<PAGE>
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 the 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 Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GENERAL SECURITIES, INCORPORATED
(Name of Registrant as Specified in Its Charter)
N/A
(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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GENERAL SECURITIES, INCORPORATED
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held [DECEMBER __, 1998]
To General Securities, Incorporated Shareholders:
You are hereby notified that a Special Meeting of Shareholders of General
Securities, Incorporated (the "Fund") will be held at 5100 Eden Avenue, Room
204, Edina, Minnesota 55436, on [INSERT WEEKDAY], [DECEMBER __, 1998] at [____]
P.M., Minneapolis time, for the following purposes:
1. To elect nine Directors to hold office until the next Regular Meeting of
Shareholders or until their successors are elected.
2. To consider the approval and ratification of a new Investment Advisory
Agreement and a new Management Agreement with Robinson Capital Management,
Inc.
3. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on November [__],
1998 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting.
By Order of the Board of Directors,
John R. Houston, Secretary
Minneapolis, Minnesota
[____________, 1998]
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT
YOU EXPECT TO ATTEND IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE
THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE. YOU CAN HELP THE COMPANY
AVOID THE NECESSITY OF ADDITIONAL EXPENSE OF FURTHER SOLICITATIONS TO ENSURE A
QUORUM AT THE SPECIAL MEETING BY PROMPTLY RETURNING THE ENCLOSED PROXY.
<PAGE>
GENERAL SECURITIES, INCORPORATED
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of General Securities,
Incorporated (the "Fund") in connection with the solicitation of proxies by the
Board of Directors of the Fund to be voted at the Special Meeting of
Shareholders to be held on [DECEMBER __, 1998] and at any adjournment or
adjournments thereof. The Special Meeting will be held at the offices of the
Fund at 5100 Eden Avenue, Room 204, Edina, Minnesota 55436 at [____] p.m.
Minneapolis time. The mailing of this Proxy Statement to shareholders of the
Fund commenced on or about [__________], 1998.
Any proxy may be revoked at any time before it is voted by the execution
and delivery to the Secretary of the Fund of a later proxy. Shareholders
present at the Special Meeting may withdraw their proxies and vote in person.
Unless revoked, proxies will be voted in accordance with the choices specified
in the proxy. If no choice is specified with respect to a particular proposal,
the proxy will be voted in favor of the proposal. Abstentions will be treated
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
the matter. Consequently, an abstention will have the same effect as a negative
vote. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will
not be considered as present and entitled to vote with respect to that matter.
Only shareholders of record at the close of business on November [__],
1998 will be entitled to vote at the meeting and any adjournment or adjournments
thereof. On that date there were issued and outstanding [_______] shares of
common stock, which constitute the only class of securities of the Fund. Each
shareholder is entitled to one vote for each share held. Under the Fund's
Articles of Incorporation, no cumulative voting is permitted.
Proposal 1 solicits the election of directors and requires the vote of a
majority of the shares represented at the meeting, assuming a quorum is present
(more than 10% of the outstanding shares). Proposal 2 seeks the approval of a
new Investment Advisory Agreement and a new Management Agreement and requires
the affirmative vote of the lesser of (1) a majority of all outstanding shares
of the Fund or (2) 67% or more of the Fund's shares represented at the Special
Meeting if more than 50% of all outstanding shares of the Fund are present or
represented by proxy.
In the event that sufficient proxy votes in favor of Proposal 2 are not
received by [DECEMBER __, 1998], the persons named as proxies may propose one or
more adjournments of the meeting to permit further solicitation of proxies. An
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the duly held meeting. The persons
named as proxies will vote in favor of such adjournment with respect to said
Proposal 2 if the proxies are instructed (by more than a majority of the shares
represented in person or by proxy) to vote "for" such Proposal.
1
<PAGE>
ANNUAL REPORT OF THE FUND
The Annual Report of the Fund containing financial statements of the Fund
for the fiscal year ended November 30, 1998 will be mailed to shareholders on or
about [JANUARY 29, 1999]. The Fund will furnish, without charge, a copy of the
Fund's annual report for the year ended November 30, 1997 and its most recent
semi-annual report to any shareholder upon request. Shareholders who want to
obtain a copy of these reports should direct all written requests to the
Assistant Secretary, General Securities, Incorporated, 5100 Eden Avenue, Room
204, Edina, Minnesota 55436, or should call 1-800-577-9217.
PROPOSAL TO ELECT NINE DIRECTORS
TO HOLD OFFICE UNTIL THE NEXT REGULAR
MEETING OF SHAREHOLDERS OR UNTIL THEIR
SUCCESSORS ARE ELECTED
(PROPOSAL NO. 1)
The Board of Directors has nominated for election the nine persons named
below, each to serve until the next Regular Meeting of Shareholders or until a
successor is elected. All of the nominees are current directors. It is
intended that proxies will be voted for such nominees, all of whom have
consented to being named herein and to serve if elected. The Fund believes that
each nominee named below will be able to serve, but should any nominee be unable
to serve as a director, the persons named in the proxies have advised that they
will vote for the election of such substitute nominee as the Board of Directors
may propose.
The names of the nominees, their business affiliations, stock ownership in
the Fund and their 1997 aggregate director fees are set forth below.
<TABLE>
<CAPTION>
PERCENT OF
COMMON STOCK OUTSTANDING 1997 AGGREGATE
PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY SHARES OF COMPENSATION
NAME AND AGE AND OTHER DIRECTORSHIPS SINCE OWNED COMMON STOCK FROM FUND
------------ ----------------------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
David W. Preus (75) Presiding Bishop Emeritus of The American 1984 10,462 0.38% $1,600
Lutheran Church and Distinguished Visiting
Professor at Luther Northwestern Theological
Seminary, St. Paul, Minnesota. Prior to 1988,
President of the American Lutheran Church.
LaVerne W. Rees (67) Business Consultant. From 1980 through 1984, 1968 2,682 0.10% $1,200
President of St. Jude Medical, Inc., St. Paul,
Minnesota (manufacturer of medical devices).
Oscar Victor (78) Retired. Formerly President of Vic Research 1974 629 0.02% $1,600
and Development Incorporated, Minneapolis,
Minnesota (consulting services) and Chief
Executive Officer of Vic Manufacturing
Company, Minneapolis, Minnesota (manufacturer
of dry cleaning and air pollution control
equipment). Director of Check Technology
Corporation and Fidelity Bank.
Charles J. Walton President, Walton Enterprise Leasing Co., 1974 7,926 0.28% $1,600
(74) Minneapolis, Minnesota (automobile, truck and
equipment leasing corporation).
James S. Womack (69) Chairman of the Board of Sheldahl, Inc., 1991 25,783 0.93% $1,600
Northfield, Minnesota (manufacturer of
electronic materials and circuitry).
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
M. Michelle Coady Director of Client Services, Major Markets, at 1996 8,623 0.31% $1,600
(40) St. Paul Fire and Marine Companies, St. Paul,
Minnesota (property and casualty insurer).
From 1991 to 1994, Senior Director of
Continuous Quality Improvement at Health
Partners, Inc., Minneapolis, Minnesota.
Proprietor of a consulting business since
1985.
Gary D. Floss (56) Director of Customer-Focused Quality for 1998 -0- -0- -0-
Medtronic Corporation, Minneapolis, Minnesota
(manufacturer of medical devices). From 1990
to 1997, Vice President, Quality and
Productivity, for Consulting Devices
International, a business unit of Ceridian
Corporation, Minneapolis, Minnesota (provider
of information services in the human resources
and transportation areas)
Arnold M. Vice President for Corporate Quality for 1998 -0- -0- -0-
Weimerskirch (61) Honeywell, Inc., Minneapolis, Minnesota
(manufacturer of temperature control systems
and avionics).
Craig H. Robinson President of the Fund and Robinson Capital 1998 854 0.03% -0-
(40)* Management, Inc. ("Robinson Capital") since
September 1998. Director of the Fund and
Robinson Capital since September 1998. Vice
President of the Fund and Robinson Capital
from February 1997 to September 1998. Various
sales and marketing positions at Robinson
Capital from August 1995 to present. Account
Executive with Paine Webber Incorporated from
August 1994 to August 1995.
</TABLE>
- ------------------------
* Mr. Robinson is an "interested person" as defined in the Investment Company
Act of 1940 by reason of his status as a controlling shareholder, President
and director of Robinson Capital, the Fund's Investment Advisor and its
Administrator.
The Board of Directors met four times during fiscal 1997. Each director
attended at least 75% of the meetings of the Board of Directors and any
committee on which such director served.
The Audit Committee, comprised of Messrs. Walton and Victor, met twice
during fiscal 1997. Among other duties, the Audit Committee reviews and
evaluates significant matters relating to the audit and internal controls of the
Fund, reviews the scope and results of audits by the Fund's independent
auditors, and authorizes services rendered by the auditors. The Audit Committee
reviews the audited financial statements of the Fund and Form N-SAR as filed
with the Securities and Exchange Commission.
The Fund has neither a compensation nor a nominating committee.
The Fund does not pay any regular salary, direct remuneration or pension or
retirement benefits to officers and directors, except a fee of $400 is paid to
the independent directors for each Board of Directors' meeting attended. The
total compensation paid to each director in fiscal 1997, consisting solely of
meeting fees, is set forth in the table above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR ALL DIRECTOR NOMINEES.
3
<PAGE>
PROPOSAL TO CONSIDER THE APPROVAL AND RATIFICATION
OF A NEW INVESTMENT ADVISORY AGREEMENT AND A NEW MANAGEMENT AGREEMENT WITH
ROBINSON CAPITAL MANAGEMENT, INC.
(PROPOSAL NO. 2)
CHANGE OF CONTROL; NECESSITY OF SHAREHOLDER APPROVAL
The Investment Company Act of 1940, as amended (the "1940 Act"), requires
that an investment company's investment advisory agreement be approved by its
shareholders if a "change of control" has occurred in the investment company's
investment advisor. The death of John P. Robinson on August 28, 1998 caused such
a technical "change of control" in the Fund's investment adviser, Robinson
Capital Management, Inc. ("Robinson Capital"). Mr. John P. Robinson was the
President of Robinson Capital from its inception since 1994 to the date of his
death and owned approximately 41% of the outstanding shares of Robinson Capital.
This technical change of control caused the Fund's existing investment advisory
and management agreements with Robinson Capital to terminate. The Board of
Directors of the Fund is now asking shareholders to approve the "new" Investment
Advisory Agreement and the "new" Management Agreement (the "Agreements") with
Robinson Capital. There have been no changes to the Agreements since the
shareholders last approved the Agreements in March 1995. In effect, the "new"
Agreements are identical to the agreements that were in effect prior to the
technical change of control in Robinson Capital. Approval of the Agreements
will not increase the advisory or administrative fee rates paid by the Fund.
Robinson Capital has served as the Fund's investment advisor since December
1994.
To provide for continuity of investment advisory services to the Fund as a
result of the technical change of control, the Directors of the Fund, none of
whom were "interested persons" of the Fund or Robinson Capital as defined in the
1940 Act ("Disinterested Directors") , at a meeting held on September 3, 1998,
voted to approve and recommended that the Fund's shareholders approve new
Agreements for the Fund. Under the new Agreements, Robinson Capital will
continue to provide investment advisory and administrative services to the Fund
on the same terms and conditions as in the past. The directors believe that the
Fund will benefit from continuing to receive the high quality advisory and
administrative services provided by Robinson Capital on the same terms and
conditions as they were provided prior to the technical change of control.
THE AGREEMENTS
The prior Agreements were first adopted by the Fund's Board of Directors
effective November 30, 1994 in connection with a change in the Fund's investment
advisor and subsequently ratified and adopted by the Fund's shareholders on
March 3, 1995. Subsequently, the agreements were annually approved by a
majority of the Fund's Disinterested Directors. Prior to November 30, 1994, the
Fund's investment advisor was Alpha-Source Asset Management, Inc.
The terms of the new Agreements, including the rate of advisory and
administrative fees paid by the Fund, are identical to those that were in effect
prior to the technical change of control. Therefore, the following description
of the new Agreements also describes the agreements that were in force prior to
the technical change of control.
Under the new Investment Advisory Agreement, Robinson Capital will continue
to act as investment advisor to the Fund and to furnish all necessary
information, advice, recommendation services and determinations relating to
investments and portfolio management. Orders for securities are placed by
Robinson Capital with the view to obtaining the best combination of price and
execution available.
Under the new Management Agreement, Robinson Capital will continue to
provide the Fund with administrative services necessary for the conduct of the
Fund's business. Robinson Capital prepares and updates securities registration
statements and filings, shareholder reports and other documents. In addition,
Robinson Capital provides office space and facilities for the management of the
Fund and provides accounting, record-keeping and data processing facilities and
services. Robinson Capital also provides information and certain administrative
services for shareholders of the Fund. Robinson Capital may subcontract with
other entities to provide certain shareholder servicing activities.
4
<PAGE>
For these investment advisory and administrative services, Robinson Capital
has received and will continue to receive the following fees:
<TABLE>
<CAPTION>
ANNUALIZED ANNUALIZED
ADVISORY FEE ADMINISTRATIVE FEE COMBINED
AS PERCENTAGE OF AS PERCENTAGE OF ANNUALIZED
NET ASSETS OF THE FUND NET ASSETS OF THE FUND FEES
---------------------- ---------------------- -----------
<S> <C> <C> <C>
AVERAGE NET ASSETS
------------------
Up to and including $100 million .60% .40% 1.00%
Over $100 million to and including $250
million .35% .40% .75%
Over $250 million .10% .40% .50%
</TABLE>
The Fund's total net assets at the beginning and end of fiscal 1997 were
$39,974,254 and $46,005,599, respectively. The combined annualized fee of 1% on
the first $100 million of the Fund's net assets is higher than advisory fees
paid by most funds, many of which have net assets that are substantially larger
than the net assets of the Fund. During the fiscal year ended November 30, 1997
the Fund paid total fees to Robinson Capital amounting to $482,730. Of this
amount, $289,638 was paid for investment advisory services and $193,092 was paid
for administrative services.
The Fund pays the investment advisory and administrative fee, shareholder
services expenses, transaction costs, interest, taxes, legal, accounting, audit,
transfer agent and custodial fees, brokerage commissions and other costs
incurred in buying and selling assets, fees paid to directors not affiliated
with Robinson Capital, the cost of stationery and envelopes, the cost of
qualification and registration of shares under state and federal laws, the cost
of solicitation of proxies and certain other operational expenses. However,
Robinson Capital is obligated to pay all Fund expenses (exclusive of brokerage
expenses and fees, interest and any federal or state income taxes) which exceed
1.50% of the Fund's average net assets for any fiscal year on the first $100
million of average net assets, 1.25% of the Fund's average net assets for any
fiscal year on the next $150 million of average net assets, and 1% of the Fund's
average net assets for any fiscal year on average net assets in excess of $250
million. For the fiscal year ended November 30, 1997, total expenses of the
Fund amounted to $696,963, or 1.44% of average net assets.
Each of the Investment Advisory Agreement and Management Agreement will
continue in force from year to year so long as the continuance is specifically
approved at least annually (1) by the Board of Directors of the Fund or (2) by a
vote of the majority of the outstanding voting securities of the Fund, provided
that in either event the continuance is also approved by the vote of a majority
of the Fund's Disinterested Directors, cast in person at a meeting called for
the purpose of voting on such approval. Each of the Investment Advisory
Agreement and Management Agreement may be terminated at any time, without the
payment of any penalty, by the Board of Directors of the Fund, by a vote of the
majority of the Fund's outstanding voting securities, or by Robinson Capital on
60 days' written notice. They each terminate automatically in the event of an
assignment, as defined in the 1940 Act. The new Agreements provide that they
will continue in effect until November 30, 1999 unless sooner terminated.
UNDERWRITING, DISTRIBUTION AND OTHER SHAREHOLDER SERVICES.
The Fund serves as its own underwriter and distributor of its shares.
Investors Fiduciary Trust Company ("IFTC"), 330 W. 9th Street, Kansas City,
Missouri 64105, currently serves as the Fund's Transfer Agent and Dividend
Paying Agent and Custodian. IFTC, which is not affiliated with either the Fund
or Robinson Capital, maintains the Fund's shareholder records and assets and
performs certain accounting
5
<PAGE>
services for the Fund. Assets of the Fund may also be held by sub-custodians
selected by IFTC and approved by the Board of Directors. During fiscal 1997,
IFTC was paid $122,062 for their services.
BROKERAGE
Robinson Capital is not registered as a broker-dealer and does not effect
brokerage transactions for the Fund. The Fund's brokerage business is
distributed among various brokers and dealers, and the allocation is determined
primarily at the discretion of Robinson Capital. The Fund always seeks to
effect its transactions in portfolio securities where it can get prompt
execution of orders at the most favorable prices ("best execution"). The
commissions charged by brokers and dealers vary and the Fund is not required by
law to utilize the services of national securities exchange members or other
brokers or dealers charging the lowest commission for any particular
transaction. During the past fiscal year, the Fund had total purchases of
portfolio securities, other than short-term securities, of $7,179,162 and sales
of such securities of $12,455,518, resulting in portfolio turnover in that year
of 20 %. The total amount of brokerage fees for handling portfolio transactions
of the Fund during the fiscal year ended November 30, 1997 was $23,060
It is the practice of the Fund and its Investment Advisor to consider
statistical and factual information, as well as reports on general market
conditions, industry analysis and analysis of particular companies whose
securities are publicly traded, furnished to them by investment banking firms as
a factor in connection with allocation of brokerage business to such firms,
provided the best execution is still obtained. Such services are generally
provided to the investment advisor, to the extent that such services are used by
it in rendering investment advice to the Fund, they tend to reduce the advisor's
expenses. During fiscal 1997, certain brokers rendered research services to the
Fund and in exchange for such services the Fund directed brokerage transactions
to them. However, such placement of brokerage transactions was not pursuant to
binding written agreement with such brokers. The aggregate amount of such
transactions was $16,367,396; the aggregate amount of related commissions was
$23,060.
ROBINSON CAPITAL AND THE FUND
GENERAL. Robinson Capital became the Fund's investment advisor pursuant to
the new Investment Advisory Agreement and the Fund's administrator, under the
new Management Agreement on December 1, 1994. Shareholders of the Fund approved
the Agreements on March 3, 1995. Robinson Capital was founded in 1994 by John
P. Robinson. Mr. Robinson lead the Fund's portfolio management team consisting
of John P. Robinson (since 1951), Winfield S. Holland (since 1984 ), Craig H.
Robinson (since 1995) and Mark D. Billeadeau (since 1995). Following Mr.
Robinson's death on August 28, 1998 and Mr. Holland's resignation on May 7,
1998, the Fund's portfolio is currently managed by Craig H. Robinson and Mark D.
Billeadeau. Robinson Capital's offices are located at 5100 Eden Avenue, Room
204, Edina, Minnesota 55436.
Securities held by the Fund may also be appropriate investments for other
investment advisory clients of Robinson Capital. Because of different
investment objectives or other factors, a particular security may be bought for
one or more clients when one or more clients are selling the security. If
purchases or sales of securities for the Fund or other advisory clients arise
for consideration at or about the same time, transactions in such securities
will be made, insofar as feasible, for the respective Fund and other clients of
Robinson Capital in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client of Robinson Capital during the
same period may increase the demand for securities being purchased or the supply
of securities being sold, there may be an adverse effect on the price.
SHAREHOLDERS. Craig H. Robinson, John C. Robinson, Susan A. Peterson and
Beth E. Robinson, John P. Robinson's four children, each own 18.06% of the
outstanding common stock of Robinson Capital. No other shareholder owns more
than 10% of the common stock of Robinson Capital. To the knowledge of
management, no person owns of record or beneficially more than five percent of
the outstanding shares of common stock of the Fund.
6
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS. The executive officers and directors of
Robinson Capital and the Fund are listed below.
CRAIG H. ROBINSON, (40), President of the Fund and Robinson Capital since
September 1998; Director of the Fund since September 1998 and of Robinson
Capital since 1997; Vice President of the Fund and Robinson Capital from
February 1997 to September 1998; various sales and marketing positions at
Robinson Capital from August 1995 to present; Account Executive with Paine
Webber Incorporated from August 1994 to August 1995.
MARK D. BILLEADEAU, (42), Vice President of the Fund and Robinson Capital
from February 1995 to present; Treasurer of Robinson Capital since September
1998; Manager (Consulting Service) of Craig-Hallum, Inc., and its successor,
Principal Financial Services, Inc., from September 1990 to February 1995.
RENEE A. RASMUSSON, (54), Assistant Treasurer of Robinson Capital and the
Fund from December 1994 to present; Employee of Hamilton Investments, Inc. from
July 1993 to July 1994; Vice President of Craig-Hallum, Inc. prior to July 1993.
LORY M. HASSLER, (67), Secretary of Robinson Capital from September 1998;
Assistant Secretary of Robinson Capital from December 1994 to September 1998 and
of the Fund since December 1994; Registered representative of Hamilton
Investments, Inc. from July 1993 to December 1994; registered representative and
Vice President of Craig-Hallum, Inc. prior to July 1993.
SUSAN A. PETERSON, (51), Director of Robinson Capital since 1997; Founder
and Chief Financial Officer of Decision Support Software, Inc. since 1983.
CONSIDERATION OF PROPOSAL BY THE BOARD
The Fund's Board of Directors, including a majority of the Disinterested
Directors and who have no direct or indirect financial interest in the operation
of the new Agreements or any agreements related thereto, unanimously recommends
approval of the new Agreements with Robinson Capital, each of which has been
personally reviewed and approved by the Board of Directors, including all the
Disinterested Directors. In making this recommendation, the Board of Directors
has given careful consideration to all factors deemed to be relevant to the
Fund, including, but not limited to, the fee and expense ratios of comparable
mutual funds, the scope and quality of services offered by Robinson Capital, the
history of Robinson Capital and its employees as Portfolio Managers of the Fund,
and continuity of investment advice following the technical change of control.
Approval of the new Agreements requires the affirmative vote of the lesser
of (1) a majority of all outstanding shares of the Fund or (2) 67% or more of
the Fund's shares represented at the Special Meeting if more than 50% of all
outstanding shares of the Fund are present or represented by proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2 TO
RATIFY AND APPROVE THE NEW INVESTMENT ADVISORY AGREEMENT AND THE NEW MANAGEMENT
AGREEMENT WITH ROBINSON CAPITAL MANAGEMENT, INC.
7
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP, independent certified public accountants, were
auditors for the Fund for fiscal 1997 and were selected by the Fund's
Disinterested Directors as auditors for fiscal 1998. A representative of KPMG
Peat Marwick LLP is expected to be present at the Special Meeting of
Shareholders and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders of
a company, after notice to the company, to present proposals for shareholder
action in the company's proxy statement where such proposals are consistent with
applicable law, pertain to matters appropriate for shareholder action and are
not properly omitted by company action in accordance with the proxy rules.
Shareholder proposals for future special or regular meetings of shareholders
must be sent to the Secretary of the Fund and must be received a reasonable time
before solicitation of proxies in connection with such meeting.
METHOD OF PROXY SOLICITATION
The entire cost of preparing, assembling, printing and mailing the Notice
of Special Meeting of Shareholders, this Proxy Statement, the proxy itself, and
the cost of soliciting proxies relating to the meeting will be borne by the
Fund. In addition to use of the mails, proxies may be solicited by officers,
directors, and other regular employees of the Fund by telephone, telegraph, or
personal solicitation, and no additional compensation will be paid to such
individuals. The Fund will, if requested, reimburse banks, brokerage houses,
and other custodians, nominees and certain fiduciaries for their reasonable
expenses incurred in mailing proxy material to their principals.
GENERAL INFORMATION
Management of the Fund knows of no matters other than those mentioned
herein to be presented at the Special Meeting. However, the enclosed proxy
gives discretionary authority in the event any additional matters should be
properly presented for consideration at the Special Meeting.
By Order of the Board of Directors,
John R. Houston, Secretary
8
<PAGE>
GENERAL SECURITIES, INCORPORATED
PROXY SOLICITED BY BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS
[DECEMBER __, 1998]
PLEASE The undersigned hereby appoints David W. Preus and Oscar Victor,
SIGN THIS or either of them, proxies with full power of substitution, to vote
PROXY AND all shares of stock of General Securities, Incorporated of record
RETURN IN in the name of the undersigned at the close of business on November
ENCLOSED [__], 1998 and to exercise all the powers which the undersigned, if
PREPAID present, could exercise, at the Special Meeting of Shareholders of
ENVELOPE General Securities, Incorporated, scheduled for December [__] and
at any adjournments thereof, hereby revoking all former proxies.
The undersigned instructs the proxy or proxies appointed herein
to vote all shares held by the undersigned as follows:
1. PROPOSAL TO ELECT NINE DIRECTORS TO HOLD OFFICE UNTIL THE NEXT
REGULAR MEETING OF SHAREHOLDERS OR UNTIL THEIR SUCCESSORS ARE
ELECTED:
/ / WITH AUTHORITY to vote for all nominees listed below
(except as marked to the contrary)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTIONS: To withhold authority to a vote for any
individual nominee, mark the "WITH AUTHORITY" box and
strike a line through the nominee's name in the list
below.)
M. Michelle Coady, Gary D. Floss, David W. Preus,
LaVerne W. Rees, Craig H. Robinson, Oscar Victor,
Charles J. Walton, Arnold M. Weimerskirch, James S.
Womack.
PLEASE DO 2. PROPOSAL TO CONSIDER THE APPROVAL AND RATIFICATION OF A NEW
NOT FOLD INVESTMENT ADVISORY AGREEMENT AND A NEW MANAGEMENT AGREEMENT WITH
ROBINSON CAPITAL MANAGEMENT, INC.
/ / FOR / / AGAINST / / ABSTAIN
3. IN THEIR DISCRETION, UPON ANY OTHER MATTERS PROPERLY COMING
BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ON PROPOSALS 1 AND 2 IN
ACCORDANCE WITH THE SPECIFICATIONS MADE AND "WITH AUTHORITY" OR "FOR", AS
APPLICABLE, SUCH PROPOSALS IF THERE IS NO SPECIFICATION.
Dated: , 1998
---------------------------------
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Please sign name(s) exactly as shown at left.
When signing as executor, administrator,
trustee or guardian, give full title as such;
when shares have been issued in the names of
two or more persons, all should sign.
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