PORTUGAL FUND INC DFRN 14A
Filing Date: 9/13/99
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TYPE: DFRN 14A
SEQUENCE: 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as
permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
PORTUGAL FUND, INC.
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(Name of Registrant as Specified in its Charter)
Deep Discount Advisors, Inc.
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(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies: _____________________________________________
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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Deep Discount Advisors, Inc.
One West Pack Square, Suite 777, Asheville, NC 28801
828-274-1863 Fax: 828-255-4834 E-mail: [email protected]
Dear Fellow Shareholders:
I am President of Deep Discount Advisors, Inc., and General Partner of Ron Olin
Investment Management Company, both registered investment advisors, which are
the Soliciting Shareholders ("Soliciting Shareholder") for this Proxy. We
represent substantial shareholder interests in The Portugal Fund, Inc. (the
"Fund"), controlling approximately 32% of the outstanding shares.
We are concerned about both the persistent discount from net asset value per
share ("NAV") at which shares of the Fund have traded and the disappointing,
long-term "total investment return" experienced by the shareholders. We are not
professional arbitrageurs, opportunistic short-term speculators, or "fund-
busters". We are fellow stockholders who believe in good corporate governance
and in maximizing shareholder value. We believe that the current Board and
Adviser have failed dismally to deliver shareholder value, that their "open-
ending" proposal is so encumbered (by a super-majority vote requirement, a
redemption fee, and previous Board recommendations against open-ending)that it
will likely fail, and that the shareholders of this Fund deserve better. That
is why we are providing you with additional choices. On our proxy, you may vote
for a Shareholder Value Resolution that recommends an option to receive Net
Asset Value, without any redemption penalty, if the open-ending vote fails, and
recommends elimination of the redemption fee if the open-ending passes. You may
also vote for different Director candidates, who are committed to maximizing
long-term shareholder value and to following the expressed wishes of the
shareholders.
THE CURRENT BOARD AND ADVISER HAVE FAILED TO PROVIDE SHAREHOLDER VALUE
The Fund commenced operations in November 1989 and purchased its first Portugal
investments in 1990. From January 1990 through July 1999, the Fund reported
"total investment returns" (which include discount impacts) of +43.4%, or a
compound annual return to shareholders of only +3.8% a year for almost 10 years.
The Fund's annual report for 1998 admits to under-performing the Morgan Stanley
Capital International Portugal Index (the "Index") for that year, as does also
its annual report for 1997. The unfortunate truth is that while the Fund
returned +43% from January 1990 through July 1999, the Portugal Index had total
returns of +83%, almost twice the results of the Fund's shareholders (+43%
Fund vs. +83% Index). As recently as July 31, 1999, the discount was $1.99 per
share, equivalent to a +14% immediate gain if eliminated. We believe this
represents a dismal record of investment returns to shareholders.
The current Board, which tolerated this poor performance, is well acquainted
with the adviser. Two of the six board members, including the portfolio
manager, Richard W. Watt, who is nominated for reelection in the Fund's proxy,
are affiliated with the adviser. The four "independent" directors own a
combined total of only 800 shares of the Fund. Dr. Enrique R. Arzac serves on
the board of 10 funds with this same advisor and received $92,500 in associated
compensation in 1998. James J. Cattano, who has been nominated by the Fund for
reelection, serves on 7 adviser related fund boards and received $60,000.
Martin M. Torino serves on 6 adviser related fund boards and received $48,000.
Jonathan W. Lubell serves on 2 adviser related fund boards and received $15,000.
On the other hand, our opposing Board candidates have no affiliation with the
adviser, and they represent substantial shareholder interests. They personally
own 96,700 shares. As Board members, their interest will be focused on
maximizing investment returns to the shareholders regardless of whether or not
the actions taken may conflict with the interests of the investment adviser. We
have proven we know how to add value for shareholders of closed-end funds. Our
efforts were featured in the September 6, 1999 Forbes Magazine Closed-End Fund
survey, page 252. This recent article highlights the significant steps we have
taken over the last year to increase Net Asset Value, shrink the discount, and
cut expenses at the Clemente Strategic Value Fund after we assumed positions on
that Board.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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THE BOARD'S "OPEN-ENDING" PROPOSAL WILL LIKELY FAIL ITS SUPER-MAJORITY VOTE
In response to our campaign to bring shareholder value to the Portugal Fund and
our opposing proxy in May, 1999, the Fund cancelled its Annual Meeting. A class
action law suit was filed by shareholders (unaffiliated with us) attempting to
force the Fund to hold the meeting. This annual meeting has now been
rescheduled for October 15, representing a five month delay. The Fund's new
proxy contains a proposal to open-end the Fund which requires a 2/3 super-
majority of all outstanding shares in order to pass. Moreover, this proposal
contains penalties in the form of a redemption fee for those shareholders who
wish to leave the Fund within 12 months.
In practice, it is very difficult to achieve a 2/3 super-majority for any
proposal, as it is rare that much more than 60% of shareholders actually vote at
annual meetings. In addition, many shareholders object to the bundling of a
redemption fee as a condition for open-ending and will vote against such an
action on principle. Furthermore, as recently as May 19, 1998 the current
directors who are making this proposal opposed open-ending in an open letter to
shareholders, giving a long list of reasons why open-ending was not in the
stockholder's best interests. For all these reasons, we believe it is quite
likely that this particular open-ending proposal will fail.
The current Board has acknowledged that their proposal may well fail, and has
alternatively committed to "an enhanced and aggressive share repurchase
program." But we have been down that road before. Last October 21, 1998 the
Board announced an earlier repurchase program of up to 803,312 shares,
representing 15% of the Fund's outstanding shares. The stated intent was "to
provide additional liquidity to those shareholders who elect to sell their
shares and to enhance the net asset value of the shares held by those
shareholders who maintain their investment." Through July 1999 the Fund had
repurchased a total of only 27,100 of the 803,312 shares authorized. The
enhancement to NAV has been less than $0.01 per share.
THE SHAREHOLDERS DESERVE BETTER - OUR SHAREHOLDER VALUE PROPOSAL
We are tired of all the games. We believe the shareholders should get what they
want from their Board, and not have super-majority restrictions and unnecessary
penalties imposed as a condition. If a majority of shareholders want an option
to receive NAV, through open-ending or other means, they should receive it. If
the shareholders do not wish to have a redemption fee imposed as a condition, it
should be waived.
Accordingly, we will introduce for approval by stockholders the following
proposals and will attempt to elect alternate Directors who will follow the
shareholders wishes commensurate with their fiduciary responsibilities:
4(a) RESOLVED: If a majority favors open-ending, but it fails to receive the
super-majority vote required, the shareholders recommend that the Board provide
shareholders an option to receive Net Asset Value, with no redemption penalty,
as soon as possible.
4(b) RESOLVED: If the open-ending proposal passes, the shareholders recommend
that the Board waive any redemption fee associated with the open-ending.
We believe the super-majority requirement to pass the open-ending is an
unreasonable constraint on the wishes of the shareholders. As a practical
matter, it requires almost all shareholders who normally vote to agree. When it
is bundled with redemption penalties and follows a long period in which the
current Board has taken previous positions against such a move, passage by such
a super-majority becomes very unlikely. Most shareholders who vote for open-
ending have as their principal consideration the
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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ability to receive NAV for
their shares, with no discount or fees imposed. There are other ways to provide
shareholders an option to receive NAV. We believe the Directors of the Fund
have an obligation to honor what the shareholders want.
In the unlikely event that the open-ending proposal receives the 2/3 super-
majority vote requirement imposed by the Fund, there is no reason to penalize
those shareholders who wish to depart with a redemption fee. They have already
suffered dismal performance as shareholders of the Fund, and it adds insult to
injury to extract an additional penalty from them because they choose to take
their money and leave. The Fund has suggested approximately 120 days is
required to effect the open-ending, should it pass. That is sufficient time to
raise capital in an orderly way in anticipation of redemptions. Many previous
closed-end funds have open-ended with no such penalty. We believe the
redemption fee is simply a device to discourage or delay redemptions in order to
maintain adviser fee income at a higher level.
Our Director candidates are committed to maximizing shareholder value whether or
not the open-ending is able to pass. If it passes, they will make every attempt
to accelerate the time-frame of the open-ending, reduce the associated costs,
and eliminate any associated redemption fees. After the open-ending, they will
insure that the Fund is run to maximize shareholder returns.
The bottom line is that Board members need to be elected who have a vested
interest in delivering value to the Fund's shareholders. Federal securities law
requires that all shareholders be treated equally. This means that any benefit
delivered to some shareholders must be delivered to all. What is needed is
Directors who will demand performance from the adviser, who have a substantial
economic interest in the Fund's results, and who will follow the wishes of the
stockholders to deliver value. Shareholder money should not be wasted on
presenting proposals that are likely to fail to shareholders and initiating
buy-back programs that are not implemented fully and therefore do not work.
Vote for an option to receive NAV even if the Open-ending Fails !
Vote Against Any Redemption Penalty !
THE ONLY WAY TO VOTE FOR OUR SHAREHOLDER VALUE PROPOSAL IS TO VOTE THE [GREEN]
PROXY !
Please read the attached Proxy Statement carefully. It contains additional
information about the persons we plan to nominate for election as directors and
the Shareholder Value Proposal we plan to introduce.
To enable us to vote your shares on these issues, PLEASE MARK, SIGN, DATE, AND
RETURN THE ENCLOSED [GREEN] PROXY CARD IN THE POSTAGE PRE-PAID ENVELOPE THAT HAS
BEEN PROVIDED. You may vote on all proposals contained in the Fund's [WHITE]
proxy card by using the enclosed [GREEN] proxy card. Instructions for executing
the [GREEN] proxy card follow below.
If you have already returned the [WHITE] proxy card sent to you by the Fund, you
may revoke that proxy and vote for our nominees and proposal by marking,
signing, dating, and mailing a later dated [GREEN] proxy card. AFTER SUBMITTING
A [GREEN] PROXY CARD, PLEASE DO NOT RETURN A [WHITE] PROXY CARD (EVEN IF YOU ARE
VOTING AGAINST THE NOMINEES NAMED IN THE FUND'S PROXY STATEMENT). DOING SO WILL
REVOKE YOUR [GREEN] PROXY CARD.
If you have any questions, please call me at (828) 274-1863
Sincerely yours,
Ronald G. Olin
TO SUPPORT OUR EFFORTS TO ENHANCE STOCKHOLDER VALUE, PLEASE MARK, DATE, SIGN,
AND RETURN THE ENCLOSED [GREEN] PROXY CARD USING THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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VOTING INFORMATION
The Fund's proxy materials include proposals relating to the open-ending, the
election of Directors, and the ratification of the selection of the Fund's
independent accountants. You may vote on all of the matters contained in the
Fund's proxy statement by completing and returning the enclosed [GREEN] proxy
card.
The Soliciting Shareholder is not making any recommendation as to how you should
vote on ratification of the selection of the Fund's independent accountants or
the open-ending and related proposal.
A [GREEN] proxy card which is returned to the Soliciting Shareholder or its
agent will be voted as you indicate on the card. If a [GREEN] proxy card is
returned without indicating how to vote on a matter, your shares will be voted
FOR the election of our nominees, FOR the proposal recommending that the Board
provide shareholders with an option to receive NAV in the event the open-ending
proposal achieves a majority, but fails to pass, FOR the proposal to waive the
redemption fee if open-ending passes, and will ABSTAIN on the proposal to ratify
the selection of the Fund's independent accountants. If no preference is
indicated on the proposal to convert the fund to an open-end fund and to change
the fund's policy on borrowing, your shares will be voted to ABSTAIN. Any other
stockholder proposals introduced at the meeting will be voted at the time of the
meeting by the Soliciting Shareholder in accordance with the best interests of
the stockholders in the sole judgement and opinion of the Soliciting
Shareholder.
If you have already returned the [WHITE] proxy card that was sent to you by the
Fund, you may revoke that proxy and vote for the Soliciting Shareholder's
nominees and proposal by marking, signing, dating, and mailing a later dated
[GREEN] proxy card.
Completing and returning a [WHITE] proxy card, even to vote against the nominees
named in the Fund's proxy statement, after you return the enclosed [GREEN] proxy
card will revoke the proxy given in the [GREEN] card.
Therefore, DO NOT return a [WHITE] proxy card after returning the [GREEN] card,
unless you wish to completely cancel ALL of your choices on the [GREEN] proxy
card.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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PROXY STATEMENT IN OPPOSITION
TO SOLICITATION BY THE BOARD OF DIRECTORS OF THE PORTUGAL FUND, INC.
ANNUAL MEETING OF STOCKHOLDERS
To be held on October 15, 1999
This proxy statement and the enclosed [GREEN] proxy card are being furnished to
holders of record on August 23, 1999 (the "Record Date") of shares of common
stock, par value $.001 per share (the "Common Stock"), of The Portugal Fund,
Inc., a Maryland corporation (the "Fund"), by Deep Discount Advisors, Inc. and
Ron Olin Investment Management Company, both registered investment advisors,
(the "Soliciting Shareholder"), in connection with the solicitation of proxies
by the Soliciting Shareholder for use at the 1999 Annual Meeting of the Fund to
be held at the offices of Willkie Farr & Gallager, 787 Seventh Avenue, 38th
Floor, New York, New York 10019, on Friday, October 15, 1999, 2:00 p.m., New
York City time. The Soliciting Shareholder is soliciting a proxy to vote your
shares at the 1999 Annual Meeting of Stockholders of the Fund and at any and all
adjournments or postponements of the meeting. The Fund has been notified of the
Soliciting Shareholder's intent to solicit proxies on its own behalf by the
Federal filing of this proxy, and the Soliciting Shareholder intends to send its
opposing proxy to a sufficient number of the Fund's shareholders to pass all
proposals.
This proxy statement and the enclosed [GREEN] proxy card are first being sent to
stockholders of the Fund on or about September 13, 1999.
INTRODUCTION
There are three matters that the Fund has scheduled to be voted on at the
meeting:
1. (a) A proposal to convert the Fund to an open-end investment company;
(b) A proposal to change the Fund's fundamental investment policy
relating to borrowing to reflect its proposed new subclassification
as an open-end fund;
2. (a) The election of two persons to serve as Directors of the Fund in the
event the open-ending Proposal 1 (a) is not approved;
(b) The election of six persons to serve as Directors of the Fund in the
event the open-ending Proposal 1 (a) is approved;
3. The ratification of the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the independent accountants of the Fund for
the fiscal year ending December 31, 1999;
More specific information with regard to these matters, including the proposed
amendment to the Articles of Incorporation may be found in the Fund's proxy.
With respect to these matters, the Soliciting Shareholder is soliciting a proxy
to vote your shares:
- IN FAVOR of the election of two persons whom the Soliciting Shareholder
intends to nominate for election as Directors of the Fund in the event the open-
ending Proposal 1 (a) is not approved; and
- IN FAVOR of the election of six persons whom the Soliciting Shareholder
intends to nominate for election as Directors of the Fund in the event the open-
ending Proposal 1 (a) is approved.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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The Soliciting Shareholder is making no recommendation on how shares should be
voted on the ratification of the selection of the Fund's independent
accountants, on the open-ending proposal, or on the change in the Fund's
borrowing policy, and will ABSTAIN if no preference is indicated.
The Soliciting Shareholder is also soliciting your proxy to vote your shares on
the following Shareholder Value Proposal, that it intends to introduce at the
meeting:
4. (a) RESOLVED: If a majority favors open-ending, but it fails to receive
the super-majority vote required, the shareholders recommend that
the Board provide shareholders an option to receive Net Asset Value,
with no redemption penalty, as soon as possible.
4. (b) RESOLVED: If the open-ending proposal passes, the shareholders
recommend that the Board waive any redemption fee associated with
the open-ending.
How Proxies Will Be Voted
All of the proposals scheduled by the Fund to be voted on at the meeting are
included in the enclosed [GREEN] proxy card. If you wish to vote IN FAVOR of
our nominees, and FOR our additional proposal, you may do so by completing and
returning a [GREEN] proxy card.
If you return a [GREEN] proxy card to the Soliciting Shareholder or its agent,
your shares will be voted on each matter as you indicate. If you do not
indicate how your shares are to be voted on a matter, they will be voted FOR the
election of our two nominees in the event the open-ending proposal is not
approved, FOR the election of our six nominees in the event the open-ending
proposal is approved, FOR the proposal recommending that the Board provide
shareholders with an option to receive NAV in the event the open-ending proposal
achieves a majority, but fails to pass, and FOR the proposal to waive the
redemption fee if open-ending passes. If no preference is indicated on the
proposal to convert the fund to an open-end fund and to change the fund's
borrowing policy, your shares will be voted to ABSTAIN. If you do not indicate
how to vote on the ratification of the selection of the Fund's independent
accountants, your shares will be voted to ABSTAIN on that matter. Any other
stockholder proposals that may be introduced at the meeting will be voted at the
time of the meeting by the Soliciting Shareholder in accordance with the best
interests of the stockholders, in the sole judgement and opinion of the
Soliciting Shareholder. If you return a [GREEN] proxy card, you will be
granting the persons named as proxies discretionary authority to vote on any
other matters of which they are not now aware that may come before the meeting.
These may include, among other things, matters relating to the conduct of the
meeting and proposals of other stockholders.
Voting Requirements
Only stockholders of record on the Record Date are entitled to vote at the
meeting. According to the Fund's proxy statement, there were 5,328,316 shares
of Common Stock issued and outstanding on the Record Date. Holders of record on
the Record Date will be entitled to cast one vote on each matter for each share
of Common Stock held. Directors of the Fund are elected by a plurality of the
votes cast, (greatest number of votes received). Proposal 1(a) requires for
approval the affirmative vote of 66-2/3% of the votes entitled to be cast at the
Meeting in person or by proxy. Proposal 1(b) requires for approval the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund. The term "majority of the outstanding voting securities" as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), and as used in this
Proxy Statement, means: the affirmative vote of the lesser of (1) 67% of the
voting securities of the Fund present at the meeting if more than 50% of the
outstanding voting securities of the Fund are present in person or by proxy or
(2) more than 50% of the outstanding voting securities of the Fund. Proposal
1(b) will be implemented only if Proposal 1(a) is approved. Because abstentions
and broker non-votes are treated as shares present but which have not been
voted, any abstentions and broker non-votes would have
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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the same effect as a vote
AGAINST Proposals 1(a) and 1(b) but would have no impact on Proposals 2(a),
2(b), 3, 4(a), or 4(b). Ratification of the selection of the Fund's independent
accountants and approval of stockholder proposals number 4(a) and 4(b) described
in this proxy statement each require the affirmative vote of a majority of the
shares voting on the matter.
In tallying stockholder votes, abstentions and "broker non-votes" (i.e., shares
held by brokers or nominees as to which (a) instructions have not been received
from the beneficial owners or persons entitled to vote and (b) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the meeting. Abstentions and broker non-votes will have no effect on
the election of directors. The two nominees receiving the largest number of
votes will be elected to serve as directors of the Fund if Proposal 1(a) is not
approved. The six nominees receiving the largest number of votes will be
elected to serve as directors of the Fund if Proposal 1(a) is approved.
The presence, in person or by proxy, of the holders of more than 50% of the
shares of Common Stock of the Fund entitled to vote at the meeting will
constitute a quorum for the transaction of business. If a quorum is not present
at the meeting, or if a quorum is present but sufficient votes to approve any of
the stockholder proposals are not received, the persons named as proxies may
propose one or more adjournments of the meeting to permit further solicitation
of proxies. The proxies may also propose an adjournment for other reasons.
Since the persons named as proxies will have discretion with regard to votes on
adjournment, it is possible that the persons named as proxies may cast such
votes against the wishes of the shareholder granting the proxy; this would only
apply to votes with regard to adjournment, all other matters will be voted as
indicated by the shareholder. Any adjournment will require the affirmative vote
of a majority of those shares present at the meeting in person or by proxy. If
an adjournment of the meeting is proposed, the persons named as proxies on the
[GREEN] proxy card will vote for or against such adjournment in their
discretion.
Revocation of Proxies
You may revoke any proxy you give to management or the Soliciting Shareholder at
any time prior to its exercise in the following ways:
Deliver a written revocation of your proxy to the Secretary of the Fund;
Execute and deliver a later dated proxy to the Soliciting Shareholder or to the
Fund or our respective agents; or
Vote in person at the meeting. (Attendance at the meeting will not in and of
itself revoke a proxy.)
There is no limit on the number of times you may revoke your proxy prior to the
meeting. Only the latest dated, properly signed proxy card will be counted.
INFORMATION CONCERNING THE SOLICITING SHAREHOLDER
The beneficial shareholders making this solicitation are Deep Discount Advisors,
Inc. and Ron Olin Investment Management Company, both registered investment
advisors. These companies presently manage investment portfolios having
combined assets between $100 and $200 million.
The address of the Soliciting Shareholder is One West Pack Square, Suite 777,
Asheville, NC 28801.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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According to the most recent Schedule 13D dated 8/2/99 on file with the SEC, the
Soliciting Shareholder has the beneficial ownership of 1,754,500 shares of
Common Stock of the Fund, held by principals and clients of the companies and
representing approximately 32.8% of the issued and outstanding shares of Common
Stock of the Fund.
Exhibit 1 to this proxy statement contains a schedule showing the purchases and
sales of Common Stock of the Fund by the Soliciting Shareholder within the past
two years.
The Soliciting Shareholder has made the decision to seek Board representation
after an extended period of unsatisfactory shareholder results. Moreover, it
believes effective measures have not been taken by Credit Suisse nor has there
been effective direction by the current Board to deal with the persistent
discount to NAV at which the Fund's shares trade on the open market and the
poor, long-term total investment return to shareholders. The Soliciting
Shareholder also believes that the imposition of a redemption fee in the open-
ending proposal is punitive and unnecessary.
REASONS FOR THE SOLICITATION
In our view, management has not taken meaningful steps to enhance stockholder
value. For this reason, the Soliciting Shareholder is soliciting your vote to
elect its candidates to the Board of Directors and to approve an additional
stockholder proposal, which it believes will enhance stockholder value.
The election of our candidates as directors will provide stockholders with an
independent voice on important matters affecting the Fund. Their election will
give the Board a new perspective and will help assure that measures intended to
benefit stockholders are more actively considered. The election of our
candidates and the approval of our proposal will also further these goals to the
extent that they may result in:
- Board approval to provide an option to receive NAV, without redemption
penalties, to those shareholders who want to redeem their shares;
- A greater focus on enhancing total investment returns of stockholders,
dealing with the discount problem, and reducing expenses;
- Greater stockholder guidance to the Board, enhancing its ability to act in
the best interests of stockholders.
In the event the open-ending Proposal 1 (a) is approved, the election of Messrs.
Olin, Bradshaw, Clark, Bentz, Wilcox, and Strauss will provide stockholders of
the new open-end fund with a Board that is dedicated to providing redemption
options for all shareholders equally without any redemption fee and to
implementing the open-ending of the Fund as soon as possible. It will also
assure a Board dedicated to maximizing shareholder value and returns.
If you share these goals, we urge you to vote for our nominees and proposals,
using the enclosed [GREEN] proxy card.
CERTAIN CONSIDERATIONS
In deciding whether to give the Soliciting Shareholder your proxy, you should
consider the following information.
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
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If the Open-ending Proposal 1 (a) is not approved, the soliciting Shareholder's
nominees, if elected, will represent only two of the fund's six directors. Even
if its Shareholder Value proposals are approved by stockholders, there can be no
assurance that the full Board of Directors will take any actions that they may
advocate or that such actions, if taken, will achieve their intended goals.
Implementation of certain Board actions may require stockholder approval, and no
assurance can be given that such approval will be obtained. In addition,
various costs, which would be borne indirectly by stockholders, may be
associated with certain actions, including but not limited to those associated
with holding a special meeting of stockholders.
The Soliciting Shareholder believes that all stockholders of the Fund will
benefit if any actions taken to improve stockholder value or to reduce or
eliminate the discount from NAV are successful. However, the Soliciting
Shareholder is paid fees by its clients who hold shares of the Fund. These fees
will be greater if the value of the Fund's shares increase and, in some cases,
are based upon the performance of the client's account.
Ron Olin and Deep Discount Advisors, Inc. are parties to a pending legal action
involving a closed-end fund. These actions are described in Exhibit 2. In that
action, the closed-end fund has alleged that the Soliciting Shareholder has
violated certain provisions of the Federal securities laws in connection with
the solicitation of proxies. Both Ron Olin and Deep Discount Advisors, Inc.
vigorously denied the allegation and moved for dismissal. A dismissal has
subsequently been agreed to by all parties and final details are in preparation.
ANNUAL MEETING PROPOSALS
PROPOSAL 1 - PROPOSAL TO CONVERT THE FUND TO AN OPEN-END FUND
The Soliciting Shareholder believes that the Management Advisor and the
incumbent Board of Directors have been inconsistent in their position regarding
the idea of converting the Fund to an open-end fund. As recently as May 19,
1998 the same directors that are making this proposal opposed open-ending in an
open letter to shareholders, giving a long list of reasons why open-ending was
not in the stockholders' best interests. In May 1999, the Fund criticized the
Soliciting Shareholder for seeking to "dismantle" the Fund. Now, in reaction to
the earlier opposing proxy, the Fund itself has proposed an open-ending, which
requires a two-thirds (2/3) super-majority in order to pass. In practice, the
super-majority requirement is very difficult to achieve, even under favorable
conditions. It is rare that much more than 60% of shareholders actually vote at
annual meetings, and we believe that the open-ending proposal will likely fail
to pass.
Moreover, if the open-ending proposal does pass, the Fund has imposed a 1.5%
redemption fee on those shareholders who want to sell their shares within
12 months. The Soliciting Shareholder believes that the imposition of a 1.5%
redemption penalty is unfair to those shareholders who elect to sell their
shares within 12 months of the open-ending. Furthermore, the Soliciting
Shareholder believes that the bundling of such a redemption fee with the open-
ending proposal will likely cause many shareholders to oppose the open-ending
and make it more unlikely to receive the super-majority it requires.
Proposal 1 is in two parts; part (a) converts the Fund to an open-end company
and authorizes a change in the Fund's Articles of Incorporation; part (b)
authorizes a change in the Fund's policy relating to borrowing. Information
concerning this proposal and the required modification to the Fund's Articles of
Incorporation is contained within the Fund's proxy statement. The Soliciting
Shareholder is making no recommendation with regard to this proposal and will
ABSTAIN if no preference is indicated on the [GREEN] proxy.
9
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
PROPOSAL 2 ELECTION OF DIRECTORS
If the open-ending Proposal 1 (a) is not approved, stockholders will have the
opportunity to elect two persons as directors of the Fund. The Fund currently
has a total of six directors, divided into three classes. There are presently
two directors whose terms expire in 1999, two directors whose terms expire in
2000, and two directors whose terms expire in 2001. Each person elected as a
director at the meeting will be a class of director whose term will expire in
2002. The Fund will be nominating its own candidates for Directors as noted in
the Fund's proxy. The Soliciting Shareholder will nominate Messrs. Olin and
Bradshaw for election as directors of the Fund; Proposal 2 (a).
If the open-ending Proposal 1 (a) is approved, stockholders will have the
opportunity to elect six persons as directors of the Fund. The Fund will be
nominating its own candidates for Directors as noted in the Fund's proxy. The
Soliciting Shareholder will nominate Messrs. Olin, Bradshaw, Clark, Bentz,
Wilcox, and Strauss for election as directors of the Fund; Proposal 2 (b).
Information about the nominees is as follows:
Name, Business Address Age Principal Business Occupations
Ronald G. Olin * 54 Mr. Olin is Chairman and Chief Executive
One West Pack Square Officer of Deep Discount Advisors, Inc.and
Suite 777 General Partner of Ron Olin Investment
Asheville, NC 28801 Management Co. Both firms are registered
investment advisors specializing in
investments in closed-end funds. Prior
to founding these investment management
firms, Mr. Olin was a senior manager with
IBM supporting government software
contracts with the N.A.S.A. and D.O.D. He
currently serves as Chairman of the Board
of Clemente Strategic Value Fund, a NYSE
Traded closed-end fund with an
internationally diversified portfolio, and
as a Director on the Board of The Austria
Fund, Inc., a NYSE-traded closed-end fund.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 89,300
Ralph W. Bradshaw 48 Mr. Bradshaw has served as Vice President
One West Pack Square and Secretary of Deep Discount Advisors,
Suite 777 Inc., a registered investment advisor
Asheville, NC 28801 specializing in closed-end fund
investments, for over five years. During
that period he has also provided financial
consulting services in the area of closed-
end funds. In previous years, he has held
various managerial positions.
Mr. Bradshaw currently serves as a
Director on the Boards of Clemente
Strategic Value Fund and The Austria Fund,
both NYSE-traded closed-end funds.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 300
William A. Clark 53 Since 1995 Mr. Clark has served as
One West Pack Square Director of Research for Deep Discount
Suite 777 Advisors, a registered investment advisor
Asheville, NC 28801 specializing in closed-end fund
investment, in addition to providing
consulting services in closed-end fund
portfolio management. Mr. Clark has
served as an investment analyst and
advisor to private clients for over 17
years. Before joining
10
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OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
Deep Discount
Advisors, Mr. Clark served in various
managerial positions, and provided
financial services to banks,
telecommunications/software companies,
private investors, and regional
developers. He currently serves as a
Director on the Boards of Clemente
Strategic Value Fund and The Austria Fund,
both NYSE-traded closed-end funds.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 2,900
Gary A. Bentz 42 Mr. Bentz has served as Vice President and
One West Pack Square Chief Financial Officer of Deep Discount
Suite 777 Advisors, Inc., a registered investment
Asheville, NC 28801 advisor specializing in closed-end fund
investments, for over five years. He has
also provided financial accounting,
investment analysis and consulting services
to companies and private investors for the
last 13 years. After commencing his career
with Arthur Andersen & Co., Mr. Bentz held
various financial managerial positions in
industry. He currently serves as a
Director on the Boards of Clemente
Strategic Value Fund and The Austria Fund,
both NYSE-traded closed-end funds.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 2,600
Glenn W. Wilcox, Sr. 67 Chairman of the Board and Chief Executive
418 Vanderbilt Road Officer of Wilcox Travel Agency; Director
Asheville, NC 28803 of Champion Industries, Inc.; Chairman of
the Board of Blue Ridge Printing Co., Inc.;
Chairman of the Board of Tower Associates,
Inc.; Director of Asheville Chamber of
Commerce; Vice Chairman of the Board of
First Union National Bank; Board of
Trustees of Appalachian State University;
Board of Trustees and Board of Directors of
Mars Hill College.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 - 0 -
Andrew Strauss 45 Attorney and senior member of Strauss &
77 Central Ave, Associates, PA., attorneys, Asheville, NC;
Suite F Previous President of White Knight
Asheville, NC 28801 Healthcare, Inc., and LMV Leasing, Inc.,
a wholly owned subsidiary of Xerox Credit
Corporation.
Shares of The Portugal Fund Owned
Directly or Indirectly as of
August 23, 1999 1,800
* interested person
Messrs. Olin, Bradshaw, Clark, and Bentz are affiliated with the company Deep
Discount Advisors, Inc., and they serve on the Boards of Directors of other
closed-end funds as noted in their biographical information. Mr. Olin, by
virtue of his controlling interest in the Soliciting Shareholder and the extent
of the Soliciting Shareholders' beneficial ownership of the Fund's shares, is
believed to be both an "interested person" and a "control person" with respect
to the Portugal Fund Inc.
Directors of the Fund who are not affiliated with Credit Suisse receive an
annual stipend for serving on the Board and its committees, an additional sum
for each Board meeting which they attend, and reimbursement for out-of-pocket
expenses in connection with their attendance at directors' meetings. According
to the Fund's Proxy statement, Directors not affiliated with Credit Suisse each
received total compensation between $7,500 and $8,500 for the fiscal year ending
December 31, 1998. The Fund does not pay any pension or other benefits to its
directors.
11
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
Other than fees that may be payable by the Fund to its directors, none of the
nominees named above has any arrangement or understanding with any person with
respect to any future employment by the Fund or by any affiliate of the Fund.
The persons named as proxies in the enclosed [GREEN] proxy card intend, in the
absence of contrary instructions, to vote all proxies they are entitled to vote
IN FAVOR of the election of the first two nominees named above if Proposal 1(a)
is not approved, and IN FAVOR of the election of the six nominees named above if
Proposal 1(a) is approved. Each nominee has consented to stand for election and
to serve if elected. If any nominee is unable to serve, an event not now
anticipated, the proxies will be voted for such other person, if any, as is
designated by the persons named as proxies.
Information regarding the persons now serving as directors and officers of the
Fund, and additional information regarding the Fund, is contained in the Fund's
proxy statement.
The Soliciting Shareholder recommends that you vote "FOR" its nominees in
Proposals 2 (a) and 2 (b).
PROPOSAL 3 - SELECTION OF INDEPENDENT ACCOUNTANTS
Information concerning this proposal is contained within the Fund's proxy
statement. The Soliciting Shareholder takes no position with regard to the
selection of independent accountants and will ABSTAIN if no preference is
indicated on the [GREEN] proxy.
PROPOSAL 4 - PROPOSAL TO DELIVER NAV TO SHAREHOLDERS IF THE OPEN-ENDING FAILS
TO PASS, AND TO WAIVE THE REDEMPTION FEE IF OPEN-ENDING PASSES
The Soliciting Shareholder intends to present the following proposal for
consideration of the shareholders at the annual meeting:
4 (a) RESOLVED: If a majority favors open-ending, but it fails to receive
the super-majority vote required, the shareholders recommend that the
Board provide shareholders an option to receive Net Asset Value, with
no redemption penalty, as soon as possible.
4 (b) RESOLVED: If the open-ending proposal passes, the shareholders
recommend that the Board waive any redemption fee associated with the
open-ending.
IF OPEN-ENDING FAILS TO PASS: If a majority favors open-ending, but the
proposal fails to pass the restrictive super-majority requirement, the
Soliciting Shareholder believes that the Fund should offer shareholders an
option to receive NAV without any redemption fees. Open-ending the Fund is not
required in order to provide shareholders the opportunity to receive NAV. The
Board of Directors, in its fiduciary responsibility to the shareholders, should
evaluate a variety of methods for delivering NAV to those shareholders who want
it and select the method that is most favorable and least costly for all
shareholders.
In practice, other closed-end funds have used a variety of methods to deliver
NAV to their shareholders; one example would be a Tender Offer to shareholders
at NAV, which would have the advantage of delivering NAV to shareholders, but
could have possible disadvantages, such as creating tax liabilities for
remaining shareholders, increasing the fixed-expense ratio of the Fund, and
shrinking the Fund to an untenable size through large redemptions. However, the
Soliciting Shareholder is making no specific recommendation as to
12
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
which method,
might be best suited for The Portugal Fund. We believe that the Board in
consultation with the investment adviser should make this determination in its
best judgment.
In the likely event that the open-ending proposal fails to pass, we believe that
the discount may well widen to its previous levels. CONSEQUENTLY, it is
important that the shareholders send a very explicit message to the Board of
Directors that if the open-ending achieves a majority, but fails to pass, the
shareholders of the Fund still expect the Board to provide an option to
shareholders to receive Net Asset Value.
IF OPEN-ENDING PASSES: If the open-ending proposal is passed by the
shareholders, we think that the unnecessary and punitive redemption fee should
be waived. Accordingly, this proposal recommends that the Board eliminate the
redemption fee for those shareholders who want to redeem their shares. The Fund
has suggested that approximately 120 days is required to complete the open-
ending; this is sufficient time to raise capital in an orderly way in
anticipation of redemptions. Many previous closed-end funds have open-ended
with no such redemption penalty. We believe the redemption fee is simply a
device to discourage or delay redemptions in order to maintain adviser fee
income at a higher level.
In the interests of all shareholders, the Soliciting Shareholder recommends that
you vote "FOR" Proposal 4(a) and 4(b).
THE ONLY WAY TO VOTE FOR THIS SHAREHOLDER VALUE PROPOSAL
IS TO VOTE THE [GREEN] PROXY
PRINCIPAL HOLDERS OF VOTING SECURITIES
According to the Fund's proxy statement and the most recent Schedule 13D filing
for Deep Discount Advisors, Inc., there are two entities which have reported
beneficial ownership of more than 5% of the outstanding Common Stock: (i) Deep
Discount Advisors, Inc., One West Pack Square, Suite 777, Asheville, NC 28801,
1,754,500 shares (32.8%) and (ii) Fidelity Management and Research Corp., 82
Devonshire Street, Boston, MA 02109, 383,600 shares (7.2%).
According to the Fund's proxy statement, the directors and officers of the Fund,
as a group owned less than 1% of the outstanding shares of the Fund.
THE SOLICITATION
Deep Discount Advisors, Inc. and Ron Olin Investment Management Company
(Soliciting Shareholder) are making this solicitation.
Banks, brokerage houses and other custodians, nominees, and fiduciaries will be
requested to forward this proxy statement and the enclosed [GREEN] proxy card to
the beneficial owners of shares of Common Stock for whom they hold shares of
record. The Soliciting Shareholder will reimburse these organizations for their
reasonable out-of-pocket expenses.
The Soliciting Shareholder will bear all of the fees and expenses related to
this proxy solicitation.
The Soliciting Shareholder is not and, within the past year, has not been a
party to any contract, arrangement or understanding with any person with respect
to any securities of the Fund. In addition, there is no arrangement or
understanding involving either the Soliciting Shareholder, or any associate
which relates to future employment by the Fund or any future transaction with
the Fund.
13
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
If you have any questions concerning this proxy solicitation or the procedures
to be followed to execute and deliver a proxy, please contact the Soliciting
Shareholder at 828-274-1863.
ADDITIONAL PROPOSALS
The Soliciting Shareholder knows of no business that will be presented for
consideration at the meeting other than that set forth in this proxy statement
and in the Fund's proxy statement. If any other matters are properly presented
for consideration at the meeting, it is the intention of the persons named as
proxies on the enclosed [GREEN] proxy card to vote in accordance with their own
best judgment on such matters.
The date by which a stockholder must submit a proposal to be presented at the
2000 Annual Meeting of Stockholders is set forth in the Fund's proxy statement.
Dated: September 13, 1999.
14
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
EXHIBIT 1 Purchases and Sales of Portugal Fund Shares
SECURITIES OF THE FUND PURCHASED OR SOLD
WITHIN THE PAST TWO YEARS BY THE SOLICITING SHAREHOLDER
Except as disclosed in this proxy statement, neither Ronald G. Olin nor Deep
Discount Advisors, Inc. nor Ron Olin Investment Management Company has, or had,
any interest, direct or indirect, by security holdings or otherwise, in the
Fund. The following table sets forth certain information with respect to
purchases and sales of shares of Common Stock of the Fund by Deep Discount
Advisors, Inc. and Ron Olin Investment Management Company for accounts holding
shares as to which they are deemed to be the beneficial owners (the "Accounts").
Some of the shares are held in margin accounts. Therefore, a portion of the
purchase price and market value of the shares may from time to time be
represented by margin borrowings, depending upon the net debit balances, if any,
of the margin accounts, which fluctuate daily.
9/16/97 2000
9/17/97 500
9/18/97 3500
9/19/97 2500
9/22/97 2000
9/23/97 1100
9/30/97 2400
10/2/97 2000
10/24/97 -8000
11/4/97 500
11/5/97 2400
11/7/97 400
12/15/97 5000
12/17/97 10000
12/22/97 -1900
12/29/97 -1600
1/15/98 -800
1/16/98 600
1/23/98 3500
1/26/98 25000
1/29/98 2100
1/30/98 6000
2/3/98 9400
2/4/98 4600
2/5/98 6000
2/6/98 2000
2/9/98 4400
2/13/98 25200
2/17/98 400
2/19/98 5500
2/23/98 2000
2/24/98 25000
3/4/98 500
3/16/98 5000
3/17/98 160000
3/18/98 159600
4/2/98 6800
4/16/98 800
4/27/98 4700
4/28/98 15100
4/29/98 5000
4/30/98 6000
5/12/98 15000
5/26/98 13000
5/29/98 23000
6/1/98 500
6/15/98 -800
8/31/98 -4300
9/4/98 4000
9/9/98 3000
9/11/98 5000
9/14/98 500
9/15/98 3000
9/16/98 4000
9/17/98 8000
9/18/98 23000
9/22/98 8600
9/23/98 9000
9/24/98 10000
9/25/98 17500
9/28/98 7500
10/22/98 5000
10/23/98 1100
10/26/98 2900
10/28/98 3000
10/29/98 5300
11/2/98 500
11/4/98 3200
11/5/98 8000
11/6/98 3000
11/9/98 3000
11/10/98 1000
11/11/98 107000
11/13/98 1500
11/19/98 3500
11/23/98 16000
11/27/98 100000
12/2/98 108000
12/3/98 118500
12/4/98 50000
12/8/98 32500
12/14/98 4300
06/01/99 72500
06/07/99 23000
06/08/99 9800
06/09/99 2300
06/10/99 5100
06/11/99 1700
06/14/99 47000
06/15/99 8500
06/16/99 600
06/18/99 18500
06/21/99 5800
06/22/99 4500
06/23/99 20000
06/28/99 25400
06/29/99 12000
06/30/99 500
07/06/99 1300
07/07/99 600
15
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
EXHIBIT 2
PENDING LITIGATION INVOLVING THE SOLICITING SHAREHOLDER
The soliciting shareholder, and entities affiliated with it, are involved in the
following pending litigation relating to closed-end funds. The litigation is
pending in U.S. District Court for the Southern District of New York.
The Emerging Germany Fund Litigation
Ronald Olin and Deep Discount Advisors, Inc., of which Ronald Olin is President
and Chief Executive Officer, are named defendants in a federal court action for
injunctive relief filed on April 8, 1998 by The Emerging Germany Fund, Inc.
("FRG"). FRG filed this action immediately after canceling its 1998 annual
meeting scheduled for April 27, 1998, and stated that it would not schedule an
annual meeting until the litigation has been resolved.
Subsequently, a class action lawsuit was filed by a stockholder who demanded
that FRG reschedule its 1998 Annual Meeting. Recently, FRG rescheduled and
held its 1998 Annual Meeting on January 26, 1999 and the shareholders approved a
proposal initiated by the Fund to open-end.
In its action, FRG alleges that the defendants solicited proxies in violation of
Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") in
connection with certain postings by Mr. Olin on an Internet bulletin board and
engaged in a alleged scheme to force FRG to open-end. FRG also alleges that Mr.
Olin, Deep Discount Advisors, Inc. and the three other defendants, Mr.
Goldstein, and Opportunity Partners L.P., and Kimball & Winthrop, were a "group"
within the meaning of Section 13(d) of the Williams Act, and had failed to file
a Schedule 13D.
All defendants have moved to dismiss FRG's complaint. A dismissal has
subsequently been agreed to by FRG with regard to the Soliciting Shareholder and
final details are in preparation. All of the above actions were filed in the
Federal District Court , S.D.N.Y. Copies of all pleadings in the above actions
are available upon request.
16
<PAGE>
OPPOSING PROXY 1999 THE PORTUGAL FUND,INC.
- -------------------------------------------------------------------------------
PROXY CARD
PROXY SOLICITED IN OPPOSITION
TO THE BOARD OF DIRECTORS OF THE PORTUGAL FUND, INC.
BY DEEP DISCOUNT ADVISORS, INC. AND RON OLIN INVESTMENT MANAGEMENT COMPANY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 15, 1999
The undersigned hereby appoints Ronald G. Olin, Ralph W. Bradshaw, Gary A.
Bentz, and William A. Clark, and each of them, as the undersigned's proxies,
with full power of substitution, to attend the Annual Meeting of Stockholders of
The Portugal Fund, Inc. (the "Fund") to be held at the offices of Willkie Farr &
Gallager, 787 Seventh Avenue, 38th Floor, New York, New York 10019, on Friday,
October 15, 1999, 2:00 p.m., New York City time, (the "Meeting"), and any
adjournment(s) or postponement(s) thereof, and to vote on all matters that may
come before the Meeting and any such adjournment or postponement the number of
shares that the undersigned would be entitled to vote, with all the power the
undersigned would possess if present in person, as specified below. The proxies
may vote in their discretion with respect to such other matter or matters,
including adjournment or postponement issues, as may come before the Meeting and
with respect to all matters incident to the conduct of the Meeting.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [ ].)
1. (a) To change the Fund's subclassification from a closed-end investment
company to an open-end investment company; and to amend and restate
the Fund's Articles of Incorporation to provide for such conversion.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
1. (b) To change the Fund's fundamental investment policy relating to
borrowing to reflect its proposed new subclassification as an open-end
investment company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER HAS NO RECOMMENDATION FOR PROPOSALS 1 (a) AND 1 (b),
IF PROPOSAL 1 (a) AND 1 (b) ARE LEFT BLANK, THE SOLICITING SHAREHOLDER WILL VOTE
TO ABSTAIN.
2. (a) ELECTION OF DIRECTORS.
To elect the following nominees to serve as Directors of the Fund for a
three year term in the event that Proposal 1(a) is not approved:
RONALD G. OLIN
RALPH W. BRADSHAW
FOR ALL NOMINEES [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
2. (b) ELECTION OF DIRECTORS.
To elect the following nominees to serve as Directors of the Fund in the
event that Proposal 1(a) is approved:
RONALD G. OLIN
RALPH W. BRADSHAW
WILLIAM A. CLARK
GARY A. BENTZ
GLENN W. WILCOX, SR.
ANDREW STRAUSS
FOR ALL NOMINEES [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" ANY PARTICULAR NOMINEE, MARK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S) OF THE
NOMINEE(S). YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE(S).
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" THE ELECTION OF ALL NOMINEES
3. To ratify the selection by the Board of Directors of PricewaterhouseCoopers
LLP as the Fund's independent auditors for the year ending December 31,
1999:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER HAS NO RECOMMENDATION FOR PROPOSAL THREE (3), IF
PROPOSAL THREE (3) IS LEFT BLANK, THE SOLICITING SHAREHOLDER WILL VOTE TO
ABSTAIN.
SHAREHOLDER VALUE PROPOSAL
4. (a) RESOLVED: If a majority favors open-ending, but it fails to receive
the super-majority vote required, the shareholders recommend that the
Board provide shareholders an option to receive Net Asset Value, with
no redemption penalty, as soon as possible.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. (b) RESOLVED: If the open-ending proposal passes, the shareholders
recommend that the Board waive any redemption fee associated with the
open-ending.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE SOLICITING SHAREHOLDER URGES YOU TO VOTE "FOR" PROPOSALS 4(a) AND 4(b)
IMPORTANT - - PLEASE SIGN AND DATE BELOW
SHARES WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN FAVOR OF THE ELECTION OF ALL NOMINEES NAMED ABOVE IN ITEMS 2(a) AND
2(b) AND "FOR" PROPOSALS 4(a) AND 4(b) AND WILL ABSTAIN FROM VOTING ON PROPOSALS
1(a), 1(b), AND 3. AN ABSTENTION ON PROPOSALS 1(a) AND 1(b) WILL HAVE THE EFFECT
OF A VOTE AGAINST THESE PROPOSALS. ALL OTHER PROPOSALS WILL BE VOTED BY THE
SOLICITING SHAREHOLDER IN THE BEST INTERESTS OF STOCKHOLDERS AS DETERMINED BY
THE SOLE JUDGEMENT OF THE SOLICITING SHAREHOLDER AT THE TIME OF THE MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT DATED
SEPTEMBER 13, 1999 OF DEEP DISCOUNT ADVISORS, INC. THE UNDERSIGNED HEREBY
REVOKES ANY PROXY HERETOFORE EXECUTED BY THE UNDERSIGNED RELATING TO THE SUBJECT
MATTER HEREOF AND CONFIRMS ALL THAT THE PROXIES MAY LAWFULLY DO BY VIRTUE
HEREOF.
(IMPORTANT - PLEASE FILL IN DATE)
This proxy card is provided by Deep Discount Advisors, Inc. and Ron Olin
Investment Management Company, both beneficial shareholders of the Fund. Please
sign exactly as your name appears hereon or on proxy cards previously sent to
you. When shares are held by joint tenants, both should sign. When signing as
an attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by the
President or other duly authorized officer.
If a partnership, please sign in partnership name by authorized person.
SIGNATURE(S)_____________________________________________Dated:_______________
Please sign as registered and return promptly in the enclosed envelope.
Executors, trustees and other signing in a representative capacity should
include their names and the capacity in which they sign.
