SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
HIGHLANDER INCOME FUND INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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
Items 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 transactions 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:
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 20, 1996
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 Tuesday, August 20, 1996, 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, 1997.
3. To transact such other business as may properly come before
the meeting.
Shareholders of record on June 26, 1996, 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.
Susan Sharp Miley, Secretary
Dated: July 1, 1996
PROXY STATEMENT
HIGHLANDER INCOME FUND INC.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
ANNUAL MEETING OF SHAREHOLDERS--AUGUST 20, 1996
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 20, 1996, 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 9, 1996. 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,
if a proposal is considered "non-discretionary," then 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 a proposal, then the shares covered by such non-vote shall
not be counted as present for purposes of calculating the vote with respect to
such 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 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 June 26, 1996, may vote at the meeting
or any adjournments thereof. As of that date, there were issued and outstanding
1,989,467 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. 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, 1996.
In the event that sufficient votes are not received for the adoption of
either proposal, 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 at the meeting (or any adjournment thereof)
in person or by proxy. The persons named as proxies will vote all shares
represented by proxies which they are required to vote in favor of the
proposals, in favor of an adjournment and will vote all shares which they are
required to vote against the proposals, against the adjournment.
A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT IS AVAILABLE TO
SHAREHOLDERS UPON REQUEST. IF YOU WOULD LIKE TO RECEIVE A 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 OF YOUR REQUEST.
PROPOSAL ONE
ELECTION OF DIRECTORS
Fund shareholders are being asked to re-elect the members of the Fund's
Board 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
re-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 55 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 69 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* 54 President of Piper Jaffray Companies Inc.; Director and Chairman
of the Board of the Adviser since October 1985 and President of the
Adviser since December 1994; Director of Piper Jaffray Inc.
Karol D. Emmerich 47 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 59 Member of the Board of Directors of Northwestern National Life
Insurance Company (since 1976), The ReliaStar Financial Corp.
(since 1989), TCF Bank Savings fsb (since 1985), TCF Financial
Corporation (since 1988) 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 60 Chief Executive Officer of National Equity Fund, Chicago, Illinois
since November 1995; prior thereto, Director, Special Actions
Office, Office of the Secretary, Department of Housing and Urban
Development since 1993; and prior thereto, Mr. Latimer had been
Dean of Hamline Law School, Saint Paul, Minnesota, from 1990 to
1993. 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.
As of June 26, 1996, 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 fiscal year ended
February 29, 1996. 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.
During the fiscal year ended February 29, 1996, there were seven
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 closed- and open-end investment companies managed by
the Adviser on the basis of relative net asset values. 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 29, 1996, 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, 1995. 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.
AGGREGATE COMPENSATION TOTAL COMPENSATION
DIRECTOR FROM THE FUND FROM FUND COMPLEX*
- -------- ---------------------- --------------------
David T. Bennett $2,083 $61,700
Jaye F. Dyer $2,106 $67,700
Karol D. Emmerich $2,106 $67,700
Luella G. Goldberg $2,129 $70,700
George Latimer $2,083 $64,700
- --------------------
* Currently consists of 20 open-end and closed-end investment companies managed
by the Adviser, including the Fund. During the 1995 calendar year, the Fund
Complex consisted of up to 27 such investment companies, managed by the
Adviser or an affiliate of the Adviser, several of which were merged or
consolidated during the year. 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 19 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, 1997.
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 and has been the
independent public accountants for the Fund since commencement of operations.
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.
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE WITH THE FUND AND
NAME AGE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
- ---- --- ----------------------------------------------
<S> <C> <C>
William H. Ellis 54 President of the Fund since 1994; see "Proposal One--Election of Directors" for
additional biographical information.
Paul A. Dow 45 Senior Vice President of the Fund since 1996 and Senior Vice President and Chief
Investment Officer of the Adviser.
Thomas S. McGlinch 39 Senior Vice President of the Fund since inception and Senior Vice President of
the Adviser since 1995; previously, Vice President of the Adviser since November
1992, Assistant Vice President of the Adviser from January to November 1992 and
a specialty products trader at FBS Investment Services, Minneapolis from 1990 to
1992.
Robert H. Nelson 32 Senior Vice President and Treasurer of the Funds since 1995 and Senior Vice
President of the Adviser since 1993; previously, Vice President of the Funds since
inception and Vice President of the Adviser from 1991 to 1993.
Susan S. Miley 38 Secretary of the Fund since 1996 and Senior Vice President and General Counsel
of the Adviser since 1995; previously, counsel for American Express Financial
Advisors, Minneapolis from 1994 to 1995 and attorney at Simpson Thacher &
Bartlett, New York, New York from 1984 to 1992.
</TABLE>
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 29, 1996, were satisfied, except that Paula Meyer, Susan S. Miley and
Momchilo Vucenich each failed to timely file a Form 3 and William Ellis failed
to timely a Form 4. There were no transactions reportable that were not reported
on a timely basis and the required Forms were subsequently filed.
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 1,
1997.
Dated: July 1, 1996 Susan Sharp Miley, Secretary
- -------------------------------------------------------------------------------
HIGHLANDER INCOME FUND INC.
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints William H. Ellis, Susan S. Miley and Robert H.
Nelson, 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 20, 1996, 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.
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 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: ______________________________, 1996
___________________________________________
___________________________________________
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.
Book 5
Fund 77
