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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
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(Name of Registrant as Specified In Its Charter)
THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration number, or the Form or Schedule and the date of its
filing.
1) Amount Previously Paid: $00.00
2) Form, Schedule or Registration Statement No.: 811-5734
3) Filing Party: The Southeastern Thrift and Bank Fund, Inc.
4) Date Filed:<PAGE>
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PRELIMINARY PROXY MATERIALS
THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
(800) 843-0090
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 31, 1995
JUNE 23, 1995
To The Stockholders of
The Southeastern Thrift and Bank Fund, Inc.:
Notice is hereby given that a Special Meeting of Stockholders
(the "Meeting") of The Southeastern Thrift and Bank Fund, Inc. (the
"Company") will be held at 1100 Peachtree Street, Suite 2800, Atlanta,
Georgia 30309, on August 31, 1995 at 9:00 a.m., for the following
purposes:
(1) To consider and act upon a proposal to amend the
Company's Investment Policies and Investment Restriction No. 1 to
permit the Company to invest in issuers in the financial services
industry and expand the Company's ability to invest in banks and
savings and loans outside the Southeast (Proposal No. 1).
(2) To consider and act upon a proposal to amend the
Company's Articles of Incorporation to provide that the Company
shall have perpetual duration (Proposal No. 2). If Proposal 2 is
approved by the stockholders, Proposal 3 will not be presented
and considered at the Meeting.
(3) If Proposal 2 is not approved by the stockholders, to
consider and act upon a proposal to amend the Company's Articles
of Incorporation to convert the Company from a closed-end
investment company to an open-end investment company (Proposal
No. 3).
(4) To transact such other business as may properly come
before the meeting or any adjournment(s) thereof.
The Directors of the Company have fixed the close of business on
June 23, 1995 as the record date for the determination of stockholders
entitled to notice of and to vote at the Meeting or any adjournment(s)
thereof.
You are cordially invited to attend the Meeting. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED
FOR THAT PURPOSE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE
COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN
YOUR PROXY PROMPTLY. THE ENCLOSED PROXY IS BEING SOLICITED ON BEHALF
OF THE DIRECTORS OF THE COMPANY.
By Order of the Directors,
----------------------------------
Reinaldo Pascual
Secretary
Dated: June 23, 1995<PAGE>
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THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
(800) 843-0090
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
AUGUST 31, 1995
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Directors of The Southeastern
Thrift and Bank Fund, Inc., a Maryland corporation (the "Company"), to
be voted at the Special Meeting of Stockholders (the "Meeting"). The
Meeting will be held at 1100 Peachtree Street, Suite 2800, Atlanta,
Georgia 30309, on August 31, 1995 at 9:00 a.m. Copies of this Proxy
Statement were first mailed to stockholders of the Company on or about
_________ __, 1995.
All properly executed proxies received prior to the Meeting will
be voted at the Meeting in accordance with the instructions marked
thereon or otherwise as provided therein. Unless instructions to the
contrary are marked, proxies will be voted in favor of each of the
proposals referred to on the form of proxy and in accordance with the
discretion of the proxy holders on any other matter that may properly
come before the Meeting. Any shareholder giving a proxy has the power
to revoke it at any time before it is voted by filing with the
Secretary of the Company either an instrument revoking the proxy or a
duly executed proxy bearing a later date. Proxies may also be revoked
by any stockholder present at the Meeting who expresses a desire to
vote his shares in person.
The Directors of the Company have fixed the close of business on
June 23, 1995 as the record date for the determination of stockholders
entitled to notice of and to vote at the Meeting and at any
adjournment(s) thereof. Stockholders of record of the Company as of
the record date will be entitled to one vote for each share held, with
no shares having cumulative voting rights. As of June 23, 1995, the
Company had outstanding _______________ shares of common stock.
The Directors know of no business other than that mentioned in
Items 1 through 3 in the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matter is properly
presented, it is the intention of the persons named in the enclosed
proxy to vote the proxies in accordance with their best judgment.
Proposals 1 through 3 will be presented and considered at the
Meeting in the order in which they are listed in the Notice of
Meeting, but if the stockholders approve Proposal 2, Proposal 3 will
not be presented and considered at the Meeting.<PAGE>
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DISCUSSION OF PROPOSALS
PROPOSAL 1: APPROVAL OF AMENDMENTS TO THE COMPANY'S INVESTMENT
POLICIES AND INVESTMENT RESTRICTION NO. 1 TO ALLOW THE
COMPANY TO INVEST IN ISSUERS IN THE FINANCIAL SERVICES
INDUSTRY AND EXPAND THE COMPANY'S ABILITY TO INVEST IN
BANKS AND SAVINGS AND LOANS OUTSIDE THE SOUTHEAST
DESCRIPTION OF PROPOSAL
The Company's investment policies provide that the Company will
seek to achieve its primary investment objective of long-term capital
appreciation by investing at least 65% of its total assets in equity-
related securities issued by Southeastern banks, savings and loan
institutions and bank and savings and loan holding companies. The
directors have determined that Southeastern institutions are those
located in the States of Alabama, Florida, Georgia, Louisiana,
Mississippi, North Carolina, South Carolina, Tennessee, and Virginia.
The Company's investment policies also provide that in meeting its
primary investment objective the Company may invest up to 25% of its
total assets in equity-related securities issued by banking and
savings institutions (or their holding companies) located outside the
Southeast.
The Board of Directors is proposing that the Company's investment
policies be amended to allow the Company to invest up to "35% [25%] of
its total assets in equity-related securities issued by banking and
savings institutions (or their holding companies) located outside the
Southeast and in equity-related securities of other United States
issuers in the financial services industry." Material to be deleted
is in brackets [ ]. Material to be added is underlined. Issuers in
the financial services industry include, without limitation, insurance
companies, broker/dealers, investment advisers, credit card companies,
finance companies, credit reporting companies, insurance brokerage
companies, mortgage companies and such other companies as may provide
administrative or other support services to financial services
companies.
The Company's Investment Restriction No. 1 provides that, except
for temporary defensive purposes, the Company may not invest more than
25% of its total assets in one industry or group of related industries
except that the Company will invest more than 25% of its assets in the
banking and savings industries. The proposed amendment to the
Company's investment policies will also require an amendment to
Investment Restriction No. 1. If Proposal 1 is approved, Investment
Restriction No. 1 would be amended to provide that, except for
temporary defensive purposes, the Company "may not invest more than
25% of its total assets in any one industry or group of related
industries EXCEPT that the Company will invest more than 25% of its
assets in the banking and savings industries AND MAY INVEST MORE THAN
25% OF ITS TOTAL ASSETS IN OTHER ISSUERS IN THE FINANCIAL SERVICES
INDUSTRY." Material to be added is underlined.
REASONS FOR AMENDMENTS TO THE INVESTMENT POLICIES AND RESTRICTION AND
BOARD RECOMMENDATION
Certain regulatory changes have taken place, and others have been
proposed, that are expected to result in continued growth
opportunities for banks and savings and loan institutions.
Opportunities are expected to arise from, among other things, the
enactment of legislation allowing for interstate banking. Interstate
banking is expected to result in consolidation of the industry as
larger institutions acquire smaller ones, and increased earnings as
larger multi-state institutions begin to reap the benefits of
economies of scale. Proposed reforms to
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the Glass-Steagall Act allowing banks to enter the securities business,
and a more flexible posture on the part of federal regulators that has
allowed banks and savings and loan institutions to expand their product
offering and enter new lines of business are also expected to create
increasing opportunities in the future. For example, banks have
already begun to provide insurance services on a limited basis
and have increasingly become an important part of the money management
(e.g., mutual fund) industry in the United States. It is difficult
to predict the effect that the regulatory changes that have been enacted
and proposed will have in the banking and savings and loan industries
and whether and when the proposed reforms will be adopted. Regardless
of whether these regulatory changes are effected, banks and savings and loan
institutions have increasingly found ways to expand their product
offering and enter new lines of business. The Board feels that having
the ability to invest in companies in the financial services industry
will potentially enhance the investment opportunities and return of
the Company's portfolio, thereby benefitting the Company and its
stockholders. Accordingly, the Board believes that the Company's
investment adviser should have the ability to make such investments as
it deems appropriate under these circumstances.
In addition, the Board feels that increasing the maximum
percentage of the Company's assets which may be invested in equity-
related securities issued by banking and savings institutions (or
their holding companies) located outside the Southeast, from 25% to
35%, will clarify the Company's investment policies and provide the
Company's investment adviser with somewhat greater investment
flexibility.
VOTE REQUIRED AND IMPLEMENTATION
Approval of the amendments to the Company's investment policies
and restriction requires the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Company which,
under the 1940 Act, means the affirmative vote of the lesser of (a)
more than 50% of the outstanding shares of the Company or (b) 67% or
more of the outstanding shares present at the Meeting or represented
by proxy, provided that more than 50% of the outstanding shares are
present or represented. If the proposed amendments are not approved,
the Company will continue to operate within its existing policies and
restrictions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSED AMENDMENTS TO THE COMPANY'S INVESTMENT POLICIES AND
INVESTMENT RESTRICTION NO. 1.
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PROPOSAL 2: APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO PROVIDE THAT THE COMPANY SHALL HAVE A
PERPETUAL DURATION
BACKGROUND AND DESCRIPTION OF THE PROPOSAL
Article Ninth of the Company's Articles of Incorporation provides
that:
"The duration of the Corporation shall be until June 30,
1994, provided, however, that prior to that date the Board
of Directors may, by resolution and without the approval of
the stockholders, extend the duration of the Corporation
from time to time until not later than June 30, 1997."
In accordance with Article Ninth, the Company's duration was
extended to June 30, 1997 by action of the Board of Directors at a
Special Meeting on December 10, 1993. Therefore, the Company is to
dissolve on June 30, 1997.
The Board of Directors is proposing and recommending that Article
Ninth of the Company's Articles of Incorporation be amended to read in
its entirety as follows:
"The duration of the Corporation shall be perpetual."
If Proposal 2 is approved, the Company's duration as a closed-end
investment company shall be perpetual unless the Board, in its sole
discretion, recommends that the Company be dissolved at such time in
the future as it deems advisable and such dissolution is approved by
the stockholders at a meeting held for such purpose. At the time of
any such meeting, the stockholders would also be given the
opportunity, pursuant to Article Tenth of the Company's Articles of
Incorporation, to convert the Company from a closed-end company to an
open-end company (See Proposal 3).
VOTE REQUIRED AND IMPLEMENTATION
Approval of Proposal 2 requires the affirmative vote of holders
of a majority of all of the outstanding shares of the Company. If
Proposal 2 is not approved, the Company will either be converted to an
open-end investment company or dissolved as of June 30, 1997, all of
which is addressed in Proposal 3 below.
BOARD RECOMMENDATION
The Company's investment policies provide that the Company will
seek to achieve its primary investment objective of long-term capital
appreciation by investing at least 65% of its total assets in equity-
related securities issued by Southeastern banks, savings and loan
institutions and bank and savings and loan holding companies. The
Company's investment policies also provide that in meeting its primary
investment objective the Company may invest up to 25% of its total
assets in equity-related securities issued by banking and savings and
loan institutions (or their holding companies) located outside the
Southeast. Please refer to Porposal 1 for certain amendments being
proposed to the Company's investment policies.
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The Board of Directors believes that the superior performance
returns of the Fund since its inception, both in general and compared
to other investment companies in its peer group and to relevant market
indices, bears out the merits of the Fund's investment strategy and
focus. Although past performance is not indicative of future
performance, the Board of Directors believes that the Southeastern
United States, the Company's main geographical focus, and the banking
and savings and loan industries present opportunities for above market
rates of return beyond June 30, 1997. This belief was key to the
Board's decision to retain net long-term capital gains in the Company
for investment purposes. The Company's 1989 Prospectus stated that
"investment in the savings and banking industries offers attractive
opportunities for long-term capital appreciation." The Prospectus
also stated that "the economy of the Southeastern United States is
particularly attractive relative to that of other regions of the
country." The Board of Directors believe that these statements are as
true today as they were in 1989. In light of the foregoing and the
other factors discussed below, the Board now believes that it would be
in the Company's and its stockholder's best interest to extend the
duration of the Fund indefinitely.
The Board's belief is based on a number of factors, including,
without limitation, the fact that regulatory changes taking place in
the banking and savings and loan industries are expected to result in
continued growth opportunities for banks and savings and loan
institutions as well as increased opportunities for consolidation in
the industry. Opportunities are expected to arise from, among other
things, the enactment of legislation allowing for interstate banking.
Interstate banking is expected to result in consolidation of the
industry as larger institutions acquire smaller ones, and increased
earnings as larger multi-state institutions begin to reap the benefits
of economies of scale. Proposed reforms to the Glass-Steagall Act
allowing banks to enter the securities business, and a more flexible
posture on the part of federal regulators that has allowed banks and
savings and loan institutions to expand their product offering and get
into new lines of business are also expected to create increasing
opportunities in the future. Furthermore, the Southeastern United
States is expected to continue to be one of the country's leading
areas for economic growth and activity.
The Board has also considered the effect that a possible
liquidation of the Fund on June 30, 1997 has had on the discount to
net asset value at which the Company's shares trade on the open
market. In 1989, the Company believed, as stated in its Prospectus,
that "sellers may be less inclined to accept a significant discount if
they have some prospect of being able to receive net asset value if
the Fund dissolved or converted to an open-end company." That was the
reason why Articles ninth (dissolution) and tenth (conversion) were
included in the Company's Articles of Incorporation. Although the
possibility of dissolution or conversion might have contributed to
keeping the discount at acceptable levels, the Board believes that
such contribution has not been significant. The Board believes that
the positive investment prospects of the banking and savings and loan
industries, combined with the Board's determination to take decisive
action to narrow the discount if and when it is appropriate, has had
and will continue to have as much, if not more, of an impact on the
size of the discount than forced dissolution or conversion. In this
regard, the Board will continue to consider each quarter the
repurchase of Company shares and the making of tender offers during
periods when the Company shares are trading at a discount to net asset
value. The Board will also consider such other action as may be
appropriate to narrow an unusually large discount, including, without
limitation, proposing to the stockholders that the Company be
dissolved or converted to open-end at a later time.
The Board also believes that making the duration of the Fund
perpetual will give John Hancock Advisers, Inc., the Company's adviser
and administrator, the ability to take advantage of investment
opportunities on a long-term basis. It will also give the Board
additional flexibility to take such action as it believes appropriate
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to maximize stockholder value and prospects without the uncertainty
and pressures of a forced dissolution on June 30, 1997.
CONFLICTING INTERESTS
Extension of the duration of the Company as opposed to
dissolution of the Company on June 30, 1997 will benefit John Hancock
Advisers, Inc., the Company's investment adviser and administrator
("JHA"), to the extent that the continuation of the Investment
Advisory and Administration Agreements between the Company and JHA
continues to be approved by the Board. No member of the Board of
Directors is an affiliate of JHA. However, various senior officers of
JHA also serve as officers of the Company, including James K. Schmidt,
Vice-President and Portfolio Manager of the Company and Senior Vice
President and Portfolio Manager of JHA, and James B. Little, Treasurer
of the Company and Chief Financial Officer of JHA.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO PROVIDE THAT THE COMPANY SHALL HAVE A PERPETUAL DURATION.
PROPOSAL 3: PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF
INCORPORATION TO CONVERT THE COMPANY TO AN OPEN-END
INVESTMENT COMPANY
BACKGROUND AND DESCRIPTION OF PROPOSAL
Proposal 3 will only be presented and considered at the Meeting
if Proposal 2 is not approved by the stockholders.
Article Tenth of the Company's Articles of Incorporation mandates
that prior to dissolution of the Company, the stockholders be
submitted "a proposal to convert the Corporation from a "closed-end
company" to an "open-end company," as those terms are defined in
sections 5(a)(2) and 5(a)(1), respectively, of the Investment Company
Act of 1940, as amended (the "Act"), and amendments to the charter of
the Corporation required to effect such proposal." (1) Proposal 3
presents such matters to the stockholders. Attached hereto as Exhibit
A is a copy of the Articles of Amendment necessary to effect such
conversion. Approval of Proposal 3 would constitute approval of the
Articles of Amendment.
____________________
(1) Section 5(a)(1) of the Investment Company Act of 1940, as amended
(the "1940 Act"), defines an "open-end company" as a management
company which is offering for sale or has outstanding any redeemable
security of which it is the issuer. Section 5(a)(2) of the 1940 Act
defines a "closed-end company" as any management company other than an
open-end company. A "management company" is defined by Section 4(3)
of the 1940 Act as any investment company other than a face-amount
certificate company or a unit investment trust.
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COMPARISON BETWEEN CLOSED-END AND OPEN-END INVESTMENT COMPANIES
The Company is currently a closed-end investment company (also
known as a "closed-end fund"). As such, it neither redeems its
outstanding shares of stock nor continuously offers new stock for
sale; thus, it operates with a relatively fixed capitalization. The
Company's shares of stock are traded on the NASDAQ National Market
System ("NASDAQ"). Open-end investment companies (also known as
"mutual funds") issue redeemable shares entitling stockholders to
redeem their proportionate share of a fund's net asset value. Also,
open-end funds generally issue new shares at the fund's net asset
value. Finally, open-end funds generally have a perpetual duration.
In addition to the definitional differences between closed-end
and open-end funds, several significant distinctions exist which tend
to favor one type or the other in terms of advantages or disadvantages
to the stockholder, although some are indistinct. Grouped in this
manner, some of the legal, operational and practical differences
between closed-end and open-end investment companies are as follows:
CLOSED-END FUND ADVANTAGES AND/OR OPEN-END FUND DISADVANTAGES
(1) PORTFOLIO MANAGEMENT. Whereas closed-end funds can be fully
invested, open-end funds generally maintain some buffer of highly
liquid assets or cash to meet net redemptions to avoid liquidating
portfolio securities at an inopportune time. Closed-end funds,
therefore, may invest with greater emphasis on longer-term
appreciation. This is particularly true with respect to the Company,
as its primary investment objective is long-term capital appreciation.
(2) ILLIQUID SECURITIES. An open-end investment company is
subject to the 1940 Act requirement that no more than 15% of its total
assets may be invested in securities that are not readily marketable.
The Company is currently subject to a 20% limitation. If the Company
is converted to an open-end fund it will be required to meet the 15%
limitation. Approval of Proposal 3 by the stockholders constitutes
approval of an amendment to the Company's investment restrictions to
comply with the 15% requirement, as well as approval of any other
similar amendment that may be legally required by the Act.
(3) NASDAQ LISTING. The Company is currently listed on NASDAQ's
National Market System. Conversion to an open-end fund would require
immediate de-listing of the Company from NASDAQ's National Market
System. It is believed in some investment circles that a fund listing
on a U.S. stock exchange, and in particular such as NASDAQ's National
Market System, is a valuable asset, especially in terms of attracting
non-U.S. investors. In addition, certain investors, such as pension
funds, have internal restrictions on the amount of their portfolio
which can be invested in non-listed securities.
(4) BLUE SKY RESTRICTIONS AND COSTS. Because the Company is
listed on NASDAQ, it is exempt from the securities registration
requirements of most states. If converted, as an open-end fund no
longer listed on NASDAQ, it will be required to observe certain state
investment limitations from which it is now exempt. While state
investment limitations probably would not require changing fundamental
policies of the Company and may not have a significant impact on the
Company's investment operations, the cost of registering in the states
can be significant.
(5) UNDERWRITING COSTS. If the Company converts to open-end
status it will need to sell new shares in order to, among other
things, counterbalance the effect of redemptions. A principal
underwriter will be needed for selling the new shares. The cost of
the underwriting would be paid either by purchasers (in the case of
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a front-end load) or by stockholders (in the case of a Rule 12b-1
distribution plan, which would require separate stockholder approval).
Redemption fees and contingent deferred sales charges may also be
employed. In any case, a selling effort is likely to result in
increased costs to the Company and its stockholders.
(6) LEVERAGE; RAISING CAPITAL. The ability to borrow is more
restricted in the case of open-end funds than it is in the case of
closed-end funds. Closed-end funds can also issue preferred stock,
which is not permitted to open-end funds. The Company has not to date
utilized this additional flexibility.
(7) QUALIFICATION AS A REGULATED INVESTMENT COMPANY. Treatment
as a regulated investment company under the Internal Revenue Code of
1986, as amended, allows the Company to be relieved of federal income
tax on that part of its investment company taxable income and net
capital gain that is distributed to its shareholders. To qualify for
this treatment the Company must currently meet several requirements,
one of which is that less than 30% of the Company's gross income each
taxable year may be derived from the sale or other disposition of
securities, option or futures contracts held for less than three
months. This requirement may not be able to be satisfied if the
Company converts to an open-end fund, particularly if the Company is
required to sell recently acquired portfolio securities because of
unexpectedly large net redemptions or large influxes of cash followed
within a short time by significant redemptions of Company shares.
OPEN-END FUND ADVANTAGES AND/OR CLOSED-END DISADVANTAGES
(1) REDEEMABILITY OF SHARES. Open-end funds are required to
redeem their shares at the holder's option on seven days' notice.
This enables holders to realize promptly the full value of the
underlying assets. An open-end fund thus eliminates the possibility
of realizing a premium as well as the possibility of suffering a
discount on sale. If the proposal to open-end the Company is
approved, the current discount on the Company's shares will most
likely be reduced prior to the date the Company converts to an open-
end fund because the market, in anticipation of the ability to redeem
shares at net asset value, will most likely cause the market price for
the Company's shares to increase to net asset value.
(2) RAISING CAPITAL. A closed-end fund trading at a discount
may not be able to raise capital through share sales when it believes
further investment would be advantageous because the 1940 Act
restricts the ability of a closed-end fund to sell its shares at a
price below net asset value, other than through a "rights offering" to
existing stockholders. Open-end funds, on the other hand, are priced
at net asset value and therefore can sell additional shares at any
time. Open-end funds generally maintain that this ability to raise
new money achieves greater economies of scale and improves investment
management. However, others have suggested that large net purchases
often occur around market highs and net redemptions around market
lows, normally considered inopportune times to invest or liquidate
portfolio positions, respectively. In a falling market situation, for
example, redemptions increase and liquidations in the portfolio must
increase to meet those redemptions. In the event temporary
investments and borrowings are exhausted, the result may be that the
more liquid blue chip securities will be sold, leaving the open-end
fund with the less-liquid, lower-grade securities.
(3) NASDAQ's NATIONAL MARKET SYSTEM FEE. As an open-end fund,
the Company will no longer be listed on NASDAQ. The Company will thus
save the annual NASDAQ fee of $5,750 but will, as a result of de-
listing, have to pay the state blue sky fees and expenses, discussed
above, which could range from $50,000 to $75,000 annually.
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(4) REPORTING OF NET ASSET VALUE. As an open-end fund, net
asset value would be reportedly daily (as contrasted to weekly at
present). Computing net asset value on a daily basis will be more
expensive for the Company than only having it computed on a weekly
basis, but would provide more current information to stockholders.
(5) STOCKHOLDER SERVICES. Open-end funds typically provide more
services to stockholders than closed-end funds. One service that is
generally offered by open-end funds is enabling stockholders to
transfer their investment from one fund into another fund which is
part of a family of open-end funds at little or no cost to the
stockholders. This permits the exchange of shares at relative net
asset value when the holder's investment objective changes. There
does not currently exist a family of funds that the Company could be a
part of and no assurance can be given that a family of funds will be
available in the future. Other services that could be offered include
use of the Company for retirement plans and permitting purchase and
sales of shares in convenient amounts. There are, of course,
additional costs for these services which must be weighed against the
anticipated benefit of the particular service.
In addition to the relative inherent qualities of closed-end and
open-end investment companies, certain negative results will
necessarily derive from the act of conversion itself:
(1) REDEMPTION EXPENSES AND CONSEQUENCES. Net redemptions are
probable immediately after open-ending the Company, although the
redemption fee mentioned below may reduce the number of redemptions
that would otherwise occur. Redemptions will result in increased
brokerage expense and increased recognition of taxable gains and
losses. These redemptions could reduce the Company to a size smaller
than is economically viable, resulting in a decision to terminate and
liquidate the Company. At a minimum, the expense ratio will increase
because the cost of operating the Company will remain the same
although the size of the Company will have decreased.
(2) CAPITAL GAINS. The treatment of capital gains required
under U.S. tax law can be onerous to non-redeeming stockholders in the
event of the Company's conversion to an open-end fund. To raise cash
to satisfy redeeming stockholders, the Company would be required to
sell portfolio securities. If the Company's basis in the portfolio
securities sold is less than the sale price obtained, net capital gain
may be realized. U.S. tax law imposes both an income tax and an
excise tax on net capital gain unless the Company distributes net
capital gain to all stockholders, including non-redeeming
stockholders. Two negative results occur: first, non-redeeming
stockholders recognize a greater amount of capital gain than would
otherwise be the case; and, second, to make the capital gain
distribution, the Company may need to sell additional portfolio
securities, thereby reducing further the size of the Company and,
possibly creating additional capital gain.
(3) CONVERSION COSTS. Conversion would be expensive, requiring
legal, accounting and other expenses of establishing a new structure.
Although the Board has been advised that the cost of conversion would
be at least $100,000, it is unable to determine at this time the
actual costs that would be involved.
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VOTE REQUIRED AND IMPLEMENTATION
Approval of conversion of the Company to an open-end investment
company requires the affirmative vote of the holders of a majority of
all of the outstanding shares of the Company.
If Proposal 2 is not approved, and Proposal 3 is approved, the
Board will convene and consider the method and time period for the
conversion of the Company into an open-end investment company. The
Board currently projects that a period of six to nine months would be
necessary to effectuate the conversion. The Board will also need to
determine whether to impose a redemption fee (commonly between 1% and
3%) for redemptions (whether in cash or in-kind) occurring within a
certain period of time (e.g., six months) after the change in status
of the Company. This type of redemption fee is similar to that
imposed by other funds which have converted into open-end funds and is
a method of reducing the number of immediate redemptions and
offsetting the brokerage and other costs of liquidations.
In addition, in order to reduce the problem of recognition of
capital gains discussed above, the Board may determine that aggregate
redemptions by any single investor or related group of investors in an
amount greater than a set dollar level (for example, $250,000),
occurring within a certain period of time (e.g., six months) following
the conversion of the Company to an open-end fund, will be made in
securities held by the Company. This payment-in-kind would shift the
brokerage cost of liquidating those securities to the redeeming
stockholder and would reduce the recognition of capital gain by the
Company and non-redeeming stockholders. Any in-kind distributions
would likely be done on an across-the-board basis, to the extent
practicable, to avoid partiality in the selection of securities to be
distributed.
The Board will consider other methods of easing the transition
into becoming an open-end fund. These methods will be adopted if the
Board finds that they are in the best interest of stockholders.
If neither Proposal 2 nor Proposal 3 is approved by the
stockholders, the Company will dissolve pursuant to Article Ninth of
its Articles of Incorporation as of June 30, 1997 pursuant to a Plan
of Liquidation and Dissolution to be adopted by the Board at that
time. It is expected that such plan would be similar, if not
identical, to the Plan of Liquidation and Dissolution attached hereto
as Exhibit B (the "Plan").
In such event, the assets of the Company would be liquidated
pursuant to the Plan, and the nature and timing of such liquidation
would be determined by the officers of the Company. The proceeds of
liquidation will be used to satisfy the Company's known obligations.
The "Liquidation Value" (as defined below) will then be distributed to
the stockholders on the Distribution Date (as defined in the Plan),
which is currently expected to be no later than December 31, 1997.
The Company anticipates that the Liquidation Value will be paid in
cash. Upon distribution of the Liquidation Value, stockholders will
recognize a taxable gain or loss on their Company shares, and
stockholders should consult their tax advisors if dissolution is
approved. Promptly thereafter the officers of the Company would take
all necessary and appropriate action to effect a complete statutory
dissolution of the Company.
The Liquidation Value will be determined in the same manner as
the Company's net asset value is determined. Liquidation Value means,
as of the Distribution Date, the aggregate of all assets of the
Company less the sum of the aggregate amount of all liabilities of the
Company, divided by the total number of issued and outstanding shares
of the Company. The Board of Directors may, if appropriate, authorize
the establishment of
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PRELIMINARY PROXY MATERIALS
a reserve to meet any contingent liabilities of the Company which amount,
if any, shall be deducted pro rata from the Liquidation Value.
CONFLICTING INTERESTS
Extension of the duration of the Company as opposed to
dissolution of the Company on June 30, 1997 will benefit John Hancock
Advisers, Inc., the Company's investment adviser and administrator
("JHA"), to the extent that the continuation of the Investment
Advisory and Administration Agreements between the Company and JHA
continues to be approved by the Board. No member of the Board of
Directors is an affiliate of JHA. However, various senior officers of
JHA also serve as officers of the Company, including James K. Schmidt,
Vice-President and Portfolio Manager of the Company and Senior Vice
President and Portfolio Manager of JHA, and James B. Little, Treasurer
of the Company and Chief Financial Officer of JHA.
BOARD POSITION
The Board of Directors has extensively considered the advantages
and disadvantages of conversion to an open-end format listed above as
well as other relevant factors. The Board believes that no
circumstances exist at this time that warrant the fundamental changes
in investment strategy and fund operation which would result from the
conversion of the Company to open-end status. Rather, the Board
strongly believes that the perpetual continuation of the Company as a
closed-end fund is in the best interests of the Company and its
stockholders, as discussed in Proposal 2. Therefore, the Board
reiterates its recommendation that the stockholders vote FOR Proposal
2, and makes no recommendation as to Proposal 3.
ADVISER AND ADMINISTRATOR
The Company's investment adviser and administrator is John
Hancock Advisers, Inc., 101 Huntington Avenue, Boston, Massachusetts,
02199.
PRINCIPAL STOCKHOLDERS
As of June 23, 1995, no person was known to be record and
beneficial owner of more than five percent (5%) of the outstanding
shares of common stock of the Company.
ANNUAL REPORT
The Annual Report to Stockholders for the fiscal year ended
December 31, 1994 has preceded this Proxy Statement. The Company will
furnish, without charge, a copy of the annual report and the most
recent semi-annual report, if any, to any stockholder upon request.
Such requests should be directed in writing to the Company c/o Artie
Regan, Regan & Associates, Inc., 15 Park Row, New York, New York
10058.
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PRELIMINARY PROXY MATERIALS
ADDITIONAL INFORMATION
EXPENSES
The expense of preparation, printing and mailing of the enclosed
form of proxy and accompanying Notice and Proxy Statement will be
borne by the Company. The Company will reimburse the Adviser and
others for their reasonable expenses, if any, in forwarding proxy
solicitation material to the beneficial owners of the shares of the
Company.
SOLICITATION
In order to obtain the necessary quorum at the Meeting,
supplementary solicitation may be made by mail, telephone, telegraph
or personal interview by officers of the Company and by Regan &
Associates, Inc. ("Regan"). Regan has agreed to provide the Company
with all necessary consulting and solicitation services, including,
without limitation, assistance in preparing proxy materials, meeting
agenda, remainder mailings, notifying brokers and banks, delivering
proxy materials to every broker and bank that holds shares in street
name and tabulating stockholder votes. Regan's fees for these
services will be $6,000 plus reimbursement for out-of-pocket expenses
up to $3,000, provided, however, that no fee shall be payable if the
proposals recommended by the Board of Directors are not approved.
SHAREHOLDER PROPOSALS
As a Maryland corporation, the Company does not intend to, and is
not required to, hold annual meetings of stockholders except under
certain limited circumstances. Stockholders wishing to submit
proposals for inclusion in a proxy statement for a subsequent
stockholders' meeting should send their written proposals to the
Secretary of the Company, 1100 Peachtree Street, Suite 2800, Atlanta,
Georgia 30309.
By Order of the Board of Directors,
Dated: June 23, 1995 ____________________________________
Reinaldo Pascual
Secretary
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PRELIMINARY PROXY MATERIALS
EXHIBIT A
THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
ARTICLES OF AMENDMENT
THE SOUTHEASTERN THRIFT AND BANK FUND, INC., a Maryland
corporation having its principal office c/o The Prentice-Hall
Corporation System, Maryland, 1123 N. Eutaw Street, Baltimore,
Maryland 21201 (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
as follows:
(1) Article THIRD, Section (1) of the charter is
amended to read in its entirety as follows:
(a) To act as an open-end management
investment company registered as such with the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act").
(2) Article SIXTH of the charter is amended to
read in its entirety as follows:
SIXTH: (a) the total number of shares of
stock of all classes which the Corporation has authority to issue is
fifty million (50,000,000) shares of capital stock (par value $0.001
per share), amounting in aggregate par value to $50,000. All of such
shares are classified as "Common Stock". The Board of Directors may
classify and reclassify any unissued shares of capital stock into one
or more additional or other classes or series as may be established
from time to time by setting or changing in any one or more respects
the designations, preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications or
terms or conditions of redemption of such shares of stock; provided
that there may be variations so fixed and determined among different
series and classes as to investment objectives, purchase price, right
of redemption, special rights as to dividends, and in liquidation,
with respect to assets belonging to a particular series or class,
voting powers, and conversion rights.
(b) The following is a description of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions
of redemption of the Common Stock and any additional class or series
of stock of the Corporation (unless provided otherwise by the Board of
Directors with respect to any such additional class or series at the
time of establishing and designating such additional class or series).
(1) ASSETS BELONGING TO CLASS OR SERIES.
All consideration received by the Corporation from
the issue or sale of shares of a particular class
or series, together with all assets in which such
consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale,
exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be,
shall irrevocably belong to that class or series
for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books
of account of the Corporation. Such
consideration, assets, income, earnings, profits,
and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived
from any reinvestment of such proceeds, in
A-1<PAGE>
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PRELIMINARY PROXY MATERIALS
whatever form the same may be, together with any
General Items allocated to that class or series as
provided in the following sentences, are herein
referred to as "assets belonging to" that class or
series. In the event that there are any assets,
income, earnings, profits, and proceeds thereof,
funds, or payments which are not readily
identifiable as belonging to any particular class
or series (collectively "General Items"), such
General Items shall be allocated by or under the
supervision of the Board of Directors to and among
any one or more of the classes or series
established and designated from time to time in
such manner and on such basis as the Board of
Directors, in its sole discretion, deems fair and
equitable; and any General Items so allocated to a
particular class or series shall belong to that
class or series. Each such allocation by the
Board of Directors shall be conclusive and binding
for all purposes.
(2) LIABILITY BELONGING TO CLASS OR SERIES.
The assets belonging to each particular class or
series shall be charged with the liabilities of
the Corporation in respect of that class or series
and all expenses, costs, charges and reserves
attributable to that class or series, and any
general liabilities, expenses, costs, charges or
reserves of the Corporation which are not readily
identifiable as belonging to any particular class
or series shall be allocated and charged by or
under the supervision of the Board of Directors to
and among any one or more of the classes or series
established and designated from time to time in
such manner and on such basis as the Board of
Directors, in its sole discretion, deems fair and
equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to a
class or series are herein referred to as
"liabilities belonging to" that class or series.
Each allocation of liabilities, expenses, costs,
charges and reserves by the Board of Directors
shall be conclusive and binding for all purposes.
(3) INCOME BELONGING TO CLASS OR SERIES.
The Board of Directors shall have full discretion,
to the extent not inconsistent with the Maryland
General Corporation Law and the 1940 Act, to
determine which items shall be treated as income
and which items as capital; and each such
determination and allocation shall be conclusive
and binding.
Income belonging to a class or series
includes all income, earnings and profits derived
from assets belonging to that class or series,
less any expenses, costs, charges or reserves
belonging to that class or series, for the
relevant time period, all determined in accordance
with sound accounting principles.
(4) DIVIDENDS. Dividends and distributions
on shares of a particular class or series may be
paid with such frequency, in such form and in such
amount as the Board of Directors may from time to
time determine. Dividends may be daily or
otherwise pursuant to a standing resolution or
resolutions adopted only once or with such
frequency as the Board of Directors may determine,
after providing for actual and accrued liabilities
belonging to that class.
A-2<PAGE>
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All dividends or distributions on shares of a
particular class or series shall be paid only out
of the assets belonging to that class or series.
All dividends and distributions on shares of a
particular class or series shall be distributed
pro rata to the holders of that class or series in
proportion to the number of shares of that class
or series held by such holders at the date and
time of record established for the payment of such
dividends or distributions, except that in
connection with any dividend or distribution
program or procedure, the Board of Directors may
determine that no dividend or distribution shall
be payable on shares as to which the stockholder's
purchase order and/or payment have not been
received by the time or times established by the
Board of Directors under such program or
procedure.
The Corporation intends to qualify as a
"regulated investment company" under the Internal
Revenue Code of 1986, or any successor or
comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the
computation of net income and gains for Federal
income tax purposes may vary from the computation
thereof on the books of the Corporation, the Board
of Directors shall have the power, in its sole
discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole
or in part as capital gains distributions, amounts
sufficient, in the opinion of the Board of
Directors, to enable the Corporation to qualify as
a regulated investment company and to avoid
liability of the Corporation for federal income
tax in respect of that year. However, nothing in
the foregoing shall limit the authority of the
Board of Directors to make distributions greater
than or less than the amount necessary to qualify
as a regulated investment company and to avoid
liability of the Corporation for such tax.
Dividends and distributions may be made in
cash, property or additional shares of the same or
another class or series, or a combination thereof,
as determined by the Board of Directors or
pursuant to any program that the Board of
Directors may have in effect at the time for the
election by each stockholder of the mode of the
making of such dividend or distribution to that
stockholder. Any such dividend or distribution
paid in shares will be paid at the net asset value
thereof as defined in subsection (9) below.
(5) LIQUIDATION. In the event of the
liquidation or dissolution of the Corporation or
of a particular class or series, the stockholders
of each class or series that has been established
and designated and is being liquidated shall be
entitled to receive, as a class or series, when
and as declared by the Board of Directors, the
excess of the assets belonging to that class or
series over the liabilities belonging to that
class or series. The holders of shares of any
particular class or series shall not be entitled
thereby to any distribution upon liquidation of
any other class or series. The assets so
distributable to the stockholders of any
particular class or series shall be distributed
A-3<PAGE>
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PRELIMINARY PROXY MATERIALS
among such stockholders in proportion to the
number of shares of that class or series held by
them and recorded on the books of the Corporation.
The liquidation of any particular class or series
in which there are shares then outstanding may be
authorized by vote of a majority of the Board of
Directors then in office, subject to the approval
of a majority of the outstanding securities of
that class or series, as defined in the 1940 Act,
and without the vote of the holders of any other
class or series. The liquidation or dissolution
of a particular class or series may be
accomplished, in whole or in part, by the transfer
of assets of such class or series to another class
or series or by the exchange of shares of such
class or series for the shares of another class or
series. Upon complete liquidation of a class or
series, all outstanding shares of the class or
series shall be considered redeemed and shall be
cancelled without payment of consideration or
further action by the Board of Directors.
(6) VOTING. On each matter submitted to a
vote of the stockholders, each holder of a share
shall be entitled to one vote for each share
standing in his name on the books of the
Corporation, irrespective of the class or series
thereof, and all shares of all classes or series
shall vote as a single class or series ("Single
Class Voting"); provided, however, that (a) as to
any matter with respect to which a separate vote
of any class or series is required by the 1940 Act
or by the Maryland General Corporation Law, such
requirement as to a separate vote by that class or
series shall apply in lieu of Single Class voting
as described above; (b) in the event that the
separate vote requirements referred to in (a)
above apply with respect to one or more classes or
series, then, subject to (c) below, the shares of
all other classes or series shall vote as a single
class or series; and (c) as to any matter which
does not affect the interest of a particular class
or series, including liquidation of a particular
class or series as described in subsection (5)
above, only the holders of shares of the one or
more affected classes shall be entitled to vote.
(7) Redemption at the Stockholder's Option.
Each holder of shares of a particular class or
series shall have the right at such times as may
be permitted by the Corporation, to require the
Corporation to redeem all or any part of his
shares of that class or series at a redemption
price per share equal to the net asset value per
share of that class or series next determined (in
accordance with subsection (9)) after the shares
are properly tendered for redemption, less such
redemption or sales charge, if any, as is
determined by the Board of Directors. Payment of
the redemption price shall be in cash; provided,
however, that if the Board of Directors
determines, which determination shall be
conclusive, that conditions exist which make
payment wholly in cash unwise or undesirable, the
Corporation may make payment wholly or partly in
securities or other assets belonging to the class
or series of which the shares being redeemed are
part at the value of such securities or assets
used in such determination of net asset value.
A-4<PAGE>
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PRELIMINARY PROXY MATERIALS
Notwithstanding the foregoing, the
Corporation may postpone payment of the redemption
price and may suspend the right of the holders of
shares of any class or series to require the
Corporation to redeem shares of that class or
series during any period or at any time when and
to the extent permissible under the 1940 Act.
(8) REDEMPTION BY CORPORATION. The Board of
Directors may cause the Corporation to redeem at
net asset value the shares of any class from a
holder if such redemption is, in the opinion of
the Board of Directors of the Corporation,
desirable.
(9) NET ASSET VALUE PER SHARE. The net
asset value per share of any class or series shall
be the quotient obtained by dividing the value of
the net assets of t at class or series (being the
value of the assets belonging to that class less
the liabilities belonging to that class or series)
by the total number of shares of that class or
series outstanding, all determined by the Board of
Directors in accordance with sound accounting
principles and not inconsistent with the 1940 Act.
The Board of Directors may determine to
maintain the net asset value per share of any
class or series at a designated constant dollar
amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for
the continuing declarations of income attributable
to that class or series as dividends payable in
additional shares of that class or series at the
designated constant dollar amount and for the
handling of any losses attributable to that class
or series. Such procedures may provide that in
the event of any loss, each stockholder Shall be
deemed to have contributed to the capital of the
Corporation attributable to that class or series
his pro rata portion of the total number of shares
required to be cancelled in order to permit the
net asset value per share of that class or series
to be maintained, after reflecting such loss, at
the designated constant dollar amount. Each
stockholder of the Corporation shall be deemed to
have agreed, by his investment in any class or
series with respect to which the Board of
Directors shall have adopted any such procedure,
to make the contribution referred to in the
preceding sentence in the event of any such loss.
(10) EQUALITY. Each share of any particular
class or series shall be equal to each other share
of that class or series. The Board of Directors
may from time to time divide or combine the shares
A-5<PAGE>
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PRELIMINARY PROXY MATERIALS
of any particular class or series into a greater
or lesser number of shares of that class or series
without thereby changing the proportionate
beneficial interest in the assets belonging to
that class or series or in any way affecting the
rights of shares of any other class or series.
(11) CONVERSION OR EXCHANGE RIGHTS. Subject
to compliance with the requirements of the 1940
Act, the Board of Directors shall have the
authority to provide that holders of shares of any
class or series shall have the right to convert or
exchange said shares into shares of one or more
other classes or series of shares in accordance
with such requirements and procedures as may be
established by the Board of Directors.
(12) FRACTIONAL SHARES. The Corporation may
issue and sell fractions of shares having pro rata
all the rights of full shares, including, without
limitation, the right to vote and to receive
dividends, and wherever the words "share" or
"shares" are used in the Charter or in the
By-Laws, they shall be deemed to include fractions
of shares, where the context does not clearly
indicate that only full shares are intended.
(13) STOCK CERTIFICATES. The Corporation
shall not be obligated to issue certificates
representing shares of any class or series unless
it shall receive a written request therefor from
the record holder thereof in accordance with
procedures established in the By-Laws or by the
Board of Directors.
(14) TRANSFER RESTRICTIONS. If, in the
opinion of the Board of Directors of the
corporation, concentration of ownership of shares
of Common Stock may cause the Corporation to be
deemed a personal holding company within the
meaning of the Internal Revenue Code of 1986, as
amended, the Corporation may at any time and from
time to time refuse to give effect on the books of
the Corporation to any transfer or transfers of
any share or shares of Common Stock in an effort
to prevent such personal holding company status.
(c) Unless otherwise prohibited by law,
so long as the Corporation is registered as an open-end investment
company under the 1940 Act, the Board of Directors shall have the
power and authority, without the approval of the holders of any
outstanding shares, to increase or decrease the number of shares of
capital stock or the number of shares of capital stock of any class or
series that the Corporation has authority to issue.
(3) Article NINTH is amended to read in its
entirety as follows:
NINTH: The duration of the Corporation shall be
perpetual.
(4) Article TENTH is deleted in its entirety.
SECOND: The foregoing amendment does not increase the
authorized capital stock of the Corporation or alter the par value of
such capital stock.
THIRD: The amendment to the charter of the Corporation
was duly advised by the Board of Directors and approved by the
stockholders of the Corporation.
A-6<PAGE>
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IN WITNESS WHEREOF, The Southeastern Savings
institutions Fund, Inc. has caused these articles to be signed in its
name and on its behalf by its President and attested by its Secretary
on __________________, 1995.
THE SOUTHEASTERN THRIFT AND BANK
FUND, INC.
By:_______________________________
Franklin C. Golden, President
Attest:
___________________________________
Reinaldo Pascual, Secretary
THE UNDERSIGNED, President Of THE SOUTHEASTERN THRIFT
AND BANK FUND, INC., who executed on behalf of said corporation the
foregoing Articles of Amendment, of which this certificate is made a
party, 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.
______________________________
President
A-7<PAGE>
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PRELIMINARY PROXY MATERIALS
EXHIBIT B
PLAN OF LIQUIDATION AND DISSOLUTION
PLAN OF LIQUIDATION AND DISSOLUTION dated as of
_______________ ___, 199__ adopted by The Southeastern Thrift and Bank
Fund, Inc. a Maryland corporation (the "Fund").
WHEREAS, the Fund is a closed-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Fund is to dissolve on June 30, 1997 in
accordance with the Fund's Articles of Incorporation; and
WHEREAS, this Plan is intended to be and is adopted as
a plan of complete liquidation and dissolution, pursuant to which all
of the assets of the Fund shall be liquidated at such prices and on
such terms and conditions as the directors and officers of the Fund,
in consultation with the Fund's investment adviser, shall determine to
be reasonable and in the best interest of the Fund and its
stockholders, all as hereinafter set forth in the Plan.
NOW, THEREFORE, the Fund hereby declares the following
Plan:
1. AUTHORIZATION OF DIRECTORS AND OFFICERS. The
Board of Directors and officers of the Fund are hereby authorized and
directed to wind up the affairs of the Fund.
2. LIQUIDATION OF ASSETS. The assets of the Fund
shall be liquidated at such prices and on such terms and conditions as
the directors and officers of the Fund, in consultation with the
Fund's investment adviser, shall determine to be reasonable and in the
best interests of the Fund and its stockholders.
3. INVESTMENTS PENDING LIQUIDATION. To the extent
feasible, the Fund shall, beginning on March 31, 1996, take a
defensive position pending liquidation and concentrate its investments
in highly liquid, short-term securities with a view to facilitating an
orderly liquidation of the Fund's portfolio.
4. LIQUIDATION. As soon as practicable after the
consummation of the sale or distribution of the Fund's portfolio
securities and the payment of all the Fund's known liabilities and
obligations, but in any event no later than June 30, 1997, the
officers of the Fund shall determine the Liquidation Value (as such
term is hereinafter defined) of the Fund's shares (the date of such
determination shall be referred to herein as the "Distribution Date").
The Liquidation Value shall be determined in the same manner as the
Fund's net asset value is determined. Accordingly, the term
"Liquidation Value" means, as of the Distribution Date, (i) the
aggregate value of all of the assets of the Fund, less (ii) the sum of
the aggregate amount of all the liabilities of the Fund, divided by
(iii) the total number of issued and outstanding shares of the Fund.
The Board of Directors may, if appropriate, authorize the
establishment of a reserve to meet any contingent liabilities of the
Fund, which amount, if any, shall be deducted pro rata from the
Liquidation Value.
5. LIQUIDATING TRUST. In the event the Fund is
unable to distribute all its assets pursuant to the Plan because of
its inability to locate stockholders to whom liquidation distributions
will be sent, the Fund may create, at the expense of such
stockholders, a liquidating trust with a financial institution and
deposit any remaining assets of the Fund for the benefit of the
stockholders that cannot be located.
B-1<PAGE>
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PRELIMINARY PROXY MATERIALS
6. DISSOLUTION. As soon as practicable after June
30, 1997, the officers of the Trust will close the books of the Fund
and prepare and file, in a timely manner, any and all required income
tax returns and other documents and instruments and file or cause to
be filed, with the Secretary of State of Maryland and any other
appropriate governmental authorities, any and all documents and
instruments necessary to effect a complete statutory dissolution of
the Fund. As soon as practicable after the complete statutory
dissolution of the Fund, the officers of the Fund will file or cause
to be filed with the Securities and Exchange Commission and any state
in which the Fund's shares were sold, any and all documents and
instruments necessary to terminate the regulation of the Fund and its
business and affairs by the Securities and Exchange Commission and any
such state. Thereafter, the Fund will cease to exist and no
stockholder will have any interest whatsoever in the Fund.
7. DISSENTER'S RIGHTS. No stockholder shall have any
dissenters' rights or right of appraisal in connection with the
liquidation and dissolution of the Fund.
8. PROVISION FOR LOST CERTIFICATES. Prior to the
dissolution and liquidation of the Fund, the Fund will send to its
stockholders to whom certificates representing shares have been sent
by the Fund a redemption form for the purpose of effecting a
redemption of each stockholder's shares in exchange for such
stockholder's liquidation distribution. No amount will be distributed
by the Fund to a stockholder to whom a stock certificate has been sent
unless and until such stockholder delivers to the Fund a signed
redemption form and the certificates representing shares or, in the
event a stock certificate has been lost, a lost certificate affidavit
and other documents and instruments as are reasonably required by the
Fund, together with appropriate forms of assignment, endorsed in
blank, with any and all signatures thereon guaranteed by a financial
institution reasonably acceptable to the Fund. Stockholders to whom
certificates representing shares have not been sent will receive their
liquidation distribution without any further action on their part.
IN WITNESS WHEREOF, the Fund has caused this Plan to be
executed by their duly authorized representatives as of the date first
set forth above.
THE SOUTHEASTERN THRIFT AND BANK
FUND, INC.
Attest:
______________________________ By:__________________________________
Reinaldo Pascual Franklin C. Golden
Secretary President
B-2<PAGE>
<PAGE>
PRELIMINARY PROXY MATERIALS
THE SOUTHEASTERN THRIFT AND BANK FUND, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
AUGUST 31, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of
Special Meeting of Stockholders and Proxy Statement, each dated June
23, 1995, and does hereby appoint Victor L. Andrews, Franklin C.
Golden and Reinaldo Pascual, and any one of them, with full power of
substitution, as proxy or proxies of the undersigned to represent the
undersigned and to vote all shares of Common Stock of The Southeastern
Thrift and Bank Fund, Inc. (the "Company") which the undersigned would
be entitled to vote if personally present at the Special Meeting of
Stockholders of the Company (the "Meeting") to be held 1100 Peachtree
Street, Suite 2800, Atlanta, Georgia 30309, on August 31, 1995 at 9:00
a.m., and at any adjournment(s) thereof:
1. TO APPROVE AMENDMENTS TO THE COMPANY'S INVESTMENT POLICIES
AND INVESTMENT RESTRICTION NO. 1 TO ALLOW THE COMPANY TO
INVEST IN ISSUERS IN THE FINANCIAL SERVICE INDUSTRY.
THE BOARD RECOMMENDS VOTING FOR PROPOSAL 1.
---
FOR ___ AGAINST __ ABSTAIN __
2. TO APPROVE AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO CONTINUE AS A CLOSED-END FUND PERPETUALLY.
THE BOARD RECOMMENDS VOTING FOR PROPOSAL 2.
---
FOR ___ AGAINST ___ ABSTAIN ___
3. TO ACT ON AMENDMENTS TO THE COMPANY'S ARTICLES OF
INCORPORATION TO CONVERT TO AN OPEN-END FUND.
FOR ___ AGAINST ___ ABSTAIN ___
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Proposals 1 through 3 above will be considered at the Meeting in
the order in which they are listed. If Proposal 2 is approved by the
stockholders, Proposal 3 will not be presented and considered at the
Meeting. However, stockholders voting in favor of Proposal 2 must
still vote on Proposal 3 so that their preference is given effect in
the event Proposal 2 is not approved by a majority of stockholders.
(Continued and to be signed on other side)
<PAGE>
<PAGE>
PRELIMINARY PROXY MATERIALS
By acceptance, the proxies named above agree that this Proxy will
be voted in the manner directed by the stockholder giving this Proxy.
If no direction is made, it will be voted in favor of Proposals 1, 2
and 3 and will be voted on other matters in accordance with the best
judgment and discretion of the proxies, all as provided in the
accompanying Proxy Statement.
(Signature(s))
______________________________
______________________________
______________________________
Date:____________________, 1995
Please sign exactly as name(s)
appears hereon, and when
signing as attorney, executor,
administrator, trustee or
guardian, give your full title
as such. If the signatory is
a corporation, sign the full
corporate name by a duly
authorized officer.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
(Continued from previous side)<PAGE>
