must make an independent investment decision
based on his or her own judgement and research.
<PAGE>
TERMS AND CONDITIONS OF
CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.
"INVESTLINK"-SM-* PROGRAM
1. You, BankBoston, N.A. will act as agent for me, and will open an
account for me under the "InvestLink" Program (the "Program") of Credit
Suisse Asset Management Strategic Global Income Fund, Inc. (the
"Company") and will put the Program into effect for me as of the date
you receive an Authorization form duly executed by me. You will also
act as program administrator of the Program ("Program Administrator").
The provisions herein relating to dividends and dividend reinvestment
apply only to the extent that the Company pays dividends. The dividend
reinvestment options as referred to in Paragraph 2, below, will go into
effect for me as of the first record date for a dividend after you
receive the Authorization form duly executed by me. The automatic bank
account deduction option referred to on the Authorization form will go
into effect for me on the last Wednesday of the month, provided such
Authorization form duly completed and executed by me is received by you
no later than 30 days prior to such date.
2. If I select one of the dividend reinvestment options, whenever the
Company declares an income dividend payable either in cash or in common
stock of the Company ("Company Common Stock"), I hereby elect to take
such dividend entirely in stock, and you shall automatically receive
such shares, including fractions, for my account. Whenever the Company
declares an income dividend payable only in cash, you shall apply the
amount of such dividend payable to me to the purchase of Company Common
Stock, as detailed in Paragraphs 3 and 9, below.
3. If I am not a current registered owner of shares of Company Common
Stock, my initial investment under the Program must be at least
$250.00. The amount of each other cash payment or automatic bank
account deduction to be deposited by me in the Program must be at least
$100.00 but not more than a total of $100,000.00 annually. Whenever you
receive any cash dividend, cash payment or automatic bank account
deduction on my behalf for investment, you shall apply such funds (less
my pro rata share of brokerage commissions and any other applicable
share of brokerage commissions and any other applicable fees) to
purchase shares of Company Common Stock in the open market. Such
purchases will be made by participating brokers on an agency basis.
Cash dividends or cash payments received and automatic bank account
deductions debited on my behalf will be used to purchase Company Common
Stock commencing each Wednesday, unless low volume levels require less
frequent transaction intervals. In all cases, transaction processing
will occur within 30 days of the receipt of funds, except where
temporary curtailment or suspension of purchases is necessary to comply
with applicable provisions of the Federal securities laws or when
unusual market conditions make prudent investment
* "INVESTLINK" IS A SERVICE MARK OF EQUISERVE
<PAGE>
impracticable. If you are unable to purchase shares within 30 days of
the receipt of funds, such funds will be returned by you. Uninvested
funds will not accrue interest for my benefit.
4. Commencing each Wednesday (an "Initial Investment Date") you will
attempt to purchase shares of Company Common Stock in the open market
through a registered broker dealer. You will commingle all funds
received from participants whether from initial investments, automatic
debits or optional cash payments towards the purchase of Company Common
Stock, provided such funds were received by you no later than 12:00
noon eastern time on the business day preceding the Initial Investment
Date. If Wednesday does not fall on a day which is a business day in
Massachusetts, then the Initial Investment Date will occur on the next
succeeding business day. In months in which the Company pays a
dividend, an Initial Investment Date will occur, and optional cash
investments will commence, on the dividend payment date, which may or
may not fall on a Wednesday. The Program Administrator will invest all
dividend funds authorized to be reinvested and combine such dividend
funds with cash payments received prior to 12:00 noon eastern time on
the business day preceding such dividend payment date and will attempt
to purchase shares in the open market commencing on the dividend
payment date. In no event will funds be held for investment later than
30 days after they are received. Cash investments and initial cash
deposits received after 12:00 noon eastern time on the business day
preceding an Initial Investment Date will not be invested until the
succeeding Initial Investment Date, generally approximately one week
after receipt.
5. Open-market purchases and sales under the Program may be made on any
securities exchange where Company Common Stock is traded, in the
over-the-counter market or in negotiated transactions and may be on
such terms as to price, delivery and otherwise as you shall determine.
It is understood that, in any event, you shall have no liability in
connection with any inability to purchase shares within 30 days of the
receipt of funds, or with the timing of any purchases effected. You
shall have no responsibility as to the value of the Company Common
Stock acquired for my account. For the purposes of purchases or sales
in the open market, you may aggregate my purchases or sales with those
of other Program participants, but purchases will not be offset against
any sales of shares to be made by you as Program Administrator under
the Program. The average price of all shares purchased by you as
Program Administrator with all the funds received during the time
period from 12:00 noon eastern time on the business day preceding any
Initial Investment Date up to 12:00 noon eastern time on the business
day preceding the next Initial Investment Date shall be the price per
share allocable to me in connection with the shares purchased for my
account with my funds or dividends received by you during such time
period. The average price of all shares sold by you as Program
Administrator pursuant to sell orders received during such time period
shall be the price per share allocable to me in connection with the
shares sold for my account pursuant to my sell orders received by you
during such time period.
<PAGE>
6. Cash deposit payments must be made payable to BankBoston, drawn against
U.S. banks and be made payable in U.S. Dollars. Third party checks are
not accepted. Checks drawn on foreign banks must have the U.S. currency
imprinted on the check or draft. All cash payments must be mailed
directly to BankBoston, using the address supplied in on the
Authorization form. Checks delivered to any other address do not
constitute valid delivery.
In the event any deposit such as a check or automatic bank account
debit is returned unpaid for any reason, the Program Administrator will
consider the request for investment of such money null and void and
shall immediately remove from the participant's account shares of
Company Common Stock, if any, purchased upon the prior credit of such
money. The Program Administrator shall thereupon be entitled to sell
these shares to satisfy any uncollected amounts. If the net proceeds of
the sale of such shares are insufficient to satisfy the balance of such
uncollected amounts, the Program Administrator shall be entitled to
sell such additional shares from the participant's account to satisfy
the uncollected balance. A $25.00 fee will be charged for any deposit
returned unpaid.
7. You will hold my shares acquired pursuant to my Authorization form in
uncertificated or book-entry form. I may deposit in my Program account
shares registered in my name. You will forward to me any proxy
solicitation material and any shares so held for me will be voted only
in accordance with the proxy returned by me to the proxy tabulation
agent. If I do not provide instructions or return an executed proxy,
the plan will not vote my shares. Upon my written request, you will
deliver to me, without charge, a certificate or certificates for the
shares held in my account.
8. You will confirm to me each acquisition made for my account as soon as
practicable but not later than 30 days after the date thereof. Although
I may from time to time have an undivided fractional interest in a
share of Company Common Stock, no certificates for a fractional share
will be issued; however, dividends on fractional shares will be
received for my account. In the event of termination of my account
under the Program, you will send me a check for any such undivided
fractional interest at the per share price which shall be the most
recent closing price for Company Common Stock on the securities
exchange or in the over-the-counter market in which the Company Common
Stock is traded on that date.
9. If dividends are paid on Company Common Stock, you will receive them
for my Program account for all full and fractional shares in my
account, and for all other shares of Company Common Stock registered in
my name. If you receive cash dividends on my Program shares, you will
send me a check for the amount of such dividends that are not subject
to automatic reinvestment or direct deposit, without charge. If I
select one of the dividend reinvestment options, that percentage of
cash dividends on my Program shares and all other shares registered in
my name will be automatically reinvested in Company Common Stock, as is
designated in the appropriate space on the Authorization form. Any
stock dividends or split shares distributed by the Company on shares in
my account and on shares registered in my name will be credited to my
account. The shares held for me under the Program will be added to
other shares registered in my name in calculating the number of rights
to be issued, or the amount of any cash or stock dividend to be
distributed, to me.
<PAGE>
10. You may, at your discretion, terminate my account if it at any time
contains less than # shares of Company Common Stock, and will send me a
certificate for the amount of full shares and a check for the market
value of any fractional share as calculated pursuant to Paragraph 8,
above.
11. I may terminate my account under the Program by notifying you in
writing. My request to terminate participation must be received by you
on or before the 15th calendar day preceding a dividend payment date in
order to be effective for that dividend. If the request to terminate is
received after the 15th calendar day preceeding a dividend payment
date, it will not be processed until after shares purchased with
dividends have been credited to my account. The Program may be
terminated by you or the Company upon notice in writing mailed to me at
least 30 days prior to the date of termination. Upon any termination
you will cause a certificate or certificates for the number of full
shares held for me under the Program and a cash payment for any
fractional share (calculated in the manner described in Paragraph 8,
above) to be delivered as soon as possible to me without charge. If I
elect by notice to you in writing to have you sell part or all of my
shares and remit the proceeds to me, you are authorized to deduct
applicable per share processing fees of $0.15 per share (which include
brokerage commissions) as well as a service fee equal to 5% of the net
proceeds, with a minimum of $1.00 and a maximum of $10.00, and transfer
taxes, if any. If I am only requesting some of my shares be withdrawn
either through the issuance of a stock certificate or through a sale of
shares, you will make every effort to process the request within five
business days of receipt. Whether I am selling all or a portion of the
shares through the Program, the fees stated in this paragraph apply.
12. These Terms and Conditions may be amended or supplemented by you at any
time or times but, except when necessary or appropriate to comply with
applicable law or the rules or policies of the Securities and Exchange
Commission or any other regulatory authority, only by mailing to me
appropriate written notice at least 30 days prior to the effective date
thereof. The amendment or supplement shall be deemed to be accepted by
me unless, prior to the effective date thereof, you receive written or
telephonic notice of the termination of my account under the Program.
Any such amendment may include an appointment by you in your place and
stead of a successor Program Administrator under these Terms and
Conditions, with full power and authority to perform all or any of the
acts to be performed by the Program Administrator under these Terms and
Conditions. Upon any such appointment of any successor Program
Administrator, the Company will be authorized to pay or issue to such
successor Program Administrator, for my account, all dividends and
rights payable or issuable on Company Common Stock held in my account,
and all other shares registered in my name. Such dividends and rights
shall be paid to me, applied to my account, or used to purchase shares
in the open market as provided in these Terms and Conditions.
13. You shall at all times act in good faith and agree to use your best
efforts within reasonable limits to insure the accuracy of all services
performed under these Terms and Conditions and to comply with
applicable law, but assume no responsibility and shall not be liable
for loss or damage due to errors unless such error is caused by your
negligence, bad faith, or willful misconduct or that of your employees.
Shares held in
<PAGE>
custody by you are not subject to protection under the Securities
Investors Protection Act of 1970.
14. You may delegate some of your duties hereunder to service companies,
which may not be registered broker-dealers.
15. These Terms and Conditions shall be governed by the laws of The
Commonwealth of Massachusetts.
CS FIRST BOSTON STRATEGIC INCOME FUND, INC.
(being changed to "BEA STRATEGIC INCOME FUND, INC.")
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the l3th day of June, 1995 between CS First Boston
Strategic Income Fund, Inc., a Maryland corporation whose name is being changed
to "BEA Strategic Income Fund, Inc." (the "Fund"), and BEA Associates, a New
York general partnership (the "Adviser").
WITNESSETH
WHEREAS, the Fund is a diversified, closed-end investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Fund hereby appoints the Adviser to act as investment adviser
to the Fund. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the Fund,
the Adviser will manage the portfolio of securities and investments (including
cash) belonging to the Fund including the purchase, retention and disposition
thereof and the execution of agreements relating thereto, in accordance with the
Fund's investment objective, policies and restrictions as stated in the
Prospectus (as defined in paragraph 4(f) of this Agreement) and subject to the
following understandings:
(a) The Adviser shall furnish a continuous investment program for the
Fund and in so doing shall determine from time to time what investments or
securities will be purchased, retained or sold by the Fund, and what
portion of the assets will be invested or held uninvested as cash;
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement;
(c) The Adviser, in the performance of its duties and obligations
under this Agreement, shall art in conformity with the Articles of
Incorporation, the Bylaws and Prospectus of the Fund and with the
instructions and directions of the Board of Directors of the Fund and will
<PAGE>
conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations;
(d) The Adviser shall determine the securities to be purchased or sold
by the Fund and as agent for the Fund will effect portfolio transactions
pursuant to its determinations either directly with the issuer or with any
broker and/or dealer in such securities; in placing orders with brokers
and/or dealers the Adviser intends to seek the best available price and
execution for purchases and sales; the Adviser shall also determine whether
or not the Fund shall enter into repurchase or reverse repurchase
agreements;
On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other customers,
the Adviser may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be
so sold or purchased in order to obtain the best execution and lower
brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and, if
applicable, to such other customers;
(e) The Adviser shall maintain books and records with respect to the
securities transactions of the Fund and shall render to the Fund's Board of
Directors such periodic and special reports as the Board of Directors may
reasonably request;
(f) The Adviser shall provide the Fund's Custodian as required with
information relating to all transactions concerning the assets belonging to
the Fund, except purchases of and any sales of the Fund's Common Stock
("Fund Shares"); and
(g) The investment management services of the Adviser to the Fund
under this Agreement are not to be deemed exclusive, and the Adviser shall
be free to render similar services to others.
3. The Adviser is authorized to select the brokers and dealers that
will execute the purchases and sales of portfolio securities for the Fund and is
directed to use its best efforts to obtain the best available price and
execution, except as prescribed herein. Unless and until otherwise directed by
the Board of Directors of the Fund, the Adviser may also effect individual
securities transactions at commission rates in excess of the minimum commission
rates available, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
-2-
<PAGE>
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise.
4. The Fund has delivered copies of each of the following documents to
the Adviser and will promptly notify and deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Fund, filed with the Department
of Assessments and Taxation of the State of Maryland on January 27, 1988
(such Articles of Incorporation, as presently in effect and as amended from
time to time, being herein called the "Articles of Incorporation");
(b) Bylaws of the Fund (such Bylaws, as presently in effect and as
amended from time to time, being herein called the "Bylaws");
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Adviser and approving the form of this
Agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-2 (No. 33-19869) (the "Registration
Statement") as filed with the Securities and Exchange Commission (the
"Commission") on January 29, 1988 relating to the Fund and the Fund Shares,
and all amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission on January 29, 1988 and all
amendments thereto; and
(f) Prospectus of the Fund dated April 22, 1988 (such prospectus being
herein called the "Prospectus").
5. The Adviser shall authorize and permit any of its partners, agents
and employees who may be elected as directors or officers of the Fund to serve
in the capacities in which they are elected. Services to be furnished by the
Adviser under this Agreement may be furnished through the medium of any of such
partners, agents or employees of the Adviser.
6. The Adviser shall keep the Fund's books and records required to be
maintained by it pursuant to paragraph 2(e) of this Agreement. The Adviser
agrees that all records which it maintains for the Fund are the property of the
Fund and it will promptly surrender any of such records to the Fund upon the
Fund's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records
as are required to be maintained by the
-3-
<PAGE>
Adviser with respect to the Fund by Rule 3la-1 of the Commission under the 1940
Act.
7. During the term of this Agreement the Adviser will pay all expenses
(including without limitation the compensation of all its partners, agents and
employees serving as directors or officers of the Fund pursuant to paragraph 5
of this Agreement) incurred by it in connection with its activities under this
Agreement other than the cost of securities and investments purchased for the
Fund (including taxes and brokerage commissions, if any).
8. For the services provided and the expenses borne pursuant to this
Agreement, the Fund will pay to the Adviser as full compensation therefor a fee,
computed weekly and payable quarterly, at an annual rate equal to 0.50% per
annum of the average weekly net assets of the Fund. This fee for each quarter
will be paid to the Adviser during the month succeeding such quarter.
9. The Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period
and the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss
resulting from willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
10. This Agreement shall become effective upon the later of (a) the
termination of the previous Investment Advisory Agreement between the Fund
and CS First Boston Investment Management Corporation or (b) its approval by
the stockholders of the Fund in the manner prescribed by the 1940 Act. Upon
becoming effective, this Agreement shall remain in effect until January 31,
1997 and shall continue in effect from year to year thereafter if such
continuance is approved at least annually by (a) a majority of the
outstanding voting securities (as defined in the 1940 Act) or by vote of the
Fund's Board of Directors, cast in person at a meeting called for the purpose
of voting on such approval, and (b) vote of a majority of the Directors of
the Fund who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval. This Agreement may
be terminated by the Fund at any time, without the payment of any penalty, by
the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund on 60
days' written notice to the Adviser, or by the Adviser at any time, without
the payment of any penalty, on 90 days' written notice to the Fund. This
Agreement will automatically and
-4-
<PAGE>
immediately terminate in the event of its assignment (as defined in the 1940
Act).
11. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Directors of the Fund from time to time, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
12. This Agreement may be amended by mutual consent, but the consent
of the Fund must be approved (a) by vote of a majority of those Directors of the
Fund who are not parties to this Agreement or "interested persons" (as defined
in the 1940 Act) of any such party, cast in person at a meeting called for the
purpose of voting on such amendment, and (b) by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund.
13. Notices of any kind to be given to the Adviser by the Fund shall
be in writing and shall be duly given if mailed or delivered to the Adviser at
One Citicorp Center, 153 East 53rd Street, New York, New York 10022, Attention:
President, or at such other address or to such other individual as shall be
specified by the Adviser to the Fund in accordance with this paragraph 13.
Notices of any kind to be given to the Fund by the Adviser shall be in writing
and shall be duly given if mailed or delivered to the Fund at CS First Boston
Strategic Income Fund, Inc., One Citicorp Center, 153 East 53rd Street, New
York, New York 10022, Attention: President, or at such other address or to such
other individual as shall be specified by the Fund to the Adviser in accordance
with this paragraph 13. The Adviser agrees to notify the Fund of any change in
its membership within a reasonable time of such change.
14. The Fund agrees that if this Agreement is terminated and the
Adviser shall no longer be the adviser to the Fund, the Fund will, within a
reasonable period of time, change its name to delete reference to "BEA".
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
CS FIRST BOSTON STRATEGIC INCOME FUND, INC.
(being changed to "BEA Strategic Income Fund, Inc.")
By: [signature illegible]
-----------------------------------
BEA ASSOCIATES
By: [signature illegible]
-----------------------------------
-6-
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
BEA INCOME FUND, INC.
BEA STRATEGIC GLOBAL INCOME FUND, INC.
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 29th day of January 1999,
between BEA INCOME FUND, INC. and BEA STRATEGIC GLOBAL INCOME FUND, INC. and
Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the Custodian
as a custodian for the term and subject to the provisions of this Agreement. The
Custodian shall not be under any duty or obligation to require the Fund to
deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Declaration of
Trust or Certificate of Incorporation and By-Laws (or comparable documents) of
the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund
held by the Custodian: Except for securities and funds held by any Subcustodians
appointed pursuant to the provisions of Section 3 hereof or held by any Foreign
Depositories (as said term is defined in Section 3) utilized by a Subcustodian,
the Custodian shall have and perform the following powers and duties:
2.l Safekeeping - To keep safely the securities and other assets of the Fund
that have been delivered to the Custodian and, on behalf of the Fund, from time
to time to receive delivery of securities for safekeeping. The Custodian's
responsibility for safekeeping equity securities of Russian issuers ("Russian
Equities") hereunder shall be limited to the safekeeping of relevant share
extracts from the share registration books maintained by the entities providing
share registration services to issuers of Russian Equities (each a "Registrar")
indicating an investor's ownership of such securities (each a "Share Extract").
2.2 Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or
<PAGE>
other instruments representing such securities in registered or bearer form, or
(2) in book-entry form by a Securities System (as said term is defined in
Section 2.22) or a Foreign Depository.
2.3 Registration - To hold registered securities of the Fund, with or without
any indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets held
as fiduciary or custodian for customers. With respect to Russian Equities, the
Custodian shall instruct a Subcustodian to endeavor to assure that registration
thereof shall be reflected on the books of the issuer's Registrar, subject to
the following conditions, but shall in no event be liable for losses or costs
incurred as a result of delays or failures in the registration process,
including without limitation the inability to obtain or enforce relevant Share
Extracts. Such registration may be in the name of a nominee of a Subcustodian.
In the event registration is in the name of the Company, such Company hereby
acknowledges that only the Custodian or Subcustodian may give instructions to
the Registrar to transfer or engage in other transactions involving the Russian
Equities so registered.
A Subcustodian may from time to time enter into contracts with Registrars
with respect to the registration of Russian Equities ("Registrar Contracts").
Such Registrar Contracts may provide for (i) regular share confirmations by the
Subcustodian, (ii) reregistrations within set timeframes, (iii) use of a
Subcustodian's nominee name, (iv) direct access by auditors of the Subcustodian
or its clients to share registers, and (v) specification of the Registrar's
responsibilities and liabilities. It is hereby acknowledged and agreed that the
Custodian does not represent or warrant that such Registrar Contracts are
enforceable.
If the Company instructs the Custodian to settle a purchase of a Russian
Equity, the Custodian will instruct a Subcustodian to endeavor on a best efforts
basis to reregister the Russian Equity and obtain a Share Extract in a timely
manner.
After completion of reregistration of a Russian Equity in respect of which
a Subcustodian has entered into a Registrar Contract, the Custodian shall
instruct the Subcustodian to monitor such registrar on a best efforts basis and
to notify the Custodian upon the Subcustodian's obtaining knowledge of the
occurrence of any of the following events ("Registrar Events"): (i) a Registrar
has eliminated a shareholder from the register or has altered registration
records; (ii) a Registrar has refused to register securities in the name of a
particular purchaser and the purchaser or seller has alleged that the
registrar's refusal to so register was unlawful; (iii) a Registrar holds for its
own account shares of an issuer for which it serves as registrar; (iv) if a
Registrar Contract is in effect with a Registrar, the
<PAGE>
Registrar notifies the Subcustodian that it will no longer be able materially to
comply with the terms of the Registrar Contract; or (v) if a Registrar Contract
is in effect with a Registrar, the Registrar has materially breached such
Contract. The Custodian shall inform the Company of the occurrence of a
Registrar Event provided the Custodian has in fact received actual notice
thereof from the Subcustodian.
It shall be the sole responsibility of the Company to contact the Custodian
prior to executing any transaction in a Russian Equity to determine whether a
Registrar Contract exists in respect of such issuer.
If the Company instructs the Custodian by Proper Instruction to settle a
purchase of a Russian Equity in respect of which the Subcustodian has not
entered into a Registrar Contract, then the Custodian shall instruct the
Subcustodian to endeavor to settle such transaction in accordance with the
Proper Instruction and with the provisions of Section 2.4 of this Agreement,
notwithstanding the absence of any such Registrar Contract and without the
Custodian being required to notify the Company that no such Registrar Contract
is then in effect, and it being understood that neither the Custodian nor the
Subcustodian shall be required to follow the procedure set forth in the second
preceding paragraph.
2.4 Purchases - Upon receipt of proper instructions, as defined in Section
2.27, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the securities (1) by the Custodian, or (2) by a clearing corporation
of a national securities exchange of which the Custodian is a member, or (3) by
a Securities System or a Foreign Depository. However, (i) in the case of
repurchase agreements entered into by the Fund, the Custodian (as well as an
Agent) may release funds to a Securities System, a Foreign Depository or a
Subcustodian prior to the receipt of advice from the Securities System, Foreign
Depository or Subcustodian that the securities underlying such repurchase
agreement have been transferred by book entry into the Account (as defined in
Section 2.22) of the Custodian (or such Agent) maintained with such Securities
System or to the Foreign Depository or Subcustodian, so long as such payment
instructions to the Securities System, Foreign Depository or Subcustodian
include a requirement that delivery is only against payment for securities, (ii)
in the case of foreign exchange contracts, options, time deposits, call account
deposits, currency deposits, and other deposits, contracts or options pursuant
to Sections 2.10, 2.12, 2.13, 2.14 and 2.15, the Custodian may make payment
therefor without receiving an instrument evidencing said deposit, contract or
option so long as such payment instructions detail specific securities to be
acquired, and (iii) in the case of securities as to which payment for the
security and receipt of the instrument evidencing the security are under
generally accepted trade practice for institutional investors or the terms
<PAGE>
of the instrument representing the security expected to take place in different
locations or through separate parties, such as commercial paper which is indexed
to foreign currency exchange rates, derivatives and similar securities, the
Custodian may make payment for such securities prior to receipt thereof in
accordance with such generally accepted trade practice or the terms of the
instrument representing such security. Without limiting the generality of the
foregoing, the following provisions shall apply with respect to settlement of
purchases of securities in Russia. Unless otherwise instructed by Proper
Instructions acceptable to the Custodian, the Custodian shall only authorize a
Subcustodian to make payment for purchases of Russian Equities upon receipt of
the relevant Share Extract in respect of the Company's purchases. With respect
to securities other than Russian Equities, settlement of purchases shall be made
in accordance with securities processing or settlement practices, which the
Custodian in its discretion determines to be a market practice. The Custodian
shall only be responsible for securities purchased upon actual receipt of such
securities at the premises of its Subcustodian, provided that the Custodian's
responsibility for securities represented by Share Extracts shall be limited to
the safekeeping of the relevant Share Extract upon actual receipt of such Share
Extract at the premises of the Subcustodian.
2.5 Exchanges - Upon receipt of proper instructions, to exchange in accordance
with the registration procedures described in Section 2.3 of this Agreement,
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into an account as permitted in Section
2.3, and may surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be delivered to the
Custodian.
2.6 Sales of Securities - Upon receipt of proper instructions, to make delivery
of securities which have been sold for the account of the Fund, but only against
payment therefor (1) in cash, by a certified check, bank cashier's check, bank
credit, or bank wire transfer, or (2) by credit to the account of the Custodian
with a clearing corporation of a national securities exchange of which the
Custodian is a member, or (3) by credit to the account of the Custodian or an
Agent of the Custodian with a Securities System or a Foreign Depository;
provided, however, that (i) in the case of delivery of physical certificates or
<PAGE>
instruments representing securities, the Custodian may make delivery to the
broker buying the securities, against receipt therefor, for examination in
accordance with "street delivery" custom, provided that the payment therefor is
to be made to the Custodian (which payment may be made by a broker's check) or
that such securities are to be returned to the Custodian, and (ii) in the case
of securities referred to in clause (iii) of the last sentence of Section 2.4,
the Custodian may make settlement, including with respect to the form of
payment, in accordance with generally accepted trade practice for institutional
investors relating to such securities or the terms of the instrument
representing said security. Without limiting the generality of the foregoing,
the following provisions shall apply with respect to settlement of sales of
securities in Russia. Unless otherwise expressly instructed by Proper
Instructions acceptable to the Custodian, settlement of sales of securities
shall be made in accordance with securities processing or settlement practices
which the Custodian in its discretion determines to be a market practice. The
Company hereby expressly acknowledges that such market practice might require
delivery of securities prior to receipt of payment and that the Company bears
the risk of payment in instances where delivery of securities is made prior to
receipt of payment therefor in accordance with Proper Instructions received by
the Custodian or pursuant to the Custodian's determination in its discretion
that such delivery is in accordance with market practice. The Custodian shall
not be responsible for any securities delivered from the premises of the
Subcustodian from the time they leave such premises.
2.7 Depositary Receipts - Upon receipt of proper instructions, to instruct a
Subcustodian or an Agent to surrender securities to the depositary used by an
issuer of American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such securities against a
written receipt therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such securities
ADRs in the name of the Custodian, or a nominee of the Custodian, for delivery
to the Custodian in Boston, Massachusetts, or at such other place as the
Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer thereof
against a written receipt therefor adequately describing the ADRs surrendered
and written evidence satisfactory to the Custodian that the issuer of the ADRs
has acknowledged receipt of instructions to cause its depositary to deliver the
securities underlying such ADRs to a Subcustodian or an Agent.
2.8 Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or
<PAGE>
similar securities for the purpose of being exercised or sold, provided that the
new securities and cash, if any, acquired by such action are to be delivered to
the Custodian, and, upon receipt of proper instructions, to deposit securities
upon invitations for tenders of securities, provided that the consideration is
to be paid or delivered or the tendered securities are to be returned to the
Custodian. With respect to Russian Equities, upon receipt of Proper Instruction
the Custodian shall take any action required by the terms of a rights offer,
tender offer, put, call, merger, consolidation, reorganization or other
corporate action affecting securities held on behalf of a Company. The Custodian
shall use reasonable efforts to act on such Proper Instructions but will not be
held liable for any losses or costs incurred as a result of such actions or as a
result of the Custodian's inability for reasons beyond its control to take the
actions requested by such Proper Instructions.
2.9 Stock Dividends, Rights, Etc. - To receive and collect all stock dividends,
rights and other items of like nature; and to deal with the same pursuant to
proper instructions relative thereto. With respect to Russian Equities, to
request a Subcustodian to endeavor to obtain a Share Extract with respect to all
Russian Equities issued by reason of a stock dividend, bonus issue or other
distribution resulting from a corporate action not requiring instructions from
the shareholder of the security, provided that the Custodian shall not be
responsible for its inability to obtain any such Share Extract or for the
failure of a Registrar or any agent thereof to record the Company's ownership on
the issuer's records.
2.10 Options - Upon receipt of proper instructions or upon receipt of
instructions given pursuant to any agreement relating to an option or as
otherwise provided in any such agreement to (i) receive and retain, to the
extent provided to the Custodian, confirmations or other documents evidencing
the purchase, sale or writing of an option of any type on or in respect of a
security, securities index or similar form of property by the Fund; (ii) deposit
and maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository or with a broker, dealer or other
entity, securities, cash or other assets in connection with options transactions
entered into by the Fund; (iii) transfer securities, cash or other assets to a
Securities System, Foreign Depository, broker, dealer or other entity, as margin
(including variation margin) or other security for the Fund's obligations in
respect of any option; and (iv) pay, release and/or transfer such securities,
cash or other assets in accordance with a notice or other communication
evidencing the expiration, termination or exercise of or default under any such
option furnished by The Options Clearing Corporation, by the securities or
options exchange on which such option is traded or by such broker, dealer or
other entity as may be responsible for handling such options transaction or have
authority to give such notice or communication. The Custodian
<PAGE>
shall not be responsible for the sufficiency of assets held in any segregated
account established in compliance with applicable margin maintenance
requirements or the performance of the other terms of any agreement relating to
an option. Notwithstanding the foregoing, options on futures contracts and
options to purchase and sell foreign currencies shall be governed by Sections
2.14 and 2.15.
2.11 Borrowings - Upon receipt of proper instructions, to deliver securities of
the Fund to lenders or their agents as collateral for borrowings effected by the
Fund, provided that such borrowed money is payable to or upon the Custodian's
order as Custodian for the Fund.
2.12 Demand Deposit Bank Accounts - To open and operate an account or accounts
in the name of the Fund, subject only to draft or order by the Custodian, and to
hold in such account or accounts as a deposit accepted on the Custodian's books
cash, including foreign currency, received for the account of the Fund other
than cash held as deposits with Banking Institutions in accordance with the
following paragraph. The responsibilities of the Custodian for cash, including
foreign currency, of the Fund accepted on the Custodian's books as a deposit
shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to hereafter as a "Banking
Institution"), and may deposit cash, including foreign currency, of the Fund
in such account or accounts, provided that such account(s) (hereinafter
collectively referred to as "demand deposit bank accounts") shall be in the
name of the Custodian or a nominee of the Custodian for the account of the
Fund or for the account of the Custodian's customers generally and shall be
subject only to the Custodian's draft or order; provided that any such demand
deposit bank account shall contain only assets held by the Custodian as a
fiduciary or custodian for the Fund and/or other customers and that the
records of the Custodian shall indicate at all times the Fund and/or other
customers for which such funds are held in such account and the respective
interests therein. Such demand deposit accounts may be opened with Banking
Institutions in the United States and in other countries and may be
denominated in either U. S. Dollars or other currencies as the Fund may
determine. The records for each such account will be maintained by the
Custodian but the deposits in any such account shall not constitute a deposit
liability of the Custodian. All such deposits, including with Subcustodians,
shall be deemed to be portfolio securities of the Fund and accordingly the
responsibility of the Custodian therefor shall be the same as and no greater
than the Custodian's responsibility in respect of other portfolio securities
of the Fund. The authorization by the Fund to appoint a Subcustodian as such
shall also constitute a
<PAGE>
proper instruction to open a demand deposit bank
account subject to the provisions of this paragraph with such Subcustodian.
2.13 Interest Bearing Call or Time Deposits - To place interest bearing fixed
term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with
the Custodian or with Subcustodians or other Banking Institutions as the Fund
may determine, in the name of the Custodian or a nominee of the Custodian for
the account of the Fund or the account of the Custodian's customers generally
and subject only to the Custodian's draft or order; provided that any such
deposit shall be held in an account containing only assets held by the
Custodian as a fiduciary or custodian for the Fund and/or other customers and
that the records of the Custodian shall indicate at all times the Fund and/or
other customers for which such funds are held in such account and the
respective interests therein. Deposits may be denominated in U. S. Dollars or
other currencies and need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian shall include in
its records with respect to the assets of the Fund appropriate notation as to
the amount and currency of each such deposit, the accepting Banking
Institution and other appropriate details, and shall retain such forms of
advice or receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the Banking Institution. Funds, other than those accepted on the
Custodian's books as a deposit, but including those placed with
Subcustodians, shall be deemed portfolio securities of the Fund and the
responsibilities of the Custodian therefor shall be the same as those for
demand deposit bank accounts placed with other banks, as described in the
second paragraph of Section 2.12 of this Agreement. The responsibility of the
Custodian for funds accepted on the Custodian's books as a deposit shall be
that of a U. S. bank for a similar deposit.
2.14 Futures Contracts. Upon receipt of proper instructions or upon receipt
of instructions given pursuant to any agreement relating to a futures
contract or an option thereon or as otherwise provided in any such agreement,
to (i) receive and retain, to the extent provided to the Custodian,
confirmations or other documents evidencing the purchase or sale of a futures
contract or an option on a futures contract by the Fund; (ii) deposit and
maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository, for the benefit of any futures
commission merchant, or pay to such futures commission merchant, securities,
cash or other assets designated by the Fund as initial, maintenance or
variation "margin" deposits intended to secure the Fund's performance of its
obligations under any futures contract purchased or sold or any option on a
futures contract written, purchased or sold by the Fund, in accordance with
the provisions of any agreement relating thereto or the rules of the
Commodity Futures Trading Commission and/or any contract market or any
<PAGE>
similar organization on which such contract or option is traded; and (iii)
pay, release and/or transfer securities, cash or other assets into or out of
such margin accounts only in accordance with any such agreement or rules. The
Custodian shall not be responsible for the sufficiency of assets held in any
segregated account established in compliance with applicable margin maintenance
requirements or the performance of the other terms of any agreement relating to
a futures contract or an option thereon.
2.15 Foreign Exchange Transactions - Pursuant to proper instructions, to settle
foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf and for the account of the Fund with such
currency brokers or Banking Institutions, including Subcustodians, as the Fund
may direct pursuant to proper instructions. The Custodian shall be responsible
for the transmission of cash and instructions to and from the currency broker or
Banking Institution with which the contract or option is made, the safekeeping
of all certificates and other documents and agreements evidencing or relating to
such foreign exchange transactions as the Custodian may receive and the
maintenance of proper records as set forth in Section 5.1. In connection with
such transactions, the Custodian is authorized to make free outgoing payments of
cash in the form of U. S. Dollars or foreign currency without receiving
confirmation of a foreign exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received. The
Fund accepts full responsibility for its use of third-party foreign exchange
dealers and for execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs and
interest charges which may be incurred by the Fund or the Custodian as a result
of the failure or delay of third parties to deliver foreign exchange.
Alternatively, such transactions may be undertaken by the Custodian as
principal, if instructed by the Fund.
Foreign exchange contracts and options, other than those executed with the
Custodian as principal, but including those executed with Subcustodians, shall
be deemed to be portfolio securities of the Fund and the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund. The
responsibility of the Custodian with respect to foreign exchange contracts and
options executed with the Custodian as principal shall be that of a U. S. bank
with respect to a similar contract or option.
2.16 Stock Loans - Upon receipt of proper instructions, to deliver securities of
the Fund, in connection with loans of
<PAGE>
securities by the Fund, to the borrower thereof prior to receipt of the
collateral, if any, for such borrowing, provided that for stock loans secured by
cash collateral the Custodian's instructions to any Securities System holding
such securities require that the Securities System may deliver the securities to
the borrower thereof only upon receipt of the collateral for such borrowing.
2.17 Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder,
and in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when
securities are called, redeemed, retired or otherwise become payable;
provided, that the payment is to be made in such form and manner and at such
time, which may be after delivery by the Custodian of the instrument
representing the security, as is in accordance with the terms of the
instrument representing the security, or such proper instructions as the
Custodian may receive, or governmental regulations, the rules of Securities
Systems, Foreign Depositories or other U. S. or foreign securities
depositories and clearing agencies or, with respect to securities referred to
in clause (iii) of the last sentence of Section 2.4, in accordance with
generally accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in
connection with receipt of income, principal or other payments with respect
to securities of the Fund or in connection with transfer of securities; and
(iii) pursuant to proper instructions to take such other actions with respect
to collection or receipt of funds or transfer of securities which involve an
investment decision.
2.18 Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of the Fund.
2.19 Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all forms
of proxies and all notices of meetings and any other notices or announcements
affecting or relating to
<PAGE>
securities owned by the Fund that are received by the Custodian, and upon
receipt of proper instructions, to execute and deliver or cause its nominee to
execute and deliver such proxies or other authorizations as may be required.
Neither the Custodian nor its nominee shall vote upon any of such securities or
execute any proxy to vote thereon or give any consent or take any other action
with respect thereto (except as otherwise herein provided) unless ordered to do
so by proper instructions.
2.20 Nondiscretionary Details - Without the necessity of express authorization
from the Fund, (1) to attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer or other dealings with
securities, funds or other property of the Fund held by the Custodian except as
otherwise directed from time to time by the Directors or Trustees of the Fund,
and (2) to make payments to itself or others for minor expenses of handling
securities or other similar items relating to the Custodian's duties under this
Agreement, provided that all such payments shall be accounted for to the Fund.
2.21 Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are available for the purpose, bills, statements and other
obligations of the Fund (including but not limited to interest charges, taxes,
management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
2.22 Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) the Participants Trust Company, (iii) any book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31
CFR Part 350, or the book-entry regulations of federal agencies substantially in
the form of Subpart O, or (iv) any other domestic clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and whose use the
Fund has previously approved in writing (each of the foregoing being referred to
in this Agreement as a "Securities System"). Utilization of a Securities System
shall be in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may deposit and/or maintain Fund securities, either directly
or through one or more Agents appointed by the Custodian (provided that any such
agent shall be qualified to act as a custodian of the Fund pursuant to the
Investment Company Act of 1940 and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any
<PAGE>
assets of the Custodian or Agent other than assets held as a fiduciary,
custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund which
are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such securities
have been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the account of
the Fund. The Custodian shall transfer securities sold for the account of the
Fund upon (i) receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian or an Agent as referred to above, and
be provided to the Fund at its request. The Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund in the form of
a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use of
any such Securities System on behalf of the Fund as promptly as practicable.
2.23 Other Transfers - To deliver securities, funds and other property of the
Fund to a Subcustodian or another custodian as necessary to effect transactions
authorized by proper instructions and upon receipt of proper instructions, to
deliver securities, funds and other property of the Fund to a Subcustodian or
another custodian of the Fund; and, upon receipt of proper instructions, to make
such other disposition of securities, funds or other property of the Fund in a
manner other than or for purposes other than as enumerated elsewhere in this
Agreement, provided that the instructions relating to such disposition shall
state the amount of securities to be delivered
<PAGE>
and the name of the person or persons to whom delivery is to be made.
2.24 Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Trustees or Directors of the Fund.
The Custodian shall in no event be liable to the Fund and shall be indemnified
by the Fund for any violation which occurs in the course of carrying out
instructions given by the Fund of any investment limitations to which the Fund
is subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
2.25 Custodian Advances - In the event that the Custodian is directed by proper
instructions to make any payment or transfer of funds on behalf of the Fund for
which there would be, at the close of business on the date of such payment or
transfer, insufficient funds held by the Custodian on behalf of the Fund, the
Custodian may, in its discretion without further proper instructions, provide an
advance ("Advance") to the Fund in an amount sufficient to allow the completion
of the transaction by reason of which such payment or transfer of funds is to be
made. In addition, in the event the Custodian is directed by proper instructions
to make any payment or transfer of funds on behalf of the Fund as to which it is
subsequently determined that the Fund has overdrawn its cash account with the
Custodian as of the close of business on the date of such payment or transfer,
said overdraft shall constitute an Advance. Any Advance shall be payable on
demand by Custodian, unless otherwise agreed by the Fund and the Custodian, and
shall accrue interest from the date of the Advance to the date of payment by the
Fund at a rate agreed upon from time to time by the Custodian and the Fund. It
is understood that any transaction in respect of which the Custodian shall have
made an Advance, including but not limited to a foreign exchange contract or
transaction in respect of which the Custodian is not acting as a principal, is
for the account of and at the risk of the Fund, and not, by reason of such
Advance, deemed to be a transaction undertaken by the Custodian for its own
account and risk. The Custodian and the Fund acknowledge that the purpose of
Advances is to finance temporarily the purchase or sale of securities for prompt
delivery in accordance with the settlement terms of such transactions or to meet
emergency expenses not reasonably foreseeable by the Fund.
2.26 Restricted Securities - In the case of a "restricted security", the Fund
shall have the responsibility to provide to or obtain for the Custodian, the
issuer of the security or other appropriate third party any necessary
documentation, including
<PAGE>
without limitation, legal opinions or consents, and to take any necessary
actions required in connection with the registration of restricted securities in
the manner provided in Section 2.3 upon acquisition thereof by the Fund or
required in connection with any sale or other disposition thereof by the Fund.
Upon acquisition and until so registered, the Custodian shall have no duty to
service such restricted securities, including without limitation, the receipt
and collection of cash and stock dividends, rights and other items of like
nature, nor shall the Custodian have responsibility for the inability of the
Fund to exercise in a timely manner any right in respect of any restricted
security or to take any action in a timely manner in respect of any other type
of corporate action relating to a restricted security. Similarly, the Custodian
shall not have responsibility for the inability of the Fund to sell or otherwise
transfer in a timely manner any restricted security in the absence of any such
documentation or action to be provided, obtained or taken by the Fund. At such
time as the Custodian shall receive any restricted security, regardless of when
it shall be registered as aforesaid, the Fund shall also deliver to the
Custodian a term sheet summarizing those rights, restrictions or other matters
of which the Custodian should have knowledge, such as exercise periods,
expiration dates and payment dates, in order to assist the Custodian in
servicing such securities. As used herein, the term "restricted security" shall
mean a security which is subject to restrictions on transfer, whether by reason
of contractual restrictions or federal, state or foreign securities or similar
laws, or a security which has special rights or contractual features which do
not apply to publicly-traded shares of, or comparable interests representing,
such security.
2.27 Proper Instructions - Proper instructions shall mean a tested telex from
the Fund or a written request, direction, instruction or certification signed or
initialed on behalf of the Fund by one or more person or persons as the Board of
Trustees or Directors of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Fund shall
be signed by such person. Those persons authorized to give proper instructions
may be identified by the Board of Trustees or Directors by name, title or
position and will include at least one officer empowered by the Board to name
other individuals who are authorized to give proper instructions on behalf of
the Fund. Telephonic or other oral instructions or instructions given by
facsimile transmission may be given by any one of the above persons and will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. Oral instructions will be confirmed by tested telex or in
writing in the manner set forth above but the lack of such confirmation shall in
no way affect any action taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape
<PAGE>
record any and all telephonic or other oral instructions given to the Custodian
by or on behalf of the Fund (including any of its officers, Directors, Trustees,
employees or agents or any investment manager or adviser or person or entity
with similar responsibilities which is authorized to give proper instructions on
behalf of the Fund to the Custodian). Proper instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form of
standing instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree to the use of such device
or system.
2.28 Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2.22 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. (or any futures commission
merchant registered under the Commodity Exchange Act) relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies, and (iv) as mutually agreed from time to time
between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the
<PAGE>
Fund. The Fund hereby further authorizes and instructs the Custodian and any
Subcustodian to utilize such securities depositories located outside the United
States which are approved in writing by the Fund to hold securities, cash and
other property of the Fund (a "Foreign Depository"). Upon such approval by the
Fund, the Custodian is authorized on behalf of the Fund to notify each
Subcustodian of its appointment as such.
With respect to Russia, the Company hereby expressly acknowledges that a
Subcustodian for Russian securities may from time to time delegate any of its
duties and responsibilities to any securities depository, clearing agency, share
registration agent or sub-subcustodian (collectively, "Russian Agent") in
Russia, including without limitation Rosvneshtorgbank (also called Vneshtorgbank
RF) ("VTB"). The Company acknowledges that the rights of the Subcustodian
against any such Russian Agent may consist only of a contractual claim against
the Russian Agent. Notwithstanding any provision of this Agreement to the
contrary, neither the Custodian nor the Subcustodian shall be responsible or
liable to a Company or its shareholders for the acts or omissions of any such
Russian Agent. In the event of a loss of securities or cash held on behalf of a
Company through any Russian Agent, the Custodian shall not be responsible to a
Company or its shareholders unless and to the extent it in fact recovers from
the Subcustodian.
It is also understood that no Registrar, whether or not any such Registrar
has entered into a contract or other arrangement with a Subcustodian or Foreign
Depository, is or shall be considered or deemed to be a Foreign Depository or an
agent of the Custodian or any Subcustodian, and accordingly neither the
Custodian nor the Subcustodian shall be responsible for or liable to a Company
or to the shareholders of a Company for the acts or omissions of any such
Registrar.
Those Subcustodians, and the countries where and the Foreign Depositories
through which they or the Custodian may hold securities, cash and other property
of the Fund which the Fund has approved to date are set forth on Appendix A
hereto. Such Appendix shall be amended from time to time as Subcustodians,
and/or countries and/or Foreign Depositories are changed, added or deleted. The
Fund shall be responsible for informing the Custodian sufficiently in advance of
a proposed investment which is to be held in a country not listed on Appendix A,
in order that there shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian, including negotiation of a
subcustodian agreement and submission of such subcustodian agreement to the Fund
for approval.
If the Fund shall have invested in a security to be held in a country before the
foregoing procedures have been completed, such security shall be held by such
agent as the Custodian may
<PAGE>
appoint. In any event, the Custodian shall be liable to the Fund for the actions
of such agent if and only to the extent the Custodian shall have recovered from
such agent for any damages caused the Fund by such agent. At the request of the
Fund, Custodian agrees to remove any securities held on behalf of the Fund by
such agent, if practical, to an approved Subcustodian. Under such circumstances
the Custodian will collect income and respond to corporate actions on a best
efforts basis.
With respect to securities and funds held by a Subcustodian, either directly or
indirectly (including by a Foreign Depository or foreign clearing agency) or by
a Foreign Depository or foreign clearing agency utilized by the Custodian,
notwithstanding any provision of this Agreement to the contrary, payment for
securities purchased and delivery of securities sold may be made prior to
receipt of the securities or payment, respectively, and securities or payment
may be received in a form, in accordance with governmental regulations, rules of
Foreign Depositories and foreign clearing agencies, or generally accepted trade
practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either directly
or indirectly, (including by a securities depository or a clearing agency)
including demand and interest bearing deposits, currencies or other deposits and
foreign exchange contracts as referred to in Sections 2.12, 2.13, 2.14 or 2.15,
the Custodian shall be liable to the Fund for any loss or damage to the Fund
caused by or resulting from the acts and omissions of any Subcustodian to the
extent that under the terms set forth in the subcustodian agreement between the
Custodian and the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary
Subcustodian) has failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement as determined in accordance with the
law which is adjudicated to govern such agreement and in accordance with any
determination of any court as to the duties of said Subcustodian pursuant to
said agreement. The Custodian shall nevertheless be liable to the Fund for its
own negligence in transmitting any instructions received by it from the Fund and
for its own negligence in connection with the delivery of any securities or
funds held by it to any such Subcustodian. Notwithstanding the foregoing, with
respect to securities and funds held by a Subcustodian listed on Schedule C
attached hereto (as the same may from time to time be amended), either directly
or indirectly (including by a Securities System or a Foreign Depository or
clearing system), including demand deposits, currencies or other deposits and
foreign exchange contracts, the Custodian shall be liable to the Fund if and
only to the extent that such Subcustodian is liable to the Custodian and the
Custodian recovers under the applicable subcustodian agreement.
<PAGE>
In the event that any Subcustodian appointed pursuant to the provisions of this
Section 3 fails to perform any of its obligations under the terms and conditions
of the applicable subcustodian agreement, the Custodian shall use its best
efforts to cause such Subcustodian to perform such obligations. In the event
that the Custodian is unable to cause such Subcustodian to perform fully its
obligations thereunder, the Custodian shall forthwith upon the Fund's request
terminate such Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement and, if necessary or desirable, appoint
another subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to change or
permit any changes thereunder except upon the prior written approval of the
Fund.
The Custodian may, at any time in its discretion upon notification to the Fund,
terminate any Subcustodian of the Fund in accordance with the termination
provisions under the applicable Subcustodian Agreement, and at the written
request of the Fund, the Custodian will terminate any Subcustodian in accordance
with the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another subcustodian to
replace a Subcustodian terminated pursuant to the foregoing provisions of this
Section 3, such appointment to be made upon approval of the successor
subcustodian by the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under the
indemnification provisions of any subcustodian agreement, the Custodian shall
promptly give written notice to the Fund of such claim. No more than thirty days
after written notice to the Fund of the Custodian's intention to make such
payment, the Fund will reimburse the Custodian the amount of such payment except
in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters:
The Custodian may assist generally in the preparation of reports
to Fund shareholders and others, audits of accounts, and other ministerial
matters of like nature.
<PAGE>
5. Powers and Duties of the Custodian with Respect to its Role as
Recordkeeping Agent: The Custodian shall have and perform the following duties
with respect to recordkeeping:
5.l Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
5.2 Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
5.3 Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5.1 and 5.2 shall at all times during the Custodian's
regular business hours be open to inspection and audit by officers of, attorneys
for and auditors employed by the Fund and by employees and agents of the
Securities and Exchange Commission, provided that all such individuals shall
observe all security requirements of the Custodian applicable to its own
employees having access to similar record within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
<PAGE>
6. Standard of Care and Related Matters:
6.1 Liability of the Custodian with Respect to Proper Instructions; Evidence of
Authority, Etc. The Custodian shall not be liable for any action taken or
omitted in reliance upon proper instructions believed by it to be genuine or
upon any other written notice, request, direction, instruction, certificate or
other instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the Custodian
the names, signatures and scope of authority of all persons authorized to give
proper instructions or any other such notice, request, direction, instruction,
certificate or instrument on behalf of the Fund, the names and signatures of the
officers of the Fund, the name and address of the Shareholder Servicing Agent,
and any resolutions, votes, instructions or directions of the Fund's Board of
Directors or Trustees or shareholders. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and
act upon advice of (i) counsel regularly retained by the Custodian in respect of
custodian matters, (ii) counsel for the Fund, or (iii) such other counsel as the
Fund and the Custodian may agree upon, with respect to all matters, and the
Custodian shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
6.2 Liability of the Custodian with Respect to Use of Securities Systems and
Foreign Depositories - With respect to the portfolio securities, cash and other
property of the Fund held by a Securities System or by a Foreign Depository
utilized by the Custodian or any Subcustodian, the Custodian shall be liable to
the Fund only for any loss or damage to the Fund resulting from use of the
Securities System or Foreign Depository if caused by any negligence, misfeasance
or misconduct of the Custodian or any of its Agents (as said term is defined in
Section 6.6) or of any of its or its Agents' employees or from any failure of
the Custodian or any such Agent to enforce effectively such rights as it may
have against the Securities System or Foreign Depository. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System, Foreign Depository or any
other person which the Custodian may have as a consequence of any
<PAGE>
such loss or damage to the Fund if and to the extent that the Fund has not been
made whole for any such loss or damage.
6.3 Standard of Care; Liability; Indemnification - The Custodian shall be held
only to the exercise of reasonable care and diligence in carrying out the
provisions of this Agreement, provided that the Custodian shall not thereby be
required to take any action which is in contravention of any applicable law,
rule or regulation or any order or judgment of any court of competent
jurisdiction. It is also agreed that the Company shall be responsible for
preparation and filing of tax returns, reports and other documents on any
activities it undertakes in Russia which are to be filed with any relevant
governmental or other authority and for the payment of any taxes, levies, duties
or similar liability the Company incurs in respect of property held or sold in
Russia or of payments or distributions received in respect thereof in Russia.
Accordingly, each Company hereby agrees to indemnify and hold harmless the
Custodian from any loss, cost or expense resulting from the imposition or
assessment of any such tax, duty, levy or liability or any expenses related
thereto.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from all claims and liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the performance of this Agreement,
except such as may arise from its or its nominee's breach of the relevant
standard of conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered against any liability the Custodian or such nominee
may incur by reason of taxes assessed to the Custodian or such nominee or other
costs, liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund is registered in the name of the Custodian or such nominee.
In no event shall the Custodian incur liability under this Agreement if the
Custodian or any Subcustodian, Securities System, Foreign Depository, Banking
Institution or any agent or entity utilized by any of them is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be performed, by
reason of (i) any Sovereign Risk or (ii) any provision of any present or future
law or regulation or order of the United States of America or any state thereof,
or of any foreign country or political subdivision thereof, or of any securities
depository or clearing agency which operates a central system for handling of
securities or equivalent book-entries in a country or which operates a
transnational system for the central handling of securities or equivalent
book-entries, or (iii) any provision of any order or judgment of any court of
competent jurisdiction. A "Sovereign Risk" shall mean nationalization,
expropriation,
<PAGE>
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or acts of war, terrorism, insurrection or
revolution; or any other act or event beyond the Custodian's control.
6.4 Reimbursement of Disbursements, Etc. - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
6.5 Security for Obligations to Custodian - If the Custodian or any
nominee thereof shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement (collectively a "Liability"), except such as may arise from its or
such nominee's breach of the relevant standard of conduct set forth in this
Agreement, or if the Custodian shall make any Advance to the Fund, then in such
event any property at any time held for the account of the Fund by the Custodian
or a Subcustodian shall be security for such Liability or for such Advance and
the interest thereon, and if the Fund shall fail to pay such Advance or interest
when due or shall fail to reimburse or indemnify the Custodian promptly in
respect of a Liability, the Custodian shall be entitled to utilize available
cash and to dispose of the Fund's property, including securities, to the extent
necessary to obtain repayment, reimbursement or indemnification.
6.6 Appointment of Agents - The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
as its agent (an "Agent") to carry out such of the provisions of this Agreement
as the Custodian may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this Agreement.
6.7 Powers of Attorney - Upon request, the Fund shall deliver to the Custodian
such proxies, powers of attorney or other instruments as may be reasonable and
necessary or desirable in connection with the performance by the Custodian or
any Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a custody
fee based on such fee schedule as may from time to time be agreed upon in
writing by the Custodian and the Fund. Such fee, together with all amounts for
which the
<PAGE>
Custodian is to be reimbursed in accordance with Section 6.4, shall be billed to
the Fund and be paid in cash to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full
force and effect until terminated by either party by an instrument in writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect not sooner than one hundred and twenty days (120) after the date of
such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6.4 and 7, and all Advances and Liabilities,
upon receipt by the Fund of a statement setting forth such fees, expenses,
Advances and Liabilities.
In the event of the appointment of a successor custodian, it is agreed that the
funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and the Fund
may agree in writing from time to time on such provisions interpretative of or
in addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the parties
and in no way alter, amend, limit or restrict the contractual obligations of the
parties set forth in this Agreement.
10. Governing Law: This Agreement is executed and delivered in The Commonwealth
of Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage prepaid to
the Fund addressed to the Fund at BEA Associates, 153 East 53rd Street, New
York, New York 10022 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities
<PAGE>
Department, or to such other address as the Custodian may have designated to the
Fund in writing, shall be deemed to have been properly delivered or given
hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
14. Risk Disclosure Acknowledgement: The Company hereby acknowledges that it
has received, has read and has understood the Custodian's Risk Disclosure
Statement, a copy of which is attached hereto and is incorporated herein by
reference. The Company further acknowledges that the Risk Disclosure Statement
is not comprehensive, and warrants and represents to the Custodian that it has
undertaken its own review of the risks associated with investment in Russia and
has concluded that such investment is appropriate for the Company and in no way
conflicts with the Company's constitutive documents, investment objective,
duties to its shareholders or with any regulatory requirements applicable to the
Company.
15. Confidentiality: The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering or obtaining services pursuant
to this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any bank examiner of the Custodian or any Subcustodian, any
regulatory authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by applicable law or regulation.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in its name and behalf on the day and year first above written.
BEA INCOME FUND, INC. BROWN BROTHERS HARRIMAN & CO.
BEA STRATEGIC GLOBAL
INCOME FUND, INC.
By: /s/ Michael Pignataro By: /s/ [Illegible]
Name: Michael Pignataro Name:
Title: Vice President and Title:
Secretary
Date: January 29, 1999 Date:
Boston
EquiServe
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
BEA STRATEGIC GLOBAL INCOME FUND, INC.
AND
BANKBOSTON, N.A.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Article 1. Terms of Appointment; Duties of the Bank....................................................1
Article 2. Fees and Expenses...........................................................................3
Article 3. Representations and Warranties of the Bank..................................................4
Article 4. Representations and Warranties of the Fund..................................................4
Article 5. Data Access and Proprietary Information.....................................................5
Article 6. Indemnification.............................................................................7
Article 7. Standard of Care............................................................................9
Article 8. Covenants of the Fund and the Bank.........................................................10
Article 9. Termination of Agreement...................................................................11
Article 10. Assignment.................................................................................11
Article 11. Amendment..................................................................................12
Article 12. Massachusetts Law to Apply.................................................................12
Article 13. Force Majeure..............................................................................12
Article 14. Consequential Damages......................................................................13
Article 15. Merger of Agreement........................................................................13
Article 16. Survival...................................................................................13
Article 17. Severability...............................................................................13
Article 18. Counterparts...............................................................................13
</TABLE>
(i)
<PAGE>
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
This Transfer Agency and Stock Transfer Services Agreement (the
"Agreement"), dated as of October 26, 1998, or upon commencement of services
described below as soon as is practical following October 26, 1998, is between
BEA Strategic Global Income Fund, Inc., a Maryland corporation (the "Fund") and
BankBoston, N.A. (the "Bank"), a national banking association.
WHEREAS, the Fund desires to appoint the Bank as its registrar, transfer
agent, dividend disbursing agent and agent in connection with certain other
activities and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE 1.
TERMS OF APPOINTMENT; DUTIES OF THE BANK
1.01. Subject to the terms and conditions set forth in this
Agreement the Fund hereby employs and appoints the Bank to act as, and the Bank
agrees to act as registrar, transfer agent for the Funds authorized and issued
shares of its common stock ("Shares"), dividend disbursing agent and agent in
connection with any dividend reinvestment plan as set out in the prospectus of
the Fund, corresponding to the date of this Agreement.
1.02. The Bank agrees that it will perform the following
services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and the Bank, the Bank shall:
<PAGE>
(i) Issue and record the appropriate number of Shares
as authorized and hold such Shares in the appropriate
Shareholder account;
(ii) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate
documentation;
(iii) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(iv) Act as agent for Shareholders pursuant to the
dividend reinvestment and cash purchase plan of the Fund
as amended from time to time;
(v) Issue replacement certificates for those
certificates alleged to have been lost, stolen or
destroyed upon receipt by the Bank of indemnification
satisfactory to the Bank and protecting the Bank and the
Fund, and the Bank at its option, may issue replacement
certificates in place of mutilated stock certificates
upon presentation thereof and without such indemnity.
(b) In addition to and neither in lieu nor in contravention
of the services set forth in the above paragraph (a), the Bank shall: (i)
perform all of the customary services of a registrar, transfer agent, dividend
disbursing agent and agent of the dividend reinvestment and cash purchase plan
as described in Article 1 consistent with those requirements in effect as of the
date of this Agreement. The detailed definition, frequency, limitations and
associated costs (if any) set out in the attached
-2-
<PAGE>
fee schedule, include but are not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, and mailing
Shareholder reports to current Shareholders, withholding taxes on U.S. resident
and non-resident alien accounts where applicable, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required with respect
to dividends and distributions by federal authorities for all registered
Shareholders.
(c) The Bank shall provide additional services on behalf of
the Fund (i.e., escheatment services) which may be agreed upon in writing
between the Fund and the Bank.
ARTICLE 2.
FEES AND EXPENSES
2.01. For the performance by the Bank pursuant to this Agreement,
the Fund agrees to pay the Bank an annual maintenance fee as set out in the
initial fee schedule attached hereto. Such fees and out-of-pocket expenses and
advances identified under Section 2.02 below may be changed from time to time
subject to mutual written agreement between the Fund and the Bank.
2.02. In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Bank for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by the Bank at the request or with the consent of the
Fund, will be reimbursed by the Fund.
-3-
<PAGE>
2.03. The Fund agrees to pay all fees and reimbursable expenses
within five days following the receipt of the respective billing notice. Postage
and the cost of materials for mailing of dividends, proxies, Fund reports and
other mailings to all Shareholder accounts shall be advanced to the Bank by the
Fund at least seven (7) days prior to the mailing date of such materials.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Fund that:
3.01. It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02. It is duly qualified to carry on its business in the
Commonwealth of Massachusetts.
3.03. It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Bank that:
4.01. It is a corporation duly organized and existing and in good
standing under the laws of Maryland.
-4-
<PAGE>
4.02. It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03. All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04. It is a closed-end, diversified investment company registered
under the Investment Company Act of 1940, as amended.
4.05. To the extent required by federal securities laws a
registration statement under the Securities Act of 1933, as amended is currently
or will be effective and appropriate state securities law filings have been made
with respect to all Shares of the Fund being offered for sale by the Fund;
information to the contrary will result in immediate notification to the Bank.
4.06. It shall make all required filings under federal and state
securities laws.
ARTICLE 5.
DATA ACCESS AND PROPRIETARY INFORMATION
5.01. The Fund acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and other
proprietary information furnished to the Fund by the Bank are provided solely in
connection with the services rendered under this Agreement and constitute
copyrighted trade secrets or proprietary information of substantial value to the
Bank. Such databases, programs, formats, designs and techniques are collectively
referred to below as "Proprietary
-5-
<PAGE>
Information." The Fund agrees that it shall treat all Proprietary information as
proprietary to the Bank and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as expressly
permitted hereunder. The Fund agrees for itself and its employees and agents:
(a) to use such programs and databases (i) solely on the
Fund computers, or (i) solely from equipment at the locations agreed to between
the Fund and the Bank and (ii) in accordance with the Banks applicable user
documentation;
(b) to refrain from copying or duplicating in any way (other
than in the normal course of performing processing on the Funds' computers) any
part of any Proprietary Information;
(c) to refrain from obtaining unauthorized access to any
programs, data or other information not owned by the Fund, and if such access is
accidentally obtained, to respect and safeguard the same Proprietary
Information;
(d) to refrain from causing or allowing proprietary
information transmitted from the Banks computer to the Funds' terminal to be
retransmitted to any other computer terminal or other device except as expressly
permitted by the Bank, (such permission not to be unreasonably withheld);
(e) that the Fund shall have access only to those authorized
transactions as agreed to between the Fund and the Bank; and
(f) to honor reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
-6-
<PAGE>
Proprietary Information at common law and under applicable statues.
5.02. If the transactions available to the Fund include the ability
to originate electric instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event the Bank shall be entitled to rely on
the validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by the Bank from time to time.
ARTICLE 6.
INDEMNIFICATION
6.01. The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services which (i) are
received by the Bank or its agents or
-7-
<PAGE>
subcontractors, and (ii) have been prepared, maintained or performed by the Fund
or any other person or firm on behalf of the Fund including but not limited to
any previous transfer agent registrar.
(d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any federal
or state securities laws requiring that such shares be registered or in
violation of any stop order or other determination or ruling by any federal or
state agency with respect to the offer or sale of such Shares; and
6.02. At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The Bank,
its agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund, reasonably believed
to be genuine and to have been signed by the proper person or persons, or upon
any instruction, information, data, records or documents provided the Bank or
its agents or subcontractors by telephone, in person, machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall
not be held to
-8-
<PAGE>
have notice of any change of authority of any person, until receipt of written
notice thereof from the Fund. The Bank, its agents and subcontractors shall also
be protected and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper countersignature of any former transfer
agent or former registrar, or of a co-transfer agent or co-registrar.
6.03. In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Bank in the defense of such claim or to defend against said claim in its own
name or in the name of the Bank. The Bank shall in no case confess any claim or
make any compromise in any case in which the Fund may be required to indemnify
the Bank except with the Fund's prior written consent.
ARTICLE 7.
STANDARD OF CARE
7.01. The Bank shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct of that of its employees.
-9-
<PAGE>
ARTICLE 8.
COVENANTS OF THE FUND AND THE BANK
8.01. The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Board of
Directors of the Fund authorizing the appointment of the Bank and the execution
and delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of
the Fund and all amendments thereto.
8.02. The Bank hereby agrees to establish and maintain facilities
and Procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03. The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
8.04. The Bank and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the
-10-
<PAGE>
negotiation or the carrying out of this Agreement shall remain confidential, and
shall not be voluntarily disclosed to any other person, except as may be
required by law.
8.05. In cases of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
ARTICLE 9.
TERMINATION OF AGREEMENT
9.01. This Agreement may be terminated by either party upon ninety
(90) days written notice to the other.
9.02. Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by the Fund. Additionally, the Bank reserves the right to charge for
any other reasonable expenses associated with such termination and/or a charge
equivalent to the average of three (3) month's fees.
ARTICLE 10.
ASSIGNMENT
10.01. Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
-11-
<PAGE>
10.02. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
10.03. The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston EquiServe Limited
Partnership, a Delaware limited partnership ("Boston EquiServe"), which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the Securities
Exchange Act of 1934 ("Section 17A(c)(2)"), or (ii) a Boston EquiServe affiliate
duly registered as a transfer agent pursuant to Section 17A(c)(2), provided,
however, that the Bank shall be as fully responsible to the Fund for the acts
and omissions of any subcontractor as it is for its own acts and omissions.
ARTICLE 11.
AMENDMENT
11.01. This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund.
ARTICLE 12.
MASSACHUSETTS LAW TO APPLY
12.01. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
ARTICLE 13.
FORCE MAJEURE
13.01. In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond
-12-
<PAGE>
its control, such party shall not be liable for damages to the other for any
damages resulting from such failure to perform or otherwise from such causes.
ARTICLE 14.
CONSEQUENTIAL DAMAGES
14.01. Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
ARTICLE 15.
MERGER OF AGREEMENT
15.01. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
ARTICLE 16.
SURVIVAL
16.01. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
ARTICLE 17.
SEVERABILITY
17.01. If any provision or provisions of this Agreement shall be held
to be invalid, unlawful, or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
-13-
<PAGE>
ARTICLE 18.
COUNTERPARTS
18.01. This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
BEA STRATEGIC GLOBAL INCOME FUND, INC.
BY: /s/ Michael A. Pignataro
----------------------------------
Michael A. Pignataro
Secretary
BANKBOSTON, N.A.
BY: /s/ Joseph F. Idzal
----------------------------------
Joseph F. Idzal
Vice President
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
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STANDARD TRANSFER AGENT AND REGISTRAR FEES AND SERVICES
TERM
The term of this Fee and Service Schedule shall be for a period of three (3)
years, commencing from October 26, 1998, the effective date of this Fee and
Service Schedule (the "Initial Term").
After the Initial Term, this Fee and Service Schedule shall be self renewing,
and providing that the service mix and volumes remain constant, the fees listed
below shall be increased by the accumulated change in the National Employment
Cost Index for Service Producing Industries (Finance, Insurance, Real Estate)
for the preceding years of the contract, as published by the Bureau of Labor
Statistics of the United States Department of Labor. Fees will be increased on
this basis on each successive contract anniversary thereafter.
Notwithstanding the paragraphs above, the fees and services may be changed from
time to time as agreed upon in writing by both parties.
FEES AND SERVICES
TRANSFER AGENT AND REGISTRAR FEE
$1,500.00 Per Month - Includes the standard Transfer Agent and Registrar
services as stated in the following sections:
ADMINISTRATIVE SERVICES
- Annual administrative services as Transfer Agent and Registrar
- Assignment of Account Administrator
- Remote inquiry access to Fund records via PC or terminal with
telecommunication software
ACCOUNT MAINTENANCE
- Maintaining up to 2,500 record shareholder accounts per year,
additional shareholder accounts to be billed at $7.00 each per year,
to include the following services:
- Processing of new shareholder accounts
- Posting and acknowledging address changes
- Processing other routine file maintenance adjustments
- Posting all transactions, including debit and credit certificates
to the stockholder file
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
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- Researching and responding to all registered shareholder
inquiries, telephone inquiries via toll-free number (line usage
charges billed as incurred)
- Confirmations of purchases and sales of shares of the Fund
- Maintaining shareholder mailing database
CERTIFICATE ISSUANCE
- Issuance, cancellation and registration of certificates to include the
following services:
- Production and mailing of daily transfer reports
- Processing of all legal transfers including New York window and
mail items
- Combining certificates into large and/or smaller denominations
- Processing Indemnity Bonds
- Replacing lost certificates
- Placing, maintaining and removing stop-transfer notations
ANNUAL MEETING SERVICES
- Preparing a full stockholder list as of the Annual Meeting Record Date
- Printing and addressing proxy cards for all registered shareholders
- Enclosing and mailing proxy card, proxy statement, return envelope and
Annual Report to all registered shareholders
- Receiving, opening and examining returned proxies
- Writing in connection with unsigned or improperly executed proxies
- Tabulating returned proxies; up to five (5) proposals, additional
billed at $0.03 per proposal per shareholder
- Provide on-line access to proxy vote status
- Attending Annual Meeting as Inspector of Election (Travel expenses
billed as incurred)
- Preparing a final Annual Meeting List reflecting how each account has
voted on each proposal
- Interfacing with outside proxy solicitor
MAILING AND REPORTING SERVICES
- Addressing, enclosing and mailing to registered shareholders
company-provided Semi-Annual Reports, 2 times per annum
- Preparing eight (8) standard reports at the company's discretion per
annum
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
================================================================================
- Prepare and mail account statements to shareholders, twelve times per
annum,
- Coding "multiple" accounts at a single household to suppress duplicate
mailings of reports.
ABANDONED PROPERTY REPORTING SERVICES
- Preparing Abandoned Property Reports, one (1) per annum to all 50
states
- Preparing a set of labels, one (1) per annum to perform Due Diligence
mailing
DIVIDEND SERVICES
As Dividend Disbursing Agent and Paying Agent (checks to be drawn on BankBoston,
N.A. and funding must be received via Federal Funds Wire or BankBoston Demand
Deposit Account debit on the mail date), BankBoston will perform the following
dividend related services:
- - Preparing and mailing monthly dividends (check includes address change
feature) with an additional enclosure with each dividend check
- - Preparing a hardcopy dividend list as of each dividend record date
- - Preparing and filing Federal Information Returns (Form 1099) of dividends
paid in a year and mailing a statement to each stockholder
- - Preparing and filing State Information Returns of dividends paid in a year
to stockholders resident within such state
- - Preparing and filing annual withholding return (Form 1042) and payments to
the government of income taxes withheld from Non-Resident Aliens
- - Replacing lost dividend checks
- - Providing photocopies of canceled checks when requested
- - Reconciling paid and outstanding checks
- - Coding "undeliverable" accounts to suppress mailing dividend checks to
same, per SEC regulations
- - Processing and recordkeeping of accumulated
uncashed dividends
- - Furnishing requested dividend information to stockholders
- - Performing the duties as required by the Interest and Dividend Tax
Compliance Act of 1983
- - Direct deposit of dividends via ACH
DIVIDEND REINVESTMENT SERVICES
- - Monthly Reinvestment and/or cash investment transactions of Dividend
Reinvestment Plan (DRP) participant accounts
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
================================================================================
- - Preparing and mailing a monthly dividend reinvestment detailed statement
with an additional enclosure to each DRP participant
- - Preparing and mailing a monthly cash investment detailed statement with an
additional enclosure to each DRP participant
- - Maintaining DRP accounts and establishing new participant accounts
- - Processing termination/sale requests
- - Processing withdrawal requests
- - Supplying summary reports for each reinvestment/investment to Company
- - Certificate safekeeping
- - Handling shareholder inquiries concerning the DRP
- Preparing and mailing Form 1099, Form 1042, and Form 1099B to
participants and related filings with the IRS
- Preparing a Dividend
Reinvestment Journal, 12 per annum
ITEMS NOT COVERED
ADDITIONAL SERVICES
Items not included in the fees and services set forth in this Fee and Service
Schedule including, but not limited to, services associated with the payment of
a stock dividend, stock split, corporate reorganization, or any services
associated with a special project are to be billed separately, on an appraisal
basis.
Services required by legislation or regulatory fiat which become effective after
the date of acceptance of this Fee and Service Schedule shall not be a part of
the Standard Services and shall be billed by appraisal. All additional services
not specifically covered under this Fee and Service Schedule will be billed by
appraisal, as applicable.
OUT OF POCKET EXPENSES
All direct out-of-pocket expenses will be billed as incurred. A list of
applicable out-of-pocket expenses is attached as Exhibit A.
ACCEPTANCE
In witness whereof, the parties hereto have caused this Fee and Service Schedule
to be executed by their respective officers, hereunto duly agreed and
authorized, as of the effective date of this Fee and Service Schedule.
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
================================================================================
Submitted by BankBoston, N.A. Accepted by BEA Strategic Global
Income Fund, Inc.
By: /s/ (illegible) By: /s/ Michael A. Pignataro
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Title: Vice President Title: Secretary
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Date: 8/26/98 Date: 11/9/98
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THIS FEE AND SERVICE SCHEDULE SHALL SERVE AS AN ATTACHMENT TO A TRANSFER AGENCY
AND STOCK TRANSFER SERVICES AGREEMENT TO BE AGREED UPON BY THE PARTIES.
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FEE AND SERVICE SCHEDULE
FOR
BEA STRATEGIC GLOBAL INCOME FUND, INC.
================================================================================
EXHIBIT A
OUT OF POCKET EXPENSES
Out of pocket expenses associated with, but not limited to, the following are
not included in the fees quoted in this Fee and Service Schedule and are
billable as incurred.
POSTAGE (Outgoing and Business Reply)
ENVELOPES
LABELS
FORMS AND STATIONERY
INSURANCE PREMIUMS (Mailing certificates)
DELIVERY AND FREIGHT CHARGES (including overnight delivery; Airborne Express,
FedEx, etc.)
TYPESETTING (proxy cards, dividend reinvestment enrollment cards, due diligence
mailings, ACH enrollment cards, etc.)
PRINTING (proxy cards, dividend reinvestment cards, etc.)
DESTRUCTION OF EXCESS/OBSOLETE MATERIAL
DTC TRADE TRANSACTIONS EXPENSES (Treasury buybacks, DR trades, etc.)
CUSTODY SETTLEMENT CHARGES
TOLL FREE TELEPHONE USAGE AND LINE EXPENSES
PLEASE NOTE:
Other out of pocket expenses could be incurred depending on the services
utilized.
Good funds to cover postage expenses in excess of $5,000 for shareholder
mailings must be received in full by 12:00 p.m. Eastern Time on the scheduled
mailing date. Postage expenses less than $5,000 will be billed as incurred.
SKU numbers are required on all material received for mailing. A special
handling fee of $10.00 per box will be assessed for all material not marked with
a SKU number. Such material includes, but is not limited to: proxy statements,
annual and quarterly reports, dividend enclosures and news releases. Overtime
charges will be assessed in the event of late delivery of material for mailings
to shareholders unless the mail date is rescheduled.
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ADMINISTRATIVE AND ACCOUNTING AGENCY AGREEMENT
THIS AGREEMENT is made as of February 27, 1999 by and between BROWN
BROTHERS HARRIMAN & CO., a limited partnership organized under the laws of the
State of New York (the "ADMINISTRATOR"), and each of the Funds listed on
Appendix A to this Agreement (each a "FUND" and collectively, the "FUNDS").
WITNESSETH:
WHEREAS, the Funds are registered with the United States Securities and
Exchange Commission as management investment companies under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Funds desire to retain the Administrator to render certain
services to the Funds, and the Administrator is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Funds hereby employ and appoint the
Administrator to act as their administrative and fund accounting agent on the
terms set forth in this Agreement, and the Administrator accepts such
appointment.
2. DELIVERY OF DOCUMENTS. The Funds will:
2.1 Furnish the Administrator with properly certified or authenticated
copies of resolutions of the Funds' Board of Directors or Trustees
authorizing the appointment of the Administrator as administrative and fund
accounting agent of the Funds and approving this Agreement.
2.2 Provide the Administrator with any other documents or resolutions
(including but not limited to directions or resolutions of the Funds' Board
of Directors or Trustees) which relate to or affect the Administrator's
performance of its duties hereunder or which the Administrator may
reasonably request.
2.3 Notify the Administrator promptly of any matter
affecting the performance by the Administrator of its services under this
Agreement.
3. DUTIES AS ADMINISTRATOR. Subject to the supervision and direction of the
Board of Directors or Trustees of the Funds, the Administrator will perform the
following services:
3.1 Provide an Assistant Treasurer to the Fund.
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3.2 Accumulate information for and, subject to approval by the Funds'
Treasurer, prepare reports to the Funds' shareholders of record as set
forth in Rule 30d-1 of the 1940 Act or as agreed upon in writing from time
to time between the parties hereto and file such reports with the
Securities and Exchange Commission.
3.3 Prepare and file the Securities and Exchange Commission's Form N-SAR.
3.4 Consult with the Funds' Treasurer on financial matters relating to the
Funds including without limitation dividend distributions, expense
proformas, expense accruals and other matters, including payment of
expenses, as shall from time to time be agreed upon by the parties.
3.5 Assist the Funds' Treasurer with the Funds' federal, state and
applicable local tax preparation and reporting, including the following:
3.5.1 preparation of fiscal and excise tax distribution
calculations;
3.5.2 preparation and filing of federal, state and any local income
tax returns, including tax return extension requests;
3.5.3 preparation of shareholder year end reporting statements;
3.5.4 provide the appropriate amounts and characterization of
distributions declared during the calendar year for Forms
1099 reporting;
3.5.5 periodically review and determine of distributions to be paid
to shareholders;
3.5.6 consult with the Fund's Treasurer regarding potential passive
foreign investment companies ("PFICs");
3.5.7 consult with the Fund's Treasurer on various tax issues as
they arise and with the Fund's outside auditors when
appropriate;
3.6 Assist the investment adviser for the Fund (the "Adviser"), at the
Adviser's request, in monitoring and developing compliance procedures for
the Fund which will include, among other matters, procedures to assist the
Adviser in monitoring compliance with the Fund's investment objectives,
policies and restrictions, tax matters and applicable laws and regulations
and performing certain monthly compliance tests, to the extent relevant
information is available to the Administrator in the performance of its
functions as the Fund's net asset value calculation agent.
3.7 Assist the Fund's Treasurer in the preparation of quarterly reporting
to the Fund's Board of Directors or Trustees as required by applicable
rules under the 1940 Act and as agreed between the Administrator and the
Funds from time to time.
3.8 Report monthly to the Funds' Treasurer on compliance of the Funds'
fidelity bond coverage with Rule 17g-1 of the 1940 Act.
3.9 Report monthly to Treasurer on comparison of the Funds' actual shares
outstanding with its authorized shares.
3.10 Assist the Funds' Treasurer in preparing the Funds' performance
analysis reports (including yield and total return information) calculated
in accordance with applicable U. S. securities laws and in reporting to
external databases such information as may reasonably be
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requested.
3.11 Serve as recordkeeper and net asset value calculation agent
responsible for performing those functions as set forth in Section 4 below
3.12 Create, maintain and retain such records relating to its obligations
under this Agreement as are required under the 1940 Act (including Section
31 thereof and Rules 31a-1 and 31a-2 thereunder).
3.13 Assist the Funds' Treasurer, officers and Adviser in such other
matters as the Funds and the Administrator shall from time to time agree.
In performing its duties and obligations hereunder, the Administrator will
act in accordance with the Funds' Articles of Incorporation or Declaration of
Trust, By-laws and Prospectus and Proper Instructions. It is agreed and
understood, however, that the Administrator shall not be responsible for
compliance the Funds' investments with any applicable documents, laws or
regulations, or for losses, costs or expenses arising out of the Funds' failure
to comply with said documents, laws or regulations or the Funds' failure or
inability to correct any non-compliance therewith.
4. DUTIES AS NET ASSET VALUE CALCULATION AGENT. The Administrator shall
compute and determine the net asset value per share of the Funds as of the close
of business on the New York Stock Exchange on each day on which such Exchange is
open, unless otherwise directed by Proper Instruction. Such computation and
determination shall be made in accordance with:
4.1 The provisions of the Funds' Declaration of Trust or Certificate of
Incorporation and By-Laws, as they may from time to time be amended and
delivered to the Administrator.
4.2 The votes of the Board of Directors or Trustees of the Fund at the
time in force and applicable, as they may from time to time be delivered to
the Administrator.
4.3 Proper Instructions, including without limitation any information:
4.3.1 as to accrual of liabilities of the Funds and as to
liabilities of the Funds not appearing on the books of
account kept by the Administrator
4.3.2 as to the existence, status and proper treatment of reserves,
if any, authorized by the Funds
4.3.3 as to the sources of quotations to be used in computing the
net asset value, including those listed in Appendix B hereto
4.3.4 as to the fair value to be assigned to any securities or
other property for which price quotations are not readily
available
4.3.5 as to the sources of information with respect to "corporate
actions" affecting portfolio securities of the Funds,
including those listed in Appendix B. (Information as to
"corporate actions" shall include information as to
dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations,
mergers, redemptions, calls, maturity dates and similar
transactions, including the ex- and record dates and the
amounts or other terms thereof.).
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4.3.6 as to the use a particular source for the valuation of a
specific Security or other Property of the Funds.
Notwithstanding anything in this Agreement to the contrary, the
Administrator shall not be responsible for the failure of the Funds or their
Investment Advisers to provide the Administrator with Proper Instructions
regarding liabilities which ought to be included in the calculation of the
Funds' net asset value.
On each day that the Administrator shall compute the net asset value per
share of the Funds, the Administrator shall provide the Investment Advisers of
the Funds with written reports which the Investment Advisers will use to verify
that portfolio transactions have been recorded in accordance with the Funds'
instructions and are reconciled with the Funds' trading records.
In like manner, the Administrator shall compute and determine the net asset
value as of such other times as the Board of Directors or Trustees of the Funds
from time to time may reasonably request.
Notwithstanding any other provisions of this Agreement, the following
provisions shall apply with respect to the Administrator's responsibilities as
net asset valuation calculation agent. The Administrator shall be held to the
exercise of reasonable care in computing and determining net asset value, but
shall not be held accountable or liable for any losses or damages the Funds or
any shareholder or former shareholder of the Funds or any other person may
suffer or incur arising from or based upon errors or delays in the determination
of such net asset value resulting from any event beyond the reasonable control
of the Administrator unless such error or delay was due to the Administrator's
negligence willful misconduct in determination of such net asset value (The
parties hereto acknowledge, however, that the Administrator's causing an error
or delay in the determination of net asset value may, but does not in and of
itself, constitute negligence or reckless or willful misconduct.). In no event
shall the Administrator be liable or responsible to the Funds, any present or
former shareholder of the Funds or any other person for any error or delay which
continued or was undetected after the date of an audit performed by the
certified public accountants employed by the Funds if, in the exercise of
reasonable care in accordance with generally accepted accounting standards, such
accountants should have become aware of such error or delay in the course of
performing such audit. The Administrator's liability for any such negligence or
reckless or willful misconduct which results in an error in determination of
such net asset value shall be limited exclusively to the direct, out-of-pocket
loss the Fund, shall actually incur, measured by the difference between the
actual and the erroneously computed net asset value, and any expenses the Fund
shall incur in connection with correcting the records of the Fund affected by
such error (including charges made by the Fund's registrar and transfer agent
for making such corrections) or communicating with shareholders or former
shareholders of the Fund affected by such error.
Without limiting the foregoing, the Administrator shall not be held
accountable or liable to the Funds, any shareholder or former shareholder
thereof or any other person for any delays or losses, damages or expenses any of
them may suffer or incur resulting from (i) the Administrator's failure to
receive timely and suitable notification concerning quotations or corporate
actions relating to or affecting portfolio securities of the Funds or (ii) any
errors in the computation of the net asset value based upon or arising out of
quotations or information as to corporate
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actions if received by the Administrator either (a) from a source which the
Administrator was authorized to rely upon (including those sources listed on
Appendix B), (b) from a source which in the Administrator's reasonable judgment
was as reliable a source for such quotations or information as such authorized
sources, or (c) relevant information known to the Fund or the Investment Adviser
which would impact the calculation of net asset value but which is not
communicated by the Fund or the Investment Adviser to the Administrator.
In the event of any error or delay in the determination of such net asset
value for which the Administrator may be liable, the Funds and the Administrator
will consult and make good faith efforts to reach agreement on what actions
should be taken in order to mitigate any loss suffered by the Fund or its
present or former shareholders, in order that the Administrator's exposure to
liability shall be reduced to the extent possible after taking into account all
relevant factors and alternatives. It is understood that in attempting to reach
agreement on the actions to be taken or the amount of the loss which should
appropriately be borne by the Administrator, the Fund and the Administrator will
consider such relevant factors as the amount of the loss involved, the Fund's
desire to avoid loss of shareholder good will, the fact that other persons or
entities could have been reasonably expected to have detected the error sooner
than the time it was actually discovered, the appropriateness of limiting or
eliminating the benefit which shareholders or former shareholders might have
obtained by reason of the error, and the possibility that other parties
providing services to the Fund might be induced to absorb a portion of the loss
incurred.
The Administrator shall in no event be liable or responsible to the Fund,
any present or former shareholder of the Fund or any other person for any error
or delay which continued or was undetected after the date of an audit performed
by the certified public accountants employed by the Fund if, in the exercise of
reasonable care in accordance with generally accepted accounting standards, such
accountants should have become aware of such error or delay in the course of
performing such audit.
Notwithstanding anything else in this Agreement to the contrary, the
Administrator's entire liability to the Fund for any loss or damage arising or
resulting from its performance hereunder or for any other cause whatsoever, and
regardless of the form of action, shall be limited to the Fund's actual and
direct out-of-pocket expenses and losses which are reasonably incurred by the
Fund. In no event and under no circumstances shall the Administrator or a Fund
be held liable to the other party for consequential or indirect damages, loss of
profits, damage to reputation or business or any other special damages arising
under or by reason of any provision of this Agreement or for any act or omission
hereunder.
5. EXPENSES AND COMPENSATION. For the services to be rendered and the
facilities to be furnished by the Administrator as provided for in this
Agreement, the Funds shall pay the Administrator for its services rendered
pursuant to this Agreement a fee based on such fee schedule as may from time to
time be agreed upon in writing by the Funds and the Administrator. In addition
to such fee, the Administrator shall bill the Funds separately for any
out-of-pocket disbursements of the Administrator. Out-of-pocket disbursements
shall include, but shall not be
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limited to, postage, including courier services; telephone; telecommunications;
printing, duplicating and photocopying charges; forms and supplies; filing fees;
legal expenses; and travel expenses. The foregoing fees and disbursements shall
be billed to the Fund by the Administrator and shall be paid promptly by wire
transfer or other appropriate means to the Administrator.
6. STANDARD OF CARE. The Administrator shall be held only to the exercise of
reasonable care and diligence in carrying out the provisions of this Agreement,
provided that the Administrator shall not thereby be required to take any action
which is in contravention of any applicable law, rule or regulation or any order
or judgment of any court of competent jurisdiction.
7. LIMITATION OF LIABILITY. The Administrator shall incur no liability with
respect to any telecommunications, equipment or power failures, or any failures
to perform or delays in performance by postal or courier services or third-party
information providers (including without limitation those listed on Appendix B).
The Administrator shall also incur no liability under this Agreement if the
Administrator or any agent or entity utilized by the Administrator shall be
prevented, forbidden or delayed from performing, or omits to perform, any act or
thing which this Agreement provides shall be performed or omitted to be
performed, by reason of causes or events beyond its control, including but not
limited to:
7.1 any Sovereign Event. A "Sovereign Event" shall mean any
nationalization; expropriation; devaluation; revaluation; confiscation;
seizure; cancellation; destruction; strike; act of war, terrorism,
insurrection or revolution; or any other act or event beyond the
Administrator's control.
7.2 any provision of any present or future law, regulation or order of the
United States or any state thereof, or of any foreign country or political
subdivision thereof, or of any securities depository or clearing agency,
7.3 any provision of any order or judgment of any court of competent
jurisdiction.
Notwithstanding any other provision of this Agreement, the Administrator
shall not be held accountable or liable for any losses, damages or expenses the
Funds or any shareholder or former shareholder of the Funds or any other person
may suffer or incur arising from acts, omissions, errors or delays of the
Administrator in the performance of its obligations and duties hereunder,
including without limitation any error of judgment or mistake of law, except a
damage, loss or expense resulting from the Administrator's willful malfeasance,
bad faith or negligence in the performance of such obligations and duties. The
Administrator shall in no event be required to take any action, which is in
contravention of any applicable law, rule or regulation or any order or judgment
of any court of competent jurisdiction.
The Fund hereby agrees to indemnify the Administrator against and hold it
harmless from any and all
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losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any act, omission, error or delay
or any claim, demand, action or suit, in connection with or arising out of
performance of its obligations and duties under this Agreement, not resulting
from the willful malfeasance, bad faith or negligence of the Administrator in
the performance of such obligations and duties.
8. RELIANCE BY THE ADMINISTRATOR ON PROPER INSTRUCTIONS AND OPINIONS OF COUNSEL
AND OPINIONS OF CERTIFIED PUBLIC ACCOUNTANTS. The Administrator shall not be
liable for, and shall be indemnified by the Funds against any and all losses,
costs, damages or expenses arising from or as a result of, any action taken or
omitted in reliance upon Proper Instructions or upon any other written notice,
request, direction, instruction, certificate or other instrument believed by it
to be genuine and signed or authorized by the proper party or parties.
Proper Instructions shall include a written request, direction, instruction
or certification signed or initialed on behalf of the Fund by one or more
persons as the Board of Directors or Trustees of the Fund shall have from time
to time authorized. Those persons authorized to give Proper Instructions may be
identified by the Board of Directors or Trustees by name, title or position and
will include at least one officer empowered by the Board to name other
individuals who are authorized to give Proper Instructions on behalf of the
Fund.
Telephonic or other oral instructions or instructions given by telefax
transmission may be given by any one of the above persons and will also be
considered Proper Instructions if the Administrator believes them to have been
given by a person authorized to give such instructions with respect to the
transaction involved.
With respect to telefax transmissions, the Fund hereby acknowledges that
(i) receipt of legible instructions cannot be assured, (ii) the Administrator
cannot verify that authorized signatures on telefax instructions are original,
and (iii) the Administrator shall not be responsible for losses or expenses
incurred through actions taken in reliance on such telefax instructions. The
Fund agrees that such telefax instructions shall be conclusive evidence of the
Fund's Proper Instruction to the Administrator to act or to omit to act.
Proper Instructions given orally will be confirmed by written instructions
in the manner set forth above, including by telefax, but the lack of such
confirmation shall in no way affect any action taken by the Administrator in
reliance upon such oral instructions. The Fund authorizes the Administrator to
tape record any and all telephonic or other oral instructions given to the
Administrator by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents or any investment manager or adviser or
person or entity with similar responsibilities which is authorized to give
Proper Instructions on behalf of the Fund to the Administrator.)
The Administrator may consult with its counsel or the Fund's counsel in any
case where so doing appears to the Administrator to be necessary or desirable.
The Administrator shall not be considered to have engaged in any misconduct or
to have acted negligently and shall be without liability in acting upon the
advice of its counsel or of the Fund's counsel.
The Administrator may consult with a certified public accountant or the
Fund's Treasurer in any case where so doing appears to the Administrator to be
necessary or desirable. The Administrator shall not be
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considered to have engaged in any misconduct or to have acted negligently and
shall be without liability in acting upon the advice of such certified public
accountant or of the Fund's Treasurer.
9. TERMINATION OF AGREEMENT. This Agreement shall continue in full force and
effect until terminated by the Administrator or the Fund by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than ninety (90) days after the date of
such delivery or mailing. In the event a termination notice is given by a party
hereto, all expenses associated with the movement of records and materials and
the conversion thereof shall be paid by the Fund for which services shall cease
to be performed hereunder.
Notwithstanding anything in the foregoing provisions of this clause, if it
appears impracticable in the circumstances to effect an orderly delivery of the
necessary and appropriate records of the Administrator to a successor within the
time specified in the notice of termination as aforesaid, the Administrator and
the Fund agree that this Agreement shall remain in full force and effect for
such reasonable period as may be required to complete necessary arrangements
with a successor.
If a party hereto shall fail to perform its duties and obligations
hereunder (a "Defaulting Party") resulting in material loss to another party
("the "Non-Defaulting Party"), the Non-Defaulting Party may give written notice
thereof to the Defaulting Party, and if such material breach shall not have been
remedied within thirty (30) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving thirty (30) days'
written notice of such termination to the Defaulting Party. If the Administrator
is the Non-Defaulting Party, its termination of this Agreement shall not
constitute a waiver of any other rights or remedies of the Administrator with
respect to payment for services performed prior to such termination or rights of
the Administrator to be reimbursed for out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party.
This Section 9 shall survive any termination of this Agreement, whether for
cause or not for cause.
10. AMENDMENT OF THIS AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof. No provision of this Agreement may be amended or terminated
except by a statement in writing signed by the party against which enforcement
of the amendment or termination is sought.
In connection with the operation of this Agreement, the Fund and the
Administrator may agree in writing from time to time on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
8
<PAGE>
The section headings and the use of defined terms in the singular or plural
tenses in this Agreement are for the convenience of the parties and in no way
alter, amend, limit or restrict the contractual obligations of the parties set
forth in this Agreement.
11. GOVERNING LAW. This Agreement shall be governed by and construed according
to the laws of the Commonwealth of Massachusetts without giving effect to
conflicts of laws principles.
12. NOTICES. Notices and other writings delivered or mailed postage prepaid to
the Fund addressed to the Fund at 153 East 53rd Street, New York, New York 10022
or to such other address as the Fund may have designated to the Administrator in
writing, or to the Administrator at 40 Water Street, Boston, MA 02109,
Attention: Manager, Fund Administration Department, or to such other address as
the Administrator may have designated to the Fund in writing, shall be deemed to
have been properly delivered or given hereunder to the respective addressee.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Fund and the Administrator and their respective successors and
assigns, provided that no party hereto may assign this Agreement or any of its
rights or obligations hereunder without the written consent of the other party.
14. COUNTERPARTS. This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
15. EXCLUSIVITY. The services furnished by the Administrator hereunder are not
to be deemed exclusive, and the Administrator shall be free to furnish similar
services to others.
16. AUTHORIZATION. The Fund hereby represents and warrants that the
execution and delivery of this Agreement have been authorized by the
Fund's Board of Directors or Trustees and that this Agreement has been
signed by an authorized officer of the Fund.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
BROWN BROTHERS HARRIMAN & CO. each of the Management Investment
Companies listed on the attached
Appendix A
By: /s/ Illegible By: /s/ Hal Liebes
---------------------------- ----------------------------
Name: Name: Hal Liebes
Title: Title: Senior Vice President
10
<PAGE>
APPENDIX A
TO
ADMINISTRATIVE AND ACCOUNTING AGENCY AGREEMENT
Dated as of February 27, 1999
The following is a list of Investment Companies for which the Administrator
shall serve under a Administrative and Accounting Agency Agreement dated as of
February 27, 1999 (the "Agreement"):
BEA INCOME FUND, INC.
BEA STRATEGIC GLOBAL INCOME FUND, INC.
IN WITNESS WHEREOF, each of the parties hereto has caused this Schedule to be
executed in its name and on behalf of each such Investment Company.
each of the Investment Companies BROWN BROTHERS HARRIMAN & CO.
listed above
By: /s/ Hal Liebes By: /s/ Illegible
------------------------ ------------------------
Name: Hal Liebes Name:
Title: Senior Vice President Title:
11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 5 to the registration statement on Form N-2 (the "Registration
Statement") of our report dated February 19, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of Credit Suisse Asset Management Strategic Global Income
Fund, Inc., which financial statements and financial highlights are also
incorporated by reference into the Registration Statement. We also consent to
the references to our firm under the heading "Financial Highlights" in the
Prospectus and under the heading "Experts" in the Statement of Additional
Information.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
July 29, 1999
