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
HATTERAS INCOME SECURITIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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)(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:
( ) 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:
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(Hatteras logo) HATTERAS INCOME SECURITIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1997
TO THE STOCKHOLDERS OF
HATTERAS INCOME SECURITIES, INC.
Notice is hereby given that the Annual Meeting (the "Annual Meeting") of
Stockholders of Hatteras Income Securities, Inc. (the "Company") will be held on
Thursday, April 24, 1997 at 11:00 a.m. (Eastern time), at One NationsBank Plaza,
33rd Floor, Charlotte, North Carolina 28255, for the following purposes:
(1) To elect three Directors of the Company;
(2) To ratify the selection by the Board of Directors of Price Waterhouse
LLP as independent public accountants of the Company for the fiscal year ending
December 31, 1997; and
(3) To transact such other business as may properly come before the Annual
Meeting, or any adjournment(s) thereof, including any adjournment(s) necessary
to obtain requisite quorums and/or approvals.
The Board of Directors of the Company has fixed the close of business on
March 14, 1997 as the record date for the determination of Stockholders entitled
to receive notice of and to vote at such Annual Meeting or any adjournment(s)
thereof. The enclosed Proxy Statement contains further information regarding the
meeting and the proposals to be considered. The enclosed Form of Proxy is
intended to permit you to vote even if you do not attend the meeting in person.
YOUR PROXY IS VERY IMPORTANT TO US. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED FORM OF PROXY
TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Signed but unmarked Forms of Proxy
will be counted in determining whether a quorum is present and will be voted in
favor of the proposals.
By Order of the Board of Directors.
/s/ Robert B. Carroll
ROBERT B. CARROLL
SECRETARY
March 21, 1997
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YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE
NUMBER OF SHARES THAT YOU OWN.
PLEASE MARK, SIGN, DATE AND RETURN YOUR
FORM OF PROXY IMMEDIATELY.
SHARES OF THE COMPANY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, NATIONSBANK, N.A. ("NATIONSBANK") OR ANY OF ITS
AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN THE COMPANY INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
NATIONSBANK AFFILIATES PROVIDE INVESTMENT ADVISORY AND CERTAIN OTHER
SERVICES TO THE COMPANY, FOR WHICH THEY ARE COMPENSATED.
<PAGE>
HATTERAS INCOME SECURITIES, INC.
One NationsBank Plaza
Charlotte, North Carolina 28255
(800) 851-9677
PROXY STATEMENT
Annual Meeting of Stockholders
April 24, 1997
This Proxy Statement is being furnished to holders of common stock
("Stockholders") of Hatteras Income Securities, Inc. (the "Company") in
connection with the solicitation by the Board of Directors of the Company of
proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting")
of the Company to be held on April 24, 1997 at 11:00 a.m. (Eastern time) at One
NationsBank Plaza, 33rd Floor, Charlotte, North Carolina 28255, and at any
adjournment(s) thereof. Your proxy is being solicited for the purposes set forth
in the accompanying Notice of Annual Meeting.
The Board of Directors has fixed March 14, 1997 (the "Record Date") as the
date for the determination of Stockholders entitled to receive notice of and to
vote at such Annual Meeting, and, accordingly, only Stockholders of record at
the close of business on that date will be entitled to notice of and to vote at
such Annual Meeting. As of the Record Date, there were 3,363,512 outstanding
shares of common stock of the Company. This Proxy Statement is first being
mailed to Stockholders on or about March 21, 1997.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
AND SEMI-ANNUAL REPORTS TO ANY STOCKHOLDER UPON WRITTEN OR ORAL REQUEST MADE TO
THE ADDRESS OR TOLL-FREE TELEPHONE NUMBER ABOVE.
All actions of the Board of Directors of the Company described in the
proposals below were unanimously approved by the Board, none of whom are
"interested persons" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Company, NationsBanc Advisors, Inc. ("NBAI"),
the Company's investment adviser, or TradeStreet Investment Associates, Inc.
("TradeStreet"), the Company's investment sub-adviser.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, the Stockholders of the Company will be asked to
vote for the three nominees for Director listed below (the "Nominees"). Voting
for the Nominees is not cumulative. Each Director will serve until the next
Annual Meeting or until his successor shall be elected and shall qualify. Each
Nominee is currently a member of the Board of Directors and has consented to his
nomination and to serve if elected. Although the Board of Directors expects that
each of the Nominees will be available for election, in the event a vacancy in
the slate of Nominees is occasioned by death or other unexpected occurrence, it
is intended that shares represented by proxies in the accompanying form will be
voted for the election of a substitute Nominee selected by the persons named in
the proxy. Directors will be elected by a plurality of the votes cast.
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO ELECT EACH
OF THE NOMINEES.
THE BOARD OF DIRECTORS
Information regarding each member of the Board of Directors is as follows:
WILLIAM H. GRIGG, age 64, Chairman and Chief Executive Officer, Duke Power
Co., Charlotte, North Carolina, a public utility, since April 1994. Mr. Grigg
was Vice Chairman of Duke Power Co. from November 1991 to April 1994, and
Executive Vice President -- Customer Group of Duke Power Co. from April 1988 to
November 1991. He has been a Director of the Company since March 1980. Mr. Grigg
is also a Director of Duke Power Co., Coltec Industries, Nations Government
Income Term Trust 2003, Inc., Nations Government Income Term Trust 2004, Inc.,
Nations Balanced Target Maturity Fund, Inc., Nations Institutional Reserves,
Nations Fund Trust, Nations Fund, Inc., Nations Fund Portfolios, Inc. and
Nations LifeGoal Funds, Inc.
THOMAS F. KELLER, age 65, R. J. Reynolds Industries Professor of Business
Administration and Former Dean of Fuqua School of Business, Duke University,
Durham, North Carolina, since 1974. He has been a Director of the Company since
March 1985. Mr. Keller is also a Director of LADD Furniture, Inc., Wendy's
International, Inc., American Business Products, Inc., Dimon, Inc. and Biogen,
Inc. Mr. Keller is a Trustee of The Mentor Funds, Mentor Institutional Trust and
Cash Resource Trust. Mr. Keller is also a Director of Nations Government Income
Term Trust 2003, Inc., Nations Government Income Term Trust 2004, Inc., Nations
Balanced Target Maturity Fund, Inc., Nations Institutional Reserves, Nations
Fund Trust, Nations Fund, Inc., Nations Fund Portfolios, Inc. and Nations
LifeGoal Funds, Inc.
A. MAX WALKER, age 74, independent Financial Consultant since May 1987.
From April 1982 through May 1987, Mr. Walker was Vice President of Merrill
Lynch, Pierce, Fenner & Smith, Inc. He has been a Director of the Company since
the Company was organized in February 1973. Mr. Walker serves as a Director of
Cerulean Companies, Inc. Mr. Walker is Chairman of the Board of Nations
Government Income Term Trust 2003, Inc., Nations Government Income Term Trust
2004, Inc., Nations Balanced Target Maturity Fund, Inc., Nations Institutional
Reserves, Nations Fund Trust, Nations Fund, Inc., Nations Fund Portfolios, Inc.
and Nations LifeGoal Funds, Inc.
None of the Nominees owns, either directly or indirectly, more than 1% of
the capital stock of the Company. No Nominee has been, during the past five
years, an officer, employee, director, general partner or shareholder, of NBAI,
the Company's investment adviser, or TradeStreet, the Company's investment
sub-adviser, owned any securities or had any other material direct or indirect
interest in NBAI or any of its affiliates. None of the Nominees has had, since
the beginning of the current fiscal year, a material direct or indirect interest
in any material transactions or proposed material transactions to which NBAI,
TradeStreet or any affiliate thereof was or is to be a party, other than a
transaction involving an investment company in the Company's "Fund Complex", as
that term is defined under Rule 14a-101 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"). No Nominee is a party adverse, or has a material
interest adverse, to the Company or any affiliates thereof in connection with
any material pending legal proceedings. Since the beginning of the current
fiscal year, none of the Nominees has engaged in any transactions to which the
Company was a party or been indebted to the Company. Some of the Nominees and
their affiliates have been customers of NationsBank, an affiliate of NBAI. All
extensions of credit to such persons have been made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing in
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comparable transactions with others, and did not involve more than the normal
risk of collectability or present other unfavorable features. Based solely on
its review of copies of Forms 3 and 4 and amendments thereto and Forms 5
received by it, or written representations from certain reporting persons that
no such Forms were required from such persons, the Company believes that, during
the fiscal year ended December 31, 1996, it complied with all filing
requirements applicable to its officers, directors and, if any,
greater-than-ten-percent beneficial owners.
COMMITTEES OF DIRECTORS
The Board of Directors meets regularly once each quarter at an in-person
meeting and may have special meetings. The Board held four regular meetings
during the fiscal year ended December 31, 1996. In addition, the Board
re-established an Audit Committee and a Nominating Committee on February 5,
1997. Both Committees are composed of all three incumbent members of the Board
of Directors. The principal functions of the Audit Committee are to (i) nominate
the independent public accountants to be engaged by the Company, subject to the
approval of the Board of Directors and ratification by the Stockholders, and
(ii) review with the independent public accountants the proposed scope of the
annual audit, the results of their examination, the financial statements and
their opinion thereon. Thomas F. Keller is Chairman of the Audit Committee. The
Audit Committee did not hold a meeting during the fiscal year ended December 31,
1996. The function of the Nominating Committee is to review information
assembled for the purpose of selecting candidates for nomination to membership
on the Board and to recommend nominees for election as directors. The Nominating
Committee will consider nominees recommended by Stockholders, in writing, that
are submitted to the Secretary of the Company. William H. Grigg is Chairman of
the Nominating Committee. The Nominating Committee did not hold a meeting during
the fiscal year ended December 31, 1996. The Board has no standing compensation
committee or committee performing a similar function. In 1996, each Director
attended at least 75% of the regular meetings of the Board.
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EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The Executive Officers and Significant Employees of the Company and their
principal occupations for at least the last five years and their other
affiliations are set forth below.
<TABLE>
<CAPTION>
<S> <C>
MARK H. WILLIAMSON President, Nations Government Income Term Trust 2003, Inc., Nations
President Government Income Term Trust 2004, Inc., and Nations Balanced Target
Maturity Fund, Inc.; President, NationsBanc Investments, Inc.,;
President and Chief Executive Officer, NationsBanc Advisors, Inc. since
1995; Senior Vice President, NationsBank, N.A. since 1990.
EDWARD D. BEDARD Chief Financial Officer, Nations Government Income Term Trust 2003,
Chief Financial Officer Inc., Nations Government Income Term Trust 2004, Inc. and Nations
Balanced Target Maturity Fund, Inc., since 1997; Senior Vice President,
Chief Operating Officer, NationsBanc Advisors, Inc. since 1996;
Corporate Vice President, New York Life Insurance 1992-1996;
Treasurer, Seligman Family of Funds January 1992-June 1992;
Senior Manager, Price Waterhouse 1991-1992.
ROBERT B. CARROLL Secretary, Nations Government Income Term Trust 2003, Inc., Nations
Secretary Government Income Term Trust 2004, Inc. and Nations Balanced Target
Maturity Fund, Inc. since February 1997; Assistant General Counsel,
NationsBank Corporation since 1996; Vice President, SEI Corporation,
1994-1996; Senior Special Counsel, Securities and Exchange Commission,
Division of Investment Management 1990-1994.
RICHARD S. SZAFRAN Treasurer, Nations Government Income Term Trust 2003, Inc., Nations
Treasurer Government Income Term Trust 2004, Inc. and Nations Balanced Target
Maturity Fund, Inc., Secretary, Nations Government Income Term Trust
2003, Inc., Nations Government Income Term Trust 2004, Inc. and Nations
Balanced Target Maturity Funds, Inc. 1993-February 1997. Vice President,
NationsBanc Advisors, Inc. since 1995; Vice President, NationsBank, N.A.
1993-1995; Assistant Vice President, The Boston Company 1987-1993.
MARK S. AHNRUD, CFA Director of Fixed Income Management, TradeStreet Investment Associates,
Assistant Secretary Inc. since 1995; Vice President, NationsBank, N.A. 1991-1995; Senior
Fixed Income Portfolio Manager and holder of Chartered Financial Analyst
designation.
</TABLE>
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COMPENSATION OF MANAGEMENT
The following table shows compensation paid by the Company and the Fund
Complex to the Directors of the Company for the fiscal year ended December 31,
1996. Officers of the Company are employed by the Company's investment adviser
or sub-adviser and receive no compensation or reimbursements from the Company.
COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME OF PERSON, AGGREGATE COMPENSATION TOTAL COMPENSATION FROM COMPANY
POSITION FROM COMPANY1 AND FUND COMPLEX PAID TO DIRECTORS2
<S> <C> <C>
William H. Grigg $ 7,000 $65,375
Director
Thomas F. Keller $ 7,000 $65,375
Director
A. Max Walker $ 11,000 $77,375
Chairman
</TABLE>
1 The Company pays the Chairman of the Board $11,000 per year and each Director
$7,000 per year and reimburses each for travel and other out-of-pocket
disbursements incurred in connection with attending meetings.
2 The Fund Complex consists of seven registered investment companies in addition
to the Company.
3 Includes $49,375 deferred compensation.
4 Includes $49,375 deferred compensation.
RETIREMENT PLAN
Under the terms of the Nations Fund Retirement Plan for Eligible Directors
(the "Retirement Plan"), each Director may be entitled to certain benefits upon
retirement from the Board of Directors of one or more of the open-end investment
companies (the "Funds") in the Company's Fund Complex. Pursuant to the
Retirement Plan, the normal retirement date is the date on which an eligible
director has attained age 65 and has completed at least five years of continuous
service with one or more of the Funds. If a Director retires before reaching age
65, no benefits are payable. Each eligible director is entitled to receive an
annual benefit from the Funds equal to 5% of the aggregate directors' fees
payable by the Funds during the calendar year in which such director's
retirement occurs multiplied by the number of years of service (not in excess of
ten years of service) completed with respect to any of the Funds. Such benefit
is payable to each eligible director in quarterly installments for a period of
no more than five years. If an eligible director dies after attaining age 65,
such director's surviving spouse (if any) will be entitled to receive 50% of the
benefits that would have been paid (or would have continued to have been paid)
to the director if he had not died. The Retirement Plan is unfunded. The
benefits owed to each director are unsecured and subject to the general
creditors of the Funds. Each Director of the Company is a participant in the
Retirement Plan. Messrs. Grigg, Keller and Walker have 6, 5, and 11 years of
credited service, respectively, with the Funds.
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ESTIMATED ANNUAL RETIREMENT BENEFITS TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 5 10
<S> <C> <C>
$ 25,000 $ 6,250 $12,500
50,000 12,500 25,000
75,000 18,750 37,500
100,000 25,000 50,000
</TABLE>
PROPOSAL 2: RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
selected Price Waterhouse LLP ("Price Waterhouse"), which has served as
independent public accountants of the Company since 1994, as independent public
accountants of the Company to examine the financial statements of the Company
for its fiscal year ending December 31, 1997, and to report thereon to the Board
and the Stockholders. If more shares of the Company's capital stock represented
at the meeting are voted against ratification of the selection of Price
Waterhouse than for ratification, the selection of auditors may be reconsidered
by the Audit Committee and the Board of Directors. To the best knowledge of
management, the firm of Price Waterhouse has no direct or material indirect
financial interest in the Company. Price Waterhouse acts as the independent
public accountants for the other investment companies in the Company's Fund
Complex. Price Waterhouse also acts as the independent public accountants for
affiliates of NBAI, including NationsBank, N.A. and NationsBank Corporation. If
the Company receives, at least five business days before the Annual Meeting, any
written request from one or more Stockholders to have representatives of Price
Waterhouse present at the Annual Meeting to respond to appropriate questions
from Stockholders, the Company will arrange to have such representatives present
and provide them with an opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO RATIFY THE
SELECTION OF PRICE WATERHOUSE.
ADDITIONAL INFORMATION
PROCEDURAL MATTERS
Each Stockholder of the Company will be entitled to one non-cumulative vote
for each share and a fractional non-cumulative vote for each fractional share.
As of the Record Date, there were 3,363,512 outstanding shares of the Company.
Shareholders holding a majority of the aggregate outstanding shares of the
Company at the close of business on the Record Date will constitute a quorum for
the approval of each of the proposals described in the accompanying Notice of
Annual Meeting and in this Proxy Statement. The two proposals described above
have differing thresholds for Stockholder approval. With respect to the proposal
relating to the election of Directors, the Directors will be elected by a
plurality of the voters cast. The proposal to ratify the selection of Price
Waterhouse as independent public accountants of the Company will be approved if
more votes are cast in favor of the proposal than against. Stockholders are not
entitled to rights of appraisal or similar rights of dissenters with respect to
any matter to be acted upon at the Annual Meeting.
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Any form of proxy which is properly executed and received in time to be
voted at the Annual Meeting will be counted in determining whether a quorum is
present and will be voted in accordance with the instructions marked thereon. In
the absence of instructions, any such form of proxy will be voted in favor of
(i) electing as Directors of the Company the three Nominees named in the Proxy
Statement for the terms indicated; and (ii) ratifying the selection of Price
Waterhouse as independent public accountants of the Company for the fiscal year
ending December 31, 1997. Abstentions and "broker non-votes" (I.E., proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons entitled to vote shares as to a
particular matter with respect to which the brokers or nominees do not have
discretionary power to vote) will be counted solely for purposes of determining
whether a quorum is present and otherwise will not be counted for or against any
proxy to which they relate. Abstentions and broker non-votes will have no
effect, either for or against, on any of the proposals.
If, by the time scheduled for the Annual Meeting, a quorum is not present,
or if a quorum is present but sufficient votes in favor of any of the proposals
are not received, the persons named as proxies may move for one or more
adjournments of the Annual Meeting to permit further solicitation of proxies
with respect to any of the proposals. Any such adjournment(s) will require that
more shares present in person or by proxy at the session of the Annual Meeting
to be adjourned be voted in favor of adjournment than against. The persons named
as proxies will vote in favor of such adjournment(s) those shares which they are
entitled to vote which have voted in favor of such proposals. They will vote
against any such adjournment(s) those proxies required to be voted against such
proposals.
The duly appointed proxies may, in their discretion, vote upon such other
matters as may come before the Annual Meeting or any adjournment(s) thereof,
including any proposal to adjourn a meeting at which a quorum is present to
permit the continued solicitation of proxies in favor of the proposals. A
Stockholder of the Company may revoke his or her proxy at any time prior to its
exercise by delivering written notice of revocation or by executing and
delivering a later-dated form of proxy to the Secretary of the Company, at the
address set forth on the cover page of this Proxy Statement, or by attending the
Annual Meeting in person to vote the shares held by such Stockholder.
Signed but unmarked forms of proxy will be counted in determining whether a
quorum is present and will be voted IN FAVOR of each of the proposals.
SOLICITATION OF PROXIES AND PAYMENT OF EXPENSES
The cost of soliciting proxies for the Annual Meeting, consisting
principally of expenses incurred in preparing, printing and mailing proxy
materials, together with the costs of any supplementary solicitation and proxy
soliciting services provided by third parties, will be borne by the Company. In
following up the original solicitation of the proxies by mail, the Company may
request brokers and others to send forms of proxy and proxy materials to the
beneficial owners of the stock and may reimburse them for their reasonable
expenses in so doing. Proxies will be solicited in the initial, and any
supplemental, solicitation by mail and may be solicited in person, by telephone,
telegraph, telefacsimile, or other electronic means by officers of the Company,
personnel of NBAI or an agent of the Company. Compensation for such services
will be paid by the Company or NBAI, except that officers or employees of the
Company will not be compensated for performing such services.
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SUBSTANTIAL SHAREHOLDERS
As of the close of business on the Record Date, there were no persons known
to the Company to be beneficial owners of 5% or more of the outstanding shares
of the Company.
ADDITIONAL INFORMATION
The Company, with principal executive offices located at One NationsBank
Plaza, Charlotte, North Carolina 28255, is subject to the informational
requirements of the 1934 Act and the 1940 Act, and in accordance therewith files
reports, proxy materials and other information with the SEC. Such reports, proxy
materials and other information may be inspected and copied at the public
reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such materials can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
NBAI and TradeStreet, both located at One NationsBank Plaza, Charlotte,
North Carolina 28255, are the investment adviser and the investment sub-adviser,
respectively, of the Company.
FUTURE SHAREHOLDER PROPOSALS
In the event any Stockholder wishes to present a proposal to Stockholders
of the Company for inclusion in the Proxy Statement and form of proxy relating
to the 1998 Annual Meeting of Stockholders, such proposal must be received by
the Company on or before November 17, 1997.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. However, if other matters are properly
presented to the Annual Meeting, it is the intention of the proxy holders named
in the accompanying form of proxy to vote the proxies in accordance with their
best judgment.
