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 section 240.14a-11(c)
or section 240.14a-12
Highlander Income Fund Inc.
(Name of Registrant as Specified in its Charter)
[Insert Name]
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction :
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
HIGHLANDER INCOME FUND INC.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 17, 1995
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Highlander Income Fund Inc. (the "Fund") will be held at 10:00 a.m., Central
Time, on Thursday, August 17, 1995, on the eleventh floor of the Piper Jaffray
Tower, 222 South Ninth Street, Minneapolis, Minnesota. The purposes of the
meeting are as follow:
1. To fix the number of members of the Board of Directors at six and to
elect a Board of Directors of the Fund.
2. To ratify the selection by a majority of the independent members of the
Board of Directors of the Fund of KPMG Peat Marwick LLP as independent
public accountants for the Fund for the fiscal year ending February 28,
1996.
3. To transact such other business as may properly come before the
meeting.
Shareholders of record on June 23, 1995, 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.
David Evans Rosedahl, Secretary
Dated: July 7, 1995
PROXY STATEMENT
HIGHLANDER INCOME FUND INC.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
ANNUAL MEETING OF SHAREHOLDERS--AUGUST 17, 1995
The enclosed proxy is solicited by the Board of Directors of Highlander
Income Fund Inc. (the "Fund") in connection with the annual meeting of
shareholders of the Fund to be held August 17, 1995, and any adjournments
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 Fund, and
such mailing will take place on approximately July 12, 1995. 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. The address of the Adviser is that of the Fund as provided above.
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 choices are not specified by
the shareholders will be voted "for" each item for which no choice is specified,
in accordance with the recommendation of the Fund's Board of Directors. In
instances where choices are specified by the shareholders in the proxy, those
proxies will be voted or the vote will be withheld in accordance with the
shareholder's choice. With regard to the election of directors, votes may be
cast in favor or withheld; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals other than the election of directors and will be counted as present
for purposes of determining whether a quorum of shares is present at the meeting
with respect to the item on which the abstention is noted, but will be counted
as a vote "against" such item. Under the Rules of the New York Stock Exchange,
each of the proposals being considered at the meeting is considered a
"discretionary" proposal, which means that brokers who hold Fund shares in
street name for customers are authorized to vote on such proposal on behalf of
their customers with or without specific voting instructions from such
customers. Should any other matters properly come before the meeting, it is the
intention of the persons named as proxies in the enclosed proxy to act upon them
according to their best judgment.
Only shareholders of record on June 23, 1995, may vote at the meeting or
any adjournments thereof. As of that date, there were issued and outstanding
2,002,467 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. None of the matters to be presented at
the meeting will entitle any shareholder to appraisal rights. No person, to the
knowledge of Fund management, was the beneficial owner of more than 5% of the
voting shares of the Fund as of June 26, 1995.
THE FUND'S ANNUAL REPORT FOR THE FISCAL PERIOD ENDED FEBRUARY 28, 1995,
INCLUDING FINANCIAL STATEMENTS, WAS PREVIOUSLY MAILED TO SHAREHOLDERS. IF YOU
HAVE NOT RECEIVED THIS REPORT OR WOULD LIKE TO RECEIVE ANOTHER COPY, PLEASE
CONTACT THE FUND 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.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws of the Fund provide that the shareholders have the power to fix
the number of Directors. The Directors recommend that the size of the Board of
Directors be set at six.
It is intended that the enclosed Proxy will be voted for the election of
the six persons named below as Directors of the Fund unless such authority has
been withheld in the proxy. The term of office of each person elected will be
until the next annual meeting of shareholders or until his or her successor is
duly elected and shall qualify. Pertinent information regarding each nominee for
the past five years is set forth following his or her name below. Each of the
nominees also serves as a Director of each of the other closed-end and open-end
investment companies managed by the Adviser (except that Mr. Bennett does not
serve as a Director of Piper Global Funds Inc.). Each Director has served as a
Director of the Fund since the commencement of operations on March 31, 1994.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING PAST 5 YEARS
<S> <C> <C>
David T. Bennett 54 Of counsel to the law firm of Gray, Plant, Mooty, Mooty & Bennett, P.A.,
located in Minneapolis, Minnesota. Mr. Bennett is chairman of a group
of privately held companies and serves on the board of directors of a
number of non-profit organizations.
Jaye F. Dyer 68 President of Dyer Management Company, a private management company,
since January 1, 1991; prior thereto, Mr. Dyer was President and Chief
Executive Officer of Dyco Petroleum Corporation, a Minneapolis based oil
and natural gas development company he founded, from 1971 until March 1,
1989, and Chairman of the Board until December 31, 1990. Mr. Dyer
serves on the board of directors of Northwestern National Life Insurance
Company, The ReliaStar Financial Corp. (the holding company of
Northwestern National Life Insurance Company) and various privately held
and nonprofit corporations.
William H. Ellis* 53 President of Piper Jaffray Companies Inc. and Piper Jaffray Inc. since
September 1982 and Chief Operating Officer of the same two companies
since August 1983; Director and Chairman of the Board of the Adviser
since October 1985 and President of the Adviser since December 1994.
Karol D. Emmerich 46 President of The Paraclete Group, a consultant to nonprofit
organizations, since May 1993; prior thereto, Ms. Emmerich was Vice
President, Treasurer and Chief Accounting Officer of Dayton Hudson
Corporation from 1980 to May 1993. Ms. Emmerich is an Executive Fellow
at the University of St. Thomas Graduate School of Business and serves
on the board of directors of a number of privately held and nonprofit
corporations.
Luella G. Goldberg 58 Member of the Board of Directors of Northwestern National Life Insurance
Company (since 1976), The ReliaStar Financial Corp. (since 1989), TCF
Financial Corporation (since 1988), the holding company of TCF Bank
Savings fsb (since 1985) and Hormel Foods Corp. (since 1993). Ms.
Goldberg also serves as a Trustee of Wellesley College and as a director
of a number of other organizations, including the University of
Minnesota Foundation and the Minnesota Orchestral Association. Ms.
Goldberg was Chairman of the Board of Trustees of Wellesley College from
1985 to 1993 and acting President from July 1, 1993 to October 1, 1993.
George Latimer 59 Director, Special Actions Office, Office of the Secretary, Department of
Housing and Urban Development since 1993; prior thereto, Mr. Latimer had
been Dean of Hamline Law School, Saint Paul, Minnesota, since 1990. Mr.
Latimer also serves on the board of directors of Digital Biometrics,
Inc. and Payless Cashways, Inc.
</TABLE>
*Denotes Directors who are "interested persons" (as defined by the Investment
Company Act of 1940, as amended) of the Fund. Mr. Ellis is deemed an "interested
person" of the Fund because of his positions with the Adviser and/or its
affiliates.
Except as indicated above, the Directors of the Fund are not directors of
any other "reporting companies." As of June 26, 1995, the officers and Directors
of the Fund as a group beneficially owned less than 1% of the Fund's outstanding
shares. None of the officers or Directors of the Fund have family relationships
with other officers or Directors of the Fund.
The Board of Directors of the Fund has established an Audit Committee,
currently consisting of Mr. Dyer, Ms. Emmerich and Ms. Goldberg, who serves as
its chairperson. The Audit Committee met twice during the period from March 31,
1994 (commencement of operations) to February 28, 1995. The Fund does not have
nominating or compensation committees.
The functions to be performed by the Audit Committee are to recommend
annually to the Board a firm of independent certified public accountants to
audit the books and records of the Fund for the ensuing year; to monitor that
firm's performance; to review with the firm the scope and results of each audit
and determine the need, if any, to extend audit procedures; to confer with the
firm and representatives of the Fund on matters concerning the Fund's financial
statements and reports including the appropriateness of its accounting practices
and of its financial controls and procedures; to evaluate the independence of
the firm; to review procedures to safeguard portfolio securities; to review the
purchase by the Fund from the firm of non-audit services; to review all fees
paid to the firm; and to facilitate communications between the firm and the
Fund's officers and Directors.
The Board of Directors also has established a Committee of the Independent
Directors, consisting of Mr. Bennett, who serves as chairperson, Messrs. Dyer
and Latimer, Ms. Emmerich and Ms. Goldberg and a Derivatives Committee
consisting of Ms. Emmerich, who serves as chairperson, Ms. Goldberg and Mr.
Dyer. The Committee of the Independent Directors met three times and the
Derivatives Committee met one time during the period from their formation on
November 1, 1994 through the fiscal year ended February 28, 1995.
The functions of the Committee of the Independent Directors are: (a)
recommendation to the full Board of approval of any management, advisory,
sub-advisory and/or administration agreements; (b) recommendation to the full
Board of approval of any underwriting and/or distribution agreements; (c) review
of the fidelity bond and premium allocation; (d) review of errors and omissions
and any other joint insurance policies and premium allocation; (e) review of,
and monitoring of compliance with, procedures adopted pursuant to certain rules
promulgated under the 1940 Act; and (f) such other duties as the independent
directors shall, from time to time, conclude are necessary or appropriate to
carry out their duties under the 1940 Act. The functions of the Derivatives
Committee are: (a) to oversee practices, policies and procedures of the Adviser
in connection with the use of derivatives; (b) to receive periodic reports from
management and independent accountants; and (c) to report periodically to the
Committee of the Independent Directors and the Board of Directors.
During the period from March 31, 1994 (commencement of operations) to
February 28, 1995, there were five meetings of the Board of Directors. All
Directors attended at least 75% of the aggregate of the meetings of the Board of
Directors and meetings of committees of which they were members that were held
while they were serving on the Board of Directors or on such committee.
No compensation is paid by the Fund to any of its Directors who are
officers or employees of the Adviser or any of its affiliates. The Fund,
together with all closed-end investment companies managed by the Adviser, pays
each of the other Directors an aggregate quarterly retainer of $5,000, which is
allocated among the Fund and such other investment companies on the basis of
each company's net assets. In addition, the Fund pays each such Director a fee
for each in-person meeting of the Board of Directors he or she attends. Such fee
is based on the net asset value of the Fund and ranges from $250 (net assets of
less than $200 million) to $1,500 (net assets of $5 billion or more). Members of
the Audit Committee who are not affiliated with the Adviser receive $1,000 per
meeting attended ($2,000 for the chairperson of such Committee) with such fee
being allocated among all closedand open-end investment companies managed by the
Adviser on the basis of relative net asset values. Members of the Committee of
the Independent Directors and the Derivatives Committee currently receive no
additional compensation. In addition, each Director who is not affiliated with
the Adviser is reimbursed for expenses incurred in connection with attending
meetings.
The following table sets forth the aggregate compensation received by each
Director from the Fund for the fiscal year ended February 28, 1995, as well as
the total compensation received by each Director from the Fund and all other
open-end and closed-end investment companies managed by the Adviser or an
affiliate of the Adviser (the "Fund Complex") during the calendar year ended
December 31, 1994. Directors who are officers or employees of the Adviser or any
of its affiliates did not receive any such compensation and are not included in
the table.
<TABLE>
<CAPTION>
Pension or Retirement Estimated Total
Aggregate Benefits Annual Benefits Compensation
Compensation Accrued as Part Upon from Fund
Director from the Fund of Fund Expense Retirement Complex*
<S> <C> <C> <C> <C>
David T. Bennett $1,909 None None $57,500
Jaye F. Dyer $1,962 None None $68,250
Karol D. Emmerich $1,962 None None $68,250
Luella G. Goldberg $2,014 None None $71,250
George Latimer $1,909 None None $65,250
</TABLE>
* Consists of 26 open-end and closed-end investment companies managed by the
Adviser or an affiliate of the Adviser, including the Fund. Each director
included in the table, other than Mr. Bennett, serves on the board of each
such open-end and closed end investment company. Mr. Bennett serves on the
board of 24 of such open-end and closed-end investment companies.
The Board of Directors recommends that the shareholders of the Fund vote in
favor of the foregoing nominees to serve as Directors of the Fund. The vote of a
majority of shares of the Fund represented at the meeting, provided at least a
quorum (a majority of the outstanding shares) is represented in person or by
proxy, is sufficient for the election of the above nominees to the Board of
Directors. Unless otherwise instructed, the proxies will vote for the above six
nominees. In the event any of the above nominees are not candidates for election
at the meeting, the proxies will vote for such other persons as the Board of
Directors may designate. Nothing currently indicates that such a situation will
arise.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Investment Company Act of 1940 (the "1940 Act") provides that every
registered investment company shall be audited at least once each year by
independent public accountants selected by a majority of the directors of the
investment company who are not interested persons of the investment company or
its investment adviser. The 1940 Act requires that the selection be submitted
for ratification or rejection by the shareholders at their next annual meeting
following the selection.
The Directors, including a majority who are not interested persons of the
Adviser or the Fund, have selected KPMG Peat Marwick LLP to be the Fund's
independent public accountants for the fiscal year ending February 28, 1996.
KPMG Peat Marwick LLP has no direct or material indirect financial interest in
the Fund or in the Adviser, other than receipt of fees for services to the Fund.
KPMG Peat Marwick LLP also serves as the independent public accountants for each
of the other investment companies managed by the Adviser. KPMG Peat Marwick LLP
has been the independent public accountants for the Fund since commencement of
operations in March 1994.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting. Such representatives will be given the opportunity to make a statement
to the shareholders if they desire to do so and are expected to be available to
respond to any questions that may be raised at the meeting.
The Board of Directors recommends that the shareholders of the Fund vote in
favor of the ratification of the selection of KPMG Peat Marwick LLP as the
independent public accountants for the Fund. The vote of a majority of the
shares of the Fund represented at the meeting, provided at least a quorum (a
majority of the outstanding shares) is represented in person or by proxy, is
sufficient for the ratification of the selection of the independent public
accountants. Unless otherwise instructed, the proxies will vote for the
ratification of the selection of KPMG Peat Marwick LLP as the Fund's independent
public accountants.
EXECUTIVE FUND OFFICERS
Certain information about the executive officers of the Fund is set forth
below. Unless otherwise indicated, all positions have been held more than five
years.
POSITION AND TERM OF OFFICE WITH THE FUND AND
NAME AGE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
William H. Ellis 53 President of the Fund since December 1994; see
"Proposal One--Election of Directors"for
additional biographical information.
Thomas S. McGlinch 38 Senior Vice President of the Fund since
inception; Vice President of the Adviser since
November 1992; previously, Assistant Vice
President of the Adviser from January to
November 1992 and a specialty products trader
at FBS Investment Services from 1990 to 1992.
Robert H. Nelson 31 Senior Vice President of the Fund since 1995;
previously Vice President of the Fund since
inception; Senior Vice President of the
Adviser since November 1993; previously, Vice
President of the Adviser from 1991 to 1993 and
Assistant Vice President from 1989 to 1991.
J. Bradley Stone 36 Senior Vice President of the Fund since
inception; Vice President since 1991 and a
fixed-income analyst of the Adviser.
David E. Rosedahl 48 Secretary of the Funds since inception;
Secretary and Director of the Adviser;
Managing Director, Secretary (since 1993) and
General Counsel for Piper Jaffray Inc.;
Managing Director and General Counsel for
Piper Jaffray Companies Inc.; and General
Counsel of the Adviser.
Charles N. Hayssen 44 Treasurer of the Funds since inception;
Director, Chief Financial Officer and Chief
Operating Officer (since 1994) of the Adviser;
Managing Director of Piper Jaffray Inc. and of
Piper Jaffray Companies Inc.; and Chief
Financial Officer of Piper Jaffray Inc.
SUPPLEMENTAL INFORMATION AND SHAREHOLDER PROPOSALS
Based on Fund records and other information, the Fund believes that all SEC
filing requirements applicable to its Directors, officers, Adviser and companies
affiliated with the Adviser, pursuant to Section 16(a) of the Securities
Exchange Act of 1934, with respect to the Fund's fiscal year ended February 28,
1995, were satisfied.
Any proposal by a shareholder to be considered for presentation at the next
Annual Meeting must be received at the Fund's offices, Piper Jaffray Tower, 222
South Ninth Street, Minneapolis, Minnesota 55402, no later than March 15, 1996.
Dated: July 7, 1995 David Evans Rosedahl, Secretary
HIGHLANDER INCOME FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints William H. Ellis, Charles N. Hayssen and David
Evans Rosedahl, 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 Highlander Income Fund Inc. (the "Fund"), held by the undersigned at
the annual meeting of shareholders of the Fund to be held on August 17, 1995,
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 all nominees listed below
(except as marked to the contrary below)
______WITHHOLD AUTHORITY to vote for all nominees listed below
NOMINEES: David T. Bennett, Jaye F. Dyer, William H. Ellis, Karol D.
Emmerich, Luella G. Goldberg and George Latimer. (Instruction: To withhold
authority to vote for any individual nominee, write that nominee's name on the
line provided below.)
2. To vote: FOR ___ AGAINST ___ ABSTAIN ___ ratification of the selection
of KPMG Peat Marwick LLP as independent public accountants for the Fund.
To transact any other business that may properly come before the meeting or
any adjournments thereof.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTERS. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
ITEMS. 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: ______________________ , 1995
____________________________________
____________________________________
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.
