CURRENT INCOME SHARES INC
PRE 14A, 2000-04-03
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                       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

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[X]  Preliminary Proxy Statement           [ ]  Confidential, For Use of the
[ ]  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.
- --------------------------------------------------------------------------------
                (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:
                      ----------------------------------------------------
    4)   Date Filed:
                    ------------------------------------------------------
<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 __, 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 , 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, 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 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
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

                                       1
<PAGE>
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, 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(1)                         3,118,333                 84.90%

All Executive Officers and
Directors as a group                          3,664                  0.10%

- ----------
(1)  These shareholders own shares in nominee accounts for many individual
     shareholders. The Fund is not aware of the size or identity of the
     underlying individual accounts held by Cede & Company.

                              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:

                                       2
<PAGE>
<TABLE>
<CAPTION>
                                                                                             NUMBER OF
                                                                                              SHARES
                        PRINCIPAL OCCUPATIONS,                            HAS SERVED AS     BENEFICIALLY
NAME             AGE    EMPLOYMENT AND DIRECTORSHIPS                      DIRECTOR SINCE       OWNED+
- ----             ---    ----------------------------                      --------------       ------
<S>              <C>    <C>                                               <C>                  <C>
Willard H.        64    Retired. Partner, Ernst & Young LLP from 1969           1997           1,064
Altman(1)(2)            to retirement in 1995; Vice President,
                        Evangelical Council for Financial                   Chair, Audit
                        Accountability from 1995; Director of Source      Committee since
                        Capital, Inc., FPA Capital Fund, Inc., FPA New          1997
                        Income Fund, Inc., and FPA Perennial Fund,
                        Inc., investment companies not affiliated with
                        the Adviser, since 1998.

Clark R. Gates*   51    President and Chief Executive Officer, HighMark         1991           None
                        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. since 1999.

Kathleen L.       46    President, KLK Consulting since 1994;                   1999           None
Kellogg(1)(2)           President, CEO and Director, American Savings
                        Bank, 1997 to 2000; President, CEO and                 Chair,
                        Director, Hancock Savings Bank, 1997;                Nominating
                        President, CEO and Director, Frontier Bank,          Committee
                        1994 to 1997                                         since 1999

Michael L.        59    President, Noel Consulting Company since 1998;          1981            300
Noel(1)(2)              Senior Vice President and Chief Financial
                        Officer, Southern California Edison Company          Chairman of
                        until retirement in 1994; Director, Amervest         the Board
                        Company since 1997; Director, SCAN (health           since 1999
                        plan) since 1997; Member of Advisory Board,
                        HighMark Funds, affiliate of the Company, 1997
                        to 1998, Member Board of Trustees, HighMark
                        Funds, affiliate of the Company, 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.               Retired. Executive Vice President, member of            1998            300
Whitler(1)(2)**   61    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, affiliate of the Company, 1997 to
                        1998; Member , Board of Trustees of HighMark
                        Funds, affiliate of the Company, since 1998;
                        Member, Board of Directors, Acculabs, Inc. since
                        1998.
</TABLE>
                                       3
<PAGE>
- ----------
*    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 reviews 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  mettwice  in  1999,  is  to  nominate   candidates  for
     directorships  when  vacancies  occur.  Kathleen L. Kellogg is Chair of the
     Nominating Committee.

     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 Management                               HighMark Capital Management, Inc.
445 S. Figueroa Street
Los Angeles, CA 90071

E. Jack Montgomery                   Vice President and   Director, Fixed Income at HighMark
HighMark Capital Management    49    Portfolio Manager    Capital Management, Inc. Vice President
475 Sansome Street                                        of Union Bank of California
San Francisco, CA 94111

Denise Lewis                   36    Treasurer            Senior Vice President, Investment
Investment Company                                        Company Administration, LLC.
Administration, L.L.C.
2020 Financial Way
Glendora, CA 91741

Rita Dam                       33    Secretary            Senior Vice President, Investment
Investment Company                                        Company Administration, LLC.
Administration, L.L.C.
2020 Financial Way
Glendora, CA 91741
</TABLE>
                                       4
<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 FROM     AS PART OF       BENEFITS UPON   ADVISER COMPLEX PAID
NAME                       COMPANY       COMPANY EXPENSES     RETIREMENT          TO DIRECTOR
- ----                       -------       ----------------     ----------          -----------
<S>                         <C>                <C>                <C>               <C>
Willard H. Altman           $7,050             -0-                -0-               $ 7,050*
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>

- ----------
* Indicates the Company only.
**   Indicates Adviser Complex, including the Company.

     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.

                        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.

                                       5
<PAGE>
     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.

     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 HighMark Capital Management, Inc., a
California corporation (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
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 management and
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 fees totaling 0.50% of the Company's
average net asset value. 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.

                                       6
<PAGE>
     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 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 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 in connection with
the purchase and sale of portfolio securities.

     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.

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,
the principal subsidiary of which is Union Bank of California, N.A. 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:

                                       7
<PAGE>
                                              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.

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 to
                       Officer                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.
</TABLE>
                                       8
<PAGE>
<TABLE>
<S>                    <C>                    <C>
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 California,
                       Officer                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.

Kevin A. Rogers        Managing               Managing Director, Regional Portfolio Group, HighMark
                       Director-Chief         Capital Management, Inc. from June 1998 to October
                       Financial Officer      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 President  Senior Vice President of Sales, Union Bank of
                       of Sales               California, N.A., from April 1996, Vice President,
                                              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.

                                       9
<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

                                       10
<PAGE>
                                 [FRONT OF CARD]

April __, 2000


                           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.

     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>
                                 [REVERSE OF CARD]


                           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              Nominees Excepted
    to the right.)

    Willard H. Altman, Clark R. Gates, Kathleen
    Kellogg, Michael L. Noel, and Robert M. Whitler.

    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.



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