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:
(x) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Northstar High Yield Fund
(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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NORTHSTAR HIGH YIELD FUND
TWO PICKWICK PLAZA, GREENWICH, CONNECTICUT 06830
MAY 19, 1997
Dear Shareholder:
A Special Meeting of the Shareholders of the Northstar High Yield Fund (the
"Fund") will be held at 10 a.m. EST on June 20, 1997, at the offices of the
Fund. Formal notice of the Meeting appears on the next page, followed by the
proxy statement. We hope that you can attend the meeting in person; however, we
urge you in any event to vote your shares by completing and returning the
enclosed proxy card in the envelope provided at your earliest convenience.
At the Meeting, you will be asked to consider approving a proposed amendment to
your Fund's investment advisory agreement with Northstar Investment Management
Corporation, the Fund's investment adviser ("Northstar" or the "Adviser"). After
carefully considering the proposal, your Fund's Trustees unanimously believe
that the amendment is fair and reasonable and in the best interests of your Fund
and its shareholders. We urge you to vote in favor of the proposal. No changes
are being proposed to the way the Fund is managed, advised or operated.
PLEASE VOTE BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE HAS BEEN ENCLOSED FOR YOUR CONVENIENCE. IT
IS IMPORTANT THAT YOU VOTE AND THAT YOUR VOTE BE RECEIVED BY NO LATER THAN JUNE
19, 1997.
We appreciate your participation and prompt response in this matter, and thank
you for your continued support.
Sincerely,
Mark L. Lipson
President
<PAGE>
NORTHSTAR HIGH YIELD FUND
TWO PICKWICK PLAZA, GREENWICH, CONNECTICUT 06830
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1997
To the Shareholders of Northstar High Yield Fund:
Notice is hereby given that a Special Meeting (the "Meeting") of Shareholders of
Northstar High Yield Fund (the "Fund"), a Massachusetts business trust, will be
held at the offices of the Fund on June 20, 1997, at 10:00 a.m., or at such
adjourned time as may be necessary for the holders of a majority of the shares
of the Fund to vote, for the following purposes:
(1) To approve an amendment to the investment advisory agreement between
the Fund and Northstar Investment Management Corporation to increase
the investment advisory fee schedule; and
(2) To transact such other business as may properly come before the Special
Meeting.
The Trustees of the Trust have fixed the close of business on May 5, 1997 as the
record date for determining shareholders entitled to notice of and to vote at
the Meeting or any adjournment thereof.
By Order of the Trustees
Stephanie L. Beckner
Greenwich, Connecticut
May 19, 1997
SHAREHOLDERS ARE URGED TO VOTE PROMPTLY ON THIS MATTER. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO COMPLETE, DATE AND SIGN
THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR
THAT PURPOSE. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER. SHAREHOLDERS WHO HOLD SHARES IN MORE THAN ONE ACCOUNT WILL
RECEIVE A PROXY PACKAGE FOR EACH ACCOUNT. YOU MUST RETURN SEPARATE PROXY CARDS
FOR EACH SEPARATE ACCOUNT.
THE PROMPT RETURN OF YOUR PROXY WILL AVOID THE EXPENSE OF FURTHER MAILINGS.
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NORTHSTAR HIGH YIELD FUND
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 20, 1997
This proxy statement is being furnished in connection with the
solicitation of proxies by Northstar High Yield Fund (the "Fund") for the
Special Meeting of Shareholders to be held on June 20, 1997, or any adjournment
thereof. At the Special Meeting, Shareholders of the Fund will be asked to
approve an amendment to the advisory agreement (the "Amendment"), a copy of
which is attached hereto as Exhibit A, between the Fund and Northstar Investment
Management Corporation, the Fund's investment adviser. The terms of the
Amendment and the purposes for the proposed Amendment are set forth herein. It
is anticipated that the first mailing to shareholders of proxies and proxy
statements will be on or about May 19, 1997.
Adoption of the Amendment is subject to approval of at least a majority
of the shareholders of the Fund (as defined in the Investment Company Act of
1940, as amended (the "1940 Act")). The Trustees of the Fund have reviewed the
terms of the Amendment, and, having found it to be in the best interest of the
Fund and its shareholders, unanimously recommended that shareholders approve the
Amendment.
May 5, 1997 has been chosen as the record date to determine
shareholders entitled to vote at the Meeting. Shareholders are entitled to one
vote for each share held, which may be cast by proxy or by personally appearing
at the Meeting. On ____________, 1997 there were ________ shares of the Fund
outstanding, of which the Trustees and officers of the Fund as a group
beneficially owned less than 1%. The Fund knows of no person who owns
beneficially 5% or more of the outstanding shares of the Fund.
The enclosed form of proxy, if properly executed and returned, will be
voted in accordance with the instructions specified thereon. If no choice is
specified, the proxy will be voted FOR the Amendment, and, in the discretion of
the proxies named on the proxy card, on any other matter properly brought before
the Meeting. PLEASE NOTE THAT A PROXY MARKED "ABSTAIN" IS EQUIVALENT TO A VOTE
AGAINST THE PROPOSAL.
The enclosed proxy is revocable by you at any time prior to the
exercise thereof by submitting a written notice of revocation or a subsequently
executed proxy. Signing and mailing the proxy will not affect your right to give
a later proxy or to attend the Meeting and vote your shares in person.
In the event that a quorum is not obtained, or if a quorum is present
at the Meeting but sufficient votes to approve the proposal are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR the proposal in favor of
such an adjournment and will vote those proxies required to be voted AGAINST the
proposal against any such adjournment. A shareholder vote may be taken on the
proposals in this proxy statement prior to any such adjournment if sufficient
votes have been received for approval.
The costs of soliciting proxies in the accompanying form for the
Special Meeting, including the costs of preparing, printing and mailing the
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accompanying Notice of Special Meeting, the President's letter and this proxy
statement and the costs of the Special Meeting will be borne by Northstar. Proxy
material will also be distributed through brokers, custodians and nominees to
beneficial owners, and Northstar will reimburse such parties for reasonable
charges and expenses. In addition to the use of the mails, proxies may be
solicited by telephone or telegraph by officers and Trustees of the Fund, or
their agents, on behalf of the Trustees of the Fund, expenses of which shall be
charged to Northstar. Northstar may also retain, at its expense, Shareholder
Communications Corporation, a proxy soliciting firm, to assist with proxy
soliciting activities to obtain the necessary shareholder representation.
PROPOSAL ONE: APPROVAL OF AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
On April 24, 1997, a majority of the Trustees of the Fund who are not parties
to such agreement or interested persons (as defined in the 1940 Act) of any such
party (the "Independent Trustees"), and a majority of the entire Board of
Trustees met in person and approved, subject to the required shareholder
approval described herein, the Amendment and recommended approval of the
Amendment by shareholders of the Fund. The form of the Amendment is attached to
this proxy statement as Exhibit A.
If the Amendment, is approved by vote of the holders of a majority of
the outstanding shares of the Fund (as defined in the 1940 Act), the Advisory
Agreement will be amended (the "Amended Agreement") to increase the fee payable
to Northstar by the Fund. The Amended Agreement will become effective on or
about July 1, 1997 and will continue in effect for an initial term of two years.
Thereafter, the Amended Agreement will continue in effect from year to year,
subject to approval annually by the Trustees of the Fund or vote of the holders
of a majority of the outstanding shares of the Fund (as defined in the 1940
Act), and also, in either event, to approval by a majority of the Independent
Trustees. For this purpose, the vote of the holders of a majority of the
outstanding shares of the Fund means the lesser of either (i) the vote of 67% or
more of the shares of the Fund present at the Meeting if the holders of more
than 50% of the outstanding Fund shares are present or represented by proxy or
(ii) the vote of the holders of more than 50% of the outstanding shares of the
Fund ("1940 Act Majority"). In the event that shareholders of the Fund do not
approve the Amendment , Northstar would continue to serve as Adviser to the Fund
under the current Investment Advisory Agreement ("Current Advisory Agreement")
and the Trustees of the Fund may consider other possible courses of action to
accomplish the purposes for which the Proposal has been made, subject, as
required, to approval by the shareholders of the Fund.
THE TRUSTEES OF THE FUND BELIEVE THAT THE PROPOSED AMENDMENT TO
THE ADVISORY AGREEMENT BETWEEN THE FUND AND NORTHSTAR IS
IN THE BEST INTEREST OF THE FUND AND ITS SHAREHOLDERS AND,
ACCORDINGLY, HAVE APPROVED THE AMENDMENT AND RECOMMEND THAT
SHAREHOLDERS VOTE FOR THIS PROPOSAL.
BACKGROUND AND SUMMARY
On June 2, 1995, Northstar became the investment adviser for the six
former Advest Advantage Funds, including the Fund (formerly the "Advantage High
Yield Fund"). Northstar assumed this responsibility by entering into the
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Current Advisory Agreement, which had been approved by the Trustees of the Fund,
including the Independent Trustees on March 1, 1995, and by the shareholders at
a Special Meeting called for such purpose on May 17, 1995.
At a meeting of the Board of Trustees on April 24, 1997, at which all
of the Trustees, except one, who are not parties to the Amended Agreement
or interested persons of any such party (the "Independent Trustees")
were present and voting in person, the Board considered the
new advisory fee schedule proposed by Northstar. After concluding that
the requested fee increase was appropriate, the Independent
Trustees voting separately and then the Board as a whole unanimously approved
the Amendment and recommended that the Shareholders of the Fund vote in favor of
approving the Amendment to commence on July 1, 1997 and to continue through July
1, 1999. The form of the Amended Agreement is attached as Exhibit A.
TERMS OF THE CURRENT ADVISORY AGREEMENT AND THE AMENDED ADVISORY AGREEMENT
("AGREEMENTS")
Pursuant to the Agreements, the Adviser, at its expense:
(1) Offers the Fund advice and assistance with respect to the
selection, acquisition, holding and disposal of
securities;
(2) Maintains all books and records required under the 1940
Act to the extent not maintained by the Fund's custodian;
and
(3) Provides to the Trustees such periodic and special
reports as the Trustees may reasonably request.
Northstar pays the salary and expenses of all personnel of the Fund and
Northstar required to perform the services under the Agreements and all expenses
incurred by Northstar and the Fund in connection with the performance of
Northstar's responsibilities under the Agreements. The Fund bears all other
expenses incurred in the operation of the Fund, including interest charges,
taxes, fees and commissions of every kind, expenses of issue, sale, repurchase
or redemption of shares, expenses of registering or qualifying shares for sale,
all charges of custodians (including sums as custodian and for keeping books,
performing portfolio valuations and rendering other services to the Fund),
transfer agents, permits, registrars, auditors and legal counsel, expenses of
preparing, printing and distributing to shareholders prospectuses, reports and
notices to shareholders, and all costs incident to the Fund's organization and
existence. Under the Current Advisory Agreement, the Adviser agreed to reimburse
the Fund in any year in which the Fund's total operating expenses exceed the
most restrictive limitation imposed from time to time by states where the Fund's
shares are qualified for sale. This provision is not contained in the New
Advisory Agreement because these state rules no longer apply to the Fund.
The Agreements provide that the Adviser is not liable for any act or
omission in the course of or in connection with rendering services thereunder in
the absence of willful misfeasance, bad faith, or gross negligence in fulfilling
its obligations or duties. The Agreements permit the Adviser to render services
to others and to engage in other activities.
The Agreements provide for their automatic termination in the event of
assignment (as defined in the 1940 Act) or may be terminated at any time without
payment of any penalty upon no more than 60 nor less than 30 days' written
notice by Northstar, by the Trustees of the Fund, or by the
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affirmative vote of the holders of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act).
Under the Current Advisory Agreement, Northstar is entitled to receive
an annual fee for services it renders to the Fund, payable monthly, in an amount
equal to 0.45% of the Fund's average daily net assets. For the fiscal year ended
December 31, 1996, Northstar received $941,594 in investment advisory fees from
the Fund; Northstar Administrators received $0 during the same period for its
services under the Administrative Services Agreement. Aggregate commissions paid
by the Fund to Northstar Distributors, Inc., pursuant to Underwriting Agreements
for each class of shares were $40,461 and 12b-1 fees paid to the
Underwriter by the Fund totaled $1,557,865 of which $888,855 was paid out
to dealers or reimbursed Northstar for payments to dealers.
THE AMENDMENT
The Board of Trustees, including a majority of the Independent
Trustees, approved the Amendment on April 24, 1997. A form of the Amendment is
attached hereto as Exhibit A. If the Amendment is approved, the Current Advisory
Agreement will be amended (the "Amended Agreement") to increase the fee payable
to Northstar by the Fund. All other terms of the Current Advisory Agreement will
remain unchanged. Under the Amended Agreement, Northstar would be entitled to
receive from the Fund an annual fee, payable monthly, in an amount equal to
0.60% of the average daily net assets of the Fund.
In requesting a fee increase, Northstar referred to, among other
things, the fact that the Fund's advisory fees are less than the average and
median of investment advisory fees for mutual funds similar to the Fund in terms
of investment objective, the superior long term investment
performance of the Fund, the intense competition for high quality
personnel, the cost and complexity of managing high yield bond
funds, and the amount of research needed to keep abreast of
potential investment opportunities and to monitor developments
in this market.
The following table sets forth the Fund's actual investment advisory
fees, effective investment advisory fee rates and expense ratios (which includes
the investment advisory fee and all other operating expenses) for the fiscal
year ended December 31, 1996, under the Current Advisory Agreement and on a pro
forma basis under the Amended Advisory Agreement:
Investment Advisory Fee
Actual (a) $ 941,594
Pro Forma (b) $1,255,459
% Change 33%
Effective Advisory Fee Rate
Actual 0.45%
Pro Forma 0.60%
Expense Ratios
Class A Shares
Actual 1.11%
Pro Forma 1.26%
Class B Shares
Expense Ratios
Actual 1.81%
Pro Forma 1.96%
Class C Shares
Actual 1.82%
Pro Forma 1.97%
Class T Shares
Actual 1.31%
Pro Forma 1.46%
Average Net Assets (mil)
Class A Shares $ 11
Class B Shares $ 58
Class C Shares $ 10
Class T Shares $ 131
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(a) Computed pursuant to the current fee schedule as described above
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(b) Computed pursuant to the proposed fee schedule as described above.
CONSIDERATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Fund met on April 24, 1997 to consider the
new advisory fee schedule proposed by Northstar. The proposal was considered by
the full Board of Trustees. In addition, the Independent Trustees met separately
with their legal counsel, reviewed their duties to the Fund's shareholders in
considering such a proposal, and the various factors to be considered and
standards to be applied. After consideration of the
proposal, the Board of Trustees, including all of the Independent Trustees
present at the Meeting, unanimously approved the Amendment.
In presenting the proposed advisory fee schedule to the Board of
Trustees, officers of Northstar stated that they believed that the current
investment advisory fee structure did not accurately reflect the complexity and
related costs of managing the Fund, and thus did not reflect a level of
compensation that was fair and reasonable. Officers of Northstar stated that the
cost of managing the Fund had increased due to increases in the costs of
maintaining capable researchers, analysts, specialized management and
sophisticated information systems and other technology. Officers of Northstar
also reviewed the Fund's good performance relative to other comparable high
yield funds since Northstar had become the investment adviser to the Fund.
Additionally, net assets of the Fund had grown from $148 million to
$233 million in the two years since Northstar had managed the Fund. The
increase in the net assets of the Fund was due to both the positive investment
performance of the Fund and the increased marketing support provided to the Fund
by Northstar Distributors, Inc., an affiliate of Northstar.
In deciding to approve the Amendment, Independent Trustees first
examined the nature, quality and scope of the services provided to the Fund by
Northstar. Second, they reviewed the basis for an increase in the investment
advisory fee and analyzed the fee proposed by Northstar in terms of investment
advisory fees charged by Northstar and other investment advisers. Finally, the
Independent Trustees examined mutual fund related revenues and expenses of
Northstar.
The Independent Trustees were provided with information,
including data as to the qualifications of Northstar's personnel, the quality
and extent of the services rendered, and its commitment to its mutual fund
advisory business. Information prepared specifically for the purpose of
assisting the Independent Trustees in their evaluation of the Amendment included
an analysis of the performance and expenses of the Fund as well as comparative
advisory fee information regarding other high yield bond funds.
After consideration of all of the data and information provided to them
and a separate meeting to evaluate the new advisory fee proposed by Northstar,
the Independent Trustees present at the meeting unanimously determined to
recommend to the Board of Trustees, and the Board
approved, the fee schedule reflected in the
Amended Agreement. Noting their favorable experience in overseeing, on an
ongoing basis, the nature, quality and extent of Northstar's services to the
Fund, the Independent Trustees considered among other factors: (1) the necessity
of Northstar maintaining and enhancing its ability to retain and attract capable
personnel to serve the Fund; (2) the complexity of research
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and investment activities in the high yield bond market; (3) the investment
record of Northstar in managing the Fund and other similar investment companies
for which it acts as investment adviser; (4) the fact that the Fund's
advisory fees are less than the average and median of investment advisory
fees for mutual funds similar to the Fund in terms of investment
objective; (5) the substantial marketing and
promotional activities in which Northstar and its affiliates engage and propose
to engage on behalf of the Fund; (6) Northstar's overall profitability in
connection with its activities on behalf of the Fund; (7) the effect of the
proposed investment advisory fee increase on the expense ratio of the Fund; (8)
possible economies of scale; (9) data as to investment performance, advisory
fees and expense ratios of other investment companies not advised by Northstar
but believed to be generally comparable to the Fund; (10) other benefits to
Northstar from serving as investment adviser to the Fund, as well as benefits to
its affiliates serving as administrator and principal underwriter of the Fund or
providing other services to the Fund and its Shareholders; (11) current and
developing conditions in the financial services industry, including
the presence
into the industry of large and highly capitalized companies which are spending
and appear to be prepared to continue to spend substantial sums to engage
personnel and to provide services to competing investment companies; and (12)
the financial resources of Northstar and the desirability of appropriate
incentives to assure that Northstar will continue to furnish high quality
services to the Fund.
ANALYSIS OF PROPOSED FEE INCREASE
In their review of the proposed increase in the level of the investment
advisory fee, the Independent Trustees considered the fact that the current
investment advisory fee paid by the Fund, as well as the Fund's total
expense ratio is lower than the average and
median fee rates and expense ratios of groups of mutual funds selected
by Lipper Analytical Services as comparison groups. Also, if the
Amended Agreement had been in effect, the Fund's
pro forma investment advisory fee rate and expense ratio (including the
investment advisory fee) would be at or about the average and median for the
groups. The proposed investment advisory fee is higher than those paid by some
other investment companies, although the fee is comparable to those paid by most
funds which invest in high yield bonds.
VOTE REQUIRED FOR APPROVAL
Adoption of the Amendment set forth herein requires the approval by a
1940 Act Majority of the Fund's outstanding voting securities.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE THE
AMENDMENT.
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ADDITIONAL INFORMATION ABOUT THE ADVISER
Northstar currently serves as the investment adviser to the Fund
pursuant to the Current Advisory Agreement. The Adviser's principal offices are
located at Two Pickwick Plaza, Greenwich, Connecticut 06830. Northstar was
organized in July of 1993 as a Delaware corporation. Northstar, and its
affiliated companies, Northstar Administrators Corporation, the Funds'
administrator, and Northstar Distributors, Inc., the Fund's underwriter, are
each wholly-owned by Northstar, Inc., which is held 80% by ReliaStar Financial
Corporation ("ReliaStar") and 20% by members of senior management of the
Northstar companies. ReliaStar is a New York Stock Exchange listed company, with
over $16 billion in assets, and $1,418 million in shareholders' equity as of
December 31, 1996. ReliaStar, through its subsidiaries, specializes in the life
and health insurance businesses, issuing and distributing individual life
insurance, annuities and mutual funds, group life and health insurance and life
and health reinsurance, and provides related investment management services.
Northstar registered with the Securities and Exchange Commission under
the Investment Advisers Act of 1940 in August of 1993, and began advising mutual
funds in November of 1993. Through April of 1997, Northstar advised the
Northstar Trust (formerly the "Northstar Advantage Trust"), comprised of the
Northstar High Total Return Fund (formerly the "Northstar Advantage High Total
Return Fund"), the Northstar Income and Growth Fund (formerly the "Northstar
Advantage Income and Growth Fund"), Northstar Growth + Value Fund, Northstar
High Total Return Fund II and the Northstar International Value Fund. Northstar
also serves as investment advisor to the Northstar Growth, Special, Balance
Sheet Opportunities, Strategic Income and Government Securities Funds. Further,
Northstar serves as investment adviser to the Northstar Variable Trust (formerly
the "Northstar/NWNL Trust"), an open-end management investment company comprised
of four funds that serve as underlying investment vehicles for variable products
issued through Northstar-affiliated insurance companies, ReliaStar Life
Insurance Company (formerly "Northwestern National Life Insurance Company"),
Northern Life Insurance Company and ReliaStar Bankers Security Life Insurance
Company (formerly "Bankers Security Life Insurance Society").
After assuming the advisory function for the Northstar Advantage Funds
on June 2, 1995, and after giving effect to a reorganization of the Northstar
Advantage Multi-Sector Bond Fund into the Northstar Strategic Income Fund on
October 27, 1995, Northstar serves as adviser to eleven mutual funds marketed
through investment dealers (the "Northstar Funds") and to the four Northstar
funds serving as investment vehicles for variable life and annuity products.
With these Funds and two private accounts totaling approximately $337 million
in assets, Northstar managed assets in excess of $2.5 billion as of December 31,
1996.
Northstar Administrators Corp., an affiliate of the Adviser, serves as
administrator for the Fund pursuant to an Administrative Services Agreement
entered into between the administrator and the Fund dated June 2, 1995. The
administrator provides the overall business management and administrative
services necessary to the proper conduct of the Fund's business, except for
services provided by other providers to the Fund pursuant to separate service
contracts, for which the Administrator acts as liaison. The Administrator
receives an annual fee from the Fund equal to 0.10% of the Fund's average daily
net assets, plus $5 per account per year.
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Northstar Distributors, Inc., also an affiliate of the Adviser, serves
as Underwriter of the Fund's shares pursuant to Underwriting Agreements for the
Class A, Class B and Class C shares. The Underwriter conducts a continuous
offering pursuant to a "best efforts" arrangement, requiring it to take and pay
for only such securities as may be sold to the public through investment
dealers. The Underwriter also receives fees pursuant to the Fund's Distribution
Plan adopted under Rule 12b-1 of the 1940 Act at the annual rate of 0.30% for
Class A shares, 1.00% for Class B shares and Class C shares, and 0.65% for Class
T shares.
Northstar's directors and principal executive officers, and their
principal occupations including any position with the Fund, are shown below.
Unless otherwise indicated, the business address of each director and officer is
Two Pickwick Plaza, Greenwich, Connecticut 06830.
<TABLE>
<CAPTION>
Name Principal Occupation Position with Fund
<S> <C> <C>
John G. Turner Chairman/CEO of ReliaStar Financial Corp.; Chairman
20 Washington Ave. South Director of Northstar
Minneapolis, MN 55401
John Flittie President/COO of ReliaStar; Director of None
20 Washington Ave, South Northstar
Minneapolis, MN 55401
Mark L. Lipson Chairman/CEO and Director of Northstar; President
Chairman and Director of Northstar
Distributors, Inc. and Northstar
Administrators Corp.
Robert J. Adler Executive Vice President of Northstar; None
President of Northstar Distributors, Inc.
Thomas Ole Dial Executive Vice President/CIO Fixed Income of Vice President
Northstar
Agnes Mullady Senior Vice President/CFO of Northstar; Vice President and Treasurer
Executive VP of Northstar Administrators;
VP/Treasurer of Northstar Distributors, Inc.
Stephanie L. Beckner Assistant Vice President and Assistant Assistant Secretary
Secretary/Counsel of Northstar; Assistant
Secretary of Northstar Administrators;
Assistant Secretary of Northstar
Distributors, Inc.
</TABLE>
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MISCELLANEOUS
OTHER BUSINESS
The Trustees know of no other business to be brought before the
meeting. However, if any other matters properly come before the meeting, it is
their intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named as proxies in the enclosed form of proxy.
SHAREHOLDER PROPOSALS
As a general matter, the Fund does not hold regular annual or other
meetings of shareholders. Any shareholder who wishes to submit proposals for
consideration at a special meeting of the Fund's shareholders should send such
proposal to the Fund, c/o Northstar Investment Management Corporation at Two
Pickwick Plaza, Greenwich, Connecticut 06830. Proposals must be received within
a reasonable time prior to the date of the meeting. Timely submission of a
proposal does not necessarily mean that such proposal will be included.
By Order of the Trustees
Stephanie L. Beckner
Assistant Secretary
Greenwich, Connecticut
May 19, 1997
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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APPENDIX
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NORTHSTAR HIGH YIELD FUND
SPECIAL MEETING OF SHAREHOLDERS - June 20, 1997
PROXY SOLICITED ON BEHALF OF THE TRUSTEES
The undersigned shareholder of NORTHSTAR HIGH YIELD FUND (the "Fund"),
a Massachusetts business trust, hereby appoints Mark L. Lipson and Stephanie
Beckner, and each of them, with full power of substitution and revocation, as
proxies to represent the undersigned at the Special Meeting of Shareholders of
the Fund, which shall be held on June 20, 1997, at 10:00 a.m., New York City
time, at the offices of the Fund, Two Pickwick Plaza, Greenwich, Connecticut,
and at any and all adjournments thereof, and thereat to vote all shares of the
Fund which the undersigned would be entitled to vote, with all powers the
undersigned would possess if personally present, in accordance with the
following instructions:
1. FOR_____AGAINST_____ABSTAIN_____ as to the proposal to
approve a new investment advisory agreement for the Fund with
Northstar Investment Management Corporation that increases
the advisory fee schedule
and, in their discretion, upon such other business as may properly come before
the meeting or any adjournments thereof.
If more than one of the proxies, or their substitutes, are present at
the meeting or at any adjournment thereof, they jointly (or, if only one is
present and voting, then that one) shall have authority and may exercise all the
powers granted hereby. This proxy, when properly executed, will be voted in
accordance with the instructions marked hereon by the undersigned. In the
absence of contrary instructions, this proxy will be voted FOR the proposal.
The undersigned hereby acknowledges receipt of the accompanying Notice
of Meeting and Proxy Statement dated May 19, 1997.
IMPORTANT: Please insert date of signing.
Dated: , 1997
------------------------------------
Signature of Shareholder(s)
(if held jointly)
This Proxy shall be signed exactly as your name(s) appear hereon. If as
attorney, executor, guardian or in some other capacity or as an officer of a
corporation, please state capacity or title as such.
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