SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, OCTOBER 7, 1999
-----------------
TO THE SHAREHOLDERS OF
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of The
Emerging Markets Telecommunications Fund, Inc. (the "Fund") will be held at the
offices of Willkie Farr & Gallagher, 787 Seventh Avenue, 38th Floor, New York,
New York 10019, on Thursday, October 7, 1999 commencing at 2:00 p.m., New York
City time. The purpose of the meeting is to consider and act upon the following
proposals and to consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof:
(1) To elect two (2) directors of the Fund.
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants of the Fund for the fiscal year ending May 31,
2000.
(3) To consider a shareholder proposal to terminate the investment
advisory agreement with Credit Suisse Asset Management, LLC within
sixty days, with a recommendation that the Board give heavy weight
to a commitment to realize net asset value for shareholders when
selecting a new advisor.
The close of business on August 17, 1999 has been fixed as the record date
for the determination of the shareholders entitled to notice of, and to vote at,
the meeting.
This notice and related proxy material are first being mailed on or about
September 1, 1999.
By order of the Board of Directors,
/s/ Michael A. Pignataro
MICHAEL A. PIGNATARO
SECRETARY
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED AND VOTED AT THE MEETING. ACCORDINGLY, PLEASE DATE,
SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT YOUR PROXY CARD BE RETURNED
PROMPTLY IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
Dated: September 1, 1999
New York, New York
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
ONE CITICORP CENTER
153 EAST 53RD STREET
57TH FLOOR
NEW YORK, NEW YORK 10022
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PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, OCTOBER 7, 1999
-----------------
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors (the "Board") of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") for use at the Annual Meeting of
Shareholders to be held at the offices of Willkie Farr & Gallagher, 787 Seventh
Avenue, 38th Floor, New York, New York 10019 on Thursday, October 7, 1999
(commencing at 2:00 p.m.) and at any adjournments thereof (collectively, the
"Meeting"). A Notice of Annual Meeting of Shareholders and a proxy card (the
"Proxy") accompany this Proxy Statement. Proxy solicitations will be made
primarily by mail, but solicitations may also be made by telephone, telegraph or
personal interviews conducted by officers or employees of the Fund, Credit
Suisse Asset Management, LLC (formerly BEA Associates) ("CSAM"), the investment
adviser to the Fund, Bear Stearns Funds Management Inc., the administrator of
the Fund (the "Administrator"), or Georgeson Shareholder Communications, Inc.
("Georgeson"), a proxy solicitation firm that has been retained by the Fund and
which will receive a fee of approximately $5,000 and will be reimbursed for its
reasonable expenses. All costs of solicitation, including (a) printing and
mailing of this Proxy Statement and accompanying material, (b) the reimbursement
of brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of the Fund's shares, (c) payment of Georgeson
for its services in soliciting Proxies and (d) supplementary solicitations to
submit Proxies, will be borne by the Fund. This Proxy Statement is expected to
be mailed to shareholders on or about September 1, 1999.
The principal executive office of CSAM is One Citicorp Center, 153 East 53rd
Street, 57th Floor, New York, New York 10022. The Administrator has its
principal executive office at 575 Lexington Avenue, 9th Floor, New York, New
York 10022.
The Fund's Annual Report containing audited financial statements for the
fiscal year ended May 31, 1999 has been previously furnished to all shareholders
of the Fund. It is not to be regarded as proxy-soliciting material.
If the enclosed Proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted in accordance with
the instructions marked on the Proxy. If no instructions are marked on the
Proxy, the Proxy will be voted FOR election of the nominees for director, FOR
the ratification of PricewaterhouseCoopers LLP as independent public accountants
of the Fund for the fiscal year ending May 31, 2000, AGAINST the shareholder
proposal to terminate the Fund's Investment Advisory Agreement with CSAM, and in
accordance with the judgment of the persons named in the proxy on any other
matters that may properly come before the Meeting and that are deemed
appropriate. Any shareholder giving a Proxy has the right to attend the Meeting
to vote his shares in
1
person (thereby revoking any prior Proxy) and also the right to revoke the Proxy
at any time by written notice received by the Fund prior to the time it is
voted.
In the event that a quorum is present at the Meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of Proxies. Any such adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by Proxy. If a quorum is
present, the persons named as proxies will vote those Proxies that they are
entitled to vote thereon in accordance with their best judgment in the interest
of the Fund. A shareholder vote may be taken on one or more of the proposals in
the Proxy Statement prior to any adjournment if sufficient votes have been
received and it is otherwise appropriate. A quorum of shareholders is
constituted by the presence in person or by proxy of the holders of a majority
of the outstanding shares of the Fund entitled to vote at the Meeting. For
purposes of determining the presence of a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted.
Proposal 1 requires for approval the affirmative vote of a plurality of the
votes cast at the Meeting in person or by proxy. Proposal 2 requires for
approval the vote of a majority of the votes cast at the Meeting in person or by
proxy and Proposal 3 requires for approval the vote of a "majority of the
outstanding voting shares" of the Fund. "Majority of the outstanding voting
shares" (as defined in the Investment Company Act of 1940, as amended (the "1940
Act")) means the lesser of (a) 67% or more of the shares of the Fund present at
the Meeting if the holders of more than 50% of the outstanding shares of the
Fund are present in person or by proxy, or (b) more than 50% of the outstanding
shares of the Fund. Because abstentions and broker non-votes are not treated as
shares voted, any abstentions and broker non-votes would have no impact on
Proposals 1 and 2 and would have the same effect as a vote AGAINST Proposal 3.
The Fund has one class of shares of capital stock, par value $.001 per share
(the "Shares"). On the record date, August 17, 1999, there were 7,440,919 Shares
outstanding. Each Share is entitled to one vote at the Meeting, and fractional
Shares are entitled to proportionate shares of one vote.
In order that your Shares may be represented at the Meeting, you are
requested to:
--indicate your instructions on the Proxy;
--date and sign the Proxy;
--mail the Proxy promptly in the enclosed envelope;
--allow sufficient time for the Proxy to be received and processed on or
before 2:00 p.m. on October 7, 1999.
PROPOSAL 1: ELECTION OF DIRECTORS
The first proposal to be submitted at the Meeting will be the election of
two (2) directors of the Fund, each to hold office for such term set forth below
and until his successor is elected and qualified.
The Board is divided into three classes, each class having a term of no more
than three years. Each year the term of office of one class expires and the
successor or successors elected to such class will serve for a three-year term.
2
George W. Landau and Richard W. Watt, directors whose current terms expire
on the date of this Meeting, have been nominated for a three-year term to expire
at the 2002 Annual Meeting of Shareholders. Messrs. Landau and Watt currently
serve as directors of the Fund. Mr. Landau has been a member of the Board of
Directors since the Fund commenced operations in 1992, and Mr. Watt has served
as a director since 1995.
Each nominee has indicated an intention to continue to serve if elected and
has consented to being named in this Proxy Statement. Each director named below
who is deemed an "interested person" of the Fund, as defined in the 1940 Act, is
indicated by an asterisk. Messrs. Priest and Watt are interested persons of the
Fund by virtue of their positions as directors and/or officers of CSAM.
The following table sets forth certain information regarding the nominees
for election to the Board of the Fund, directors whose terms of office continue
beyond the 1999 annual meeting, and the officers and directors of the Fund as a
group. Each of the nominees, directors and officers of the Fund has sole voting
and investment power with respect to the Shares shown. Each nominee, each
director and the officers and directors of the Fund as a group owns less than
one percent of the outstanding Shares of the Fund.
MEMBERSHIPS ON
BOARDS OF OTHER
SHARES LENGTH OF SERVICE REGISTERED
BENEFICIALLY AS DIRECTOR AND INVESTMENT
OWNED ON CURRENT PRINCIPAL OCCUPATION TERM OF COMPANIES AND
AUGUST 17, AND PRINCIPAL EMPLOYMENT MEMBERSHIP ON PUBLICLY HELD
NAME (AGE) 1999 DURING THE PAST FIVE YEARS BOARD OF THE FUND COMPANIES
- ----------------------------------- ------------- -------------------------------- ----------------- -----------------
Dr. Enrique R. Arzac (57) 700 Professor of Finance and Econom- Since 1996; cur- Director of nine
Columbia University ics, Graduate School of rent term ends at other CSAM-
Graduate School of Business, Columbia University the 2001 annual advised
Business (1971-present). meeting. investment
New York, NY 10027 companies; Direc-
tor of The Adams
Express Company;
Director of
Petroleum and
Resources Corpo-
ration.
James J. Cattano (55) ............. 100 President, Primary Resource Inc. Since 1994; cur- Director of six
55 Old Field Point Road (an international trading and rent term ends at other CSAM-
Greenwich, CT 06830 manufacturing company the 2000 annual advised
specializing in the sale of meeting. investment
agricultural commodities companies.
throughout Latin American mar-
kets) (10/96-present);
President, Atlantic Fertilizer &
Chemical Company (an
international trading company
specializing in the sale of
agricultural commodities in
Latin American markets)
(10/91-10/96).
3
MEMBERSHIPS ON
BOARDS OF OTHER
SHARES LENGTH OF SERVICE REGISTERED
BENEFICIALLY AS DIRECTOR AND INVESTMENT
OWNED ON CURRENT PRINCIPAL OCCUPATION TERM OF COMPANIES AND
AUGUST 17, AND PRINCIPAL EMPLOYMENT MEMBERSHIP ON PUBLICLY HELD
NAME (AGE) 1999 DURING THE PAST FIVE YEARS BOARD OF THE FUND COMPANIES
- ----------------------------------- ------------- -------------------------------- ----------------- -----------------
Peter A. Gordon (57) .............. 0 Retired (1/96-present); General Since 1992; cur- Director of five
284 Coopers Neck Lane Partner of Ethos Capital Manage- rent term ends at other CSAM-
P.O. Box 1327 ment (6/92-12/95); Managing the 2001 annual advised invest-
Southampton, NY 11968 Director at Salomon Brothers Inc meeting. ment companies;
(1981-6/92). Director of TCS
Fund, Inc.;
Director of the
Mills
Corporation.
George W. Landau (79) ............. 2,000 Senior Advisor, Latin America Since 1992; cur- Director of six
Two Grove Isle Drive Group, The Coca-Cola Company rent term ends at other CSAM-
Coconut Grove, FL 33133 (1988-present); President of the the 1999 annual advised
Americas Society and Council of meeting. investment
the Americas (7/85-10/93); companies; Direc-
United States Ambassador to tor of Emigrant
Venezuela (1982-1985); United Savings Bank;
States Ambassador to Chile Director of GAM
(1977-1982) and United States Funds, Inc.
Ambassador to Paraguay
(1972-1977).
William W. Priest, Jr.* (57) 1,000 Chairman--Management Committee, Since 1997; cur- Director of ten
153 East 53rd Street Chief Executive Officer and rent term ends at other CSAM-
New York, NY 10022 Executive Director of CSAM 2000 annual advised
(12/90-present). meeting. investment
companies.
Martin M. Torino (49) ............. 0 Chairman of the Board of Ingenio Since 1992; cur- Director of five
Reconquista 365, 9th Fl. y Refineria San Martin Del rent term ends at other CSAM-
Capital Federal 1003 Tabacal S.A. (8/96-present); the 2001 annual advised
Buenos Aires, Argentina Executive Director of TAU S.A. meeting. investment
(a commodities trading firm) companies.
(11/90-present); President of
DYAT S.A. (10/93-
present).
Richard W. Watt* (40) ............. 1,790 Managing Director of CSAM Since 1995; cur- Director of seven
153 East 53rd Street (7/96-present); Senior Vice rent term ends at other CSAM-
New York, NY 10022 President of CSAM (8/95-6/96); the 1999 annual advised
Head of Emerging Markets meeting. investment
Investments and Research at companies.
Gartmore Investment Limited
(11/92-6/95); Director of
Kleinwort Benson International
Investment (5/87-10/92).
All directors and officers
(11 persons, including
the foregoing) as a group........ 5,590
4
During the fiscal year ended May 31, 1999, each director who is not a
director, officer, partner, co-partner or employee of CSAM, the Administrator,
or any affiliate thereof, received an annual fee of $5,000 and $500 for each
meeting of the Board attended by him and was reimbursed for expenses incurred in
connection with his attendance at the Board meetings. The total remuneration
paid or accrued by the Fund during the fiscal year ended May 31, 1999 to all
such unaffiliated directors was $42,000. During the fiscal year ended May 31,
1999, the Board convened eight times. Each director attended at least
seventy-five percent of the aggregate number of meetings of the Board and any
committee on which he served held during the period for which he was a Director.
Messrs. Arzac, Cattano, Gordon, Landau and Torino constitute the Fund's
Audit Committee, which is composed of directors who are not interested persons
of the Fund. The Audit Committee met twice during the fiscal year ended May 31,
1999. The Audit Committee advises the full Board with respect to accounting,
auditing and financial matters affecting the Fund. The Board performs the
functions of a nominating committee. The Board will consider nominees
recommended by shareholders in the event any vacancies arise. Recommendations
should be submitted to the Board care of the Secretary of the Fund. The Fund
does not have a compensation committee.
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(f) of
the 1940 Act require the Fund's officers and directors, officers and directors
of the investment adviser, affiliated persons of the investment adviser, and
persons who beneficially own more than ten percent of the Fund's Shares, to file
reports of ownership with the Securities and Exchange Commission, the New York
Stock Exchange and the Fund. Based solely upon its review of the copies of such
forms received by it and written representations from such persons, the Fund
believes that, for the fiscal year ended May 31, 1999, all filing requirements
applicable to such persons were complied with.
The following table shows certain information about officers of the Fund
other than Messrs. Priest and Watt, who are described above. Mr. Priest is
Chairman of the Board of the Fund and was appointed to such position on February
11, 1997. Mr. Watt is President and Chief Investment Officer of the Fund. Mr.
Watt was appointed to his positions on February 11, 1997, having previously
served as Executive Vice President and Investment Officer of the Fund since
August 15, 1995. Mr. Pignataro has been an officer since the commencement of the
Fund's operations. On August 12, 1997, Mr. Liebes and Mr. Del Guercio were
elected Senior Vice President and Vice President of the Fund, respectively. Mr.
Hrabchak was elected investment officer of the Fund on November 4, 1997. Each
officer of the Fund will hold office until a successor has been elected by the
Board. All officers of the Fund are employees of and are compensated by CSAM.
SHARES
BENEFICIALLY CURRENT PRINCIPAL OCCUPATION AND
OWNED ON PRINCIPAL EMPLOYMENT DURING THE PAST FIVE
NAME AGE AUGUST 17, 1999 POSITION WITH FUND YEARS
- ------------------------------ ----- ----------------- ----------------------- -----------------------------------------
Robert Hrabchak .............. 35 0 Investment Officer Director of CSAM (1/99-present); Vice
153 East 53rd Street President of CSAM (6/97-1/99); Senior
New York, NY 10022 Portfolio Manager, Merrill Lynch Asset
Management, Hong-Kong (1/95-5/97);
Associate, Salomon Brothers Inc
(4/93-1/95).
5
SHARES
BENEFICIALLY CURRENT PRINCIPAL OCCUPATION AND
OWNED ON PRINCIPAL EMPLOYMENT DURING THE PAST FIVE
NAME AGE AUGUST 17, 1999 POSITION WITH FUND YEARS
- ------------------------------ ----- ----------------- ----------------------- -----------------------------------------
Hal Liebes ................... 35 0 Senior Vice President Director and General Counsel of CSAM
153 East 53rd Street (1/99-present); Senior Vice President and
New York, NY 10022 General Counsel of CSAM (3/97-1/99); Vice
President and Counsel of Lehman Brothers,
Inc. (6/96-3/97); Vice President and
Legal Counsel for CSAM (6/95-6/96); Chief
Compliance Officer, CS First Boston
Investment Management (94-95); Staff
Attorney, Division of Enforcement, U.S.
Securities and Exchange Commission
(91-94); Associate, Morgan, Lewis &
Bockius (89-91).
Michael A. Pignataro ......... 39 0 Chief Financial Officer Vice President of CSAM (12/95-present);
153 East 53rd Street and Secretary Assistant Vice President and Chief
New York, NY 10022 Administrative Officer for Investment
Companies of CSAM (9/89-12/95).
Rocco A. Del Guercio ......... 36 0 Vice President Assistant Vice President of CSAM
153 East 53rd Street (1/99-present); Administrative Officer
New York, NY 10022 for CSAM-advised investment companies
(6/96-present); Assistant Treasurer,
Bankers Trust Corp., Fund Administration
(3/94-6/96); Mutual Fund Accounting
Supervisor, Dreyfus Corporation
(4/87-3/94).
The following table shows certain compensation information for the directors
of the Fund for the fiscal year ended May 31, 1999. None of the Fund's executive
officers or directors who are also officers or directors of CSAM received any
compensation from the Fund for such period. The Fund has no bonus, profit
sharing, pension or retirement plans.
PENSION OR
RETIREMENT TOTAL TOTAL NUMBER
BENEFITS ESTIMATED COMPENSATION FROM OF BOARDS OF
ACCRUED AS ANNUAL FUND AND CSAM- ADVISED
AGGREGATE PART OF BENEFITS FUND COMPLEX INVESTMENT
COMPENSATION FUND UPON PAID TO COMPANIES
NAME OF DIRECTOR FROM FUND EXPENSES RETIREMENT DIRECTORS SERVED
- ------------------------------ ------------ ---------- ---------- ----------------- ------------
Dr. Enrique R. Arzac ......... $9,000 0 0 $97,000 10
James J. Cattano ............. $8,500 0 0 $61,500 7
Peter A. Gordon .............. $8,000 0 0 $47,500 6
George W. Landau ............. $9,000 0 0 $63,000 7
Martin M. Torino ............. $8,000 0 0 $52,000 6
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" THE NOMINEES FOR DIRECTOR.
6
PROPOSAL 2: RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The second proposal to be submitted at the Meeting will be the ratification
or rejection of the selection by the Board of PricewaterhouseCoopers LLP as
independent public accountants of the Fund for the fiscal year ending May 31,
2000. At a meeting held on July 27, 1999, the Board, including those directors
who are not "interested persons" of the Fund, approved the selection of
PricewaterhouseCoopers LLP for the fiscal year ending May 31, 2000.
PricewaterhouseCoopers LLP has been the Fund's independent public accountants
since the Fund commenced operations in 1992, and has informed the Fund that it
has no material direct or indirect financial interest in the Fund. A
representative of PricewaterhouseCoopers LLP will be available by telephone at
the Meeting and will have the opportunity to make a statement if the
representative so desires and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS.
PROPOSAL 3: SHAREHOLDER PROPOSAL
The Fund has received the following proposal and supporting statement from
Mr. Walter Baer, who advised the Fund that, at the time he submitted his
proposal to the Fund, he had owned shares of the Fund with a market value of at
least $2,000 continuously for the preceding year. The Fund will provide the
address of Mr. Baer to any person who so requests such information orally or in
writing, promptly upon the receipt of any oral or written request therefor, to
Credit Suisse Asset Management, LLC at 153 East 53rd Street, 57th Floor, New
York, New York 10022. The Board and the Fund accept no responsibility for the
accuracy of either the proposal or Mr. Baer's supporting statement. For the
reasons set forth in detail in the Opposing Statement of the Board of Directors,
which follows Mr. Baer's Supporting Statement, the Board of Directors recommends
a vote AGAINST this shareholder proposal. The text of the shareholder proposal
and supporting statement is as follows:
"RESOLVED: The investment advisory agreement between Credit Suisse Asset
Management ("Advisor") and the Fund shall be terminated within sixty days. The
shareholders recommend that the Directors give heavy weight to a commitment to
realize net asset value for shareholders when selecting a new advisor."
SUPPORTING STATEMENT
"Last year shareholders approved by a decisive margin -- 59% of shares
voting -- a shareholder proposal recommending 'that the Board of Directors
expedite the process to ensure the Fund's shares can be purchased and or sold at
net asset value.' Regrettably, the Board chose to side with the Fund's
Investment Advisor and against the shareholders. The Board stated three months
later that it had 'considered the proposal...and unanimously voted not to
implement the recommendation at this time.'
"Why did the Board disregard the legitimate request of a majority of voting
shareholders? I believe the principal reason is that the Directors, including
the so-called 'Independent Directors', are more concerned with the interests of
the Fund's Advisor than with the interests of the Fund's shareholders. In my
view, further shareholder votes that are merely recommendations will also be
ignored.
"This proposal would break the ties between the Advisor and its cronies on
the Board. It is not a recommendation but a demand for action. It sends a clear
message to the Board that we shareholders want full value for our shares, just
as we wanted and voted for last year.
7
"While this proposal may appear drastic, I believe that if it passes, the
Board will have to deliver net asset value to shareholders rather than endlessly
consider what to do about the discount."
OPPOSING STATEMENT OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE FUND OPPOSES THE PROPOSAL DESCRIBED ABOVE AND
URGES ALL SHAREHOLDERS TO VOTE AGAINST THE PROPOSAL FOR THE REASONS NOTED BELOW.
At a meeting held on July 27, 1999, the Board, including the Non-interested
Directors, unanimously resolved to recommend that you vote AGAINST Proposal 3.
At its November 10, 1998 quarterly meeting, the Board, including the
Non-interested Directors voting separately, unanimously approved the
continuation of the Investment Advisory Agreement with CSAM. The Directors
thoroughly reviewed CSAM's performance and the relevant information made
available to them by CSAM as required under the 1940 Act, and determined that
such continuation was in the best interest of the Fund. Since then, the
Directors have periodically reviewed CSAM's performance and the relevant
information made available to them by CSAM and determined that continuation of
the Investment Advisory Agreement is in the best interest of the Fund. The
Directors do not believe that there has been any subsequent change in the facts
upon which their decision was premised that would now warrant terminating CSAM.
As required by Section 15 of the 1940 Act, advisory contracts must be
approved annually by the board of directors (including a majority of the
non-interested directors) or a majority of the outstanding voting securities of
an investment company. Section 15(c) of the 1940 Act charges directors with the
duty to review information reasonably necessary to evaluate the terms of the
advisory contract.
In anticipation of the November 10th meeting and in accordance with
well-established practice, CSAM provided the Directors with extensive
information to enable them to satisfy their duty to conduct a meaningful
evaluation of the CSAM Investment Advisory Agreement before deciding whether to
approve its continuation. This information included, among other things, (i) a
description of the business, operations, investment philosophy and financial
condition of CSAM, (ii) an analysis of the profitability to CSAM of each
Investment Advisory Agreement, (iii) a comparison of the investment performance
of the Fund with that of other funds managed by CSAM, as well as other
registered and unregistered investment companies within such Fund's peer group
and relevant stock indices, (iv) financial information relating to the Fund,
including net asset value total return and market price data for the Fund's
Shares, (v) data regarding fees paid by other clients of CSAM, and (vi) a
comparison of the expense ratios and advisory fee levels of the Fund with those
of their peer groups.
Additionally, the Directors commissioned an advisory contract renewal report
from an independent research firm unaffiliated with CSAM. The report compared
the expenses, assets and fees of the Fund with comparable emerging market funds.
The Directors thoroughly discussed and analyzed the information and independent
report before making the decision to continue the Investment Advisory Agreement
with CSAM.
After finding, among other things, that (i) CSAM's compensation is at a
level comparable to similarly situated funds, (ii) the Fund's performance is
within an acceptable range of performance for a fund with an investment strategy
such as that of the Fund, and (iii) CSAM and the personnel assigned to the Fund
have the requisite experience and skill to manage the Fund in accordance with
their respective investment objectives and policies, the Directors, including
the Non-interested Directors, separately concluded that the continuation of the
Fund's Investment Advisory Agreement with CSAM was in the best interest of the
8
shareholders. The Directors reached this determination in the exercise of their
business judgment as part of their lawful authority over the Fund's business
affairs under Maryland law.
Mr. Baer's proposal to terminate CSAM is premised on his stated belief that
the Board failed to take action in response to the adoption by a "decisive
margin" of shareholders at last year's shareholders' meeting of a proposal
recommending that the Board "expedite the process to ensure that the Fund's
shares can be purchased and or sold at net asset value" because the Board is
beholden to the interest of CSAM, which is opposed to realizing net asset value.
(In fact, only 41.8% of the Fund's outstanding shares voted on the proposal,
with 25.5% of the outstanding shares in favor and 16.3% against.)
Shortly after the Fund's 1998 annual meeting, the Board announced on October
21, 1998 that it had approved a share repurchase program (the "Share Repurchase
Program") in order to enhance shareholder value, pursuant to which the Directors
authorized the repurchase by the Fund of up to 15% of the Fund's outstanding
common stock. The Directors had been reviewing the market discount and available
remedial steps for some time and concluded that authorizing a share repurchase
program was at the time and still is an appropriate response to the market
discount issue.
The Share Repurchase Program was implemented in light of the significant
discount at which the Fund's shares had been trading, and was intended both to
provide additional liquidity to those shareholders who elect to sell their
shares and to enhance the net asset value of the shares held by those
shareholders who maintain their investment. At the prevailing discount levels
and in light of the market volatility at the time, the Board believed that such
repurchases would present an attractive investment opportunity as well as reduce
discount levels. The Board has reviewed periodically management reports on
repurchase activity. As of August 27, 1999, the Fund has repurchased 997,800 of
its Shares, representing 11.83% of its total number of issued and outstanding
Shares, with a $0.27 per Share anti-dilutive impact to net asset value.
The Directors realize that many shareholders are frustrated by the market
discount, which is a market-wide phenomenon, and are striving to deal with that
issue in a balanced and careful fashion so as to meet their duty to all
shareholders. The Directors closely monitor the market price and net asset value
of the Fund's shares on an ongoing basis, including at each quarterly Board
meeting. The Directors have discussed at length, both internally and with
industry analysts and others, possible approaches to the market discount issue,
including mergers, tender offers, the conversion to open-end status or
liquidation. The Directors adopted the Share Repurchase Program after review of
available information and consideration of, among other things, (i) current
levels of market discount, (ii) the cash position of the Fund, (iii) alternative
investment opportunities, and (iv) the positive impact the repurchases would
have upon the Fund's net asset value.
Contrary to what Mr. Baer asserts in his Supporting Statement, the Board and
the Non-interested Directors are continuously working in cooperation with CSAM
towards enhancing shareholder value. They have considered other possible actions
(namely merging, liquidating or open-ending the Fund or conducting a tender
offer) and may decide to implement any of these actions if they deem it
appropriate in the future. The Directors also continue to believe, for the
reasons stated below, that the benefits to shareholders of the closed-end status
of the Fund currently continue to outweigh the advantages which an open-ended
structure or tender offer would offer.
Converting the Fund into an "open-end fund," commonly known as a mutual
fund, would permit shareholders to redeem Shares at net asset value upon
request. Although open-ending the Fund would undoubtedly eliminate the discount,
the Directors believe that the shareholders derive significant benefits from the
closed-end structure. This structure allows CSAM to concentrate on managing a
stable pool of assets, without the need to keep assets in low-yielding cash or
to liquidate assets, sometimes at inopportune
9
times, to meet redemption requests. The closed-end structure guards the Fund's
stock price from declining due to high volume sales to meet redemption requests,
particularly in light of the fact many of the Fund's portfolio securities may be
relatively illiquid compared to securities traded in the U.S. or other developed
markets. The closed-end structure also allows CSAM to buy even more illiquid
holdings, such as private equities, which can benefit performance. The Directors
have continuously analyzed performance information relating to the Fund's
private equity positions, and such information shows that the private equity
positions have enhanced the Fund's net asset value return.
Open-ending the Fund would require the Directors to consider whether and how
to spend its money to market its Shares, which would affect the Fund's
performance. If the Directors decided not to spend money on marketing the
Shares, redemptions could shrink the Fund's asset base to the point where its
expense ratio increases, simply because fixed expenses are spread across a
smaller asset base. For now, the Directors continue to be guided by the
principles upon which the Fund was established, and which caused investors to
initially buy the Fund. Open-ending the Fund would fundamentally change its
character in ways that the Directors do not believe are in the best interest of
its shareholders.
In addition to the Share Repurchase Program, CSAM has made a greater effort
to increase the Fund's visibility in the investment community. In this regard,
the Fund's portfolio managers have been meeting with analysts and institutional
investors to ensure that the investment community has access to important
information about the Fund and its investments. Daily net asset values are
available by calling the Fund at 1-800-293-1232 or by visiting the Fund's
Website (www.cefsource.com). The management of CSAM has expanded the Website to
include reasonably current selected portfolio information on-line. The Fund
believes these steps may increase potential investor demand generally for its
Shares.
Changing advisers for funds that are as specialized as the Fund is not an
action to be taken lightly. The number of investment advisers with the requisite
expertise is limited. CSAM was one of the early proponents of investing in
emerging markets and is committed to maintaining and enhancing its presence in
this sector. These efforts are ongoing and in your best interests.
Accordingly, the Board and the Non-interested Directors believe that
termination of the Fund's Investment Advisory Agreement with CSAM is not in the
best interest of the Fund at this time and therefore THE BOARD, INCLUDING THE
NON-INTERESTED DIRECTORS, RECOMMENDS THAT THE SHAREHOLDERS VOTE "AGAINST" THIS
SHAREHOLDER PROPOSAL.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING;
SHAREHOLDER PROPOSALS
The Board is not aware of any other matters that will come before the
Meeting. Should any other matter properly come before the Meeting, it is the
intention of the persons named in the accompanying Proxy to vote the Proxy in
accordance with their judgment on such matters.
Notice is hereby given that for a shareholder proposal to be considered for
inclusion in the Fund's proxy material relating to its 2000 annual meeting of
shareholders, the shareholder proposal must be received by the Fund no later
than May 4, 2000. The shareholder proposal, including any accompanying
supporting statement, may not exceed 500 words. A shareholder desiring to submit
a proposal must be a record or beneficial owner of Shares with a market value of
$2,000 and must have held such Shares for at least one year. Further, the
shareholder must continue to hold such Shares through the date on which the
meeting is held. Documentary support regarding the foregoing must be provided
along with the proposal. There are additional requirements regarding proposals
of shareholders, and a shareholder contemplating submission of a proposal is
referred to Rule 14a-8 promulgated under the Securities Exchange Act of 1934.
The timely submission of a proposal does not guarantee its inclusion in the
Fund's proxy materials.
10
Pursuant to the Bylaws of the Fund, at any annual meeting of the
shareholders, only such business will be conducted as has been properly brought
before the annual meeting. To be properly brought before the annual meeting, the
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board, (ii) otherwise properly
brought before the meeting by or at the direction of the Board, or (iii)
otherwise properly brought before the meeting by a shareholder.
For business to be properly brought before the annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Fund. To be timely, any such notice must be delivered to or
mailed and received at The Emerging Markets Telecommunications Fund, Inc. c/o
Credit Suisse Asset Management, LLC, 153 E. 53rd Street, 57th Floor, New York,
NY 10022 not later than 60 days prior to the date of the meeting; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, any such notice by a
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which notice of the date of the
annual meeting was given or such public disclosure was made.
Any such notice by a shareholder must set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Fund's books, of the shareholder proposing such business,
(iii) the class and number of Shares of the capital stock of the Fund which are
beneficially owned by the shareholder, and (iv) any material interest of the
shareholder in such business.
The Fund may exercise discretionary voting authority with respect to any
shareholder proposals for the 2000 annual meeting of shareholders not included
in the proxy statement and form of proxy which are not submitted to the Fund
within the time-frame indicated above. Even if timely notice is received, the
Fund may exercise discretionary voting authority in certain other circumstances.
Discretionary voting authority is the ability to vote proxies that shareholders
have executed and returned to the Fund on matters not specifically reflected on
the form of proxy.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
REPORTS TO SHAREHOLDERS
The Fund sends unaudited semi-annual and audited annual reports to its
shareholders, including a list of investments held. THE FUND WILL FURNISH,
WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, UPON
REQUEST TO THE FUND AT ONE CITICORP CENTER, 153 EAST 53RD STREET, NEW YORK, NEW
YORK 10022, TELEPHONE (1-800-293-1232) OR AT THE FUND'S WEBSITE AT
WWW.CEFSOURCE.COM. THESE REQUESTS WILL BE HONORED WITHIN THREE BUSINESS DAYS OF
RECEIPT.
11
THE EMERGING MARKETS
TELECOMMUNICATIONS
FUND, INC.
---------------------------------------------------------------
3916-PS-99
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby appoints Messrs. Hal Liebes and Michael
A. Pignataro as Proxies, each with the power to appoint his
R substitute, and hereby authorizes them to represent and to vote, as
designated on the reverse side and in accordance with their judgment on
O such other matters as may properly come before the meeting or any
adjournments thereof, all shares of The Emerging Markets
X Telecommunications Fund, Inc. (the "Fund") that the undersigned is
entitled to vote at the annual meeting of shareholders on Thursday,
Y October 7, 1999, and at any adjournment thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
/X/ Please mark
votes as in
this example
This proxy when properly executed will be voted in the manner directed by the
undersigned shareholder. If no direction is made, this proxy will be voted
for Proposals 1 and 2 and against Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES IN PROPOSAL 1,
"FOR" PROPOSAL 2 AND "AGAINST" PROPOSAL 3.
1--ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:
Nominees: George W. Landau (three-year term) 2--TO RATIFY THE SELECTION OF FOR AGAINST ABSTAIN
Richard W. Watt (three-year term) PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT / / / / / /
PUBLIC ACCOUNTANTS OF THE FUND FOR THE
FISCAL YEAR ENDING MAY 31, 2000:
FOR ALL NOMINEES WITHHOLD ALL NOMINEES
/ / / /
3--TO APPROVE OR DISAPPROVE THE SHAREHOLDER FOR AGAINST ABSTAIN
/ / ______________________________________ PROPOSAL TO TERMINATE THE FUND'S INVESTMENT / / / / / /
For all nominees except as noted above ADVISORY AGREEMENT WITH CREDIT SUISSE ASSET
MANAGEMENT, LLC WITHIN SIXTY DAYS WITH A
RECOMMENDATION THAT THE BOARD GIVE HEAVY
WEIGHT TO A COMMITMENT TO REALIZE NET ASSET
VALUE FOR SHAREHOLDERS WHEN SELECTING A NEW
ADVISOR.:
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE BELOW
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears at left. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
Signature: _______________________ Date:_______________ Signature: _____________________________ Date:_______________