<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CURRENT INCOME SHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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:
------------------------------------------------------------------------
/X/ 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>
CURRENT INCOME SHARES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 14, 1996
To the Shareholders of
Current Income Shares, Inc.
The Annual Meeting of Shareholders (the "Meeting") of Current Income Shares,
Inc., a Delaware corporation (the "Company"), will be held in the Board Room on
the 38th floor of the Union Bank Building at 445 South Figueroa Street, Los
Angeles, California 90071, on Thursday, March 14, 1996 at 11:00 A.M. California
time, for the following purposes:
(1) To elect the Board of Directors of the Company;
(2) To approve or disapprove the selection of Arthur Andersen LLP as the
independent public accountants for the Company for the fiscal year ending
December 31, 1996;
(3) To approve or disapprove a new Management and Investment Advisory
Agreement between the Company and Union Bank of California, N.A., the
banking successor to Union Bank, the Company's present adviser; and
(4) To transact such other business as may properly come before the
Meeting.
The Meeting may be adjourned from time to time and, at any adjourned
meeting, action with respect to the matters specified in this notice may be
taken with such further notice to shareholders, if any, as may be required by
the By-Laws.
Only shareholders of the Company of record at the close of business on
January 19, 1996 are entitled to notice of and to vote at the Meeting and any
adjournments thereof. A list of such shareholders will be open to examination by
any shareholder for any purpose germane to the Meeting, at the time and place of
the Meeting and, during the ten days prior to the Meeting, at the office of
Harris Trust Company of California, 601 South Figueroa Street, 49th Floor, Los
Angeles, California 90017.
Your attention is directed to the attached Proxy Statement. YOU ARE
REQUESTED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE WITHOUT DELAY. PLEASE DO SO WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING IN PERSON. You are invited to attend and your proxy will
not be used if you are present and prefer to vote in person.
By order of the Board of Directors
Jonathan A. Wright, Secretary
January 22, 1996
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 14, 1996
CURRENT INCOME SHARES, INC.
445 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90071
PROXY STATEMENT
This Proxy Statement is being sent on or about January 26, 1996 in
connection with the solicitation by the Board of Directors of Current Income
Shares, Inc., a Delaware corporation (the "Company"), of proxies, on the form
enclosed with this Proxy Statement, for use at the Annual Meeting of
Shareholders of the Company (the "Meeting") to be held on Thursday, March 14,
1996, at 11:00 A.M. California time, in the 38th floor Conference Room of the
Union Bank Building at 445 South Figueroa Street, Los Angeles, California 90071,
and at any adjournments of the Meeting. All proxies which are properly
completed, signed and returned to the Company prior to the Meeting will be voted
in accordance with the instructions given therein. Any proxy given by a
shareholder may be revoked at any time before it is exercised by filing with the
Secretary of the Company an instrument revoking it, by a duly executed proxy
bearing a later date, or by any shareholder voting in person at the Meeting.
The Company has fixed the close of business on January 19, 1996 as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the Meeting or any adjournments thereof. On that date the Company had
outstanding 3,673,334 shares of common stock, par value $1.00 per share (the
"Common Stock"), constituting the only voting securities of the Company. The
presence in person or by proxy of more than one-half of the outstanding shares
entitled to vote at the Meeting will constitute a quorum. If a quorum is not
present at the Meeting, sufficient votes in favor of a proposal are not received
by the time scheduled for the Meeting, or the holders of shares present, in
person or by proxy, determine to adjourn the Meeting for any other reason, the
shareholders present, in person or by proxy, may adjourn the Meeting from time
to time. No notice of an adjourned meeting date will be given, other than
announcement at the Meeting, unless the adjournment is for more than 30 days or
a new record date is set for the adjourned meeting. Any such adjournment will
require the affirmative vote of shareholders holding a majority of the shares
present, in person or by proxy, at the Meeting. The persons named in the Proxy
will vote in favor of such adjournment those shares which they are entitled to
vote
1
<PAGE>
that voted in favor of all proposals; they will vote against any such
adjournment those shares that they are entitled to vote that voted against any
proposal. Business may be conducted once a quorum is present and may continue
until adjournment of the Meeting notwithstanding the withdrawal or temporary
absence of sufficient shares to reduce the number present to less than a quorum.
Each shareholder is entitled to one vote for each share of Common Stock then
standing in his or her name. Shareholders are not entitled to cumulate their
votes for the election of Directors, which means that the holders of a majority
of the shares represented can elect the entire Board of Directors.
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 not be counted for or against any proposal to which they relate, but will
be counted for purposes of determining whether a quorum is present and will be
counted as votes present for purposes of determining a "majority of the
outstanding shares" present at the Meeting, as defined in the Investment Company
Act of 1940. For this reason, abstentions and broker non-votes will have the
effect of a "no" vote for purposes of obtaining the requisite approval of
Proposal 3.
The Company will furnish without charge a copy of its most recent Annual
Report and Semi-Annual Report to a shareholder upon request. Such request may be
made by calling the Company during business hours at (800) 634-6521, or by
writing to the Company at the address set forth above.
The cost of preparing, assembling, printing and mailing this Proxy Statement
and the enclosed proxy form and the cost of soliciting proxies relating to the
Meeting will be borne by the Company and Union Bank (the "Adviser"), the
Company's present investment advisor. The Company will request banks and brokers
to solicit their customers who are beneficial owners of Common Stock listed of
record in names of nominees, and will reimburse such banks and brokers for the
reasonable out-of-pocket expenses of such solicitations. The original
solicitations of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers and other regular employees of the Company or
of Union Bank, but no additional compensation will be paid to such individuals,
or the Adviser, on account of such activities.
2
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 1995 certain information
as to the Common Stock owned beneficially by each person who is known to the
Company to own more than 5% of the outstanding Common Stock and all executive
officers and Directors as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED SHARES
- -------------------------- ------------ -------------
<S> <C> <C>
All executive officers and
Directors as a group 2,589 0.07%
</TABLE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, six members of the Board of Directors are to be elected, to
serve until the Company's next annual meeting of shareholders and until their
successors are elected and qualified. It is the intention of the persons named
in the accompanying proxy to vote the shares represented thereby for the
election of the persons listed below unless a shareholder specifically indicates
in his proxy his desire to withhold authority to vote for any of those persons.
A plurality of votes cast is required to elect directors.
At a meeting held on November 9, 1995, the Company's Board of Directors
nominated the following slate of Directors. All of these nominees have indicated
that they are willing to serve as Directors and that they are able to do so. If,
however, any nominee should refuse or be unable to serve, the Board of Directors
proxy holders will vote the proxies FOR such other person as the Board of
Directors may recommend.
Directors of the Company serve terms of office which expire on the date of
the next annual meeting of shareholders and upon the election of their
successors.
3
<PAGE>
According to information furnished to the Company by the nominees listed
below, their principal occupations and affiliations during at least the past
five years, their current directorships with other companies, and their
beneficial ownership of shares of Common Stock of the Company at December 1,
1995, are as follows:
<TABLE>
<CAPTION>
NUMBER
HAS SERVED AS OF
PRINCIPAL OCCUPATIONS, DIRECTOR SHARES
NAME AGE EMPLOYMENT AND DIRECTORSHIPS SINCE OWNED+
- ------------ --- -------------------------------------------------- ------------- ------
<S> <C> <C> <C> <C>
Lorenzo D. 75 Partner of Ernst & Whinney, in charge of May, 1981 --
Courtright management consulting services, Western Region,
(1)(2) and audit partner, until retirement in 1980;
Financial Reporting Adviser to the Commonwealth of
Puerto Rico from 1981 to 1984; Treasurer, City of
Rolling Hills from 1979.
Morris A. 72 President, Weingart Foundation (a charitable May, 1980 500
Densmore foundation), from 1983 to 1988; Executive Vice
(1)(2) President, Union Bank, from 1971 until retirement
in 1983.
Stephen J. 73 Vice President, Union Bank, from 1983 until May, 1986 1,689
Dunn(1) retirement in 1991; Vice President and Portfolio
Manager of the Company from 1983 to 1991; Bond
Trader and Portfolio Adviser with Thomson McKinnon
from 1981 to 1983.
Clark R. 47 President, Union Capital Advisors, a division of May, 1991 --
Gates*(2) Union Bank, from October 1990; Senior Vice
President, Union Bank, since October, 1991; Vice
President, Union Bank, from January, 1990 to
October, 1991; Managing Director, Pacific Century
Advisors, from 1986 to 1989; Vice President and
Director, Dreyfus Service Corporation, from 1981
to 1986.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NUMBER
HAS SERVED AS OF
PRINCIPAL OCCUPATIONS, DIRECTOR SHARES
NAME AGE EMPLOYMENT AND DIRECTORSHIPS SINCE OWNED+
- ------------ --- -------------------------------------------------- ------------- ------
<S> <C> <C> <C> <C>
William R. 73 Director, Stepstone Funds (a registered investment May, 1980 100
Howell(1) company), since November, 1990; Vice Chairman,
Union Bank, from 1976 until retirement in 1982;
Executive Vice President, Union Bank, from 1969 to
1976; Director of Municipal Fund for California
Investors, from 1983.
Michael L. 54 Independent financial consultant from January, May, 1981 300
Noel(1) 1995; Executive Vice President, Mission Land
Company, from January 1994 until retirement in
December, 1994; Senior Vice President, Chief
Financial Officer and Director, Mission Energy
Company, February 1992 to January 1994; Senior
Vice President, Southern California Edison
Company, April 1991 to February 1992; Vice
President, Treasurer and Chief Financial Officer,
Southern California Edison Company, from October
1990 to April 1991; Director, Hancock Savings
Bank, from 1986; Director, Software Toolworks,
Inc., from July, 1989 to April 1994; Director,
Stepstone Funds, from November 1990.
</TABLE>
- ------------------------
+ As of December 1, 1995, no Director or nominee beneficially owned 1% or more
of the outstanding Common Stock. As of December 1, 1995, all Directors and
officers as a group beneficially owned a total of 2,589 shares of Common Stock
of the Company, or less than 1% of the outstanding shares.
* Mr. Gates is an "interested person" of the Company within the meaning of the
Investment Company Act of 1940, because he is an officer of Union Bank, which
is the Company's present investment adviser and which provides other services
to the Company (see "Approval of New Management and Investment Advisory
Agreement"). Mr. Gates is also President of the Company.
5
<PAGE>
(1) Member of the Audit Committee. The function of the Audit Committee, which
met two times in 1995, is to review the financial statements and control
procedures with the officers of the Company and the independent accountants,
with a view to assessing and improving the Company's control procedures,
determining the adequacy of the audit and understanding the factors which
influenced the Company's performance. Results of these reviews are reported
to the Board of Directors of the Company. The Audit Committee also has the
responsibility of recommending independent public accountants for selection
by the Board of Directors. Mr. Courtright is the current Chairman of the
Audit Committee.
(2) Member of the Executive Committee, which has the powers of the Board of
Directors in the management of the business and affairs of the Company
except the power to recommend to shareholders any action requiring
shareholder approval. Mr. Gates is Chairman of the Executive Committee.
The Board of Directors has no nominating committee. During 1995, the Board of
Directors met four times, and all directors attended at least 75% of the
meetings. Richard H. Earnest and Kevin R. Rogers, who were last elected
directors in 1995, are not standing for reelection. Both are Vice Presidents of
Union Bank.
Set forth below is a table indicating the names and ages of the principal
officers of the Company who will not also be Directors of the Company. Although
they are not currently affiliated with the New Adviser, such officers and
Directors may be employed by the New Adviser following the Mergers.
<TABLE>
<CAPTION>
POSITION WITH POSITION WITH
NAME AGE THE COMPANY UNION BANK
- --------------------- --- ---------------------- ---------------------
<S> <C> <C> <C>
James V. Atkinson 61 Vice President and Vice President
Portfolio Manager
Richard H. Earnest 57 Vice President Vice President
Richard Dunchak 55 Treasurer Vice President
Jonathan A. Wright 47 Secretary Vice President and
Senior Counsel
</TABLE>
The principal business address of Mr. Atkinson is Union Bank, 530 "B"
Street, San Diego, California 92101. The principal business address of Messrs.
Earnest, Dunchak and Wright is Union Bank, 445 South Figueroa Street, Los
Angeles, California 90071.
6
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Each Director who is not a director, officer or employee of the Adviser or
of a corporation affiliated with the Adviser receives a Director's fee of $6,000
per year for his services, which includes fees for attending regular meetings.
In addition, such Directors receive $250 for each special meeting attended.
The following table sets forth the aggregate compensation paid by the
Company for the fiscal year ended December 31, 1995, to the Directors who are
not affiliated with the Adviser, as well as the aggregate compensation paid to
such Directors for service on the Boards of all other registered investment
companies advised by the Adviser or its affiliates (the "Adviser Complex"):
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT ESTIMATED COMPENSATION
BENEFITS ANNUAL FROM COMPANY
AGGRETATE ACCRUED AS BENEFITS AND ADVISER
COMPENSATION PART OF COMPANY UPON COMPLEX PAID
NAME FROM COMPANY EXPENSES RETIREMENT TO DIRECTOR
- ------------------------------ ------------ --------------- ---------- ------------
<S> <C> <C> <C> <C>
L. D. Courtright.............. $6,000 -0- -0- $ 6,000(1*)
M. A. Densmore................ $6,000 -0- -0- $ 6,000(1*)
S. J. Dunn.................... $6,000 -0- -0- $ 6,000(1*)
W. R. Howell.................. $6,000 -0- -0- $13,000(14**)
M. L. Noel.................... $6,000 -0- -0- $13,000(14**)
</TABLE>
- ------------------------
* Indicates the Company only.
** Indicates total number of funds in Adviser Complex, plus the Company.
The Company does not compensate its officers or employees for their services
to the Company, which expenses are borne by the Adviser. Reference is made to
information under the heading "The New Advisory Agreement and Compensation of
the Adviser" for a discussion of fees paid by the Company to the Adviser.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL NO. 2)
At a meeting held on November 9, 1995, a majority of the independent
Directors, who are not interested persons of the Company (as defined in the
Investment Company Act of 1940), selected the firm of Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year ending December 31,
1996. The Company is submitting such selection to the shareholders for approval
or disapproval. To the best knowledge of the Board of Directors, such firm has
no direct or material indirect financial interest in the Company, nor has it
served the Company in any capacity other than as independent public accountants.
7
<PAGE>
A majority of votes cast is required to approve the independent public
acountants. Unless otherwise instructed, the proxies will vote to approve the
selection of Arthur Andersen LLP.
APPROVAL OF NEW MANAGEMENT
AND INVESTMENT ADVISORY AGREEMENT
(PROPOSAL NO. 3)
At the Meeting, the shareholders will be asked to approve a new Management
and Investment Advisory Agreement (the "New Agreement") between the Company and
The Bank of California, N.A., to be renamed Union Bank of California, N.A. (the
"New Adviser"), the banking successor to Union Bank resulting from the pending
merger of BanCal Tri-State Corporation into Union Bank. Pursuant to the
Investment Company Act of 1940, the combination of the two California banks will
result in the termination of the existing Management and Investment Advisory
Agreement (the "Old Agreement") between the Company and Union Bank (the "Old
Adviser"). If the New Agreement is approved by the Company's shareholders, Union
Bank of California, N.A. will become the Company's new investment advisor upon
the effective date of the merger. Approval of the New Agreement will be
contingent upon the successful completion of the merger on or after April 1,
1996. The Old Agreement was originally approved by the Board of Directors and
the disinterested directors on May 11, 1988 and by the shareholders at the
Special Meeting held August 10, 1988. It was last submitted to a vote of the
shareholders for regular annual approval and approved by the shareholders at the
Annual Meeting held May 11, 1995.
The New Agreement is attached hereto as Exhibit A, with changes from the Old
Agreement indicated in bold face type. The material provisions of the New
Agreement and the Old Agreement are the same, with the exception of the name of
the investment adviser.
The Board of Directors, in evaluating its recommendation with respect to the
New Agreement, has inquired as to whether the New Adviser (1) wants to be the
Company's investment adviser, (2) will make the necessary commitment to do so
and (3) will allow the present officers to continue in their present capacities.
In response, the New Adviser has undertaken to provide the same level and
quality of service that was provided under the Old Agreement. The New Agreement
was approved by the Board of Directors, including a majority of the
disinterested directors, on November 9, 1995.
THE NEW AGREEMENT AND COMPENSATION OF THE ADVISER
By its terms, the New Agreement continues from year to year so long as its
continuance is approved at least annually by vote of a majority of the
outstanding voting securities
8
<PAGE>
of the Company or by vote of the Board of Directors of the Company and, in
either event, by the vote cast in person by a majority of Directors who are not
parties to the New Agreement or "interested persons" of any party to the New
Agreement, at a meeting called for the purpose of voting on such approval. The
New Agreement may be terminated on sixty days' notice by the New Adviser, by the
Board of Directors of the Company or by a vote of a majority of the outstanding
voting securities of the Company, in each instance without the payment of any
penalty. It will automatically terminate upon any assignment. For purposes of
the Investment Company Act of 1940, a "majority of the outstanding voting
securities" of the Company means the lesser of (i) 67% of the shares represented
at a meeting at which more than 50% of the outstanding shares are represented,
or (ii) more than 50% of the outstanding shares.
The New Agreement requires the New Adviser to provide investment management
and advisory services to the Company. Under the New Agreement, the New Adviser
advises the Company on the composition of its portfolio and provides and bears
the costs of research and continuous supervision of the portfolio. The New
Adviser is authorized, subject to control by the Company's Board of Directors,
to determine which securities are to be bought or sold and in what amounts. The
New Adviser is required by the New Agreement to pay for office space,
facilities, business equipment and the costs of keeping the Company's accounting
records.
For providing these services, the New Adviser receives a management fee
which on an annual basis will amount to 0.5% of the average net asset value of
the Company. This fee is computed and accrued weekly and is payable monthly. At
December 31, 1995, the Company's total net asset value was $50,120,223,
equivalent to $13.64 per share (unaudited figures).
All costs and expenses incurred in the operation of the Company, other than
the expenses specifically assumed by the New Adviser under the New Agreement,
are borne by the Company. These costs and expenses include brokerage commissions
on portfolio transactions, fees and expenses of directors, interest, taxes,
various corporate fees and expenses, auditing and legal fees and expenses
incident to any public offering of the shares of the Company.
The New Agreement provides that if costs and expenses (including the
management fee but excluding interest, taxes, brokerage fees and the expenses of
any offering of the Company's securities) borne by the Company in any fiscal
year exceed 1 1/2% of the first $30 million of the average net asset value of
the Company plus 1% of the average net asset
9
<PAGE>
value of the Company in excess of $30 million, the New Adviser will pay such
excess to the Company on a monthly basis as provided in the Agreement. No such
payment under the Company's Old Agreement was required for 1995.
The Company paid $244,995 for management and investment advisory services in
1995 to the Old Adviser, Union Bank.
PORTFOLIO TRANSACTIONS AND RATE OF TURNOVER
The Company's investment adviser, subject to the supervision of the Board of
Directors of the Company, purchases and sells securities for the Company's
portfolio through those brokers or dealers who execute such orders promptly and
at prices and under conditions believed to be most favorable to the Company.
Certain dealers may be selected for the research, statistical or other services
they provide, but best execution and price are the primary considerations in all
cases. Purchases and sales of securities traded in the over-the-counter market
will be transacted with those persons who, in the opinion of the Company's
investment adviser, provide the best prices and executions.
During 1995, the Company paid no brokerage commissions in connection with
the purchase and sale of portfolio securities.
The rate of portfolio turnover for 1995 was 116.8%.
FURTHER INFORMATION CONCERNING THE PROPOSED NEW ADVISER
The Old Adviser, Union Bank, is a California state-chartered bank whose
majority owner is The Bank of Tokyo, Ltd. ("Bank of Tokyo"), which presently
owns approximately 73% of Union Bank's common stock. Under the terms of a
proposed merger (i) Bank of Tokyo will merge on April 1, 1996 into The
Mitsubishi Bank, Limited ("Mitsubishi Bank"), which will change its name to The
Bank of Tokyo-Mitsubishi, Ltd. ("Bank of Tokyo-Mitsubishi"), and (ii) as soon as
practicable thereafter Union Bank will combine with The Bank of California, N.A.
("Bank of California"), the California bank subsidiary of Mitsubishi Bank. Bank
of California is a Federally chartered national banking association dating to
1868, is a member of the Federal Reserve System, and is subject to oversight by
the Federal Deposit Insurance Corporation and the Office of the Comptroller of
the Currency, among others. Bank of California had total assets of approximately
$8.0 billion and shareholder equity of approximately $.9 billion at December 31,
1995. On that date, Union Bank had total assets of approximately $19.5 billion
and shareholder equity of approximately $1.5 billion.
The combination of the California banking subsidiaries of Bank of Tokyo and
Mitsubishi Bank will be accomplished pursuant to (i) an Agreement and Plan of
Reorganization (the "Reorganization Agreement") among Union Bank, Bank of
California
10
<PAGE>
and BankCal Tri-State Corporation ("Tri-State"), Bank of California's Delaware
holding company, (ii) an Agreement and Plan of Merger (the "Merger Agreement"),
pursuant to which Tri-State will merge with and into Union Bank, with Union Bank
being the surviving corporation, and (iii) a Purchase and Assumption Agreement
(the "Purchase Agreement") between Union Bank and Bank of California, pursuant
to which Union Bank will transfer substantially all of its banking business and
other assets to Bank of California in exchange for Bank of California's
assumption of substantially all of the liabilities of Union Bank and the
issuance by Bank of California to Union Bank of 26,117,714 shares of common
stock. As a practical matter, the transactions under the Reorganization
Agreement, the Merger Agreement and the Purchase Agreement will be effected as a
single, integrated transaction.
Following the transactions described above, Bank of California will be
renamed Union Bank of California, N.A. (which, as indicated above, is proposed
to be the New Adviser to the Company). The New Adviser will succeed by operation
of law to all rights, obligations, properties, assets, investments, deposits,
demands, and agreements covered by the Purchase Agreement, and to all
properties, assets, investments, agreements, rights and obligations of Union
Bank under all fiduciary or representative capacities (e.g., trusts and
executorships). After this transfer to the New Adviser of substantially all of
Union Bank's banking business, Union Bank will voluntarily relinquish its
California banking license and its federal deposit insurance, and will be
strictly a bank holding company for the New Adviser and its non-bank
subsidiaries and will be renamed UnionBanCal Corporation.
Immediately following the combination of the California subsidaries,
UnionBanCal Corporation will own approximately 94% of the outstanding shares of
common stock of the New Adviser. Bank of Tokyo-Mitsubishi will in turn own
approximately 81% of the outstanding common stock of UnionBanCal Corporation. In
addition to its indirect ownership of the New Adviser through its ownership of
81% of the common stock of UnionBanCal Corporation, Bank of Tokyo-Mitsubishi
will also own directly approximately 6% of the common stock of the New Adviser.
As a consequence, both UnionBanCal Corporation and Bank of Tokyo-Mitsubishi will
be deemed to control the New Adviser for purposes of the Investment Company Act
of 1940.
The New Adviser will be subject to the Glass-Steagall Act. The
Glass-Steagall Act, among other things, prohibits, with certain exceptions, bank
and bank holding companies from engaging in the business of issuing,
underwriting, selling or distributing securities and from affiliating with
companies engaged in those activities. Subsequent to the decision of the United
States Supreme Court in INVESTMENT COMPANY INSTITUTE v. CAMP, the Board of
Governors of the Federal Reserve System issued regulations forbidding a bank
11
<PAGE>
holding company or subsidiary thereof from organizing, sponsoring or controlling
a registered open-end investment company continuously engaged in distributing
its shares but permitting a subsidiary of a bank holding company to serve as
investment adviser to a registered investment company, such as the Company,
subject to a number of terms and conditions. In the event the New Adviser is
prohibited from acting as the investment adviser for the Company, it is expected
that the Board of Directors would recommend to the shareholders the selection of
another qualified adviser.
It is anticipated that Union Bank of California, N.A. will also become the
investment adviser to the Stepstone Funds, a family of registered mutual funds
presently advised by Union Bank. As of December 31, 1995, the Stepstone Funds
included the following funds with investment objectives similar to that of the
Company:
<TABLE>
<CAPTION>
RATIO OF
ASSET VALUE ADVISORY FEE
(000 OMITTED) TO NET ASSETS*
------------- --------------
<S> <C> <C>
Intermediate Bond Fund............................ $138,969 0.50%
Limited Maturity Govt. Fund....................... 35,222 0.30%
Government Securities Fund........................ 41,569 0.50%
</TABLE>
- ------------------------
* Excluding fee waivers
DIRECTORS AND OFFICERS OF THE PROPOSED NEW ADVISER
The following are planned to be the directors and principal executive
officers of Union Bank of California, N.A., the New Adviser:
<TABLE>
<CAPTION>
POSITION WITH
NAME THE NEW ADVISER BUSINESS BACKGROUND
- ---------------------------- ----------------------------- ---------------------------------------
<S> <C> <C>
Alexander D. Calhoun Director. Of counsel, Graham & James, attorneys,
since 1992. General Partner, 3638
Washington Associates. A director of
Union Bank since 1968.
Richard D. Farman Director. President, Chief Operating Officer and
Director of Pacific Enterprises since
1993. A director of Union Bank since
1988.
Stanley F. Farrar Director. Partner, Sullivan & Cromwell,
attorneys, since 1984. A director of
Bank of California, N.A. since 1984.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME THE NEW ADVISER BUSINESS BACKGROUND
- ---------------------------- ----------------------------- ---------------------------------------
<S> <C> <C>
Herman E. Gallegos Director. Independent management consultant since
1982. Director of Pacific Telesis Group
and Pacific Bell. A director of Union
Bank since 1988.
Jack L. Hancock Director. Former Executive Vice President of
Pacific Bell. Director of Whittaker
Corporation. A director of Union Bank
since 1994.
Richard C. Hartnack Vice Chairman of the Board. Former Executive Vice President of The
First National Bank of Chicago. Vice
Chairman of the Union Bank Board since
1991.
Roy A. Henderson Vice Chairman of the Board. Chairman of LoPresti Flight Concepts.
Former President and Chief Operating
Officer of Puget Sound Bank. A director
of Bank of California, N.A. since 1993.
Harry W. Low Director. Mediator/Arbitrator, Judicial
Arbitration & Mediation Services, Inc.
since 1992. A director of Union Bank
since 1993.
Mary S. Metz Director. Dean of University Extension,
University of California, Berkeley
since 1991. Director of Pacific Telesis
Group, Pacific Gas & Electric Co. and
Longs Drugs Stores. A director of Union
Bank since 1988.
Raymond E. Miles Director. Professor, Haas School of Business,
University of California, Berkeley
since 1963. A director of Bank of
California, N.A. since 1987.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME THE NEW ADVISER BUSINESS BACKGROUND
- ---------------------------- ----------------------------- ---------------------------------------
<S> <C> <C>
J. Fernando Niebla Director. Chairman and Chief Executive Officer of
Infotec Development, Inc. since 1979. A
director of Bank of California, N.A.
since 1994.
Hiroo Nozawa Deputy Chairman of the Board Chairman, President and Chief Executive
and Chief Operating Officer. Officer of Bank of California, N.A.
since 1994. A director of the
Mitsubishi Bank Ltd. since 1992 and of
Bank of California, N.A. since 1994.
Sidney R. Peterson Director. Consultant and private investor since
1984. Former Chairman and Chief
Executive Officer of Getty Oil Company.
Director of Avery Dennison Corporation,
NICOR, Inc., Global Natural Resources,
Inc. and Group Technologies
Corporation. A director of Union Bank
since 1988.
Carl W. Robertson Director. Managing Director of Warland
Investments Company since 1985. A
director of Bank of California, N.A.
since 1975.
Charles R. Scott Director. Chairman and Chief Executive Officer of
Leadership Centers USA since 1995. Vice
Chairman and Director of Pier I
Imports, Inc. A director of Bank of
California, N.A. since 1990.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME THE NEW ADVISER BUSINESS BACKGROUND
- ---------------------------- ----------------------------- ---------------------------------------
<S> <C> <C>
Paul W. Steere Director. Member, Bogle & Gates, P.L.L.C.,
attorneys, since 1966. Director of
Accordia Northwest, Inc., a subsidiary
of Accordia, Inc. A director of Bank of
California, N.A. since 1981.
Henry T. Swigert Director. Chairman of ESCO Corporation since
1979. A director of Bank of California,
N.A. since 1989.
Robert M. Walker Vice Chairman and Director. Vice Chairman of the Union Bank Board
since 1992. Former Vice Chairman and
Chief Credit Officer of Valley National
Bank of Arizona.
Blenda J. Wilson Director. President of California State
University, Northridge since 1992. A
director of Union Bank since 1993.
Kanetaka Yoshida President and Chief Executive President and Chief Executive Officer
Officer and Director. of Union Bank since 1993. A director of
both Union Bank and The Bank of Tokyo,
Ltd. since 1990.
</TABLE>
15
<PAGE>
REQUIRED VOTE FOR APPROVAL OF THE NEW AGREEMENT
The Board of Directors of the Company recommends that the shareholders vote
in favor of the New Agreement previously described. The favorable vote of the
lesser of (i) a majority of the outstanding shares of Common Stock of the
Company, or (ii) 67% or more of the shares represented at the Meeting if the
holders of more than 50% of the outstanding shares of Common Stock of the
Company are present or represented by proxy at the Meeting, is required for such
approval. The Board of Directors' proxy holders will vote to approve the New
Agreement unless otherwise instructed.
If the shareholders of the Company approve, the New Agreement will become
effective on the date of the merger of BanCal Tri-State Corporation, the parent
company of The Bank of California, N.A., into Union Bank. If the shareholders do
not approve the New Agreement, the Board of Directors of the Company will
attempt to negotiate a new agreement with some other party and submit it for
approval to the Company's shareholders.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
Meeting other than those mentioned in this Proxy Statement. If any other
business should come before the Meeting, the proxies will vote thereon in
accordance with their best judgment.
Please complete and sign the enclosed proxy and return it in the envelope
provided so that the Meeting may be held and action taken on the matters
described herein with the greatest possible number of shares participating. You
may nevertheless vote in person if you attend the Meeting.
By Order of the Board of Directors
JONATHAN A. WRIGHT, Secretary
January 22, 1996
16
<PAGE>
EXHIBIT A
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the 1ST day of APRIL, 1996 by and between
Current Income Shares Inc., a Delaware corporation (hereinafter called the
"Fund"), and UNION BANK OF CALIFORNIA, N.A. (hereinafter called the "Manager").
RECITALS
A. The Fund is engaged in business as a closed-end management investment
company and is registered as such under the Investment Company Act of 1940.
B. The Manager IS UNION BANK OF CALIFORNIA, N.A., WHICH WILL ASSUME THE
BANKING AND INVESTMENT MANAGEMENT OPERATIONS OF UNION BANK UPON THE MERGER OF
BANCAL TRI-STATE CORPORATION INTO UNION BANK ON OR AFTER APRIL 1, 1996. UNION
BANK WILL REMAIN THE ADVISER TO THE FUND UNTIL THE LATER OF APRIL 1, 1996 OR THE
EFFECTIVE DATE OF THE MERGER.
C. THE FUND DESIRES TO RETAIN THE MANAGER TO RENDER SUCH SERVICES IN THE
MANNER AND ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants
hereinafter contained, the Fund and the Manager hereby agree as follows:
1. The Fund hereby employs the Manager to provide investment advisory,
statistical and research facilities and services, to supervise the
composition of the Fund's portfolio and to determine the nature and timing
of changes therein and the manner of effectuating such changes, subject to
supervision of the Fund's Board of Directors and for the period and on the
terms set forth in this Agreement. The Manager hereby accepts such
employment and agrees to render the services and to assume the obligations
herein set forth, for the compensation herein provided.
2. The Manager shall:
(a) Furnish to the Fund research and statistical and other factual
information and reports with respect to securities held by the Fund or
which the Fund might purchase. It will also furnish to the Fund such
information as may be appropriate concerning developments which may
affect issuers of securities held by the Fund or which the Fund might
purchase or the businesses in which such issuers may
A-1
<PAGE>
be engaged. Such statistical and other factual information and reports
shall include information and reports on industries, businesses,
corporations and all types of securities which the Manager may consider
appropriate for investment consideration by the Fund, whether or not the
Fund has at the time any holdings in such industries, businesses,
corporations or securities.
(b) Furnish to the Fund, from time to time, advice, information and
recommendations with respect to the acquisition, holding, or disposal by
the Fund of securities held by the Fund or of the types which the Fund
is authorized to purchase and determine, subject to control by the
Fund's Board of Directors, which securities are to be bought or sold by
the Fund and in what amounts.
(c) Furnish to the Fund necessary assistance in:
(i) The preparation of all reports now or hereafter required by
federal or other laws.
(ii) The preparation of prospectuses, registration statements
and amendments thereto and proxy statements that may be required by
federal or other laws or by the rules or regulations of any duly
authorized commission or administrative body. However, nothing
herein shall obligate the Manager to pay the costs of preparation,
printing, or mailing of such prospectuses, registration statements
and amendments or proxy statements.
(d) Furnish to the Fund, at the Manager's expense, office space in
the offices of the Manager or in such other place or places as may be
agreed upon from time to time, and all office facilities, business
equipment, supplies, utilities and telephone service necessary for
managing the affairs and investments and keeping the general accounts
and records of the Fund (exclusive of the necessary records of the
transfer agents, registrars and custodians), and shall arrange, if
desired by the Fund, for members of the Manager's organization to serve,
without compensation from the Fund, as officers, directors or employees
of the Fund.
(e) In the performance of its duties hereunder the Manager may, in
its discretion, purchase without additional cost to the Fund statistical
information and other services from other sources.
3. Except as otherwise expressly provided in this Agreement, the Fund
assumes and shall pay or cause to be paid all expenses of the Fund,
including without
A-2
<PAGE>
limitation: a(a) all costs and expenses incident to any public offering of
shares of the Fund, for cash or otherwise, including those related to the
registration of shares under the Securities Act of 1933, as amended, the
qualification of shares of the Fund under state securities laws, the
printing or other reproduction and distribution of any registration
statement (and all amendments thereto) under the Securities Act of 1933, the
preliminary and final prospectuses included therein, and any other necessary
documents incident to any public offering, the advertising of shares of the
Fund, the services rendered by any securities dealers or brokers, and the
review by the National Association of Securities Dealers, Inc. of any
underwriting arrangements; (b) the charges and expenses of any registrar and
any custodian or depository appointed by the Fund for the safekeeping of its
cash, portfolio securities and other property; (c) the charges and expenses
of auditors; (d) the charges and expenses of any stock transfer or dividend
agents appointed by the Fund; (e) broker's commissions chargeable to the
Fund in connection with portfolio securities transactions to which the Fund
is a party; (f) all taxes, including securities issuance and transfer taxes,
and corporate fees payable by the Fund to federal, state or other
governmental agencies; (g) the cost and expense of engraving or printing of
stock certificates representing shares of the Fund; (h) fees involved in
registering and maintaining registrations of the Fund and of its shares with
the Securities and Exchange Commission and with various states and other
jurisdictions; (i) all expenses of shareholders' and directors' meetings and
of preparing, printing and mailing proxy statements and quarterly,
semi-annual and annual reports to shareholders; (j) fees and travel expenses
of directors who are not also officers, directors or employees of the
Manager or affiliated companies of the Manager; (k) all expenses incident to
any dividend reinvestment program; (l) charges and expenses of legal counsel
in connection with matters relating to the Fund, including without
limitation, legal services rendered in connection with the Fund's corporate
and financial structure and relations with its shareholders, issuance of
Fund shares, and registrations and qualifications of securities under
federal, state and other laws; (m) association dues; (n) interest payable on
Fund borrowings; (o) fees and expenses incident to the listing of the Fund
shares in any stock exchange; and (p) postage.
4. For the services to be rendered, the Fund shall pay to the Manager
compensation at the annual rate (the "Annual Rate") of five-tenths (0.5) of
one percent (1%) of the value of the average net assets of the Fund,
calculated as hereinafter set forth. Compensation under this Agreement shall
be calculated and accrued weekly commencing on the day following
effectiveness hereof, by applying the Annual Rate to the net assets of the
Fund as of the close of the last business day of the calendar week for which
the fee is being calculated and dividing the sum so computed by the number
of
A-3
<PAGE>
calendar weeks ending within the fiscal year. For the purposes of this
provision, a week ends within a fiscal year or calendar month when the last
business day of that week falls within that year or calendar month. If the
contract becomes effective subsequent to the first business day of a week or
terminates before the last business day of a week, compensation for such
weeks shall be computed on a pro rata basis for the number of business days
it is in effect in relation to the number of business days in that week.
Subject to the provisions of paragraph 5 hereof, the fees accrued for the
weeks ending within each calendar month will be payable as promptly as
possible after the end of such calendar month and after completion of the
computations contemplated by paragraph 5 hereof.
5. (a) For purposes of this paragraph 5:
(1) "Includable Expenses" shall mean all expenses of the Fund,
including amounts payable to the Manager pursuant to paragraph 4 hereof
but excluding (i) interest, (ii) taxes, (iii) brokerage fees and
commissions payable by the Fund in connection with the purchase or sale
of portfolio securities, and (iv) the following costs and expenses
incident to any public offering of shares of the Fund: filing fees for
the registration and qualification of the Fund's shares under the
Securities Act of 1933 and the securities laws of various states, legal
and auditing fees and expenses incurred in the preparation and filing of
all documents incident to such registration and qualification, the costs
of printing the registration statement, the preliminary and final
prospectuses forming a part thereof, the underwriting documents filed as
exhibits to the registration statement, or any blue sky surveys or
memoranda incident to the offerings to be made by the prospectus, fees
payable to the National Association of Securities Dealers, Inc. in
connection with the offerings described in the registration statement,
and the costs of advertising the offering described in the registration
statement prior to the effective date thereof.
(2) "Annualized Includable Expenses" shall mean an amount equal to
the Includable Expenses on an accrual basis for the period which is the
subject of the calculation multiplied by a fraction, the numerator of
which is 12, and the denominator of which is the number of full months
within such period.
(3) "Net Asset Limitation" shall mean an amount equal to one and
one-half percent (1 1/2%) of the first thirty million dollars
($30,000,000) of the average net assets of the Fund, plus one percent
(1%) of the average net assets of the Fund in
A-4
<PAGE>
excess of thirty million dollars ($30,000,000). In calculating the Net
Asset Limitation for any period, the average net assets of the Fund
shall be the average of the valuations of the net assets of the Fund as
of the close of business on the last day of each calendar week ending
within such period.
(b) Not later than the fifth business day after the end of each month
ending on a day on which this Agreement is in effect, there shall
be computed the Annualized includable Expenses and the Net Asset
Limitation for the period commencing with the first day of the fiscal
year of the Fund within which the last day of the month just ended fell
(the "current fiscal year") and ending on the last day of the month just
ended. If the amount of the Annualized Includable Expenses exceeds the
Net Asset Limitation, there shall be deducted from the monthly fee then
payable to the Manager an amount equal to the difference between (A)
one-twelfth ( 1/12) of such excess, multiplied by the number of
completed months within the period for which the calculation is being
made and (B) all amounts previously deducted pursuant to this
subparagraph (b) from the Manager's compensation for the current fiscal
year.
(c) As promptly as possible after the end of a fiscal year of the Fund
ending on a date on which this Agreement is in effect, there shall
be computed all of the Fund's Includable Expenses for such fiscal year.
If the amount thereof, reduced by all amounts previously deducted
pursuant to subparagraph 5(b) from the Manager's compensation during
such fiscal year exceeds the Net Asset Limitation, computed on the basis
of the average of all of the valuations of the net assets of the Fund as
of the close of business on the last day of each week ending within such
fiscal year, the Manager shall pay the amount of such excess to the Fund
promptly, and in all events prior to the publication of the annual
report of the Fund for such fiscal year. In the same manner, if the sum
of the Net Asset Limitation for such year plus all amounts previously
deducted pursuant to subparagraph 5(b) from the Manager's compensation
for such fiscal year exceeds the Fund's Includable Expenses for such
year, the Fund will promptly pay the Manager the lesser of (A) all
amounts previously deducted pursuant to subparagraph 5(b) from the
Manager's compensation for such fiscal year or (B) the amount of such
excess.
(d) Appropriate adjustments shall be made in the foregoing
computations for the first fiscal year during which the Agreement
is in effect to reflect the fact that the Manager will have rendered
services hereunder for only a portion of that year.
6. The services of the Manager to the Fund are not to be deemed
exclusive, and the Manager shall be free to engage in any other business or
to render similar services
A-5
<PAGE>
to others so long as its services hereunder be not impaired thereby. The
Manager assumes no responsibility under this Agreement other than to render
the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Directors of the Fund, or any
committee thereof, in following or declining to follow any advice or
recommendation of the Manager. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Manager to
engage in any other business or to devote his time and attention in part to
the management or other aspects of any other business, whether of a similar
or dissimilar nature.
7. This Agreement shall remain in effect until MAY 31, 1997, unless
sooner terminated as hereinafter provided. This Agreement shall continue in
effect from year-to-year thereafter provided it is approved annually, within
90 days of its termination date, by vote of a majority of the outstanding
voting securities of the Fund or by vote of the Board of Directors of the
Fund and by a majority of the Directors of the Fund (as defined in the
Investment Company Act of 1940) who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act of 1940) of
any party to this Agreement, which vote must be cast in person at a meeting
called for the purpose of voting on approval of the terms of this Agreement
and its continuance; provided, however, that (a) the Fund may, at any time
and without the payment of any penalty, terminate this Agreement upon sixty
days written notice to the Manager either by majority vote of the Board of
Directors of the Fund or by the vote of a majority of the outstanding voting
securities of the Fund; (b) this Agreement shall immediately terminate in
the event of its assignment (within the meaning of the Investment Company
Act of 1940) unless such automatic termination shall be prevented by an
exemptive order of the Securities and Exchange Commission; and (c) the
Manager may terminate this Agreement without payment or penalty on sixty
days written notice to the Fund. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed postpaid, to the other
party at the principal office of such party.
8. This Agreement shall become effective as soon (1) as it has been
approved by a majority of (a) the outstanding voting securities of the Fund
and (b) the Directors of the Fund including those Directors who are not
parties to this Agreement or "interested persons" (as defined in the
Investment Company Act of 1940) of any such party AND (2) THE MERGER OF
BANCAL TRI-STATE CORPORATION INTO UNION BANK HAS BECOME EFFECTIVE.
9. For purposes of this Agreement, a "majority of the outstanding
voting securities of the Fund" shall be determined in accordance with the
applicable provisions of the Investment Company Act of 1940.
A-6
<PAGE>
10. This Agreement shall be construed in accordance with the laws of the
State of California and the applicable provisions of the Investment Company
Act of 1940. To the extent applicable law of the State of California, or any
of the provisions herein, conflict with applicable provisions of the
Investment Company Act of 1940, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in Los Angeles, California.
CURRENT INCOME SHARES, INC.
By ____________________________________________
President
UNION BANK OF CALIFORNIA, N.A.
By ____________________________________________
By ____________________________________________
A-7
<PAGE>
PLEASE MARK IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
FOR all / /
nominees listed
below (except
as marked to
the contrary)
WITHHOLD AUTHORITY / /
to vote for all
nominees
listed at left.
Lorenzo D. Courtright, Morris A. Densmore, Stephen J. Dunn, Clark R. Gates,
William R. Howell and Michael L. Noel
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR 1996.
For / /
Against / /
Abstain / /
3. PROPOSAL TO APPROVE THE MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT WITH
UNION BANK OF CALIFORNIA, N.A.
For / /
Against / /
Abstain / /
A majority of the above-named proxies present at said Meeting, either in person
or by substitute (or if only one thereof shall be present and acting, then that
one), shall have and exercise all powers of said proxies hereunder. This proxy
will be voted as specified. If no instructions to the contrary are indicated
hereon, this proxy will be voted FOR items 1, 2, and 3, shown on this proxy.
The undersigned acknowledges receipt of a copy of the Notice of Annual Meeting
and Proxy Statement for the Meeting
Dated , 1996
________________________________________
Signature(s)
________________________________________
IMPORTANT: In signing this proxy, please sign your name or names on the
signature lines in the same way as it appears on the proxy. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title as such. EACH JOINT TENANT SHOULD SIGN.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
POSTAGE PREPAID ENVELOPE PROVIDED.
<PAGE>
PROXY CURRENT INCOME SHARES, INC. PROXY
445 SOUTH FIGUEROA STREET, LOS ANGELES, CALIFORNIA 90071
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned shareholder of Current Income Shares, Inc., a Delaware
corporation, hereby constitutes and appoints Morris A. Densmore, Stephen J.
Dunn and Clark R. Gates, and each of them, the attorneys and proxies of the
undersigned, each with full power of substitution, to attend and act for the
undersigned at the Special Meeting of Shareholders of said corporation to be
held on Thursday, March 14, 1996, at 11:00 A.M. California time, in the
Conference Room on the 38th floor of the Union Bank Building at 445 South
Figueroa Street, Los Angeles, California 90071, and at any adjournments
thereof, and in connection therewith to vote and represent all of the shares
of Common Stock of said corporation which the undersigned is entitled to vote
as directed on the reverse side.
Such attorneys and proxies, and each of them, shall have all the powers
which the undersigned would have if acting in person. The undersigned hereby
revokes any other proxy to vote at such Meeting and hereby ratifies and
confirms all that said attorneys and proxies, and each of them, may lawfully
do by virtue hereof. With respect to matters not known at the time of the
solicitation hereof, said proxies are authorized to vote in accordance with
their best judgment.
PLEASE MARK THIS PROXY AND SIGN AND DATE IT ON THE REVERSE SIDE
HEREOF AND RETURN IT IN THE ENCLOSED ENVELOPE.
