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:
[ ] 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
PRIMARY INCOME FUNDS 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)(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:
[ ] 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 date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Proxy:
4) Date Filed:
(THE PRIMARY TREND FUND LOGO)
First Financial Centre
700 North Water Street
Milwaukee, Wisconsin 53202
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1998
To Our Shareholders:
A Joint Special Meeting of Shareholders of The Primary Trend Fund, Inc.
and The Primary Income Funds, Inc. (collectively, the "Companies") will be
held Wednesday, April 29, 1998, at 6:00 p.m., Milwaukee time, in the
Wisconsin Room at the Milwaukee Athletic Club, 758 North Broadway,
Milwaukee, Wisconsin. The Primary Income Funds, Inc. consists of two
portfolios: The Primary Income Fund and The Primary U.S. Government Fund.
The Primary Trend Fund, The Primary Income Fund and The Primary U.S.
Government Fund are referred to as the "Funds". The purpose of the meeting
is:
1. To elect four Directors for each Company; and
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record of each Company at the close of business on
March 25, 1998, the record date for this meeting, will be entitled to notice
of, and to vote at, the Joint Special Meeting and any adjournments thereof.
Shareholders are entitled to one vote for each share held.
By Order of the Boards of Directors,
The Primary Trend Fund, Inc.
The Primary Income Funds, Inc.
/s/ James R. Arnold, Jr.
JAMES R. ARNOLD, JR.
Secretary-Treasurer
Milwaukee, Wisconsin
April 2, 1998
YOUR VOTE IS VERY IMPORTANT, WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, PLEASE REIVEW THE ATTACHED PROPOSALS AND INDICATE YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD. SIGN, DATE AND RETURN IT IN
THE ENVELOPE PROVIDED AS SOON AS POSSIBLE. YOUR PROMPT RESPONSE WILL
HELP YOU FUNDS SAVE THE EXPENSE OF ADDITIONAL SOLICITATIONS.
(THE PRIMARY TREND FUNDS LOGO)
First Financial Centre
700 North Water Street
Milwaukee, Wisconsin 53202
Proxy Statement for Joint Special Meeting of Shareholders
To Be Held On April 29, 1998
----------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Boards of Directors of The Primary Trend Fund, Inc. and The
Primary Income Funds, Inc. (collectively, the "Companies") to be used at the
Joint Special Meeting of Shareholders of the Companies to be held Wednesday,
April 29, 1998, at 6:00 p.m., Milwaukee time, in the Wisconsin Room at the
Milwaukee Athletic Club, 758 North Broadway, Milwaukee, Wisconsin, and at any
adjournments or postponements thereof (the "Meeting") for the purposes set forth
in the attached Notice of Joint Special Meeting of Shareholders. The Primary
Income Funds, Inc. consists of two portfolios: The Primary Income Fund, Inc.
and The Primary U.S. Government Fund. The principal executive offices of The
Primary Trend Fund ("Trend Fund"), The Primary Income Fund ("Income Fund") and
The Primary U.S. Government Fund ("Government Fund"), collectively the "Funds",
are located at 700 North Water Street, Milwaukee, Wisconsin 53202.
Execution of a proxy given in response to this solicitation will not affect a
shareholder's right to attend the meeting and to vote in person. Presence at
the meeting by a shareholder who has signed a proxy does not in itself revoke
the proxy. Any shareholder giving a proxy has the power to revoke it at any
time before it is voted by providing written notice of the revocation to the
appropriate Company. Unless so revoked, the shares represented by proxies
received by the Board of Directors of each Company will be voted at the meeting
or any adjournments thereof. Where a shareholder specifies a choice by means of
a ballot provided in the proxy, the shares will be voted in accordance with such
specification. If no choice is indicated, proxies will be voted FOR the
election of the nominees for Directors.
The Meeting could be adjourned if a quorum does not exist, or fire or other
emergency disrupts the Meeting. For purposes of any adjournment, proxies will be
voted FOR adjournment unless otherwise directed. A shareholder may otherwise
direct by writing anywhere on the enclosed proxy that the shareholder will vote
against any adjournments.
The cost of soliciting proxies will be borne by the Funds. The Funds expect
to solicit proxies primarily by mail. Proxies may also be solicited personally
and by telephone by certain officers of the Funds. It is not anticipated that
anyone will be specially engaged to solicit proxies or that special compensation
will be paid for that purpose.
The close of business on March 25, 1998, has been fixed as the record date for
the determination of shareholders entitled to notice of, and to vote at, the
Joint Special Meeting and at any adjournment thereof. On that date, The Primary
Trend Fund, Inc. had 1,751,528 shares of common stock, $.01 par value,
outstanding and entitled to vote, and The Primary Income Funds, Inc. had 424,502
shares of common stock outstanding and entitled to vote, consisting of 348,064
shares of Class B common stock, $.0001 par value (Income Fund), and 76,438
shares of Class C common stock, $.0001 par value (Government Fund). Each share
of common stock of a Company is entitled to one vote on all matters submitted to
shareholders of that Company (shares of common stock of a Company are not
entitled to vote in matters submitted to the shareholders of the other Company).
The Notice of Joint Special Meeting of Shareholders, this Proxy Statement and
the accompanying form of proxy were first mailed to shareholders of the Funds
on or about April 2, 1998.
COPIES OF THE PRIMARY TREND FUNDS' COMBINED ANNUAL REPORT FOR THE YEAR ENDED
JUNE 30, 1997, AND SEMIANNUAL REPORT FOR THE SIX MONTHS ENDED DECEMBER 31, 1997,
ARE AVAILABLE, WITHOUT CHARGE, UPON REQUEST BY WRITING TO THE FUNDS, 700 NORTH
WATER STREET, MILWAUKEE, WISCONSIN 53202, OR BY CALLING 1-800-443-6544.
ELECTION OF DIRECTORS
The Board of Directors of each Company deemed it in the best interests of
each Company to have four members on the Board of Directors and amended the
Bylaws to increase the number of directors from three to four. Thus, if the
nominees set forth in this Proxy Statement are elected, the Board of Directors
of each Company will consist of the same four members, each of whom is elected
to serve until his or her successor is elected and qualified. Each nominee has
consented to being named in this Proxy Statement and to serve if elected. In
the event any of the named nominees is unable to serve as a director, the
persons named as proxies reserve full discretion, in accordance with their best
judgement, to vote or refrain from voting for such other person or persons as
may be nominated. The proxies cannot vote for a greater number of persons than
named on the following page.
Directors are elected by plurality of the votes cast by the holders of each
Company's common stock entitled to vote in the election of directors at a
meeting at which a quorum is present. "Plurality" means that the individuals who
receive the largest number of votes cast are elected as directors up to the
maximum number of directors to be chosen at the meeting. Consequently, any
shares not voted (whether by abstention, broker non-vote, or otherwise) will
have no effect on the election of directors except to the extent the failure to
vote for an individual results in that individual not receiving a sufficient
number of votes to be elected.
THE PRIMARY TREND FUND, INC.
Certain information concerning the nominees is set forth in the following
table. Ms. Gust and Mr. Arnold are currently directors of The Primary Trend
Fund, Inc. Ms. Gust has served as a director of such Company since its
incorporation on June 3, 1986. Mr. Arnold has served as a director since
January 24, 1997. The business address of Ms. Gust, Mr. Arnold and Mr. Holtz is
First Financial Centre, 700 North Water Street, Milwaukee, Wisconsin 53202, and
the business address of Mr. Hillery is 207 East Buffalo Street, Milwaukee,
Wisconsin 53202.
NAME OF SHARES OF
NOMINEE AND PRINCIPAL OF TREND FUND PERCENT
POSITION WITH OCCUPATIONS DURING BENEFICIALLY AS OF
THE COMPANY AGE PAST FIVE YEARS OF MARCH 24, 1998 TOTAL
- ------------- --- ------------------ ----------------- -----
Lilli Gust*<F1> 51 Executive Vice 66,683(a)(b) 3.8%
President and President, Secretary <F3><F4>
Director -Treasurer
and Director of
Arnold Investment
Counsel Incorporated,
Milwaukee, Wisconsin
since February, 1978.
Barry S. Arnold*<F1>33 Vice President of 41,781(b)<F4> 2.4%
Vice President, Arnold Investment
Assistant Secretary Counsel Incorporated,
and Director Milwaukee, Wisconsin,
since September, 1987
Clark J. Hillery 48 President and Owner of 807 **
Director Ink Printing Corporation <F2>
since August, 1979.
Harold L. Holtz 73 Retired; CPA with Egan 2,163 **
Director & Associates, CPAs <F2>
from January, 1996 to
December, 1997;
Sole proprietor, Harold
L. Holtz,CPA, from November,
1987 to December, 1995.
Directors and Officers 125,459 7.2%
as a Group
- ---------------
*<F1> "Interested persons" of the Company as defined in the Investment Company
Act of 1940 because of their positions with Arnold Investment Counsel
Incorporated, 700 North Water Street, Milwaukee, Wisconsin 53202, the Company's
investment adviser (the "Adviser") and because they are officers of the Company.
**<F2> The amount shown is less than 1% of the outstanding shares of the Trend
Fund.
(a)<F3> The amount shown includes shares held by Arnold Investment Counsel
Incorporated.
(b)<F4> The amount shown includes 22,866 shares held by Arnold Investment
Counsel Incorporated's 401 (k) Plan for which Ms. Gust and Mr. Arnold are
trustees.
THE PRIMARY INCOME FUNDS, INC.
Certain information concerning the nominees is set forth in the following
table. Ms. Gust and Mr. Arnold are currently directors of The Primary Income
Funds, Inc. Ms. Gust has served as a director of such Company since its
incorporation on April 5, 1989. Mr. Arnold has served as a director since
January 24, 1997.
SHARES BENEFICIALLY
NAME OF OWNED AS OF MARCH
NOMINEE AND PRINCIPAL 24, 1998 (INCOME PERCENT
POSITION WITH OCCUPATIONS DURING AND GOVERNMENT FUND, OF
THE COMPANY AGE PAST FIVE YEARS RESPECTIVELY) TOTAL
- ------------- --- ------------------ ----------------- -----
Lilli Gust*<F5> 51 Executive Vice 45,818(a)(b) 13.2%
President President, Secretary <F7><F8>
and Director -Treasurer and Director 25,952(a)<F7> 34.0%
of Arnold Investment
Counsel Incorp
Milwaukee, Wisconsin
since February, 1978.
Barry S. Arnold*<F5> 33 Vice President of 30,742(b)<F8> 11.1%
Vice President, Arnold Investment 4,483 5.9%
Assistant Secretary Counsel Incorporated,
and Director Milwaukee, Wisconsin,
since September, 1987
Clark J. Hillery 48 President and owner of -0- --
Director Ink Printing Corporation -0- --
since August, 1979.
Harold L. Holtz 73 Retired; CPA with Egan 601 **<F6>
Director & Associates, CPAs from 406 **<F6>
January, 1996 to December,
1997; Sole proprietor,
Harold L. Holtz,
CPA, from November,
1987 to December, 1995.
Directors and Officers 88,214 25.4%
as a Group 35,242 46.1%
- ---------------
*<F5>"Interested persons" of the Company as defined in the Investment Company
Act of 1940 because of their positions with the Adviser and because they are
officers of the Company.
**<F6> The amount shown is less than 1% of the outstanding shares of the
applicable Fund.
(a)<F7> The amount shown includes shares held by Arnold Investment Counsel
Incorporated.
(b)<F8> The amount shown includes 17,558 shares held by Arnold Investment
Counsel Incorporated's 401 (k) Plan for which Ms. Gust and Mr. Arnold
are trustees.
Each of the Companies has an officer who is not a director. James R. Arnold,
Jr., 40, is Secretary-Treasurer of each Company. He is also Client Services and
Accounting Manager of Sunstone Financial Group, Inc., 207 East Buffalo Street,
Milwaukee, Wisconsin 53202, the administrator of the Funds, since January, 1997.
He was Vice President of the Adviser from October, 1985 to January, 1997. James
R. Arnold, Jr. and Barry S. Arnold are brothers. The officers of each Company
are elected annually by its Board of Directors.
The Boards of Directors held two meetings during the fiscal year ended June
30, 1997. Ms. Gust and Mr. Arnold attended both meetings. The Boards of
Directors have no standing committees.
Each Company's standard method of compensating directors is to pay each
disinterested director a fee of $250 for each meeting of the Board of Directors
of such Company attended. Directors or officers who are "interested persons"
receive no compensation from the Funds. The directors do not receive any
pension or retirement benefits from any Fund. The Table below shows the
compensation paid by each Fund to directors of the applicable Company during the
fiscal year ended June 30, 1997.
PENSION OR
RETIREMENT
BENEFITS ESTIMATED TOTAL
ACCRUED AS ANNUAL COMPENSATION
AGGREGATE PART OF BENEFITS FROM COMPANY
NAME OF COMPENSATION COMPANY UPON PAID TO
DIRECTOR FROM COMPANY EXPENSES RETIREMENT DIRECTORS
- -------- ------------ ----------- ---------- ------------
The Primary Trend Fund, Inc.
Barry S. Arnold $ 0 $0 $0 $ 0
Joseph L. Cook* $500 $0 $0 $500
<F9>
Lilli Gust $ 0 $0 $0 $ 0
The Primary Income Fund, Inc.
Barry S. Arnold $ 0 $0 $0 $ 0
Joseph L. Cook* $500 $0 $0 $500
<F9>
Lilli Gust $ 0 $0 $0 $ 0
- --------------
*<F9> No longer a director effective March 4, 1998.
PRINCIPAL SHAREHOLDERS
As of March 1, 1998, no person is known to the Funds to own beneficially more
than five percent of the outstanding share of any Fund, except as indicated
below:
NUMBER OF PERCENT OF
FUND NAME AND ADDRESS SHARES CLASS
---- ---------------- --------- ----------
Government Fund Arnold Investment 17,696 22.3%
Counsel Incorporated*<F10>
Milwaukee, Wisconsin
53202
Lilli Gust 8,256 10.4%
Milwaukee, Wisconsin 53208
Theodore H. & Mildred V. Braam 5,915 7.4%
Glendale, Wisconsin 53209
Sydney W. Frey 5,630 7.1%
Brookfield, Wisconsin 53005
Barry S. Arnold 4,483 5.6%
New Berlin, Wisconsin 53146
Holger A. Olsson 4,476 5.6%
Presque Isle, Wisconsin 54557
Carolyn M. Gross 4,408 5.5%
New Berlin, Wisconsin 53146
James R. Arnold, Jr. 4,401 5.5%
Big Bend, Wisconsin 53103
Income Fund Steven Mayer 22,909 6.4%
Crystal Lake, Illinois 60039
Barry S. Arnold 21,184 6.0%
New Berlin, Wisconsin 53146
James R. Arnold, Jr. 20,611 5.8%
Big Bend, Wisconsin 53103
Carolyn M. Gross 20,585 5.8%
New Berlin, Wisconsin 53146
Trend Fund Ruth L. Leef 179,928 10.1%
Elm Grove, Wisconsin 53122
- --------------
*<F10> Arnold Investment Counsel Incorporated is controlled by Lilli Gust.
OTHER MATTERS
The Board of Directors of the Companies know of no other matters that may
come before the Special Meeting. If any other matters properly come before the
meeting, the persons named in the proxy will vote the shares represented by such
proxies in accordance with their best judgment.
By Order of the Board of Directors,
The Primary Trend Fund, Inc.
The Primary Income Funds, Inc.
/s/ James R. Arnold, Jr.
JAMES R. ARNOLD, JR.
Secretary-Treasurer
PROXY
THE PRIMARY TREND FUND, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LILLI GUST and BARRY S. ARNOLD, and each of
them, with full power of substitution, proxies for and in the name and place
of the undersigned to appear and vote with the same force and effect as the
undersigned at the Special Meeting of THE PRIMARY TREND FUND, INC., to be held
in the Wisconsin Room at the Milwaukee Athletic Club, 758 N. Broadway,
Milwaukee, Wisconsin, at 6:00 p.m. (Milwaukee time), April 29, 1998 and at any
adjournment thereof.
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
LILLI GUST BARRY S. ARNOLD CLARK J. HILLERY HAROLD L. HOLTZ
(Please Sign on Reverse Side)
THIS PROXY, WHEN PROPERTY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN THE ELECTION OF DIRECTORS FOR THE NOMINEES LISTED IN THE PROXY
STATEMENT AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears on this card. When shares are held by
two or more persons, both must sign. When signing as trustee, guardian or other
fiduciary, please give full title as such. If a Partnership, please sign in
partnership name by authorized person.
Dated -----------------, 1998
- -----------------------------
(Signature)
- -----------------------------
(Signature)
Please mark, sign and date and return this proxy card promptly using the
enclosed postage-paid envelope. Please call us at (800)443-6544 if you plan
to attend the Meeting.
PROXY
THE PRIMARY INCOME FUNDS, INC.
THE PRIMARY INCOME FUND (CLASS B COMMON STOCK)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LILLI GUST and BARRY S. ARNOLD, and each of
them, with full power of substitution, proxies for and in the name and place of
the undersigned to appear and vote with the same force and effect as the
undersigned at the Special Meeting of THE PRIMARY INCOME FUNDS, INC., to be held
in the Wisconsin Room at the Milwaukee Athletic Club, 758 N. Broadway,
Milwaukee, Wisconsin, at 6:00 p.m. (Milwaukee time), April 29, 1998 and at any
adjournment thereof.
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
LILLI GUST BARRY S. ARNOLD CLARK J. HILLERY HAROLD L. HOLTZ
(Please Sign on Reverse Side)
THIS PROXY, WHEN PROPERTY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN THE ELECTION OF DIRECTORS FOR THE NOMINEES LISTED IN THE PROXY
STATEMENT AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears on this card. When shares are held by
two or more persons, both must sign. When signing as trustee, guardian or other
fiduciary, please give full title as such. If a Partnership, please sign in
partnership name by authorized person.
Dated -----------------, 1998
- -----------------------------
(Signature)
- -----------------------------
(Signature)
Please mark, sign and date and return this proxy card promptly using the
enclosed postage-paid envelope. Please call us at (800)443-6544 if you plan
to attend the Meeting.
PROXY
THE PRIMARY INCOME FUNDS, INC.
THE PRIMARY U.S. GOVERNMENT FUND (CLASS C COMMON STOCK)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LILLI GUST and BARRY S. ARNOLD, and each of
them, with full power of substitution, proxies for and in the name and place
of the undersigned to appear and vote with the same force and effect as the
undersigned at the Special Meeting of THE PRIMARY INCOME FUNDS, INC., to be
held in the Wisconsin Room at the Milwaukee Athletic Club, 758 N. Broadway,
Milwaukee, Wisconsin, at 6:00 p.m. (Milwaukee time), April 29, 1998 and at any
adjournment therof.
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (excpet as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
LILLI GUST BARRRY S. ARNOLD CLARK J. HILLERY HAROLD L. HOLTZ
(Please Sign on Reverse Side)
THIS PROXY, WHEN PROPERTY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN THE ELECTION OF DIRECTORS FOR THE NOMINEES LISTED IN THE PROXY
STATEMENT AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears on this card. When shares are held by
two or more persons, both must sign. When signing as trustee, guardian or other
fiduciary, please give full title as such. If a Partnership, please sign in
partnership name by authorized person.
Dated -----------------, 1998
- -----------------------------
(Signature)
- -----------------------------
(Signature)
Please mark, sign and date and return this proxy card promptly using the
enclosed postage-paid envelope. Please call us at (800)443-6544 if you plan
to attend the Meeting.
