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RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
, 1996
Dear Stockholders:
The enclosed proxy materials describe the proposed transaction (the
"Transaction") involving RCM Capital Management ("Old RCM"), the investment
manager to RCM Strategic Global Government Fund, Inc. (the "Fund"), and Dresdner
Bank AG, an international banking organization headquartered in Frankfurt,
Germany ("Dresdner"). Upon the closing of the Transaction, the business of Old
RCM will be carried on as a wholly owned subsidiary of Dresdner organized under
the laws of Delaware as either a limited liability company or corporation ("New
RCM").
[Old RCM has informed the Fund that this Transaction is not expected to have
a material effect on the operation of the Fund or on the Fund's stockholders. No
material changes in investment philosophy, policies, or strategies are
contemplated.] While the Transaction will provide New RCM with access to the
expertise and experience of Dresdner and its affiliates, New RCM will use the
name "RCM Capital Management," and will still operate from offices in San
Francisco, with the same personnel functioning in the same capacities. Those
currently responsible for the investment strategies of Old RCM are expected to
continue to direct the investment decisions of the Fund. To assure this
continuity, certain key personnel of Old RCM, including the principal portfolio
managers of the Fund, will enter into employment contracts with New RCM.]
The change in ownership of Old RCM is a transfer of control under the
provisions of the Investment Company Act of 1940 and, as such, will have the
effect of terminating the Fund's existing investment management agreement. The
stockholders of the Fund are therefore being asked to approve a new contract
with the New RCM in order for it to act as investment manager to the Fund. The
substantive terms of this new agreement are identical to those of the existing
agreement.
We also ask you to consider and vote on two other proposals. The first is
the re-election of two directors to the Board of Directors for terms to expire
in 1999. The second is the ratification of the selection by the Board of
Directors of Coopers & Lybrand L.L.P. as independent public accountants for the
fiscal year ending January 31, 1997.
The Board of Directors recommends that you vote to approve the new
investment management agreement and each of the other proposals. Enclosed you
will find a proxy statement which more fully describes the Transaction, the new
investment management agreement and the other matters that you are being asked
to approve. We urge you to spend a few minutes reviewing the proxy statement,
and filling out your proxy card. Please return your proxy card in the
postage-paid envelope provided. We want to know how you would like to vote and
welcome your comments.
Should you have any questions, please call 415-954-5400. We look forward to
continuing to meet your investment needs.
Sincerely,
Gary W. Schreyer
PRESIDENT
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RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
FOUR EMBARCADERO CENTER
SUITE 2800
SAN FRANCISCO, CALIFORNIA 94111
(415) 954-5400
NOTICE OF THE ANNUAL MEETING
To the Stockholders:
Notice is hereby given that the Annual Meeting (the "Meeting") of
stockholders of RCM Strategic Global Government Fund, Inc., a Maryland
corporation (the "Fund"), will be held on April 29, 1996, at (Pacific Time)
at the Hyatt Regency Hotel, located at Five Embarcadero Center, San Francisco,
California 94111. At the Meeting, you and the other stockholders of the Fund
will be asked to consider and vote on the following matters:
1. To approve or disapprove a new investment management agreement between
[new RCM investment management entity] and the Fund, effective upon the
closing date of the transaction involving Dresdner Bank AG, an
international banking organization headquartered in Frankfurt, Germany,
and RCM Capital Management, a California limited partnership, the current
investment manager to the Fund.
2. To re-elect two directors to the Board of Directors for terms to expire
in 1999 or until successors shall be duly elected and qualified.
3. To ratify or reject the selection by the Board of Directors of Coopers &
Lybrand L.L.P. as independent public accountants for the fiscal year
ending January 31, 1997.
4. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
Stockholders of record at the close of business on March 14, 1996, are
entitled to notice of, and to vote at, the Meeting. Regardless of whether you
plan to attend the Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD so that a quorum will be present and the maximum number of
shares may be voted. You may change your vote by written notice to the Fund, by
submission of a subsequent proxy, or by voting in person at the Meeting.
By Order of the Board of Directors,
Timothy B. Parker
SECRETARY
San Francisco, California
March , 1996
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RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
FOUR EMBARCADERO CENTER
SUITE 2800
SAN FRANCISCO, CALIFORNIA 94111
(415) 954-5400
PROXY STATEMENT
This Proxy Statement is being provided to the stockholders of RCM Strategic
Global Government Fund, Inc., a Maryland corporation (the "Fund"), in connection
with the solicitation of proxies by the Board of Directors of the Fund (the
"Board of Directors," or the "Board"). The proxies are to be used at the Annual
Meeting of Stockholders (the "Meeting") to be held at the Hyatt Regency Hotel,
located at Five Embarcadero Center, San Francisco, California 94111, on April
29, 1996 at a.m. (Pacific Time), and any adjournment(s) thereof, for action
upon the matters set forth in the Notice of the Annual Meeting of Stockholders.
All shares represented by each properly signed proxy ("Proxy") received
prior to the Meeting will be voted at the Meeting. If a stockholder specifies
how the Proxy is to be voted on any of the business matters to come before the
meeting, it will be voted in accordance with the specification. If no
specification is made, the Proxy will be voted FOR the approval of a new
investment management agreement for the Fund (the "New Investment Management
Agreement") (Proposal 1), FOR the re-election of the directors nominated by the
Board of Directors (Proposal 2), and FOR the ratification of the selection by
the Board of Directors of Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as the
independent public accountants for the fiscal year ending January 31, 1997
(Proposal 3). The Proxy may be revoked by a stockholder at any time prior to its
use by written notice to the Fund, by submission of a subsequent Proxy, or by
voting in person at the Meeting.
The representation in person or by proxy of at least a majority of the
shares of capital stock of the Fund (the "Capital Shares") entitled to vote is
necessary to constitute a quorum for transacting business at the meeting. For
purposes of determining the presence of a quorum, abstentions, withheld votes or
broker "non-votes" will be counted as present. Broker "non-votes" occur when the
Fund receives a Proxy from a broker or nominee who does not have discretionary
power to vote on a particular matter and the broker or nominee has not received
instructions from the beneficial owner or other person entitled to vote the
shares represented by the Proxy. The New York Stock Exchange has indicated that
its members have discretionary authority to vote shares held in street name even
if they have not received instructions from the beneficial owners. Proposals 1
and 3 require the approval of a "majority of the outstanding voting securities"
of the Fund, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), while Proposal 2 requires a plurality of the Capital Shares voting
and entitled to vote thereon at the meeting. Withheld votes and broker non-votes
will not be counted in favor of or against, and will have no other effect on the
voting on Proposal 2, but abstentions and broker non-votes will have the effect
of a vote against Proposals 1 and 3, depending on the number of Capital Shares
present at the meeting. See "Proposal 1 -- Required Vote" and "Proposal 3 --
Required Vote."
The cost of solicitation, including postage, printing and handling, and
excepting those costs associated with the preparation and printing of the
portions of this proxy statement related to the New Investment Management
Agreement, will be borne by the Fund. The solicitation will be made
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primarily by mail, but may be supplemented by telephone calls, telegrams and
personal interviews by officers, employees and agents of the Fund. This Proxy
Statement and the enclosed form of Proxy were first mailed to stockholders on or
about March , 1996.
At 5:00 p.m. (Eastern Standard Time) on March 14, 1996, the record date for
the determination of stockholders entitled to vote at the meeting, there were
outstanding Capital Shares. Each Capital Share is entitled to one
vote.
As of March 14, 1996, there was no person or group known to the Fund to be
the beneficial owner of more than 5% of the outstanding Capital Shares. However,
on such date, Cede & Co., a nominee of Depository Trust Company ("DTC"), owned
of record Capital Shares, or approximately of the number of
Capital Shares entitled to vote at the meeting. DTC is a securities depository
for brokers, dealers and other institutional investors. Securities are so
deposited for the purpose of permitting book entry transfers of securities among
such investors. The Fund does not know the names of beneficial owners of Capital
Shares that have been deposited at DTC. As of March 14, 1996, all Fund directors
and officers as a group owned, beneficially, less than 1% of the Capital Shares.
INTRODUCTION. In connection with the transaction contemplated by the
Agreement of Purchase and Sale dated as of December 13, 1995 (the "Purchase
Agreement"), an entity organized in Delaware either as a limited liability
company or corporation wholly owned by Dresdner Bank AG, an international
banking organization headquartered in Frankfurt, Germany ("Dresdner"), will
acquire all the outstanding partnership interests in RCM Capital Management, a
California limited partnership ("Old RCM"), from RCM Acquisition, Inc. and RCM
Limited L.P. (the "Transaction"). Upon the closing date of the Transaction (the
"Closing Date"), New RCM will own all of the partnership interests in Old RCM,
all of the assets and liabilities of Old RCM will become the assets and
liabilities of New RCM, and New RCM will succeed to the business and affairs of
the Old RCM.
The Transaction is being treated for purposes of the 1940 Act as a change in
control of Old RCM. The 1940 Act provides that such a change in control
constitutes an "assignment" of the Management Agreement (the "Existing
Investment Management Agreement") under which Old RCM provides advisory services
to the Fund. Such an "assignment" will result in the automatic termination of
the Existing Investment Management Agreement at the time of the Closing Date.
This Proxy Statement seeks stockholder approval of the New Investment
Management Agreement between the Fund and New RCM, to be effective as of the
Closing Date. The New Investment Management Agreement would be in substance
identical to the Existing Investment Management Agreement. The effect of
Proposal 1 is to permit the Fund to continue to operate, following the
Transaction, under an investment management arrangement substantially identical
to that in effect immediately before the Transaction.
THE TRANSACTION. The sole general partner and controlling person of Old RCM
is RCM Limited L.P., a California limited partnership ("RCM Limited"). The sole
general partner of RCM Limited is RCM General Corporation, a California
corporation ("RCM General"). As of this date, RCM General has 19 stockholders
and RCM Limited has 19 limited partners (all of whom are principals of Old RCM)
including certain directors and officers of the Fund.
The sole limited partner of Old RCM is RCM Acquisition, Inc., a wholly owned
subsidiary of Travelers Group Inc. ("Travelers"). Travelers, whose principal
executive offices are located at 388 Greenwich Street, New York, New York 10013,
is a financial services holding company which,
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<PAGE>
through its subsidiaries, is principally engaged in the business of life and
property and casualty insurance services, consumer finance services, and
investment services. Neither Travelers nor its affiliates has the power to
control the management or operation of Old RCM.
As stated above, in connection with the Purchase Agreement, RCM Acquisition,
Inc. and RCM Limited will sell all partnership interests in Old RCM to New RCM.
In addition, [New RCM or Dresdner] will acquire from Travelers or its affiliates
all of the issued and outstanding shares of RCM Capital Trust Company, a
California limited purpose trust company (the 'Trust Company"). Subject to the
terms and conditions of the Purchase Agreement, Travelers will be paid an
aggregate purchase price of $297 million for its interests in Old RCM and the
Trust Company, and RCM Limited will be paid $3 million for its interest in Old
RCM. The total purchase price, $300 million, is subject to certain adjustments
on the Closing Date as provided in the Purchase Agreement.
In addition, New RCM will make aggregate payments of an estimated $100
million over approximately the next five years (collectively, the "Additional
Payments") to the limited partners of RCM Limited who are party to employment
agreements with New RCM and certain other employees of New RCM. On the Closing
Date, New RCM will make the first Additional Payment of $33.3 million. In
addition, on each of the first five anniversaries of the first day of the
calendar quarter next succeeding the Closing Date, New RCM will make an
Additional Payment of $13.34 million, as adjusted by certain income growth
measurements. The Additional Payments will be allocated in the sole discretion
of RCM Limited, but subject to consultation with New RCM directors designated
and elected by Dresdner.
Pursuant to that certain Agreement Regarding RCM Capital Management, dated
April 1, 1990, Travelers has agreed, subject to certain conditions, to pay to
RCM Limited a fee equal to 30% of the net proceeds received by Travelers (the
"Transition Fee") upon the transfer by Travelers of its interests in Old RCM or
the Trust Company. RCM Limited is entitled to determine the portion of the
Transition Fee, if any, to be distributed to each of its limited partners.
While New RCM will succeed to the business and affairs of Old RCM on the
Closing Date, the Purchase Agreement provides that RCM Limited shall manage,
operate and make all decisions regarding the day-to-day business and affairs of
New RCM, subject to the oversight of New RCM's Board of Directors. A management
agreement (the "Dresdner-New RCM Management Agreement") among RCM Limited,
Dresdner, and New RCM will be entered into on the Closing Date, granting RCM
Limited the authority to take all actions on behalf of New RCM that may be
"necessary, appropriate, proper, advisable, incidental to or convenient" in the
judgement of RCM Limited. In consideration for the services to be rendered by
RCM Limited, New RCM will pay RCM Limited an amount equal to 35% of the gross
operating income of New RCM, less the aggregate salary payments (the "RCM
Contract Payments") made by New RCM to the limited partners of RCM Limited (the
"Management Fee"). The Management Fee shall be no less than $25 million, less
the RCM Contract Payments, for each of the first two years that the Management
Agreement is in place. RCM Limited is entitled to determine the portion of the
Management Fee, if any, to be distributed to each of its limited partners.
RCM Limited has informed the Fund that it contemplates no material changes
in the investment philosophy, policies, or strategies of the Fund. New RCM will
continue to operate from offices in San Francisco, California, with the same
personnel functioning in the same capacities as before the Closing Date. The
same persons who are presently responsible for the investment strategies of Old
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RCM are expected to direct New RCM's investment strategies following the Closing
Date. The Purchase Agreement requires that certain key personnel of Old RCM,
including the principal portfolio managers of the Fund, will enter into
employment agreements (which will include non-competition and/or
non-solicitation and other customary provisions) with New RCM, providing
assurance that investment continuity will be maintained.
Pursuant to a governance agreement to be entered into on the Closing Date
(the "Governance Agreement"), the Board of Directors of New RCM will consist of
nine members, six of whom are to be designated by RCM Limited and three of whom
are to be designated by Dresdner. New RCM may not reorganize, change its line of
business, sell or lease substantial assets, incur substantial indebtedness,
encumber substantial assets, or issue or sell debt or equity securities, among
other actions, absent the consent of a supermajority of the New RCM Board of
Directors, including a director who is also a director of Dresdner. Certain
extraordinary events, including marked declines in New RCM's assets under
management, New RCM's poor asset management performance, and the departures of
certain limited partners of RCM Limited will entitle Dresdner to take any
actions necessary so that persons designated by Dresdner shall constitute a
majority of the Board of Directors. As of the date of this Proxy Statement,
neither RCM Limited nor Dresdner has designated any person to be a director of
New RCM.
Each of Old RCM and Dresdner has informed the Fund that they will use all
commercially reasonable efforts to assure compliance with the conditions of
Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe
harbor for an investment adviser or any affiliated persons to receive any amount
or benefit in connection with a change in control of the investment adviser to
an investment company as long as two conditions are met. First, no "unfair
burden" may be imposed on the investment company as a result of the transaction
relating to the change of control, or any express or implied terms, conditions
or understandings applicable thereto. As defined in the 1940 Act, the term
"unfair burden" includes any arrangement during the two-year period after the
change in control whereby the investment adviser (or predecessor or successor
adviser), or any interested person of any such adviser, receives or is entitled
to receive any compensation, directly or indirectly, from the investment company
or its security holders (other than fees for bona fide investment advisory or
other services), or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the investment company
(other than fees for bona fide brokerage and principal underwriting services).
The second condition of Section 15(f) is that, during the three year period
immediately following the change of control, at least 75% of an investment
company's board of directors must not be "interested persons" of the investment
adviser or the predecessor investment adviser within the meaning of the 1940
Act. In order to comply with this provision, the Board has recommended certain
changes to the composition of the Board, including the resignation of Jeffrey S.
Rudsten, all as described more fully under Proposal 2, below.
Other conditions precedent to the closing of the Transaction include, among
other things, that all regulatory filings, applications and notifications,
including those required by the Glass-Steagall Act for bank holding companies
registered under the Federal Bank Holding Company Act of 1956, have been duly
and properly made or obtained. If the conditions to the Transaction are not met
and the Transaction is therefore not consummated, the Existing Investment
Management Agreement will remain in effect. In the event the New Investment
Management Agreement is not approved by the Fund's stockholders and the
Transaction is completed, the Board will consider appropriate action.
4
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APPROVAL OF NEW INVESTMENT
MANAGEMENT AGREEMENT
(PROPOSAL 1)
DESCRIPTION OF THE EXISTING INVESTMENT MANAGEMENT AGREEMENT AND THE NEW
INVESTMENT MANAGEMENT AGREEMENT. If the New Investment Management Agreement is
approved by the stockholders, New RCM will act as investment manager to the
Fund. With the exception of the effective dates and termination dates, the terms
and conditions of the Investment Management Agreement are identical in all
material respects to those of the Existing Investment Management Agreement with
Old RCM. Stockholders should refer to Exhibit A attached hereto for the complete
terms of the New Investment Management Agreement. The description of the New
Investment Management Agreement set forth herein is qualified in its entirety by
the provisions of the New Investment Management Agreement.
The New Investment Management Agreement will become effective upon the later
of its approval by a "majority of the outstanding voting securities" (as such
term is defined in the 1940 Act) of the Fund or the closing of the Transaction.
The New Investment Management Agreement will continue in effect for a two-year
period, and thereafter from year to year if its continuance is approved at least
annually (i) by the Board of the Fund or by the vote of a majority of
outstanding voting securities of the Fund and (ii) by vote of a majority of the
directors who are not "interested persons" of the Fund (as defined in the 1940
Act), cast in person at a meeting called for the purpose of voting on such
approval. The New Investment Management Agreement may be terminated at any time
without the payment of any penalty, either by the Board of Directors or by the
vote of a "majority of the outstanding voting securities" of the Fund on not
less than 60 days written notice to New RCM. The New Investment Management
Agreement may also be terminated by New RCM on 60 days advance written notice to
the Fund, and will also terminate automatically in the event of its "assignment"
(as defined in the 1940 Act). Under the New Investment Management Agreement, as
under the Existing Investment Management Agreement, New RCM will furnish
investment management services to the Fund, subject to the provisions of the
1940 Act and the Fund's investment objectives, policies, procedures and
investment restrictions.
Under the terms of the Existing Investment Management Agreement and the New
Investment Management Agreement, respectively, Old RCM has performed and New RCM
will perform the following services for the Fund: (a) managing the investment
and reinvestment of the Fund's assets, (b) providing investment research advice
and supervision of the Fund in accordance with the Fund's investment objective,
policies and restrictions, (c) furnishing suitable office space for the Fund,
and (d) maintaining books and records with respect to the Fund's portfolio
transactions.
The fees under the New Investment Management Agreement are the same as the
fees under the Existing Investment Management Agreement. Under the New
Investment Management Agreement, the Fund will pay New RCM for its services a
fee which is calculated daily and paid monthly, at an annual rate equal to 0.95%
of average daily net assets of the Fund.
Net fees accrued for services provided by Old RCM under the Existing
Investment Management Agreement for the fiscal year ended January 31, 1996 were
$ . Neither Old RCM nor any person affiliated with Old RCM received any
other fees from the Fund for services provided to the Fund during the fiscal
year ended January 31, 1996.
5
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The Existing Investment Management Agreement with Old RCM was last approved
by the Board of Directors of the Company on December 12, 1995, and by the
stockholders of the Fund on February 15, 1994, in connection with the initial
organization of the Fund.
INFORMATION REGARDING DRESDNER. Dresdner is an international banking
organization headquartered in Frankfurt, Germany, whose principal executive
offices are located at Gallusanlage 7, 60041 Frankfurt am Main. With total
consolidated assets as of December 31, 1994 of DM 400.1 billion ($ billion),
and approximately 1,600 offices and 45,000 employees in over 60 countries around
the world, Dresdner is Germany's second largest bank. Dresdner provides a full
range of banking services, including traditional lending activities, mortgages,
securities, project finance and leasing, to private customers and financial and
institutional clients. It is one of a small number of global banking
organizations which has an "AAA" credit rating from Moody's Investors Service.
In the United States, Dresdner maintains branches in New York and Chicago
and an agency in Los Angeles. Its wholly owned subsidiary,
Deutsch-Suedamerikanische Bank AG, has an agency in Miami. Dresdner affiliates
that are expected to maintain a relationship with New RCM include Dresdner
Securities (USA) Inc., a registered broker-dealer, and Kleinwort Benson Group
plc ("Kleinwort"), a merchant banking group based in the United Kingdom, subject
to Dresdner obtaining Federal Reserve Board approval to acquire Kleinwort's U.S.
based operations.
DIRECTORS' CONSIDERATION. The Board of Directors met on March 15, 1996 to
consider the effect of the Transaction on the management of the Fund, and the
possible recommendation of the New Investment Management Agreement between the
Company and New RCM. In connection with their decision to approve the New
Investment Management Agreement and to recommend it to the stockholders of the
Fund for approval, the directors' consideration included the same factors as
those considered by them on December 12, 1995, when the directors, including the
directors who were not "interested persons" of the Fund as defined in the 1940
Act, last approved the Existing Investment Management Agreement with Old RCM.
Old RCM has advised the Board of Directors that it expects that there will be no
diminution in the scope or quality of advisory services provided to the Fund as
a result of the Transaction.
In their consideration of the New Investment Management Agreement, the
directors requested and reviewed such information as they deemed necessary to
evaluate the terms of the agreement. RCM Limited, Old RCM and Dresdner provided
information to the directors concerning the anticipated relationship of New RCM
and Dresdner following the Closing Date, and its relevance to the management,
policies, investment management philosophy, and strategies of New RCM. The
directors were informed that the investment management philosophy, policies, and
strategies currently pursued for the Fund would not be affected by the
Transaction. The directors received assurances that, following the Closing Date,
New RCM would operate as a business unit separate from Dresdner, with Old RCM's
personnel functioning in the same capacities; that principals and employees of
Old RCM who manage the Fund's assets would perform the same functions on behalf
of New RCM following the Closing Date; and that such principals (other than
certain principals of Old RCM who had previously planned retirements) would
enter into employment agreements with New RCM that include noncompetition and
nonsolicitation provisions. The directors were informed that New RCM Limited
will be engaged to manage, operate and make all decisions regarding the
day-to-day business and affairs of New RCM (subject to the oversight of New
RCM's Board of Directors) pursuant to the Management Agreement. The directors
considered New RCM's financial resources after the Transaction, and Dresdner's
commitment to services of the quality and type currently provided by Old RCM to
the
6
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Fund. The directors also considered expected benefits to the Fund, including the
expertise of Dresdner and its affiliates in global markets and the reputation
and experience of Dresdner and its affiliates as investment advisers and/or
administrators to other mutual funds. Finally, the directors were informed that
the Fund will bear only those expenses ordinarily incurred in connection with
solicitations for an annual meeting, and will not bear any of the expenses which
relate to the Transaction or the approval of the New Investment Management
Agreement.
As stated above, the directors' consideration included the same factors
considered by them on December 12, 1995. Those factors included, but were not
limited to, the historic performance of the Fund as compared to relevant
industry indices and comparable investment companies, the nature and quality of
the services expected to be rendered to the Fund by its investment manager, the
terms of the Existing Investment Management Agreement and the fees payable
thereunder as compared to fees paid to investment advisers of similar investment
companies, the benefits accruing to Old RCM as a result of its affiliation with
the Fund, the profitability of Old RCM, and the history, reputation,
qualifications, and background of Old RCM and its personnel. The directors also
considered the interests of certain directors and officers of the Fund in the
transaction. See "Proposal 2 -- RCM Affiliations."
[Following the Transaction, Dresdner and its affiliates, and
, may be deemed to be subject to certain restrictions under the
1940 Act on transactions involving a registered investment company and certain
affiliates thereof. Accordingly, the Fund proposes to limit certain transactions
with Dresdner, its affiliates, and . The Fund
currently operates under similar restrictions with respect to Travelers and its
affiliates, Smith Barney, Inc. and The Robinson-Humphrey Company Inc. The
directors do not believe that the limitations with respect to Dresdner and its
affiliates will have a material effect on the management or performance of the
Fund.]
As a result of its investigation and deliberations concerning the
Transaction and the New Investment Management Agreement, the directors,
including all of the directors who are not "interested persons," concluded that
the terms of the New Investment Management Agreement are in the best interests
of the Fund and the Fund's stockholders. Accordingly, the Board of Directors,
including all of the directors who are not "interested persons," voted at its
meeting on March 15, 1996 to approve the New Investment Management Agreement
with RCM and to recommend it to the stockholders of the Fund for their approval.
REQUIRED VOTE. The affirmative vote of the holders of a "majority of the
outstanding voting securities" of the Fund, as defined in the 1940 Act, is
required to approve the New Investment Management Agreement. "Majority of the
outstanding voting securities" for this purpose under the 1940 Act means the
lesser of (i) 67% of the Capital Shares represented at the meeting if more than
50% of the outstanding Capital Shares are represented, or (ii) more than 50% of
the outstanding Capital Shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND APPROVAL OF THE NEW INVESTMENT
MANAGEMENT AGREEMENT.
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ELECTION OF DIRECTORS
(PROPOSAL 2)
In order to ensure compliance with Section 15(f) of the 1940 Act (see "The
Transaction" above), on March 15, 1996, the Board of Directors, by resolution of
the Continuing Directors pursuant to the Articles of Incorporation (the
"Articles") and By-Laws of the Fund, decreased the number of directors by one,
contingent upon the consummation of the Transaction. This decrease in directors,
to a number to be fixed at four, will be effective as of the Closing Date. On
the Closing Date, immediately precedent to the decrease in the number of
directors, Jeffrey S. Rudsten, an "interested person" of both Old RCM and New
RCM, is expected to resign his position.
Gary W. Schreyer, an "interested person" of both Old RCM and New RCM, and
James M. Whitaker, each presently a director of the Fund, have been nominated by
the Board to be re-elected as Class II directors of the Fund for three-year
terms. If a stockholder grants authority to vote for the Class II directors, the
enclosed Proxy will be voted for Gary W. Schreyer and James M. Whitaker, each of
whom has consented to serve as a director of the Fund, if elected. In the
unanticipated event that either Gary W. Schreyer or James M. Whitaker is not a
candidate, then the Proxy holders may vote in favor of such substitute nominee
as the Board of Directors may designate, or the Board of Directors may leave a
vacancy in the Board that relates to one or more Class II director. The Fund has
no reason to believe that the nominees will be unable or unwilling to serve as
directors.
The following table provides certain information concerning the nominees for
election as well as for the Class I and Class III directors, including Jeffrey
S. Rudsten, who, as stated, is expected to resign on the Closing Date. The
address of each director (including the nominees for election) is Four
Embarcadero Center, Suite 2800, San Francisco, California 94111. The Fund pays
each of its directors who is not a principal, director, officer or employee of
Old RCM or any of its affiliates $6,000 per year and $1,000 per meeting, and
reimburses each such director for reasonable expenses incurred in connection
with such meetings. Directors who are principals, officers or employees of Old
RCM are
8
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not compensated by the Fund. The Fund's Articles provide that the Fund shall, to
the extent permitted by law, indemnify each of its currently acting and its
former directors against any and all liabilities and expenses incurred in
connection with their services in such capacities.
<TABLE>
<CAPTION>
POSITION, IF ANY, CAPITAL
WITH THE FUND SHARES
AND OLD RCM, OF THE
PRINCIPAL FUND
NAME OCCUPATION PRESENT BENEFICIALLY
AND AND BUSINESS DIRECTOR TERM OWNED AT PERCENT OF
AGE EXPERIENCE SINCE EXPIRES 3/14/96 CLASS
<C> <S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
William A. Hasler Dean, Haas School of Business,
+++ University of California,
(54) Berkeley since 1991; Vice
Chairman of KPMG Peat Marwick
from 1967 to 1991 1994 1998 -0- -0-
Gary W. Schreyer Chairman, President and Chief
*++ Executive Officer of the Fund
(50) since 1994; Principal of Old
RCM since 1977 1994 1996 2,000 **
James M. Whitaker Attorney at Law, sole
+ practitioner since 1972
(53) 1994 1996 -0- -0-
Francis E. Lundy President, Technical
+ Instrument Company since 1985;
(58) Director, Syncotec, Inc. since
1983; Director, E. Licht, Inc.
from 1980 to 1992 1994 1997 -0- -0-
Jeffrey S. Rudsten Vice President of the Company
*++ since 1994; Principal of Old
(47) RCM since 1981 1994 1997 1,000 **
</TABLE>
- ------------------------
* An "interested person" of the Fund as that term is defined in the 1940 Act.
Mr. Schreyer is an interested person by virtue of his status as President
and Chief Executive Officer of the Fund and his position as Principal of Old
RCM. Mr. Rudsten is an interested person by virtue of his status as Vice
President of the Fund and his position as Principal of Old RCM.
** Less than 1.00% of Class.
+ Member of the Audit Committee.
++ Member of the Nominating Committee.
In accordance with the Fund's Articles, the directors are classified into
three staggered classes, each of approximately the same size, with one class
elected at each annual meeting of stockholders for a three-year term. The Class
II and Class III directors were elected in February, 1994 by the then sole
9
<PAGE>
stockholder of the Fund, for terms of two and three years, respectively. The
Class I director was elected August 18, 1995 by the stockholders of the Fund for
a full three-year term. The Class I and Class III directors are expected to
remain in office for the remainder of their terms or until their successors are
duly elected and qualified.
RCM AFFILIATIONS. Gary W. Schreyer and Jeffrey S. Rudsten are stockholders
of RCM General, limited partners of RCM Limited and principals of Old RCM.
In connection with the Transaction, Messrs. Schreyer and Rudsten will enter
into an employment agreement with New RCM, and will therefore receive employment
compensation from New RCM. At the discretion of RCM Limited, Messrs. Schreyer
and Rudsten may receive some portion of the Management Fee, some portion of the
Transaction Fee, and/or same portion of the Additional Payments. Through their
stock ownership of RCM General, Messrs. Schreyer and Rudsten will also receive a
portion of the $3 million paid by Dresdner to RCM Limited. By virtue of these
interests, Messrs. Schreyer and Rudsten may be deemed to have a substantial
interest in stockholder approval of Proposal 1, as may the executive officers
and officers identified in "Additional Information -- Executive Officers and
Officers of the Fund" by virtue of their interests described therein.
BOARD MEETINGS AND COMMITTEES. During the fiscal year ended January 31,
1996, the Board held four meetings. All directors attended at least 75% of the
meetings. There is no compensation committee, nor any committee performing the
function of a compensation committee.
The Board has a standing Audit Committee and a standing Nominating
Committee. The responsibilities of the Audit Committee include reviewing and
making recommendations to the Board concerning the Fund's financial and
accounting reporting procedures. The Audit Committee meets with the Fund's
independent public accountants and reviews the Fund's financial statements, and
generally assists the Board in fulfilling its responsibilities relating to
corporate accounting and reporting practices. The Audit Committee held its only
fiscal 1995 meeting on May 22, 1995.
The Nominating Committee reviews candidates to fill vacancies on the Board
and makes recommendations to the Board regarding such candidates. The Nominating
Committee did not meet during the fiscal year ended January 31, 1996. [The
Nominating Committee will accept nominees recommended by stockholders. Such
recommendations should be submitted in writing to Timothy B. Parker, Secretary
to the Fund, at the address of the principal executive offices of the Fund.]
During the fiscal year ended January 31, 1996, no director other than Mr.
Lundy was a director of any company with a class of securities registered
pursuant to Section 12 of the Securities and Exchange Act of 1934 or subject to
the requirements of Sections 15(d) of that Act or any company registered as an
investment company under the 1940 Act (other than the Fund). Mr. Lundy has
served on the board of Syncotec, Inc., a manufacturer of precision
opto-electronic instrumentation and systems, since 1983.
REQUIRED VOTE. The election of directors requires the affirmative vote of a
plurality of the Capital Shares voting and entitled to vote thereon at the
meeting, in person or by proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE ELECTION OF EACH
NOMINEE NAMED ABOVE.
10
<PAGE>
APPROVAL OF ACCOUNTANTS
(PROPOSAL 3)
Coopers & Lybrand has acted as independent public accountants for the Fund
for the fiscal year ended January 31, 1996. The Board of Directors, including
the independent directors, have selected Coopers and Lybrand as the auditors for
the Fund for the current fiscal year ending January 31, 1997.
REQUIRED VOTE. The ratification of the selection of Coopers & Lybrand
requires the affirmative vote of a "majority" of the outstanding Capital Shares,
as defined in the 1940 Act. See "Proposal 1 -- Required Vote."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE RATIFICATION OF
THE SELECTION BY COOPERS & LYBRAND AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
FUND.
ADDITIONAL INFORMATION
EXECUTIVE OFFICERS AND OFFICERS OF THE FUND. The table below provides
certain information concerning the executive officers of the Fund and certain
other officers who perform similar duties. Similar information regarding Mr.
Schreyer, Chairman of the Board of Directors, President and Chief Executive
Officer of the Fund, and Mr. Rudsten, Vice President of the Fund, is set forth
above. The address of each executive officer and officer is Four Embarcadero
Center, Suite 2800, San Francisco,
11
<PAGE>
California 94111. Officers hold office at the pleasure of the Board and until
their successors are appointed and qualified or until their earlier resignation
or removal. Officers and employees of the Fund who are principals, officers or
employees of Old RCM are not compensated by the Fund.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS
NAME AND AGE POSITION WITH FUND EXPERIENCE
<C> <S> <C>
- -------------------------------------------------------------------------------------------
Eamonn F. Dolan Vice President and Portfolio Manager, RCM Capital Management
(34) Portfolio Manager (since 1989), Principal (since 1992)
(since 1994)
Stephen Kim Vice President and Portfolio Manager, RCM Capital Management
(35) Portfolio Manager (since 1989), Principal (since 1994)
(since 1994)
John L. Bernard Vice President and Senior Vice President, RCM Capital Man-
(41) Portfolio Manager agement (since 1993); Director of Institu-
(since 1994) tional Trading, Merrill Lynch, Pierce,
Fenner & Smith, Inc. (1984-1993)
Mark E. Raaberg Vice President and Senior Portfolio Strategist, RCM Capital
(43) Portfolio Manager Management (since 1993); Vice President
(since 1994) and Treasurer, Bank of the West (1989-
1993)
Michael J. Apatoff Vice President (since Chief Operating Officer, RCM Capital Man-
(41) 1994) agement (since 1991), Principal (since
1992); Chief Operating Officer, Chicago
Mercantile Exchange (1986-1991)
Susan C. Gause Treasurer and Chief Director of Finance, RCM Capital Manage-
(43) Financial Officer ment (since 1994); CFO and Controller,
Citicorp Bankers Leasing (1990-1994);
Assistant Controller, Sierra Capital
Realty Advisers (1988-1990)
Caroline M. Hirst Vice President and Director of Investment Operations, RCM
(35) Principal Accounting Capital Management (since December 1994);
Officer (since 1993) Head of International Administration, Mor-
gan Grenfell Asset Management (1980 to
1994)
Anthony Ain Vice President and General Counsel, RCM Capital Management
(36) General Counsel (since 1992), Senior Vice President (since
(since 1994) 1993); Counsel to a Commissioner, Senior
Special Counsel, Securities and Exchange
Commission (1988-1992)
Timothy B. Parker Secretary and Associ-
( ) ate General Counsel
(since 1996)
</TABLE>
12
<PAGE>
Each of Frederick J. Clancy, Ellen M. Courtien and Judith A. Wilkinson serve
as a Vice President to the Fund, and each of Gayle Kiviat and Laura J. Shaw
serve as an Assistant Secretary to the Fund.
Each of Eammon F. Dolan, Stephen Kim, John L. Bernard, Mark E. Raaberg,
Michael J. Apatoff, Susan C. Gause, Caroline M. Hirst, Anthony Ain, Timothy B.
Parker, Frederick J. Clancy, Ellen M. Courtien, Judith A. Wilkinson, Gayle
Kiviat and Laura J. Shaw are either principals of or are currently employed by
Old RCM, and, in connection with the Transaction, each would either be
principals of or would enter into employment agreements with New RCM. In
addition, Messrs. Dolan and Kim and Ms. Courtien are each shareholders of RCM
General, limited partners of RCM Limited, and principals of Old RCM. Each may,
at the discretion of RCM Limited, receive some portion of the Management Fee,
some portion of the Transition Fee, and/or some portion of the Additional
Payments. Through their stock ownership of RCM General, they will also receive a
portion of the $3 million paid by Dresdner to RCM Limited.
INFORMATION REGARDING OLD RCM. Old RCM was established in July, 1986, as
the successor to the business and operations of Rosenberg Capital Management
(established in 1970). As of January 1, 1996, Old RCM had approximately $___
billion in assets under management. Old RCM is registered under the Investment
Advisers Act of 1940 (the "Advisers Act"). Upon consummation of the Transaction,
New RCM will be registered under the Advisers Act and will employ the same key
personnel as previously employed by Old RCM.
Old RCM also serves as investment manager or subadviser to other registered
investment companies. Old RCM does not provide advisory services to any funds
with investment objectives and policies similar to the Fund.
Listed below are the names and principal occupations of certain of the
principal executive officers of Old RCM who do not hold positions with the Fund.
The principal business address of each is Four Embarcadero Center, Suite 3000,
San Francisco, California 94111. Each serves as a director to RCM General, as do
Messrs. Schreyer, Rudsten, and Apatoff.
<TABLE>
<CAPTION>
NAME TITLE PRINCIPAL OCCUPATION
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Claude N. Rosenberg, Jr. Senior Principal
William L. Price Principal
William S. Stack Senior Vice President
- --------------------------------------------------------------------------------------------
</TABLE>
BROKERAGE PORTFOLIO TRANSACTIONS. In most cases no brokerage commissions,
as such, are paid by the Fund for purchases and sales undertaken through
principal transactions, although the price paid usually includes an undisclosed
compensation to the dealer. During the fiscal year ended January 31, 1996, the
Fund paid no brokerage commissions for portfolio transactions. The prices paid
to underwriters of newly issued securities typically include a concession paid
by the issuer to the underwriter, and purchasers of after-market securities from
dealers ordinarily are executed at a price between the bid and asked price.
COSTS OF SOLICITATION. The costs of associated with the preparation and
printing [and additional postage costs] of the portions of these proxy materials
related to the New Investment Management
13
<PAGE>
Agreement will be paid from the proceeds of the Transaction. In the event the
transaction is not consummated, such costs will be paid by Old RCM. In either
event, all other costs of solicitation, including postage, handling and other
printing costs, will be borne by the Fund.
OTHER BUSINESS. As of the date of this Proxy Statement, the Fund's
management and Old RCM know of no business other than as set forth in the Notice
of the Annual Meeting of Stockholders to come before the meeting. If any other
business is properly brought before the meeting, or any adjournment thereof, the
persons named as proxies will vote in their sole discretion.
ADJOURNMENT. In the event that sufficient votes in favor of any of the
proposals set forth in the Notice of the Annual Meeting of Stockholders are not
received by the time scheduled for the meeting, the persons named as proxies may
propose one or more adjournments of the meeting after the date set for the
original meeting to permit further solicitation of proxies with respect to any
of such proposals. In addition, if, in the judgment of the persons named as
proxies, it is advisable to defer action on one or more proposals, the persons
named as proxies may propose one or more adjournments of the meeting for a
reasonable time. Any such adjournments will require the affirmative vote of a
majority of the votes cast on the question in person or by proxy at the session
of the meeting to be adjourned, as required by the Fund's Articles and By-Laws.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of such proposals. They will
vote against any such adjournment those proxies required to be voted against any
of such proposals. The costs of any additional solicitation and of any adjourned
session will be allocated in the fashion described in "Costs of Solicitation"
above. Any proposals for which sufficient favorable votes have been received by
the time of the meeting will be acted upon and such action will be final
regardless of whether the meeting is adjourned to permit additional solicitation
with respect to any other proposal.
ANNUAL REPORT. The Fund's 1995 Annual Report to Stockholders will be mailed
to stockholders on or about March , 1996. IF YOU SHOULD DESIRE AN ADDITIONAL
COPY OF THE ANNUAL REPORT, OR A COPY OF THE SEMI-ANNUAL REPORT FOR THE SIX
MONTHS ENDED JULY 31, 1995, THESE REPORTS CAN BE OBTAINED, WITHOUT CHARGE, FROM
BOSTON FINANCIAL DATA SERVICE, INC. BY CALLING (800) 426-5523.
STOCKHOLDER PROPOSALS FOR 1997 PROXY STATEMENT. Stockholders submitting
proposals intended to be presented at the next annual meeting must be received
by the Fund no later than December 29, 1996. Stockholder proposals should be
addressed to Timothy B. Parker, Secretary, at the address of the principal
executive offices of the Fund.
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY TO ENSURE THAT A
QUORUM IS PRESENT AT THE ANNUAL MEETING. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE.
Gary W. Schreyer,
PRESIDENT
March , 1996
San Francisco, CA
14
<PAGE>
EXHIBIT LIST
Exhibit A -- Form of the New Investment Management Agreement
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made as of this ___ day of _________ 1996, between RCM
Strategic Global Government Fund, Inc., a Maryland corporation (the "Fund"), and
[RCM Capital Management, Inc., a Delaware corporation] (the "Manager").
W I T N E S S E T H:
WHEREAS, the Fund is a non-diversified closed-end management
investment company registered under the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder (the "1940 Act"); and
WHEREAS, the Fund has been organized for the purpose of investing its
funds and desires to avail itself of the experience, sources of information,
advice, assistance and facilities available to the Manager and to have the
Manager perform for it various investment management services; and the Manager
is willing to furnish the investment management services sought by the Fund on
the terms and conditions hereinafter set forth;
-1-
<PAGE>
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed as follows:
1. The Fund hereby appoints the Manager to act as Investment Manager to
the Fund on the terms set forth in this Agreement. The Manager accepts such
appointment and agrees to render the services herein described, for the
compensation herein provided.
2. Subject to the supervision of the Board of Directors of the Fund (the
"Board") and to the express provisions and limitations set forth in the Fund's
Articles of Incorporation, By-Laws, and Form N-2 Registration Statement under
the 1940 Act and the 1933 Act (the "Registration Statement"), each as it may be
amended from time to time, the Manager shall have full discretionary authority
to manage the investment and reinvestment of the Fund's assets and to provide
investment research advice and supervision of the Fund's portfolio in accordance
with the Fund's investment objectives, policies and restrictions as stated in
the Fund's Registration Statement, as such Registration Statement may be amended
from time to time. The services to be provided under this paragraph 2 shall be
subject to the following understandings:
(a) The Manager shall provide supervision of the Fund's investments and
shall determine from time to time the investments or securities that will
be
-2-
<PAGE>
purchased, retained, sold or loaned by the Fund, and the portion of the
assets that will be invested in securities or otherwise. Subject to the
limitations in this Section 2, the Manager is empowered hereby, through any
of its principals or employees, to take any of the following actions for
the benefit of the Fund:
(i) to invest and reinvest in stocks, bonds, notes, trade
acceptances, commercial paper, structured instruments, and other
obligations of every description issued or incurred by governmental or
quasi-governmental bodies or their agencies, authorities or
instrumentalities, or by corporations, trusts, associations,
partnerships, or other firms or entities;
(ii) to invest and reinvest in loans and deposits at interest on call
or on time, whether or not secured by collateral;
(iii) to purchase and sell put and call options, financial futures
and put and call options on such financial futures, and to enter into
transactions with respect to swaps, caps, floors, collars, and other
similar instruments;
-3-
<PAGE>
(iv) to purchase and sell foreign currency and forward contracts on
such foreign currency;
(v) to lend the Fund's portfolio securities to brokers, dealers,
other financial institutions, or other parties, and to engage in
repurchase and reverse repurchase transactions with such entities;
(vi) to buy, sell, or exercise rights and warrants to subscribe for
stock or other securities;
(vii) to execute agreements with broker-dealers, banks, futures
commission merchants, and other financial institutions on behalf of
the Fund for the purpose of entering into any of the foregoing
transactions;
(viii) to purchase, sell, and otherwise enter into transactions
with respect to any instrument not described above that may be
considered a "derivative" instrument;
(ix) to engage in transactions with respect to any other instruments,
or to take any other actions with respect to the Fund's
-4-
<PAGE>
investments, that the Fund is authorized to invest in or to take
pursuant to the Registration Statement; and
(x) to take such other actions, or to direct the Custodian to take
such other actions, as may be necessary or desirable to carry out the
purpose and intent of this subparagraph (a) of this paragraph (2).
In determining the investments or securities to be purchased or sold
by the Fund, the Manager shall place orders with respect to such
instruments either directly with the issuer or in such markets and through
such underwriters, dealers, brokers, or futures commission
merchants (collectively, "brokers") as in the Manager's best judgment offer
the most favorable price and market for the execution of each transaction;
provided, however, that, to the extent permitted under the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act") and the 1940 Act, the Manager may cause the
Fund to place orders for transactions with brokers that furnish brokerage
and research services, as defined in the 1934 Act, to the Manager or any
affiliated person of the Manager, subject to such policies as the Board may
adopt from time to time with respect to the extent and continuation of this
practice. The Fund understands and agrees that the Manager may effect
transactions in portfolio securities through brokers who may charge an
amount in excess of the amount of
-5-
<PAGE>
commission another broker would have charged, provided that the Manager
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by
such broker, viewed in terms of either the specific transaction or the
Manager's overall responsibilities to the Fund and other clients as to
which the Manager or any affiliated person of the Manager exercises
discretionary investment authority. Receipt by the Manager or any
affiliated person of the Manager of any such brokerage research services
shall not give rise to any requirement for abatement or reduction of the
advisory fee payable by the Fund to the Manager under this Agreement. It
is understood that the services provided by such brokerage firms may be
useful to the Manager or its affiliated persons in connection with their
services to other clients. The Fund agrees that any entity or person
associated with the Manager or any affiliated person of the Manager which
is a member of a national securities exchange is authorized to effect any
transaction on such exchange for the account of the Fund which is permitted
by Section 11(a) of the 1934 Act, and Rule 11a2-2(T) thereunder, and the
Fund hereby consents to the retention of compensation for such transactions
in accordance with Rule 11a2-2(T) (2) (iv).
(b) The Manager agrees to furnish suitable office space for the Fund.
-6-
<PAGE>
(c) The Manager shall use its best judgment in the performance of its
duties under this Agreement.
(d) The Manager undertakes to perform its duties and obligations under
this Agreement in conformity with the Registration Statement, with the
requirements of the 1940 Act and all other applicable Federal and state
laws and regulations and with the instructions and directions of the Fund's
Board of Directors, all as may be amended or modified from time to time.
(e) The Manager shall maintain books and records with respect to the
Fund's portfolio transactions and the Manager shall render to the Fund's
Board such periodic and special reports as the Board of Directors may
reasonably request from time to time. The Manager agrees that all records
that it maintains for the Fund are the property of the Fund and it will
surrender promptly to the Fund any of such records upon the Fund's request.
(f) The Fund understands and agrees:
(i) that the Manager performs investment management services for
various clients and that the Manager may take action with respect to
any of its other clients which may differ from action taken or
-7-
<PAGE>
from the timing or nature of action taken with respect to the Fund, so
long as it is the Manager's policy, to the extent reasonably
practical, to allocate investment opportunities to the Fund over time
on a fair and equitable basis relative to other clients;
(ii) that the Manager shall have no obligation to purchase or sell
for the Fund any security that the Manager, or its principals or
employees, may purchase or sell for their own accounts or for the
account of any other client, if, in the opinion of the Manager, such
transaction or investment appears unsuitable, impractical or
undesirable for the Fund; and
(iii) that, to the extent permitted by applicable laws and
regulations, on occasions when the Manager deems the purchase or sale
of a security or other instrument to be in the best interests of the
Fund as well as of the other clients of the Manager, the Manager may
aggregate the securities to be so sold or purchased when the Manager
believes that to do so would be in the best interests of the Fund. In
such event, allocation of the securities or other instruments so
purchased or sold, as well as the expenses incurred in that
transaction, shall be made by the Manager in the
-8-
<PAGE>
manner the Manager considers to be the most equitable and consistent
with its fiduciary obligations to the Fund and such other clients.
3. The Manager will bear all of expenses related to salaries of its
employees and to the Manager's overhead in connection with its duties under this
Agreement. The Manager also will pay all directors' fees and salaries of the
Fund's directors and officers who are affiliated persons (as such term is
defined in the 1940 Act) of the Manager.
Except for the expenses specifically assumed by the Manager, the Fund
will pay all of its expenses, including, without limitation, fees of the
directors not affiliated with the Manager and board meeting expenses; fees of
the Manager; fees of the Fund's Administrator; interest charges; taxes; charges
and expenses of the Fund's legal counsel and independent accountants, and of the
transfer agent, registrar and dividend reinvestment and disbursing agent of the
Fund; expenses of repurchasing shares of the Fund; expenses of printing and
mailing share certificates, stockholder reports, notices, proxy statements and
reports to governmental offices; brokerage and other expenses connected with the
execution, recording and settlement of portfolio security transactions; expenses
connected with negotiating, effecting purchases or sales or registering
privately issued portfolio securities; fees and expenses of the Fund's custodian
and sub-custodians for all services to the Fund, including safekeeping of funds
and securities and maintaining required books and accounts; expenses of
calculating and publishing the net asset value
-9-
<PAGE>
of the Fund's shares; expenses of membership in investment company associations;
premiums and other costs associated with the acquisition of a mutual fund
directors and officers errors and omissions liability insurance policy; expenses
of fidelity bonding and other insurance premiums; expenses of stockholders'
meetings; SEC and state blue sky registration fees; New York Stock Exchange
listing fees; any fees payable by the Fund to the National Association of
Securities Dealers, Inc. in connection with this offering; and its other
business and operating expenses.
4. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Manager a monthly fee in arrears equal to
0.95% per annum of the Fund's average daily net assets during the month. The
Fund authorizes the Manager to charge the Fund for the full amount of fees as
they become due and payable pursuant to this paragraph 4; provided, however,
that copies of the fee statement relating to said payment shall be sent to the
Custodian and to the Fund.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Manager may, by written notice to the
-10-
<PAGE>
Fund, voluntarily declare to be effective with respect to the Fund, subject to
such terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager
shall bear the Fund's expenses to the extent required by such expense
limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
5. The Manager shall authorize and permit any of its directors, officers
and employees who may be elected as directors or officers of the Fund to serve
in the capacities in which they are elected.
6. The Manager shall not be liable to the Fund or any of its stockholders
for any error of judgment, mistake of law, or any loss suffered by the Fund or
any of its stockholders in connection with any act or omission in the
performance of its obligations to the Fund or to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
7. This Agreement shall continue in effect for a period of two years from
its effective date, and if not sooner terminated, will continue in effect for
successive periods
-11-
<PAGE>
of 12 months thereafter, provided that each continuance is specifically approved
at least annually in conformity with the requirements of the 1940 Act. This
Agreement may be terminated as a whole at any time by the Fund, without the
payment of any penalty, upon the vote of a majority of the Fund's Board of
Directors or the vote of a majority of the outstanding voting securities (as
defined in the 1940 Act or the rules and regulations thereunder) of the Fund, or
by the Manager, on 60 days' written notice by either party to the other. This
Agreement shall terminate automatically in the event of its assignment (as such
term is defined in the 1940 Act and the rules thereunder).
8. Nothing in this Agreement shall limit or restrict the right of any of
the Manager's principals, officers or employees who may also be a director,
officer or employee of the Fund to engage in any other business or to devote his
time and attention in part to management or other aspects of any business,
whether of a similar or a dissimilar nature, nor limit or restrict the Manager's
right to engage in any other business or to render services of any kind to any
other corporation, investment company, firm, individual or association. The
investment management services provided by the Manager hereunder are not to be
deemed exclusive, and the Manager shall be free to render similar services to
others.
9. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage
-12-
<PAGE>
prepaid, (i) to the Manager at Four Embarcadero Center, Suite 3000,
San Francisco, CA 94111 or (ii) to the Fund at Four Embarcadero Center, Suite
2800, San Francisco, CA 94111.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
11. Under a License Agreement dated February 11, 1994 between the Fund and
RCM Capital Management, RCM has granted to the Fund a royalty-free, non-
exclusive license to use the name "RCM" as part of its name only in connection
with the operation of an investment company. It is further provided in the
License Agreement that RCM may use or license the above term in connection with
other investment companies, subject to the requirements of the 1940 Act, or any
other business enterprise during the term of such License Agreement or
thereafter. The License Agreement is terminable by RCM on sixty days' notice to
the Fund or as soon as practicable thereafter. Upon such termination, the Fund
is required to change its name to one which does not include the term "RCM".
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
-13-
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
Attest:
By By
---------------------------- -----------------------------------
RCM CAPITAL MANAGEMENT[, INC]
Attest:
By By
---------------------------- -----------------------------------
-14-
<PAGE>
EXHIBIT A
<PAGE>
RCM STRATEGIC GLOBAL GOVERNMENT FUND, INC.
FOUR EMBARCADERO CENTER, SUITE 2800
SAN FRANCISCO, CALIFORNIA 94111
The undersigned hereby appoints Laura A. Shaw, Dede Dunegan and Jennie Wong,
and each of them, as proxies of the undersigned (the "Proxies") each with full
power to appoint his or her substitute, and hereby authorizes each of them to
represent and vote all the shares of common stock of RCM Strategic Global
Government Fund, Inc. (the "Fund") held of record as of March 14, 1996 at the
Annual Meeting of Stockholders to be held at the Hyatt Regency Hotel, located at
Five Embarcadero Center, San Francisco, California 94111, on April 29, 1996 at
a.m. (Pacific Time), and at any and all of the adjournment(s) or
postponement(s) thereof.
When property executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder(s). IF NO DIRECTION IS GIVEN THIS PROXY
WILL BE VOTED FOR APPROVAL OF THE INVESTMENT MANAGEMENT AGREEMENT, FOR ELECTION
OF THE CLASS II DIRECTORS AND FOR RATIFICATION OF THE SELECTION OF THE
INDEPENDENT PUBLIC ACCOUNTANTS. In their discretion, the Proxies are each
authorized to vote upon such other business as may properly come before the
meeting and any adjournments or postponements of the meeting. A stockholder
wishing to vote in accordance with the Board of Directors' recommendation need
only sign and date this proxy and return it in the envelope provided.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders and the Proxy Statement with respect
thereto and hereby revoke(s) any proxy or proxies heretofore given. This proxy
may be revoked at any time before it is exercised.
PLEASE VOTE AND SIGN ON THE OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
Note: Please sign exactly as the name appears on this proxy card. When
shares are held by joint tenants, both should sign. When signing as executor,
administrator, trustee or guardian, please give the appropriate and complete
title. If a corporation, please sign the corporation name by the appropriate
authorized officer. If a partnership, please sign the partnership name by the
appropriate authorized person.
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<S> <C>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1.) To approve the new investment management agreement between the Fund and [THE
NEW RCM INVESTMENT MANAGEMENT ENTITY].
For / / Against / / Abstain / /
2.) To elect as director the nominees listed below:
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<S> <C> <C> <C> <C> <C> <C>
For Withhold For Withhold
Gary A. Schreyer / / / / James A. Whitaker / / / /
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3.) To ratify the selection of the Board of Directors of Coopers & Lybrand
L.L.P. as independent public accountants for the fiscal year ending January
31, 1997.
For / / Against / / Abstain / /
I plan to attend the meeting in San Francisco at a.m. on April 29,
1996. / /
Mark box at right if comments or address change have been noted on the reverse
side
of this card. / /
RECORD DATE SHARES:
Please be sure to sign and date this Proxy.
Shareholder sign here Co-owner sign here
Date
