SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ] Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
(Name of Registrant as Specified In Its Charter)
TERESA M. R. HAMLIN
ASSISTANT SECRETARY
(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 transactions 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:
<PAGE>
PREFERRED INCOME MANAGEMENT FUND, INC.
1680 38TH Street, Suite 800
Boulder, CO 80301
March 3, 1999
Dear Shareholder:
Enclosed is the Proxy Statement for the election of Directors and
Auditors for the Preferred Income Management Fund (the "Fund") at the Fund's
Annual Shareholder Meeting to be held on April 21, 1999 in Scottsdale, Arizona.
Please read the Proxy Statement for details regarding current proposals and mail
the enclosed proxy card in the return envelope provided.
You are being asked to vote on three Director candidates. This will
give the Fund a complete board of five Directors. Further, you are being asked
to approve PricewaterhouseCoopers LLC as the Fund's independent accountants for
1999. PricewaterhouseCoopers has been the Fund's auditors from its inception. At
this time, these are the only items on which we are asking shareholders to vote.
With respect to other business, the continuation of the Fund's
investment advisory contract with Flaherty & Crumrine, Inc. for another year was
approved by the Board on January 25, 1999. At the same meeting, Stewart Horejsi,
who controls approximately 42% of the Fund's common stock and serves as a
Director of the Fund, indicated to the other Directors that he would be
formulating a proposal which he would formally present to the Board after the
Annual Shareholder's Meeting, at a time when the entire 5-person Board is in
place. It is expected that Mr. Horejsi's proposal would include changing the
investment objective of the Fund from income to total return, which would
require Board as well as Shareholder approval.
Mr. Horejsi believes that such a change would be appropriate because
common stocks have historically outperformed virtually all fixed income-type
investments, including preferreds, over the long term. Implementing such a
change would permit the Fund to invest a greater percentage of its assets in
common stocks (i.e., more than the 15% currently permitted by the Fund's
prospectus). Of course, if the Fund were to invest a significant portion of its
assets in non-dividend paying common stocks, the Fund's income would decline. In
such circumstances, it would be likely the Fund's dividend payout to common
stock shareholders would have to be reduced. Since the Board has not yet
received a formal proposal from Mr. Horejsi, obviously there has been no
determination as to whether, when, or at what pace, investments in common stocks
would take place.
The Fund continues to pay a monthly dividend, currently $0.077 per
share. On an annual basis, this amounts to just over $0.92 per share, which
works out to yield about 7.6% based on the current price of $12.125.
The Fund's NAV, as of February 26, 1999, was $15.19 per share.
Sincerely,
/s/ STEPHEN C. MILLER
Stephen C. Miller, President
<PAGE>
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
1680 38th Street, Suite 800
Boulder, Colorado 80301
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 21, 1999
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of
Preferred Income Management Fund Incorporated (the "Fund"), a Maryland
corporation, will be held at the Radisson Hotel Scottsdale, 7171 North
Scottsdale Road, Scottsdale, Arizona 85253 at 9:00 a.m. M.S.T., on April 21,
1999, for the following purposes:
1. To elect Directors of the Fund (Proposal 1).
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants for the Fund for the fiscal year
ending November 30, 1999 (Proposal 2).
3. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
The Board of Directors of the Fund has fixed the close of business on
February 26, 1999 as the record date for the determination of shareholders of
the Fund entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
LAURA RHODENBAUGH
Secretary
March 9, 1999
- --------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD. THE PROXY CARD SHOULD BE
RETURNED IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
CONTINENTAL UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER.
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may 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 a name shown in the registration.
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:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(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
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee, u/t/d 12/28/78 Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust., John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Executor John B. Smith, Jr., Executor
estate of Jane Smith
<PAGE>
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
1680 38th Street, Suite 800
Boulder, Colorado 80301
ANNUAL MEETING OF SHAREHOLDERS
April 21, 1999
PROXY STATEMENT
This document is a proxy statement ("Proxy Statement") for Preferred
Income Management Fund Incorporated ("Preferred Income Management Fund" or the
"Fund"). This Proxy Statement is furnished in connection with the solicitation
of proxies by the Fund's Board of Directors (the "Board") for use at the Annual
Meeting of Shareholders of the Fund to be held on April 21, 1999, at 9:00 a.m.
M.S.T., at the Radisson Hotel Scottsdale, 7171 North Scottsdale Road,
Scottsdale, Arizona 85253 and at any adjournments thereof (the "Meeting"). A
Notice of Annual Meeting of Shareholders and proxy card for the Fund accompany
this Proxy Statement. Proxy solicitations will be made, beginning on or about
March 9, 1999, primarily by mail, but proxy solicitations may also be made by
telephone, telegraph or personal interviews conducted by officers of the Fund,
and First Data Investor Services Group, Inc. ("Investor Services Group"), the
transfer agent and administrator of the Fund and a wholly-owned subsidiary of
First Data Corporation. The costs of proxy solicitation and expenses incurred in
connection with the preparation of this Proxy Statement and its enclosures will
be paid by the Fund. The Fund also will reimburse brokerage firms and others for
their expenses in forwarding solicitation material to the beneficial owners of
its shares.
The Annual Report of the Fund, including audited financial statements
for the fiscal year ended November 30, 1998, is available upon request, without
charge, by writing First Data Investor Services Group, Inc., P.O. Box 1376,
Boston, Massachusetts 02104, or calling 1-800-331-1710.
If the enclosed proxy is properly executed and returned in time to be
voted at the Meeting, the Shares (as defined below) represented thereby will be
voted in accordance with the instructions marked thereon. Unless instructions to
the contrary are marked thereon, a proxy will be voted FOR the election of the
nominees for Directors and FOR the other matters listed in the accompanying
Notice of the Annual Meeting of Shareholders. Any shareholder who has given a
proxy has the right to revoke it at any time prior to its exercise either by
attending the Meeting and voting his or her Shares in person or by submitting a
letter of revocation or a later-dated proxy to the Fund at the above address
prior to the date of the Meeting.
In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present 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 such
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. If a quorum is present, the
persons named as proxies will vote those proxies which they are entitled to vote
FOR any proposal in favor of such an adjournment and will vote those proxies
required to be voted AGAINST any proposal against any such adjournment. A
shareholder vote may be taken on one or more of the proposals in the Proxy
Statement prior to any such adjournment if sufficient votes have been received
for approval. Under the By-Laws of the Fund, a quorum is constituted by the
presence in person or by proxy of the holders of a majority of the outstanding
shares of the Fund entitled to vote at the Meeting. If a proposal is to be voted
upon by only one class of the Fund's shares, a quorum of that class of shares
must be present at the Meeting in order for the proposal to be considered.
<PAGE>
The Fund has two classes of capital stock: common stock, par value
$0.01 per share (the "Common Stock") and Money Market Cumulative Preferred(TM)
Stock, par value $0.01 per share ("MMP(R)", together with the Common Stock, the
"Shares"). The holders of the Common Stock and the MMP(R) are each entitled to
one vote per share held. On the record date, February 26, 1999, the following
number of Shares of the Fund were issued and outstanding:
Common Stock MMP(R)
Outstanding Outstanding
9,416,743 775
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information regarding the
beneficial ownership of the Fund's shares as of February 26, 1999 by each person
who is known by the Fund to beneficially own 5% or more of the Fund's Common
Stock. To the Fund's knowledge, there are no 5% or greater beneficial owners of
MMP(R).
Number of Shares
Name of Owner* Beneficially Owned Percentage Beneficially Owned
Horejsi, Inc. (1) 2,071,430 22.00%
Lola Brown Trust 3,655,195 38.82%
No. 1B (1)(2)
Ernest Horejsi Trust 2,349,050 24.95%
No. 1B (1)(2)
Badlands Trust Company 3,945,550 41.89%
(1)(3)
Stewart R. Horejsi Trust 3,945,550 41.89%
No. 2 (1)(4)
Evergreen LLC (2) 2,071,430 22.00%
Aggregate Shares Owned** 3,945,550 41.89%
* The address of each listed owner is 122 South Phillips Avenue, Suite
220, Sioux Falls, South Dakota 57104.
** Aggregate number and percentage are less than the sum total of amounts
shown for each owner because the same shares may be deemed beneficially
owned by more than one party (see Footnotes 1 through 4).
(1) Direct Ownership. Horejsi, Inc. ("HI"), the Lola Brown Trust No. 1B
(the "Brown Trust"), the Ernest Horejsi Trust No. 1B (the "EH Trust"),
Badlands Trust Company ("Badlands"), the Stewart R. Horejsi Trust No. 2
(the "SRH Trust") and Stewart R. Horejsi are, as a group, considered to
be a "control person" of the Fund (as that term is defined in Section
2(a)(9) of the Investment Company Act of 1940, as amended (the "1940
Act")). HI, the Brown Trust, the EH Trust and Badlands directly own
2,071,430 (22.0%), 1,583,765 (16.8%), 277,620 (2.95%) and 12,735
(0.14%) of the Common Stock shares, totaling 3,945,550 (41.89%).
However, these entities and other trusts or companies with interlocking
management and/or common ownership may be deemed to indirectly own
additional Fund shares, which are included in the table above.
<PAGE>
(2) Indirect Ownership Through HI. Numbers shown in the table include
shares held directly (see Footnote No. 1) and shares that may be deemed
to be beneficially owned indirectly through ownership of HI. The
outstanding stock of HI is owned by the Brown Trust, the EH Trust and
Evergreen Atlantic LLC ("Evergreen") in the following percentages -
40%, 24% and 36%. The Trustees of the Brown Trust and the EH Trust are
Badlands, Larry Dunlap and Susan Ciciora, who is Mr. Horejsi's
daughter, and Mr. Horejsi is a beneficiary under each such trust. Any
action by those trusts requires a majority vote of the trustees.
Consequently, both the trusts and each trustee disclaim beneficial
ownership of shares owned by HI. Evergreen is owned by four trusts,
three of which have Badlands as the sole trustee and one of which has
Badlands as one of three trustees, along with Susan Ciciora and Robert
Kastner. Mr. Stewart Horejsi is the manager of Evergreen. Both
Evergreen and the trusts that own it, as well as the trustees of those
trusts, disclaim beneficial ownership of shares owned directly by HI.
(3) Ownership by Badlands. Number shown in the table includes shares held
directly by Badlands (see Footnote No. 1) and shares that may be deemed
to be beneficially owned indirectly by Badlands through direct or
indirect ownership by the Brown Trust, the EH Trust and HI. Badlands is
the sole trustee of three trusts that control Evergreen (see Footnote
No. 2) and, together with Larry Dunlap and Susan Ciciora, one of three
trustees of the Brown Trust and the EH Trust. Badlands is a trust
company organized under the laws of South Dakota, which is wholly owned
by the SRH Trust, an irrevocable trust organized by Mr. Stewart Horejsi
for the benefit of his children. The directors of Badlands are Larry
Dunlap, Stephen C. Miller (a candidate for director of the Fund - see
page 5), Robert Ciciora, who is the brother of Mr. Horejsi's son-in-law
(John Ciciora), Ann M. Hartmann and Carol Jorgensen. Badlands and its
directors disclaim beneficial ownership of shares owned directly by the
Brown Trust, the EH Trust and HI.
(4) Indirect Ownership by SRH Trust. Number shown in the table reflects
shares that may be deemed to be beneficially owned indirectly through
ownership of Badlands. The trustees of the SRH Trust are Badlands,
Robert Ciciora and Robert Kastner. Both the Trust and its trustees
disclaim beneficial ownership of shares beneficially owned directly or
indirectly by Badlands.
Information as to beneficial ownership in the previous paragraph has
been obtained from a representative of the holders; all other information as to
beneficial ownership is based on reports filed with the Securities and Exchange
Commission (the "SEC") by such holders.
As of February 26, 1999, Cede & Co., a nominee partnership of
Depository Trust Company, held 9,154,901 shares or 97.2% of Common Stock
outstanding and 775 shares or 100% of MMP(R) outstanding of the Fund.
In order that your Shares may be represented at the Meeting, you are
requested to vote on the following matters:
PROPOSAL 1: ELECTION OF DIRECTORS
The first proposal to be considered at the Meeting is the election of
three (3) Directors of the Fund. Prior to January 15, 1999, the Board consisted
of six Directors. Effective January 15, 1999, four out of the six Directors
resigned. Only Messrs. Horejsi and Duff remained on the Board. Immediately after
these resignations, Mr. Richard I. Barr was elected by the remaining members of
the Board to serve as a Director of the Fund. Also on January 15, 1999, the
Board voted to reduce the number of Directors to serve on the Fund's Board from
six to five.
The Board of Directors is divided into three classes, each class having
a term of three years. Each year the term of one class will expire. Mr. Richard
I. Barr and Mr. Stephen C. Miller, proposed Class II Directors of the Fund, have
been nominated for a three-year term to expire at the Fund's 2002 Annual Meeting
of Shareholders and until their successors are duly elected and qualified. Mr.
Alfred G. Aldridge, Jr., a proposed Class III Director of the Fund, has been
nominated for a one-year term and will serve until the Fund's Annual Meeting of
Shareholders in 2000 and until his successor is duly elected and qualified. Mr.
James G. Duff and Mr. Stewart R. Horejsi, Class I Directors of the Fund, were
elected on April 28, 1998 for a three-year term to expire at the Fund's 2001
Annual Meeting of Shareholders and until their successors are duly elected and
qualified.
<PAGE>
Each nominee has consented to serve as a Director if elected at the
Meeting. If a designated nominee declines or otherwise becomes unavailable for
election, however, the proxy confers discretionary power on the persons named
therein to vote in favor of a substitute nominee or nominees.
Under the Fund's Articles of Incorporation, Articles Supplementary and
the 1940 Act, holders of shares of MMP(R), voting as a single class, will be
entitled to elect two Directors, and holders of the Common Stock will be
entitled to elect the remaining Directors, subject to the provisions of the 1940
Act and the Fund's Articles of Incorporation, which permit the holders of shares
of MMP(R), when dividends are in arrears for two full years, to elect the
minimum number of additional Directors that when combined with the two Directors
elected by the holders of shares of MMP(R) would give the holders of shares of
MMP(R) a majority of the Directors. No dividend arrearages exist at this time.
Messrs. Aldridge and Barr are proposed to represent holders of shares of MMP(R)
of the Fund. A quorum of the MMP(R) shareholders must be present at the Meeting
of the Fund in order for the proposal to elect Messrs. Aldridge and Barr to be
considered.
Information About Directors and Officers
Set forth in the following table are the nominees for election to the
Board of Directors and the existing Directors of the Fund, together with certain
other information. No Director or officer owned any shares of MMP(R) on February
26, 1999.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Business Experience Common Stock
During the Beneficially Owned
Name, Address and Age Past Five Years on February 26, 1999* Percent
- --------------------- --------------- --------------------- -------
Nominee to Serve Until 2000 Annual Meeting of Shareholders
Alfred G. Aldridge, Jr. Sales Manager, Shamrock Foods Company 100 shares **
6831 E. Presidio Road since 1982.
Scottsdale, AZ 85254
Age: 61
Nominees to Serve Until 2002 Annual Meeting of Shareholders
Richard I. Barr Director of the Fund; Manager of 500 shares **
2502 E. Solano Drive Advantage Sales and Marketing, Inc.
Phoenix, AZ 85016 since 1963.
Age: 61
Stephen C. Miller*** President of the Fund; General Counsel, 2,084,165 shares+ 22.13%
1680 38th Street, Suite 800 Brown Welding Supply, LLC; Director and
Boulder, CO 80301 President of HI, since 1997; Director,
Age: 45 Vice President and Assistant Secretary
of Badlands; Of Counsel to Krassa, Madsen &
Miller, LLC since 1991.
Directors Serving Until 2001 Annual Meeting of Shareholders
James G. Duff Director of the Fund; Retired since 1,011 shares **
6325 N. Yucca Road January, 1997; Prior to January, 1997,
Paradise Valley, AZ 85253 Chairman and CEO of USL Capital Inc.
Age: 61 (commercial financing).
Stewart R. Horejsi*** Director of the Fund; Since April 1994, 3 ,945,550 shares++ 41.90%
253 N. Santa Fe General Manager, Brown Welding Supply,
Salina, KS 67401 LLC; Director, Sunflower Bank; President
Age: 61 or Manager, various subsidiaries of HI,
since June, 1986.
Directors and Officers as a Group 3,947,161 shares 41.92%
- ----------------------------------------------------------------------------
* This information has been furnished by each Director. "Beneficial
Ownership" is defined under Section 13(d) of the Securities Exchange
Act of 1934 (the "1934 Act").
** Less than 1%.
*** "Interested person" of the Fund as defined in the 1940 Act. Mr.
Miller is an "interested person" as a result of his officership as
President of the Fund and the amount of his beneficial ownership of
Fund shares. Mr. Horejsi is an "interested person" as a result of
the amount of his beneficial ownership of Fund shares.
+ Mr. Miller is a director and executive officer of HI and Badlands.
2,071,430 and 12,735 shares of the Fund are held by HI and Badlands,
respectively. By virtue of such relationships, Mr. Miller may be
deemed to share the indirect power to vote and direct the disposition
of the shares held by HI and Badlands. Mr. Miller disclaims beneficial
ownership of such shares.
++ 2,071,430, 1,583,765, 277,620 and 12,735 shares of the Fund are held by
HI, the Brown Trust, the EH Trust and Badlands, respectively. By virtue
of the relationships among the entities described on pages 2 and 3 and
his roles with HI and the primary stockholders of HI, Mr. Horejsi may
be deemed to control HI and may be deemed to possess indirect
beneficial ownership of the shares held by HI. In addition, by virtue
of the relationships described on pages 2 and 3, HI, the Brown Trust,
the EH Trust, Badlands, the SRH Trust and Mr. Horejsi are as a group
considered to be a control person of the Fund. Mr. Horejsi disclaims
all such beneficial ownership.
</TABLE>
<PAGE>
Each Director of the Fund who is not a Director, officer or employee of
the investment adviser, or any of their affiliates receives a fee of $9,000 per
annum plus $500 for each in-person meeting, and $100 for each telephone meeting.
Each Director of the Fund is reimbursed for travel and out-of-pocket expenses
associated with attending Board and Committee meetings. The Board of Directors
of the Fund held eight meetings (four of which were held by telephone conference
call) during the fiscal year ended November 30, 1998. Each Director then serving
in such capacity attended in-person at least 75% of the meetings of Directors
and any Committee of which he is a member. The aggregate remuneration paid to
the Directors of the Fund for the fiscal year ended November 30, 1998 amounted
to $104,121.53 (including reimbursement for travel and out-of-pocket expenses
for both "interested" and non-interested Directors).
The Board of Directors has an Audit Committee consisting of Messrs.
Barr and Duff. Messrs. Barr and Duff were appointed to the Audit Committee on
January 15, 1999. The Audit Committee reviews the scope and results of the
Fund's annual audit with the Fund's independent accountants and recommends the
engagement of such accountants. The Audit Committee in place prior to January
15, 1999 met twice during the fiscal year ended November 30, 1998.
The Board of Directors has a Nominating Committee consisting of Messrs.
Barr and Duff which is responsible for considering candidates for election to
the Board of Directors of the Fund in the event a position is vacated or
created. Messrs. Barr and Duff were appointed to the Nominating Committee on
January 15, 1999. The Nominating Committee would consider recommendations by
shareholders if a vacancy were to exist. Such recommendations should be
forwarded to the Secretary of the Fund. The Nominating Committee of the Fund in
place prior to January 15, 1999 met twice during the fiscal year ended November
30, 1998.
The names of the executive officers of the Fund (other than Mr. Miller
who is described above) are listed in the table below. Each officer was elected
to office by the Board at a special telephone meeting held on January 15, 1999.
This table also shows certain additional information. Each officer will hold
such office until a successor has been elected by the Board of Directors of the
Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
Positions Held Principal Occupations and Other Affiliations
Name and Age With the Fund During The Past Five Years
Carl D. Johns Chief Financial Officer, Chief Chief Financial Officer, Chief Accounting Officer,
Age: 36 Accounting Officer, Vice Vice President and Treasurer, Preferred Income
President and Treasurer Management Fund Incorporated, since January 15,
1999; Employee of Flaherty & Crumrine Incorporated
prior to December 31, 1998; Assistant Treasurer of
Preferred Income Management Fund Incorporated,
Preferred Income Fund Incorporated and Preferred
Income Opportunity Fund Incorporated prior to
December 31, 1998.
Laura Rhodenbaugh Secretary Secretary and Treasurer, various subsidiaries of HI,
Age: 48 since June, 1986.
</TABLE>
<PAGE>
The following table sets forth certain information regarding the
compensation of the Fund's Directors in place for the fiscal year ended November
30, 1998. No executive officer or person affiliated with the Fund received
compensation from the Fund during the fiscal year ended November 30, 1998 in
excess of $60,000. Directors and executive officers of the Fund do not receive
pension or retirement benefits from the Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Name of Person and Aggregate Compensation Total Compensation From the Fund and Fund
Position with the Fund from the Fund Complex Paid to Directors*
Donald F. Crumrine $0 $0 (3)**
Prior to January 15, 1999, Director,
Chief Financial Officer, Chief
Accounting Officer, Vice President
and Secretary
Robert T. Flaherty $0 $0 (3)**
Prior to January 15, 1999, Director,
Chairman of the Board, President and
Chief Executive Officer
Martin Brody $ 8,300 $39,200 (3)***
Prior to April 28, 1998, Director
James G. Duff $ 7,340 $7,340 (1)
Director
David Gale $ 7,600 $35,500 (3)***
Prior to April 28, 1998, Director
Morgan Gust $12,800 $37,200 (3)**
Prior to January 15, 1999, Director
Stewart R. Horejsi $11,400 $11,400 (1)
Director
Robert F. Wulf $12,800 $37,200 (3)**
Prior to January 15, 1999, Director
* Represents the total compensation paid to such persons by the Fund,
Preferred Income Fund Incorporated and Preferred Income Opportunity
Fund Incorporated for the fiscal year ended November 30, 1998, which
are considered part of the same "fund complex" because they have a
common adviser. The parenthetical number represents the total number of
investment company directorships held by the director or nominee in
such fund complex.
** Effective January 15, 1999, no longer a Director of Preferred Income
Management Fund Incorporated.
*** Effective April 28, 1998, no longer a Director of Preferred Income
Management Fund Incorporated.
</TABLE>
<PAGE>
Required Vote
Election of each of the listed nominees for Director of the Fund will
require the affirmative vote of a plurality of the votes cast at the Meeting in
person or by proxy.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 1.
PROPOSAL 2: RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), One
Post Office Square, Boston, Massachusetts 02109, has served as independent
accountants for the Fund since the Fund's commencement of operations, and has
been selected to serve in such capacity for the Fund's fiscal year ending
November 30, 1999 by the Directors of the Fund, including those Directors who
are not "interested persons" (as defined in the 1940 Act) of the Fund or the
investment adviser. PricewaterhouseCoopers has informed the Fund that it has no
direct or indirect financial interest in the Fund. A representative of
PricewaterhouseCoopers will not be present at the Meeting but will be available
by telephone and will have an opportunity to make a statement if the
representative so desires and will be available to respond to appropriate
questions.
Required Vote
Ratification of the selection of PricewaterhouseCoopers as independent
accountants for the Fund requires the affirmative vote of the holders of a
majority of the Shares of Common Stock and MMP(R), voting as a single class,
cast at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals by shareholders of the Fund that are intended to be
presented at the Fund's next Annual Meeting of Shareholders to be held in 2000
must be received by the Fund for consideration for inclusion in the Fund's proxy
statement relating to the meeting no later than November 9, 1999.
ADDITIONAL INFORMATION
Investment Adviser and Administrator
Flaherty & Crumrine Incorporated ("Flaherty & Crumrine") serves as the
investment adviser to the Fund and its business address is 301 E. Colorado
Boulevard, Suite 720, Pasadena, California 91101. Investor Services Group acts
as the transfer agent and administrator to the Fund and is located at 101
Federal Street, Boston, Massachusetts 02110.
Compliance with the Securities Exchange Act of 1934
Section 16(a) of the 1934 Act requires the Fund's Directors and
officers, certain persons affiliated with Flaherty & Crumrine and persons who
own more than 10% of a registered class of the Fund's securities, to file
reports of ownership and changes of ownership with the SEC and the New York
Stock Exchange. Directors, officers and greater-than-10% shareholders are
required by SEC regulations to furnish the Fund with copies of all Section 16(a)
forms they file. Based solely upon the Fund's review of the copies of such forms
it receives and written representations from certain of such persons, the Fund
believes that through the date hereof all such filing requirements applicable to
such persons were complied with.
<PAGE>
Broker Non-Votes and Abstentions
A proxy which is properly executed and returned accompanied by
instructions to withhold authority to vote represents a broker "non-vote" (i.e.,
shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter). Proxies that reflect abstentions or broker non-votes (collectively
"abstentions") will be counted as shares that are present and entitled to vote
on the matter for purposes of determining the presence of a quorum. Under
Maryland law, abstentions will be disregarded in determining the "votes cast" on
all proposals.
OTHER MATTERS TO COME BEFORE THE MEETING
The Fund does not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with their judgment.
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN ALL PROXY CARDS AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
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 Stephen
C. Miller, Carl D. Johns, 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
Radisson Hotel Scottsdale, 7171 North Scottsdale Road, Scottsdale, Arizona 85253
at 9:00 a.m. M.S.T., on April 21, 1999, and any adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement 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 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
<PAGE>
Please mark votes as in this example.
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 NOMINEE AS DIRECTOR AND FOR PROPOSAL 2.
Please refer to the Proxy Statement for a discussion of the Proposals.
1. Election of Director.
Nominee: Stephen C. Miller
FOR ____ WITHHELD ____
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the Fund.
FOR ____ AGAINST ____ ABSTAIN ____
The Board of Directors recommends that the shareholders vote "FOR" the election
of the nominee and "FOR" ratification of the selection of PricewaterhouseCoopers
LLP as independent accountants for the Fund.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ____
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
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.
Signature:
Date:
Signature:
Date:
<PAGE>
PROXY
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Money Market Cumulative Preferred(TM) Stock
("MMP(R)") of Preferred Income Management Fund Incorporated, a Maryland
corporation, (the "Fund"), hereby appoints Stephen C. Miller, Carl D. Johns,
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 MMP(R), which
the undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Fund to be held at the Radisson Hotel Scottsdale, 7171 North Scottsdale Road,
Scottsdale, Arizona 85253 at 9:00 a.m. M.S.T., on April 21, 1999, and any
adjournments thereof. The undersigned hereby acknowledges receipt of the Notice
of Annual Meeting and Proxy Statement 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
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
<PAGE>
Please mark votes as in this example.
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 for a discussion of the Proposals.
1. Election of Directors.
Nominees: Alfred G. Aldridge, Jr.
Richard I. Barr
FOR ____ WITHHELD ____
-----------------------------------------------
For all nominees except as noted above.
2. To ratify the selection of PricewaterhouseCoopers LLP 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
PricewaterhouseCoopers LLP as independent accountants for the Fund.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ____
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
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.
Signature:
Date:
Signature:
Date:
