PAINEWEBBER FUNDS
1285 Avenue of the Americas
New York, New York 10019
February 28, 1996
Dear Shareholder:
Enclosed is a proxy statement asking you to vote in favor of several
proposals relating to the management and operation of your Fund.
Meetings of your Fund and of other Funds within the PaineWebber fund complex
are being held on April 11, 1996 to consider these proposals and to transact any
other business that may properly come before the meetings. In the past, when we
have solicited proxies for your Fund, we usually have enclosed a proxy statement
directed solely to the shareholders of your Fund. This time, however,
shareholders of several Funds are being asked to approve many of the same
proposals, so most of the information that must be included in a proxy statement
for your Fund needs to be included in a proxy statement for the other Funds as
well. Therefore, in order to save money, one proxy statement has been prepared
for these Funds. This proxy statement contains detailed information about each
of the proposals relating to your Fund, and we recommend that you read it
carefully. However, we have also attached some Questions and Answers that we
hope will assist you in evaluating the proposals.
We have retained an outside firm that specializes in proxy solicitation to
assist us with any necessary follow-up. If we have not received your vote as the
meeting date approaches, you may receive a telephone call from Shareholder
Communications Corporation to ask for your vote. We hope that their telephone
call does not inconvenience you.
Thank you for your attention to this matter and for your continuing
investment in the Funds.
Very truly yours,
Margo N. Alexander
President
Proxy cards for each of your Funds are enclosed along with the proxy
statement. Please vote your shares today by signing and returning each
enclosed proxy card in the postage prepaid envelope provided. The Board of
your Fund recommends that you vote "FOR" each proposal.
<PAGE>
QUESTIONS AND ANSWERS
Q: WHAT IS THE PURPOSE OF THIS PROXY SOLICITATION?
A: The purpose of this proxy is to ask you to vote on two primary issues:
. to elect ten Board members, and
. to approve changes to your Fund's fundamental investment restrictions.
For most of the Funds, this proxy is for a special meeting called
specifically to consider those two issues. For 2002 Target Term Trust Inc.,
Global High Income Dollar Fund Inc. and Strategic Global Income Fund, Inc.,
however, this proxy is for the Fund's regular annual meeting. Therefore, to
comply with legal requirements, shareholders of those Funds also are being
asked to ratify the selection of their Fund's independent auditors for the
current year.
Q: WHY AM I RECEIVING PROXY INFORMATION ON FUNDS THAT I DO NOT OWN?
A: In the past, when we have solicited proxies for your Fund, we have usually
enclosed a proxy statement directed solely to the shareholders of one Fund.
This time, however, shareholders of several Funds are being asked to
approve many of the same proposals, so most of the information that must be
included in a proxy statement for your Fund needs to be included in a proxy
statement for the other Funds as well. Therefore, in order to save money,
one proxy statement has been prepared for these Funds.
Q: WHY ARE YOU RECOMMENDING A UNIFIED BOARD FOR THE FUNDS?
A: A Corporate Governance Task Force, comprised of a number of the Funds'
existing Board members, assisted by Mitchell Hutchins representatives,
recommended to the Fund Boards, and they agreed, that PaineWebber funds
should be governed by larger Boards composed of the same members. The Task
Force concluded that this "unified" Board structure benefits the Funds by
creating a diverse, experienced group of Board members who understand the
operations of the PaineWebber funds and are exposed to the wide variety of
issues that arise from overseeing different types of funds.
Q: WHY HAS THE BOARD BEEN EXPANDED TO TEN MEMBERS?
A: At the recommendation of the Corporate Governance Task Force, each Fund's
Board has been expanded to include ten members, seven of whom would be
independent. The Task Force considered issues relating to the management
and long-term welfare of the Funds. It recommended, and the Boards agreed
to adopt, an expanded Board as part of an overall plan to coordinate and
enhance the efficiency of the governance of the Funds. Expanding the size
of the Boards is intended to facilitate the increased use of Board
committees for different purposes, including the periodic review of the
Funds' contractual and audit arrangements. The Fund Boards approved the
Task Force recommendations and nominated ten individuals drawn primarily
from the existing Boards.
Q: WILL THE PROPOSED CHANGES RESULT IN HIGHER ADVISORY FEES?
A: No. The advisory and administrative fees charged to each Fund will remain
the same.
<PAGE>
Q: WHAT ARE "FUNDAMENTAL" INVESTMENT RESTRICTIONS, AND WHY ARE THEY BEING
CHANGED?
A: A Fund's "fundamental" investment restrictions are limitations placed on a
Fund's investment policies that can be changed only by a shareholder
vote--even if the changes are minor. The law requires certain investment
policies to be designated as fundamental. Each Fund adopted a number of
fundamental investment restrictions when the Fund was created, and many of
those fundamental restrictions reflect regulatory, business or industry
conditions, practices or requirements that are no longer in effect. Others
reflect regulatory requirements that, while still in effect, do not need to
be classified as fundamental restrictions.
The Funds' Boards believe that fundamental investment restrictions that are
not legally required should be eliminated and that the remaining
fundamental restrictions should be modernized and made more uniform. The
Boards believe that the proposed changes to the Funds' fundamental
investment restrictions will provide greater flexibility. The proposed
changes also will eliminate minor differences in wording that may give rise
to unintended differences in effect or interpretation among funds in the
PaineWebber fund complex.
Q: DO THE PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS MEAN THAT MY
FUND'S INVESTMENT OBJECTIVE IS BEING CHANGED?
A: No. None of the proposals would change the investment objective of any
Fund.
Q: WHAT WILL BE THE EFFECT OF THE PROPOSED CHANGES TO MY FUND'S FUNDAMENTAL
RESTRICTIONS?
A: The Boards do not believe that the proposed changes to fundamental
investment restrictions will result at this time in a material change in
the level of investment risk for any Fund. However, the changes will allow
each Fund greater flexibility to respond to future investment opportunities
by making changes in non-fundamental investment policies that, at a future
time, its Board considers desirable. A shareholder vote will not be
necessary for future changes to non-fundamental investment policies or
restrictions.
Q: WHAT ARE MY BOARD'S RECOMMENDATIONS?
A: The Board of each Fund has recommended that you vote "FOR" the nominees for
Board member and "FOR" each Proposal that applies to your Fund.
THE ATTACHED PROXY STATEMENT CONTAINS MORE DETAILED INFORMATION ABOUT EACH
OF THE PROPOSALS RELATING TO YOUR FUND. PLEASE READ IT CAREFULLY.
<PAGE>
2002 TARGET TERM TRUST INC.
ALL-AMERICAN TERM TRUST INC.
GLOBAL HIGH INCOME DOLLAR FUND INC.
GLOBAL SMALL CAP FUND INC.
MANAGED HIGH YIELD FUND INC.
STRATEGIC GLOBAL INCOME FUND, INC.
TRIPLE A AND GOVERNMENT SERIES--1997, INC.
-------------------
NOTICE OF
SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON
APRIL 11, 1996
-------------------
TO THE SHAREHOLDERS:
Meetings of the shareholders of each of the above-listed investment
companies ("Funds") will be held at 1285 Avenue of the Americas, 38th Floor, New
York, New York, on April 11, 1996 at 11:00 a.m., Eastern time, for the purpose
of considering the following proposals with respect to the Funds:
(1) For each Fund, to elect ten members of its Board of Directors to serve
until the next annual meeting or until their successors are duly elected and
qualified;
(2) For 2002 Target Term Trust Inc., Global High Income Dollar Fund Inc. and
Strategic Global Income Fund, Inc., to ratify the selection of independent
auditors for its current fiscal year;
(3) For each Fund, to approve certain changes to its fundamental investment
restrictions; and
(4) For each Fund, to transact such other business as may properly come
before the meetings and any adjournments thereof.
For 2002 Target Term Trust Inc., Global High Income Dollar Fund Inc. and
Strategic Global Income Fund, Inc., the meetings will be the Funds' annual
meetings. For the other Funds, the meetings are special meetings.
You are entitled to vote at the meetings, and at any adjournments thereof,
of each Fund in which you owned shares at the close of business on February 16,
1996. If you attend the meetings, you may vote your shares in person. IF YOU DO
NOT EXPECT TO ATTEND THE MEETINGS, PLEASE COMPLETE, DATE, SIGN AND RETURN EACH
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By order of the Boards,
DIANNE E. O'DONNELL
Secretary
February 28, 1996
1285 Avenue of the Americas
New York, New York 10019
<PAGE>
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
ENCLOSED YOU WILL FIND ONE OR MORE PROXY CARDS RELATING TO EACH OF THE
FUNDS FOR WHICH YOU ARE ENTITLED TO VOTE. PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON EACH OF THE ENCLOSED PROXY CARDS, DATE AND SIGN THEM, AND
RETURN THEM IN THE ENVELOPE PROVIDED. IF YOU SIGN, DATE AND RETURN A PROXY
CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE
NOMINEES FOR DIRECTOR NAMED IN THE ATTACHED PROXY STATEMENT AND "FOR" ALL
OTHER PROPOSALS INDICATED ON THE CARDS. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE TO THE FUNDS OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING IN YOUR PROXY CARDS PROMPTLY. UNLESS PROXY CARDS ARE SIGNED BY THE
APPROPRIATE PERSONS AS INDICATED IN THE INSTRUCTIONS BELOW, THEY WILL NOT BE
VOTED.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
------------ ---------------
<S> <C>
Corporate Accounts
(1) ABC Corp.............................................. ABC Corp.
John Doe, Treasurer
(2) ABC Corp.............................................. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer..................... John Doe
(4) ABC Corp. Profit Sharing Plan......................... John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership................................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership.................. Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account..................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA..................................................... John B. Smith
(2) Estate of John B. Smith............................... John B. Smith, Jr.,
Executor
</TABLE>
<PAGE>
2002 TARGET TERM TRUST INC.
ALL-AMERICAN TERM TRUST INC.
GLOBAL HIGH INCOME DOLLAR FUND INC.
GLOBAL SMALL CAP FUND INC.
MANAGED HIGH YIELD FUND INC.
STRATEGIC GLOBAL INCOME FUND, INC.
TRIPLE A AND GOVERNMENT SERIES--1997, INC.
1285 Avenue of the Americas
New York, New York 10019
-------------------
PROXY STATEMENT
SPECIAL AND ANNUAL MEETINGS OF SHAREHOLDERS TO BE HELD ON APRIL 11, 1996
-------------------
This proxy statement is being furnished to holders of Shares of each of the
above-listed investment companies ("Funds") in connection with the solicitation
by their respective Boards of proxies to be used at meetings ("Meetings") of
Shareholders to be held on April 11, 1996, at 11:00 a.m., Eastern time, or any
adjournment or adjournments thereof. For 2002 Target Term Trust Inc., Global
High Income Dollar Fund Inc., and Strategic Global Income Fund, Inc., the
Meetings are the Funds' annual meetings of Shareholders. For each other Fund,
the meetings are Special Meetings. This proxy statement is being first mailed to
Shareholders on or about March 4, 1996.
Each Fund is a registered, management investment company under the
Investment Company Act of 1940, as amended ("1940 Act"), and is organized as a
Maryland corporation. Each Fund's shares of common stock are referred to as
"Shares," and the holders of the Shares are "Shareholders"; each Fund's board of
directors is referred to as a "Board," and the directors are "Board Members";
and each Fund's articles of incorporation are referred to as its "Charter." A
listing of the formal name for each Fund and the shorthand name for each Fund
that is used in this proxy statement is set forth below.
<TABLE>
<CAPTION>
NAME PROPOSALS
AS USED IN THIS PROXY APPLICABLE TO
FUND NAME STATEMENT FUND
--------- --------------------------- ---------------
<S> <C> <C>
2002 Target Term Trust Inc. .................... 2002 Trust 1, 2 and 3
All-American Term Trust Inc. ................... All-American 1 and 3
Global High Income Dollar Fund Inc. ............ Global High Income Dollar 1, 2 and 3
Global Small Cap Fund Inc. ..................... Global Small Cap 1 and 3
Managed High Yield Fund Inc. ................... Managed High Yield 1 and 3
Strategic Global Income Fund, Inc. ............. Strategic Global 1, 2 and 3
Triple A and Government Series--1997, Inc. ..... TAGS 1 and 3
</TABLE>
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") is the
investment adviser and administrator for each Fund. Mitchell Hutchins is a
wholly owned subsidiary of PaineWebber Incorporated ("PaineWebber"), which, in
turn, is a wholly owned subsidiary of Paine Webber Group Inc. ("PW Group"), a
publicly held financial services holding company. PaineWebber has, from time to
time, acted as a dealer and secondary market-maker in connection with
over-the-counter secondary market sales of each Fund's
<PAGE>
Shares. Mitchell Hutchins Institutional Investors, Inc. ("MHII"), a wholly-owned
subsidiary of Mitchell Hutchins, serves as sub-adviser to TAGS. The principal
business address of each of Mitchell Hutchins, MHII, PaineWebber and PW Group is
1285 Avenue of the Americas, New York, New York 10019. Goldman Sachs Funds
Management, L.P. ("GSFM") serves as the sub-adviser for 2002 Trust. GSFM is a
limited partnership indirectly controlled by Goldman Sachs Group, L.P. through
Goldman Sachs Funds Management, Inc. The principal business address of GSFM is
One New York Plaza, New York, New York 10004. GE Investment Management Inc.
("GEIM"), a subsidiary of General Electric Company, serves as sub-adviser to
Global Small Cap. The principal business address of GEIM is 3003 Summer Street,
Stamford, Connecticut 06905.
VOTING INFORMATION
For each Fund, the presence, in person or by proxy, of a majority of the
Shares of the Fund outstanding and entitled to vote will constitute a quorum for
the transaction of business at the Meetings.
In the event that a quorum is not present at a Meeting, or if a quorum is
present at that Meeting but sufficient votes to approve any of the proposals are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any adjournment will
require the affirmative vote of a majority of those Shares represented at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies which they are entitled to vote FOR any proposal in favor of the
adjournment and will vote those proxies required to be voted AGAINST any
proposal against the adjournment. A Shareholder vote may be taken on one or more
of the proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received and it is otherwise appropriate.
Broker non-votes are Shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote, and the broker does not have discretionary
voting authority. Abstentions and broker non-votes will be counted as Shares
present for purposes of determining whether a quorum is present but will not be
voted for or against any adjournment or proposal. Accordingly, abstentions and
broker non-votes will have no effect on Proposals 1 and 2, for which the
required vote is a plurality or majority of the votes cast, but effectively will
be a vote against adjournment and against Proposal 3, for which the required
vote is a percentage of the Shares present or outstanding.
The individuals named as proxies on the enclosed proxy cards will vote in
accordance with your direction as indicated thereon, if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you give no voting instructions, your Shares will be voted
FOR the nominees named herein for the Board of the Fund to which the proxy card
relates and FOR the remaining proposals described in this proxy statement and
referenced on the proxy card. If any nominee for the Fund Boards should withdraw
or otherwise become unavailable for election, your Shares will be voted in favor
of such other nominee or nominees as management may recommend. You may revoke
any proxy card by giving another proxy or by letter or telegram revoking the
initial proxy. To be effective, your revocation must be received by the Fund
prior to the related Meeting and must indicate your name and account number. In
addition, if you
2
<PAGE>
attend a Meeting in person you may, if you wish, vote by ballot at that Meeting,
thereby canceling any proxy previously given.
Information as to the number of outstanding Shares of each Fund as of the
record date, February 16, 1996 ("Record Date") is set forth below:
FUND NUMBER OF SHARES OUTSTANDING
---- ----------------------------
2002 Trust 9,369,467.000
All-American 13,706,667.000
Global High Income Dollar 22,736,667.000
Global Small Cap 3,801,667.000
Managed High Yield 6,031,667.000
Strategic Global 21,407,127.584
TAGS 4,245,202.154
Management does not know of any person who owned beneficially 5% or more of
the Shares of any Fund as of January 31, 1996. To the knowledge of management,
the executive officers and Board Members of each Fund, as a group, owned less
than 1% of the outstanding Shares of each Fund as of January 31, 1996.
COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS OF ANY FUND MAY REQUEST COPIES OF THAT FUND'S ANNUAL AND
SEMI-ANNUAL REPORTS BY WRITING THE FUND AT 1285 AVENUE OF THE AMERICAS, NEW
YORK, NEW YORK 10019, OR BY CALLING 1-800-852-4750.
Each full Share of each Fund outstanding is entitled to one vote, and each
fractional Share of each Fund outstanding is entitled to a proportionate share
of one vote, with respect to each matter to be voted upon by the Shareholders of
that Fund. Information about the vote necessary with respect to each proposal is
discussed below in connection with the proposal.
-------------------
PROPOSAL 1--ELECTION OF BOARD MEMBERS
RELEVANT FUNDS. All Funds.
DISCUSSION. The Board of each Fund has acted to expand its membership and
has nominated the ten individuals identified below for election to the related
Fund's Board at its Meeting. Under Proposal 1, Shareholders of each Fund are
being asked to vote on those nominees. Pertinent information about each nominee
is set forth in the listing below and in Exhibits A through D hereto. Each
nominee has indicated a willingness to serve if elected. If elected, each
nominee will hold office until the next annual meeting of Shareholders or until
his or her successor is duly elected and qualified, or until he or she resigns
or is otherwise removed.
3
<PAGE>
The increase in the size of the Boards and the nomination of a single group
of nominees to serve as the Board Members for each Fund reflects an overall plan
to coordinate and enhance the efficiency of the governance of the Funds and of
certain other investment companies that are part of the PaineWebber fund
complex. This plan was developed by a Corporate Governance Task Force comprised
of a number of current Board Members who are not "interested persons" of the
Funds, as defined in the 1940 Act ("independent" Board Members) with the advice
of their counsel, and assisted by representatives of Mitchell Hutchins and Fund
counsel. The Corporate Governance Task Force considered various matters related
to the management and long-term welfare of the Funds and made recommendations to
the Boards, including proposals concerning the size and composition of the
Boards, committee structures, fees and related matters. These proposals, the
substance of which is summarized below, were adopted by the Boards at meetings
in November 1995. The Boards acted in February 1996 to establish the size of the
Boards at ten, following the untimely death of a member of several of the
PaineWebber fund boards, who had been expected to be a nominee as an independent
Board Member. The nominees for independent Board memberships were selected by
the Board of each Fund. With the exception of the nominations for Board
membership, which are the subject of Proposal 1, no Shareholder action is
required with respect to the Corporate Governance Task Force recommendations.
Consistent with the recommendations of the Corporate Governance Task Force,
and concurrently with this proxy solicitation, shareholders of other funds
within the PaineWebber fund complex are also being asked to elect the
below-listed nominees to the boards of their funds. However, the election of the
nominees for the Board of any Fund is not conditioned upon their election to the
Board of any other Fund or of any other fund within the PaineWebber fund
complex.
The Boards believe that coordinated governance through a unified group of
Board Members will benefit each of the Funds. Despite some recent
consolidations, the PaineWebber fund complex has grown substantially in size in
the years since the current Board structures were created. This growth has been
due to the creation of new Funds intended to serve a wide variety of investment
needs and the recent acquisition of the asset management business of Kidder
Peabody Asset Management, Inc. The PaineWebber fund complex currently includes
over 60 portfolios of open-end and closed-end funds having a wide variety of
investment objectives and policies. These include money market funds; bond funds
that invest in corporate and other bonds with varying maturities and risk
characteristics; municipal bond funds; balanced funds that invest in
combinations of debt and equity securities; growth funds that invest in a wide
variety of domestic equity securities; and global funds that invest in debt or
equity securities from around the world. The Boards believe that the Funds will
benefit from the experience that each nominee will gain by serving on the Boards
of such a diverse group of funds. Coordinated governance within the PaineWebber
fund complex also will reduce the possibility that the separate Boards might
arrive at conflicting decisions regarding the operations and management of the
Funds and avoid costs resulting from conflicting decisions.
4
<PAGE>
The Boards also believe that the Funds will benefit from the diversity and
experience of the nominees that would comprise the expanded Boards. These
nominees have had distinguished careers in government, finance, law, marketing
and other areas and will bring a wide range of expertise to the Boards. Seven of
the ten nominees have no affiliation with PaineWebber or Mitchell Hutchins and
would be independent Board Members. Independent Board Members are charged with
special responsibilities to provide an independent check on management and to
approve advisory, distribution and similar agreements between the Funds and
management. They also constitute the members of the Boards' audit committees. In
the course of their duties, Board Members must review and understand large
amounts of financial and technical material and must be willing to devote
substantial amounts of time. Due to the demands of service on the Boards,
independent nominees may need to reject other attractive opportunities. Each of
the independent nominees already serves as an independent Board Member for one
or more funds within the PaineWebber fund complex and understands the operations
of the complex.
The proposed unified Board structure will require a greater expenditure of
time by each Board Member. Election of the ten nominees will permit the Boards
to enhance their supervision of the Funds by increased use of a committee
structure. Under the Board structure envisioned by the Corporate Governance Task
Force and adopted by the Boards, each Board's audit committee will be divided
into two sub-committees, each comprised of independent Board Members. Each
sub-committee will function as an audit and contract review committee that
periodically will review the contractual and audit arrangements for Funds having
similar characteristics. The sub-committee structure will enable Board members
both to develop expertise about particular Funds, while still benefiting from
the experience and knowledge of the full Boards. Other committees may be used in
the future, and the Boards will review the sub-committee structure from time to
time to make necessary adjustments. It is anticipated that the full Boards will
have five regularly scheduled meetings per year.
As recommended by the Corporate Governance Task Force, the compensation paid
to independent Board Members will change. Under the new structure, each
independent Board Member will be paid annual fees of $1,000 per Fund and will
receive an attendance fee of $150 for each Board meeting and for each committee
meeting (other than committee meetings held on the same date as a Board
meeting). It is anticipated that the chairs of the two audit and contract review
sub-committees each will receive additional annual compensation from the
PaineWebber funds in the aggregate amount of $15,000. Interested Board Members
will continue to receive no compensation from any Fund. Board Members will
continue to be reimbursed for any expenses incurred in attending meetings.
Pursuant to the recommendations of the Corporate Governance Task Force, each
Board Member will be subject to mandatory retirement at the end of the year in
which he or she becomes 72 years old. The following table sets forth information
relating to the compensation paid to Board Members during the past fiscal and
calendar years:
5
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
AMOUNTS PAID DURING THE MOST RECENT FISCAL YEAR FROM FUND TO BOARD
TOTAL COMPENSATION
MEMBERS PAID TO BOARD
-------------------------------------------------------------------- MEMBERS
GLOBAL FROM FUND AND FUND
HIGH GLOBAL MANAGED COMPLEX
INCOME SMALL HIGH STRATEGIC FOR THE YEAR ENDED
INDEPENDENT BOARD MEMBER(1) 2002 TRUST ALL-AMERICAN DOLLAR CAP YIELD GLOBAL TAGS DECEMBER 31, 1995(2)
- ----------------------------- ---------- ------------ ------ ------ ------- --------- ------ --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard Q. Armstrong......... $1,125 $2,000 $1,125 -- -- -- -- $ 9,000
Richard Burt................. $ 875 $1,500 $ 875 -- -- -- -- $ 7,750
Meyer Feldberg............... -- -- -- -- -- $ 6,500 -- $106,375
George W. Gowen.............. -- -- -- -- -- $ 6,500 -- $ 99,750
Frederic V. Malek............ -- -- -- -- -- $ 6,500 -- $ 99,750
Judith Davidson Moyers*...... -- -- -- -- -- $ 6,500 -- $ 98,500
Carl W. Schafer.............. -- -- -- -- -- -- -- $118,175
John R. Torell III........... $3,250 $4,125 $3,250 $3,750 $3,875 -- $3,750 $ 28,125
William D. White*............ $3,250 $4,125 $3,250 $3,750 $3,375 -- $3,250 $ 33,125
</TABLE>
- ------------
* Indicates Board Member who is not standing for reelection.
(1) Board Members who were not independent did not receive compensation from the
Funds.
(2) No fund within the fund complex has a bonus, pension, profit sharing or
retirement plan.
The nominees for election as Board Members, their ages, and a description of
their principal occupations are listed in the table below. A table indicating
each nominee's ownership of Fund Shares is attached as Exhibit B.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE
NOMINEE; AGE PAST FIVE YEARS; OTHER DIRECTORSHIPS
- ------------ -------------------------------------------
<S> <C>
Margo N. Alexander;* 48....... Mrs. Alexander is president, chief executive
officer and a director of Mitchell Hutchins
(since January 1995). Mrs. Alexander is an
executive vice president and director of
PaineWebber. Mrs. Alexander also is a
director or trustee of 3 investment companies
for which Mitchell Hutchins or PaineWebber
serves as investment adviser.
Richard Q. Armstrong; 60...... Mr. Armstrong is chairman and principal of RQA
Enterprises (management consulting firm)
(since April 1991 and principal occupation
since March 1995). Mr. Armstrong is also a
director of Hi Lo Automotive, Inc. He was
chairman of the board, chief executive
officer and co-owner of Adirondack Beverages
(producer and distributor of soft drinks and
sparkling/still waters) (October 1993-March
1995). He was a partner of the New England
Consulting Group (management consulting firm)
(December 1992-September 1993). He was
managing director of LVMH U.S. Corporation
(U.S. subsidiary of the French luxury goods
conglomerate, Louis Vuitton Moet Hennessey
Corporation) (1987-1991) and chairman of its
wine and spirits subsidiary, Schieffelin &
Somerset Company (1987-1991). Mr. Armstrong
also is a director or trustee of 6 investment
companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE
NOMINEE; AGE PAST FIVE YEARS; OTHER DIRECTORSHIPS
- ------------ ----------------------------------------------
<S> <C>
E. Garrett Bewkes, Jr.;* 69... Mr. Bewkes is a director of, and a consultant
to, PW Group. Prior to 1988, he was chairman
of the board, president and chief executive
officer of American Bakeries Company. Mr.
Bewkes is also a director of Interstate
Bakeries Corporation and NaPro
Bio-Therapeutics, Inc. Mr. Bewkes also is a
director or trustee of 24 investment
companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
Richard Burt; 47.............. Mr. Burt is chairman of International Equity
Partners (international investments and
consulting firm) (since March 1994) and a
partner of McKinsey & Company (management
consulting firm) (since 1991). He is also a
director of American Publishing Company. He
was the chief negotiator in the Strategic
Arms Reduction Talks with the former Soviet
Union (1989-1991) and the U.S. Ambassador to
the Federal Republic of Germany (1985-1989).
Mr. Burt also is a director or trustee of 7
investment companies for which Mitchell
Hutchins or PaineWebber serves as investment
adviser.
Mary C. Farrell;* 46.......... Ms. Farrell is a managing director, senior
investment strategist, and member of the
Investment Policy Committee of PaineWebber.
Ms. Farrell joined PaineWebber in 1982. She
is a member of the Financial Women's
Association and Women's Economic Roundtable,
and is employed as a regular panelist on Wall
$treet Week with Louis Rukeyser. She also
serves on the Board of Overseers of New York
University's Stern School of Business.
Meyer Feldberg; 53............ Mr. Feldberg is Dean and Professor of
Management of the Graduate School of Business,
Columbia University. Prior to 1989, he was
president of the Illinois Institute of
Technology. Dean Feldberg is also a director
of AMSCO International Inc., Federated
Department Stores, Inc. and New World
Communications Group Incorporated. Dean
Feldberg also is a director or trustee of 19
investment companies for which Mitchell
Hutchins or PaineWebber serves as investment
adviser.
George W. Gowen; 66........... Mr. Gowen is a partner in the law firm of
Dunnington, Bartholow & Miller. Prior to May
1994, he was partner in the law firm of
Fryer, Ross & Gowen. Mr. Gowen is also a
director of Columbia Real Estate Investments,
Inc. Mr. Gowen also is a director or trustee
of 17 investment companies for which Mitchell
Hutchins or PaineWebber serves as investment
adviser.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE
NOMINEE; AGE PAST FIVE YEARS; OTHER DIRECTORSHIPS
- ------------ -----------------------------------------------
<S> <C>
Frederic V. Malek; 59......... Mr. Malek is chairman of Thayer Capital
Partners (investment bank) and a co-chairman
and director of CB Commercial Group Inc.
(real estate). From January 1992 to November
1992, he was campaign manager of Bush-Quayle
'92. From 1990 to 1992, he was vice chairman
and, from 1989 to 1990, he was president of
Northwest Airlines Inc., NWA Inc. (holding
company of Northwest Airlines Inc.) and Wings
Holdings Inc. (holding company of NWA Inc.).
Prior to 1989, he was employed by the
Marriott Corporation (hotels, restaurants,
airline catering and contract feeding), where
he most recently was an executive vice
president and president of Marriott Hotels
and Resorts. Mr. Malek is also a director of
American Management Systems, Inc., Automatic
Data Processing, Inc., Avis, Inc., FPL Group,
Inc., National Education Corporation and
Northwest Airlines Inc. Mr. Malek also is a
director or trustee of 17 investment
companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
Carl W. Schafer; 60........... Mr. Schafer is president of the Atlantic
Foundation (charitable foundation supporting
mainly oceanographic exploration and
research). He also is a director of Roadway
Express, Inc. (trucking), The Guardian Group
of Mutual Funds, Evans Systems, Inc. (a motor
fuels, convenience store and diversified
company), Hidden Lake Gold Mines Ltd. (gold
mining), Electronic Clearing House, Inc.
(financial transactions processing), Wainoco
Oil Corporation and Nutraceutix Inc.
(biotechnology). Prior to January 1993, Mr.
Schafer was chairman of the Investment
Advisory Committee of the Howard Hughes
Medical Institute. Mr. Schafer also is a
director or trustee of 17 investment
companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
John R. Torell III; 56........ Mr. Torell is chairman of Torell Management,
Inc. (financial advisory firm), partner of
Zilkha & Company (merchant banking and
private investment company) and chairman of
Telesphere Corporation (electronic provider
of financial information). He is the former
chairman and chief executive officer of
Fortune Bancorp (1990-1991 and 1990-1994,
respectively). He is the former chairman,
president and chief executive officer of
CalFed, Inc. (savings association) (1988 to
1989) and former president of Manufacturers
Hanover Corp. (bank) (prior to 1988). Mr.
Torell is also a director of American Home
Products Corp., Volt Information Sciences
Inc., and New Colt Inc. (armament
manufacturer). Mr. Torell also is a director
or trustee of 7 investment companies for
which Mitchell Hutchins or PaineWebber serves
as investment adviser.
</TABLE>
- ------------
* Indicates "interested person" of the Funds as defined by the 1940 Act, by
reason of his or her position with Mitchell Hutchins, PaineWebber or PW Group
or share ownership in PW Group and/or the General Electric Company (the parent
company of the sub-adviser of Global Small Cap).
8
<PAGE>
Each Board met seven times during its most recently completed fiscal year
with the exception of the Boards for All-American, Strategic Global, and Global
Small Cap, which met eight, six, and nine times, respectively. Each Board has an
audit committee consisting of its independent Board Members. Each of the members
attended 75% or more of Board meetings during each Fund's most recently
completed fiscal year, with the exception of Mr. Burt with respect to 2002 Trust
and Mr. William D. White (who is not standing for reelection) with respect to
TAGS. The audit committee of each Board met one time during each Fund's most
recently completed fiscal year. Tables indicating the membership of the audit
committee for each Fund and providing additional information concerning the
current Board and its audit committee are attached as Exhibits C and D. The
duties of the audit committee are (a) to review reports prepared by the Fund's
independent auditors, including reports on the Fund's internal accounting
control procedures; (b) to review and recommend approval or disapproval of audit
and non-audit services and the fees charged for such services; (c) to evaluate
the independence of the independent auditors and to recommend whether to retain
such independent auditors for the next fiscal year; and (d) to report to the
Board and make such recommendations as it deems necessary.
Information concerning Fund officers is set forth in Exhibit E.
The Boards do not have standing nominating or compensation committees. Each
Board Member who was a member of a Fund's audit committee attended 75% or more
of the committee meetings.
REQUIRED VOTE. In the election of each Board, the candidates receiving the
affirmative vote of a plurality of the votes cast for the election of Board
Members will be elected, provided a quorum is present.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL 1.
-------------------
PROPOSAL 2--RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS OF THE FUNDS
RELEVANT FUNDS. 2002 Trust, Global High Income Dollar and Strategic Global.
DISCUSSION. Under Proposal 2, Shareholders of each relevant Fund are asked
to ratify their Board's selection of independent auditors ("Auditors") for their
Fund. The Auditors for each Fund audit the Fund's financial statements for each
year and prepare the Fund's federal and state annual income tax returns.
During the last fiscal year, Ernst & Young LLP served as Auditors for 2002
Trust and Strategic Global, and Price Waterhouse LLP served as Auditors for
Global High Income Dollar. The Boards of each of these Funds have selected their
respective Auditors to continue to serve in that capacity for the current fiscal
year, subject to ratification by Shareholders of each of those Funds at the
Meetings.
Representatives of the Auditors are not expected to be present at the
Meetings but have been given the opportunity to make a statement if they so
desire, and will be available should any matters arise requiring
9
<PAGE>
their presence. Ernst & Young LLP and Price Waterhouse LLP have informed the
Funds for which they will act as Auditors that they have no material direct or
indirect financial interest in those Funds.
The persons named in the accompanying proxy will vote FOR ratification of
the selection of each Fund's Auditors unless contrary instructions are given.
REQUIRED VOTE. For each Fund, approval of Proposal 2 requires a vote of a
majority of the votes cast with respect to Proposal 2 at the Meeting, provided a
quorum is present.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
-------------------
PROPOSAL 3--APPROVAL OF CHANGES TO FUNDAMENTAL INVESTMENT
RESTRICTIONS AND POLICIES OF EACH FUND
RELEVANT FUNDS. Changes are proposed for all Funds, but some of the proposed
changes apply only to certain Funds. See "Proposed Changes," below, for listings
of the Funds to which each specific change applies.
REASONS FOR THE PROPOSED CHANGES. Pursuant to the 1940 Act, each of the
Funds has adopted certain fundamental investment restrictions and policies
("fundamental restrictions"), which are set forth in the Fund's prospectus or
statement of additional information, and which may be changed only with
Shareholder approval. Restrictions and policies that a Fund has not specifically
designated as being fundamental are considered to be "non-fundamental" and may
be changed by the Fund's Board without Shareholder approval.
Certain of the fundamental restrictions that the Funds have adopted in the
past reflect regulatory, business or industry conditions, practices or
requirements that are no longer in effect. Other fundamental restrictions
reflect regulatory requirements which remain in effect, but which are not
required to be stated as fundamental, or in some cases even as non-fundamental,
restrictions. Also, as new funds have been created within the PaineWebber fund
complex over a period of years, substantially similar fundamental restrictions
often have been phrased in slightly different ways, sometimes resulting in minor
but unintended differences in effect or potentially giving rise to unintended
differences in interpretation.
Accordingly, the Boards have approved revisions to their respective Funds'
fundamental restrictions in order to simplify, modernize and make more uniform
those investment restrictions that are required to be fundamental, and to
eliminate those fundamental restrictions that are not legally required. Existing
fundamental restrictions that are eliminated because they are not required to be
fundamental would be re-classified as non-fundamental restrictions.
The Boards believe that the proposed changes to the Funds' fundamental
restrictions will enhance management's ability to manage efficiently and
effectively the Funds' assets in changing regulatory and
10
<PAGE>
investment environments. In addition, by reducing to a minimum those policies
that can be changed only by Shareholder vote, each Fund will more often be able
to avoid the costs and delays associated with a Shareholder meeting when making
changes to its investment policies that, at a future time, its Board considers
desirable. Although the proposed changes in fundamental restrictions will allow
the Funds greater investment flexibility to respond to future investment
opportunities, the Boards do not anticipate that the changes, individually or in
the aggregate, will result at this time in a material change in the level of
investment risk associated with an investment in any Fund.
The text and a summary description of each proposed change to the Funds'
fundamental restrictions are set forth below. Shareholders should refer to
Exhibit FR to this proxy statement for the text of the Funds' existing
fundamental restrictions. Shareholders should note, however, that for some Funds
certain of the fundamental restrictions that are treated separately below
currently may be combined within a single existing fundamental restriction.
The text below also describes those non-fundamental restrictions that would
be adopted by the Boards in conjunction with the elimination of fundamental
restrictions under Proposal 3. Any non-fundamental restriction may be modified
or eliminated by the appropriate Board at any future date without any further
approval of Shareholders.
If the proposed changes are approved by Shareholders of the respective Funds
at the Meeting, the Funds' prospectuses and statements of additional information
will be revised, as appropriate, to reflect those changes. This will occur as
soon as practicable following the Meetings. In those cases in which a Fund's
practice has been to state its fundamental restrictions both in its prospectus
(as affirmative policies) and in its statement of additional information (as
restrictions), adoption of Proposal 3 will result in a change to both. Proposal
3 will not result in a change to any Fund's investment objective, even though it
also constitutes a fundamental policy.
PROPOSED CHANGES. The following is the text and a summary description of the
proposed changes to the Funds' fundamental restrictions, together with the text
of those non-fundamental restrictions that would be adopted in connection with
the elimination of certain of the Funds' current fundamental restrictions. With
respect to each Fund and each proposed fundamental restriction, if a percentage
restriction is adhered to at the time of an investment or transaction, a later
increase or decrease in percentage resulting from a change in the values of the
Fund's portfolio securities or the amount of its total assets will not be
considered a violation of the fundamental restriction.
1. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION FOR
DIVERSIFIED FUNDS.
Funds to Which This Change Applies: 2002 Trust, All-American, Global Small
Cap, Managed High Yield and TAGS.
Proposed Text of Fundamental Restriction:
"The Fund will not purchase securities of any one issuer if, as a
result, more than 5% of the Fund's total assets would be invested in
securities of that issuer or the Fund would own or hold more than 10%
11
<PAGE>
of the outstanding voting securities of that issuer, except that up to 25%
of the Fund's total assets may be invested without regard to this
limitation, and except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies and
instrumentalities or to securities issued by other investment companies."
With respect to Funds that may invest in municipal obligations, the
following interpretation applies to, but is not a part of, this fundamental
restriction:
"Each state (including the District of Columbia and Puerto Rico),
territory and possession of the United States, each political subdivision,
agency, instrumentality and authority thereof, and each multi-state agency
of which a state is a member is a separate issuer. When the assets and
revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and
the security is backed only by the assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the
case of an Industrial Development Bond or Private Activity Bond, if that
bond is backed only by the assets and revenues of the non-governmental user,
then that non-governmental user would be deemed to be the sole issuer.
However, if the creating government or another entity guarantees a security,
then to the extent that the value of all securities issued or guaranteed by
that government or entity and owned by the Fund exceeds 10% of the Fund's
total assets, the guarantee would be considered a separate security and
would be treated as issued by that government or entity."
Similarly, with respect to Funds that may invest in mortgage- and
asset-backed securities, the following interpretation applies to, but is not a
part of, this fundamental restriction:
"Mortgage- and asset-backed securities will not be considered to have
been issued by the same issuer by reason of the securities having the same
sponsor, and mortgage- and asset-backed securities issued by a finance or
other special purpose subsidiary that are not guaranteed by the parent
company will be considered to be issued by a separate issuer from the parent
company."
The issuers of these securities generally are trusts or special purpose
entities.
Discussion: All of the above referenced Funds are "diversified" investment
companies under the 1940 Act and, accordingly, must have fundamental
restrictions or policies establishing the percentage limitations with respect to
investments in individual issuers that they will follow in order to qualify as
"diversified" for that purpose. These Funds have stated their diversification
restrictions in several different ways, and their current restrictions are
somewhat more limiting than is necessary in order to qualify as "diversified"
funds. For example, some Funds' restrictions do not reflect exceptions for
investments in securities of other investment companies. The Funds' current
restrictions also do not refer to the required limitation on holding more than
10% of an issuer's voting securities.
12
<PAGE>
2. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
Except as specified below, the following text will apply to all Funds:
"The Fund will not purchase any security if, as a result of that
purchase, 25% or more of the Fund's total assets would be invested in
securities of issuers having their principal business activities in the same
industry, except that this limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities or to
municipal securities."
With respect to 2002 Trust and TAGS, the following exception will be added
at the end of the foregoing fundamental restriction to conform with the Fund's
existing concentration policy:
"and except that the Fund, under normal circumstances, will invest 25% or more
of its total assets in mortgage- and asset-backed securities, which (whether or
not issued or guaranteed by an agency or instrumentality of the U.S.
government) shall be considered a single industry for purposes of this
limitation."
Discussion: The proposed changes to the Funds' fundamental concentration
policy would clarify that the limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities or to
municipal securities and would eliminate minor inconsistencies in the wording of
the Funds' existing restrictions. The existing policies of 2002 Trust and TAGS
to concentrate in the mortgage and asset-backed securities industry would also
be continued.
3. MODIFICATION OF FUNDAMENTAL RESTRICTION ON SENIOR SECURITIES AND
BORROWING.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
"The Fund will not issue senior securities or borrow money, except as
permitted under the 1940 Act and then not in excess of 33 1/3% of the Fund's
total assets (including the amount of the senior securities issued but
reduced by any liabilities not constituting senior securities) at the time
of the issuance or borrowing, except that the Fund may borrow up to an
additional 5% of its total assets (not including the amount borrowed) for
temporary or emergency purposes."
Discussion: The 1940 Act establishes limits on the ability of the Funds to
engage in leverage through borrowings or the issuance of other "senior
securities," a term that is defined, generally, to refer to Fund obligations
that have a priority over the Fund's Shares with respect to the distribution of
Fund assets or the payment of dividends. Currently, the fundamental restrictions
for most of the Funds allow them to issue senior securities in amounts up to the
regulatory maximum, and that authority would be continued under the proposed
language. The proposed language would eliminate minor inconsistencies in the
wording of the Funds' existing restrictions.
13
<PAGE>
In the case of Managed High Yield, however, the current fundamental
restriction limits the Fund's borrowings to 10% of total assets and provides
that borrowings may only be for temporary or emergency purposes. The current
fundamental restriction for Managed High Yield also provides that the Fund may
not purchase additional portfolio securities at a time when its borrowings
exceed 5% of total assets. The proposed changes would relax this fundamental
restriction for Managed High Yield. The Managed High Yield Board believes that
changing the Fund's fundamental restriction in this manner will provide
flexibility for future contingencies. However, the Board is not at this time
making any change to Managed High Yield's operating policy with respect to
borrowings. Rather, the Fund will become subject to a non-fundamental, operating
policy that contains the same substantive limitation on borrowings as is set
forth in the current fundamental restriction. As with all non-fundamental
operating policies, this policy could be changed by the Board without further
Shareholder approval.
4. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
"The Fund will not make loans, except through loans of portfolio
securities or through repurchase agreements, provided that for purposes of
this restriction, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests therein and
investments in government obligations, commercial paper, certificates of
deposit, bankers' acceptances or similar instruments will not be considered
the making of a loan."
Discussion: The proposed change to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restrictions
for greater uniformity and to avoid unintended limitations. The language also
clarifies that the acquisition of loan participations and similar interests in
debt instruments does not constitute the making of a loan.
The proposed change also clarifies that loans of portfolio securities will
be excluded from the general fundamental restriction on making loans. For most
Funds, this does not represent any change in fundamental policy. However, in the
case of Managed High Yield Fund, the proposed change would eliminate language in
the current fundamental restriction that limits securities lending to 25% of the
Fund's assets. The Boards believe that the Funds should not be subject to a
fundamental restriction on securities lending and that each Board should be able
to govern the extent of securities lending through a non-fundamental policy.
Subject, where necessary, to approval of this Proposal 3 by the
Shareholders, the Boards have authorized the adoption of non-fundamental
policies that would allow each Fund to lend portfolio securities in an amount up
to 33 1/3% of its total assets, which is the maximum level permitted under the
1940 Act. None of the Funds currently lends any portfolio securities, and the
Funds will not do so unless and until specific securities lending programs are
considered and approved by their respective Boards. Mitchell Hutchins currently
is considering proposals for securities lending programs for the Funds, and it
anticipates presenting a recommendation for such a program to the Boards in the
near future.
14
<PAGE>
Lending securities would enable a Fund to earn additional income but could
result in a loss or delay in recovering the securities. Under any securities
lending program that may be approved by the Boards, a Fund would lend portfolio
securities to broker-dealers or institutional investors that Mitchell Hutchins
(or, where applicable, a Fund's sub-adviser) deems qualified, but only when the
borrower maintains acceptable collateral with the Fund's custodian in an amount
at least equal to the market value of the securities loaned, plus accrued
interest and dividends. The Fund would pay reasonable administrative and
custodial fees in connection with any loan and might pay a negotiated portion of
the interest earned on the cash or instruments held as collateral to the
borrower or to the placing broker. The Fund would retain the authority to
terminate any loans at any time. A Fund would regain record ownership of loaned
securities to exercise beneficial rights, such as voting rights, when doing so
is considered to be in the Fund's interest.
5. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
"The Fund will not engage in the business of underwriting securities of
other issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities."
Discussion: The proposed changes to this fundamental restriction clarify
that the prohibition applies only to engaging in "the business of" underwriting
securities. The proposed language also eliminates an exception for writing
options, which the Boards believe does not need to be explicitly stated since
writing options would not normally fall within the business of underwriting.
6. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
"The Fund will not purchase or sell real estate, except that investments
in securities of issuers that invest in real estate and investments in
mortgage-backed securities, mortgage participations or other instruments
supported by interests in real estate are not subject to this limitation,
and except that the Fund may exercise rights under agreements relating to
such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real
estate can be liquidated in an orderly manner."
Discussion: The proposed changes to this investment restriction eliminate
minor inconsistencies in the wording of the Funds' current restrictions for
greater uniformity and more completely describe the types of real estate-related
securities that are permissible.
15
<PAGE>
7. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
"The Fund will not purchase or sell physical commodities unless acquired
as a result of owning securities or other instruments, but the Fund may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments."
Discussion: The proposed changes to this investment restriction are intended
to ensure that each Fund will have the maximum flexibility to enter into hedging
or other transactions utilizing financial contracts and derivative products when
doing so is permitted by operating policies established for the Fund by its
Board. The Boards believe that this flexibility is necessary for the Funds to
respond to the rapid and continuing development of derivative products. The
proposed changes also allow flexibility in the event of changes in regulatory
standards or limitations. The Funds' existing fundamental restrictions already
permit the Boards to establish investment policies using most or all of these
types of financial contracts.
8. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING PORTFOLIO SECURITIES.
Fund to Which This Change Applies: Managed High Yield.
Proposed Change; Text of Related Non-Fundamental Restriction:
For Managed High Yield, the existing fundamental restriction on pledging
securities would be eliminated upon the approval of Proposal 3, and the Fund
would become subject to the following non-fundamental restriction:
"The Fund will not mortgage, pledge or hypothecate any assets except in
connection with permitted borrowings or the issuance of senior securities."
Discussion: The Funds are not required to have a fundamental restriction on
their ability to pledge securities, and Managed High Yield is the only Fund that
currently has such a restriction. The current Managed High Yield fundamental
restriction prevents the Fund from pledging more than 15% of its total assets.
However, if Proposal 3 is approved, Managed High Yield's fundamental restriction
on borrowing money or issuing senior securities would be relaxed, so that, if
approved by the Board, it could borrow up to 33 1/3% of its total assets (plus
an additional 5% of total assets for temporary or emergency purposes), but it
will be subject to a non-fundamental restriction limiting borrowings to the same
extent as under its current fundamental restriction. The Managed High Yield
Board believes that the Fund's restriction on this subject should be
non-fundamental and should allow the Fund to pledge assets to the same extent as
it may borrow or issue senior securities.
16
<PAGE>
9. ELIMINATION OF FUNDAMENTAL RESTRICTION ON MARGIN TRANSACTIONS.
Funds to Which This Change Applies: All Funds.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
engaging in margin transactions would be eliminated, and the Funds would become
subject to the following non-fundamental restriction:
"The Fund will not purchase securities on margin, except for short-term
credit necessary for clearance of portfolio transactions and except that the
Fund may make margin deposits in connection with its use of financial
options and futures, forward and spot currency contracts, swap transactions
and other financial contracts or derivative instruments."
Discussion: The Funds are not required to have a fundamental restriction on
a Fund's ability to engage in margin transactions. In order to maximize the
Funds' flexibility, the Boards believe that the Funds' restrictions on margin
transactions should be made non-fundamental.
The non-fundamental restriction eliminates minor differences in wording
among existing fundamental restrictions and contains an exception for margin
deposits in connection with financial contracts or derivative instruments. The
language of that exception conforms with the exception contained in the proposed
change to the Funds' fundamental restriction on investing in commodities.
10. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SHORT SALES.
Funds to Which This Change Applies: All Funds.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
engaging in short sales would be eliminated, and the Funds would become subject
to the following non-fundamental restriction:
"The Fund will not engage in short sales of securities or maintain a
short position, except that the Fund may (a) sell short 'against the box'
and (b) maintain short positions in connection with its use of financial
options and futures, forward and spot currency contracts, swap transactions
and other financial contracts or derivative instruments."
Discussion: Under the 1940 Act, the Securities and Exchange Commission
("SEC") is authorized to limit the ability of the Funds to engage in short
sales, except in connection with an underwriting in which the Fund is a
participant. One type of short sale transaction that is permitted under SEC
policies is a short sale "against the box," in which a Fund engages in a short
sale of a security that it already owns or has the right to own. These
transactions generally are entered into in order to defer realization of gains
or losses for tax or other purposes.
Although the Funds may be limited in their ability to engage in short sales,
the Funds are not required to establish a fundamental restriction on short
sales. Consistent with the Boards' determination to promote flexibility and
efficiency in the event of future changes in the law, the Boards believe that
the Funds'
17
<PAGE>
fundamental restriction on this subject should be removed and replaced by a
non-fundamental restriction. That non-fundamental restriction will eliminate
minor differences in wording among existing fundamental restrictions and will
contain an exception for short positions in connection with financial contracts
or derivative instruments. The language of that exception conforms with the
exception contained in the proposed change to the Funds' fundamental restriction
on investing in commodities. Each non-fundamental restriction will clarify that
a Fund may engage in short sales "against the box."
11. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL, GAS AND
MINERAL LEASES AND PROGRAMS.
Funds to Which This Change Applies: Global High Income Dollar, Global Small
Cap, Managed High Yield, Strategic Global and TAGS.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investments in oil, gas or minerals would be eliminated, and those Funds that
currently have them would become subject to the following non-fundamental
restriction:
"The Fund will not invest in oil, gas or mineral exploration or
development programs or leases, except that investments in securities of
issuers that invest in such programs or leases and investments in
asset-backed securities supported by receivables generated from such
programs or leases are not subject to this prohibition."
Discussion: The Funds are not required to have a fundamental restriction
with respect to oil, gas or mineral investments. In order to maximize the Funds'
flexibility, the Boards believe that the Funds' restrictions on oil, gas and
mineral investments should be made non-fundamental.
The non-fundamental restriction adopted by the Boards will eliminate minor
differences in wording among existing fundamental restrictions and will
establish uniform exceptions that serve to clarify the limited scope of the
restriction. Also, the non-fundamental restriction applies only to oil, gas and
mineral leases and development programs and not to other investments relating to
oil, gas or minerals.
12. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OTHER
INVESTMENT COMPANIES.
Fund to Which This Change Applies: TAGS.
Proposed Change; Text of Related Non-Fundamental Restriction:
For TAGS, the existing fundamental restriction on investments in other
investment companies would be eliminated upon the approval of Proposal 3, and
the Fund would become subject to the following non-fundamental restriction:
"The Fund will not purchase securities of other investment companies,
except to the extent permitted by the 1940 Act and except that this
limitation does not apply to securities received or
18
<PAGE>
acquired as dividends, through offers of exchange, or as a result of
reorganization, consolidation, or merger."
Discussion: The ability of the Funds to invest in other investment companies
is limited under the 1940 Act, but the Funds are not required to have a
fundamental restriction on this subject. TAGS is the only Fund to have such a
fundamental restriction. In order to maximize the flexibility of TAGS in the
event of future changes in federal and state securities rules or policies, its
Board believes that the Fund's restriction on investments in other investment
companies should be made non-fundamental.
The non-fundamental restriction adopted by the Board will allow investments
in other investment companies to the full extent permitted under the 1940 Act.
Under the 1940 Act, a Fund may purchase the securities of other investment
companies if immediately thereafter not more than (i) 3% of the total
outstanding voting stock of such company is owned by the Fund, (ii) 5% of the
Fund's total assets, taken at market value, would be invested in any one such
company, (iii) 10% of the Fund's total assets, taken at market value, would be
invested in such securities, and (iv) the Fund, together with other investment
companies having the same investment adviser and companies controlled by such
companies, owns not more than 10% of the total outstanding stock of any one
closed-end investment company. TAGS' current fundamental restriction on this
subject is a flat prohibition on investments in open-end investment companies.
The Board believes that investments in open- end investment companies may be
desirable under certain circumstances. For example, temporary investments of
cash reserves in money market funds or other pooled investment vehicles may
provide a combination of diversification and return that otherwise would not be
available.
REQUIRED VOTE. Approval of each of the numbered changes contemplated by
Proposal 3 with respect to a Fund requires the affirmative vote of a "majority
of the outstanding voting securities" of that Fund, which for this purpose means
the affirmative vote of the lesser of (1) more than 50% of the outstanding
Shares of the Fund or (2) 67% or more of the Shares of the Fund present at the
Meeting if more than 50% of the outstanding Shares of the Fund are represented
at the Meeting in person or by proxy. Shareholders of any Fund may vote against
the changes proposed with respect to specific fundamental restrictions
applicable to their Fund in the manner indicated on the proxy card.
IF ONE OR MORE OF THE NUMBERED CHANGES CONTEMPLATED BY PROPOSAL 3 IS NOT
APPROVED BY SHAREHOLDERS OF A FUND, THE RELATED, EXISTING FUNDAMENTAL
RESTRICTION(S) OF THE FUND WILL CONTINUE IN EFFECT FOR THAT FUND, BUT
DISAPPROVAL OF ALL OR PART OF PROPOSAL 3 BY THE SHAREHOLDERS OF ONE FUND WILL
NOT AFFECT ANY APPROVALS OF PROPOSAL 3 THAT ARE OBTAINED WITH RESPECT TO ANY
OTHER FUND.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
-------------------
19
<PAGE>
ADDITIONAL INFORMATION
The solicitation of proxies, the cost of which will be borne by the Funds,
will be made primarily by mail but also may include telephone or oral
communications by regular employees of Mitchell Hutchins or PaineWebber, who
will not receive any compensation therefor from the Funds, or by Shareholder
Communications Corporation, professional proxy solicitors retained by the Funds,
who will be paid the approximate fees and expenses for soliciting services set
forth below. Soliciting fees and expenses payable to Shareholder Communications
Corporation by a particular Fund are a function of the number of Shareholders in
that Fund.
<TABLE>
<CAPTION>
SOLICITING
FEES AND EXPENSES
FUND (APPROXIMATE)
---- -----------------
<S> <C>
2002 Trust.................................................. $7,100
All-American................................................ $10,900
Global High Income Dollar................................... $18,000
Global Small Cap............................................ $2,600
Managed High Yield.......................................... $4,400
Strategic Global............................................ $16,300
TAGS........................................................ $2,300
</TABLE>
SHAREHOLDER PROPOSALS
Any Shareholder who wishes to submit proposals to be considered at a Fund's
next annual meeting of Shareholders should send the proposals to that Fund at
1285 Avenue of the Americas, New York, New York 10019, so as to be received by
the following dates, which have been determined on the basis of SEC rules:
<TABLE>
<CAPTION>
FUND DATE
---- -----------------
<S> <C>
2002 Trust.............................................. November 2, 1996
All-American............................................ December 2, 19961
Global High Income Dollar............................... November 2, 1996
Global Small Cap........................................ June 1, 1996
Managed High Yield...................................... June 1, 1996
Strategic Global........................................ November 2, 1996
TAGS.................................................... May 1, 1996
</TABLE>
- ------------
1 For 1997 annual meeting (estimated). The last date for the submission of
Shareholder proposals for All-American's 1996 annual meeting has already
passed.
Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
20
<PAGE>
OTHER BUSINESS
Management knows of no business to be presented at the Meetings other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of Shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Funds.
By order of the Boards,
DIANNE E. O'DONNELL
Secretary
February 28, 1996
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN ALL OF YOUR PROXIES PROMPTLY.
21
<PAGE>
INDEX TO EXHIBITS TO PROXY STATEMENT
<TABLE>
<CAPTION>
Exhibit A -- Year in Which Each Nominee or Current Board Member Standing for A-1
Reelection Became a Member of the Board................................
<S> <C> <C>
Exhibit B -- Fund Ownership of Nominees and Current Board Members................... B-1
Exhibit C -- Membership on Board Committees......................................... C-1
Exhibit D -- Board and Committee Information........................................ D-1
Exhibit E -- Officer Information.................................................... E-1
Exhibit FR -- Existing Fundamental Restrictions...................................... FR-1
</TABLE>
<PAGE>
EXHIBIT A
YEAR IN WHICH EACH NOMINEE OR CURRENT BOARD MEMBER STANDING FOR REELECTION
BECAME A MEMBER OF THE BOARD*
<TABLE>
<CAPTION>
E. GARRETT
RICHARD Q. BEWKES, MEYER GEORGE W. FREDERIC V. RICHARD JOHN R.
FUND NAME ARMSTRONG JR.** FELDBERG GOWEN MALEK BURT TORELL III
--------- ---------- ------------ -------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
2002 Trust............................. 1995 1992 -- -- -- 1995 1992
All-American........................... 1995 1993 -- -- -- 1995 1993
Global High Income Dollar.............. 1995 1993 -- -- -- 1995 1993
Global Small Cap....................... 1995 1993 -- -- -- -- 1993
Managed High Yield..................... 1995 1993 -- -- -- 1995 1993
Strategic Global....................... -- 1992 1992 1992 1992 -- --
TAGS................................... 1995 1992 -- -- -- 1995 1992
</TABLE>
- ------------
<TABLE>
<S> <C>
* Excludes Margo N. Alexander, Mary C. Farrell and Carl W. Schafer, who are not presently
members of these Boards.
** Mr. Bewkes resigned from each Board and was reappointed in 1993.
</TABLE>
A-1
<PAGE>
EXHIBIT B
FUND OWNERSHIP OF NOMINEES AND CURRENT BOARD MEMBERS*
<TABLE>
<CAPTION>
NOMINEES OR CURRENT BOARD MEMBERS NO. OF SHARES HELD AS OF
WHO ARE STANDING FOR REELECTION FUND FEBRUARY 21, 1996**
- ---------------------------------- ---- ------------------------
<S> <C> <C>
E. Garrett Bewkes, Jr. ........... Global Small Cap 2,000
John R. Torell III................ 2002 Trust 100
All-American 100
Global High Income Dollar 100
Global Small Cap 100
Managed High Yield 100
</TABLE>
- ------------
* The following Board Members did not file timely reports under Section 16(a)
of the Securities Exchange Act of 1934 ("Exchange Act"): Mr. Armstrong filed
one late report for 2002 Trust, All-American, Global Small Cap, Managed High
Yield, and TAGS; Mr. Burt filed one late report for 2002 Trust, All-American,
Global Small Cap, Managed High Yield, and TAGS. None of the delayed reports
involved any transactions, and none of the Funds is aware of any outstanding
reports required to be filed by any Board Member.
** Unless otherwise stated, as of the date indicated, each director has sole
voting and investment power of Shares owned.
B-1
<PAGE>
EXHIBIT C
MEMBERSHIP ON BOARD COMMITTEES*
<TABLE>
<CAPTION>
BOARD MEMBERS NOT
STANDING FOR
REELECTION
CURRENT BOARD MEMBERS STANDING FOR REELECTION ---------------------
---------------------------------------------------------------------- JUDITH
RICHARD Q. MEYER GEORGE W. FREDERIC V. RICHARD JOHN R. DAVIDSON WILLIAM D.
COMPANY/FUND NAME ARMSTRONG FELDBERG GOWEN MALEK BURT TORELL III MOYERS WHITE
------------------------ ---------- -------- --------- ----------- ------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2002 Trust..................... A A A A
All-American................... A A A A
Global High Income Dollar...... A A A A
Global Small Cap............... A A A
Managed High Yield............. A A A A
Strategic Global............... A A A A
TAGS........................... A A A A
</TABLE>
- ------------
* Only independent Board Members serve on Board audit committees.
A = Member of audit committee
C-1
<PAGE>
EXHIBIT D
BOARD AND COMMITTEE INFORMATION
<TABLE>
<CAPTION>
GLOBAL HIGH
INCOME GLOBAL MANAGED STRATEGIC
2002 TRUST ALL-AMERICAN DOLLAR SMALL CAP HIGH YIELD GLOBAL TAGS
---------- ------------ ----------- --------- ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Annual Fee*........................ $1,500 $1,500 $ 1,500 $ 1,500 $1,500 $ 3,000 $3,000
Fee for Attendance of Board
Meetings*........................ $ 250 $ 250 $ 250 $ 250 $ 250 $ 500 $ 250
Fee for Attendance of Committee
Meetings*........................ $ 250 $ 250 $ 250 $ 250 $ 250 $ 500 $ 250
</TABLE>
- ------------
* Reflects compensation rates in effect prior to changes described in proxy
statement. Board Members who were not independent did not receive compensation
from the Funds.
D-1
<PAGE>
EXHIBIT E
<TABLE>
<CAPTION>
OFFICER INFORMATION
OFFICER SINCE
NO. OF INVESTMENT --------------------------------------------------------
NAME; PRINCIPAL COMPANIES ON GLOBAL
BUSINESS OCCUPATION WHICH SERVES AS 2002 GLOBAL HIGH SMALL
FOR THE PAST FIVE YEARS AGE OFFICE AN OFFICER(1)(2) TRUST ALL-AMERICAN INCOME DOLLAR CAP
- ----------------------- --- --------------- ----------------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Margo N. Alexander; 48 President 30 5/95 5/95 5/95 5/95
Mrs. Alexander is
president, chief
executive officer and
a director of Mitchell
Hutchins (since
January 1995). Mrs.
Alexander is an
executive vice
president and director
of PaineWebber.
T. Kirkham Barneby; Mr. 49 Vice President 5 9/95
Barneby is a managing
director and chief
investment
officer--quantitative
investments of Mitchell
Hutchins. Prior to
September 1994, he was
a senior vice
president at Vantage
Global Management.
Prior to June 1993, he
was a senior vice
president at Mitchell
Hutchins Institutional
Investors, Inc.
Teresa M. Boyle; Ms. 37 Vice President 30 12/93 12/93 12/93 12/93
Boyle is a first vice
president and
manager-- advisory
administration of
Mitchell Hutchins.
Prior to November
1993, she was
compliance manager of
Hyperion Capital
Management, Inc., an
investment advisory
firm. Prior to April
1993, Ms. Boyle was a
vice president and
manager--legal
administration of
Mitchell Hutchins.
Joan L. Cohen; Ms. 31 Vice President 25 2/94 2/94 2/94 2/94
Cohen is a vice and Assistant
president and attorney Secretary
of Mitchell Hutchins.
Prior to December
1993, she was an
associate at the law
firm of Seward &
Kissel.
Mary B. King; Mrs. King 32 Vice President 2 2/93
is a first vice
president and
portfolio manager of
Mitchell Hutchins.
Thomas J. Libassi; Mr. 37 Vice President 4 9/95 9/94
Libassi is a senior
vice president and
portfolio manager of
Mitchell Hutchins.
Prior to May 1994, he
was a vice president
of Keystone Custodian
C. William Maher; Mr. 34 Vice President 30 6/95 6/95 6/95 6/95
Maher is a first vice and Assistant
president and a senior Treasurer
manager of the mutual
fund finance division
of Mitchell Hutchins.
<CAPTION>
NAME; PRINCIPAL
BUSINESS OCCUPATION MANAGED STRATEGIC
FOR THE PAST FIVE YEARS HIGH YIELD GLOBAL TAGS
- ----------------------- ---------- -------------- -----------------
<S> <C> <C> <C>
Margo N. Alexander; 5/95 5/95 9/95
Mrs. Alexander is
president, chief
executive officer and
a director of Mitchell
Hutchins (since
January 1995). Mrs.
Alexander is an
executive vice
president and director
of PaineWebber.
T. Kirkham Barneby; Mr. 9/95
Barneby is a managing
director and chief
investment
officer--quantitative
investments of Mitchell
Hutchins. Prior to
September 1994, he was
a senior vice
president at Vantage
Global Management.
Prior to June 1993, he
was a senior vice
president at Mitchell
Hutchins Institutional
Investors, Inc.
Teresa M. Boyle; Ms. 12/93
Boyle is a first vice
president and
manager-- advisory
administration of
Mitchell Hutchins.
Prior to November
1993, she was
compliance manager of
Hyperion Capital
Management, Inc., an
investment advisory
firm. Prior to April
1993, Ms. Boyle was a
vice president and
manager--legal
administration of
Mitchell Hutchins.
Joan L. Cohen; Ms. 2/94 2/94 2/94
Cohen is a vice
president and attorney
of Mitchell Hutchins.
Prior to December
1993, she was an
associate at the law
firm of Seward &
Kissel.
Mary B. King; Mrs. King
is a first vice
president and
portfolio manager of
Mitchell Hutchins.
Thomas J. Libassi; Mr. 9/94
Libassi is a senior
vice president and
portfolio manager of
Mitchell Hutchins.
Prior to May 1994, he
was a vice president
of Keystone Custodian
C. William Maher; Mr. 6/95 6/95 6/95
Maher is a first vice
president and a senior
manager of the mutual
fund finance division
of Mitchell Hutchins.
</TABLE>
E-1
<PAGE>
OFFICER INFORMATION--(CONTINUED)
<TABLE><CAPTION> OFFICER SINCE
NO. OF INVESTMENT --------------------------------------------------------
NAME; PRINCIPAL COMPANIES ON GLOBAL
BUSINESS OCCUPATION WHICH SERVES AS 2002 GLOBAL HIGH SMALL
FOR THE PAST FIVE YEARS AGE OFFICE AN OFFICER(1)(2) TRUST ALL-AMERICAN INCOME DOLLAR CAP
- ----------------------- --- --------------- ----------------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dennis McCauley; Mr. 49 Vice President 18 9/95 9/95
McCauley is a managing
director and chief
investment
officer--fixed income
of Mitchell Hutchins.
Prior to December
1994, he was director
of fixed income
investments of IBM
Corporation.
Ann E. Moran; Ms. Moran 38 Vice President 30 6/93 6/93 6/93 6/93
is a vice president of and Assistant
Mitchell Hutchins. Treasurer
Dianne E. O'Donnell; 43 Vice President 30 10/92 11/92 2/93 6/93
Ms. O'Donnell is a and Secretary
senior vice president
and deputy general
counsel of Mitchell
Hutchins.
Victoria E. Schonfeld; 45 Vice President 30 5/94 5/94 5/94 5/94
Ms. Schonfeld is a
managing director and
general counsel of
Mitchell Hutchins.
From April 1990 to May
1994, she was a
partner in the law
firm of Arnold &
Porter. Prior to April
1990, she was a
partner in the law
firm of Shereff,
Friedman, Hoffman &
Goodman.
Paul H. Schubert; Mr. 33 Vice President 30 9/94 9/94 9/94 9/94
Schubert is a first and Assistant
vice president and a Treasurer
senior manager of the
mutual fund finance
division of Mitchell
Hutchins. From August
1992 to August 1994,
he was a vice
president at BlackRock
Financial Management,
Inc. Prior to August
1992, he was an audit
manager with Ernst &
Young LLP.
Nirmal Singh; Mr. Singh 39 Vice President 5
is a first vice
president of Mitchell
Hutchins. Prior to
September 1993, he was
a member of the
portfolio management
team at Merrill Lynch
Asset Management, Inc.
Julian F. Sluyters; Mr. 35 Vice President 30 10/92 11/92 2/93 6/93
Sluyters is a senior and Treasurer
vice president and the
director of the mutual
fund finance division
of Mitchell Hutchins.
Prior to 1991, he was
an audit senior
manager with Ernst &
Young LLP.
<CAPTION>
NAME; PRINCIPAL
BUSINESS OCCUPATION MANAGED STRATEGIC
FOR THE PAST FIVE YEARS HIGH YIELD GLOBAL TAGS
- ----------------------- ---------- -------------- -----------------
<S> <C> <C> <C>
Dennis McCauley; Mr. 9/95 9/95
McCauley is a managing
director and chief
investment
officer--fixed income
of Mitchell Hutchins.
Prior to December
1994, he was director
of fixed income
investments of IBM
Corporation.
Ann E. Moran; Ms. Moran 6/93 6/93 6/93
is a vice president of
Mitchell Hutchins.
Dianne E. O'Donnell; 6/93 11/91 5/92
Ms. O'Donnell is a
senior vice president
and deputy general
counsel of Mitchell
Hutchins.
Victoria E. Schonfeld; 5/94 5/94 5/94
Ms. Schonfeld is a
managing director and
general counsel of
Mitchell Hutchins.
From April 1990 to May
1994, she was a
partner in the law
firm of Arnold &
Porter. Prior to April
1990, she was a
partner in the law
firm of Shereff,
Friedman, Hoffman &
Goodman.
Paul H. Schubert; Mr. 9/94 9/94 9/94
Schubert is a first
vice president and a
senior manager of the
mutual fund finance
division of Mitchell
Hutchins. From August
1992 to August 1994,
he was a vice
president at BlackRock
Financial Management,
Inc. Prior to August
1992, he was an audit
manager with Ernst &
Young LLP.
Nirmal Singh; Mr. Singh 9/95
is a first vice
president of Mitchell
Hutchins. Prior to
September 1993, he was
a member of the
portfolio management
team at Merrill Lynch
Asset Management, Inc.
Julian F. Sluyters; Mr. 6/93 2/92 5/92
Sluyters is a senior
vice president and the
director of the mutual
fund finance division
of Mitchell Hutchins.
Prior to 1991, he was
an audit senior
manager with Ernst &
Young LLP.
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
OFFICER INFORMATION--(CONTINUED)
OFFICER SINCE
NO. OF INVESTMENT --------------------------------------------------------
NAME; PRINCIPAL COMPANIES ON GLOBAL
BUSINESS OCCUPATION WHICH SERVES AS 2002 GLOBAL HIGH SMALL
FOR THE PAST FIVE YEARS AGE OFFICE AN OFFICER(1)(2) TRUST ALL-AMERICAN INCOME DOLLAR CAP
- ----------------------- --- --------------- ----------------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mark A. Tincher; Mr. 40 Vice President 11 9/95 9/95
Tincher is a managing
director and chief
investment
officer--U.S. equity
investments of
Mitchell Hutchins.
Prior to March 1995,
he was a vice
president and directed
the U.S. funds
management and equity
research areas of
Chase Manhattan
Private Bank.
Gregory K. Todd; Mr. 39 Vice President 30 6/93 6/93 6/93 6/93
Todd is a first vice and Assistant
president and Secretary
associate general
counsel of Mitchell
Hutchins. Prior to
1993, he was a partner
in the law firm of
Shereff, Friedman,
Hoffman & Goodman.
Craig M. Varrelman; Mr. 37 Vice President 5
Varrelman is a first
vice president of
Mitchell Hutchins.
Stuart Waugh; Mr. Waugh 40 Vice President 5 2/93
is a managing director
and a portfolio
manager of Mitchell
Hutchins responsible
for global fixed
income investments and
currency trading.
Keith A. Weller; Mr. 34 Vice President 24 9/95 9/95 9/95 9/95
Weller is a first vice and Assistant
president and Secretary
associate general
counsel of Mitchell
Hutchins. From
September 1987 to May
1995, he was an
attorney in private
practice.
<CAPTION>
NAME; PRINCIPAL
BUSINESS OCCUPATION MANAGED STRATEGIC
FOR THE PAST FIVE YEARS HIGH YIELD GLOBAL TAGS
- ----------------------- ---------- -------------- -----------------
<S> <C> <C> <C>
Mark A. Tincher; Mr. 9/95
Tincher is a managing
director and chief
investment
officer--U.S. equity
investments of
Mitchell Hutchins.
Prior to March 1995,
he was a vice
president and directed
the U.S. funds
management and equity
research areas of
Chase Manhattan
Private Bank.
Gregory K. Todd; Mr. 6/93 6/93 6/93
Todd is a first vice
president and
associate general
counsel of Mitchell
Hutchins. Prior to
1993, he was a partner
in the law firm of
Shereff, Friedman,
Hoffman & Goodman.
Craig M. Varrelman; Mr. 9/95
Varrelman is a first
vice president of
Mitchell Hutchins.
Stuart Waugh; Mr. Waugh 9/92
is a managing director
and a portfolio
manager of Mitchell
Hutchins responsible
for global fixed
income investments and
currency trading.
Keith A. Weller; Mr. 9/95 9/95 9/95
Weller is a first vice
president and
associate general
counsel of Mitchell
Hutchins. From
September 1987 to May
1995, he was an
attorney in private
practice.
</TABLE>
- ------------
1 Indicates only investment companies for which Mitchell Hutchins or PaineWebber
serves as investment adviser; each officer serves in the same capacity for
each separate investment company.
2 The following officers had one report that was not timely filed under Section
16(a) of the Exchange Act: for 2002 Trust--Mrs. Alexander, Mr. Barneby, Mr.
Maher, and Mr. Schubert; for All-American Target Term Trust--Mrs. Alexander,
Mr. Libassi, Mr. Maher, Mr. McCauley, Mr. Schubert, and Mr. Tincher; for
Global Small Cap--Mrs. Alexander, Mr. Maher, Mr. Schubert, and Mr. Tincher;
for Global High Income Dollar--Mrs. Alexander, Mr. Maher, Mr. McCauley, and
Mr. Schubert; for Managed High Yield--Mrs. Alexander, Mr. Maher, Mr. Libassi,
and Mr. Schubert, and Mr. Tincher; for Strategic Global Income--Mrs.
Alexander, Mr. Maher, Mr. McCauley, and Mr. Schubert; for TAGS--Mrs.
Alexander, Mr. Barneby, Mr. Maher, Mr. McCauley, Mr. Singh, Mr. Schubert, and
Mr. Varrelman. None of the delayed reports involved any transactions, and none
of the Funds is aware of any outstanding reports required to be filed by an
officer.
E-3
<PAGE>
EXHIBIT FR
EXISTING FUNDAMENTAL RESTRICTIONS
The existing fundamental restrictions of each Fund will be found on the
following pages of this exhibit.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
2002 Trust.......................................................................... FR-2
All-American........................................................................ FR-4
Global High Income Dollar........................................................... FR-6
Global Small Cap.................................................................... FR-7
Managed High Yield.................................................................. FR-9
Strategic Global.................................................................... FR-11
TAGS................................................................................ FR-12
</TABLE>
FR-1
<PAGE>
2002 TRUST
The Trust may not:
(1) issue senior securities or borrow money from banks or other entities
(including borrowings through reverse repurchase agreements and mortgage
dollar rolls), in excess of 33 1/3% of the Trust's total assets (including
the amount of borrowings and senior securities issued, but reduced by any
liabilities and indebtedness not constituting senior securities), except
that the Trust may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes;
(2) purchase the securities of any one issuer if as a result more than
5% of its total assets would be invested in the securities of that issuer,
provided, that securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities are not subject to this limitation and further
provided that up to 25% of the Trust's total assets may be invested without
regard to this 5% limitation;
(3) make an investment in any one industry if the investment would cause
the aggregate value of all the Trust's investments in such industry to equal
25% or more of the Trust's total assets; provided that this limitation shall
not apply to: (a) investments in securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities; (b) securities issued by
Municipal Issuers other than those backed only by the assets and revenues of
a nongovernmental entity; and (c) investments in mortgage-backed and
asset-backed securities, which (whether or not issued or guaranteed by an
agency or instrumentality of the U.S. government) shall be considered a
single industry for purposes of this limitation;
(4) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the Trust
may make margin deposits in connection with its use of options, futures
contracts and options on futures contracts;
(5) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Trust may be deemed an underwriter under federal securities
laws and except that the Trust may write options;
(6) make short sales of securities or maintain a short position, except
that the Trust may maintain short positions in connection with its use of
Strategic Transactions and may sell short "against the box;"
(7) purchase or sell real estate (including real estate limited
partnership interests), provided that the Trust may invest in securities
secured by real estate or interests therein or issued by entities that
invest in real estate or interests therein, and provided further that the
Trust may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to liquidate real
estate acquired as a result of such enforcement;
(8) purchase or sell commodities or commodity contracts, except that the
Trust may engage in Strategic Transactions;
FR-2
<PAGE>
(9) make loans, except through loans of portfolio instruments, mortgage
dollar rolls and repurchase agreements, provided that for purposes of this
restriction the acquisition of bonds, debentures or other debt instruments
or interests therein and investment in government obligations, short-term
commercial paper, certificates of deposit and bankers' acceptances shall not
be deemed to be the making of a loan.
For purposes of fundamental investment limitation (2) above, Mortgage- and
Asset-Backed Securities will not be considered to have been issued by the same
issuer by reason of such securities having the same sponsor, and Mortgage- and
Asset-Backed Securities issued by a finance subsidiary or other single purpose
subsidiary of a corporation that are not guaranteed by the parent corporation
will be considered to be issued by a separate issuer from its parent
corporation.
FR-3
<PAGE>
ALL-AMERICAN
As fundamental investment limitations, the Trust may not:
(1) issue senior securities or borrow money from banks or other entities
(including borrowings through reverse repurchase agreements and mortgage
dollar rolls), in excess of 33 1/3% of the Trust's total assets (including
the amount of borrowings and senior securities issued, but reduced by any
liabilities and indebtedness not constituting senior securities), except
that the Trust may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes;
(2) purchase the securities of any one issuer if as a result more than
5% of its total assets would be invested in the securities of that issuer,
provided, that securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities are not subject to this limitation and further
provided that up to 25% of the Trust's total assets may be invested without
regard to this 5% limitation;
(3) make an investment in any one industry if the investment would cause
the aggregate value of all the Trust's investments in such industry to equal
25% or more of the Trust's total assets; provided that this limitation shall
not apply to: (a) investments in securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities; and (b) securities issued by
Municipal Issuers other than those backed only by the assets and revenues of
a non-governmental entity;
(4) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the Trust
may make margin deposits in connection with its use of options, futures
contracts and options on futures contracts;
(5) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Trust may be deemed an underwriter under federal securities
laws and except that the Trust may write options;
(6) make short sales of securities or maintain a short position, except
that the Trust may maintain short positions in connection with its use of
Strategic Transactions and may sell short "against the box";
(7) purchase or sell real estate (including real estate limited
partnership interests), provided that the Trust may invest in securities
secured by real estate or interests therein or issued by entities that
invest in real estate or interests therein, and provided further that the
Trust may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to liquidate real
estate acquired as a result of such enforcement;
(8) purchase or sell commodities or commodity contracts, except that the
Trust may engage in Strategic Transactions; or
(9) make loans, except through loans of portfolio instruments, mortgage
dollar rolls and repurchase agreements, provided that for purposes of this
restriction the acquisition of bonds, debentures or other debt instruments
or interests therein and investment in government obligations, short-term
FR-4
<PAGE>
commercial paper, certificates of deposit and bankers' acceptances shall not
be deemed to be the making of a loan.
For purposes of fundamental investment limitation (2) above, Mortgage-Backed
Securities and Asset-Backed Securities will not be considered to have been
issued by the same issuer by reason of such securities having the same sponsor,
and Mortgage-Backed Securities and Asset-Backed Securities issued by a finance
subsidiary or other single purpose subsidiary of a corporation that are not
guaranteed by the parent corporation will be considered to be issued by a
separate issuer from its parent corporation.
FR-5
<PAGE>
GLOBAL HIGH INCOME DOLLAR
The Fund may not:
(1) issue senior securities (including borrowing money from banks and
other entities and through reverse repurchase agreements) in excess of 33
1/3% of its total assets (including the amount of senior securities issued,
but reduced by any liabilities and indebtedness not constituting senior
securities), except that the Fund may borrow up to an additional 5% of its
total assets (not including the amount borrowed) for temporary or emergency
purposes;
(2) make an investment in any one industry if the investment would cause
the aggregate value of all investments in such industry to equal 25% or more
of the Fund's total assets; provided that this limitation does not apply to
investments in securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities;
(3) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions and except that the Fund
may make margin deposits in connection with its use of options, futures
contracts, options on futures contracts, forward currency contracts and
other financial instruments;
(4) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Fund may be deemed an underwriter under federal securities
laws and except that the Fund may write options;
(5) make short sales of securities or maintain a short position, except
that the Fund may maintain short positions in connection with its use of
options, futures contracts, options on futures contracts and forward
currency contracts;
(6) purchase or sell real estate (including real estate limited
partnership interests), provided that the Fund may invest in securities
secured by, or issued by companies that invest in, real estate or interest
therein;
(7) purchase or sell commodities or commodity contracts, except that the
Fund may sell commodities received upon the exercise of warrants, may
purchase or sell financial and currency futures contracts and options
thereon, may purchase and sell forward contracts, may engage in transactions
in foreign currencies and may purchase or sell options on foreign
currencies;
(8) invest in oil, gas or mineral-related programs or leases; or
(9) make loans, except through loans of portfolio instruments and
repurchase agreements, provided that for purposes of this restriction the
acquisition of bonds, debentures or other debt instruments or interests
therein and investment in government obligations, short-term commercial
paper, certificates of deposit and bankers' acceptances shall not be deemed
to be the making of a loan.
FR-6
<PAGE>
GLOBAL SMALL CAP
The Fund may not:
(1) issue senior securities (including borrowing money from banks and
other entities, and reverse repurchase agreements) in excess of 33 1/3% of
its total assets (including the amount of senior securities issued but
excluding any liabilities and indebtedness not constituting senior
securities), except that the Fund may borrow up to an additional 5% of its
total assets (not including the amount borrowed) for temporary or emergency
purposes;
(2) make an investment in any one industry if the investment would cause
the aggregate value of all of the Fund's investments in such industry to
equal 25% or more of the Fund's total assets, provided that this limitation
shall not apply with respect to investments issued or guaranteed by the U.S.
government, its agencies or instrumentalities;
(3) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the Fund
may make margin deposits in connection with its use of options, futures
contracts, options on futures contracts and forward contracts;
(4) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Fund may be deemed an underwriter under federal securities
laws and except that the Fund may write options;
(5) make short sales of securities or maintain a short position, except
that the Fund may make short sales "against the box" and maintain short
positions in connection with its use of options, futures contracts, options
on futures contracts and forward contracts;
(6) purchase or sell real estate (including real estate limited
partnership interests), provided that the Fund may invest in securities
secured by real estate or interests therein or issued by companies that
invest in real estate or interests therein, and provided further that the
Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and liquidate real estate
acquired as a result of such enforcement;
(7) purchase or sell commodities or commodity contracts, except that the
Fund may purchase or sell financial and currency futures contracts and
options thereon, may purchase and sell forward contracts, may engage in
transactions in foreign currencies and may purchase or sell options on
foreign currencies;
(8) invest in oil, gas or mineral-related programs or leases;
(9) make loans, except through loans of portfolio instruments and
repurchase agreements, provided that for purposes of this restriction the
acquisition of bonds, debentures or other debt instruments or interests
therein and investment in government obligations, short-term commercial
paper, certificates of deposit and bankers' acceptances shall not be deemed
to be the making of a loan; or
FR-7
<PAGE>
(10) purchase the securities of any issuer if as a result more than 5%
of the total assets of the Fund would be invested in the securities of that
issuer; provided that securities issued or guaranteed by the U.S.
government, its agencies and instrumentalities are not subject to this
limitation and further provided that up to 25% of the value of the Fund's
assets may be invested without regard to this limitation.
FR-8
<PAGE>
MANAGED HIGH YIELD
The Fund may not:
(1) issue senior securities, as defined in the Investment Company Act of
1940, as amended ("1940 Act"), except to the extent such issuance might be
involved with respect to borrowings described under (2) below or with
respect to transactions involving futures, options, forward currency
contracts and other financial instruments;
(2) borrow money in excess of 10% of the value (taken at the lower of
cost and current value) of its total assets (not including the amount
borrowed) at the time the borrowing is made, and then only from banks as a
temporary measure (not for leverage) in situations that might otherwise
require the untimely disposition of portfolio investments or for
extraordinary or emergency purposes (The Fund will not purchase securities
while borrowings in excess of 5% of the Fund's total assets are outstanding.
Interest rate protection transactions are not considered borrowings for this
purpose);
(3) pledge, hypothecate, mortgage, or otherwise encumber its assets in
excess of 15% of its total assets (taken at the lower of cost and current
value) in connection with borrowings permitted by (2) above except in
connection with futures, options, forward currency contracts, forward
commitments, when-issued or delayed delivery securities and other financial
instruments;
(4) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the Fund
may make margin deposits in connection with its use of options, futures
contracts, options on futures contracts, forward currency contracts and
other financial instruments;
(5) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Fund may be deemed an underwriter under federal securities
laws and except that the Fund may write options;
(6) make short sales of securities or maintain a short position, except
that the Fund may maintain short positions in connection with its use of
options, futures contracts, forward currency contracts and options on
futures contracts and the Fund may sell short "against the box";
(7) purchase or sell real estate (including real estate limited
partnership interests), provided that the Fund may invest in securities
secured by real estate or interests therein or issued by entities that
invest in real estate or interests therein, and provided further that the
Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and liquidate real estate
acquired as a result of such enforcement;
(8) purchase or sell commodities or commodity contracts, except that the
Fund may purchase and sell futures contracts, options, forward currency
contracts and other financial instruments;
(9) invest in oil, gas or mineral-related programs or leases;
FR-9
<PAGE>
(10) make loans, except by purchase of debt obligations in which the
Fund may invest consistent with its investment policies, through repurchase
agreements or through the lending of its portfolio securities with respect
to not more than 25% of its total assets;
(11) invest 25% or more of the value of its total assets in securities
of issuers in any one industry (Securities of the U.S. government, its
agencies, or instrumentalities, and securities backed by the credit of a
U.S. governmental entity are not considered to represent industries); or
(12) purchase the securities of any issuer if as a result more than 5%
of the total assets of the Fund would be invested in the securities of that
issuer; provided that securities issued or guaranteed by the U.S.
government, its agencies and instrumentalities are not subject to this
limitation and further provided that up to 25% of the value of the Fund's
assets may be invested without regard to this limitation.
Except for the investment restrictions listed above and the Fund's
investment objective, the other investment policies described in the Prospectus
and this Statement of Additional Information are not fundamental and may be
changed with approval of the Board of Directors. Although the Fund has no
present intention of doing so during the coming year, the Fund may sell short
"against the box."
FR-10
<PAGE>
STRATEGIC GLOBAL
The Fund may not:
(1) issue senior securities (including borrowing money from banks and
other entities, reverse repurchase agreements and dollar rolls) in excess of
33 1/3% of its total assets (including the amount of senior securities
issued but excluding any liabilities and indebtedness not constituting
senior securities), except that the Fund may borrow up to an additional 5%
of its total assets (not including the amount borrowed) for temporary or
emergency purposes;
(2) make an investment in any one industry if the investment would cause
the aggregate value of all of the Fund's investments in such industry to
exceed 25% of the Fund's total assets, provided that this limitation shall
not apply with respect to investments in U.S. government securities;
(3) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the Fund
may make margin deposits in connection with its use of options, futures
contracts, options on futures contracts and forward contracts;
(4) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Fund may be deemed an underwriter under federal securities
laws and except that the Fund may write options;
(5) make short sales of securities or maintain a short position, except
that the Fund may make short sales and maintain short positions in
connection with its use of options, futures contracts, options on futures
contracts and forward contracts;
(6) purchase or sell real estate (including real estate limited
partnership interests), provided that the Fund may invest in securities
secured by real estate or interests therein or issued by companies that
invest in real estate or interests therein;
(7) purchase or sell commodities or commodity contracts, except that the
Fund may purchase or sell financial and currency futures contracts and
options thereon, may purchase and sell forward contracts, may engage in
transactions in foreign currencies and may purchase or sell options on
foreign currencies;
(8) invest in oil, gas or mineral-related programs or leases; or
(9) make loans, except through loans of portfolio instruments and
repurchase agreements, provided that for purposes of this restriction the
acquisition of bonds, debentures or other debt instruments or interests
therein and investment in government obligations, short-term commercial
paper, certificates of deposit and bankers' acceptances shall not be deemed
to be the making of a loan.
FR-11
<PAGE>
TAGS
The Series has adopted certain investment limitations which, like the
Series' investment objective, may not be changed without the approval of its
shareholders. The Series may not:
(1) issue senior securities (including borrowing money from banks and
other entities reverse repurchase agreements and dollar rolls) in excess of
33 1/3% of its total assets (including the amount of senior securities
issued, but excluding any liabilities and indebtedness not constituting
senior securities), except that the Series may borrow up to an additional 5%
of its total assets (not including the amount borrowed) for temporary or
emergency purposes;
(2) purchase the securities of any issuer if as a result more than 5% of
its total assets would be invested in the securities of that issuer;
provided that securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities are not subject to this limitation and
further provided that up to 25% of the value of the Series' assets may be
invested without regard to this limitation;
(3) make an investment in any one industry if the investment would cause
the aggregate value of all of the Series' investments in such industry to
equal 25% or more of the Series' total assets, provided that this limitation
shall not apply with respect to investments in securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities, and
provided further that this limitation also shall not apply to investments in
mortgage-backed and asset-backed securities (whether or not issued or
guaranteed by an agency or instrumentality of the U.S. government), which
shall be considered a single industry for purposes of this limitation;
(4) purchase securities on margin, except for short-term credits
necessary for clearance of portfolio transactions, and except that the
Series may make margin deposits in connection with its use of options,
futures contracts and options on futures contracts;
(5) engage in the business of underwriting securities of other issuers,
except to the extent that, in connection with the disposition of portfolio
securities, the Series may be deemed an underwriter under federal securities
laws and except that the Series may write options:
(6) make short sales of securities or maintain a short position, except
that the Series may maintain short positions in connection with its use of
options, futures contracts and options on futures contracts and sell short
"against the box;"
(7) purchase or sell real estate (including real estate limited
partnership interests), provided that the Series may invest in securities
secured by real estate or interests therein or issued by companies that
invest in real estate or interests therein;
(8) purchase or sell commodities or commodity contracts, except that the
Series may purchase or sell financial futures contracts and options thereon;
(9) invest in oil, gas or mineral-related programs or leases;
FR-12
<PAGE>
(10) make loans, except through loans of portfolio instruments, reverse
repurchase agreements and repurchase agreements, provided that for purposes
of this restriction the acquisition of bonds, debentures or other debt
instruments or interests therein and investment in government obligations,
short-term commercial paper, certificates of deposit and bankers'
acceptances shall not be deemed to be the making of a loan; or
(11) invest in the securities of an open-end investment company.
FR-13
<PAGE>
PROXY
-----
[COMPANY NAME]
Annual Meeting of Shareholders - April 11, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF [COMPANY NAME]
("Company"). The undersigned hereby appoints as proxies Gregory K. Todd and
Keith A. Weller and each of them (with power of substitution) to vote for the
undersigned all of the undersigned's shares of common stock in the Company at
the above-referenced meeting, and any adjournment thereof, with all the power
the undersigned would have if personally present. The shares represented by
this proxy will be voted as instructed. UNLESS INDICATED TO THE CONTRARY, THIS
PROXY SHALL BE DEEMED TO GRANT AUTHORITY TO VOTE 'FOR' ALL PROPOSALS RELATING
TO THE COMPANY.
YOUR VOTE IS IMPORTANT
Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to PFPC Inc., P.O. Box 9426, Wilmington, DE 19809-9938.
Please indicate your vote by an 'X' in the appropriate box below.
The Board of Directors recommends a vote 'FOR'
1. Election of ten members of the Company's Board of Directors to serve
until the next annual meeting or until their successors are duly elected
and qualified;
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all
below) nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes, Jr.,
Richard Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen,
Frederic V. Malek, Carl W. Schafer, John R. Torell III
FOR AGAINST ABSTAIN
2. Ratification of the selection of the
Company's independent auditors for its
current fiscal year
[ ] [ ] [ ]
3. Approval of the proposed
changes to the Company's
fundamental investment
restrictions [ ] [ ] [ ]
[ ] To vote against the
proposed changes to one or
more specific fundamental
investment restrictions,
but to approve the others,
place an "X" in the box at
left AND indicate the number(s)
---
(as set forth in the proxy
statement) of the
investment restriction(s)
you do not want to change
on this line: ________
Continued and to be signed on the reverse side
C
<PAGE>
This proxy will not be voted unless it is dated and signed
exactly as instructed below
If shares are held by an individual, sign your name exactly as it appears
on this proxy card. If shares are held jointly, either party may sign, but
the name of the party signing should conform exactly to the name shown on
this proxy card. If shares are held by a corporation, partnership or
similar account, the name and the capacity of the individual signing the
proxy card should be indicated -- for example: "ABC Corp., John Doe,
Treasurer."
Sign exactly as name appears hereon.
__________________________________(L.S.)
__________________________________(L.S.)
Date______________________________, 1996
<PAGE>
PROXY
-----
[COMPANY NAME]
Special Meeting of Shareholders - April 11, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF [COMPANY NAME].
The undersigned hereby appoints as proxies Gregory K. Todd and Keith A. Weller
and each of them (with power of substitution) to vote for the undersigned all of
the undersigned's shares of common stock in the Company at the above-referenced
meeting, and any adjournment thereof, with all the power the undersigned would
have if personally present. The shares represented by this proxy will be voted
as instructed. UNLESS INDICATED TO THE CONTRARY, THIS PROXY SHALL BE DEEMED
TO GRANT AUTHORITY TO VOTE 'FOR' ALL PROPOSALS RELATING TO THE COMPANY.
YOUR VOTE IS IMPORTANT
Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to PFPC Inc., P.O. Box 9426, Wilmington, DE 19809-9938.
Please indicate your vote by an 'X' in the appropriate box below.
The Board of Directors recommends a vote 'FOR'
1. Election of ten members of the Company's Board of Directors to serve
until the next annual meeting or until their successors are duly elected
and qualified;
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all
below) nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes, Jr.,
Richard Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen,
Frederic V. Malek, Carl W. Schafer, John R. Torell III
2. This Proposal does not apply to
the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the proposed
changes to the Company's
fundamental investment
restrictions [ ] [ ] [ ]
[ ] To vote against the
proposed changes to one or
more specific fundamental
investment restrictions,
but to approve the others,
place an "X" in the box at
left AND indicate the number(s)
---
(as set forth in the proxy
statement) of the
investment restriction(s)
you do not want to change
on this line: ________
Continued and to be signed on the reverse side
C
<PAGE>
This proxy will not be voted unless it is dated and signed
exactly as instructed below
If shares are held by an individual, sign your name exactly as it appears
on this proxy card. If shares are held jointly, either party may sign, but
the name of the party signing should conform exactly to the name shown on
this proxy card. If shares are held by a corporation, partnership or
similar account, the name and the capacity of the individual signing the
proxy card should be indicated -- for example: "ABC Corp., John Doe,
Treasurer."
Sign exactly as name appears hereon.
__________________________________(L.S.)
__________________________________(L.S.)
Date______________________________, 1996
