SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
CURRENT INCOME SHARES, INC.
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(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
CURRENT INCOME SHARES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 2000
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
Conference Room on the 3rd floor of the Union Bank of California Building at 445
South Figueroa Street, Los Angeles, California 90071, on Thursday, May 11, 2000
at 11:00 a.m. Pacific time, for the following purposes:
(1) To elect the Board of Directors of the Company;
(2) To approve or disapprove the selection of Deloitte & Touche LLP as the
independent auditors for the Company for the fiscal year ending
December 31, 2000;
(3) To approve or disapprove the amendment and continuation of the
Investment Advisory Agreement between the Company and HighMark Capital
Management, Inc., the Company's 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
March 31, 2000 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
Rita Dam, Secretary
<PAGE>
April 14, 2000
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 11, 2000
CURRENT INCOME SHARES, INC.
445 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90071
PROXY STATEMENT
This Proxy Statement is being sent on or about April 14, 2000 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, May 11,
2000, at 11:00 a.m. Pacific time, in the 3rd floor Conference Room of the Union
Bank of California 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 March 31, 2000 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, then the proxy attorneys may vote those proxies that
have been received to adjourn the Meeting to a later date. If a quorum is
present but sufficient votes in favor of one or more proposals have not been
received, the proxy attorneys may propose one or more adjournments of the
Meeting to permit further proxy solicitations.. 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 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.. If there are
sufficient votes for the approval of one or more proposals, a vote may be taken
on those proposals prior to any such adjournment if it is otherwise appropriate.
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.
The Fund will count 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)
toward a quorum, but not toward the approval of any proposal.. For this reason,
abstentions and broker non-votes will have the effect of a "no" vote for
purposes of obtaining the requisite approval of Proposals 2 and 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 (888) 465-2825, 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. 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
<PAGE>
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, HighMark Capital Management, Inc. (the "Advisor"), the Company's
investment adviser, or Union Bank of California, N.A. but no additional
compensation will be paid to any of them on account of such activities.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 1999 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.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING SHARES
---------------- ------------------ ------------------
Cede & Company 3,118,333 84.90%
All Executive Officers
and Directors as a group 3,664 0.10%
2
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, five 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. The five persons receiving the highest number of votes will be elected.
At a meeting held on February 17, 2000, 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
election of their successors or upon their earlier retirement, resignation or
removal.
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 31,
1999, are as follows:
<TABLE>
<CAPTION>
POSITION NUMBER OF
HELD SHARES
WITH PRINCIPAL OCCUPATIONS, BENEFICIALLY
NAME AGE COMPANY EMPLOYMENT AND DIRECTORSHIPS OWNED
---- --- ------- ---------------------------- -----
<S> <C> <C> <C> <C>
Willard H. Altman(1)(2) 64 Director Retired. Partner, Ernst & Young LLP from 1,064
since 1997 1969 to retirement in 1995; Vice
President, Evangelical Council for
Financial Accountability from 1995;
Director of Source Capital, Inc., FPA
Capital Fund, Inc., FPA New Income Fund,
Inc., and FPA Perennial Fund, Inc.,
investment companies not affiliated with
the Adviser.
Clark R. Gates* 51 Director President and Chief Executive Officer, None
since 1991 HighMark Capital Management, Inc. from
June 1998; President, Pacific Alliance
Capital Management, a division of Union
Bank of California, N.A., 1990 to 1998;
Senior Vice President, Union Bank of
California, N.A., from October 1991;
Managing Director, Pacific Century
Advisers, 1986 to 1989; Director,
HighMark World Funds, PLC, 1999.
Kathleen L. Kellogg(1)(2) 46 Director President, KLK Consulting since 1994; None
since 1999 President, CEO and Director, American
Savings Bank, 1997 to 2000; President,
CEO and Director, Hancock Savings Bank,
1997; President, CEO and Director,
Frontier Bank, 1994 to 1997
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
POSITION NUMBER OF
HELD SHARES
WITH PRINCIPAL OCCUPATIONS, BENEFICIALLY
NAME AGE COMPANY EMPLOYMENT AND DIRECTORSHIPS OWNED
---- --- ------- ---------------------------- -----
<S> <C> <C> <C> <C>
Michael L. Noel(1)(2) 59 Director President, Noel Consulting Company since 300
since 1981, 1998; Senior Vice President and Chief
Chairman Financial Officer, Southern California
of the Edison Company until retirement in 1994;
Board Director, Amervest Company since 1997;
Director, SCAN (health plan) since 1997;
Member of Advisory Board, HighMark Funds
which the Adviser . serves as investment
adviser, 1997 to 1998, Member Board of
Trustees, HighMark Funds which the
Adviser serves as investment adviser,
since 1998; Member Board of Trustees,
Stepstone Funds 1991 to 1997; Director,
Hancock Savings Bank, 1986 to 1997;
Director, Software Toolworks, 1989 to
1994.
Robert M. Whitler(1)(2)** 61 Director Retired. Executive Vice President, 300
since 1998 member of Executive Policy Committee and
head of Trust and Investments Group,
Union Bank of California from March 1991
to 1996; Member of Advisory Board,
HighMark Funds which the Adviser serves
as investment adviser, 1997 to 1998;
Member , Board of Trustees of HighMark
Funds which the Adviser serves as
investment adviser, since 1998; Member,
Board of Directors, Acculabs, Inc. since
1998.
</TABLE>
- ----------
* 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 HighMark
Capital Management, Inc., which is the Company's investment adviser and
Union Bank of California, N.A., which provides other services to the
Company (see "Approval of Amendment and Continuation of the Investment
Advisory Agreement").
** Mr. Whitler previously served as an interested director due to his
ownership of stock of UnionBanCal Corporation, the parent of the Company's
adviser. During 1999, Mr. Whitler sold his stock of UnionBanCal Corporation
and is now considered a "disinterested person" of the Company within the
meaning of the Investment Company Act of 1940.
(1) Member of the Audit Committee. The function of the Audit Committee, which
met three times in 1999, is to review the Company's financial statements
and internal control procedures with the officers of the Company and the
independent auditors, and to review with such auditors the results of the
annual audit and the adequacy of the audit procedures. The Audit Committee
also has the responsibility of recommending independent auditors for
selection by the Board of Directors. Willard H. Altman is Chair of the
Audit Committee.
(2) Member of the Nominating Committee. The function of the nominating
committee, which met twice in 1999, is to nominate candidates for
directorships when vacancies occur. Kathleen L. Kellogg is Chair of the
Nominating Committee.
4
<PAGE>
During 1999, the Board of Directors held four regular meetings and one
special meeting, and all Directors attended all of the meetings. Ms. Kellogg
attended all of the meetings after her election in November 1999.
Shareholders wishing to submit nominations of directors for
consideration by the nominating committee for inclusion in the Proxy Statements
for the 2001 shareholders' meeting should send their written nominations to the
Secretary of the Company by December 31, 2000 at 2020 East Financial Way,
Glendora, California 91741. Any such nomination must satisfy all applicable
federal and state requirements.
Set forth below is a table indicating the names and ages of the
principal Officers of the Company who are not also Directors of the Company.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS AGE THE COMPANY PRINCIPAL OCCUPATION
- ---------------- --- ----------- --------------------
<S> <C> <C> <C>
R. Greg Knopf 49 President Managing Director, Mutual Funds at
HighMark Capital HighMark Capital Management, Inc.
Management, Inc.
445 S. Figueroa Street
Los Angeles, CA 90071
E. Jack Montgomery 49 Vice Director, Fixed Income at HighMark
HighMark Capital President Capital Management, Inc. Vice
Management, Inc. and Portfolio President of Union Bank of California
475 Sansome Street Manager
San Francisco, CA 94111
Denise Lewis 36 Treasurer Senior Vice President,
Investment Company Investment Company
Administration, L.L.C. Administration, L.L.C.
2020 Financial Way
Glendora, CA 91741
Rita Dam 33 Secretary Senior Vice President,
Investment Company Investment Company
Administration, L.L.C. Administration, L.L.C.
2020 Financial Way
Glendora, CA 91741
</TABLE>
5
<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, plus $200 for each regular meeting attended.
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, 1999, 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").
There are 15 such companies, including the Company, in the Adviser Complex.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL FROM COMPANY AND
COMPENSATION AS PART OF BENEFITS UPON ADVISER COMPLEX PAID
NAME FROM COMPANY COMPANY EXPENSES RETIREMENT TO DIRECTOR
---- ------------ ---------------- ---------- -----------
<S> <C> <C> <C> <C>
Clark R. Gates $ -0- -0- -0- $ -0-
Willard H. Altman $7,050 -0- -0- $ 7,050
Morris A. Densmore+ $1,500 -0- -0- $ 1,500
Kathleen L. Kellogg $1,950 -0- -0- $ 1,950
Michael L. Noel $7,050 -0- -0- $24,050
Robert M. Whitler $7,050 -0- -0- $24,050
</TABLE>
- ----------
+ Retired in 1999.
The Company does not compensate its Officers for their services to the
Company, which expenses are borne by the Adviser. Reference is made to
information under the heading "The Agreement and Compensation of the Adviser"
for a discussion of fees paid by the Company to the Adviser.
6
<PAGE>
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
At a meeting held on February 17, 2000, the independent Directors who
are not "interested persons" of the Company (as defined in the Investment
Company Act of 1940) selected the firm of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000. 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 auditors.
No representative of Deloitte & Touche LLP will be present at the
meeting of shareholders. A majority of votes cast is required to approve the
independent auditors. Unless otherwise instructed, the Board of Directors' proxy
holders will vote to approve the selection of Deloitte & Touche LLP.
APPROVAL OF AMENDMENT AND CONTINUATION OF THE
INVESTMENT ADVISORY AGREEMENT
(PROPOSAL NO. 3)
At a meeting held on February 17, 2000, the Board of Directors of the
Company approved the continuation of the Company's Investment Advisory Agreement
with the Adviser. The Board's approval was based primarily on its view that the
Adviser's management of the Fund's portfolio has resulted in satisfactory
investment performance compared with similar closed-end funds, and that the
Adviser's fees are reasonable compared with similar funds. The Directors gave
equal consideration to all factors deemed to be relevant to the Fund, including,
but not limited to the following: (1) the quality of services provided to the
Fund since the Fund's commencement of operations; (2) the positive relationship
of the Adviser with the Company; (3) the performance of the Fund since
commencement of operations; (4) the research-intensive nature and quality of the
services rendered to the Fund by the Adviser; (5) the favorable history,
reputation, qualification and background of the Adviser, as well as the
qualifications of their personnel and financial condition; (8) the Adviser's
favorable overall investment performance record; and (9) other factors deemed
relevant.
Accordingly, at the Meeting, the shareholders will be asked to approve
the amendment and continuation of the Investment Advisory Agreement (the
"Agreement") between the Company and the Adviser. The Agreement was originally
approved by the Board of Directors and the directors who are not "interested
persons" of the Company on May 14, 1998. The Agreement was last approved by the
shareholders on May 13, 1999.
The Board of Directors also approved, effective March 1, 2000, the
selection of Investment Company Administration, L.L.C. as the Company's
administrator (the "Administrator"), and ICA Fund Services Corp., an affiliate
of the Administrator, as the Company's fund accountant (the "Fund Accountant").
The services provided by the Administrator and Fund Accountant are similar to
the services formerly performed by the Adviser prior to March 1, 2000.
THE AGREEMENT AND COMPENSATION OF THE ADVISER
By its terms, the 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 of the Company or by vote of the Board of
Directors of the Company and, in either event, by the vote cast in person of a
majority of Directors who are not parties to the Agreement or "interested
persons" of any party to the Agreement, (as defined in the Investment Company
Act of 1940) at a meeting called for the purpose of voting on such approval. The
Agreement may be terminated on sixty days' notice by the 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 (as defined in the
7
<PAGE>
Investment Company Act of 1940). 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 Agreement requires the Adviser to provide investment advisory
services to the Company. Under the Agreement, the 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 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 Adviser is required by the
Agreement to pay for office space, facilities, and business equipment.
For providing these services, the Adviser receives an advisory fee,
which on an annual basis, will amount to 0.30% of the average net asset value of
the Company. This fee is computed and accrued weekly and is payable monthly.
Prior to March 1, 2000, the Adviser received management and advisory fees
totaling 0.50% of the Company's average annual net assets. The Adviser received
investment management and advisory fees totaling 0.50% of the Company's average
annual net assets or $234,955, for the fiscal year ended December 31, 1999.
Effective March 1, 2000, the Administrator and Fund Accountant assumed several
duties previously provided by the Adviser. The newly proposed fees for the
Adviser, combined with the fees paid to the Administrator and Fund Accountant,
will remain the same as the fee formerly paid to the Adviser. At December 31,
1999, the Company's total net asset value was $44,928,141, equivalent to $12.23
per share.
All costs and expenses incurred in the operation of the Company, other
than the expenses specifically assumed by the Adviser under the 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 Company paid $234,955 for management and investment advisory
services in 1999 to the Adviser. This amount was for management and investment
advisory services and was paid at the rate of 0.50% of the Company's average
annual net assets. In future years, the rate paid to the Adviser for investment
advisory services only will be 0.30% of the Company's average annual net assets.
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 1999, the Company paid no brokerage commissions because the
portfolio securities were traded on a bid and asked basis.
The rate of the Company's portfolio turnover for 1999 was 19%.
CUSTODIAL SERVICES
Union Bank of California, N.A. provided custodial services for the
Company for the year 1999. Total custody fees paid by the Company in 1999 were
$4,966.
8
<PAGE>
FURTHER INFORMATION CONCERNING THE ADVISER
The Adviser, HighMark Capital Management, Inc., is incorporated in
California and is a wholly owned subsidiary of UnionBanCal Corporation, a
registered bank holding company which is regulated by the Federal Reserve Board.
Union Bank of California, N.A. is also a subsidiary of UnionBanCal Corporation,
therefore, an affiliate of the Adviser. UnionBanCal Corporation had total assets
of approximately $33.7 billion and shareholder equity of approximately $2.9
billion at December 31, 1999.
As of December 31, 1999, the Bank of Tokyo-Mitsubishi, Ltd. owned
approximately 64% of the outstanding common stock of UnionBanCal Corporation. As
a consequence, both UnionBanCal Corporation and The Bank of Tokyo-Mitsubishi,
Ltd. are deemed to control the Adviser for purposes of the Investment Company
Act of 1940. The Bank of Tokyo-Mitsubishi, Ltd. is the largest bank in Japan,
based on total assets, with a domestic network of 350 branches, sub-branches and
agencies, and an overseas network that includes more than 400 facilities.
The Adviser also acts as the investment adviser to the HighMark Funds,
a family of registered mutual funds. As of January 31, 2000, the HighMark Funds
included the following funds with investment objectives similar to that of the
Company:
ASSET VALUE RATIO OF ADVISORY
(000 OMITTED) FEE TO NET ASSETS*
------------- ------------------
HighMark Intermediate-Term Bond Fund $246,600 0.50%
HighMark Bond Fund $323,800 0.50%
- ----------
* Excluding fee waivers but including management services. The Adviser has
agreed to contractually waive fees in order to keep the Funds' total annual
operating expenses at a specified level.
9
<PAGE>
DIRECTORS AND OFFICERS OF THE ADVISER
The following are the directors and principal executive officers of
HighMark Capital Management, Inc., the Adviser:
<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER BUSINESS BACKGROUND
- ---- ----------- -------------------
<S> <C> <C>
Pieter Westerbeek III Director, Chairman Executive Vice President, Division Manager, Chief
of the Board Fiduciary Officer, Union Bank of California, N.A.
since January 1999; Senior Vice President, Union
Bank of California, April 1996 to March 1999;
Senior Vice President, Division Manager, Union
Bank, March 1994 to 1996.
Susumu Hanada Director Chief Executive Officer and Chairman of the Board,
HighMark Capital Management, Inc. from June 1998
to September 1999; Senior Inspector, Inspection
Division, The Bank of Tokyo-Mitsubishi, Ltd. since
May 1997; Deputy General Manager, Capital Markets
Group, Bank of Tokyo-Mitsubishi, April 1996 to
April 1997; CEO and President, Tokyo-Mitsubishi
Derivative Products (USA), Inc., April 1996 to
April 1997; CEO and President, Mitsubishi Capital
Market Securities, Inc., 1991 to May 1996. Various
offices with The Bank of Tokyo-Mitsubishi, Ltd.
from 1974 to April 1996
Clark R. Gates Director, President, President, Pacific Alliance Capital Management, a
and Chief Executive division of Union Bank of California, N.A., 1990
Officer to 1998; Senior Vice President, Union Bank of
California, N.A., from October 1991; Managing
Director, Pacific Century Advisers, 1986 to 1989;
Director, HighMark World Funds, PLC since 1999.
Richard C. Hartnack Director Vice Chairman and head of Community Banking and
Investment Services Group since August 1999 and
the Community Banking Group for UnionBanCal
Corporation and Union Bank of California, N.A.
from April 1996 to August 1999. Vice Chairman of
Union Bank from June 1991 until March 1996.
Director, UnionBanCal Corportion since 1991.
Tsutomu Nakagawa Director Executive Vice President and Manager, Office of
the President, Union Bank of California, N.A.,
from March 1998; Senior Vice President,
International Banking Group, Union Bank of
California, N.A., December 1996 to March 1998.
Various offices with The Bank of Tokyo-Mitsubishi,
Ltd. from 1973 to December 1996.
Honaria F. Vivell Director Executive Vice President, Wealth Management, Union
Bank of California, N.A. since July 1975.
Luke C. Mazur Managing Director - Chief Investment Officer, Pacific Alliance Capital
Chief Investment Management, a division of Union Bank of
Officer California, N.A., June 1990 to August 1998; Senior
Vice President, Union Bank of California, N.A.,
June 1990 to August 1998; Chief Investment
Officer, Northern Trust Company, 1964 to June
1990.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER BUSINESS BACKGROUND
- ---- ----------- -------------------
<S> <C> <C>
Kevin A. Rogers Managing Director- Managing Director, Regional Portfolio Group,
Chief Financial HighMark Capital Management, Inc. from June 1998
Officer to October 1999; Managing Director, Regional
Portfolio Group, Union Bank of California, N.A.,
since September 1994.
R. Greg Knopf Managing Director - Director, HighMark World Funds, PLC since 1999.
Mutual Funds President, Current Income Shares since 1999.
Senior Vice President and Manager , Mutual Fund
Division, Union Bank of California N.A. from April
1996 to September 1998; Vice President Product
Manager Mutual Funds, Trust and Investment Group,
Union Bank of California N.A., December 1991 to
April 1996; Vice President-Regional Manager,
Personal Asset Management Sales Division, Union
Bank of California, N.A., September 1988 to
December 1991.
Jeffrey L. Boyle Senior Vice Senior Vice President of Sales, Union Bank of
President of California, N.A., from April 1996, Vice President,
Sales Business Trust, Bank of California from April 1988
to April 1996.
John J. King Secretary Vice President and Associate General Counsel, Union
Bank of California, N.A., since 1991.
</TABLE>
REQUIRED VOTE FOR APPROVAL OF THE AMENDMENT AND CONTINUATION
OF THE INVESTMENT ADVISORY AGREEMENT
The Board of Directors of the Company recommends that the shareholders
vote in favor of the renewal of the 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 Agreement unless otherwise instructed.
If the shareholders do not approve the renewal of the Agreement, the
Board of Directors of the Company will attempt to renegotiate the terms of the
agreement or negotiate a new agreement with some other party and submit it for
approval to the Company's shareholders.
11
<PAGE>
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.
Shareholders wishing to submit proposals for inclusion in the proxy
statement for the 2001 Shareholders' meeting should send their written proposals
to the Secretary of the Company by December 31, 2000 at 2020 East Financial Way,
Glendora, California 91741. Any such proposal must satisfy all applicable
federal and state requirements.
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
Rita Dam, Secretary
April 14, 2000
12
<PAGE>
CURRENT INCOME SHARES, INC.
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 Michael L. Noel, 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 Annual
Meeting of Shareholders of said corporation to be held on Thursday, May 11,
2000, at 11:00 A.M. California time, in the Conference Room on the 3rd floor of
the Union Bank of California 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
that 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.
The Board of Directors recommends that the Company's shareholders vote
FOR the election of each of the Directors, FOR the selection Deloitte & Touche
LLP as the independent auditors for the Company for the fiscal year ending
December 31, 2000, and FOR the amendment and continuation of the Investment
Advisory Agreement between the Company and HighMark Capital Management, Inc.
PLEASE MARK THIS PROXY AND SIGN AND DATE IT ON THE REVERSE
SIDE HEREOF AND RETURN IT IN THE ENCLOSED ENVELOPE.
-FOLD AND DETACH HERE-
<PAGE>
CURRENT INCOME SHARES INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
For Withhold For All
All All Except
1. ELECTION OF DIRECTORS / / / / / /
(INSTRUCTION: To withhold authority to vote for
any individual nominee, write the nominee's name -----------------
in the space provided to the right.) Nominees Excepted
Willard H. Altman, Clark R. Gates, Kathleen
The Board of Directors recommends a vote FOR
Proposal No. 1.
For Against Abstain
2. SELECTION OF DELOITTE & TOUCHE LLP AS THE / / / / / /
INDEPENDENT AUDITORS FOR THE COMPANY FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2000.
The Board of Directors recommends a vote FOR
Proposal No. 2.
For Against Abstain
3. AMENDMENT AND CONTINUATION OF THE INVESTMENT / / / / / /
ADVISORY AGREEMENT BETWEEN THE COMPANY AND
HIGHMARK CAPITAL MANAGEMENT, INC., THE COMPANY'S
CURRENT ADVISER.
The Board of Directors recommends a vote FOR
Proposal No. 3.
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 act, then that
one), shall have and exercise all powers of said proxies hereunder. This proxy
will be voted in 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 to the Meeting.
Dated ______________, 2000
________________________________________________________________________________
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.
-FOLD AND DETACH HERE-
PLEASE SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
