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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
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Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PREFERRED INCOME MANAGEMENT INCORPORATED
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PREFERRED INCOME MANAGEMENT FUND INCORPORATED
301 E. COLORADO BOULEVARD, SUITE 720
PASADENA, CALIFORNIA 91101
STEWART HOREJSI IS ATTEMPTING TO BUY THIS ELECTION CONTEST!
BUT, HAS HE OFFERED YOU A PREMIUM FOR YOUR SHARES?
April 6, 1998
TO OUR SHAREHOLDERS:
You should know that Stewart Horejsi recently disclosed he purchased
another 2.7% of the Fund for $15.50 per share -- about $1.25 above the
prevailing market price. He did this in private transactions so that he would
get the voting rights for those shares. Although what he did is not illegal, it
did benefit a few large holders while leaving the rest of you out in the cold.
Ask yourself why a $1.25 per share premium was offered to only a few
shareholders?
But why should he worry about you? With these additional shares, he needs
only a few more votes to win this contest. If you vote for Horejsi, he has the
benefit of owning your shares -- your vote -- without it costing him a penny.
It's not hard to figure out why Horejsi hasn't offered a premium of $1.25 per
share to all shareholders.
Don't be a dupe for Horejsi's tactics! There must be something wrong if he
has to buy more shares just before the election when his group already owned
39%. Ask yourself how you will be treated once he gets control of the Fund? It's
not too late to support your Fund's Board to make sure that all shareholders are
treated fairly and equally.
DON'T LET HOREJSI CUT YOUR INCOME! VOTE YOUR GREEN PROXY TODAY!
Mr. Horejsi's proposals would result in sharp cuts in the distributions the
Fund pays you. He plans to drop the Fund's successful strategy of emphasizing
current income and, instead, invest for capital gains. His plans include buying
very large equity positions in just a few companies, some of which might be
"troubled companies", and possibly taking control of their management.
He would pay out to shareholders only the minimum amount required by the
tax laws and have the Fund invest the balance. He can afford to do without
monthly income. Can you?
HOREJSI'S REAL GOAL IS TO TAKE OVER MANAGEMENT OF YOUR FUND
Mr. Horejsi also proposes that the Fund's common stock investments be
managed by him at fees 50% more than what the Fund is currently paying -- even
though he has no experience as an investment advisor.
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Horejsi says his proposed changes are justified by the personal tax
benefits he would receive under recent tax law changes. But you should know
that:
- Two years ago he attempted to purchase the Fund's investment advisor,
Flaherty & Crumrine Incorporated.
- Last year he suggested merging his family-owned welding supplies and
industrial gas company with the Fund.
Clearly, his intent all along has been to gain control of the Fund.
YOU CAN STOP THE HOREJSI POWER PLAY.
VOTE YOUR GREEN PROXY TODAY!
Mr. Horejsi's proposals are designed to serve his needs -- not yours. But
you have a choice. No matter how many or how few shares you own, your vote is
very important. Please take a moment to mark, date, sign and mail the enclosed
GREEN proxy card in the postage-paid envelope provided for your convenience.
Even if you have already signed a BLUE Horejsi Group proxy card, you have
every legal right to change your mind and vote a GREEN card in support of your
current Board. Only your latest dated proxy card will count in the final tally.
If you have questions about the Fund or about voting your shares, we invite
you to call Carl Johns, Manager, Fund Investor Relations at (626) 795-7300 or
MacKenzie Partners, Inc. toll-free at (800) 322-2885.
We appreciate very much the strong support we have received from
shareholders and your continued patience through this barrage of mailings and
telephone calls.
On behalf of your Board of directors,
Sincerely,
[ROBERT FLAHERTY SIGNATURE]
ROBERT T. FLAHERTY
Chairman of the Board and Chief Executive
Officer
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IMPORTANT
DO NOT USE HOREJSI'S BLUE CARD TO VOTE AGAINST HIS CANDIDATES. DOING SO
MAY CANCEL YOUR VOTE SUPPORTING YOUR BOARD'S NOMINEES ON THE GREEN CARD.
REMEMBER -- ONLY YOUR LATEST DATED PROXY WILL COUNT IN THE ELECTION. MAKE
SURE IT'S A GREEN CARD SUPPORTING YOUR BOARD. THAT'S WHY WE CONTINUE TO
SEND YOU ADDITIONAL GREEN CARDS, EVEN IF YOU HAVE ALREADY SUPPORTED THE
BOARD -- WE DON'T KNOW IF YOU SENT IN A BLUE PROXY AND THEREFORE NEED
ANOTHER GREEN CARD.
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GREEN CARD
PROXY
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of Preferred Income
Management Fund Incorporated, a Maryland corporation (the "Fund"), hereby
appoints Robert T. Flaherty, Donald F. Crumrine, Teresa M.R. Hamlin and
Christine P. Ritch, attorneys and proxies for the undersigned, with full powers
of substitution and revocation, to represent the undersigned and to vote on
behalf of the undersigned all shares of Common Stock, which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Fund to be held
at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd
Street, 47th Floor, New York, New York 10022 at 9:00 a.m., on April 17, 1998,
and any adjournments thereof. The undersigned hereby acknowledges receipt of
the Notice of Annual Meeting and Proxy Statement as supplemented and hereby
instructs said attorneys and proxies to vote said shares as indicated hereon.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. A majority of the
proxies present and acting at the Annual Meeting in person or by substitute
(or, if only one shall be so present, then that one) shall have and may
exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[SEE REVERSE SIDE]
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ELECTION OF NOMINEES AS DIRECTORS AND FOR PROPOSAL 2.
PLEASE REFER TO THE PROXY STATEMENT, AS SUPPLEMENTED, FOR A DISCUSSION OF THE
PROPOSAL.
1. Election of Directors.
Nominees: Martin Brody and David Gale
FOR WITHHELD
[ ] [ ]
[ ]
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For all nominees except as noted above
2. To ratify the selection of Coopers & Lybrand L.L.P. as
independent accountants for the Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION
OF ALL NOMINEES AND "FOR" RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND
L.L.P. AS INDEPENDENT ACCOUNTANTS FOR THE FUND.
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
Date:
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Signature
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Signature
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Title
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
