<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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 Section 240.14a-11(c) or Section
240.14a-12
The Portugal Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
THE PORTUGAL FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 2000
-------------------
TO THE SHAREHOLDERS OF
THE PORTUGAL FUND, INC.
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of The
Portugal Fund, Inc. (the "Fund") will be held at the offices of Credit Suisse
Asset Management, LLC, 466 Lexington Avenue (between 45th & 46th Street), 12th
Floor, New York, New York 10017, on Friday, April 28, 2000, commencing at 10:00
a.m.
The purpose of the meeting is to consider and act upon the following
proposals and to consider such other matters as may properly come before the
meeting or any adjournments thereof:
(1) To elect two (2) directors of the Fund; and
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants for the fiscal year ending December 31, 2000.
The close of business on March 1, 2000 has been fixed as the record date for
the determination of the shareholders of the Fund entitled to notice of, and to
vote at, the meeting.
This notice and related proxy material are first being mailed on or about
March 31, 2000.
By order of the Board of Directors,
/s/ Michael A. Pignataro
MICHAEL A. PIGNATARO
SECRETARY OF THE FUND
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON AND WISH YOUR STOCK TO BE
VOTED, PLEASE COMPLETE, SIGN AND DATE THE PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. IT IS
IMPORTANT THAT YOUR PROXY CARD BE RETURNED PROMPTLY IN ORDER TO AVOID THE
ADDITIONAL EXPENSE OF FURTHER SOLICITATION. IF YOU OWN YOUR SHARES THROUGH BANK
OR BROKERAGE ACCOUNTS, YOU SHOULD BRING PROOF OF YOUR OWNERSHIP IF YOU WISH TO
ATTEND THE MEETING.
Dated: March 31, 2000
New York, New York
<PAGE>
THE PORTUGAL FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
-------------------
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 2000
-------------------
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors (the "Board") of The Portugal Fund, Inc. (the
"Fund") for use at its Annual Meeting of Shareholders to be held at the offices
of Credit Suisse Asset Management, LLC, 466 Lexington Avenue, 12th Floor, New
York, New York 10017, on Friday, April 28, 2000 at 10:00 a.m. (New York City
time) and at any adjournments thereof (collectively, the "Meeting"). A Notice of
the Annual Meeting of Shareholders and a proxy card (the "Proxy") accompanies
this Proxy Statement. Proxy solicitations will be made primarily by mail, but
solicitations may also be made by telephone, telegraph or personal interviews
conducted by officers or employees of the Fund, Credit Suisse Asset Management,
LLC ("CSAM"), Bear Stearns Funds Management Inc., the administrator to the Fund
(the "Administrator"), or Georgeson Shareholder Communications, Inc.
("Georgeson"), a proxy solicitation firm that has been retained by the Fund and
which will receive a fee of approximately $6,000, and will be reimbursed for its
reasonable expenses. All costs of solicitation, including (a) printing and
mailing of this Proxy Statement and accompanying material, (b) the reimbursement
of brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of the Fund's shares, (c) payment of Georgeson
for its services in soliciting Proxies and (d) supplementary solicitations to
submit Proxies, will be borne by the Fund. This Proxy Statement is expected to
be mailed to shareholders on or about March 31, 2000.
The principal executive office of CSAM is One Citicorp Center, 153 East 53rd
Street, 57th Floor, New York, New York 10022. The Administrator has its
principal executive office at 575 Lexington Avenue, 9th Floor, New York, New
York 10022.
The Fund's Annual Report containing audited financial statements for the
fiscal year ending December 31, 1999 has previously been furnished to the
shareholders of the Fund. The report is not to be regarded as proxy-soliciting
material.
If the enclosed Proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted in accordance with
the instructions marked on the Proxy. If no instructions are marked on the
Proxy, the persons appointed as proxies will abstain with respect to the
election of the two shareholder nominees named herein to serve as Directors and
the Proxy will be voted FOR the ratification of the selection of
PricewaterhouseCoopers LLP as independent public accountants for the Fund for
the fiscal year ending December 31, 2000, and in accordance with the judgment of
the persons appointed as proxies upon any other matter that may properly come
before the Meeting. Any
1
<PAGE>
shareholder giving a Proxy has the right to attend the Meeting to vote his or
her shares in person (thereby revoking any prior Proxy) and also the right to
revoke the Proxy at any time by written notice received by the Fund prior to the
time the Proxy is voted.
In the event that a quorum is present at the Meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of Proxies. Any such adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by Proxy. A shareholder
vote may be taken on one or more of the proposals in the Proxy Statement prior
to any adjournment if sufficient votes have been received and it is otherwise
appropriate. A quorum of shareholders is constituted by the presence in person
or by proxy of the holders of a majority of the outstanding shares of the Fund
entitled to vote at the Meeting. For purposes of determining the presence of a
quorum for transacting business at the Meeting, abstentions and broker
"non-votes" (that is, proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted.
Proposal 1 requires for approval the affirmative vote of a plurality (i.e.,
the highest numbers) of the votes cast at the Meeting in person or by proxy, and
Proposal 2 requires for approval the affirmative vote of a majority of the votes
cast at the Meeting in person or by proxy. 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 no impact on Proposals 1 or 2.
The Fund has one class of shares of capital stock, par value $0.001 per
share (the "Shares"). On the record date for the Meeting, March 1, 2000 (the
"Record Date"), 4,717,316 Shares of the Fund were outstanding.
Each Share of the Fund is entitled to one vote each at the Fund's Meeting
and fractional Shares are entitled to proportionate shares of one vote.
In order that your Shares may be represented, you are requested to:
-- indicate your instructions on the Proxy;
-- date and sign the Proxy;
-- mail the Proxy promptly in the enclosed envelope;
-- allow sufficient time for the Proxy to be received before the
commencement of the Meeting on April 28, 2000.
2
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The first proposal to be submitted at the Meeting will be the election of
two directors of the Fund.
Pursuant to the Fund's Articles of Incorporation, the Board is currently
divided into three classes, each class having a term of three years. Each year
the term of office of one class expires and the successor or successors elected
to such class will serve for a three-year term. Messrs. Enrique R. Arzac and
Jonathan W. Lubell, current directors of the Fund whose terms expire at the
Meeting, have decided not to stand for reelection for the reasons described in
"Statement of Independent Directors Arzac, Lubell and Torino Regarding Proposal
1." Ronald G. Olin has nominated Messrs. Glenn W. Wilcox, Sr. and Scott B.
Rogers to stand for election. Each nominee, if elected, will serve until the
2003 Annual Meeting of the Fund and hold office for a term of three years and
until his successor is elected and qualified.
The following table sets forth certain information regarding the nominees
for election to the Board of the Fund, each current director who is not standing
for reelection to the Board at the Meeting, and the executive officers and
directors of the Fund as a group. Each of the nominees, the directors and the
executive officers of the Fund has sole voting and investment power with respect
to the Shares shown. Each nominee and director owns less than one percent of the
outstanding Shares of the Fund except as indicated below.
Each nominee has indicated an intention to serve if elected and has
consented to being named in this Proxy Statement. Each nominee or director who
is deemed an "interested person" of the Fund, as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), is indicated by an asterisk in
the following table. Mr. Priest is an interested person of the Fund by virtue of
his position as director and/or officer of CSAM.
<TABLE>
<CAPTION>
MEMBERSHIP ON
BOARDS
CURRENT PRINCIPAL LENGTH OF SERVICE AS OF OTHER REGISTERED
SHARES OCCUPATION AND DIRECTOR AND TERM INVESTMENT
BENEFICIALLY PRINCIPAL EMPLOYMENT OF MEMBERSHIP COMPANIES AND
OWNED ON DURING THE PAST ON BOARD OF PUBLICLY HELD
NAME (AGE) MARCH 15, 2000 FIVE YEARS THE FUND COMPANIES
- ------------------------- --------------- -------------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Ralph W. Bradshaw 300 Consultant with Deep Since 1999; current Director of
(49) .................. Discount Advisors, term ends at the Clemente Strategic
One West Pack Square Inc. and Ron Olin 2002 annual meeting. Value Fund, Inc.;
Suite 777 Investment The Austria Fund,
Asheville, NC 28801 Management Co., Inc. and Central
investment advisory European Value
firms, since 1995. Fund, Inc.
Ronald G. Olin (53) ..... 89,300+ President and Chief Since 1999; current Director of
One West Pack Square Executive Officer of term ends at the Clemente Strategic
Suite 777 Deep Discount 2002 annual meeting. Value Fund, Inc.;
Asheville, NC 28801 Advisors, Inc., an The Austria Fund,
investment advisory Inc. and Central
firm since 1993; European Value
General Partner of Fund, Inc.
Ron Olin Investment
Management Co. since
1987.
</TABLE>
- ------------------
+ 1.9% of the total Shares outstanding as of the Record Date.
3
<PAGE>
<TABLE>
<CAPTION>
MEMBERSHIP ON
BOARDS
CURRENT PRINCIPAL LENGTH OF SERVICE AS OF OTHER REGISTERED
SHARES OCCUPATION AND DIRECTOR AND TERM INVESTMENT
BENEFICIALLY PRINCIPAL EMPLOYMENT OF MEMBERSHIP COMPANIES AND
OWNED ON DURING THE PAST ON BOARD OF PUBLICLY HELD
NAME (AGE) MARCH 15, 2000 FIVE YEARS THE FUND COMPANIES
- ------------------------- --------------- -------------------- -------------------- -------------------
<S> <C> <C> <C> <C>
William W. Priest, 1,000 Chairman-- Since 1997; current Director of
Jr.*(58) . Management term ends at the fifty-six other
153 E. 53rd Street Committee, Chief 2001 annual meeting. CSAM- advised
New York, NY 10022 Executive Officer investment
and Managing companies.
Director of CSAM
(12/90-present).
Scott B. Rogers (44) .... -- Chief Executive -- Director, National
6 Beaverdam Ct. Officer, Asheville Urban Strategy
Asheville, NC 28804 Buncombe Community Commission;
Christian Ministry; Director,
President, ABCCM Southeastern
Doctor's Medical Jurisdiction Urban
Clinic. Networkers;
Director, Asheville
Area Red Cross;
Appointee, NC
Governor's
Commission on
Welfare to Work;
Chairman, Recycling
Unlimited;
Director,
Interdenominational
Ministerial
Alliance.
Martin M. Torino (50) ... -- Chairman of the Since 1989; current Director of five
L. N. Alen Board of Ingenio y term ends at the other CSAM- advised
986 9th Floor Refineria San Martin 2001 annual meeting. investment
1001 Buenos Aires, Del Tabacal S.A. companies.
Argentina (8/96-present);
Executive Director
of TAU S.A. (a
commodities trading
firm)
(11/90-present);
President of
DYAT S.A.
(10/93-present);
Executive Vice
President of Louis
Dreyfus Sugar, Inc.
(1984-1991).
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MEMBERSHIP ON
BOARDS
CURRENT PRINCIPAL LENGTH OF SERVICE AS OF OTHER REGISTERED
SHARES OCCUPATION AND DIRECTOR AND TERM INVESTMENT
BENEFICIALLY PRINCIPAL EMPLOYMENT OF MEMBERSHIP COMPANIES AND
OWNED ON DURING THE PAST ON BOARD OF PUBLICLY HELD
NAME (AGE) MARCH 15, 2000 FIVE YEARS THE FUND COMPANIES
- ------------------------- --------------- -------------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Glenn W. Wilcox, Sr. -- Chairman of the -- Director of
(67) .................. Board and Chief Champion
418 Vanderbilt Road Executive Officer of Industries, Inc.;
Asheville, NC 28802 Wilcox Travel Chairman of the
Agency. 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.
All directors and 91,920++
executive officers as a
group:.................
</TABLE>
- --------------
++ 1.9% of the Shares outstanding as of the Record Date.
5
<PAGE>
During the fiscal year ended December 31, 1999, each director who is not a
director, officer, partner, co-partner or employee of CSAM, or any affiliate
thereof, received an annual fee of $5,000 and $500 for each meeting of the Board
attended by him and was reimbursed for expenses incurred in connection with his
attendance at the Board meetings. The total remuneration paid by the Fund during
the fiscal year 1999 to all such unaffiliated directors was $39,000. During the
fiscal year 1999, the Board of the Fund convened nine times.
The Fund's Audit Committee is composed of directors who are not interested
persons of the Fund. Messrs. Arzac, Bradshaw, Lubell, Olin and Torino are
members of the Audit Committee of the Fund. The Audit Committee of the Fund
convened twice during the fiscal year 1999. The Audit Committee of the Fund
advises the full Board with respect to accounting, auditing and financial
matters affecting the Fund. The Board performs the functions of a nominating
committee. In the event of a vacancy on the Board of Directors, the Board of
Directors of the Fund would consider nominees recommended by shareholders.
Recommendations should be submitted to the Board in care of the Secretary of the
Fund. The Fund does not have a compensation committee.
Each Director, except William W. Priest, Jr., attended 75% or more of the
aggregate number of the Board and committee meetings held during the period for
which he was a Director.
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
and Section 30(h) of the 1940 Act require the Fund's officers and directors,
officers and directors of the investment adviser, affiliated persons of the
investment adviser, and persons who beneficially own more than ten percent of a
Fund's Shares to file reports of ownership with the SEC, the NYSE and the Fund.
Based solely upon its review of the copies of such forms received by it and
written representations from such persons, the Fund believes that for the fiscal
year ended December 31, 1999, all filings applicable to such persons were
complied with.
EXECUTIVE OFFICERS
The following table shows certain information about the executive officers
of the Fund other than Mr. Priest who is described above. Mr. Priest is Chairman
of the Board of Directors of the Fund and was appointed to such position in
May 1997. Mr. Watt is President and Chief Investment Officer of the Fund. He has
been an officer of the Fund since February 1997. Mr. Liebes was elected Senior
Vice President of the Fund on August 12, 1997. Mr. Pignataro has served as Chief
Financial Officer for the Fund since 1991 and Secretary for the Fund since 1989.
Mr. Del Guercio was elected to his office as Vice President of the Fund on
August 12, 1997.
6
<PAGE>
Each executive officer will hold office until a successor has been elected.
All executive officers of the Fund are employees of and are compensated by CSAM
and will continue to serve as officers to the Fund until a successor has been
elected by the Board. The Fund has no bonus, profit sharing, pension or
retirement plans.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY CURRENT PRINCIPAL OCCUPATION
OWNED ON AND PRINCIPAL EMPLOYMENT
NAME AGE MARCH 15, 2000 POSITION WITH FUND DURING THE PAST FIVE YEARS
- ------------------------ -------- --------------- --------------------------- -----------------------------
<S> <C> <C> <C> <C>
Richard W. Watt ........ 41 1,320 President and Chief Managing Director of CSAM
153 East 53rd Street Investment Officer (7/96-present); Senior Vice
New York, NY 10022 President of CSAM
(8/95-7/96); Head of Emerging
Markets Investments and
Research at Gartmore
Investment Limited
(11/92-6/95).
Hal Liebes ............. 35 -- Senior Vice President Managing Director and General
153 East 53rd Street Counsel of CSAM
New York, NY 10022 (12/99-present); Director and
General Counsel of CSAM
(3/97-12/99); Vice President
and Counsel, Lehman Brothers,
Inc. (6/96-3/97); Vice
President and Legal Counsel
of CSAM (6/95-6/96); Chief
Compliance Officer, CS First
Boston Investment Management
(3/94-6/95).
Michael A. Pignataro ... 40 -- Chief Financial Officer and Vice President of CSAM
153 East 53rd Street Secretary (12/95-present); Assistant
New York, NY 10022 Vice President and Chief
Administrative Officer for
Investment Companies of CSAM
(9/89-12/95).
Rocco A. Del Guercio ... 36 -- Vice President Assistant Vice President of
153 East 53rd Street CSAM (1/99-present);
New York, NY 10022 Administrative Officer for
CSAM-advised investment
companies (6/96-12/98);
Assistant Treasurer, Bankers
Trust Co.-Fund Administration
(3/94-6/96).
</TABLE>
7
<PAGE>
The following table shows certain compensation information for the directors
of the Fund for the fiscal year ended December 31, 1999. None of the Fund's
executive officers and directors who are also officers or directors of CSAM
received any compensation from the Fund for such period.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT TOTAL TOTAL NUMBER
BENEFITS ESTIMATED COMPENSATION OF BOARDS OF
ACCRUED AS ANNUAL FROM FUND AND CSAM-ADVISED
AGGREGATE PART OF BENEFITS FUND COMPLEX INVESTMENT
COMPENSATION FUND UPON PAID TO COMPANIES
NAME OF DIRECTOR FROM FUND EXPENSES RETIREMENT DIRECTORS SERVED
- -------------------------------- ------------ ---------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Dr. Enrique R. Arzac............ $9,000 0 0 $99,500 11
Ralph W. Bradshaw............... $1,750 0 0 $ 1,750 1
James J. Cattano(*)............. $9,000 0 0 $61,500 6
Jonathan W. Lubell.............. $8,500 0 0 $17,000 2
Ronald G. Olin.................. $1,750 0 0 $ 1,750 1
Martin M. Torino................ $9,000 0 0 $51,000 6
</TABLE>
- --------------
(*)Mr. Cattano's term as a director of the Fund ended on October 15, 1999.
STATEMENT OF INDEPENDENT DIRECTORS ARZAC, LUBELL AND TORINO REGARDING
PROPOSAL 1
We have decided not to support Mr. Olin's nominees to the Fund's Board of
Directors. Because Mr. Olin's advisory firms--Ron Olin Investment Management
("Olin") and Deep Discount Advisors, Inc. ("DDA")--control over 33% of the
Fund's outstanding shares, we also have decided against waging a proxy contest
that would drive up the Fund's expenses with no realistic possibility of
success. Therefore, Messrs. Arzac and Lubell, whose terms as directors expire
this year and whose nomination for reelection was not supported by Mr. Olin,
have reluctantly decided not to stand for reelection. We regret not giving you a
choice of director candidates. Instead of launching a contest, we have decided
to express our views in this Statement. If you wish to send a message to
Mr. Olin, we suggest that you WITHHOLD your vote for his candidates.
First and foremost, we disagree with Mr. Olin's views about the best
direction for the Fund in the future. Last year, Mr. Olin expressed concern
about the Fund's "persistent" market discount and criticized management for not
taking "meaningful steps to enhance stockholder value." And yet, when
shareholders were given an opportunity to vote on open-ending the Fund, with our
full support and the full support of CSAM and the two CSAM representatives then
serving on the Board, Mr. Olin opposed the proposal. Mr. Olin criticized the
temporary 1-1/2% redemption fee that we felt was appropriate to balance the
interests of shareholders who desired to liquidate their investment against
those who elected to stay in the Fund. And now, after the proposal failed, the
Fund's shares are trading at a discount of around 17%, despite the aggressive
repurchase program that was immediately launched. So instead of shareholders
having an opportunity to redeem their shares immediately at 1-1/2% below net
asset value, and later at full net asset value, shareholders are left with a
substantial discount again.
We also believe that the shareholders' interests are best served by
maintaining a Board that is not dominated by management or by any single
shareholder, even a controlling shareholder. If his two nominees are elected,
Mr. Olin will have personally selected four of the Fund's six Directors.
8
<PAGE>
And finally, we continue to be concerned that Mr. Olin's obligations to act
in the best interests of the Olin/DDA advisory clients could conflict in very
real ways with his duty to act in the best interests of all Fund shareholders.
DDA's stated investment specialty is seeking "to exploit inefficiencies in the
price of" closed-end fund shares and other securities. Mr. Olin certainly has
every right to vote the shares that Olin/ DDA controls in the best interests of
the advisory clients who own those shares. But as a director, his fiduciary
duties run to all shareholders, not just the Olin/DDA advisory clients. Going
forward, we certainly hope Mr. Olin and his nominees will look out for the
interests of all shareholders, and not place the interests of advisory clients
first.
Reducing or eliminating a fund's market discount benefits all shareholders.
But reducing or eliminating a fund's market discount also may reduce or
eliminate opportunities to exploit pricing inefficiencies. In such a
circumstance, Mr. Olin's obligations to Olin/DDA's advisory clients may compel
him to liquidate their investments on a widespread basis, regardless of the
effect of such liquidations on other shareholders. We are not questioning Mr.
Olin's intentions; however, we believe that these types of conflicts can be very
difficult to reconcile. Given that the Board's fundamental responsibility is to
carefully balance the interests of ALL shareholders, are shareholders really
well served by a Board that is dominated by individuals who are faced with these
kinds of conflicts?
In closing, we thank you for the faith and confidence that you have vested
in us over the years. We wish you every success.
RESPONSE OF RECENTLY ELECTED BOARD MEMBERS BRADSHAW AND OLIN
Messrs. Arzac and Lubell are to be commended for their decision not to seek
reelection as Directors and for thereby avoiding an unnecessary and expensive
proxy fight. We resolutely disagree with their characterizations of us, our
actions, and our motives. These issues were all thoroughly aired in the last
proxy contest, in which the incumbent board's positions failed to win enough
shareholder support to pass. Their "open-ending" proposal was not put forth
until we challenged their "business as usual" proxy with opposing director
candidates. After postponing the shareholder meeting for over six months, they
presented an open-ending proposal requiring so overwhelming a vote for its
passage that it would have failed even if every vote cast at the meeting had
been in favor.
Investment company law requires that all shareholders of a closed-end fund
be treated equally. As stockholders, our interests and those of our clients are
the same as all the other shareholders. Our only motivation is to maximize
shareholder return, and we will work diligently to that end. We reject any
assertion to the contrary. We hope that you will continue to vote in favor of
Directors who share this commitment.
VOTE REQUIRED
Proposal 1 requires for approval the affirmative vote of a plurality of the
votes cast at the Meeting in person or by proxy. Because abstentions and broker
non-votes are not treated as shares voted, any abstentions and broker non-votes
would have no impact on such proposal.
9
<PAGE>
PROPOSAL 2: RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The second proposal to be submitted at the Meeting will be the ratification
or rejection of the selection by the Board of PricewaterhouseCoopers LLP as
independent public accountants of the Fund for the present fiscal year ending
December 31, 2000. At a meeting held on February 11, 2000, the Board of
Directors of the Fund, including those directors who are not "interested
persons" of the Fund, approved the selection of PricewaterhouseCoopers LLP as
independent public accountants for the fiscal year ending December 31, 2000.
PricewaterhouseCoopers LLP has been independent public accountants for the Fund
since the commencement of operations of the Fund, and has informed the Fund that
it has no material direct or indirect financial interest in the Fund. A
representative of PricewaterhouseCoopers LLP will be available at the Meeting
and will have the opportunity to make a statement if the representative so
desires and will be available to respond to appropriate questions.
VOTE REQUIRED
Proposal 2 requires for approval the affirmative vote of a majority of the
votes cast at the Meeting in person or by proxy. Because abstentions and broker
non-votes are not treated as shares voted, any abstentions and broker non-votes
would have no impact on such proposal.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETINGS;
SHAREHOLDER PROPOSALS
The Board is not aware of any other matters that will come before the
Meeting. Should any other matter properly come before the Meeting, it is the
intention of the persons named in the accompanying Proxy to vote the Proxy in
accordance with their judgment on such matters.
Notice is hereby given that for a shareholder proposal to be considered for
inclusion in the Fund's proxy material relating to its 2001 annual meeting of
shareholders, the shareholder proposal must be received by the Fund no later
than December 2, 2000. The shareholder proposal, including any accompanying
supporting statement, may not exceed 500 words. A shareholder desiring to submit
a proposal must be a record or beneficial owner of Shares with a market value of
$2,000 and must have held such shares for at least one year. Further, the
shareholder must continue to hold such shares through the date on which the
meeting is held. Documentary support regarding the foregoing must be provided
along with the proposal. There are additional requirements regarding proposals
of the shareholders, and a shareholder contemplating submission of a proposal is
referred to Rule 14a-8 promulgated under the Exchange Act. The timely submission
of a proposal does not guarantee its inclusion in the Fund's proxy materials.
Pursuant to the Bylaws of the Fund, at any annual meeting of the
shareholders of the Fund, only such business will be conducted as has been
properly brought before the annual meeting. To be properly brought before the
annual meeting, the business must be (i) specified in the notice of meeting (or
any supplement thereto) given by or at the direction of the Board,
(ii) otherwise properly brought before the meeting by or at the direction of the
Board, or (iii) otherwise properly brought before the meeting by a shareholder.
10
<PAGE>
For business to be properly brought before the annual meeting of the Fund by
a shareholder of the Fund, such shareholder must have given timely notice
thereof in writing to the Secretary of the Fund. To be timely, any such notice
must be delivered to or mailed and received at the Fund c/o Credit Suisse Asset
Management LLC, One Citicorp Center, 153 East 53rd Street, 57th Floor, New York,
NY 10022 not later than 60 days prior to the date of the meeting; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, any such notice by a
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which notice of the date of the
annual meeting was given or such public disclosure was made.
Any such notice by a shareholder must set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Fund's books, of the shareholder proposing such business,
(iii) the class and number of Shares of the capital stock of the Fund which are
beneficially owned by the shareholder, and (iv) any material interest of the
shareholder in such business.
The Fund may exercise discretionary voting authority with respect to any
shareholder proposals for the year 2001 annual meeting not included in the proxy
statement and form of proxy which are not submitted to the Fund by February 15,
2001. Even if timely notice is received, the Company may exercise discretionary
voting authority in certain other circumstances. Discretionary voting authority
is the ability to vote proxies that shareholders have executed and returned to
the Company on matters not specifically reflected on the form of the proxy.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH TO HAVE YOUR SHARES
VOTED, PLEASE TAKE A MOMENT NOW TO VOTE BY COMPLETING, SIGNING AND RETURNING
YOUR PROXY CARD(S) IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
ADDITIONAL INFORMATION
BENEFICIAL OWNERS
The following table shows certain information concerning persons who may be
deemed beneficial owners of 5% or more of the shares of the Fund because they
possessed or shared voting or investment power with respect to the shares of the
Fund:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED OF SHARES
- ------------------------------------------------------------ ------------------ ---------
<S> <C> <C>
*Deep Discount Advisors, Inc................................ 1,009,500 18.9%
One West Pack Square
Suite 777
Asheville, NC 28801
*Ron Olin Investment Management Company..................... 760,900 14.3%
One West Pack Square
Suite 777
Asheville, NC 28801
</TABLE>
- --------------
(*)As stated in Amendment No. 10 to Schedule 13D filed with the SEC on
January 5, 2000.
11
<PAGE>
REPORTS TO SHAREHOLDERS
The Fund sends unaudited semi-annual and audited annual reports to its
shareholders, including a list of investments held. THE FUND WILL FURNISH,
WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL AND SEMI-ANNUAL REPORT, UPON
REQUEST TO THE FUND AT C/O CREDIT SUISSE ASSET MANAGEMENT, LLC ONE CITICORP
CENTER, 153 EAST 53RD STREET, 57TH FLOOR, NEW YORK, NEW YORK 10022, TELEPHONE
(1-800-293-1232), OR AT THE FUND'S WEBSITE AT WWW.CEFSOURCE.COM. THESE REQUESTS
WILL BE HONORED WITHIN THREE BUSINESS DAYS OF RECEIPT.
LEGAL PROCEEDINGS
BRAUTIGAM V. PRIEST ET AL., C.A. No. 99-365 (SLR) (D. Del. filed June 10,
1999). This purported class action complaint was filed against CSAM, the Fund
and its directors. The complaint alleges that defendants breached their
fiduciary duties to the Fund, in violation of Sections 36 and 48 of the 1940 Act
and Maryland law, by, INTER ALIA, failing to put the interests of the Fund's
stockholders before those of others, failing to take steps to reduce or
eliminate the discount to net asset value at which shares of the Fund trade, and
postponing the annual meeting of the Fund. The complaint seeks a declaratory
judgment, an order directing defendants to "take serious steps" to reduce the
discount and to hold an annual meeting, compensatory and punitive damages and
attorneys' fees.
On July 28, 1999, plaintiff filed and served a motion for a preliminary
injunction requiring defendants to schedule and hold the annual meeting of the
Fund on or before October 1, 1999. Plaintiff withdrew the motion for a
preliminary injunction, filing and serving a notice of withdrawal on August 10,
1999.
On August 5, 1999, defendants filed and served a motion to dismiss
plaintiff's complaint in its entirety. On March 2, 2000, the Court denied that
portion of the motion to dismiss based upon jurisdictional and venue grounds,
transferred the case to New York because the venue was improper, and declined to
address the other contentions in the motion to dismiss, which remain pending.
The Fund, CSAM and the director defendants believe that plaintiff's claims
are without legal merit and are prepared to defend them vigorously.
12
<PAGE>
THE PORTUGAL FUND, INC.
-------------------------------------------------------------------
3912-PS-00
<PAGE>
PROXY
P THE PORTUGAL FUND, INC.
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y The undersigned hereby appoints Michael A. Pignataro and Hal Liebes as
Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side
and in accordance with their judgment on such other matters as may properly
come before the meeting or any adjournments thereof, all shares of The
Portugal Fund, Inc. (the "Fund") that the undersigned is entitled to vote
at the annual meeting of shareholders to be held on April 28, 2000, and at
any adjournments thereof.
- ---------------- ----------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ---------------- ----------------
- --------------------------------------------------------------------------------
<PAGE>
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL ABSTAIN FROM PROPOSAL 1 AND WILL BE VOTED "FOR" PROPOSAL 2.
THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION WITH RESPECT TO THE NOMINEES
IN PROPOSAL 1 AND RECOMMENDS A VOTE "FOR" PROPOSAL 2.
1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS.
Nominees: (01) Glenn W. Wilcox, Sr. (three-year term)
(02) Scott B. Rogers (three-year term)
/ / FOR all nominees listed above (except as marked to the contrary above)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above
(Instruction: To withhold authority for any individual nominee, strike a line
through such individual's name above.)
FOR AGAINST ABSTAIN
2. TO RATIFY THE SELECTION OF / / / / / /
PRICEWATERHOUSECOOPERS
LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS OF THE FUND
FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2000.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as name appears at left. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign full in corporate name by president or other
authorized officer. If in a partnership, please sign in partnership name by
authorized person.
Signature: Date: Signature: Date:
--------------- -------- -------------- --------
- --------------------------------------------------------------------------------
