As filed with the Securities and Exchange Commission on January 17, 2003
================================================================================
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
CREDIT SUISSE MUNICIPAL BOND FUND, INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
------------------------------------------------------------------
(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:
_____________________________________________
================================================================================
CREDIT SUISSE FUNDS
Credit Suisse Capital Appreciation Fund
Credit Suisse Capital Funds
o Credit Suisse Tax Efficient Fund
o Credit Suisse Large Cap Value Fund
o Credit Suisse Small Cap Value Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Growth Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse Institutional Fixed Income Fund
Credit Suisse Institutional Fund
o Capital Appreciation Portfolio
o Harbinger Portfolio
o International Focus Portfolio
o Investment Grade Fixed Income Portfolio
o Large Cap Value Portfolio
o Select Equity Portfolio
o Small Cap Growth Portfolio
Credit Suisse Institutional High Yield Fund
Credit Suisse Institutional International Fund
Credit Suisse Institutional Money Market Fund
o Government Portfolio
o Prime Portfolio
Credit Suisse International Focus Fund
Credit Suisse Investment Grade Bond Fund
Credit Suisse Japan Growth Fund
Credit Suisse Municipal Bond Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Opportunity Funds
o Credit Suisse High Income Fund
o Credit Suisse Municipal Money Fund
o Credit Suisse U.S. Government Money Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse Trust
o Blue Chip Portfolio
o Emerging Growth Portfolio
o Emerging Markets Portfolio
o Global Post-Venture Capital Portfolio
o Global Technology Portfolio
o International Focus Portfolio
o Large Cap Value Portfolio
o Small Cap Growth Portfolio
o Small Cap Value Portfolio
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
Please take notice that Special Meetings of Shareholders (each a "Special
Meeting") of each Credit Suisse Fund listed above (each a "Fund" and,
collectively, the "Funds") will be held jointly at the offices of Credit Suisse
Asset Management, LLC (the "Adviser"), 466 Lexington Avenue, 16th Floor, New
York, NY 10017, on April 11, 2003, at 3 p.m., Eastern time, for the following
purposes:
1. To elect Directors/Trustees of the Funds;
2(a). For the shareholders of Credit Suisse Institutional
Fixed Income Fund, Credit Suisse Institutional High
Yield Fund, Credit Suisse Institutional International
Fund, Credit Suisse Municipal Bond Fund and Credit
Suisse Select Equity Fund: to approve a new investment
advisory agreement (each a "New Advisory Agreement")
between each Fund and the Adviser;
2(b). For the shareholders of Credit Suisse Institutional
Fixed Income Fund, Credit Suisse Institutional High
Yield Fund, Credit Suisse Institutional International
Fund, Credit Suisse Municipal Bond Fund and Credit
Suisse Select Equity Fund: to approve the retention or
payment of fees paid or payable to the Adviser for the
period April 18, 2000 through the effective date of the
proposed New Advisory Agreement;
3. For the shareholders of Credit Suisse High Income Fund,
Credit Suisse Municipal Money Fund and Credit Suisse
U.S. Government Money Fund, each a series of Credit
Suisse Opportunity Funds: to approve an amended
distribution plan for each class of each Portfolio;
4. To consider a series of proposals to modify and/or
eliminate certain investment restrictions of the Funds;
5. To change the investment objective of certain Funds
from fundamental to non-fundamental;
6. To amend certain Fund's organizational documents; and
-2-
7. To transact such other business as may properly come
before the Special Meeting, or any adjournment or
postponement thereof.
These proposals are discussed in greater detail in the attached proxy
statement. Holders of record of shares of each Fund at the close of business on
February 7, 2003 are entitled to vote at the Special Meeting and at any
adjournments thereof.
o By mail, with the enclosed proxy card(s);
o By telephone, with a toll-free call to the telephone
number that appears on your proxy card;
o Through the Internet, by using the Internet address
located on your proxy card and following the
instructions on the site; or
o In person at the meeting.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Special
Meeting with respect to one or more Funds or, where applicable, investment
portfolios of a Fund (each a "Portfolio" and together with those Funds that do
not have any separate investment portfolios, the "Portfolios"), the persons
named as proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law, to permit further solicitation of proxies. Any
such adjournment as to a matter requiring, respectively, a Fund-wide or
Portfolio by Portfolio vote will require the affirmative vote of the holders of
a majority of the concerned Fund's (for a Fund-wide vote) or, where applicable,
the concerned Portfolio's (for a Portfolio by Portfolio vote) shares present in
person or by proxy at the Special Meeting. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor and will vote against any such adjournment those proxies to be voted
against that proposal.
We encourage you to vote by completing and returning your proxy card(s), by
telephone or through the Internet. These voting methods will reduce the time and
costs associated with the proxy solicitation. Whichever method you choose,
please read the full text of the proxy statement before your vote.
By order of the governing Boards,
Hal Liebes
Secretary
__________, 2003
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY OR SUBMIT YOUR PROXY BY PHONE OR OVER THE INTERNET. IF YOU
OWN SHARES IN MORE THAN ONE FUND, THERE IS A SEPARATE PROXY CARD FOR EACH FUND
YOU OWN. IT IS
-3-
ESSENTIAL THAT YOU VOTE EACH ENCLOSED PROXY. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN SUBMITTING YOUR
PROXY PROMPTLY.
-4-
CREDIT SUISSE FUNDS
Credit Suisse Capital Appreciation Fund
Credit Suisse Capital Funds
o Credit Suisse Tax Efficient Fund
o Credit Suisse Large Cap Value Fund
o Credit Suisse Small Cap Value Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Growth Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse Institutional Fixed Income Fund
Credit Suisse Institutional Fund
o Capital Appreciation Portfolio
o Harbinger Portfolio
o International Focus Portfolio
o Investment Grade Fixed Income Portfolio
o Large Cap Value Portfolio
o Select Equity Portfolio
o Small Cap Growth Portfolio
Credit Suisse Institutional High Yield Fund
Credit Suisse Institutional International Fund
Credit Suisse Institutional Money Market Fund
o Government Portfolio
o Prime Portfolio
Credit Suisse International Focus Fund
Credit Suisse Investment Grade Bond Fund
Credit Suisse Japan Growth Fund
Credit Suisse Municipal Bond Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Opportunity Funds
o Credit Suisse High Income Fund
o Credit Suisse Municipal Money Fund
o Credit Suisse U.S. Government Money Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse Trust
o Blue Chip Portfolio
o Emerging Growth Portfolio
o Emerging Markets Portfolio
o Global Post-Venture Capital Portfolio
o Global Technology Portfolio
o International Focus Portfolio
o Large Cap Value Portfolio
o Small Cap Growth Portfolio
o Small Cap Value Portfolio
466 Lexington Avenue
New York, NY 10017
--------------------------
JOINT PROXY STATEMENT
--------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors or Trustees, as the case may be (the "Board,"
and members of the Board will be referred to as "Directors"), of each of the
Credit Suisse Funds listed above (each a "Fund" and, collectively, the "Funds")
for use at the Special Meeting of Shareholders of each Fund, to be held jointly
at the offices of Credit Suisse Asset Management, LLC ("CSAM" or the "Adviser"),
466 Lexington Avenue, 16th Floor, New York, NY 10017, on April 11, 2003 at 3
p.m., Eastern time, and at any and all adjournments thereof (the "Special
Meeting"). (In the descriptions of the various proposals below, the word "fund"
is sometimes used to mean investment companies or series thereof in general, and
not the Funds whose proxy statement this is.)
This Proxy Statement, the Notice of Special Meeting and the proxy cards are
first being mailed to shareholders on or about February 21, 2003 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it on the Internet, by telephone, by mail (addressed to Hal Liebes, Secretary of
the Credit Suisse Funds, c/o Credit Suisse Asset Management, LLC, 466 Lexington
Avenue, New York, NY 10017), in person at the Special Meeting, by executing a
superseding proxy or by submitting a notice of revocation. All properly executed
proxies received in time for the Special Meeting will be voted as specified in
the proxy or, if no specification is made, in favor of each proposal referred to
in the Proxy Statement.
The presence at any Special Meeting, in person or by proxy, of the holders
of one-third (a majority of the shareholders in the case of certain Funds and
Portfolios) of the shares entitled to be cast of a Fund (for a Fund-wide vote)
or an investment portfolio of a Fund (each a "Portfolio" and together with those
Funds that do not have any separate investment portfolios,
-2-
the "Portfolios") (for a Portfolio by Portfolio vote) shall be necessary and
sufficient to constitute a quorum for the transaction of business requiring,
respectively, Fund-wide or Portfolio by Portfolio voting. The quorum requirement
for each Fund and Portfolio is indicated next to its name on Exhibit A to this
Proxy Statement. In the event that the necessary quorum to transact business or
the vote required to approve or reject any proposal is not obtained at the
Special Meeting with respect to one or more Funds or, where applicable,
Portfolios, the persons named as proxies may propose one or more adjournments of
the Special Meeting in accordance with applicable law to permit further
solicitation of proxies with respect to any proposal which did not receive the
vote necessary for its passage or to obtain a quorum. With respect to those
proposals for which there is represented a sufficient number of votes in favor,
actions taken at the Special Meeting will be effective irrespective of any
adjournments with respect to any other proposals. Any such adjournment as to a
matter requiring, respectively, a Fund-wide or a Portfolio by Portfolio vote
will require the affirmative vote of the holders of a majority of the concerned
Fund's (for a Fund-wide vote) or Portfolio's (for a Portfolio by Portfolio vote)
shares present in person or by proxy at the Special Meeting. The persons named
as proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor for that proposal and will vote against any such
adjournment those proxies to be voted against that proposal. For purposes of
determining the presence of a quorum for transacting business at the Special
Meetings, abstentions and broker "non-votes" will be treated as shares that are
present but which have not been voted. Broker non-votes are proxies received
from brokers or nominees when the broker or nominee has neither received
instructions from the beneficial owner or other persons entitled to vote nor has
discretionary power to vote on a particular matter. Accordingly, shareholders
are urged to forward their voting instructions promptly.
Approval of Proposal 1 requires the affirmative vote of a plurality of the
shares of a Fund voting at the Special Meeting. Proposals 2(a), 4 and 5 each
requires the affirmative vote of a "majority of the outstanding voting
securities" of each subject Portfolio, and Proposal 3 requires the affirmative
vote of a "majority of the outstanding voting securities" of each class of each
subject Portfolio, voting separately. The terms "majority of the outstanding
voting securities" of a Portfolio as defined in the Investment Company Act of
1940, as amended (the "1940 Act"), and as used in this Proxy Statement, means:
the affirmative vote of the lesser of (1) 67% of the voting securities of each
Portfolio present at the meeting if more than 50% of the outstanding shares of
the Portfolio are present in person or by proxy or (2) more than 50% of the
outstanding shares of each Portfolio. Approval of Proposal 2(b) requires the
affirmative vote of a majority of the shares of each applicable Portfolio voting
at the Special Meeting. Approval of Proposal 6 requires the affirmative vote of
a majority of the shares of each applicable Fund voting at the Special Meeting.
Abstentions and broker non-votes will have the effect of a "no" vote for
Proposals 2(a), 3, 4 and 5, which require the approval of a specified percentage
of the outstanding shares of each Portfolio. Abstentions and broker non-votes
will not be counted in favor of, but will have no other effect on the vote for
Proposals 1, 2(b) and 6, which require the approval of a (i) for Proposal 1,
plurality of the shares of each Fund, and (ii) for Proposals 2(b) and 6, a
majority of the shares of each Fund, voting at the Special Meeting.
The Portfolios of the Credit Suisse Trust (the "Trust Portfolios") offer
their shares only to certain insurance companies ("Participating Insurance
Companies") for allocation to
-3-
certain of their separate accounts established for the purpose of funding
variable annuity contracts and variable life insurance contracts and tax
qualified pension and retirement plans. The shares of the Trust Portfolios are
currently held only by Participating Insurance Companies. Under current law, the
Participating Insurance Companies are required to solicit voting instructions
from variable annuity contract owners who beneficially own shares in any of the
Trust Portfolios as of the Record Date (as defined below) and must vote all
shares held in the separate account in proportion to the voting instructions
received for the Special Meeting, or any adjournment thereof. The Participating
Insurance Companies will vote shares of the Trust Portfolios for which no
instructions have been received in the same proportion as they vote shares for
which they have received instructions. Abstentions will have the effect of a
negative vote on the proposals. Unmarked voting instructions will be voted in
favor of the proposals.
Shareholders of each Portfolio of a Fund will vote separately with respect
to each of Proposals 2(a), 2(b), 3, 4 and 5 (if applicable); and shareholders of
each Fund will vote together as a single class on Proposals 1 and 6.
Shareholders of each class of the relevant Portfolio will vote separately with
respect to Proposal 3.
The following table summarizes those voting requirements:
SHAREHOLDERS ENTITLED VOTE REQUIRED
TO VOTE FOR APPROVAL
------------------------------------- --------------------------------
Proposal 1 Shareholders of each Fund vote together Each nominee must be elected
(Election of Directors/ for each nominee (if a Fund has several by a plurality of the
of the shares Trustees) Portfolios, shareholders of all Fund voting at the
Portfolios vote together as a single Special Meeting
class)
Proposal 2(a) Shareholders of each Portfolio vote Approved by a "majority of
(Approval of new Investment Advisory separately the outstanding voting
Agreement) securities" of each Portfolio
Proposal 2(b) Shareholders of each Portfolio vote Approved by a majority of the
(Approval of retention or payment of separately shares of each Portfolio
fees paid or payable to the Adviser) voting at the Special Meeting
Proposal 3 Shareholders of each class of each Approved by a "majority of
(Approval of the amended Distribution Portfolio vote separately the outstanding voting
Plans) securities" of each class of
the Portfolio
Proposal 4 Shareholders of each Portfolio vote Approved by a "majority of
Approval of a series of proposals to separately the outstanding voting
modify and/or eliminate certain securities" of each Portfolio
investment restrictions of the Funds)
Proposal 5 Shareholders of each Portfolio vote Approved by a "majority of
(Change of investment objective from separately the outstanding voting
fundamental to non-fundamental) securities" of each Portfolio
Proposal 6 Shareholders of each Fund vote together Approved by a majority of the
(Amendment of organizational documents) (if a Fund has several Portfolios, shares of each Fund entitled
shareholders of all Portfolios vote to vote at the Special Meeting
together as a single class)
Unless otherwise stated, the approval of any one Portfolio (or class, for
Proposal 3) is not contingent on the approval of any other Portfolio (or class),
and a proposal will
-4-
be implemented for a Portfolio (or class for Proposal 3) even if one or more
other Portfolios (or classes) do not approve the proposal.
- --------------------------------------------------------------------------------
Holders of record of the shares of common stock or beneficial interest, as
the case may be, of each Portfolio at the close of business on February 7, 2003
(the "Record Date"), as to any matter on which they are entitled to vote, will
be entitled to one vote per share on all business of the Special Meeting. The
table below sets forth the number of shares outstanding for each Portfolio as of
January 8, 2003.
NUMBER OF SHARES OUTSTANDING
NAME OF THE PORTFOLIO AS OF JANUARY 8, 2003
- ---------------------------------------------- ------------------------------
Credit Suisse Capital Appreciation Fund 43,211,379.939
Credit Suisse Capital Funds:
Credit Suisse Tax Efficient Fund 7,304,999.771
Credit Suisse Large Cap Value Fund 8,866,020.875
Credit Suisse Small Cap Value Fund 12,908,067.716
Credit Suisse Cash Reserve Fund 137,275,039.617
Credit Suisse Emerging Growth Fund 19,495,289.883
Credit Suisse Emerging Markets Fund 4,701,168.277
Credit Suisse Fixed Income Fund 22,317,181.082
Credit Suisse Global Fixed Income Fund 11,936,482.038
Credit Suisse Global Post-Venture Capital Fund 4,626,465.452
Credit Suisse Institutional Fund:
Capital Appreciation Portfolio 1,205,117.314
Harbinger Portfolio* 172,060.988
International Focus Portfolio 5,979,682.217
Investment Grade Fixed Income Portfolio 1,646,439.891
Large Cap Value Portfolio 41,544,961.160
Select Equity Portfolio 1,492,257.996
Small Cap Growth Portfolio 7,270,097.699
Credit Suisse Institutional Fixed Income Fund 16,492,783.490
Credit Suisse Institutional High Yield Fund 8,527,254.909
Credit Suisse Institutional International Fund 12,741,443.944
Credit Suisse Institutional Money Market Fund:
Government Portfolio 175,838,414.140
Prime Portfolio 843,863,928.220
Credit Suisse International Focus Fund 30,981,692.107
Credit Suisse Investment Grade Bond Fund 3,775,262.968
Credit Suisse Japan Growth Fund 18,588,213.452
Credit Suisse Municipal Bond Fund 915,163.896
Credit Suisse New York Municipal Fund 7,848,634.535
Credit Suisse New York Tax Exempt Fund 124,468,307.070
Credit Suisse Opportunity Funds:
Credit Suisse High Income Fund Class A 2,807,748.600
-5-
NUMBER OF SHARES OUTSTANDING
NAME OF THE PORTFOLIO AS OF JANUARY 8, 2003
- ---------------------------------------------- ----------------------------
Credit Suisse High Income Fund Class B 1,417,526.250
Credit Suisse High Income Fund Class C 2,752,852.528
Credit Suisse High Income Fund Common Class 183,822.625
Credit Suisse Municipal Money Fund Class A 41,934,804.53
Credit Suisse U.S. Government Money Fund Class A 32,000,469.770
Credit Suisse Select Equity Fund 834,428.268
Credit Suisse Short Duration Bond Fund 19,038,629.445
Credit Suisse Small Cap Growth Fund 3,136,478.741
Credit Suisse Strategic Small Cap Fund 100,654.484
Credit Suisse Trust:
Blue Chip Portfolio 2,746,554.658
Emerging Growth Portfolio 4,046,693.097
Emerging Markets Portfolio 6,534,530.401
Global Post-Venture Capital Portfolio 9,639,717.861
Global Technology Portfolio 524,688.994
International Focus Portfolio 13,997,591.759
Large Cap Value Portfolio 2,237,150.986
Small Cap Growth Portfolio 53,959,864.231
Small Cap Value Portfolio 952,636.778
*The Harbinger Portfolio commenced operations on January 16, 2003. The number of
shares outstanding information is as of January 27,2003.
Annex I attached hereto sets forth information as of January 8, 2003
regarding the persons known by each Portfolio to beneficially own more than 5%
of the outstanding shares of such Portfolio.
Each Portfolio provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for each Portfolio and a copy of any more recent semiannual report,
without charge, by calling 1-800-927-2874 (or for any Portfolio of Credit Suisse
Trust or any Credit Suisse Institutional Fund, 1-800-222-8977) or by writing to
Credit Suisse Funds, P.O. Box 55030, Boston, MA 02205-5030.
-6-
PROPOSAL 1:
ELECTION OF DIRECTORS/TRUSTEES FOR EACH FUND
At the Special Meeting, seven persons are to be elected who will constitute
the Board of Directors or Trustees, as the case may be, of each Fund. (For ease
of reference the term "Director" will be used for both Directors and Trustees.)
For election of Directors at the Special Meeting, each Fund's Board has approved
the nomination of the following individuals: Richard H. Francis, Jack W. Fritz,
Jeffrey E. Garten, Peter F. Krogh, James S. Pasman, Jr., Steven N. Rappaport and
William W. Priest.
The persons named as proxies on the enclosed proxy card will vote for the
election of the nominees named above unless authority to vote for any or all of
the nominees is withheld in the proxy. Each Director so elected will serve as a
Director of the respective Fund until the next meeting of shareholders, if any,
called for the purpose of electing Directors and until the election and
qualification of a successor or until such Director sooner resigns, dies or is
removed as provided in the organizational documents of each Fund.
Each of the nominees currently serves as a director of each Fund and has
indicated that he is willing to continue to serve as a Director. If any or all
of the nominees should become unavailable for election due to events not now
known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the Directors may recommend.
The following table sets forth certain information concerning the current
Directors and nominees. Unless otherwise noted, each of the Directors and
nominees has engaged in the principal occupation listed in the following table
for more than five years, but not necessarily in the same capacity.
-7-
NOMINEES
- ---------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund
Complex
Term of Overseen Other
Position(s) Office1 and by Directorships
Held with Length of Principal Occupation(s) Director/ Held by Director/
Name, Address and Age Fund Time Served During Past Five Years Trustee Trustee
- ---------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS/TRUSTEES
- ---------------------------------------------------------------------------------------------------------------------------
Richard H. Francis Director/ Since 1999 Currently retired; 54 None
c/o Credit Suisse Asset Trustee Executive Vice President
Management, LLC and Chief Financial
466 Lexington Avenue Officer of Pan Am
New York, New York 10017-3140 Corporation and Pan
Age: 70 American World Airways,
Inc. from 1988 to 1991
- ---------------------------------------------------------------------------------------------------------------------------
Jack W. Fritz Director/ Since 1987 Private investor; 53 Director of Advo,
2425 North Fish Creek Road Trustee Consultant and Director Inc. (direct mail
P.O. Box 1287 of Fritz Broadcasting, advertising)
Wilson, Wyoming 83014 Inc. and Fritz
Age: 75 Communications
(developers and operators
of radio stations) since
1987
- ---------------------------------------------------------------------------------------------------------------------------
Jeffrey E. Garten Director/ Since 1998 Dean of Yale School of 53 Director of
Box 208200 Trustee Management and William S. Aetna, Inc.;
New Haven, Connecticut Beinecke Professor in the Director of
06520-8200 Practice of International Calpine Energy
Age: 56 Trade and Finance; Corporation;
Undersecretary of Director of
Commerce for CarMax Group
International Trade from (used car dealers)
November 1993 to October
1995; Professor at
Columbia University from
September 1992 to
November 1993
- ---------------------------------------------------------------------------------------------------------------------------
- --------------
1 Each Director/Trustee and Officer serves until his or her respective successor
has been duly elected and qualified.
-8-
- ---------------------------------------------------------------------------------------------------------------------------
Peter F. Krogh Director/ Since 2001 Dean Emeritus and 53 Member of Board
301 ICC Trustee Distinguished Professor of The Carlisle
Georgetown University of International Affairs Companies Inc.;
Washington, DC 20057 at the Edmund A. Walsh Member of
Age: 65 School of Foreign Selection
Service, Georgetown Committee for
University; Moderator of Truman Scholars
PBS foreign affairs and Henry Luce
television series Scholars; Senior
Associate of
Center for
Strategic and
International
Studies; Trustee
of numerous world
affairs
organizations
- ---------------------------------------------------------------------------------------------------------------------------
James S. Pasman, Jr. Director/ Since 1999 Currently retired; 55 Director of Education
c/o Credit Suisse Asset Trustee President and Chief Management Corp.,
Management, LLC Operating Officer of Trustee of Deutsche VIT
466 Lexington Avenue National InterGroup, Inc. Funds (overseeing
New York, New York 10017-3140 (holding company) from three portfolios);
Age: 71 April 1989 to March 1991; former Director of Tyco
Chairman of Permian Oil International Ltd.
Co. from April 1989 to
March 1991
- ---------------------------------------------------------------------------------------------------------------------------
Steven N. Rappaport Director/ Since 1999 Partner of Lehigh Court, 54 None
Lehigh Court, LLC Trustee LLC since July 2002,
40 East 52nd Street, President of SunGard
New York, New York 10022 Securities Finance, Inc.,
Age: 54 from 2001 to July 2002;
President of Loanet, Inc.
(on-line accounting
service) from 1995
to 2001; Director,
President, North
American Operations, and
former Executive
Vice President from
1992 to 1993 of
Worldwide Operations of
Metallurg Inc.
(manufacturer of
specialty metals
and alloys);
Executive Vice President,
Telerate, Inc.(provider of
real-time information
to the capital markets)
from 1987 to 1992;
Partner in the law
firm of Hartman &
Craven until 1987
- ---------------------------------------------------------------------------------------------------------------------------
-9-
- ---------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR/TRUSTEE
- ---------------------------------------------------------------------------------------------------------------------------
William W. Priest2 Director/ Since 1999 Senior Partner and Fund 60 None
Steinberg Priest & Sloane Trustee Manager, Steinberg Priest
Capital Management & Sloane Capital
12 East 49th Street Management since March
12th Floor 2001; Chairman and
New York, New York 10017 Managing Director of CSAM
Age: 61 from 2000 to February
2001, Chief Executive
Officer and Managing
Director of CSAM from
1990 to 2000
- ---------------------------------------------------------------------------------------------------------------------------
The table below shows the dollar range of each nominee's ownership of
shares of each Portfolio and of all the Credit Suisse Funds served, or to be
served, by the Directors all as of December 31, 2002.
Nominees' Share Ownership Table by Dollar Range*
PORTFOLIO NAME Francis Fritz Garten Krogh Pasman Priest Rappaport
- -------------------------------- ------------ -------- --------- --------- ----------- --------- ------------
Capital Appreciation Fund
Capital Funds
Tax Efficient Fund
Large Cap Value Fund
Small Cap Value Fund
Cash Reserve Fund
Emerging Growth Fund
Emerging Markets Fund
Fixed Income Fund
Global Fixed Income Fund
Global Post-Venture Capital Fund
Institutional Fixed Income Fund
Institutional High Yield Fund
Institutional International Fund
Institutional Money Market Fund
Government Portfolio
Prime Portfolio
International Focus Fund
Investment Grade Bond Fund
- -------------------------
2 Mr. Priest is a Director/Trustee who is an "interested person" of the Funds
as defined in the 1940 Act, because he provides consulting services to
CSAM.
-10-
PORTFOLIO NAME Francis Fritz Garten Krogh Pasman Priest Rappaport
- -------------------------------- ------------ -------- --------- --------- ----------- --------- ------------
Japan Growth Fund
Municipal Bond Fund
New York Municipal Fund
New York Tax Exempt Fund
Opportunity Funds
High Income Fund
Municipal Money Fund
U.S. Government Money Fund
Select Equity Fund
Short Duration Bond Fund
Small Cap Growth Fund
Strategic Small Cap Fund
Aggregate Dollar Range of Equity
Securities in All Funds Overseen
by Director in Family of
Investment Companies
- ---------------------
*Key to Dollar Ranges:
A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. Over $100,000
The information as to beneficial ownership is based on statements furnished to
the Funds by each Director. Unless otherwise noted, beneficial ownership is
based on shared voting and investment power with spouse and/or immediate family.
-11-
Mr. Rappaport informed the Funds that his former employer, Loanet, Inc.
("Loanet"), had performed loan processing services for various Credit Suisse
entities (not including CSAM). He indicated that Loanet billed these Credit
Suisse entities approximately $1,700,000 and $2,300,000 during the years ended
December 31, 2000 and 2001, respectively. Prior to May 31, 2001, Mr. Rappaport
was President and a director of Loanet, and held an approximately 25% equity
interest in Loanet. Another investor in Loanet owned an approximately 67% equity
interest and was in control of Loanet until May 31, 2001. On May 31, 2001,
Loanet was sold to Sungard Data Systems, Inc. ("Sungard"). Mr. Rappaport sold
his shares to Sungard, but remained President of Loanet until December 31, 2001.
Mr. Rappaport remained at Loanet for a nominal salary until July 31, 2002 but
had no formal position.
RESPONSIBILITIES OF THE BOARD -- BOARD AND COMMITTEE MEETINGS
The Board of Directors of each Fund is responsible for the general
oversight of Fund business. A majority of the Board's members are not affiliated
with CSAM. These non-interested Directors have primary responsibility for
assuring that each Fund is managed in a manner consistent with the best
interests of its shareholders.
Each Board meets in person at least quarterly to review the investment
performance of the Portfolios and other operational matters, including policies
and procedures designed to assure compliance with various regulatory
requirements. At least annually, the non-interested Directors review the fees
paid to CSAM and its affiliates for investment advisory services and
administrative and distribution services.
The Board of each Fund has an Audit Committee and a Nominating Committee,
the responsibilities of which are described below. The members of the Audit
Committee and the Nominating Committee consist of all the Directors who are not
"interested persons" of the Fund as defined in the 1940 Act ("Independent
Directors"), namely Messrs. Francis, Fritz, Garten, Krogh, Pasman and Rappaport.
AUDIT COMMITTEE
In accordance with its written charter adopted by the Board, the Audit
Committee oversees the financial reporting process of the Fund and monitors the
valuation of portfolio assets. It also makes recommendations to the Board as to
the selection of the independent public accountants, reviews the audit plan and
audit fees charged, and reviews the results of the Fund's annual audit.
NOMINATING COMMITTEE
The Nominating Committee is charged with the duty of selecting and
nominating candidates for election to the Board as Independent Directors. The
Nominating Committee will consider nominees recommended by the Fund's
shareholders when a vacancy becomes available. Shareholders who wish to
recommend a nominee should send nominations to the Fund's Secretary.
The following chart sets forth the number of meetings of the Board, the
Audit Committee and the Nominating Committee of each Fund during the calendar
year 2002.
-12-
NUMBER OF BOARD AND COMMITTEE MEETINGS HELD
DURING THE CALENDAR YEAR 2002
BOARD OF DIRECTORS AUDIT NOMINATING
NAME OF FUND MEETINGS COMMITTEE MEETINGS COMMITTEE MEETINGS
- -------------------------------------------------- ------------------ ------------------ ------------------
Credit Suisse Capital Appreciation Fund 4 4 2
Credit Suisse Capital Funds 4 4 2
Credit Suisse Cash Reserve Fund 4 4 2
Credit Suisse Emerging Growth Fund 4 4 2
Credit Suisse Emerging Markets Fund 6 4 2
Credit Suisse Fixed Income Fund 4 4 2
Credit Suisse Global Fixed Income Fund 5 4 2
Credit Suisse Global Post-Venture Capital Fund 6 4 2
Credit Suisse Institutional Fixed Income Fund 4 4 2
Credit Suisse Institutional Fund 5 4 2
Credit Suisse Institutional High Yield Fund 4 4 2
Credit Suisse Institutional International Fund 5 4 2
Credit Suisse Institutional Money Market Fund 4 4 2
Credit Suisse International Focus Fund 6 4 2
Credit Suisse Investment Grade Bond Fund 4 4 2
Credit Suisse Japan Growth Fund 6 4 2
Credit Suisse Municipal Bond Fund 4 4 2
Credit Suisse New York Municipal Fund 4 4 2
Credit Suisse New York Tax Exempt Fund 5 4 2
Credit Suisse Opportunity Funds 4 4 2
Credit Suisse Select Equity Fund 4 4 2
Credit Suisse Short Duration Bond Fund 5 4 2
Credit Suisse Small Cap Growth Fund 4 4 2
Credit Suisse Strategic Small Cap Fund 4 4 2
Credit Suisse Trust 5 4 2
Each incumbent Director attended at least 75% of the total number of Board
meetings and meetings of committees on which he served during each Fund's last
full fiscal year.
-13-
EXECUTIVE OFFICERS
The following persons are executive officers of each of the Funds:
POSITION(S) HELD WITH
FUND, TERM OF OFFICE* AND PRINCIPAL OCCUPATION(S)
NAME (AGE) LENGTH OF TIME SERVED DURING PAST FIVE YEARS
- ------------------------------- ------------------------------- -----------------------------------------------
Laurence R. Smith Chairman since 2002 Managing Director and Global Chief
Credit Suisse Asset Management, LLC Investment Officer of CSAM; Associated
466 Lexington Avenue with J.P. Morgan Investment Management
New York, New York 10017-3140 from 1981 to 1999
Age: 44
Hal Liebes, Esq. Vice President and Managing Director and Global General
Credit Suisse Asset Management, LLC Secretary since 1999 Counsel of CSAM; Associated with Lehman
466 Lexington Avenue Brothers, Inc. from 1996 to 1997;
New York, New York 10017-3140 Associated with CSAM from 1995 to 1996;
Age: 38 Associated with CS First Boston
Investment Management from 1994 to
1995; Associated with Division
of Enforcement, U.S. Securities
and Exchange Commission
from 1991 to 1994
Michael A. Pignataro Treasurer and Chief Director and Director of Fund
Credit Suisse Asset Management, LLC Financial Officer since Administration of CSAM; Associated with
466 Lexington Avenue 1999 CSAM since 1984
New York, New York 10017-3140
Age: 43
Gregory N. Bressler, Esq. Assistant Secretary Director and Deputy General Counsel of
Credit Suisse Asset Management, LLC since 2000 CSAM; Associated with CSAM since January
466 Lexington Avenue 2000; Associated with the law firm of
New York, New York 10017-3140 Swidler Berlin Shereff Friedman LLP from
Age: 36 1996 to 2000
Kimiko T. Fields, Esq. Assistant Secretary Vice President and Legal Counsel of
Credit Suisse Asset Management, LLC since 2002 CSAM; Associated with CSAM since January 1998
466 Lexington Avenue
New York, New York 10017-3140
Age: 39
Rocco A. DelGuercio Assistant Treasurer Vice President-Fund Administration of
Credit Suisse Asset Management, LLC since 1999 CSAM; Associated with CSAM since June
466 Lexington Avenue 1996; Assistant Treasurer, Bankers Trust
New York, New York 10017-3140 Co. -- Fund Administration from March
Age: 39 1994 to June 1996; Mutual Fund
Accounting Supervisor, Dreyfus
Corporation from April 1987 to March 1994
Joseph Parascondola Assistant Treasurer Assistant Vice President - Fund
Credit Suisse Asset Management, LLC since 2000 Administration of CSAM since April 2000;
466 Lexington Avenue Assistant Vice President, Deutsche Asset
New York, New York 10017-3147 Management from January 1999 to April
Age: 39 2000; Assistant Vice President, Weiss,
Peck & Greer LLC from November 1995 to
December 1998
-14-
POSITION(S) HELD WITH
FUND, TERM OF OFFICE* AND PRINCIPAL OCCUPATION(S)
NAME (AGE) LENGTH OF TIME SERVED DURING PAST FIVE YEARS
- ------------------------------- ------------------------------- -----------------------------------------------
Robert M. Rizza Assistant Treasurer Assistant Vice President-Fund
Credit Suisse Asset Management, LLC Since 2002 Administration of CSAM since January
466 Lexington Avenue 2001; Associated with CSAM since March
New York, New York 10017-3147 1998; Assistant Treasurer of Bankers
Age: 37 Trust Co. from April 1994 to March 1998
- ---------------------
* Each officer serves until his or her respective successor has been duly
elected and qualified.
COMPENSATION OF DIRECTORS AND OFFICERS
No employee of CSAM, State Street Bank and Trust Company ("State Street")
or Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), the Funds'
co-administrators, or any of their affiliates, receives any compensation from a
Fund for acting as an officer or director of the Fund. Each Director who is not
a director, trustee, officer or employee of CSAM, State Street, CSAMSI or any of
their affiliates receives an annual fee of $750 and $250 for each meeting of the
Board attended by him for his services as Director, and is reimbursed for
expenses incurred in connection with his attendance at Board meetings. Each
member of the Audit Committee receives an annual fee of $250, and the chairman
of the Audit Committee receives an annual fee of $325, for serving on the Audit
Committee.
The following Compensation Table provides in tabular form the following
data:
Column (1) Name of each Fund from which each Director receives
compensation.
Column (2) Aggregate compensation received by each Director of
each Fund during the calendar year 2002 and total compensation
received by each Director from the 60 investment companies comprising
the Credit Suisse Funds (collectively, the "Fund Complex") during the
calendar year 2002.
The Directors do not receive any pension or retirement benefits from any
Fund in the Fund Complex.
-15-
COMPENSATION TABLE
(2)
AGGREGATE COMPENSATION
-------------------------------------------------------------------------------------
(1)
NAME OF FUND Francis Fritz Garten Krogh Pasman Rappaport
- ----------------------------- ------------- ------------ ------------ ------------ --------- ------------
Capital Appreciation Fund $ 2,189.29 $ 1,939.29 $ 2,189.29 $ 2,189.29 $2,189.29 $ 2,189.29
Capital Funds
Tax Efficient Fund 1,116.65 866.65 1,116.75 1,116.65 1,116.65 1,116.65
Large Cap Value Fund 1,116.67 866.67 1,116.67 1,116.67 1,116.67 1,116.67
Small Cap Value Fund 1,116.68 866.68 1,116.68 1,116.68 1,116.68 1,116.68
Cash Reserve Fund 2,812.50 2,562.50 3,062.50 2,812.50 2,812.50 3,037.50
Emerging Growth Fund 2,100.00 1,850.00 2,100.00 2,100.00 2,100.00 2,100.00
Emerging Markets Fund 2,562.50 2,312.50 2,312.50 2,562.50 2,562.50 2,787.50
Fixed Income Fund 2,100.00 1,850.00 2,100.00 2,100.00 2,100.00 2,100.00
Global Fixed Income Fund 2,350.00 2,100.00 2,100.00 2,350.00 2,350.00 2,350.00
Global Post-Venture Capital Fund
2,560.00 2,310.00 2,310.00 2,560.00 2,560.00 2,800.00
Institutional Fixed Income Fund
1,812.50 1,562.50 1,812.50 1,812.50 1,812.50 1,887.50
Institutional Fund
Capital Appreciation
Portfolio 920.00 670.00 920.00 920.00 920.00 920.00
Harbinger Portfolio*
International Focus
Portfolio 1,170.00 920.00 920.00 1,170.00 1,170.00 1,170.00
Investment Grade Fixed
Income Portfolio 625.00 375.00 625.00 625.00 625.00 625.00
Large Cap Value Portfolio 920.00 670.00 920.00 920.00 920.00 920.00
Select Equity Portfolio 920.00 670.00 920.00 920.00 920.00 920.00
Small Cap Growth Portfolio 946.98 696.98 946.98 946.98 946.98 946.98
Institutional High Yield Fund 1,812.50 1,562.50 1,812.50 1,812.50 1,812.50 1,887.50
Institutional International Fund 2,312.50 1,812.50 1,812.50 2,312.50 2,312.50 2,387.50
Institutional Money Market Fund
Government Portfolio 906.25 906.25 906.25 906.25 906.25 981.25
Prime Portfolio 906.25 906.25 906.25 906.25 906.25 981.25
International Focus Fund 2,557.50 2,307.50 2,307.50 2,557.50 2,557.50 2,812.50
Investment Grade Bond Fund 2,100.00 1,850.00 2,100.00 2,100.00 2,100.00 2,100.00
Japan Growth Fund 2,562.50 2,312.50 2,312.50 2,562.50 2,562.50 2,787.50
Municipal Bond Fund 1,812.50 1,562.50 1,812.50 1,812.50 1,812.50 1,887.50
New York Municipal Fund 2,100.00 1,850.00 2,100.00 2,100.00 2,100.00 2,100.00
New York Tax Exempt Fund 3,062.50 2,812.50 3,062.50 3,062.50 3,062.50 3,287.50
-16-
(2)
AGGREGATE COMPENSATION
-------------------------------------------------------------------------------------
(1)
NAME OF FUND Francis Fritz Garten Krogh Pasman Rappaport
- ----------------------------- ------------- ------------ ------------ ------------ --------- ------------
Opportunity Funds
High Income Fund 865.63 615.63 865.63 865.63 865.63 865.63
Municipal Money Fund 993.76 743.76 993.76 993.76 993.76 993.76
U.S. Government Money Fund 865.63 615.63 865.63 865.63 865.63 865.63
Select Equity Fund 1,812.50 1,562.50 1,812.50 1,812.50 1,812.50 1,887.50
Short Duration Bond Fund 625.00 375.00 625.00 625.00 625.00 625.00
Small Cap Growth Fund 2,100.00 1,850.00 2,100.00 2,100.00 2,100.00 2,100.00
Strategic Small Cap Fund
Credit Suisse Trust
Blue Chip Portfolio 201.35 173.57 201.35 201.35 201.35 218.05
Emerging Growth Portfolio 326.35 173.57 326.35 326.35 326.35 352.42
Emerging Markets Portfolio 388.85 361.07 326.35 388.85 388.85 414.92
Global Post-Venture
Capital Portfolio 388.85 361.07 326.35 388.85 388.85 414.92
Global Technology Portfolio 388.85 361.07 326.35 388.85 388.85 414.92
International Focus Portfolio 388.85 361.07 326.35 388.85 388.85 414.92
Large Cap Value Portfolio 326.35 298.57 326.35 326.35 326.35 352.42
Small Cap Growth Portfolio 326.35 298.57 326.35 326.35 326.35 352.42
Small Cap Value Portfolio 326.35 298.57 326.35 326.35 326.35 352.42
------------- ------------ ------------ ------------ --------- ------------
Total Compensation from the $ 82,014.67 $ 64,639.65 $ 71,514.67 $ 75,014.67 $110,014.67 $ 84,359.93
Funds and Fund Complex Paid
to each Director
* Harbinger Portfolio commenced operations on January 16, 2003. Therefore, the
Directors' compensation during the calendar year 2002 is not available.
Mr. Priest is an "interested person" of the Funds and, accordingly,
receives no compensation from any Fund or any other investment company in the
Fund Complex.
REQUIRED VOTE
Election of each of the listed nominees for Director of a Fund requires the
affirmative vote of a plurality of the votes of that Fund cast at the Special
Meeting in person or by proxy. This means that the seven nominees receiving the
largest number of votes will be elected.
-17
THE BOARD OF EACH FUND, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND VOTE IN FAVOR OF EACH OF THE
NOMINEES LISTED IN THIS PROPOSAL 1.
PROPOSAL 2(a):
FOR THE SHAREHOLDERS OF CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND, CREDIT
SUISSE INSTITUTIONAL HIGH YIELD FUND, CREDIT SUISSE INSTITUTIONAL INTERNATIONAL
FUND, CREDIT SUISSE MUNICIPAL BOND FUND AND CREDIT SUISSE SELECT EQUITY FUND:
APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
For the reasons described herein, the shareholders of each of the Funds
listed immediately above (the "BEA Legacy Funds") are being asked to approve a
new investment advisory agreement (each a "New Advisory Agreement"). The
proposed agreements are essentially identical to the agreements previously
approved by the BEA Legacy Funds' shareholders and Board of Directors. A form of
New Advisory Agreement for each Fund is attached as Exhibit B to this proxy
statement.
Prior Board Approval of the Advisory Agreements
Section 15 of the 1940 Act requires that a fund's investment advisory
agreement be in writing and be approved initially by both (i) the fund's board
of directors (including a majority of its Independent Directors and (ii) the
fund's shareholders. Each agreement may have an initial term of two years, but
must be approved annually thereafter at an in-person meeting by a majority of
the fund's board of directors, including a majority of its Independent
Directors. In the event that a fund's board fails to approve of the fund's
investment advisory agreements at least annually, the agreements will
automatically lapse. As a result, the fund would no longer have a valid advisory
agreement and must arrange for a new agreement to be adopted by the fund's board
and shareholders, as required by Section 15.
Each of the BEA Legacy Funds was a successor to a portfolio of The RBB
Fund, Inc. and became part of the Credit Suisse Funds (then Warburg Pincus
Funds) on October 26, 1998. Each of the BEA Legacy Funds had an advisory
agreement dated October 26, 1998 (each, an "Original Advisory Agreement"), which
contained a provision to the effect that the agreement would remain in effect
until April 17, 2000 and thereafter for successive annual periods if approved
annually. All of the BEA Legacy Funds were advised by CSAM, then known as BEA
Associates.
The reason the Original Advisory Agreements were structured with this fixed
termination date was to keep the BEA Legacy Funds on the same contract renewal
schedule as all of the other funds deemed a part of the Credit Suisse Fund
complex, as the Boards of all Funds in the complex typically held a contract
renewal meeting in early April each year.
In March 1999, the relevant Boards of Directors met to consider new
advisory contracts for the funds ("Former Warburg Funds") advised by Warburg
Pincus Asset
-18-
Management, Inc. ("WPAM"), which would terminate upon the acquisition of WPAM
(the "Acquisition"). These new agreements, which required shareholder approval,
did not specify a particular termination date, but provided that they would
continue for an initial two year period and then for successive annual periods
if approved annually. The BEA Legacy Funds' agreements were not modified at this
time to have the same language since, because they were advised by CSAM and not
WPAM, they would not terminate as a result of the Acquisition and had one year
and one month left on their initial terms.
Shareholder approval of the new contracts required for the Former Warburg
Funds as a result of the Acquisition having been obtained, these contracts were
dated July 9, 1999 and did not need to be reconsidered by their Boards of
Directors for two years. A contract renewal meeting for the Credit Suisse Fund
complex was next held on November 16, 2000, by which time the BEA Legacy Funds'
advisory agreements had inadvertently terminated by their terms.
Without any awareness that the Original Advisory Agreements had terminated,
the Original Advisory Agreements were presented to the Boards and approved,
without change, on November 16, 2000 and November 12, 2001. At the time the
contracts were presented, because they had not been approved by the Board prior
to April 17, 2000, the Original Advisory Agreements were not in full compliance
with the requirements in the 1940 Act, relating to annual Board approval of
advisory contracts. The subsequent approvals in November 2000 and 2001 did not
revive the Original Advisory Agreements.
Current Shareholder Approval
Having determined that each BEA Legacy Fund was without a valid investment
advisory agreement, the Adviser ceased being paid fees under the terminated
contracts. Then, the Adviser requested each BEA Legacy Fund's Board to consider
approving a new advisory agreement essentially identical to the one that lapsed
in April 2000. At its December 12, 2002 meeting, the Board of each BEA Legacy
Fund approved a New Advisory Agreement and determined that the agreement should
be submitted to the Fund's shareholders for their approval.
At the December 12, 2002 meeting, the Board of each BEA Legacy Fund was
also asked to consider whether the Adviser may retain those advisory fees that
had been paid or which were payable to the Adviser since April 18, 2000 under
the Original Advisory Agreement. Having so approved, the Board determined that
each BEA Legacy Fund's shareholders should also vote on whether to permit the
Adviser to retain those fees received or which were payable since April 18, 2000
through the time that the BEA Legacy Fund's shareholders approve a New Advisory
Agreement AND RECOMMENDED THAT SHAREHOLDERS VOTE IN FAVOR OF THIS PROPOSAL.
Original Advisory Agreements
On July 20, 1998 the sole initial shareholder of each Fund, in
accordance with the requirements of the 1940 Act, approved an Original Advisory
Agreement between each of the Funds and the Adviser. The Original Advisory
Agreement provided that it would remain in effect until April 17, 2000 and would
continue for successive annual periods thereafter if approved by a majority of
the Directors, including a majority of the Independent Directors.
-19-
When the Board approved the continuation of the Original Advisory
Agreements on November 16, 2000 and November 12, 2001, the Board was unaware
that the Agreements had already lapsed on April 18, 2000. At those Board
meetings held on November 16, 2000 and November 12, 2001, the Board's intent,
nonetheless, was to continue the Original Advisory Agreements with the Adviser
uninterrupted for the next year, and but for the technical oversight, the
Agreements would have been continued. Despite the termination of the Original
Advisory Agreements, the Adviser has continued to provide the Funds with the
services called for under those Agreements.
For the fiscal year ended August 31, 2002, the investment advisory fees
paid by each Fund and applicable fee waivers and/or reimbursements of expenses
were as follows:
FEES PAID
(AFTER WAIVERS AND
FUND REIMBURSEMENTS) WAIVERS REIMBURSEMENTS
- -------------------------------------- ---------------------- ------------------ --------------------
Credit Suisse Institutional Fixed $1,524,721 $216,189 $0
Income Fund
Credit Suisse Institutional High $420,970 $269,003 $0
Yield Fund
Credit Suisse Institutional $1,732,357 $0 $0
International Fund
Credit Suisse Municipal Bond Fund $0 $138,546 $145,536
Credit Suisse Select Equity Fund $0 $115,720 $218,811
Proposed New Advisory Agreements
With the exceptions set forth below, the terms of the New Advisory
Agreement for each Fund approved by the Board on December 12, 2002 and proposed
for shareholder approval are similar in all material respects to the Original
Advisory Agreement for that Fund. The only differences between the two are (i)
their effective dates and termination provisions and (ii) the New Advisory
Agreement contains a limited license to use the Credit Suisse name (and variants
of it) while CSAM is the adviser whereas the Original Advisory Agreement
contained a license to use the former adviser's names. The Adviser will continue
to serve as investment adviser to each of the Funds, retain ultimate
responsibility for the management of the Funds, and provide investment oversight
and supervision. These investment management services will be identical to the
services provided under the Original Advisory Agreements and to the services
provided since April 18, 2000. Likewise, the Adviser's compensation for these
services, expressed as an annual rate of each Fund's net assets, remains
unchanged under the New Advisory Agreements.
Pursuant to each New Advisory Agreement, subject to the supervision and
direction of the Board, the Adviser is responsible for managing each Fund in
accordance with the Fund's stated investment objective and policies. The Adviser
is responsible for providing investment advisory services as well as conducting
a continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition to expenses that the Adviser may
incur in performing its services under a New Advisory
-20-
Agreement, the Adviser pays the compensation, fees and related expenses of all
Directors who are affiliated persons of the Adviser or any of its subsidiaries.
Under the New Advisory Agreements, the Adviser is entitled to investment
advisory fees equal to the following percentage of each Fund's average daily net
assets on an annualized basis:
Fund Investment Advisory Fee*
- ---------------------------------------------------- ------------------------
Credit Suisse Institutional Fixed Income Fund 0.375%
Credit Suisse Institutional High Yield Fund 0.70%
Credit Suisse Institutional International Fund 0.80%
Credit Suisse Municipal Bond Fund 0.70%
Credit Suisse Select Equity Fund 0.75%
- ------------------------
*As a percentage of average daily net assets.
These advisory fees are IDENTICAL to those under the Original Advisory
Agreements.
Finally, each New Advisory Agreement will run for an initial term of two
years and annually thereafter so long as it is approved by a majority of the
Directors of the particular Fund, including a majority of the Independent
Directors. A New Advisory Agreement for a Fund is terminable at any time on 60
days' written notice without penalty by the Directors, by vote of a majority of
the outstanding shares of the Fund, or upon 90 days' written notice, by the
Adviser. Each New Advisory Agreement also terminates automatically in the event
of any assignment, as defined in the 1940 Act.
Board Deliberations
In approving a Fund's New Advisory Agreement, the Board of that Fund is
required to act solely in the best interests of the Fund and the Fund's
shareholders in evaluating the terms of that Agreement. The Board is required to
judge the terms of the arrangement in light of those that would be reached as a
result of arm's-length bargaining.
At the December 12, 2002 Board meeting, the Directors of each Fund
considered the similarity of the New Advisory Agreement to the Original Advisory
Agreement for the Fund and the fact that the Board had intended to continue the
Original Advisory Agreement in November 2000 and again in November 2001. In
determining whether or not it was appropriate to approve the New Advisory
Agreement and to recommend approval to shareholders, the Directors considered
various materials and representations provided by the Adviser, with respect to
each Fund separately, including information relating to the following factors:
(i) the extent and quality of investment advisory services each Fund will
receive for the advisory fee payable under the Agreement; (ii) the fees charged
to other clients for comparable services; (iii) the fees charged by other
investment advisers providing comparable services to similar investment
companies; (iv) comparative information on the net asset value, yield and total
return per share of each Fund with those of other funds with comparable
investment objectives and size; (v) the total of all assets managed by the
Adviser and the total number of investment companies and
-21-
other clients that it services; (vi) the Adviser's profitability; (vii) the
extent to which the Adviser receives benefits such as research services as a
result of the brokerage generated by the Funds; (viii) the organizational and
financial soundness of the Adviser in light of the needs of each Fund on an
on-going basis; (ix) the conditions and trends prevailing generally in the
economy, the securities markets and the mutual fund industry; (x) the historical
relationship between each Fund and the Adviser; and (xi) other factors deemed
relevant by the Board. After considering these factors, the Directors, including
all of the Independent Directors, approved the New Advisory Agreement for each
Fund.
Information About CSAM and its Affiliates
Information about CSAM, its managers and principal executive officers,
including those who are also officers of the Funds, CSAM's investment company
clients, the Funds' brokerage policies and the officers of CSAM is presented in
Exhibit C.
CSAMSI, an affiliate of CSAM, serves as co-administrator and distributor to
the Funds. Exhibit D sets forth the fees paid to CSAMSI by the Funds for
services provided to the Funds during the most recent fiscal year. CSAMSI will
continue to serve as co-administrator and distributor to the Funds after
Proposal 2 is approved by the shareholders.
Required Vote
Approval of Proposal 2 for a Fund requires the vote of a "majority of the
outstanding voting securities" entitled to vote on the proposal, as defined in
the 1940 Act, of that Fund, which means the vote of 67% or more of the voting
securities of that Fund entitled to vote on the proposal that are present at the
Special Meeting, if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or the vote of more than 50% of the outstanding
voting securities entitled to vote on the proposal, whichever is less.
THE BOARD OF EACH FUND, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND VOTE "FOR" APPROVAL OF THE NEW
ADVISORY AGREEMENT.
PROPOSAL 2(b):
FOR THE SHAREHOLDERS OF CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND, CREDIT
SUISSE INSTITUTIONAL HIGH YIELD FUND, CREDIT SUISSE INSTITUTIONAL INTERNATIONAL
FUND, CREDIT SUISSE MUNICIPAL BOND FUND AND CREDIT SUISSE SELECT EQUITY FUND: TO
APPROVE THE RETENTION OR PAYMENT OF FEES PAID OR PAYABLE TO THE ADVISER
Despite the inadvertent expiration of the Original Advisory Agreements on
April 17, 2000, the Adviser has continued to provide the Funds with
uninterrupted investment advisory services called for under the Original
Advisory Agreements that include, but are not limited to, regularly providing
investment advice to each of the Funds and continuously supervising the
investment and reinvestment of cash, securities and other assets for the Funds.
From April 18, 2000 until October 1, 2002, each Fund has compensated the Adviser
for these services in an amount equal to the percentage of each Fund's average
daily net assets stated in
-22-
the Original Advisory Agreements. Since October 1, 2002, following the discovery
of the invalidity of these Original Advisory Agreements, the fees payable to the
Adviser have been retained by the Fund pending the resolution of this matter.
During this same period the Adviser has also continued to honor its expense
limitation commitments to the Funds. Through September 2002, each Fund, its
Board of Directors and the Adviser were unaware that the Original Advisory
Agreement had expired due to the administrative error described above, and so
the Funds' payments of the Adviser's fees were made under the belief that the
Adviser's services were being performed according to valid advisory agreements.
For the period April 18, 2000 through December 31, 2002, the investment
advisory fees paid or payable by each Fund, and applicable fee waivers and/or
reimbursements, were as follows:
Fees Paid or Payable
(After Waivers and
Fund Reimbursements) Waivers Reimbursements
- -------------------------------------------- -------------------- ---------------- ----------------
Credit Suisse Institutional Fixed $ 3,641,892 $ 526,033 $ 0
Income Fund
Credit Suisse Institutional High Yield $ 1,040,504 $ 614,006 $ 0
Fund
Credit Suisse Institutional $ 5,205,015 $ 0 $ 0
International Fund
Credit Suisse Municipal Bond Fund $ (185,295) $ 276,290 $ 246,118
Credit Suisse Select Equity Fund $ (412,284) $ 237,583 $ 447,685
The Adviser, relying on equitable principles, sought Board approval to
allow the Adviser to avoid an economic burden and retain all payments, and be
paid all unpaid amounts, as compensation for services provided, and to be
provided, since April 18, 2000 through the effective date of the New Advisory
Agreement. In granting their unanimous approval, the Directors, who were
represented by independent counsel (as defined in the 1940 Act) who reviewed the
legal issues presented to the Board in connection with the termination of the
Funds' advisory arrangements, considered the nature of the continuing
relationship between the Adviser and the Funds, the Adviser's willingness to
subsidize the Funds' operations, and the nature and the quality of the services
it has performed for the Funds since April 18, 2000. The Directors also
considered that:
o the 1940 Act permits a court to enforce a contract that otherwise
violates the 1940 Act or rules thereunder should the court determine
that such enforcement would produce a more equitable result than
non-enforcement and would not be inconsistent with the underlying
purposes of the 1940 Act;
o the Funds and their shareholders have experienced no economic harm
during the applicable period as a result of the inadvertent
termination of the Original Advisory Agreements, and the amounts that
were paid and are payable would have been no more than what the Funds
would have paid had the Original Advisory Agreements remained in
effect;
o but for failing to meet the technical requirements of the 1940 Act,
the Board had intended that the Original Advisory Agreements continue
uninterrupted since April 2000;
-23-
o the Adviser has agreed to pay for the costs of soliciting shareholder
approval of the New Advisory Agreements and the ratification of the
retention of its advisory fees; and
o should Board or shareholder approval be withheld, the Adviser could
seek to retain some or all of these payments (and be paid some or all
of the unpaid amounts) through legal action on the grounds that it
would be unjust to withhold payments for services rendered under the
Original Advisory Agreements, the unintended lapse of which had
resulted from a simple administrative error.
Required Vote
Having been advised of the equitable standard to be applied under Section
47(b) of the 1940 Act should the Funds seek to rescind the terminated contracts
and the costs likely to be involved in such litigation and having considered the
absence of harm to Fund shareholders and the windfall that would result to
shareholders from a rescission of the terminated contracts, the Board of each
Fund unanimously approved the Adviser's request that it be permitted to retain
all fees paid, and all fees payable, to the Adviser since April 18, 2000 through
the effective date of the New Advisory Agreements. The Board of each Fund then
determined to submit the matter for approval by the Fund's shareholders.
Approval of Proposal 2(b) requires the vote of a majority of the shares of each
Fund voting on the Proposal, in person or by proxy at the Special Meeting.
THE BOARD OF EACH FUND, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE "FOR" APPROVAL OF THE PAYMENT OF
ALL FEES PAID AND PAYABLE TO THE ADVISER DURING THE APPLICABLE PERIOD.
-24-
PROPOSAL 3:
FOR THE SHAREHOLDERS OF CREDIT SUISSE HIGH INCOME FUND, CREDIT SUISSE MUNICIPAL
MONEY FUND AND CREDIT SUISSE U.S. GOVERNMENT MONEY FUND, EACH A PORTFOLIO OF
CREDIT SUISSE OPPORTUNITY FUNDS: TO APPROVE AN AMENDED DISTRIBUTION PLAN FOR
EACH CLASS OF EACH PORTFOLIO
Shareholders of each class of each Portfolio are being asked to approve the
amended distribution plan for the Portfolio pursuant to Rule 12b-1 under the
1940 Act, as follows (each a "Proposed Distribution Plan," together the
"Proposed Distribution Plans"):
- ----------------------------------------------------------------------------------------------------------------------
Name of the Proposed
Applicable Portfolio/Class Distribution Plan Approval by the Applicable Class
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Plan of Distribution Pursuant Class A shareholders and
Fund/Class A to Rule 12b-1 - Class A Class B shareholders,*
Shares voting separately
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Plan of Distribution Pursuant to Class B shareholders
Fund/Class B Rule 12b-1 - Class B Shares
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Plan of Distribution Pursuant to Class C shareholders
Fund/Class C Rule 12b-1 - Class C Shares
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Shareholder Servicing and Common Class shareholders
Fund/Common Class Distribution Plan
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse Municipal Money Plan of Distribution Pursuant to Class A shareholders
Fund/Class A** Rule 12b-1 - Class A Shares
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse U.S. Government Plan of Distribution Pursuant to Class A shareholders
Money Fund/Class A** Rule 12b-1 - Class A Shares
- ----------------------------------------------------------------------------------------------------------------------
*Class B shareholders of the Credit Suisse High Income Fund
are entitled to vote, as a separate class, on the Proposed Distribution Plan for
the Class A shares because their shares will convert to Class A shares if they
are held for certain periods of time. If Proposal 3 is not approved by the Class
A shareholders of the Fund, the Board will reevaluate the matter and consider
alternatives. If the proposal is approved by Class A shareholders but not by
Class B shareholders, the Fund may elect to establish a new class which provides
the Class B shareholders with substantially the same terms as the current Class
A.
**The change of the name of the class from Common Class to
Class A became effective on or about February 28, 2003.
The Board, including a majority of the Independent Directors (each of whom
has no direct or indirect financial interest in the operation of the Proposed
Distribution Plans or any agreements related to the Plans), unanimously approved
the Proposed Distribution Plans on
-25-
December 12, 2002, subject to the approval of the holders of shares of the
applicable class(es) of each Portfolio. The Proposed Distribution Plans will be
essentially identical to the plans that were adopted by the shareholders on the
dates listed below except that the existing plans are "reimbursement"-type plans
while the Proposed Distribution Plans are "compensation"-type plans (as
discussed in more detail below). Forms of the Proposed Distribution Plans are
attached as Exhibit E-1, E-2, E-3, E-4 and E-5 respectively.
Current Distribution Plans
Each of the Portfolios has adopted a "reimbursement"-type of distribution
plan pursuant to Rule 12b-1 under the 1940 Act, with respect to each class of
shares. Payment may be made by the Portfolio under each distribution plan for
the purpose of financing or assisting in the financing of any activity which is
primarily intended to result in the sale of shares of the Portfolio. Under each
such reimbursement plan, the Portfolio agrees to reimburse the distributor,
CSAMSI, for eligible expenses, subject to the following maximum amounts (the
dates the shareholders adopted the plans and the dates of the last amendment, if
any, are listed in parenthesis):
- ----------------------------------------------------------------------------------------------------------------------
FUND COMMON CLASS CLASS A* CLASS B CLASS C
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Fund .25% .50% 1.00% 1.00%
(8/3/00) (2/22/99) (2/22/99) (2/25/00)
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse Municipal Money Fund** .40%
(1/24/97)
- --------------------------------------------- ----------------
Credit Suisse U.S. Government Money Fund** .40%
(1/24/97)
- ----------------------------------------------------------------------------------------------------------------------
* A fee of 0.25% is currently being charged. This fee can be increased by
Board action, without the necessity of shareholder approval. CSAMSI is not
seeking such an increase.
** The Class A shares of these Funds were previously called Common Class
shares.
For the most recent fiscal year, the Funds paid the following amounts to CSAMSI
pursuant to each distribution plan:
- ----------------------------------------------------------------------------------------------------------------------
Fund Common Class Class A Class B Class C
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse High Income Fund $ 3,232 $ 19,965 $ 28,342 $ 13,570
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse Municipal Money Fund** $ 77,848
- --------------------------------------------- ----------------
Credit Suisse U.S. Government Money Fund** $158,320
- ----------------------------------------------------------------------------------------------------------------------
** The Class A shares of these Funds were previously called Common Class
shares.
-26-
The amount of fees and expenses each Portfolio actually has paid under its
Plan during its most recent fiscal year, as well as the amount of fees and
expenses that each Portfolio would have paid if the Proposed Distribution Plan
had been in effect for the last fiscal year, are shown below. All payments have
been, or would be, made to CSAMSI.
For the fiscal year ended October 31, 2002.
Annual Fund Operating Expenses
- -------------------------------
(as a percentage of average net
assets)
High Income Fund
--------------------------------------------------------------------------------------------------
Common Class Class A Class B Class C
------------------------ ---------------------- ---------------------- -----------------------
Actual 2002 Pro Forma Actual 2002 Pro Forma Actual 2002 Pro Forma Actual 2002 Pro Forma
------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------
Management fee 0.70% 0.70% 0.70% 0.70% 0.70% 0.70% 0.70% 0.70%
Service/distribution
(12b-1) fees 0.25% 0.25% 0.25% 0.25% 1.00% 1.00% 1.00% 1.00%
Other expenses 2.19% 2.19% 2.12% 2.12% 2.12% 2.12% 2.12% 2.12%
------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------
Total annual fund
operating
expenses* 3.14% 3.14% 3.07% 3.07% 3.82% 3.82% 3.82% 3.82%
============ =========== ============ =========== ============ =========== ============ ==========
* Actual fees and expenses for the fiscal year 2002 (after waivers and
reimbursements) and Pro Forma information based on those fees and expenses
are:
Expenses after Waivers and Reimbursements
- -----------------------------------------
High Income Fund
--------------------------------------------------------------------------------------------------
Common Class Class A Class B Class C
------------------------ ---------------------- ---------------------- -----------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma Actual Pro Forma
------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------
Management fee 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Service/distribution
(12b-1) fees 0.25% 0.25% 0.25% 0.25% 1.00% 1.00% 1.00% 1.00%
Other expenses 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------
Net annual fund
operating
expenses* 1.10% 1.10% 1.10% 1.10% 1.85% 1.85% 1.85% 1.85%
============ =========== ============ =========== ============ =========== ============ ===========
-27-
Municipal Money Fund U.S. Government Money Fund
Class A Class A
------------------------------ ------------------------------
Actual 2002 Pro Forma Actual 2002 Pro Forma
----------- --------- ----------- ---------
Management fee 0.40% 0.40% 0.40% 0.40%
Service/distribution (12b-1) fees 0.10% 0.25% 0.20% 0.25%
Other expenses 0.40% 0.40% 0.49% 0.49%
Total annual fund operating
expenses* 0.90% 1.05% 1.09% 1.14%
* Actual fees and expenses for the fiscal year 2002 (after waivers and
reimbursements) and Pro Forma information based on those fees and expenses
are:
Expenses after Waivers and Reimbursements
- -----------------------------------------
Municipal Money Fund U.S. Government Money Fund
Class A Class A
------------------------------ -------------------------------
Actual 2002 Pro Forma Actual 2002 Pro Forma
----------- --------- ----------- ---------
Management fee 0.40% 0.25% 0.21% 0.16%
Service/distribution (12b-1) fees 0.10% 0.25% 0.20% 0.25%
Other expenses 0.40% 0.40% 0.49% 0.49%
Net annual fund operating
expenses* 0.90% 0.90% 0.90% 0.90%
The Example below shows the effect of the Proposed Distribution Plans on
Portfolio expenses. The Example assumes that you invested $10,000 over the years
indicated, reinvested all distributions, earned a hypothetical 5% annual return,
paid the maximum applicable sales charges and closed your account at the end of
each of the time periods shown and that the expense ratios are as listed above
(before any expense waivers or reimbursements). For Class B shares, the Example
also assumes the automatic conversion to Class A shares after eight years.
HIGH INCOME FUND Common Class Class A Class B Class B Class C Class C
--------------- ---------------- --------------- --------------- --------------- ----------------
Redemption at Redemption at
No Redemption End of Period No Redemption End of Period
--------------- --------------- --------------- ----------------
Actual Pro Actual Pro Actual Pro Actual Pro Actual Pro Actual Pro
2002 Forma 2002 Forma 2002 Forma 2002 Forma 2002 Forma 2002 Forma
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Year 1 $ 317 $ 317 $ 770 $ 770 $ 384 $ 384 $ 784 $ 784 $ 384 $ 384 $ 484 $ 484
Year 3 $ 969 $ 969 $1,378 $1,378 $1,166 $1,166 $1,366 $1,366 $1,166 $1,166 $1,166 $1,166
Year 5 $1,645 $1,645 $2,009 $2,009 $1,967 $1,967 $1,967 $1,967 $1,967 $1,967 $1,967 $1,967
Year 10 $3,448 $3,448 $3,697 $3,697 $3,892 $3,892 $3,892 $3,892 $3,892 $3,892 $3,892 $3,892
-28-
Municipal Money Fund U.S. Government Money Fund
Class A Class A
------------------------------ ------------------------------
Actual 2002 Pro Forma Actual 2002 Pro Forma
----------- --------- ----------- ---------
Year 1 $ 92 $107 $111 $116
Year 3 $287 $334 $347 $362
Year 5 $498 $579 $601 $628
Year 10 $1,108 $1,283 $1,329 $1,386
Proposed Distribution Plans
The terms of the Proposed Distribution Plans approved by the Board pursuant
to Rule 12b-1 and proposed for shareholder approval are similar in all material
respects to the Current Distribution Plans except that they are
"compensation"-type plans. Under the Proposed Distribution Plans, the annual
level of payment is fixed in advance, regardless of whether CSAMSI incurs more
or less expenses than the fixed level. By converting to a compensation plan,
CSAMSI will be able to charge the maximum amount on an ongoing basis, which will
have the effect of smoothing out fluctuations in distribution-related expenses
payable by the Funds. It will also promote administrative efficiency in the
Credit Suisse Fund family, since all other funds in the complex have
compensation-type 12b-1 plans. Under the Proposed Distribution Plans, to the
extent that expenses are below the maximum amount, then CSAMSI would profit
under a compensation plan, and to the extent that a Portfolio's distribution
expenses exceed amounts payable under the proposed compensation plans, CSAMSI
would incur a loss. Currently, CSAMSI incurs more expenses than the maximum
amount for each class of the Credit Suisse High Income Fund and less expenses
than the maximum amount for the Municipal Money and U.S. Government Money Funds.
If the Funds adopt the Proposed Distribution Plans, under the current expense
levels, CSAMSI would continue to lose money on each class of the Credit Suisse
High Income Fund, but would earn a profit on the Credit Suisse Municipal Money
and Credit Suisse U.S. Government Money Funds. Based on assets as of October 31,
2002, CSAMSI would have earned a profit of $70,800 and $23,900 for the Credit
Suisse Municipal Money and Credit Suisse U.S. Government Funds, respectively,
had the Proposed Distribution Plans been in effect at a .25% level.
Each Proposed Distribution Plan will continue in effect as to each
Portfolio from year to year if specifically approved annually (a) by the
majority of such Portfolio's outstanding voting shares or by the Board of
Directors and (b) by the vote of a majority of the Independent Directors who
have no direct or indirect financial interest in the operation of the Plans.
While a Plan remains in effect, CSAMSI shall prepare and furnish to the Board of
Directors a written report setting forth the amounts spent by each Portfolio
under the Distribution Plan and the purposes for which such expenditures were
made. A Proposed Distribution Plan may not be amended to materially increase the
amount to be spent for distribution without shareholder approval, and all
material amendments to the Distribution Plan must be approved by the Board and
by the Independent Directors who have no direct or indirect financial interest
in the operation of the Plan, cast in person at a meeting called specifically
for that purpose.
-29-
Board Deliberations
In approving each Proposed Distribution Plan and in accordance with the
requirements of Rule 12b-1 under the 1940 Act, the Directors, including the
Independent Directors (each of whom has no direct or indirect financial interest
in the operation of the Proposed Distribution Plan or in any agreements related
to the Plans), considered various factors, including (i) whether the
Distribution Plan will result or has resulted in a benefit to the Funds'
shareholders by resolving or alleviating existing problems or circumstances of
the Funds, (ii) the merits of alternative distribution methods, (iii) the
interrelationship between the Distribution Plan and the activities of other
persons financing the distribution of Fund shares and (iv) the extent to which
third parties may benefit from the Distribution Plan and how these benefits
compare to the benefits experienced by the Funds from the Distribution Plan.
Based on these and other factors, the Board determined that there is a
reasonable likelihood that each Proposed Distribution Plan will benefit each
Portfolio and its shareholders.
Required Vote
Approval of Proposal 3 requires the vote of a "majority of the outstanding
voting securities" of each class of each Portfolio entitled to vote on the
Proposal, as defined in the 1940 Act, which means the vote of 67% or more of the
voting securities of each such class entitled to vote on the Proposal that are
present at the meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or the vote of more than 50% of the
outstanding voting securities entitled to vote on the Proposal, whichever is
less.
THE BOARD OF EACH FUND, INCLUDING THE INDEPENDENT DIRECTORS (EACH OF WHOM
HAS NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE OPERATION OF THE PROPOSED
DISTRIBUTION PLAN OR IN ANY AGREEMENTS RELATED TO THE PLANS), UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PROPOSED
DISTRIBUTION PLAN.
-30-
PROPOSAL 4:
TO MODIFY AND/OR ELIMINATE CERTAIN FUND INVESTMENT RESTRICTIONS
Each Fund has adopted certain investment restrictions or policies that are
"fundamental," meaning that as a matter of law they cannot be changed without
shareholder approval. Over time, some Funds have adopted fundamental
restrictions to reflect certain regulatory, business or industry conditions.
Changes in applicable law now permit investment companies like the Funds to
remove certain of these restrictions. Investment companies, however, are
required to have fundamental investment restrictions on the topics addressed in
Proposals 4A-4D.
Each Fund's Board, together with the Fund's officers and CSAM, have
reviewed each Fund's current fundamental restrictions and have concluded that
certain restrictions should be removed or revised based on the development of
new practices and changes in applicable law and to facilitate administration of
the Fund. At the Special Meeting, shareholders will be asked to approve the
revised restrictions and to reclassify certain other fundamental restrictions as
non-fundamental.
The revised restrictions maintain important investor protections while
providing flexibility to respond to changing markets, new investment
opportunities and future changes in applicable law. In some cases, only
technical changes are being made. The proposed modifications are expected to
facilitate the management of the Funds' assets and simplify the process of
monitoring compliance with investment restrictions. The revised restrictions
(with variations required by the specific investment focus of each Fund) will be
the standard form for new Funds in the Credit Suisse Fund complex.
The revised restrictions do not affect the investment objectives of the
Funds, which remain unchanged. The Funds will continue to be managed in
accordance with the investment restrictions described in their Prospectuses,
Statements of Additional Information and in accordance with federal law. The
revised restrictions would give the Funds an increased ability to engage in
certain activities. The Directors may consider and adopt such non-fundamental
investment restrictions for the Funds as they determine to be appropriate and in
the shareholders' best interests. Except where indicated below, the proposed
modifications are not expected to significantly affect the manner in which Funds
are managed, the investment programs of the Funds or the investment performance
of the Funds. The Boards do not anticipate that the changes, individually or in
the aggregate, will result in a material change in the level of investment risk
associated with an investment in any Fund, except where indicated below.
The Boards unanimously recommend that shareholders vote to amend or remove
each Fund's fundamental investment restrictions as discussed below. The Funds
affected by the proposed changes are listed in italics at the beginning of each
section. Each section sets out the fundamental investment restrictions that will
apply to each Fund if shareholders of that Fund approve the Proposal. To be
approved for a Fund, each proposal must receive the vote of a "majority of the
outstanding voting securities" of the Fund entitled to vote on the proposal, as
defined in the 1940 Act, which means the vote of 67% or more of the voting
securities entitled to vote on the proposal that are present at the Special
Meeting, if the holders of more than 50% of the outstanding shares are present
or represented by proxy, or the vote of more than 50% of the
-31-
outstanding voting securities of the Fund entitled to vote on the proposal,
whichever is less. If any proposal is not approved for a Fund, then the Fund's
existing fundamental restriction on that topic will remain in effect, although
the Boards may take other appropriate action, including resoliciting
shareholders. If shareholders approve the following changes to the fundamental
investment restrictions of a Fund, such changes will become effective as of June
1, 2003.
Proposal No. 4-A: To Modify the Fundamental Investment Restriction on Borrowing
Money.
Funds to which this Proposal applies: All Funds except Institutional Money
Market Fund, Municipal Money Fund (a series of Opportunity Funds) and U.S.
Government Money Fund (a series of Opportunity Funds)
If shareholders of a Fund approve Proposal 4-A, each Fund's current
fundamental investment restriction on borrowing money would be modified to read
as follows:
"The Fund may not borrow money, except to the extent permitted
under the 1940 Act."
Discussion of Proposed Modifications. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may borrow money. Under the 1940 Act, a fund may borrow money
from a bank for any purpose up to 33-1/3% of its total assets. Currently,
however, the borrowing authority of the individual Funds varies from 10% to
33-1/3% of the Fund's total assets. In addition, the borrowing authority of the
Funds varies with respect to their ability to borrow from entities other than
banks and to engage in reverse repurchase agreements or dollar rolls. (Reverse
repurchase agreements involve the sale of securities held by a Fund pursuant to
the Fund's agreement to repurchase the securities at an agreed upon date and
price, which typically reflects the current market rate of interest. In a dollar
roll transaction, the Fund sells a security and agrees to buy a substantially
similar security for future delivery.) Certain of the Funds also have
fundamental or non-fundamental restrictions limiting their ability to purchase
securities while borrowings in excess of 5% of the Fund's assets are outstanding
and/or to pledge assets.
The proposed modifications would: (1) permit borrowings of up to 33-1/3% of
total assets; (2) permit the use of reverse repurchase agreements or dollar
rolls; (3) remove the restrictions that allow borrowings to be made only from
banks (the 1940 Act currently allows a fund to borrow any amount in excess of 5%
of its total assets only from banks; however, the SEC has permitted some mutual
funds to borrow from other funds, although there is no assurance that the SEC
would grant the Credit Suisse Funds such permission, and other possibilities may
develop as the financial services industry continues to evolve); and (4) remove
the restrictions that limit the purchase of securities when loans are
outstanding.
For example, removing the fundamental investment restrictions on purchasing
securities when borrowings are greater than 5% of a Fund's assets will enhance
the Funds' flexibility in emergency situations. To the extent a Fund borrows
money, positive or negative performance by the Fund's investments may be
magnified.
-32-
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-A.
Proposal No. 4-B: To Modify the Fundamental Investment Restriction on Lending.
Funds to which this Proposal applies: All Funds except Institutional Money
Market Fund, Municipal Money Fund (a series of Opportunity Funds) and U.S.
Government Money Fund (a series of Opportunity Funds)
If shareholders of a Fund approve Proposal 4-B, the Fund's current
fundamental investment restriction on lending would be modified to read as
follows:
"The Fund may not make loans except through loans of portfolio
securities, entry into repurchase agreements, acquisitions of
securities consistent with its investment objective and
policies and as otherwise permitted by the 1940 Act."
Discussion of Proposed Modifications. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may lend. The Funds' current fundamental investment restrictions
on lending vary. Most generally prohibit the making of loans (except for the
lending of portfolio securities) and specify that an investment in debt
instruments does not constitute the making of a loan. Most of the Funds also
specifically except repurchase agreements from their lending restrictions. (A
repurchase agreement is an agreement to purchase a security, coupled with an
agreement to sell that security back to the original seller at an agreed upon
date, at a price that generally depends on current interest rates. The 1940 Act
treats these agreements as loans.)
The new restriction would allow the Funds to lend to the full extent
permitted under the 1940 Act. SEC staff interpretations of the 1940 Act
generally prohibit funds from lending more than one-third of their total assets,
except through the purchase of debt obligations or the use of repurchase
agreements.
The proposed modifications also would: (1) permit securities lending and
the use of repurchase agreements by all the Funds; and (2) eliminate minor
differences in the wording of the Funds' fundamental investment restrictions on
lending.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-B.
Proposal No. 4-C: To Modify the Fundamental Investment Restriction on Real
Estate Investments.
Funds to which this Proposal applies: All Funds except Institutional Money
Market Fund, Municipal Money Fund (a series of Opportunity Funds) and U.S.
Government Money Fund (a series of Opportunity Funds)
If shareholders of a Fund approve Proposal 4-C, the Fund's current
fundamental investment restriction on real estate investments would be modified
to read as follows:
-33-
"The Fund may not purchase or sell real estate, provided that
the Fund may invest in securities secured by real estate or
interests therein or issued by companies that invest or deal
in real estate or interests therein or are engaged in the real
estate business, including real estate investment trusts."
Discussion of Proposed Modifications. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may engage in the purchase and sale of real estate. The Funds'
current fundamental investment restrictions on real estate investments generally
prohibit the purchase or holding of real estate, except for the purchase or
holding of securities collateralized by real estate or interests therein.
Certain of the Funds also explicitly prohibit the selling of real estate except
for real estate acquired as a result of the Fund's ownership of securities.
The proposed new restriction would: (1) preserve the ability to invest in
all real estate-related securities and companies whose business consists in
whole or in part of investing in real estate (provided that the investment is
otherwise consistent with a Fund's investment program); (2) clarify the Funds'
ability to invest in real estate investment trusts; and (3) eliminate minor
differences in the wording of the Funds' fundamental investment restrictions on
real estate investments. As a result of exercising its rights attached to real
estate-related securities, a Fund could eventually own an interest in real
property. If this occurs, the Fund would dispose of the property as soon as
practicable, consistent with the Fund's best interests.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-C.
Proposal No. 4-D: To Modify the Fundamental Investment Restriction on Investing
in Commodities.
Fund to which this Proposal applies: Tax Efficient Fund
If shareholders of the Fund approve Proposal 4-D, the Fund's current
fundamental investment restriction on investing in commodities would be modified
to read as follows:
"The Fund may not invest in commodities except that the Fund
may purchase and sell futures contracts and options on futures
contracts."
Discussion of Proposed Modifications. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may engage in the purchase and sale of commodities. The Fund's
current fundamental investment restriction on investing in commodities generally
prohibits the purchase or sale of commodities.
The proposed modifications would: (1) clarify the types of commodities
transactions that are permissible for the Fund; and (2) give the Fund the same
flexibility other Credit Suisse Funds enjoy to use futures and related options.
-34-
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-D.
Proposal No. 4-E: To Remove the Fundamental Investment Restriction on Short
Sales.
Funds to which this Proposal applies: Capital Appreciation Fund, Cash Reserve
Fund, Emerging Growth Fund, Emerging Markets Fund, Fixed Income Fund, Global
Fixed Income Fund, Global Post-Venture Capital Fund, International Focus
Portfolio of the Institutional Fund, Large Cap Value Portfolio of the
Institutional Fund, Small Cap Growth Portfolio of the Institutional Fund,
Investment Grade Bond Fund, Japan Growth Fund, New York Municipal Fund, New York
Tax Exempt Fund, High Income Fund (a series of the Opportunity Funds), Municipal
Money Market Fund (a series of the Opportunity Funds), U.S. Government Money
Fund (a series of the Opportunity Funds), Short Duration Bond Fund, Emerging
Growth Portfolio of the Credit Suisse Trust, Emerging Markets Portfolio of the
Credit Suisse Trust, International Focus Portfolio of the Credit Suisse Trust,
Large Cap Value Portfolio of the Credit Suisse Trust and Small Cap Growth
Portfolio of the Credit Suisse Trust
If shareholders of a Fund approve Proposal 4-E, the Fund's current
fundamental investment restriction on short sales would be removed and the Board
may adopt a non-fundamental investment restriction on short sales that, in the
future, could be modified without shareholder approval.
Discussion of Proposed Modifications. The Funds are not required to have a
fundamental investment restriction on short sales of securities. Typically, in a
short sale, an investor borrows a security from a lender, sells that security to
a third party, and is obligated to return an identical security to the lender.
The obligation to return an identical security to the lender involves the risk
that the price of the securities that the borrower is obligated to purchase (and
then return to the lender) may be higher than the price the borrower received
for the sale of the securities. Currently, several of the Funds have fundamental
investment restrictions that prohibit short sales of securities, but permit
short positions in other financial instruments, such as futures. The Board of
each Fund would retain the flexibility to adopt non-fundamental restrictions
geared to the specific Fund's investment goals.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-E.
Proposal No. 4-F: To Remove the Fundamental Investment Restriction on Margin
Transactions.
Funds to which this Proposal applies: Capital Appreciation Fund, Tax Efficient
Fund (a series of the Capital Funds), Large Cap Value Fund (a series of the
Capital Funds), Small Cap Value Fund (a series of the Capital Funds), Cash
Reserve Fund, Emerging Growth Fund, Emerging Markets Fund, Fixed Income Fund,
Global Fixed Income Fund, Global Post-Venture Capital Fund, International Focus
Portfolio of the Institutional Fund, Large Cap Value Portfolio of the
Institutional Fund, Small Cap Growth Portfolio of the Institutional Fund,
International Focus Fund, Japan Growth Fund, New York Municipal Fund, New York
Tax Exempt Fund, Short Duration Bond Fund, Small Cap Growth Fund, Emerging
Growth Portfolio of the Credit Suisse Trust, Emerging Markets Portfolio of the
Credit Suisse Trust, Global Post-Venture Capital
-35-
Portfolio of the Credit Suisse Trust, International Focus Portfolio of the
Credit Suisse Trust, Large Cap Value Portfolio of the Credit Suisse Trust and
Small Cap Growth Portfolio of the Credit Suisse Trust
If shareholders of a Fund approve Proposal 4-F, the Fund's current
fundamental investment restriction on margin transactions would be removed. The
Board could adopt a non-fundamental investment restriction on margin
transactions in the future that could be modified without shareholder approval.
Discussion of Proposed Modifications. The Funds are not required to have a
fundamental investment restriction on margin transactions. Margin transactions
involve the purchase of securities with money borrowed from a broker or
elsewhere. Currently, many of the Funds have fundamental investment restrictions
that prohibit margin transactions, except where, for example, borrowing is
necessary for the clearance of transactions or the margin transaction involves
the use of futures and other financial instruments. The proposed modifications
would give each relevant Fund greater flexibility to operate consistent with the
1940 Act and relevant SEC rules and interpretation.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-F.
Proposal No. 4-G: To Remove the Fundamental Investment Restriction on
Investments in Oil, Gas and Mineral Programs.
Funds to which this Proposal applies: Capital Appreciation Fund, Cash Reserve
Fund, Emerging Growth Fund, Emerging Markets Fund, Fixed Income Fund, Global
Fixed Income Fund, Global Post-Venture Capital Fund, International Focus
Portfolio of the Institutional Fund, Large Cap Value Portfolio of the
Institutional Fund, Small Cap Growth Portfolio of the Institutional Fund,
Government Portfolio of the Institutional Money Market Fund, Prime Portfolio of
the Institutional Money Market Fund, International Focus Fund, Investment Grade
Bond Fund, Japan Growth Fund, New York Municipal Fund, New York Tax Exempt Fund,
Short Duration Bond Fund, Small Cap Growth Fund, Emerging Growth Portfolio of
the Credit Suisse Trust, Emerging Markets Portfolio of the Credit Suisse Trust,
Global Post-Venture Capital Portfolio of the Credit Suisse Trust, International
Focus Portfolio of the Credit Suisse Trust, Large Cap Value Portfolio of the
Credit Suisse Trust and Small Cap Growth Portfolio of the Credit Suisse Trust
If shareholders of a Fund approve Proposal 4-G, the Fund's current
fundamental investment restriction on investments in oil, gas and mineral
programs would be removed.
Discussion of Proposed Modifications. There is no federal requirement that
the Funds have a fundamental investment restriction on oil, gas and mineral
investments. In order to maximize each Fund's investment flexibility, the Boards
propose that each Fund's restriction on oil, gas, and mineral investments be
removed.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-G.
Proposal No. 4-H: To Remove the Fundamental Investment Restriction on Investing
for the Purpose of Exercising Control.
Funds to which this Proposal applies: Tax Efficient Fund, Large Cap Value Fund
and Small Cap Value Fund, each a series of the Capital Funds
If shareholders of a Fund approve Proposal 4-H, the Fund's current
fundamental investment restriction on investing for the purpose of exercising
control would be removed.
Discussion of Proposed Modifications. There is no federal requirement that
the Funds have an affirmative restriction on this subject if they do not intend
to make investments for the purpose of exercising control. Moreover, there is no
requirement that any restriction that they do have regarding control be
categorized as fundamental. In order to maximize each Fund's investment
flexibility, the Boards propose that each Fund's restriction on investing for
the purpose of exercising control or management be removed.
-36-
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-H.
Proposal No. 4-I: To Remove the Fundamental Investment Restriction on
Investments in Issuers Whose Securities Are Owned by Officers and Directors of
the Fund or its Investment Adviser.
Funds to which this Proposal applies: Tax Efficient Fund and Large Cap Value
Fund, each a series of the Capital Funds
If shareholders of a Fund approve Proposal 4-I, the Fund's current
fundamental investment restriction on investments in issuers whose securities
are owned by officers and directors of the Fund or its investment adviser would
be removed.
Discussion of Proposed Modifications. There is no federal requirement that
the Funds have a fundamental investment restriction on this subject. In order to
maximize each Fund's investment flexibility, the Boards propose that this
restriction be removed. The removal of this investment restriction will not
remove any existing safeguard against transactions involving conflicts of
interest between portfolio companies and the Funds' directors/trustees, officers
or advisers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-I.
Proposal No. 4-J: To Remove the Fundamental Investment Restriction on
Investments in Securities of Issuers That Have Been in Operation Less than Three
Years.
Funds to which this Proposal applies: Tax Efficient Fund and Large Cap Value
Fund, each a series of the Capital Funds and the International Focus Portfolio
of the Institutional Fund
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If shareholders of a Fund approve Proposal 4-J, the Fund's current
fundamental investment restriction on investments in securities of issuers that
have been in operation less than three years would be removed.
Discussion of Proposed Modifications. There is no federal requirement that
the Funds have a fundamental investment restriction on investments in securities
of issuers that have been in operation less than three years. In order to
maximize the Funds' investment flexibility, the Boards propose that this
restriction be removed. Although the Funds do not currently intend to invest to
a greater extent in issuers that have been in operation less than three years,
such investments can be more volatile than investments in more seasoned issuers.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-J.
Proposal No. 4-K: To Remove the Fundamental Investment Restriction on Pledging
Assets.
Funds to which this Proposal applies: Tax Efficient Fund, Large Cap Value Fund
and Small Cap Value Fund, each a series of the Capital Funds
If shareholders of a Fund approve Proposal 4-K, the Fund's current
fundamental investment restrictions on pledging assets would be removed and the
Board would adopt a non-fundamental investment restriction on pledging assets
that could, in the future, be modified without shareholder approval. The
non-fundamental investment restriction on pledging assets would state as
follows:
"The Fund may not pledge, mortgage or hypothecate its
assets except to secure permitted borrowings or as
otherwise permitted under the 1940 Act."
Discussion of Proposed Modifications. There is no federal requirement that
the Funds have a fundamental investment restriction on pledging assets. It is
advantageous to remove the fundamental investment restrictions on pledging
assets for the Funds that have it and to permit the Board to address such
situations on a case-by-case basis when it considers the approval of lines of
credit or other borrowing arrangements, consistent with current industry
practice and market conditions. In order to maximize the Funds' investment
flexibility, the Boards propose that this fundamental investment restriction be
removed.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-K.
Proposal No. 4-L: To Remove the Fundamental Investment Restriction on
Investments in Securities Issued by Other Investment Companies.
Funds to which this Proposal applies: Capital Appreciation Fund, Tax
Efficient Fund (a series of the Capital Funds), Large Cap Value Fund (a series
of the Capital Funds), Cash Reserve Fund, Emerging Growth Fund, Global Fixed
Income Fund, International Focus Fund,
-38-
Investment Grade Bond Fund, Japan Growth Fund, New York Municipal Fund and New
York Tax Exempt Fund
If shareholders of a Fund approve Proposal 4-L, the Fund's current
fundamental investment restriction on investments in securities issued by other
investment companies would be removed and the Board would adopt a
non-fundamental investment restriction on investing in other investment
companies that could, in the future, be modified without shareholder approval.
The non-fundamental investment restriction on investing in other investment
companies would state as follows:
"The Fund may not invest in other investment
companies except to the extent permitted by the 1940
Act."
Discussion of Proposed Modifications. The 1940 Act limits the extent to
which funds may acquire securities of other investment companies. There is no
federal requirement, however, that the Funds have a fundamental investment
restriction regarding investments in other investment companies. In order to
maximize the Funds' investment flexibility, the Boards propose that this
restriction be removed. Any such investment would still be subject to the
requirements of the 1940 Act. As a result of having recently received an SEC
order of exemption permitting Credit Suisse Funds to invest excess cash and
collateral from securities lending activities in Credit Suisse money market
funds, the Funds may invest to a greater extent in securities issued by other
investment companies than they have in the past. Such an investment may involve
indirect expenses to the Funds' shareholders because they will be subject to the
expenses of the investment company in which the Funds invest.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-L.
Proposal No. 4-M: To Remove the Fundamental Investment Restriction on Joint
Participation in Securities Trading Accounts.
Funds to which this Proposal applies: Tax Efficient Fund and Large Cap Value
Fund, each a series of the Capital Funds
If shareholders of a Fund approve Proposal 4-M, the Fund's current
fundamental investment restriction on joint participation in securities trading
accounts would be removed.
Discussion of Proposed Modifications. The 1940 Act limits the extent to
which funds may participate in joint transactions with their affiliates. There
is no federal requirement, however, that the Fund have a fundamental investment
restriction regarding such transactions. In order to maximize each Fund's
investment flexibility, this restriction should be removed. The Funds will
remain subject to the various prohibitions in the 1940 Act, such as Sections
17(a) and 17(d) and the rules thereunder, which are designed to address
overreaching by affiliated parties of the Funds.
-39-
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-M.
Proposal No. 4-N: To Remove the Fundamental Investment Restrictions on
Purchasing Warrants.
Funds to which this Proposal applies: Cash Reserve Fund
If shareholders of a Fund approve Proposal 4-N, the Fund's current
fundamental investment restriction prohibiting the purchase of warrants would be
removed.
Discussion of Proposed Modification. There is no federal requirement that
the Fund have a fundamental investment restriction regarding purchases of
warrants. In order to maximize the Fund's investment flexibility, the Board
proposes that the Fund's fundamental investment restriction on the purchase of
warrants be removed. As a money market fund, there is no intention for the Fund
to invest in warrants. The change would, however, conform the Fund's restriction
in this area to that of other Credit Suisse Funds.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-N.
Proposal No. 4-O: To Remove the Fundamental Policy of Concentrating in Banking
Industry.
Fund to which this Proposal applies: Cash Reserve Fund
If shareholders of the Fund approve Proposal 5-O, the Fund's current
fundamental policy of concentrating in the banking industry would be removed.
The Fund's concentration policy would then be the same as the other Credit
Suisse taxable money market funds, and would read as follows:
"The Fund may not purchase any securities which would
cause more than 25% of the value of the Fund's total
assets at the time of purchase to be invested in the
securities of issuers conducting their principal
business activities in the same industry; provided
that there shall be no limit on the purchase of
obligations issued or guaranteed by the United
States, the District of Columbia or any of their
authorities."
Discussion of Proposed Modification. The Fund is not required to have a
fundamental investment policy of concentrating in banking industry. In order to
maximize the Fund's investment flexibility, the Board propose that the Fund's
policy of concentrating its investments in the banking industry be removed. The
change should enable the Fund to better take advantage of a broader range of
money market opportunities. If shareholders of the Fund approve Proposal 4-O,
the Fund would have no limit on its ability to invest in U.S. bank obligations,
but, under current SEC guidance, would be limited to investing 25% of its assets
in foreign bank obligations.
-40-
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-O.
Proposal No. 4-P: To Remove the Fundamental Investment Restriction on Investment
in Equity Securities, Corporate Bonds and Municipal Bonds.
Fund to which this Proposal applies: Cash Reserve Fund
If shareholders of the Fund approve Proposal 4-P, the Fund's current
fundamental investment restriction on this subject would be removed.
Discussion of Proposed Modification. The Fund is not required to have a
fundamental investment restriction on investing in equity securities, corporate
bonds and municipal bonds. In order to maximize the Fund's investment
flexibility, the Board proposes that the Fund's restriction on this subject be
removed. As a money market fund, there is no intention for the Fund to invest in
equity securities, although the Fund may invest in corporate and municipal bonds
that are suitable investments for money market funds to the extent consistent
with the Fund's investment objective and policies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-P.
Proposal No. 4-Q: To Remove the Fundamental Investment Restriction on Acquiring
More Than 10% of Voting Securities of Any One Issuer.
Fund to which this Proposal applies: Fixed Income Fund.
If shareholders of the Fund approve Proposal 4-Q, the Fund's current
fundamental investment restriction on acquiring more than 10% of voting
securities of any one issuer would be removed.
Discussion of Proposed Modification. The Fund is not required to have a
fundamental investment restriction on acquiring more than 10% of the voting
securities of any one issuer. The 10% limitation is more stringent than the per
issuer limit applicable to diversified funds generally, which applies this limit
to only 75% of a fund's assets. Rather than modifying the limit, the Board
proposes that the Fund's per issuer limit be removed as it is subsumed by the
Fund's determination to be a diversified investment company under the 1940 Act,
which status could not be changed except with shareholder approval.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-Q.
Proposal No. 4-R: To Remove the Fundamental Investment Restriction on Investing
in Restricted Securities.
Fund to which this Proposal applies: Small Cap Value Fund
-41-
If shareholders of the Fund approve Proposal 4-R, the Fund's current
fundamental investment restriction on investing in restricted securities would
be removed, and the Board would adopt a non-fundamental investment restriction
on investing in restricted securities that could, in the future, be modified
without shareholder approval. The non-fundamental investment restriction on
investing in restricted securities would state as follows:
"The Fund may not invest more than 15% of the value
of the Fund's net assets in securities which may be
illiquid because of legal or contractual restrictions
on resale or securities for which there are no
readily available market quotations."
Discussion of Proposed Modification. A restriction on investing in
restricted securities is required by the 1940 Act, but it is not required to be
a fundamental restriction. Consistent with current SEC guidance, the proposed
non-fundamental investment restriction would limit investments in restricted
securities to 15% of the Fund's net assets. Restricted securities involve
additional risks, including that it may be difficult to obtain an accurate price
for the security and that it may be difficult or impossible to sell the security
at the time and the price that the Fund would like.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 4-R
-42-
PROPOSAL 5:
TO CHANGE THE INVESTMENT OBJECTIVE
OF EACH FUND FROM FUNDAMENTAL TO NON-FUNDAMENTAL
Funds to which this Proposal applies: All Funds
Every registered investment company is required to state its investment
objective, i.e., the goal of its investment program, in its prospectus. There is
no requirement that a fund's investment objective be fundamental, but most
funds, including the Funds, have stated that their investment objectives are
fundamental. The Boards of Directors of the Funds have approved a proposal to
make each Fund's investment objective non-fundamental.
If approved by shareholders, this change would mean that the Board would be
able to change a Fund's investment objective in the future without further
approval by shareholders. This change would enhance a Fund's flexibility by
allowing a Board to more easily alter the Fund's investment objective when the
Board believes it is in the best interests of shareholders or when necessary to
comply with possible future regulatory changes. Fund shareholders would receive
prior notice of any change to a Fund's investment objective. The Boards have no
current intention of changing any Fund's investment objective.
To be approved for a Fund, this Proposal must receive the vote of a
"majority of the outstanding voting securities" of the Fund entitled to vote on
the proposal, as defined in the 1940 Act, which means the vote of 67% or more of
the voting securities entitled to vote on the proposal that are present at the
Special Meeting, if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or the vote of more than 50% of the outstanding
voting securities of the Fund entitled to vote on the proposal, whichever is
less. If this Proposal is not approved for a Fund, then that Fund's investment
objective will remain fundamental. The Board of the Fund would consider any
other appropriate action, including resoliciting shareholder approval of the
change.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL 5.
-43-
PROPOSAL 6:
TO AMEND CERTAIN FUND'S ORGANIZATIONAL DOCUMENTS
Each Fund, like other mutual funds, is subject to comprehensive federal
regulation, particularly under the 1940 Act. Additionally, like other mutual
funds, governance of each Fund is subject to the law of the state in which the
Fund is organized. Each Fund is organized either as a Maryland corporation, a
Massachusetts business trust or a Delaware statutory trust, and therefore is
subject to Maryland law, Massachusetts law or Delaware law, respectively, as it
applies to these entities.
Under Massachusetts or Delaware law, a business trust or statutory trust
generally operates under an organizational document known as a declaration of
trust, which sets forth various provisions related to governance of the trust
and the authority of the trust to conduct its business (the "Declaration of
Trust"). Under Maryland law, a corporation operates under an organizational
document known as articles of incorporation. The Declaration of Trust and
articles of incorporation will be referred to as a "Charter Document."
Having determined that the amendments to the Charter Document of various
Funds as set forth in Proposals 6-A and 6-B below are advisable, the Board of
each Fund approved such amendments and unanimously recommends that the
shareholders of each Fund approve amendments to the Charter Document. Amendments
to the Charter Document will not result in any changes in the Fund's Directors
or officers or in the investment policies and shareholder services described in
each Fund's current prospectus.
Generally, shareholder approval is required to amend the existing Charter
Document. For this reason, the Directors approved the amendments to the Charter
Document and recommended the submission of the amendments to the shareholders
for their authorization at this Special Meeting.
The amended Charter Document is a more modern form of trust instrument or
charter for a Massachusetts business trust, Delaware statutory trust or a
Maryland corporation, and going forward, will be used as the standard Charter
Document for all new Credit Suisse Funds organized as Massachusetts business
trusts, Delaware statutory trusts or Maryland corporations, as applicable. The
Directors believe adoption of the amendments to the Charter Document will result
in more efficient and economical governance of each Fund.
The amendments to the Charter Document provide the Directors with more
flexibility and broader authority than under the current Charter Document. This
increased flexibility is intended to allow the Directors to react more quickly
to changes in competitive and regulatory conditions, and as a consequence, may
allow the Fund to operate in a more efficient and economical manner. Although
the amendments to the Charter Document reduce or remove certain shareholder
voting and other rights as more fully discussed below, adoption of the
amendments to the Charter Document will not affect any of the protections
afforded to shareholders under federal law.
Furthermore, adoption of the amendments to a Charter Document would not
alter the Directors' existing fiduciary obligations to act with due care and in
the shareholders' best
-44-
interests. Before utilizing any new flexibility that an amended Charter Document
would afford, the Directors would first have to consider the shareholders'
interests and then act in accordance with those interests.
Proposal No. 6-A: To amend the Charter Document to allow involuntary redemptions
Funds to which this Proposal applies: All Funds except Short Duration Bond Fund
This amendment would permit the Fund to redeem shares of a class or series
held by a shareholder for any reason if the Board of Directors determines that
doing so is in the best interest of the Fund. The circumstances under which the
Directors could involuntarily redeem shareholders would include, but not be
limited to, (a) a decision to discontinue issuance of shares of a particular
class or classes of capital stock, (b) a decision to combine the assets
belonging to, or attributable to shares of a particular class or classes of
capital stock with those belonging to, or attributable to another class (or
classes) of capital stock, (c) a decision to sell the assets belonging to, or
attributable to a particular class or classes of capital stock to another
registered investment company in exchange for securities issued by the other
registered investment company, or (d) a decision to liquidate the Fund or the
assets belonging to, or attributable to the particular class or classes of
capital stock (subject in each case to any vote of stockholders that may be
required by law notwithstanding the foregoing authority granted to the Board of
Directors). Redemption proceeds may be paid in cash or in kind.
The current Charter Document permits the Directors to involuntarily redeem
shares, but in more limited circumstances. The Fund generally would provide
prior notice of any plan to involuntarily redeem shares absent extraordinary
circumstances.
Of course, the exercise of the power granted to the Directors under either
the current Charter Document or the amended Charter Document to involuntarily
redeem shares would be subject to the Directors' fiduciary obligation to the
shareholders and any applicable provisions under the 1940 Act and the rules
adopted thereunder. The staff of the Securities and Exchange Commission
presently takes the position that the 1940 Act generally prohibits involuntary
redemptions. However, in limited circumstances, the staff has granted
enforcement no-action relief for involuntary redemptions.
In the case of the Funds which are organized as Massachusetts business
trusts (Credit Suisse Capital Appreciation Fund, Credit Suisse Capital Funds,
Credit Suisse Fixed Income Fund, Credit Suisse New York Municipal Fund and
Credit Suisse Trust), clause (i) of Section 6.2(f) (Section 6.2(g) in the case
of Credit Suisse Capital Funds and Credit Suisse Trust) of their Declarations of
Trust would be amended to provide that redemptions at the option of the Trust
would be permitted if the Trustees determined in their sole discretion that
"such redemption is in the best interests of the holders of the shares of the
Trust or of any Portfolio". The existing language, which authorizes the Trustees
to act if "failure to so redeem may have materially adverse consequences to the
holders of the shares of the Trust or of any Portfolio", would be deleted.
Proposal No. 6-B: To amend the Charter Document to permit the Funds or any class
or series thereof to be merged into or combined with another
Fund or class or series
-45-
thereof or into another class or series of the same Fund
without shareholder approval
Funds to which this Proposal applies: Credit Suisse Capital Appreciation Fund,
Credit Suisse Capital Funds (Credit Suisse Tax Efficient Fund, Credit Suisse
Large Cap Value Fund and Credit Suisse Small Cap Value Fund), Credit Suisse
Fixed Income Fund, Credit Suisse New York Municipal Fund, Credit Suisse
Opportunity Funds (Credit Suisse High Income Fund, Credit Suisse Municipal Money
Fund and Credit Suisse U.S. Government Money Fund), and Credit Suisse Trust
(Blue Chip Portfolio, Emerging Growth Portfolio, Emerging Markets Portfolio,
Global Post-Venture Capital Portfolio, Global Technology Portfolio, High Yield
Portfolio, International Focus Portfolio, Large Cap Value Portfolio, Small Cap
Growth Portfolio, Small Cap Value Portfolio and Strategic Small Cap Portfolio)
Unlike the current Declaration of Trust of each Fund, the proposed
amendment to the Declaration of Trust generally would permit the Trustees,
subject to applicable federal and state law, to reorganize or combine the Fund
or any of its series or classes into other Funds, series or classes without
shareholder approval. The current Declaration of Trust of each Fund requires
shareholder approval in order to reorganize or combine the Fund or any of its
series or classes.
Under certain circumstances, it may not be in the shareholders' interests,
due to the costs involved, to require a shareholder meeting to permit a Fund or
a series of the Fund to reorganize or combine into another Fund or series, which
may be through merger or sales of assets or other means. For example, in order
to reduce the cost and scope of state regulatory constraints or to take
advantage of a more favorable tax treatment offered by another state, the
Trustees may determine that it would be in the shareholders' interests to change
its legal form or to reorganize the Fund or a series of the Fund so that it is
domiciled in another state. In addition, because of the small amount of assets
in a Fund or one of its series or classes, it may be appropriate to merge it
into or sell its assets to another Fund or to combine its assets with another
Fund or a series or class of the same Fund. Under the current Declaration of
Trust, the Trustees cannot effectuate such potentially beneficial transactions
without first conducting a shareholder meeting and incurring the attendant costs
and delays.
In contrast, the amendment to the Declaration of Trust would give the
Trustees the flexibility to reorganize a Fund or any of its series into another
Fund or series and achieve potential shareholder benefits without incurring the
delay and costs of a proxy solicitation. Such flexibility should help to assure
that the Fund operates under the most appropriate form of organization and
operates without classes or series that are not economically viable.
Nonetheless, the Trustees have no intention of reorganizing the Funds into
another entity at this time, or of combining any series, class or Fund with any
other series, class or Fund, and before allowing such a transaction to proceed
without shareholder approval, the Trustees would have a fiduciary responsibility
to first determine that the proposed transaction is in the shareholders'
interest. Any exercise of the Trustees' increased authority under the amended
Declaration of Trust is subject to applicable requirements of the 1940 Act and
the applicable Massachusetts or Delaware law. The Fund generally would provide
prior notice of any such transaction except in extraordinary circumstances.
-46-
In the case of the Funds which are organized as Massachusetts business
trusts, clause (iii) of Section 7.1, the second sentence of Section 9.1 and the
first sentence of Section 9.2 would be amended to delete the provisions
requiring shareholder approval with respect to any termination of the Trust or
reorganization of the Trust or any Portfolio.
Required Vote
Having unanimously approved the amendments to the Charter Document, the
Board of each Fund determined to submit the matter for final approval by the
Funds' shareholders. Approval of Proposals 6-A and 6-B requires the vote of a
majority of the shares of each Fund entitled to vote on the Proposals voted in
person or by proxy at the Special Meeting.
THE DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE FOR THE AMENDMENTS TO THE
CHARTER DOCUMENT AS SET FORTH IN PROPOSALS 6-A AND 6-B.
-47-
INFORMATION ON THE FUNDS' INDEPENDENT ACCOUNTANTS
The Board of each Fund has selected PricewaterhouseCoopers LLP ("PwC") as
the independent accountants for each Fund for the current fiscal year. PwC has
been the independent accountants of each of these Funds since the Fund's
inception except for the Credit Suisse Capital Funds and Credit Suisse
Opportunity Funds. PwC became independent accountants of these funds in
September 2001. PwC has informed the Audit Committees for the Funds that it has
no material direct or indirect financial interest in any of the Funds. In the
opinion of the Audit Committees, the services provided by PwC are compatible
with maintaining its independence.
Representatives of PwC are not expected to be present at the Meeting but
have been given the opportunity to make a statement if they so desire and will
be available should any matter arise requiring their presence.
Ernst & Young LLP ("Ernst & Young") served as independent accountants for
Credit Suisse Capital Funds and Credit Suisse Opportunity Funds until September
2001. Ernst & Young resigned as independent accountants effective as of
September 2001. Ernst & Young's reports on the financial statements for the
years immediately preceding their resignation contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope, or accounting principles. During the fiscal years immediately preceding
Ernst & Young's resignation, there were no disagreements with such accountants
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
Audit Fees
The aggregate fees billed by PwC for professional services rendered for the
audit of each Fund's annual financial statements for the most recent fiscal year
and the review of the financial statements included in the Funds' most recent
annual reports to shareholders were:
Credit Suisse Capital Appreciation Fund $
Credit Suisse Capital Funds
Credit Suisse Tax Efficient Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Small Cap Value Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Growth Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
-48-
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse Institutional Fixed Income Fund
Credit Suisse Institutional Fund
Capital Appreciation Portfolio
Harbinger Portfolio
International Focus Portfolio
Investment Grade Fixed Income Portfolio
Large Cap Value Portfolio
Select Equity Portfolio
Small Cap Growth Portfolio
Credit Suisse Institutional High Yield Fund
Credit Suisse Institutional International Fund
Credit Suisse Institutional Money Market Fund
Government Portfolio
Prime Portfolio
Credit Suisse International Focus
Credit Suisse Investment Grade Bond Fund
Credit Suisse Japan Growth Fund
Credit Suisse Municipal Bond Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Opportunity Funds
Credit Suisse High Income Fund
Credit Suisse Municipal Money Fund
Credit Suisse U.S. Government Money Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse Trust
Blue Chip Portfolio
Emerging Growth Portfolio
-49-
Emerging Markets Portfolio
Global Post-Venture Capital Portfolio
Global Technology Portfolio
International Focus Portfolio
Large Cap Value Portfolio
Small Cap Growth Portfolio
Small Cap Value Portfolio
Financial Information Systems Design and Implementation Fees
No fees were billed by PwC for each Fund's most recent fiscal year for
professional services rendered to the Fund relating to financial information
systems design and implementation.
For financial information systems design and implementation services
provided to all entrities controlling, controlled by or under common control
with CSAM that provide services to the Funds, PwC billed $5,100,000. These fees
represent fees paid by Credit Suisse First Boston to PwC Consulting in
connection with the worldwide implementation of PeopleSoft. Effective September
30, 2002 PwC sold PwC Consulting to IBM Corporation and effective on that date
PwC and PwC Consulting became two separate entities.
All Other Fees
For other services provided to the Funds, PwC billed the following amounts
in fees for each Fund's most recent fiscal year:
Credit Suisse Capital Appreciation Fund $
Credit Suisse Capital Funds
Credit Suisse Tax Efficient Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Small Cap Value Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Growth Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse Institutional Fixed Income Fund
Credit Suisse Institutional Fund
Capital Appreciation Portfolio
Harbinger Portfolio
International Focus Portfolio
Investment Grade Fixed Income Portfolio
-50-
Large Cap Value Portfolio
Select Equity Portfolio
Small Cap Growth Portfolio
Small Cap Value Portfolio
Credit Suisse Institutional High Yield Fund
Credit Suisse Institutional International Fund
Credit Suisse Institutional Money Market Fund
Government Portfolio
Prime Portfolio
Credit Suisse International Focus
Credit Suisse Investment Grade Bond Fund
Credit Suisse Japan Growth Fund
Credit Suisse Municipal Bond Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Opportunity Funds
Credit Suisse High Income Fund
Credit Suisse Municipal Money Fund
Credit Suisse U.S. Government Money Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse Trust
Blue Chip Portfolio
Emerging Growth Portfolio
Emerging Markets Portfolio
Global Post-Venture Capital Portfolio
Global Technology Portfolio
International Focus Portfolio
Large Cap Value Portfolio
Small Cap Growth Portfolio
-51-
Small Cap Value Portfolio
For other services provided to CSAM and all other entities controlling,
controlled by, or under common control with CSAM that provide services to the
Funds, PwC billed $ in fees for the year ended December 31, 2002.
THE FUNDS' INVESTMENT ADVISERS, ADMINISTRATORS AND DISTRIBUTOR
CSAM, located at 466 Lexington Avenue, New York, New York 10017-3140,
serves as investment adviser to each Fund pursuant to a written investment
advisory agreement between CSAM and the Fund. CSAM is the institutional and
mutual fund asset management arm of Credit Suisse First Boston, part of the
Credit Suisse Group.
Certain Funds have entered into sub-investment advisory agreements with
CSAM and each of CSAM's United Kingdom affiliate ("CSAM U.K."), CSAM's Japanese
affiliate ("CSAM Japan") and CSAM's Australian affiliate ("CSAM Australia"),
each of which is named Credit Suisse Asset Management Limited. The principal
executive office of CSAM U.K. is Beaufort House, 15 St. Botolph Street, London
EC3A 7JJ, England. The principal executive office of CSAM Japan is Shiroyama JT
Mori Bldg. 3-1, Toranomon 4-Chome, Minato-Ku, Tokyo 105-6026, Japan. The
registered office of CSAM Australia is Level 32 Gateway, 1 Macquarie Place,
Sydney 2001, Australia.
CSAMSI and State Street serve as co-administrators to the Funds pursuant to
separate written agreements with the Funds. CSAMSI's principal business address
is 466 Lexington Avenue, New York, New York 10017. The principal business
address of State Street is 225 Franklin Street, Boston, Massachusetts 02110.
CSAMSI is also the distributor of the Funds' shares.
ADDITIONAL INFORMATION
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement and all other costs incurred in
connection with the solicitation of proxies, including any additional
solicitation made by letter or telephone, will be paid by the Funds, except for
Proposals 2 and 3, where the costs will be borne by CSAM or its affiliates. In
addition to solicitation by mail, certain officers and representatives of each
Fund, officers and employees of CSAM and certain financial services firms and
their representatives, who will receive no extra compensation for their
services, may solicit proxies in person or by telephone.
_____________(the "Agent") has been engaged to assist in the solicitation of
proxies, at an estimated fee of $_____________. As the Special Meeting date
approaches, certain shareholders of each Portfolio may receive a telephone call
from a representative of the Agent if their vote has not yet been received.
Authorization to permit the Agent to execute proxies may be obtained by
telephonic or electronic transmitted instructions from shareholders of each
Portfolio. Proxies that are obtained telephonically will be recorded in
accordance with the procedures set forth below. The Directors believe that these
procedures are reasonably designed
-52-
to ensure that the identity of the shareholder casting the vote and the
shareholder's voting instructions are accurately determined.
In all cases where a telephonic proxy is solicited, the Agent's
representative is required to ask for each shareholder's full name, address,
last four digits of the shareholder's social security or tax identification
number, title of the person and whether such person is authorized to direct the
voting of such shares (if an entity), the number of shares owned, if known, and
to confirm that the shareholder has received the proxy statement and proxy card
in the mail. If the information solicited agrees with the information provided
to the Agent, then the Agent representative has the responsibility to explain
the process, read the proposals listed on the proxy card, and ask for the
shareholder's instructions on each proposal. The Agent's representative,
although he or she is permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the proxy statement. The Agent will record the
shareholder's instructions on the card. Within 72 hours, the shareholder will be
sent a letter by first class mail to confirm his or her vote and asking the
shareholder to call the Agent immediately if his or her votes are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but does
not wish to give his or her proxy by telephone, or by the Internet, the
shareholder may still submit the proxy card originally sent with the proxy
statement or attend in person. Should shareholders require additional
information regarding the proxy or replacement proxy cards, they may contact the
Agent toll-free at 1-800_____________. Any proxy given by a shareholder, whether
in writing, by telephone or by the Internet, is revocable.
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a shareholder meeting subsequent to the Special Meeting, if any, should send
their written proposals to Hal Liebes, Secretary of the Credit Suisse Funds, c/o
Credit Suisse Asset Management, LLC, 466 Lexington Avenue, New York, NY
10017-3140, within a reasonable time before the solicitation of proxies for such
meeting. The timely submission of a proposal does not guarantee its inclusion.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
No Board is aware of any matters that will be presented for action at the
Special Meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy in the accompanying
form will confer upon the person or persons entitled to vote the shares
represented by such proxy the discretionary authority to vote the shares as to
any such other matters in accordance with their best judgment in the interest of
each Fund and/or Portfolio.
-53-
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S)
PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the governing Boards,
/s/ [Hal Liebes signature]
Hal Liebes
Secretary
-54-
[PROXY]
CREDIT SUISSE FUNDS
[FUND NAME]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Gregory Bressler and Rocco Del Guercio, and
each of them, as proxies of the undersigned, each with the power to appoint his
or her substitute, and hereby authorizes a majority of them, or any one if only
one be present, to represent and to vote, as designated on the reverse side, all
the shares of the Credit Suisse Fund named above held of record by the
undersigned, or with respect to which the undersigned is entitled to vote or
act, at the Special Meeting of Shareholders to be held on April 11, 2003 at 3
p.m., Eastern time, for the purposes referred to on the reverse side.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as your name(s) appear(s) hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------- ---------------------------
- ---------------------------- ---------------------------
- ---------------------------- ---------------------------
[REVERSE SIDE]
THIS PROXY CARD APPLIES TO ALL FUNDS IN THE PROXY STATEMENT. BEFORE VOTING,
READ THE PROXY STATEMENT CAREFULLY FOR AN EXPLANATION OF EACH PROPOSAL. YOUR
VOTES WILL COUNT ONLY FOR FUNDS ACTUALLY CONSIDERING SPECIFIC PROPOSALS.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ------------------------------------------------ For All Withheld For all
CREDIT SUISSE FUNDS Nominees Except
- ------------------------------------------------
1. To elect Directors/Trustees of the Fund: [ ] [ ] [ ]
VOTE THIS CARD TODAY!
BY MAIL, BY PHONE AT 1-800- R.H. Francis J.W. Fritz J.E. Garten
----------------- -------------------------------------------
OR ON-LINE AT WWW._______.COM P.F. Krogh J.S. Pasman W.W. Priest
-------------------------------------------
S.N. Rappaport
-------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual
nominee, mark the "For All Except" box and strike a line through
the name(s) of the nominee(s).
For Against Abstain
2(a). To approve or disapprove a new [ ] [ ] [ ]
investment advisory agreement for the Fund.
For Against Abstain
2(b). To approve or disapprove fees paid or [ ] [ ] [ ]
payable to the Adviser.
For Against Abstain
3. To approve or disapprove the amended
distribution plans of the Fund. [ ] [ ] [ ]
4. To modify and/or eliminate certain Fund
Investment Restrictions on:
4a. Borrowing 4b. Lending
--------------- ------------
4c. Real Estate 4d. Commodities
----------------- ----------------
4e. Short Sales 4f. Margin Transactions
---------------- ------------------------
4g. Oil, Gas & Mineral Programs 4h. Investing for Control
-------------------------------- --------------------------
4i. Investment in Securities owned by Management 4j. Unseasoned Issuers
------------------------------------------------- ----------------------
4k. Pledging 4l. Investing in Other Investment Companies
------------- -------------------------------------------
4m. Joint Trading Accounts 4n. Warrants
---------------------------- -------------
4o. Concentration 4p. Investing in Equities
------------------ --------------------------
4q. 10% per Issuer Limit 4r. Restricted Securities
-------------------------- ---------------------------
For All Against All Abstain All
[ ] [ ] [ ]
If you wish to vote against or abstain from a
particular item in Item 4 applicable to your For All Except As Marked
Fund, mark this box and write the number of the [ ]
item on the line above and indicate a "Vote Against"
or an "Abstention".
-2-
For Against Abstain
5. To change the investment objective of the [ ] [ ] [ ]
Fund from fundamental to non-fundamental.
6. To amend the Fund's organizational
documents on:
A. Involuntary redemption For Against Abstain
[ ] [ ] [ ]
B. Reorganization of the Fund or its series without
shareholder approval For Against Abstain
[ ] [ ] [ ]
Please be sure to sign and date this Proxy. Date Mark box at right if comments or address
change have been noted on the reverse
side of this card. [ ]
- ----------------------------------------------------------
Shareholder sign here Co-owner sign here RECORD DATE SHARES:
-3-
Exhibit A
QUORUM REQUIREMENTS
- --------------------------------------------------------------------------
NAME OF FUND QUORUM
REQUIREMENT
- --------------------------------------------------------------------------
Credit Suisse Capital Appreciation Fund Majority
- --------------------------------------------------------------------------
Credit Suisse Capital Funds Majority
- --------------------------------------------------------------------------
Credit Suisse Tax Efficient Fund Majority
- --------------------------------------------------------------------------
Credit Suisse Large Cap Value Fund Majority
- --------------------------------------------------------------------------
Credit Suisse Small Cap Value Fund Majority
- --------------------------------------------------------------------------
Credit Suisse Cash Reserve Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Emerging Growth Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Emerging Markets Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Fixed Income Fund Majority
- --------------------------------------------------------------------------
Credit Suisse Global Fixed Income Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Global Post-Venture Capital Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Institutional Fixed Income Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Institutional Fund One-Third
- --------------------------------------------------------------------------
Capital Appreciation Portfolio One-Third
- --------------------------------------------------------------------------
Harbinger Portfolio One-Third
- --------------------------------------------------------------------------
International Focus Portfolio One-Third
- --------------------------------------------------------------------------
Investment Grade Fixed Income Portfolio One-Third
- --------------------------------------------------------------------------
Large Cap Value Portfolio One-Third
- --------------------------------------------------------------------------
Select Equity Portfolio One-Third
- --------------------------------------------------------------------------
Small Cap Growth Portfolio One-Third
- --------------------------------------------------------------------------
A-1
- --------------------------------------------------------------------------
NAME OF FUND QUORUM
REQUIREMENT
- --------------------------------------------------------------------------
Credit Suisse Institutional High Yield Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Institutional International Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Institutional Money Market Fund One-Third
- --------------------------------------------------------------------------
Government Portfolio One-Third
- --------------------------------------------------------------------------
Prime Portfolio One-Third
- --------------------------------------------------------------------------
Credit Suisse International Focus One-Third
- --------------------------------------------------------------------------
Credit Suisse Investment Grade Bond Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Japan Growth Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Municipal Bond Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse New York Municipal Fund Majority
- --------------------------------------------------------------------------
Credit Suisse New York Tax Exempt Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Opportunity Funds 51%
- --------------------------------------------------------------------------
Credit Suisse High Income Fund 51%
- --------------------------------------------------------------------------
Credit Suisse Municipal Money Fund 51%
- --------------------------------------------------------------------------
Credit Suisse U.S. Government Money Fund 51%
- --------------------------------------------------------------------------
Credit Suisse Select Equity Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Short Duration Bond Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Small Cap Growth Fund One-Third
- --------------------------------------------------------------------------
Credit Suisse Strategic Small Cap Fund One-Third
- --------------------------------------------------------------------------
A-2
- --------------------------------------------------------------------------
NAME OF FUND QUORUM
REQUIREMENT
- --------------------------------------------------------------------------
Credit Suisse Trust Majority
- --------------------------------------------------------------------------
Blue Chip Portfolio Majority
- --------------------------------------------------------------------------
Emerging Growth Portfolio Majority
- --------------------------------------------------------------------------
Emerging Markets Portfolio Majority
- --------------------------------------------------------------------------
Global Post-Venture Capital Portfolio Majority
- --------------------------------------------------------------------------
Global Technology Portfolio Majority
- --------------------------------------------------------------------------
International Focus Portfolio Majority
- --------------------------------------------------------------------------
Large Cap Value Portfolio Majority
- --------------------------------------------------------------------------
Small Cap Growth Portfolio Majority
- --------------------------------------------------------------------------
Small Cap Value Portfolio Majority
- --------------------------------------------------------------------------
A-3
Exhibit B
FORM
OF
CSAM INVESTMENT ADVISORY AGREEMENT
___________, 2003
Credit Suisse Asset Management, LLC
466 Lexington Avenue
16th Floor
New York, New York 10017
Dear Sirs:
Credit Suisse ________________ Fund, Inc. (the "Fund"), a corporation
organized and existing under the laws of the State of Maryland, herewith
confirms its agreement with Credit Suisse Asset Management, LLC (the "Adviser")
as follows:
1. Investment Description; Appointment
The Fund desires to employ the capital of the Fund by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Articles of Incorporation, as may be amended from time to time,
and in the Fund's Prospectus(es) and Statement(s) of Additional Information as
from time to time in effect (the "Prospectus" and "SAI," respectively), and in
such manner and to such extent as may from time to time be approved by the Board
of Directors of the Fund. Copies of the Fund's Prospectus and SAI have been or
will be submitted to the Adviser. The Fund desires to employ and hereby appoints
the Adviser to act as investment adviser to the Fund. The Adviser accepts the
appointment and agrees to furnish the services for the compensation set forth
below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of Directors of
the Fund, the Adviser will (a) act in strict conformity with the Fund's Articles
of Incorporation, the Investment Company Act of 1940 (the "1940 Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended
(the "Advisers Act"), (b) manage the Fund's assets in accordance with the Fund's
investment objective and policies as stated in the Fund's Prospectus and SAI,
(c) make investment decisions for the Fund, (d) place purchase and sale orders
for securities on behalf of the Fund, (e) exercise voting rights in respect of
portfolio securities and other investments for the Fund, and (f) monitor and
evaluate the services provided by the Fund's investment sub-adviser(s), if any,
under the terms of the applicable investment sub-advisory agreement. In
providing those services, the Adviser will provide investment research and
B-1
supervision of the Fund's investments and conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the Fund's
assets. In addition, the Adviser will furnish the Fund with whatever statistical
information the Fund may reasonably request with respect to the securities that
the Fund may hold or contemplate purchasing.
Subject to the approval of the Board of Directors of the Fund and, where
required by law, the Fund's shareholders, the Adviser may engage an investment
sub-adviser or sub-advisers to provide advisory services in respect of the Fund
and may delegate to such investment sub-adviser(s) the responsibilities
described in subparagraphs (b), (c), (d) and (e) above. In the event that an
investment sub-adviser's engagement has been terminated, the Adviser shall be
responsible for furnishing the Fund with the services required to be performed
by such investment sub-adviser(s) under the applicable investment sub-advisory
agreement(s) or arranging for a successor investment sub-adviser(s) to provide
such services on terms and conditions acceptable to the Fund and the Fund's
Board of Directors and subject to the requirements of the 1940 Act.
3. Brokerage
In executing transactions for the Fund, selecting brokers or dealers and
negotiating any brokerage commission rates, the Adviser will use its best
efforts to seek the best overall terms available. In assessing the best overall
terms available for any portfolio transaction, the Adviser will consider all
factors it deems relevant including, but not limited to, breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, the Adviser may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as the same may from time to time be amended) provided to the Fund and/or other
accounts over which the Adviser or an affiliate exercises investment discretion.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund from time
to time with whatever information the Adviser believes is appropriate for this
purpose.
5. Disclosure Regarding the Adviser
(a) The Adviser has reviewed the disclosure about the Adviser contained
in the Fund's registration statement and represents and warrants that, with
respect to such disclosure about the Adviser or information related, directly or
indirectly, to the Adviser, such registration statement contains, as of the date
hereof, no untrue statement of any material fact and does not omit any statement
of a material fact which is required to be stated therein or necessary to make
the statements contained therein not misleading.
(b) The Adviser agrees to notify the Fund promptly of (i) any statement
about the Adviser contained in the Fund's registration statement that becomes
untrue in any material
B-2
respect, (ii) any omission of a material fact about the Adviser in the Fund's
registration statement which is required to be stated therein or necessary to
make the statements contained therein not misleading, (iii) any reorganization
or change in the Adviser, including any change in its ownership or key
employees, or (iv) any change in the membership of the Adviser, as long as the
Adviser is a partnership.
(c) Prior to the Fund or any affiliated person (as defined in the 1940
Act, an "Affiliate") of the Fund using or distributing sales literature or other
promotional material referring to the Adviser ("Promotional Material"), the Fund
shall forward such material to the Adviser and shall allow the Adviser
reasonable time to review the material. The Adviser will not act unreasonably in
its review of Promotional Material and the Fund will use all reasonable efforts
to ensure that all Promotional Material used or distributed by or on behalf of
the Fund will comply with the requirements of the Advisers Act, the 1940 Act and
the rules and regulations promulgated thereunder.
(d) The Adviser has supplied the Fund copies of its Form ADV with all
exhibits and attachments thereto and will hereinafter supply the Fund, promptly
upon preparation thereof, copies of all amendments or restatements of such
document.
6. Compliance
(a) The Adviser agrees that it shall promptly notify the Fund (i) in the
event that the SEC or any other regulatory authority has censured its
activities, functions or operations; suspended or revoked its registration as an
investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions, (ii) in the event that there is a change in the
Adviser, financial or otherwise, that adversely affects its ability to perform
services under this Agreement or (iii) upon having a reasonable basis for
believing that, as a result of the Adviser's investing the Fund's assets, the
Fund's investment portfolio has ceased to adhere to the Fund's investment
objectives, policies and restrictions as stated in the Prospectus or SAI or is
otherwise in violation of applicable law.
(b) The Fund agrees that it shall promptly notify the Adviser in the
event that the SEC has censured the Fund; placed limitations upon any of its
activities, functions or operations; or has commenced proceedings or an
investigation that may result in any of these actions.
(c) The Fund shall be given access to the records of the Adviser at
reasonable times solely for the purpose of monitoring compliance with the terms
of this Agreement and the rules and regulations applicable to the Adviser
relating to its providing investment advisory services to the Fund, including
without limitation records relating to trading by employees of the Adviser for
their own accounts and on behalf of other clients. The Adviser agrees to
cooperate with the Fund and its representatives in connection with any such
monitoring efforts.
7. Books and Records
(a) In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Adviser hereby agrees that all records which it maintains for the Fund
are the property of the Fund and further agrees to surrender promptly to the
Fund any of such records upon request.
B-3
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act and to preserve the records required by Rule 204-2 under the Advisers
Act for the period specified therein.
(b) The Adviser agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and prior, present or potential shareholders
and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder except after prior
notification to and approval in writing of the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Adviser may be exposed
to civil or criminal contempt proceedings for failure to comply or when
requested to divulge such information by duly constituted authorities.
(c) The Adviser hereby agrees to furnish to regulatory authorities
having the requisite authority any information or reports in connection with
services that the Adviser renders pursuant to this Agreement which may be
requested in order to ascertain whether the operations of the Fund are being
conducted in a manner consistent with applicable laws and regulations.
8. Standard of Care
The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Adviser
against any liability to the Fund or to shareholders of the Fund to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason of
the Adviser's reckless disregard of its obligations and duties under this
Agreement.
9. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Adviser an annual fee calculated at an annual rate of
_______%1 of the Fund's average daily net assets. The fee for the period from
the date of this Agreement to the end of the calendar year shall be prorated
according to the proportion that such period bears to the full yearly period.
Upon any termination of this Agreement before the end of a year, the fee for
such part of that year shall be prorated according to the proportion that such
period bears to the full yearly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Adviser, the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus or SAI.
- --------------------
1 For fee rates of each Fund, see Exhibit A.
B-4
10. Expenses
The Adviser will bear all expenses in connection with the performance of
its services under this Agreement, including the fees payable to any investment
sub-adviser engaged pursuant to paragraph 2 of this Agreement. The Fund will
bear its proportionate share of certain other expenses to be incurred in its
operation, including: investment advisory and administration fees; taxes,
interest, brokerage fees and commissions, if any; fees of Directors of the Fund
who are not officers, directors, or employees of the Adviser or any of its
affiliates; fees of any pricing service employed to value shares of the Fund;
Securities and Exchange Commission fees and state blue sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; the Fund's
proportionate share of insurance premiums; outside auditing and legal expenses;
costs of maintenance of the Fund's existence; costs attributable to investor
services, including, without limitation, telephone and personnel expenses; costs
of preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the shareholders of the Fund and of the
officers or Board of Directors of the Fund; and any extraordinary expenses.
The Fund will be responsible for nonrecurring expenses which may arise,
including costs of litigation to which the Fund is a party and of indemnifying
officers and Directors of the Fund with respect to such litigation and other
expenses as determined by the Directors.
11. Services to Other Companies or Accounts
The Fund understands that the Adviser now acts, will continue to act and
may act in the future as investment adviser to fiduciary and other managed
accounts and to one or more other investment companies or series of investment
companies, and the Fund has no objection to the Adviser so acting, provided that
whenever the Fund and one or more other accounts or investment companies or
portfolios advised by the Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in accordance
with a formula believed to be equitable to each entity. The Fund recognizes that
in some cases this procedure may adversely affect the size of the position
obtainable for the Fund. In addition, the Fund understands that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of the Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature, provided that doing
so does not adversely affect the ability of the Adviser to perform its services
under this Agreement.
12. Term of Agreement
This Agreement shall continue for an initial two-year period commencing
on the date first written above, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (a) the Board of Directors of the Fund or (b) a vote of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved by a
B-5
majority of the Board of Directors who are not "interested persons" (as defined
in said Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Board of Directors of the
Fund or by vote of holders of a majority of the Fund's shares, or upon 90 days'
written notice, by the Adviser. This Agreement will also terminate automatically
in the event of its assignment (as defined in said Act).
13. Representations by the Parties
(a) The Adviser represents and warrants that it is a duly registered
investment adviser under the Advisers Act, a duly registered investment adviser
in any and all states of the United States in which the Adviser is required to
be so registered and has obtained all necessary licenses and approvals in order
to perform the services provided in this Agreement. The Adviser covenants to
maintain all necessary registrations, licenses and approvals in effect during
the term of this Agreement.
(b) The Adviser represents that it has read and understands the
Prospectus and SAI and warrants that in investing the Fund's assets it will use
all reasonable efforts to adhere to the Fund's investment objectives, policies
and restrictions contained therein.
(c) The Adviser represents that it has adopted a written Code of Ethics
in compliance with Rule 17j-1 under the 1940 Act and will provide the Fund with
any amendments to such Code and will provide any certifications required by Rule
17j-1.
(d) The Fund represents that a copy of its Articles of Incorporation,
dated ________________, together with all amendments thereto, is on file in the
Department of Assessments and Taxation of the State of Maryland.
14. Miscellaneous
The Fund recognizes that directors, officers and employees of the
Adviser may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and business trusts may include the
name "CS", "CSFB", "CSAM" or "Credit Suisse" (or any combination thereof) as
part of their names, and that the Adviser or its affiliates may enter into
advisory or other agreements with such other corporations or business trusts. If
the Adviser ceases to act as the investment adviser of the Fund's shares, the
Fund agrees that, at the Adviser's request, the Fund's license to use the words
"CS", "CSFB", "CSAM" or "Credit Suisse" (or any combination thereof) will
terminate and that the Fund will take all necessary action to change the name of
the Fund to names not including the words "CS", "CSFB", "CSAM" or "Credit
Suisse" (or any combination thereof).
B-6
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
CREDIT SUISSE ____________________ FUND, INC.
By:
Name:
Title:
Accepted:
CREDIT SUISSE ASSET MANAGEMENT, LLC
By:
Name:
Title:
B-7
Exhibit A
Advisory Fee Rates For Each Fund
Fund Investment Advisory Fee*
- --------------------------------------------------- -----------------------
Credit Suisse Institutional Fixed Income Fund 0.375%
Credit Suisse Institutional High Yield Fund 0.70%
Credit Suisse Institutional International Fund 0.80%
Credit Suisse Municipal Bond Fund 0.70%
Credit Suisse Select Equity Fund 0.75%
- ------------------------
*As a percentage of average daily net assets.
B-8
Exhibit C
CERTAIN INFORMATION ABOUT CSAM AND CREDIT SUISSE GROUP
GENERAL
CSAM is located at 466 Lexington Avenue, New York, New York 10017-3140.
CSAM is the institutional and mutual fund asset management arm of Credit Suisse
First Boston ("CSFB"), part of the Credit Suisse Group ("Credit Suisse"), one of
the world's largest financial organizations with approximately $819.6 billion in
assets under management. CSFB is a leading global investment bank serving
institutional, corporate, government and individual clients. CSFB's businesses
include securities underwriting, sales and trading, investment banking, private
equity, financial advisory services, investment research, venture capital,
correspondent brokerage services and asset management. CSFB operates in 77
locations in 36 countries across six continents. CSFB is a business unit of the
Zurich-based Credit Suisse Group, a leading global financial services company.
As of September 30, 2002, Credit Suisse Asset Management employed 2,270 people
worldwide and had global assets under management of approximately $284.3
billion, with $55.8 billion in assets under management in the U.S. The principal
business address of Credit Suisse is Paradeplatz 8, CH8070, Zurich, Switzerland.
CSAM's sole member is CSAM Americas Holding Corp. located at 466
Lexington Avenue, New York, New York 10017-3140, which is wholly-owned by Credit
Suisse Asset Management Holding Corp., of the same address, which in turn is
wholly-owned by Credit Suisse First Boston, Inc., located at 11 Madison Avenue,
New York, New York 10010, which is indirectly wholly-owned by Credit Suisse
Group.
EXECUTIVE OFFICERS OF CSAM
The following chart sets forth information with respect to the name,
address and principal occupations of the executive officer(s) and managing
member(s) of CSAM. (Unless otherwise noted, the person's position at CSAM
constitutes his/her principal occupation.) Each person's address is 466
Lexington Avenue, New York, New York 10017-3140.
- ---------------------------------------------------------------------------------------------------------------------
NAME POSITION WITH CSAM AND PRINCIPAL OCCUPATION
- ---------------------------------------------------------------------------------------------------------------------
Joseph Gallagher Chief Executive Officer, Managing Director and Member of the Management
Committee
- ---------------------------------------------------------------------------------------------------------------------
Laurence R. Smith Global Chief Investment Officer, Managing Director and Member of the
Management Committee
- ---------------------------------------------------------------------------------------------------------------------
Elizabeth B. Dater Co-Head of U.S. Equities, Managing Director and Member of the Management
Committee
- ---------------------------------------------------------------------------------------------------------------------
Jo Ann Corkran Head of Core Fixed Income, Managing Director and Member of the Management
Committee
- ---------------------------------------------------------------------------------------------------------------------
George M. Jamgochian Head of Institutional Marketing, Managing Director and Member of the
Management Committee
- ---------------------------------------------------------------------------------------------------------------------
C-1
- ---------------------------------------------------------------------------------------------------------------------
NAME POSITION WITH CSAM AND PRINCIPAL OCCUPATION
- ---------------------------------------------------------------------------------------------------------------------
Hal Liebes Global General Counsel, Secretary, Managing Director and Member of the
Management Committee
- ---------------------------------------------------------------------------------------------------------------------
Matthew C. Moss Chief Financial Officer, Managing Director and Member of the Management
Committee
- ---------------------------------------------------------------------------------------------------------------------
Daniel C. Rowland Director of Human Resources, Director, Member of the Management Committee
- ---------------------------------------------------------------------------------------------------------------------
Gregory R. Sawers Head of Research, Co-Head of U.S. Equities, Managing Director and Member
of the Management Committee
- ---------------------------------------------------------------------------------------------------------------------
SIMILAR FUNDS MANAGED BY CSAM
The following chart sets forth information with respect to other mutual
funds advised by CSAM with an investment objective similar to the investment
objective of the Fund indicated.
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS OF CONTRACTUAL
CSAM MANAGED ADVISORY FEE
SIMILAR FUND AS
OF 12/31/02 (AS A PERCENTAGE OF
SIMILAR FUND AVERAGE DAILY NET
CREDIT SUISSE FUND CURRENTLY ADVISED BY CSAM (IN DOLLARS) ASSETS) FEE WAIVER
- ---------------------------------------------------------------------------------------------------------------------
OPEN-END FUNDS
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse Fixed Income Fund
Institutional Fixed 219,448,807 .50% YES
Income Fund
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse Opportunity Funds -
Institutional High Credit Suisse High Income Fund 50,336,899 .70% 1st 100 million YES
Yield Fund
.50% over 100 million
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse Institutional Fund -
Institutional International Focus Portfolio 42,342,224 .80% YES
International Fund
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse Trust - International
Institutional Focus Portfolio 86,547,248 1.00% NO
International Fund
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse International Focus
Institutional Fund 247,468,833 1.00% YES
International Fund
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse European Equity Fund
Institutional 10,118,263 1.00% YES
International Fund
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Select Credit Suisse Institutional Fund -
Equity Fund Select Equity Portfolio 11,665,038 .50% YES
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse Municipal Credit Suisse New York Municipal
Bond Fund Fund 84,657,274 .40% YES
- ---------------------------------------------------------------------------------------------------------------------
SUB-ADVISED FUNDS
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse CNI High Yield Bond Portfolio
Institutional High 17,860,832 .50% 1st 35 million NO
Yield Fund
.40% over 35 million
- ---------------------------------------------------------------------------------------------------------------------
C-2
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS OF CONTRACTUAL
CSAM MANAGED ADVISORY FEE
SIMILAR FUND AS
OF 12/31/02 (AS A PERCENTAGE OF
SIMILAR FUND AVERAGE DAILY NET
CREDIT SUISSE FUND CURRENTLY ADVISED BY CSAM (IN DOLLARS) ASSETS) FEE WAIVER
- ---------------------------------------------------------------------------------------------------------------------
Credit Suisse MLIG Variable Ins. Trust
Institutional CS International Portfolio 2,383,328 .40% 1st 200 million NO
International Fund
.32% next 200 million
.30% thereafter
- ---------------------------------------------------------------------------------------------------------------------
BROKERAGE POLICIES
CSAM is responsible for establishing, reviewing and, where necessary,
modifying the Fund's investment program to achieve its investment objective.
Purchases and sales of newly issued portfolio securities are usually principal
transactions without brokerage commissions effected directly with the issuer or
with an underwriter acting as principal. Other purchases and sales may be
effected on a securities exchange or over-the-counter, depending on where it
appears that the best price and execution will be obtained. The purchase price
paid by a Fund to underwriters of newly issued securities usually includes a
concession paid by the issuer to the underwriter, and purchases of securities
from dealers, acting as either principals or agents in the after market, are
normally executed at a price between the bid and asked price, which includes a
dealer's mark-up or mark-down. Transactions on U.S. stock exchanges and some
foreign stock exchanges involve the payment of negotiated brokerage commissions.
On exchanges on which commissions are negotiated, the cost of transactions may
vary among different brokers. On most foreign exchanges, commissions are
generally fixed. There is generally no stated commission in the case of
securities traded in domestic or foreign over-the-counter markets, but the price
of securities traded in over-the-counter markets includes an undisclosed
commission or mark-up. U.S. Government Securities are generally purchased from
underwriters or dealers, although certain newly issued U.S. Government
Securities may be purchased directly from the U.S. Treasury or from the issuing
agency or instrumentality. No brokerage commissions are typically paid on
purchases and sales of U.S. Government Securities.
In selecting broker-dealers, the Adviser does business exclusively with
those broker-dealers that, in the Adviser's judgment, can be expected to provide
the best service. The service has two main aspects: the execution of buy and
sell orders and the provision of research. In negotiating commissions with
broker-dealers, the Adviser will pay no more for execution and research services
than it considers either, or both together, to be worth. The worth of execution
service depends on the ability of the broker-dealer to minimize costs of
securities purchased and to maximize prices obtained for securities sold. The
worth of research depends on its usefulness in optimizing portfolio composition
and its changes over time. Commissions for the combination of execution and
research services that meet the Adviser's standards may be higher than for
execution services alone or for services that fall below the Adviser's
standards. The Adviser believes that these arrangements may benefit all clients
and not necessarily only the accounts in which the particular investment
transactions occur that are so executed. Further, the Adviser will only receive
brokerage or research service in connection with securities transactions that
are consistent with the "safe harbor" provisions of Section 28(e) of the
Securities Exchange Act of 1934 when paying such higher commissions. Research
services may include research on
C-3
specific industries or companies, macroeconomic analyses, analyses of national
and international events and trends, evaluations of thinly traded securities,
computerized trading screening techniques and securities ranking services, and
general research services.
Investment decisions for a Fund concerning specific portfolio securities
are made independently from those for other clients advised by the Adviser. Such
other investment clients may invest in the same securities as a Fund. When
purchases or sales of the same security are made at substantially the same time
on behalf of such other clients, transactions are averaged as to price and
available investments allocated as to amount, in a manner which the Adviser
believes to be equitable to each client, including a Fund. In some instances,
this investment procedure may adversely affect the price paid or received by a
Fund or the size of the position obtained or sold for a Fund. To the extent
permitted by law, securities may be aggregated with those to be sold or
purchased for a Fund with those to be sold or purchased for such other
investment clients in order to obtain best execution.
All orders for transactions in securities or options on behalf of a Fund
are placed by the Adviser with broker-dealers that it selects, including CSFB
and other affiliates of Credit Suisse. A Fund may utilize CSFB or other
affiliates of Credit Suisse in connection with a purchase or sale of securities
when the Adviser believes that the charge for the transaction does not exceed
usual and customary levels and when doing so is consistent with guidelines
adopted by the Board.
In no instance will portfolio securities be purchased from or sold to
CSAM, CSFB or any affiliated person of the foregoing entities except as
permitted by SEC exemptive order or by applicable law. In addition, the Funds
will not give preference to any institutions with whom a Fund enters into
distribution or shareholder servicing agreements concerning the provision of
distribution services or support services.
If permitted for a Fund, transactions for such Fund may be effected on
foreign securities exchanges. In transactions for securities not actively traded
on a foreign securities exchange, such Fund will deal directly with the dealers
who make a market in the securities involved, except in those circumstances
where better prices and execution are available elsewhere. Such dealers usually
are acting as principal for their own account. On occasion, securities may be
purchased directly from the issuer. Such portfolio securities are generally
traded on a net basis and do not normally involve brokerage commissions.
Securities firms may receive brokerage commissions on certain portfolio
transactions, including options, futures and options on futures transactions and
the purchase and sale of underlying securities upon exercise of options.
A Fund may participate, if and when practicable, in bidding for the
purchase of securities for a Fund's portfolio directly from an issuer in order
to take advantage of the lower purchase price available to members of such a
group. A Fund will engage in this practice, however, only when the Adviser, in
its sole discretion, believes such practice to be otherwise in a Fund's
interest.
C-4
Exhibit D
CSAMSI ADMINISTRATION AND DISTRIBUTION FEES
For each Fund's most recent fiscal year, the Fund paid CSAMSI co-administrative
service and distribution fees as follows:
- --------------------------------------------------------------------------------------------------------------------
Fund Co-Administrative Service Fees Distribution Fees
- --------------------------------------------------------------------------------------------------------------------
Credit Suisse Institutional Fixed $0 $0
Income Fund
- --------------------------------------------------------------------------------------------------------------------
Credit Suisse Institutional High Yield $0 $0
Fund
- --------------------------------------------------------------------------------------------------------------------
Credit Suisse Institutional $0 $291
International Fund
- --------------------------------------------------------------------------------------------------------------------
Credit Suisse Municipal Bond Fund $1,442 $38,651
- --------------------------------------------------------------------------------------------------------------------
Credit Suisse Select Equity Fund $965 $23,642
- --------------------------------------------------------------------------------------------------------------------
Exhibit E-1
CREDIT SUISSE OPPORTUNITY FUNDS
CREDIT SUISSE HIGH INCOME FUND
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
CLASS A SHARES
Credit Suisse High Income Fund (the "Fund"), a series of Credit Suisse
Opportunity Funds (the "Trust"), is an open-end management investment company
registered as such under the Investment Company Act of 1940 (the "Act"). The
Trust employs Credit Suisse Asset Management Securities, Inc. and/or others as
the principal underwriter and distributor (the "Distributor") of the Class A
shares of the Fund pursuant to a written distribution agreement and desires to
adopt a plan of distribution pursuant to Rule 12b-1 under the Act to assist in
the distribution of Class A shares of the Fund.
The Board of Trustees (the "Board") of the Trust having determined that
a plan of distribution containing the terms set forth herein is reasonably
likely to benefit the Fund and its shareholders, the Trust hereby adopts the
compensation-type plan of distribution for the Fund's Class A shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:
1. The Fund is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments and/or service fees (the
"Payments") in connection with the distribution of Class A shares of the Fund
equal to 0.50 of 1% of the average daily net assets of the Class A shares of the
Fund. Such Payments shall be accrued daily and paid monthly in arrears.
2. Payments under this Plan are not limited to the expenses actually
incurred in providing services hereunder, and such payments may exceed expenses
actually incurred. Furthermore, any portion of any fee paid to the Distributor
or to any of its affiliates by the Fund, or any of their past profits or other
revenue, may be used in their sole discretion to provide services to
shareholders of the Fund or to foster distribution of Class A shares. The
Distributor or the Fund's investment adviser or their affiliates may, from such
entity's own resources, pay a fee to an organization whose clients or customers
own or may own Class A shares.
3. Payments may be made by the Fund under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class A shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time, including the
selection of those activities for which payment can be made, whose decision
shall be conclusive. Without in any way limiting the discretion of the Board,
the following activities are hereby declared to be primarily intended to result
in the sale of Class A shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class A shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers,
E-1
brokers, banks and other servicing entities and servicing personnel (including
the Distributor, the Fund's investment adviser and their personnel) of any of
them for providing services to shareholders of the Fund relating to their
investment in the Fund, including assistance in connection with inquiries
relating to shareholder accounts; the production and dissemination of
prospectuses and statements of additional information of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; third party consultancy or similar expenses relating to any
activity for which Payment is authorized by the Board; and the financing of any
activity for which Payment is authorized by the Board.
4. Amounts paid to the Distributor by the Fund under the Plan will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of the Fund, except that distribution expenses attributable to
the Fund as a whole will be allocated to the Class A shares according to the
ratio of the sales of Class A shares to the total sales of the Fund's shares
over the Fund's fiscal year or such other allocation method approved by the
Board.
5. The Trust is hereby authorized and directed to enter into
appropriate written agreements with the Distributor on behalf of the Fund and
each other person to whom the Trust intends to make any Payment, and the
Distributor is hereby authorized and directed to enter into appropriate written
agreements with each person to whom the Distributor intends to make any payments
in the nature of a Payment. The foregoing requirement is not intended to apply
to any agreement or arrangement with respect to which the party to whom Payment
is to be made does not have the purpose set forth in Section 2 above (such as
the printer in the case of the printing of a prospectus or a newspaper in the
case of an advertisement) unless the Board determines that such an agreement or
arrangement should be treated as a "related agreement" for purposes of Rule
12b-1 under the Act.
6. Each agreement required to be in writing by Section 5 must contain
the provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the trustees
("Disinterested Trustee Approval") who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the Plan
or any such agreement, by vote cast in person at a meeting called for the
purposes of voting on such agreement.
7. The officers, investment adviser or Distributor of the Fund, as
appropriate, shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such Payments were made.
8. To the extent any activity is covered by Section 2 and is also an
activity which the Fund may pay for on behalf of the Fund without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act (such as the printing of prospectuses for existing Fund shareholders),
this Plan shall not be construed to prevent or restrict the Fund from paying
such amounts outside of this Plan and without limitation hereby and without such
payments being included in the calculation of Payments subject to the limitation
set forth in Section 1.
9. This Plan shall not take effect until it has been approved by a vote
of at least a majority of the outstanding voting securities of the Class A
shares of the Fund. This Plan may
E-2
not be amended in any material respect without Board Approval and Disinterested
Trustee Approval and may not be amended to increase the maximum level of
Payments permitted hereunder without such approvals and further approval by a
vote of at least a majority of the outstanding voting securities of the Fund.
This Plan may continue in effect for longer than one year after its approval by
the shareholders of the Fund only as long as such continuance is specifically
approved at least annually by Board Approval and by Disinterested Trustee
Approval.
10. While the Plan is in effect with respect to the Fund, the selection
and nomination of the trustees who are not "interested persons" of the Fund will
be committed to the discretion of such disinterested trustees.
11. This Plan may be terminated with respect to the Fund at any time by
a vote of the trustees who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Plan or any
agreement hereunder, cast in person at a meeting called for the purposes of
voting on such termination, or by a vote of at least a majority of the
outstanding voting securities of the Class A shares of the Fund.
12. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and the
rules adopted by the Securities and Exchange Commission thereunder and the term
"vote of a majority of the outstanding voting securities" of the Class A shares
of the Fund shall mean the vote, at the annual or a special meeting of the
holders of Class A shares of the Fund duly called, of the lesser of (a) 67% or
more of the voting securities of the Class A shares of the Fund present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Class A shares of the Fund are present or represented by proxy, or (b) more
than 50% of the outstanding voting securities of the Class A shares of the Fund.
______________, 2003
E-3
Exhibit E-2
CREDIT SUISSE OPPORTUNITY FUNDS
CREDIT SUISSE ________________ FUND
FORM OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
CLASS B SHARES
Credit Suisse ____________ Fund (the "Fund"), a series of Credit Suisse
Opportunity Funds (the "Trust"), is an open-end management investment company
registered as such under the Investment Company Act of 1940, as amended (the
"Act"). The Trust employs Credit Suisse Asset Management Securities, Inc. and/or
others as the principal underwriter and distributor (the "Distributor") of the
Class B shares of the Fund pursuant to a written distribution agreement and
desires to adopt a plan of distribution pursuant to Rule 12b-1 under the Act to
assist in the distribution of Class B shares of the Fund.
The Board of Trustees (the "Board") of the Trust having determined that
a plan of distribution containing the terms set forth herein is reasonably
likely to benefit the Fund and its shareholders, the Trust hereby adopts a
compensation-type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:
1. The Fund is hereby authorized to pay to the Distributor as compensation
for its services, distribution payments (the "Payments") in connection with the
distribution of Class B shares of the Fund in an aggregate amount equal to 1.0%
per year of the average daily net assets of Class B shares of the Fund
consisting of (i) an asset-based sales charge of up to .75 of 1% of the average
daily net assets of the Class B shares of the Fund and (ii) a service fee of up
to .25 of 1% of the average daily net assets of the Class B shares of the Fund.
Such Payments shall be accrued daily and paid monthly in arrears.
2. Payments under this Plan are not limited to the expenses actually
incurred in providing services hereunder, and such payments may exceed expenses
actually incurred. Furthermore, any portion of any fee paid to the Distributor
or to any of its affiliates by the Fund, or any of their past profits or other
revenue, may be used in their sole discretion to provide services to
shareholders of the Fund or to foster distribution of Class B shares. The
Distributor or the Fund's investment adviser or their affiliates may, from such
entity's own resources, pay a fee to an organization whose clients or customers
own or may own Class B shares.
3. Payments may be made by the Fund under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time, including the
selection of those activities for which payment can be made, whose decision
shall be conclusive. Without in any way limiting the discretion of the Board,
the following activities are hereby declared to be primarily intended to result
in the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel
E-4
of any of them for sales of Class B shares of the Fund, whether in a lump sum or
on a continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Distributor the Fund's investment adviser and their
personnel) of any of them for providing services to shareholders of the Fund
relating to their investment in the Fund, including assistance in connection
with inquiries relating to shareholder accounts; the production and
dissemination of prospectuses and statements of additional information of the
Fund and the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; third party consultancy or similar expenses
relating to any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board.
4. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund, except that distribution expenses attributable to the
Fund as a whole will be allocated to the Class B shares according to the ratio
of the sales of Class B shares to the total sales of the Fund's shares over the
Fund's fiscal year or such other allocation method approved by the Board.
5. The Trust is hereby authorized and directed to enter into appropriate
written agreements with the Distributor on behalf of the Fund and each other
person to whom the Trust intends to make any Payment, and the Distributor is
hereby authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the nature
of a Payment. The foregoing requirement is not intended to apply to any
agreement or arrangement with respect to which the party to whom Payment is to
be made does not have the purpose set forth in Section 2 above (such as the
printer in the case of the printing of a prospectus or a newspaper in the case
of an advertisement) unless the Board determines that such an agreement or
arrangement should be treated as a "related agreement" for purposes of Rule
12b-1 under the Act.
6. Each agreement required to be in writing by Section 5 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the trustees
("Disinterested Trustee Approval") who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the Plan
or any such agreement, by vote cast in person at a meeting called for the
purposes of voting on such agreement.
7. The officers, investment adviser or Distributor of the Fund, as
appropriate, shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such Payments were made.
8. To the extent any activity is covered by Section 2 and is also an
activity which the Fund may pay for on behalf of the Fund without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act (such as the printing of prospectuses for existing Fund shareholders),
this Plan shall not be construed to prevent or restrict the Fund from paying
such amounts outside of this Plan and without limitation hereby and without such
payments being included in the calculation of Payments subject to the limitation
set forth in Section 1.
E-5
9. This Plan shall not take effect until it has been approved by a vote of
at least a majority of the outstanding voting securities of the Class B shares
of the Fund. This Plan may not be amended in any material respect without Board
Approval and Disinterested Trustee Approval and may not be amended to increase
the maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the outstanding voting
securities of the Fund. This Plan may continue in effect for longer than one
year after its approval by the shareholders of the Fund only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
10. While the Plan is in effect with respect to the Fund, the selection and
nomination of the trustees who are not "interested persons" of the Fund will be
committed to the discretion of such disinterested trustees.
11. This Plan may be terminated with respect to the Fund at any time by a
vote of the trustees who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Plan or any
agreement hereunder, cast in person at a meeting called for the purposes of
voting on such termination, or by a vote of at least a majority of the
outstanding voting securities of the Class B shares of the Fund.
12. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class B shares of the Fund duly called, of the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy, or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.
______________, 2003
E-6
Exhibit E-3
CREDIT SUISSE OPPORTUNITY FUNDS
CREDIT SUISSE ________________ FUND
FORM OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
CLASS C SHARES
Credit Suisse ____________ Fund (the "Fund"), a series of Credit Suisse
Opportunity Funds (the "Trust"), is an open-end management investment company
registered as such under the Investment Company Act of 1940, as amended (the
"Act"). The Trust employs Credit Suisse Asset Management Securities, Inc. and/or
others as the principal underwriter and distributor (the "Distributor") of the
Class C shares of the Fund pursuant to a written distribution agreement and
desires to adopt a plan of distribution pursuant to Rule 12b-1 under the Act to
assist in the distribution of Class C shares of the Fund.
The Board of Trustees (the "Board") of the Trust having determined that
a plan of distribution containing the terms set forth herein is reasonably
likely to benefit the Fund and its shareholders, the Trust hereby adopts a
compensation-type plan of distribution for the Fund's Class C shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:
1. The Fund is hereby authorized to pay to the Distributor as compensation
for its services, distribution payments (the "Payments") in connection with the
distribution of Class C shares of the Fund in an aggregate amount equal to 1.0%
per year of the average daily net assets of Class C shares of the Fund
consisting of (i) an asset-based sales charge of up to .75 of 1% of the average
daily net assets of the Class C shares of the Fund and (ii) a service fee of up
to .25 of 1% of the average daily net assets of the Class C shares of the Fund.
Such Payments shall be accrued daily and paid monthly in arrears.
2. Payments under this Plan are not limited to the expenses actually
incurred in providing services hereunder, and such payments may exceed expenses
actually incurred. Furthermore, any portion of any fee paid to the Distributor
or to any of its affiliates by the Fund, or any of their past profits or other
revenue, may be used in their sole discretion to provide services to
shareholders of the Fund or to foster distribution of Class C shares. The
Distributor or the Fund's investment adviser or their affiliates may, from such
entity's own resources, pay a fee to an organization whose clients or customers
own or may own Class C shares.
3. Payments may be made by the Fund under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class C shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time, including the
selection of those activities for which payment can be made, whose decision
shall be conclusive. Without in any way limiting the discretion of the Board,
the following activities are hereby declared to be primarily intended to result
in the sale of Class C shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel
E-7
of any of them for sales of Class C shares of the Fund, whether in a lump sum or
on a continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Distributor, the Fund's investment adviser and their
personnel) of any of them for providing services to shareholders of the Fund
relating to their investment in the Fund, including assistance in connection
with inquiries relating to shareholder accounts; the production and
dissemination of prospectuses and statements of additional information of the
Fund and the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; third party consultancy or similar expenses
relating to any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board.
4. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund, except that distribution expenses attributable to the
Fund as a whole will be allocated to the Class C shares according to the ratio
of the sales of Class C shares to the total sales of the Fund's shares over the
Fund's fiscal year or such other allocation method approved by the Board.
5. The Trust is hereby authorized and directed to enter into appropriate
written agreements with the Distributor on behalf of the Fund and each other
person to whom the Trust intends to make any Payment, and the Distributor is
hereby authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the nature
of a Payment. The foregoing requirement is not intended to apply to any
agreement or arrangement with respect to which the party to whom Payment is to
be made does not have the purpose set forth in Section 2 above (such as the
printer in the case of the printing of a prospectus or a newspaper in the case
of an advertisement) unless the Board determines that such an agreement or
arrangement should be treated as a "related agreement" for purposes of Rule
12b-1 under the Act.
6. Each agreement required to be in writing by Section 5 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the trustees
("Disinterested Trustee Approval") who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the Plan
or any such agreement, by vote cast in person at a meeting called for the
purposes of voting on such agreement.
7. The officers, investment adviser or Distributor of the Fund, as
appropriate, shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such Payments were made.
8. To the extent any activity is covered by Section 2 and is also an
activity which the Fund may pay for on behalf of the Fund without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act (such as the printing of prospectuses for existing Fund shareholders),
this Plan shall not be construed to prevent or restrict the Fund from paying
such amounts outside of this Plan and without limitation hereby and without such
payments being included in the calculation of Payments subject to the limitation
set forth in Section 1.
E-8
9. This Plan shall not take effect until it has been approved by a vote of
at least a majority of the outstanding voting securities of the Class C shares
of the Fund. This Plan may not be amended in any material respect without Board
Approval and Disinterested Trustee Approval and may not be amended to increase
the maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the outstanding voting
securities of the Fund. This Plan may continue in effect for longer than one
year after its approval by the shareholders of the Fund only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
10. While the Plan is in effect with respect to the Fund, the selection and
nomination of the trustees who are not "interested persons" of the Fund will be
committed to the discretion of such disinterested trustees.
11. This Plan may be terminated with respect to the Fund at any time by a
vote of the trustees who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Plan or any
agreement hereunder, cast in person at a meeting called for the purposes of
voting on such termination, or by a vote of at least a majority of the
outstanding voting securities of the Class C shares of the Fund.
12. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class C shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class C shares of the Fund duly called, of the lesser of (a) 67% or more of the
voting securities of the Class C shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class C
shares of the Fund are present or represented by proxy, or (b) more than 50% of
the outstanding voting securities of the Class C shares of the Fund.
________________, 2003
E-9
Exhibit E-4
CREDIT SUISSE OPPORTUNITY FUNDS
CREDIT SUISSE ____________ FUND
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
COMMON CLASS
This Shareholder Servicing and Distribution Plan ("Plan") is adopted
pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as
amended (the "1940 Act"), by Credit Suisse Opportunity Funds (the "Trust"), on
behalf of its High Income Fund and International Fund series (each a "Fund" and,
together, the "Funds"), with respect to the units of beneficial interest of each
Fund designated Common Class (the "Common Class") subject to the following terms
and conditions:
SECTION 1. AMOUNT OF PAYMENTS
Each Fund will pay Credit Suisse Asset Management Securities, Inc.
("CSAMSI"), a corporation organized under the laws of the State of New York, for
shareholder servicing and distribution services provided to the Common Class,
fees of up to .25% of the value of the average daily net assets of the Common
Class. Fees to be paid with respect to each Fund under this Plan will be
calculated daily and paid quarterly in arrears by each Fund.
SECTION 2. SERVICES PAYABLE UNDER THE PLAN
(a) The fees described above payable with respect to each Fund's Common
Class are intended to compensate CSAMSI, or enable CSAMSI to compensate other
persons ("Service Providers") for providing (i) ongoing servicing and/or
maintenance of the accounts of holders of the Common Class ("Shareholder
Services"); (ii) services that are primarily intended to result in, or that are
primarily attributable to, the sale of the Common Class ("Selling Services";
together with Shareholder Services, "Services"). Shareholder Services may
include, among other things, responding to Fund shareholder inquiries and
providing services to shareholders not otherwise provided by each Fund's
distributor or transfer agent. Selling Services may include, but are not limited
to: the printing and distribution to prospective investors in the Common Class
of prospectuses and statements of additional information describing each Fund;
the preparation, including printing, and distribution of sales literature,
advertisements and other informational materials relating to the Common Class;
providing telephone services relating to each Fund, including responding to
inquiries of prospective Fund investors; formulating and implementing marketing
and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising and obtaining whatever information, analyses and reports with
respect to marketing and promotional activities that each Fund may, from time to
time, deem advisable. In providing compensation for Services in accordance with
this Plan, CSAMSI is expressly authorized (i) to make, or cause to be made,
payments to Service Providers reflecting an allocation of overhead and other
office expenses
E-10
related to providing Services and (ii) to make, or cause to be made, payments to
compensate selected dealers or other authorized persons for providing any
Services.
(b) Payments under this Plan are not tied exclusively to the expenses
for Services actually incurred by CSAMSI or any Service Provider, and such
payments may exceed expenses actually incurred. Furthermore, any portion of any
fee paid to CSAMSI or to any of its affiliates by a Fund, or any of their past
profits or other revenue, may be used in their sole discretion to provide
services to shareholders of the Fund or to foster distribution of the Common
Class.
SECTION 3. ADDITIONAL PAYMENTS
CSAMSI and Credit Suisse Asset Management, LLC, each Fund's investment
adviser (the "Investment Adviser"), or an affiliate of either, may from any such
entity's own resources, which may include a fee it received from a Fund, pay a
fee (the "Service Fee") to certain broker-dealers, financial institutions,
recordkeeping organizations and other financial intermediaries ("Service
Organizations") for providing administration, subaccounting, transfer agency
and/or other services with respect to holders of the Common Class. A portion of
the Service Fee may be borne by a Fund. The Service Fee payable to any one
Service Organization is determined based upon a number of factors, including the
nature and quality of service provided, the operations processing requirements
of the relationship and the standardized fee schedule of the Service
Organization.
SECTION 4. SELECTION OF CERTAIN DIRECTORS
While this Plan is in effect with respect to each Fund, the selection
and nomination of members of Trust's Board of Trustees (the "Board") who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of this Plan or in any agreements related to it (the
"Independent Board members") will be committed to the discretion of the
Independent Board members then in office.
SECTION 5. APPROVAL AND AMENDMENT OF PLAN
Neither this Plan nor any related agreements will take effect with
respect to a Fund until approved by a majority of (a) the outstanding voting
securities of the Common Class of the Fund, (b) the full Board of the Trust and
(c) the Independent Board members, cast in person at a meeting called for the
purpose of voting on this Plan and the related agreements.
This Plan may not be amended to increase materially the amount of the
fees described in Section 1 above with respect to the Common Class without
approval of at least a majority of the outstanding voting securities of the
Common Class. In addition, all material amendments to this Plan must be approved
in the manner described in Section 5(b) and 5(c) above.
SECTION 6. CONTINUANCE OF PLAN; REPORTING OBLIGATIONS
This Plan will continue in effect with respect to the Common Class from
year to year so long as its continuance is specifically approved annually by
vote of the Trust's Board in the manner described in Section 5(b) and 5(c)
above. The Trust's Board will evaluate the
E-11
appropriateness of this Plan and its payment terms on a continuing basis and in
doing so will consider all relevant factors, including the types and extent of
Services provided by CSAMSI and/or Service Providers and amounts CSAMSI and/or
Service Providers receive under this Plan.
Any person authorized to direct the disposition of monies paid or
payable by a Fund pursuant to this Plan or any related agreement will prepare
and furnish to the Fund's Board, and the Board will review, at least quarterly,
written reports, complying with the requirements of the Rule, which set out the
amounts expended under this Plan and the purposes for which those expenditures
were made.
SECTION 7. TERMINATION
This Plan may be terminated at any time with respect to the Common Class
of each Fund by vote of a majority of the Independent Board members or by a vote
of a majority of the outstanding voting securities of the Common Class of the
Fund.
SECTION 8. PRESERVATION OF MATERIALS
Each Fund will preserve copies of this Plan, any agreement relating to
this Plan and any report made pursuant to Section 5 above, for a period of not
less than six years (the first two years in an easily accessible place) from the
date of this Plan, the agreement or the report.
SECTION 9. MEANING OF CERTAIN TERMS
As used in this Plan, the terms "interested person" and "majority of the
outstanding voting securities " will be deemed to have the same meanings that
those terms have under the 1940 Act and the rules and regulations under the 1940
Act, subject to any exemption that may be granted to each Fund under the 1940
Act by the Securities and Exchange Commission.
Dated: ______________, 2003
E-12
Exhibit E-5
CREDIT SUISSE OPPORTUNITY FUNDS
CREDIT SUISSE U.S. GOVERNMENT MONEY FUND
CREDIT SUISSE MUNICIPAL MONEY FUND
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
CLASS A SHARES
Each of Credit Suisse U.S. Government Money Fund and Credit Suisse
Municipal Money Fund (each a "Fund"), each a series of Credit Suisse Opportunity
Funds (the "Trust"), is an open-end management investment company registered as
such under the Investment Company Act of 1940 (the "Act"). The Trust employs
Credit Suisse Asset Management Securities, Inc. and/or others as the principal
underwriter and distributor (the "Distributor") of the Class A shares of each
Fund pursuant to a written distribution agreement and desires to adopt a plan of
distribution pursuant to Rule 12b-1 under the Act to assist in the distribution
of Class A shares of the Fund.
The Board of Trustees (the "Board") of the Trust having determined that
a plan of distribution containing the terms set forth herein is reasonably
likely to benefit each Fund and its shareholders, the Trust hereby adopts the
compensation-type plan of distribution for the Fund's Class A shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:
1. Each Fund is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments and/or service fees (the
"Payments") in connection with the distribution of Class A shares of the Fund
equal to 0.40 of 1% of the average daily net assets of the Class A shares of
such Fund. Such Payments shall be accrued daily and paid monthly in arrears.
2. Payments under this Plan are not limited to the expenses actually
incurred in providing services hereunder, and such payments may exceed expenses
actually incurred. Furthermore, any portion of any fee paid to the Distributor
or to any of its affiliates by a Fund, or any of their past profits or other
revenue, may be used in their sole discretion to provide services to
shareholders of the Fund or to foster distribution of Class A shares. The
Distributor or each Fund's investment adviser or their affiliates may, from such
entity's own resources, pay a fee to an organization whose clients or customers
own or may own Class A shares.
3. Payments may be made by each Fund under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class A shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time, including the
selection of those activities for which payment can be made, whose decision
shall be conclusive. Without in any way limiting the discretion of the Board,
the following activities are hereby declared to be primarily intended to result
in the sale of Class A shares of a Fund: advertising the Fund either alone or
together with other funds; compensating
E-13
underwriters, dealers, brokers, banks and other selling entities and sales and
marketing personnel of any of them for sales of Class A shares of the Fund,
whether in a lump sum or on a continuous, periodic, contingent, deferred or
other basis; compensating underwriters, dealers, brokers, banks and other
servicing entities and servicing personnel (including the Distributor, the
Fund's investment adviser and their personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Fund,
including assistance in connection with inquiries relating to shareholder
accounts; the production and dissemination of prospectuses and statements of
additional information of the Fund and the preparation, production and
dissemination of sales, marketing and shareholder servicing materials; third
party consultancy or similar expenses relating to any activity for which Payment
is authorized by the Board; and the financing of any activity for which Payment
is authorized by the Board.
4. Amounts paid to the Distributor by each Fund under the Plan will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of a Fund, except that distribution expenses attributable to the
Fund as a whole will be allocated to the Class A shares according to the ratio
of the sales of Class A shares to the total sales of the Fund's shares over the
Fund's fiscal year or such other allocation method approved by the Board.
5. The Trust is hereby authorized and directed to enter into
appropriate written agreements with the Distributor on behalf of each Fund and
each other person to whom the Trust intends to make any Payment, and the
Distributor is hereby authorized and directed to enter into appropriate written
agreements with each person to whom the Distributor intends to make any payments
in the nature of a Payment. The foregoing requirement is not intended to apply
to any agreement or arrangement with respect to which the party to whom Payment
is to be made does not have the purpose set forth in Section 2 above (such as
the printer in the case of the printing of a prospectus or a newspaper in the
case of an advertisement) unless the Board determines that such an agreement or
arrangement should be treated as a "related agreement" for purposes of Rule
12b-1 under the Act.
6. Each agreement required to be in writing by Section 5 must contain
the provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the trustees
("Disinterested Trustee Approval") who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the Plan
or any such agreement, by vote cast in person at a meeting called for the
purposes of voting on such agreement.
7. The officers, investment adviser or Distributor of each Fund, as
appropriate, shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such Payments were made.
8. To the extent any activity is covered by Section 2 and is also an
activity which a Fund may pay for on behalf of the Fund without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act (such as the printing of prospectuses for existing Fund shareholders),
this Plan shall not be construed to prevent or restrict the Fund from paying
such amounts outside of this Plan and without limitation hereby and without such
payments being included in the calculation of Payments subject to the limitation
set forth in Section 1.
E-14
9. This Plan shall not take effect until it has been approved by a vote
of at least a majority of the outstanding voting securities of the Class A
shares of a Fund. This Plan may not be amended in any material respect without
Board Approval and Disinterested Trustee Approval and may not be amended to
increase the maximum level of Payments permitted hereunder without such
approvals and further approval by a vote of at least a majority of the
outstanding voting securities of the relevant Fund. This Plan may continue in
effect for longer than one year after its approval by the shareholders of a Fund
only as long as such continuance is specifically approved at least annually by
Board Approval and by Disinterested Trustee Approval.
10. While the Plan is in effect with respect to each Fund, the
selection and nomination of the trustees who are not "interested persons" of the
Fund will be committed to the discretion of such disinterested trustees.
11. This Plan may be terminated with respect to a Fund at any time by a
vote of the trustees who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Plan or any
agreement hereunder, cast in person at a meeting called for the purposes of
voting on such termination, or by a vote of at least a majority of the
outstanding voting securities of the Class A shares of the Fund.
12. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and the
rules adopted by the Securities and Exchange Commission thereunder and the term
"vote of a majority of the outstanding voting securities" of the Class A shares
of each Fund shall mean the vote, at the annual or a special meeting of the
holders of Class A shares of a Fund duly called, of the lesser of (a) 67% or
more of the voting securities of the Class A shares of the Fund present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Class A shares of the Fund are present or represented by proxy, or (b) more
than 50% of the outstanding voting securities of the Class A shares of the Fund.
______________, 2003
E-15
Annex I
5% SHAREHOLDERS LIST
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Capital Appreciation Fund
- ---------------------------------------
Credit Suisse Capital Funds
- ---------------------------
- Credit Suisse Tax Efficient Fund
- -----------------------------------
Credit Suisse Capital Funds
- ---------------------------
- Credit Suisse Large Cap Value Fund
- -------------------------------------
Credit Suisse Capital Funds
- ---------------------------
- Credit Suisse Small Cap Value Fund
- -------------------------------------
Credit Suisse Cash Reserve Fund
- -------------------------------
Credit Suisse Emerging Growth Fund
- ----------------------------------
Credit Suisse Emerging Markets Fund
- -----------------------------------
Credit Suisse Fixed Income Fund
- -------------------------------
I-1
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Global Fixed Income Fund
- ---------------------------------------
Credit Suisse Global Post-Venture Capital Fund
- ----------------------------------------------
Credit Suisse Institutional Fixed Income Fund
- ---------------------------------------------
Credit Suisse Institutional Fund
- --------------------------------
- Capital Appreciation Portfolio
- ---------------------------------------
Credit Suisse Institutional Fund
- --------------------------------
- Harbinger Portfolio
- -----------------------
Credit Suisse Institutional Fund,
- ---------------------------------
- International Focus Portfolio
- ---------------------------------
Credit Suisse Institutional Fund
- --------------------------------
- Investment Grade Fixed Income Portfolio
- -------------------------------------------
I-2
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Institutional Fund
- ---------------------------------------
- Large Cap Value Portfolio
- ---------------------------------------
Credit Suisse Institutional Fund
- ---------------------------------------
- Select Equity Portfolio
- ---------------------------------------
Credit Suisse Institutional Fund
- ---------------------------------------
- Small Cap Growth Portfolio
- ---------------------------------------
Credit Suisse Institutional High Yield Fund
- ----------------------------------------------
Credit Suisse Institutional International Fund
- ----------------------------------------------
Credit Suisse Institutional Money Market Fund
- ----------------------------------------------
- Government Portfolio
- ----------------------------------------------
Credit Suisse Institutional Money Market Fund
- ----------------------------------------------
- - Prime Portfolio
- ----------------------------------------------
Credit Suisse International Focus Fund
- ----------------------------------------------
Credit Suisse Investment Grade Bond Fund
- ----------------------------------------------
I-3
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Japan Growth Fund
- ----------------------------------------------
Credit Suisse Municipal Bond Fund
- ----------------------------------------------
Credit Suisse New York Municipal Fund
- ----------------------------------------------
Credit Suisse New York Tax Exempt Fund
- ----------------------------------------------
Credit Suisse Opportunity Funds
- ----------------------------------------------
- Credit Suisse High Income Fund
- ----------------------------------------------
Credit Suisse Opportunity Funds
- ----------------------------------------------
- Credit Suisse Municipal Money Fund
- ----------------------------------------------
Credit Suisse Opportunity Funds
- ----------------------------------------------
- Credit Suisse U.S. Government Money Fund
- ----------------------------------------------
Credit Suisse Select Equity Fund
- ----------------------------------------------
Credit Suisse Short Duration Bond Fund
- ----------------------------------------------
Credit Suisse Small Cap Growth Fund
- ----------------------------------------------
I-4
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Strategic Small Cap Fund
- ----------------------------------------------
Credit Suisse Trust - Blue Chip Portfolio
- ----------------------------------------------
Credit Suisse Trust - Emerging Growth Portfolio
- -----------------------------------------------
Credit Suisse Trust - Emerging Markets Portfolio
- ------------------------------------------------
Credit Suisse Trust - Global Post-Venture Capital Portfolio
- -----------------------------------------------------------
Credit Suisse Trust - Global Technology Portfolio
- -------------------------------------------------
Credit Suisse Trust - International Focus Portfolio
- ---------------------------------------------------
Credit Suisse Trust - Large Cap Value Portfolio
- ------------------------------------------------
Credit Suisse Trust - Small Cap Growth Portfolio
- ------------------------------------------------
I-5
Percentage
ownership of
Name and Address Shares Held outstanding shares
---------------- ----------- ------------------
Credit Suisse Trust - Small Cap Value Portfolio
- ------------------------------------------------
* The Portfolio believes this entity, the holder of record of these shares,
is not the beneficial owner of such shares.