SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
The Americas Income Trust Inc.
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(Name of Registrant as Specified in its Charter)
(specify)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a96(i)(4) and O-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction :
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(5) Total fee paid:
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[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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number, or the Form or Schedule and the date of its filing.
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<PAGE>
THE AMERICAS INCOME TRUST INC.
222 South Ninth Street
Minneapolis, Minnesota 55402
March 2, 1998
Dear Shareholders:
Attached is a notice and proxy statement for a special meeting of shareholders
of The Americas Income Trust Inc. (the fund) to be held April 9, 1998.
YOU ARE BEING ASKED TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN PIPER
CAPITAL MANAGEMENT INCORPORATED (PIPER CAPITAL) AND SALOMON BROTHERS ASSET
MANAGEMENT INC. (SBAM). As you may know, on November 28, 1997, Salomon Inc, the
ultimate parent company of SBAM, merged with and into Smith Barney Holdings
Inc., a subsidiary of Travelers Group Inc., to form a new company called Salomon
Smith Barney Holdings Inc. As a result of the transaction, Travelers became the
ultimate parent of SBAM. Under the Investment Company Act of 1940, as amended,
the transaction arguably resulted in the assignment and automatic termination of
the old sub-advisory agreement. Therefore, the fund's Board of Directors
approved a new sub-advisory agreement between Piper Capital and SBAM, which
became effective on November 28, 1997. The 1940 Act requires that shareholders
approve this new agreement as well.
THE NEW SUB-ADVISORY AGREEMENT IS IDENTICAL IN ALL MATERIAL RESPECTS TO THE
SUB-ADVISORY AGREEMENT BETWEEN PIPER CAPITAL AND SBAM THAT SHAREHOLDERS APPROVED
IN MAY 1996. SUB-ADVISORY FEES CHARGED BY SBAM REMAIN UNCHANGED. The fund's
Board of Directors has recommended that shareholders vote to approve the new
sub-advisory agreement.
PLEASE TAKE A MOMENT NOW TO READ THE ATTACHED NOTICE AND PROXY STATEMENT AND
RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Your prompt
attention to this proxy statement will save solicitation expenses for the fund.
If you haven't already voted as the date of the meeting approaches, you may
receive a telephone call from Shareholder Communications Corporation, a
professional proxy solicitation firm, reminding you to exercise your right to
vote. If you have questions about the proposal being presented to shareholders,
please contact your broker.
Sincerely,
Paul A. Dow, President
<PAGE>
THE AMERICAS INCOME TRUST INC.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 9, 1998
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of The
Americas Income Trust Inc. (the "Fund") will be held at 10:00 a.m., Central
Time, on Thursday, April 9, 1998, on the Eleventh floor of the Piper Jaffray
Tower, 222 South Ninth Street, Minneapolis, Minnesota. The purposes of the
meeting are as follows:
1. To vote on a new sub-advisory agreement between Piper Capital
Management Incorporated and Salomon Brothers Asset Management Inc. No
fee increase is proposed.
2. To vote on such other business as may properly come before the meeting
or any adjournments or postponements thereof.
Shareholders of record on February 27, 1998, are the only persons entitled
to notice of and to vote at the meeting. Your attention is directed to the
attached Proxy Statement.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE UPCOMING MEETING, PLEASE
FILL IN, SIGN, DATE, AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
ORDER TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. A stamped return envelope
is enclosed for your convenience.
By Order of the Board of Directors
Susan Sharp Miley
Secretary
Dated: March 2, 1998
<PAGE>
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS -- APRIL 9, 1998
The enclosed proxy is solicited by the Board of Directors of The Americas
Income Trust Inc. (the "Fund") in connection with a special meeting of
shareholders of the Fund to be held Thursday, April 9, 1998, and any
adjournments or postponements thereof. The costs of solicitation, including the
cost of preparing and mailing the Notice of Meeting and this Proxy Statement,
will be paid by the Travelers Group Inc. or its affiliates. Such mailing will
take place on approximately March 4, 1998. Representatives of Piper Capital
Management Incorporated (the "Adviser"), the investment adviser and manager of
the Fund, may, without cost to the Fund, solicit proxies on behalf of the
management of the Fund by means of mail, telephone, or personal calls. In
addition, the Fund has engaged Shareholder Communications Corporation to assist
in the solicitation of proxies, the cost of which is anticipated to be
approximately $3,500.
A proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the Fund, or at the meeting prior to voting.
Unless revoked, properly executed proxies in which a choice is not specified by
the shareholders will be voted "for" the proposal being presented to
shareholders, in accordance with the recommendation of the Fund's Board of
Directors. In instances where a choice is specified by the shareholders in the
proxy, those proxies will be voted in accordance with the shareholder's choice.
Abstentions may be specified and will be counted as present for purposes of
determining whether a quorum of shares is present at the meeting, but will have
the same effect as a vote "against" the proposal. Under the Rules of the New
York Stock Exchange, the proposal being presented to shareholders is considered
a "non-discretionary" proposal, which means that brokers who hold Fund shares in
street name for customers are not authorized to vote on such proposal on behalf
of their customers who have not furnished the broker specific voting
instructions. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on the proposal, then the shares covered by such non-vote
shall not be counted as present for purposes of calculating the vote with
respect to the proposal. So far as the Board of Directors of the Fund is aware,
no matters other than those described in this Proxy Statement will be acted upon
at the meeting. Should any other matters properly come before the meeting
calling for a vote of shareholders, it is the intention
<PAGE>
of the persons named as proxies in the enclosed proxy to vote upon such matters
according to their best judgment.
Only shareholders of record on February 27, 1998, may vote at the meeting
or any adjournments thereof. As of that date, there were issued and outstanding
6,251,305 common shares, $.01 par value, of the Fund. Common shares represent
the only class of securities of the Fund. Each shareholder of the Fund is
entitled to one vote for each share held. As of February 27, 1998, the following
persons were known to Fund management to own beneficially more than 5% of the
Fund's common shares:
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownership Common Shares
- ---------------------- ----------------------- -------------
Magten Asset 580,300 shares, shared 9.1%
Management Corp. voting and investment
("Magten") power
35 E. 21st Street
New York, NY
Mellon Bank, N.A. 453,800 shares*, shared 7.3%
as Trustee for the voting and investment
General Motors power
Employees' Domestic
Group Pension Trust
("GM Pension Trust")
One Mellon Center
Pittsburgh, PA
- -----------------
* Such shares are held by Magten on behalf of GM Pension Trust, and are included
in the 580,300 shares listed above as being beneficially owned by Magten.
In the event that sufficient votes are not received for the adoption of
proposal #1, an adjournment or adjournments of the meeting may be sought. Any
adjournment would require a vote in favor of the adjournment by the holders of a
majority of the shares present (in person or by proxy) at the meeting or any
adjournment thereof. The persons named as proxies will vote all shares that have
voted for the proposal in favor of adjournment; shares voted against the
proposal will be voted against adjournment.
<PAGE>
COPIES OF THE FUND'S MOST RECENT ANNUAL REPORT ARE AVAILABLE TO
SHAREHOLDERS UPON REQUEST. IF YOU WOULD LIKE TO RECEIVE A COPY, PLEASE CONTACT
THE FUNDS AT 222 SOUTH NINTH STREET, MINNEAPOLIS, MINNESOTA 55402, OR CALL
800-866-7778, EXTENSION 6786, AND ONE WILL BE SENT, WITHOUT CHARGE, BY
FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS OF YOUR REQUEST.
APPROVAL OF A NEW SUB-ADVISORY AGREEMENT
BETWEEN PIPER CAPITAL MANAGEMENT INCORPORATED AND
SALOMON BROTHERS ASSET MANAGEMENT INC
INTRODUCTION
Salomon Brothers Asset Management Inc ("SBAM") serves as the investment
sub-adviser for the Fund. On November 28, 1997, Salomon Inc ("Salomon"), the
ultimate parent company of SBAM, merged with and into Smith Barney Holdings
Inc., a subsidiary of Travelers Group Inc. ("Travelers"), to form a new company
called Salomon Smith Barney Holdings Inc. (the "Transaction"). Upon consummation
of the Transaction, Travelers became the ultimate parent of SBAM.
At the time of the Transaction, SBAM was serving as the investment
sub-adviser for the Fund pursuant to a sub-advisory agreement between the
Adviser and SBAM dated May 14, 1996 (the "Old Sub-Advisory Agreement"). The
Transaction could be deemed to have resulted in an "assignment," as defined in
the Investment Company Act of 1940, as amended (the "1940 Act"), of the Old
Sub-Advisory Agreement. As required by the 1940 Act, the Old Sub-Advisory
Agreement provided for its automatic termination in the event of its assignment.
Accordingly, the Fund's Board of Directors (the "Board") approved a new
sub-advisory agreement between the Adviser and SBAM (the "New Sub-Advisory
Agreement"), identical in all material respects to the Old Sub-Advisory
Agreement, which became effective on November 28, 1997. The Board is
recommending that shareholders approve the New Sub-Advisory Agreement. A
description of the New Sub-Advisory Agreement, including the services to be
provided by SBAM thereunder, is set forth below.
THE TRANSACTION
The Transaction was consummated on November 28, 1997, pursuant to a Merger
Agreement dated September 24, 1997 between Travelers and
<PAGE>
Salomon. In connection with the Transaction, Travelers issued 1.695 shares of
its common stock in exchange for each outstanding share of Salomon common stock.
Salomon preferred stockholders received one newly issued share of a
corresponding series of Travelers preferred stock with terms substantially
identical to those of the respective series of Salomon preferred stock they
exchanged. The total value of the Transaction was approximately $9 billion.
Prior to consummation of the Transaction, Travelers advised the Fund that
it anticipated that, upon consummation of the Transaction, SBAM would continue
to provide the same level of advisory services as had been provided to the Fund
to date.
EXEMPTIVE ORDER
Section 15(a) of the 1940 Act prohibits any person from serving as an
investment adviser (or sub-adviser) to a registered investment company except
pursuant to a written contract that has been approved by the shareholders of the
registered investment company. Because there was insufficient time to obtain
shareholder approval of the New Sub-Advisory Agreement prior to the Transaction,
Travelers, Smith Barney Holdings Inc. and Salomon applied for an Order (the
"Order") from the Securities and Exchange Commission exempting them from
compliance with Section 15(a) of the 1940 Act pending approval of the New
Sub-Advisory Agreement by Fund shareholders. The Order, which was issued on
November 26, 1997, permitted the New Sub-Advisory Agreement to go into effect
without shareholder approval upon consummation of the Transaction on November
28, 1997. Fees paid to the Sub-Adviser since such date have been held in escrow
with an unaffiliated financial institution pending shareholder approval of the
New Sub-Advisory Agreement. If Fund shareholders do not approve the New
Sub-Advisory Agreement within 150 days after consummation of the Transaction,
the amount held in escrow will be returned to the Fund.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act is available to the parties in connection
with the Transaction. Section 15(f) provides in substance that when a sale of a
controlling interest in an investment adviser occurs (including a sub-adviser),
the investment adviser or any of its affiliated persons may receive any amount
of benefit in connection
<PAGE>
therewith as long as two conditions are satisfied. First, an "unfair burden"
must not be imposed on the investment company as a result of the transaction
relating to the sale of such interest, or any express or implied terms,
conditions or understandings applicable thereto. The term "unfair burden" (as
defined in the 1940 Act) includes any arrangement during the two-year period
after the transaction whereby the investment adviser (or predecessor or
successor adviser), or any "interested person" (as defined in the 1940 Act) of
any such adviser, receives or is entitled to receive any compensation, directly
or indirectly, from the investment company or its security holders (other than
fees for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company. The Fund's Board of Directors is aware of
no circumstances arising from the Transaction that might result in an unfair
burden being imposed on the Fund. The second condition of Section 15(f) is that
during the three-year period following the consummation of a transaction, at
least 75% of the investment company's board of directors must not be "interested
persons" (as defined in the 1940 Act) of the investment adviser or predecessor
adviser. The Fund's Board of Directors currently meets this test.
THE OLD AND NEW SUB-ADVISORY AGREEMENTS
Prior to the Transaction, SBAM acted as sub-adviser to the Fund pursuant to
the Old Sub-Advisory Agreement. The Old Sub-Advisory Agreement was last
presented to Fund shareholders for their initial approval at a meeting held May
9, 1996, and was last reapproved by the Board at a meeting held May 23, 1997.
During the fiscal year ended October 31, 1997, SBAM received $214,596 in
sub-advisory fees under the Old Sub-Advisory Agreement.
As discussed above, the Transaction could be deemed to have resulted in the
assignment and termination of the Old Sub-Advisory Agreement. Therefore, at a
meeting held November 14, 1997, the Board approved the New Sub-Advisory
Agreement, which became effective on November 28, 1997, the date of consummation
of the Transaction.
The New Sub-Advisory Agreement contains the same terms and conditions,
including the fees payable thereunder, as the Old Sub-Advisory Agreement, except
for the effective and termination dates. A copy of the New Sub-Advisory
Agreement is attached as Exhibit A to
<PAGE>
this proxy statement and is summarized below. The following summary is qualified
in its entirety by reference to the text of the New Sub-Advisory Agreement.
Services to be Performed
Under the terms of the New Sub-Advisory Agreement, and subject to the
supervision of the Adviser, SBAM will continue to direct the investment of the
Fund's assets and be responsible for the formulation and implementation of a
continuing program for the management of the Fund's assets and resources. SBAM
will continue to make all determinations with respect to the investment of the
assets of the Fund and will take all steps as may be necessary to implement the
determinations, including the placement of purchase and sale orders on behalf of
the Fund.
Expenses and Sub-Advisory Fees
Like the Old Sub-Advisory Agreement, the New Sub-Advisory Agreement
provides that the Adviser shall pay SBAM a monthly management fee at an annual
rate of .375% of the Fund's average weekly net assets during each month. Such
fee is equal to 75% of the advisory fee received by the Adviser from the Fund
under an Investment Advisory and Management Agreement between the Fund and the
Adviser. The New Sub-Advisory Agreement provides that SBAM shall bear all
expenses of its performance of its obligations thereunder, but no other
expenses.
Limitation of Liability
The New Sub-Advisory Agreement provides that SBAM will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund or
its shareholders in connection with the performance by SBAM of its duties
thereunder, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of SBAM in the performance of its duties or from reckless
disregard by SBAM of its duties under the New Sub-Advisory Agreement.
Duration and Termination
The New Sub-Advisory Agreement has an initial term of two years, and
thereafter will continue in effect only so long as such continuance is
<PAGE>
specifically approved at least annually by either the Board of Directors of the
Fund, or by a vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund, provided that, in either event, such continuance
is also approved by a vote of a majority of the directors who are not parties to
such Agreement, or interested persons of such parties, cast in person at a
meeting called for the purpose of voting on such approval. The New Sub-Advisory
Agreement provides for automatic termination in the event of its assignment. In
addition, the New Sub-Advisory Agreement is terminable at any time, without
penalty, by the Board of Directors of the Fund or by a vote of a majority of the
Fund's outstanding voting securities on 60 days' written notice to the Adviser
and SBAM, by the Adviser on 60 days' written notice to the Sub-Adviser, or by
the Sub-Adviser on 60 days' written notice to the Adviser.
BOARD DELIBERATIONS
At a meeting held on November 14, 1997, the Fund's Board of Directors,
including the Board members who are not "interested persons" (as defined in the
1940 Act) of any party to the New Sub-Advisory Agreement or its affiliates,
approved the New Sub-Advisory Agreement and recommended that shareholders of the
Fund approve such Agreement.
Prior to and during the meeting, the independent directors requested and
received all information they deemed necessary to enable them to determine
whether implementation of the New Sub-Advisory Agreement was in the best
interests of the Fund. In approving the New Sub-Advisory Agreement and
determining to submit it to shareholders for their approval, the Board
determined that in order to assure the continuity and efficiency of sub-advisory
services upon consummation of the Transaction it would be in the best interests
of the Fund to approve the New Sub-Advisory Agreement. In connection with its
review of the New Sub-Advisory Agreement, the Board reviewed materials furnished
by SBAM and Travelers. These materials included financial statements as well as
other written information regarding Travelers and Salomon and their personnel,
operations and financial condition. The Board also considered the nature,
quality and scope of the services provided by SBAM to date. The Board noted that
it was expected that SBAM would be operated as a separate subsidiary of
Travelers after consummation of the Transaction, with substantially the same
investment personnel that SBAM employed prior to the transaction.
<PAGE>
The Board also noted certain representations made by SBAM. SBAM represented that
it expected, after the Transaction, to continue to manage the Fund in the same
manner as prior to the closing, and that it anticipated no change in any of its
portfolio managers. SBAM also represented that it would take all appropriate
steps so that the scope and quality of advisory and other services provided to
the Fund upon consummation of the Transaction would be at least equivalent to
the scope and quality of services previously provided, and that it would apprise
and consult with the Board if personnel providing services during such period
were to change materially. In addition, the Board considered the fact that the
terms of the Old Sub-Advisory Agreement and the New Sub-Advisory Agreement are
substantially the same, including identical compensation terms. The Board also
noted that all compensation payable to SBAM under the New Sub-Advisory Agreement
would be held in escrow pending approval by Fund shareholders of such Agreement.
Finally, the Board noted that the expenses of solicitation would be borne by
Travelers or its affiliates.
In addition to the foregoing considerations, the Board considered the high
likelihood of SBAM's and Travelers' financial stability following consummation
of the Transaction, particularly in light of the overall experience and
reputation of SBAM and Travelers and their financial stability, and whether
there were any aspects of the Transaction likely to affect the ability of SBAM
to retain and attract qualified personnel following consummation.
VOTE REQUIRED
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE TO APPROVE THE PROPOSED NEW SUB-ADVISORY AGREEMENT. Adoption of the
proposal requires the favorable vote of a majority of the outstanding shares of
the Fund, as defined in the 1940 Act, which means the lesser of the vote of (a)
67% of the shares of the Fund present at a meeting where more than 50% of the
outstanding shares are present in person or by proxy, or (b) more than 50% of
the outstanding shares of the Fund. Unless otherwise instructed, the proxies
will vote for the approval of the proposed New Sub-Advisory Agreement.
<PAGE>
SUPPLEMENTAL INFORMATION ABOUT THE ADVISER
The Adviser is a wholly owned subsidiary of Piper Jaffray Companies Inc.
("Piper Jaffray"), a publicly held corporation which is engaged through its
subsidiaries in various aspects of the financial services industry. The address
of the Fund, the Adviser and Piper Jaffray is Piper Jaffray Tower, 222 South
Ninth Street, Minneapolis, Minnesota 55402-3804.
On December 15, 1997, Piper Jaffray announced that it had entered into an
agreement to be acquired by U.S. Bancorp. It is anticipated that this
acquisition will be completed in the second quarter of 1998, subject to
regulatory approvals, the approval of Piper Jaffray shareholders and the
satisfaction of customary closing conditions. Under the 1940 Act, consummation
of the acquisition of Piper Jaffray by U.S. Bancorp will result in the
assignment and automatic termination of the Fund's investment advisory and
sub-advisory agreements (including the New Sub-Advisory Agreement which
shareholders are being asked to approve). Consequently, subject to prior
approval by the Fund's Board of Directors, it is anticipated that Fund
shareholders will be asked to approve new advisory and sub-advisory agreements
containing the same fees and other substantive terms as the current agreements.
The names and principal occupations of the principal executive officer and
each director of the Adviser are set forth below. The address of all individuals
is that of the Fund.
Name Principal Occupation
- ------------------- -----------------------------------------------------
Paul A. Dow Chief Executive Officer and Chief Investment Officer
of the Adviser.
Deborah K. Roesler Director of the Adviser and Chief Financial
Officer/Treasurer of Piper Jaffray Companies Inc.
Paula R. Meyer Director and President of the Adviser.
Keith A. Kale Director of the Adviser and Director of Marketing for
Piper Jaffray Inc.
<PAGE>
The following officers of the Fund are also officers and employees of the
Adviser. No directors of the Fund are officers, directors or employees of the
Adviser.
Name Position with Fund Position with Adviser
- ----------------- ------------------- -----------------------------
Paul A. Dow President See table above
Robert H. Nelson Vice President and Senior Vice President
Treasurer
Susan S. Miley Secretary Senior Vice President,
General Counsel and Secretary
The Fund's directors and executive officers own, individually and in the
aggregate, directly or indirectly, less than 1% of the outstanding shares of
each of the Fund, Piper Jaffray (the parent of the Adviser) and Travelers (the
indirect parent of SBAM).
The Adviser currently serves as investment adviser for the following
investment companies that have an investment objective similar to that of the
Fund:
Net Assets at
Funds Rate of Compensation January 30, 1998
- ----------------------- ---------------------------- ----------------
American Government *see below $16,080,953
Income Fund Inc.
("AGF")
American Government *see below 18,357,911
Income Portfolio Inc.
("AAF")
American Opportunity **see below 16,990,546
Income Fund Inc.
("OIF")
American Strategic **see below 4,723,026
Income Portfolio Inc.
("ASP")
<PAGE>
Net Assets at
Funds Rate of Compensation January 30, 1998
- ----------------------- ---------------------------- ----------------
American Strategic **see below $17,946,820
Income Portfolio
Inc.--II ("BSP")
American Strategic **see below 24,068,468
Income Portfolio
Inc.--III ("CSP")
Highlander Income Annual rate of .60%
Fund Inc. of average weekly net assets 1,989,467
American Select Annual rate of .50%
Portfolio Inc. of average weekly net assets 11,955,683
Government Income Annual rate of .50% on first
Fund (series of Piper $250,000,000; .45% on next
Funds Inc.) $250,000,000; and .40% on
average daily net assets
over $500,000,000 6,958,110
Intermediate Bond Annual rate of .30% on first
Fund (series of Piper $100,000,000; .25% on next
Funds Inc.) $150,000,000; and .20% on
average daily net assets
over $250,000,000 8,082,336
- -----------------
* With respect to AGF and AAF, the Adviser receives monthly advisory fees in
an amount equal to the sum of .025% of the average weekly net assets of
each such fund during the month (approximately .30 of 1% on an annual
basis) and 5.25% of the daily gross income (i.e., income other than gains
from the sale of securities or gains received from options and futures
contracts less interest on money borrowed by the fund) accrued by the fund
during the month, but such monthly management fee may not exceed in the
aggregate 1/12 of .60% of such fund's average weekly net assets during the
month (approximately .60% on an annual basis).
** The Adviser receives a monthly management fee from each of OIF, ASP, BSP
and CSP equal to the sum of .01667% of the average weekly net assets of
such fund during the month (approximately .20 of 1% on an annual basis) and
4.5% of the daily gross income (i.e., income other than gains from the sale
of securities or gains received from options and futures
<PAGE>
contracts less interest on money borrowed by such fund) accrued by such
fund during the month, but such monthly management fee shall not exceed in
the aggregate 1/12 of .725% of the fund's average weekly net assets during
the month (approximately .725% on an annual basis).
The Adviser has not waived, reduced or otherwise agreed to reduce its
compensation under any contract applicable to the above Funds.
In addition to providing investment advisory services to the Fund, the
Adviser provides administrative services to the Fund pursuant to an
Administration Agreement between the Adviser and the Fund. For the fiscal year
ended October 31, 1997, the Fund paid $288,685 in investment advisory fees
($214,596 of which was paid by the Adviser to SBAM) and $115,474 in
administration fees to the Adviser. The Adviser will continue to serve as the
Fund's investment adviser and administrator if the New Sub-Advisory Agreement
discussed above is approved.
As investment adviser to the Fund, the Adviser also receives research
services from broker-dealers that execute portfolio transactions for the Fund.
In selecting brokers to execute portfolio transactions for the Fund, the Adviser
seeks to obtain the best price and execution of orders. When consistent with
these criteria, business may be placed with broker-dealers who furnish
investment research services to the Adviser. Such research services are used by
the Adviser in carrying out its investment management responsibilities with
respect to its client accounts generally, but not necessarily in connection with
the Fund.
For the fiscal year ended October 31, 1997, the Fund paid no brokerage
commissions to affiliated brokers.
SUPPLEMENTAL INFORMATION ABOUT THE SUB-ADVISER
SBAM is a corporation organized under the laws of Delaware on December 24,
1987 and is registered as an investment adviser pursuant to the Investment
Advisers Act of 1940, as amended. SBAM has served as sub-adviser to the Fund
since May 14, 1996. As of December 31, 1997, SBAM and its worldwide investment
advisory affiliates managed approximately $26 billion of assets, of which SBAM
managed approximately $19.7 billion. The principal business address of SBAM is
7 World Trade Center, New York, New York 10048.
<PAGE>
SBAM is a wholly owned subsidiary of Salomon Smith Barney Holdings Inc.
("Salomon Smith Barney"), which is in turn wholly owned by Travelers. The
principal business address of Salomon Smith Barney and Travelers is 388
Greenwich Street, New York, New York 10013.
The names and principal occupations of the current directors and executive
officers of SBAM are set forth below. The address of all individuals, except Mr.
Gadkari, is 7 World Trade Center, New York, New York 10048. The business address
of Mr. Gadkari is Victoria Plaza, 111 Buckingham Palace Road, London, England
SW1W OSB.
Name Principal Occupation
- ------------------ -----------------------------------------------------
Thomas W. Brock Chairman, Chief Executive Officer and Managing
Director of SBAM and Managing Director and Member of
the Management Board of Salomon Brothers Inc.
Michael S. Hyland President, Managing Director and Member of the Board
of SBAM and Managing Director of Salomon Brothers
Inc.
Rodney B. Berens Managing Director and Member of the Board of SBAM and
Managing Director and Member of the Management Board
of Salomon Brothers Inc.
Vilas V. Gadkari Managing Director and Member of the Board of SBAM and
Managing Director of Salomon Brothers Inc.
Zachary Snow Secretary of SBAM and Managing Director and Counsel
of Salomon Brothers Inc.
No director, officer or employee of SBAM is an officer or director of the
Fund.
SBAM currently serves as investment adviser for the following investment
companies that have an investment objective similar to that of the Fund:
<PAGE>
Net Assets at
Funds Rate of Compensation January 30, 1998
- ----------------------- ------------------------- ----------------
Salomon Brothers High Annual rate of .75% of
Yield Bond Fund Inc.* average daily net assets $599,080,590
Salomon Brothers High Annual rate of .70% of
Income Fund Inc. average daily net assets 71,922,623
Salomon Brothers Annual rate of .90 of
Worldwide Income average weekly net assets 195,950,338
Fund Inc.**
Global Partners Income Annual rate of .65% of
Fund Inc.*** average weekly net assets 214,411,677
- ------------------
* For the last fiscal year SBAM waived certain management fees.
** SBAM also serves as Administrator and is paid a monthly fee at an annual
rate of .15% of the value of the Fund's average weekly net assets up to
$250 million and .125% of the value of such net assets in excess of $250
million for its services. SBAM in turn pays 80% of such fees collected to
Prudential Mutual Fund Management, Inc. which serves as sub-administrator
for the Fund. During the last fiscal year, SBAM was paid $315,258 by the
Fund for its service as Administrator.
*** Fee is paid by Value Advisors LLC out of its management fee and includes
compensation for administration services.
SHAREHOLDER PROPOSALS
The due date for shareholder proposals to be considered for presentation at
the Fund's next annual meeting has passed. As stated in the Fund's proxy
statement dated July 11, 1997, such proposals were due at the Fund's offices no
later than March 1, 1998.
Susan Sharp Miley, Secretary
Dated: March 2, 1998
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
Agreement, dated as of November 28, 1997, by and between Piper Capital
Management Incorporated, a Delaware corporation (the "Adviser"), and Salomon
Brothers Asset Management Inc, a Delaware corporation (the "Sub-Adviser").
WHEREAS, the Adviser is the investment adviser to The Americas Income Trust
Inc. (the "Company"), a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist the
Adviser in furnishing an investment program to the Company.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Adviser and the Sub-Adviser agree as follows:
1. The Adviser hereby employs the Sub-Adviser to serve as sub-adviser with
respect to the assets of the Company, and to perform the services hereinafter
set forth. The Sub-Adviser hereby accepts such employment and agrees, for the
compensation herein provided, to assume all obligations herein set forth and to
bear all expenses of its performance of such obligations (but no other
expenses). The Sub-Adviser shall not be required to pay expenses of the Company,
including, but not limited to (a) brokerage and commission expenses; (b)
federal, state, local and foreign taxes, including issue and transfer taxes
incurred by or levied on the Company; (c) interest charges on borrowings; (d)
the cost of other personnel providing services to the Company; (e) fees and
expenses of registering and maintaining registration of the Company's shares
under appropriate federal securities laws and of registering or otherwise
qualifying and maintaining registration or qualification of the shares of the
Company under applicable state securities laws; (f) fees and expenses of listing
and maintaining the listing of the Company's shares on the principal exchanges
where listed or, if the Company's shares are not so listed, fees and expenses of
listing and maintaining the quotation of the Company's shares on the principal
over-the-counter market where traded; (g) expenses of printing and distributing
reports to
<PAGE>
shareholders; (h) costs of shareholders' meetings and proxy solicitation; (i)
charges and expenses of the Company's administrator, custodian and registrar,
transfer agent and dividend disbursing agent; (j) compensation of the Company's
officers, directors and employees that are not Affiliated Persons or Interested
Persons (as defined in Section 2(a)(19) of the 1940 Act and the rules,
regulations and releases relating thereto) of the Adviser or the Sub-Adviser;
(k) legal and auditing expenses; (l) costs of certificates representing common
shares of the Company; (m) costs of stationery and supplies; (n) insurance
expenses; (o) association membership dues; (p) travel expenses of officers and
employees of the Sub-Adviser to the extent such expenses relate to the
attendance of such persons at meetings at the request of the Board of Directors
of the Company; (q) travel expenses for attendance at Board of Directors
meetings by members of the Board of Directors of the Company, if any, who are
also "interested persons" or "affiliated persons" of the Sub-Adviser; and (r)
all other charges and costs of the Company's operation unless otherwise
explicitly provided herein. The Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as expressly provided
or authorized (whether herein or otherwise), have no authority to act for or on
behalf of the Company in any way or otherwise be deemed an agent of the Company.
2. The Sub-Adviser shall direct the investment of the Company's assets in
accordance with the 1940 Act, the provisions of the Internal Revenue Code of
1986, as amended, relating to regulated investment companies, applicable laws,
and the investment objective, policies and restrictions set forth in the
Company's Prospectus and Statement of Additional Information filed with the
Securities and Exchange Commission pursuant to Rule 497 under the Securities Act
of 1933, subject to the supervision of the Company, its officers and directors,
and the Adviser and in accordance with the investment objectives, policies and
restrictions from time to time prescribed by the Board of Directors of the
Company and communicated by the Adviser to the Sub-Adviser and subject to such
further limitations as the Adviser may from time to time impose by written
notice to the Sub-Adviser.
3. The Sub-Adviser shall formulate and implement a continuing program for
the management of the Company's assets. The Sub-Adviser shall amend and update
such program from time to time as financial and other economic conditions
warrant. The Sub-Adviser shall make all determinations with respect to the
investment of the assets of the
<PAGE>
Company and shall take such steps as may be necessary to implement the same,
including the placement of purchase and sale orders on behalf of the Company.
The Sub-Adviser shall advise the Adviser and, if requested by the Adviser,
advise the Company's Board of Directors (which shall make all non-investment
decisions with respect to the securities in which the assets of the Company may
be invested), of the manner in which voting rights, rights to consent to
corporate action, and any other noninvestment decisions pertaining to the
Company's portfolio securities should be exercised.
4. The Sub-Adviser shall furnish such reports to the Adviser as the Adviser
may reasonably request for the Adviser's use in discharging its obligations
under the Investment Advisory and Management Agreement between the Company and
the Adviser (the "Advisory Agreement"), which reports may be distributed by the
Adviser to the Company's Board of Directors at periodic meetings of such Board
and at such other times as may be reasonably requested by the Company's Board of
Directors. Copies of all such reports shall be furnished to the Adviser for
examination and review within a reasonable time prior to the presentation of
such reports to the Company's Board of Directors.
5. The Sub-Adviser shall select the brokers and dealers that will execute
the purchases and sales of portfolio instruments for the Company and markets on
or in which such transactions will be executed and shall place, in the name of
the Company or its nominee, all such orders.
(a) When placing such orders, the Sub-Adviser is authorized to employ such
dealers and brokers as may, in the judgment of the Sub-Adviser (taking into
account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities),
implement the policy of the Company to obtain the best price and execution.
Consistent with this policy, the Sub-Adviser is authorized to direct the
execution of the Company's portfolio transactions to dealers and brokers
furnishing statistical information or research deemed by the Sub-Adviser to be
useful or valuable to the performance of its sub-advisory functions for the
Company. Information so received will be in addition to and not in lieu of the
services required to be performed by the Sub-Adviser.
<PAGE>
It is understood that certain other clients of the Sub-Adviser may have
investment objectives and policies similar to those of the Company, and that the
Sub-Adviser may, from time to time, make recommendations that result in the
purchase or sale of a particular security by its other clients simultaneously
with the Company. If transactions on behalf of more than one client during the
same period increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or quantity. In
such event, the Sub-Adviser shall allocate advisory recommendations and the
placing of orders in a manner that is deemed equitable by the Sub-Adviser to the
accounts involved, including the Company. When two or more of the clients of the
Sub-Adviser (including the Company) are purchasing or selling the same security
on a given day from the same broker or dealer, such transactions may be averaged
as to price.
(b) The Sub-Adviser agrees that, except to the extent permitted under Rule
17a-7 under the 1940 Act, or under any no-action letter or exemptive order
issued to the Company by the Securities and Exchange Commission, it will not
purchase or sell securities for the Company in any transaction in which it, the
Adviser or any "affiliated person" of the Company, the Adviser or Sub-Adviser or
any affiliated person of such "affiliated person" is acting as principal. The
Sub-Adviser agrees that any transactions effected under Rule 17a-7 shall comply
with the then-effective procedures adopted under such rule by the Company's
Board of Directors.
(c) The Sub-Adviser agrees that it will not execute any portfolio
transactions for the Company with a broker or dealer or futures commission
merchant which is an "affiliated person" of the Company, the Adviser or the
Sub-Adviser or an "affiliated person" of such an "affiliated person" without the
prior written consent of the Adviser. Notwithstanding the foregoing,
transactions may be effected through Piper Jaffray Inc. if commissions, fees or
other remuneration received are reasonable and fair compared to the commissions,
fees or other remuneration paid to other brokers or dealers or other futures
commission merchants in connection with comparable transactions involving
similar securities or similar futures contracts or options thereon being
purchased or sold on an exchange or contract market during a comparable period
of time. In effecting such transactions, the Sub-Adviser shall comply with
Section 17(e)(1) of the 1940 Act and the
<PAGE>
then-effective procedures adopted under such rule by the Company's Board of
Directors.
(d) The Sub-Adviser shall promptly communicate to the Adviser and, if
requested by the Adviser, to the Company's Board of Directors, such information
relating to portfolio transactions as the Adviser may reasonably request. The
parties understand that the Company shall bear all brokerage commissions in
connection with the purchases and sales of portfolio securities for the Company
and all ordinary and reasonable transaction costs in connection with purchases
of such securities in private placements and subsequent sales thereof.
6. The Sub-Adviser may (at its cost except as contemplated by paragraph 5
of this Agreement) employ, retain or otherwise avail itself of the services and
facilities of persons and entities within its own organization or any other
organization for the purpose of providing the Sub-Adviser, the Adviser or the
Company with such information, advice or assistance, including but not limited
to advice regarding economic factors and trends and advice as to transactions in
specific securities, as the Sub-Adviser may deem necessary, appropriate or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Adviser or the Company, or in the discharge of the Sub-Adviser's overall
responsibilities with respect to the other accounts for which it serves as
investment manager or investment adviser.
7. The Sub-Adviser shall cooperate with and make available to the Adviser,
the Company and any agents engaged by the Company, the Sub-Adviser's expertise
relating to matters affecting the Company.
8. For the services to be rendered and the facilities to be furnished under
this Agreement, the Adviser shall pay to the Sub-Adviser a monthly management
fee at the annual rate of .375% of the Company's average weekly net assets
during each month, as calculated below.
For purposes of the calculation of such fee, average weekly net assets
shall be determined on the basis of the Company's average net assets for each
weekly period (ending on Friday) ending during the month. The net assets for
each weekly period are determined by averaging the net assets on the Friday of
such weekly period with the net assets on the Friday of the immediately
preceding weekly period. When a Friday is not a business day for the Company,
then the calculation will be based on the Company's net assets on the business
<PAGE>
day immediately preceding such Friday. Such fee shall be payable on the fifth
day of each calendar month for services performed hereunder during the preceding
month. If this Agreement becomes effective subsequent to the first day of a
month or shall terminate before the last day of a month, compensation for that
part of the month during which this Agreement is in effect shall be prorated in
a manner consistent with the calculation of fees as set forth above.
Anything to the contrary herein notwithstanding, the Sub-Adviser may at any
time and from time to time waive any part or all of any fee payable to it
pursuant to this Agreement.
9. The Sub-Adviser represents, warrants and agrees that:
(a) The Sub-Adviser is registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act") and is currently in compliance
and shall at all times continue to comply with the requirements imposed upon it
by the Advisers Act and other applicable laws and regulations. The Sub-Adviser
agrees to (i) supply the Adviser with such documents as the Adviser may
reasonably request to document compliance with such laws and regulations and
(ii) immediately notify the Adviser of the occurrence of any event which would
disqualify the Sub-Adviser from serving as an investment adviser of a registered
investment company pursuant to any applicable law or regulation.
(b) The Sub-Adviser will maintain, keep current and preserve on behalf of
the Company in the manner provided by the 1940 Act all records required by the
1940 Act with respect to the Sub-Adviser's activities hereunder. The Sub-Adviser
agrees that such records are the property of the Company, and will be
surrendered to the Company promptly upon request.
(c) The Sub-Adviser will complete such reports concerning purchases or
sales of securities on behalf of the Company as the Adviser or the Company's
administrator may from time to time require to document compliance with the 1940
Act, the Advisers Act, the Internal Revenue Code, applicable state securities
laws and other applicable laws and regulations or regulatory and taxing
authorities in countries other than the United States.
<PAGE>
(d) After filing with the Securities and Exchange Commission any amendment
to its Form ADV, the Sub-Adviser will promptly furnish a copy of such amendment
to the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the occurrence
of any event which would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9 of the 1940
Act or any other applicable statute or regulation.
10. The Adviser represents, warrants and agrees that:
(a) It has been duly authorized by the Board of Directors of the Company to
delegate to the Sub-Adviser the provision of the services contemplated hereby.
(b) The Adviser and the Company are currently in compliance and shall at
all times continue to comply with the requirements imposed upon the Adviser and
the Company by applicable law and regulations.
11. The Sub-Adviser will not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company or its shareholders in connection
with the performance of its duties under this Agreement, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
12. This Agreement shall become effective as of the date first set forth
above. Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect for a period of two years from the date of its execution, and
thereafter shall continue in effect only so long as such continuance is
specifically approved at least annually (a) by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
Company, and (b) by the vote of a majority of the directors who are not parties
to this Agreement or Interested Persons of any such parties, cast in person at a
meeting called for the purpose of voting on such approval. It shall be the duty
of the Directors of the Company to request and evaluate, and the duty of the
Adviser and Sub-Adviser to furnish, such information as may be reasonably
necessary to evaluate the terms of this Agreement and any renewal thereof.
<PAGE>
This Agreement may be terminated at any time without the payment of any
penalty (a) by the vote of the Board of Directors of the Company or by the vote
of the holders of a majority of the outstanding voting securities of the
Company, upon 60 days' written notice to the Adviser and the Sub-Adviser, or (b)
by the Adviser, upon 60 days' written notice to the Sub-Adviser; or (c) by the
Sub-Adviser, upon 60 days' written notice to the Adviser. This Agreement shall
automatically terminate in the event of its assignment as defined in the 1940
Act and the rules thereunder. This Agreement shall automatically terminate upon
completion of the dissolution, liquidation or winding up of the Company.
Wherever referred to in this Agreement, the vote or approval of the holders
of a majority of the outstanding voting securities or shares of the Company
shall mean the vote of 67% or more of such shares if the holders of more than
50% of such shares are present in person or by proxy or the vote of more than
50% of such shares, whichever is less.
13. No amendment to or modification of this Agreement shall be effective
unless and until approved by the vote of a majority of the outstanding shares of
the Company.
14. This Agreement shall be binding upon, and inure to the benefit of, the
Adviser and the Sub-Adviser, and their respective successors.
15. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
16. Nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or any affiliate of the Sub-Adviser, or any employee of the
Sub-Adviser, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
17. To the extent that state law is not preempted by the provisions of any
law of the United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered, construed and
enforced according to the laws of the State of Minnesota.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers thereunto duly authorized in multiple counterparts,
each of which shall be an original but all of which shall constitute one of the
same instrument.
PIPER CAPITAL MANAGEMENT
INCORPORATED
By /s/ Robert H. Nelson
------------------------------
Name: Robert H. Nelson
Title: Senior Vice President
SALOMON BROTHERS ASSET
MANAGEMENT INC
By /s/ Thomas W. Brock
------------------------------
Name: Thomas W. Brock
Title: Chairman
<PAGE>
THE AMERICAS INCOME
TRUST INC.
NOTICE OF SPECIAL
MEETING OF SHAREHOLDERS
DATE: APRIL 9, 1998
TIME: 10:00 A.M.
PLACE:
PIPER JAFFRAY TOWER, 11TH FLOOR
222 SOUTH NINTH STREET
MINNEAPOLIS, MINNESOTA
IMPORTANT:
PLEASE DATE AND SIGN YOUR
PROXY CARD AND RETURN IT PROMPTLY
USING THE ENCLOSED REPLY ENVELOPE.
<PAGE>
THE AMERICAS INCOME TRUST INC.
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints Paul A. Dow, Robert H. Nelson and Susan S.
Miley, and each of them, with power to act without the other and with the right
of substitution in each, the proxies of the undersigned to vote all shares of
The Americas Income Trust Inc. (the "Fund"), held by the undersigned at a
special meeting of shareholders of the Fund to be held on April 9, 1998, and at
any adjournments thereof, with all the powers the undersigned would possess if
present in person. All previous proxies given with respect to the meeting are
revoked.
THE PROXIES ARE INSTRUCTED:
1. To vote: FOR_____ AGAINST_____ ABSTAIN_____ approval of a new sub-advisory
agreement between the Adviser and Salomon Brothers Asset Management Inc.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the annual meeting or any adjournments or
postponements thereof.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTER. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE
ABOVE ITEM. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE
BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.
Dated:____________________________, 1998
________________________________________
________________________________________
IMPORTANT: Please date and sign this
proxy. If the stock is held jointly,
signature should include both names.
Executors, administrators, trustees,
guardians, and others signing in a
representative capacity should give
their full title as such.
