| As filed with the Securities and Exchange Commission on July 2, 2020 | |||
| UNITED STATES | |||
| SECURITIES AND EXCHANGE COMMISSION | |||
| WASHINGTON, DC 20549 | |||
| SCHEDULE 14C INFORMATION STATEMENT | |||
| Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 | |||
| Check the appropriate box: | |||
| [ ] | Preliminary Information Statement | ||
| [ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) | ||
| [X] | Definitive Information Statement | ||
| NICHOLAS HIGH INCOME FUND, INC. | |||
| -------------------------------------------------------------------------------- | |||
| (Name of Registrant as Specified in Its Charter) | |||
| Payment of filing fee (Check the appropriate box): | |||
| [X] | No fee required. | ||
| [ ] | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. | ||
| (1 | ) | Title of each class of securities to which transaction applies: N/A | |
| (2 | ) | Aggregate number of securities to which transaction applies: N/A | |
| (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.): N/A | |||
| (4 | ) | Proposed maximum aggregate value of transaction: N/A | |
| (5 | ) | Total fee paid: N/A | |
| [ ] | 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: N/A | |
| (2 | ) | Form, Schedule or Registration Statement No.: N/A | |
| (3 | ) | Filing Party: N/A | |
| (4 | ) | Date Filed: N/A | |
NICHOLAS HIGH INCOME FUND, INC.
IMPORTANT NOTICE TO STOCKHOLDERS
We are requesting that you take action regarding your investment in the Nicholas High IncomeFund, Inc. (the “Fund”).At this time, we provide you an option to (i) redeem your shares in the Fund for cash or (ii) exchange your shares in the Fund for shares in another mutual fund. Please carefully review the prospectus of such fund prior to exchanging your shares. We recommend you consult with your financial adviser regarding the appropriateness of any other mutual fund offerings. At any time prior to the Liquidation Date (as defined below), you may redeem your shares in the Fund for cash or exchange your Fund shares for shares in another mutual fund.
The Fund’s Board of Directors (the “Board”) has determined that a completeliquidation and dissolution of the Fund is in the best interests of the Fund and itsshareholders and has adopted a Plan of Liquidation and Dissolution (the “Plan”).The liquidation of the Fund will occur on or about July 24, 2020 (the“Liquidation Date”).We also want you to be aware that in connection with the liquidation, it may be necessary for the Fund to depart from its stated investment objective in order to meet shareholder redemption requests.
On the Liquidation Date, we will redeem all of the shares that remain in your account in accordance with the Plan. Shares held in any type of account, regardless if such account is taxable or tax deferred and regardless of the aggregate value of the shares held in such account, will be redeemed for cash and the proceeds sent to the address of record.
Under no circumstances will your shares in the Fund be involuntarily exchanged by us for the shares of another mutual fund.Therefore, if you do not want to receive cash in exchange for your shares in the Fund upon the completion of the liquidation of the Fund, we strongly encourage you take the necessary steps to exchange such shares for shares in another mutual fund prior to the Liquidation Date. In addition, if you hold your shares in an individualretirement account (“IRA”), Roth IRA, SEP, SARSEP, Coverdell EducationSavings Account, custodial accounts, or certain other retirement plan accounts(such accounts, collectively, the “Qualified Accounts”) and would like topreserve such tax treatment, then you should also consult your tax advisor and complete one of the following actions prior to the Liquidation Date:
instruct us to redeem the shares and transfer the proceeds to aqualified account with a different custodian or trustee;
instruct us to transfer the shares to a qualified account in anothermutual fund; or
roll over the distribution within 60 days of the date of thedistribution to another qualified account.
Whether you redeem your shares now or allow your shares to be redeemed on the Liquidation Date, the liquidating transaction may be a taxable event to you and you may realize a gain or loss depending on your adjusted tax basis. If you hold shares in a Qualified Account, your liquidation will be subject to all state and federal tax withholding.
The specific details of the Plan are described in detail in the enclosed Information Statement. We encourage your prompt consideration of these materials and action regarding the direction of your investment.
If you have any questions regarding the enclosed materials, please contact us at 1-800-544-6547. We will be happy to answer any questions you may have.
NICHOLAS HIGH INCOME FUND, INC.
411 East Wisconsin Avenue
Suite 2100
Milwaukee, Wisconsin 53202
(800) 544-6547
July 1, 2020
Dear Fellow Stockholder:
This Information Statement is to inform you that a special meeting of stockholders of Nicholas High IncomeFund, Inc., a Maryland corporation (the “Fund”), will be held onJuly 20, 2020 at 411 East Wisconsin Center, 411 E. Wisconsin Avenue, Lobby Conference Room, Milwaukee, Wisconsin 53202, at 10:00 a.m.Central time (the “Special Meeting”).
The purpose of the meeting is the consideration and adoption of a Plan of Liquidation andDissolution (the “Plan”) for the Fund. Approval of the Plan requires the affirmative vote of at leasttwo-thirds (2/3) of the outstanding shares of the Fund entitledto vote on the matter. The Fund’sstockholders holding the requisite amount of outstanding shares have advised us that they intend to cast the votes of all of their outstanding shares for the Plan. Therefore, approval of the Plan is assured.
Please note that no proxies will be solicited by the Board of Directors in connection with the meeting. The purpose of this Information Statement is to give you important information regarding the Plan and its implementation. We urge you to read the Information Statement carefully.
| Very truly yours, |
| /s/Lawrence J. Pavelec |
| Lawrence J. Pavelec |
| Senior Vice President and Secretary |
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
NICHOLAS HIGH INCOME FUND, INC.
411 East Wisconsin Avenue
Suite 2100
Milwaukee, Wisconsin 53202
(800) 544-6547
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
Please take notice that a special meeting of stockholders of Nicholas High Income Fund, Inc. aMaryland corporation (the “Fund”), will be held onJuly 20, 2020 at 411 East Wisconsin Center, 411 E. Wisconsin Avenue, Lobby Conference Room, Milwaukee, Wisconsin 53202, at 10:00 a.m. Central time (the "Special Meeting"), for the following purposes:
| 1. | To adopt a Plan of Liquidation and Dissolution of the Fund; and |
| 2. | To conduct business properly raised before the meeting and any adjournment or postponement of the meeting. |
Only stockholders of record as of the close of business on June 26, 2020 may vote at the special meeting or any adjournments or postponements of the special meeting.
Persons will be admitted to the meeting upon verification of their shareholdings in the Fund. If your shares are held in the name of your broker, bank or other nominee, you must bring an account statement or letter from the nominee indicating that you were the beneficial owner of the shares on June 26, 2020, the record date for voting.
By order of the Board of Directors of Nicholas High Income Fund, Inc.
July 1, 2020
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
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INFORMATION STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
NICHOLAS HIGH INCOME FUND, INC.,
a Maryland Corporation
411 East Wisconsin Avenue
Suite 2100
Milwaukee, Wisconsin 53202
(800) 544-6547
----------------
INTRODUCTION
This Information Statement is being furnished in connection with a special meeting of the stockholders of Nicholas High Income Fund, Inc., a Maryland corporation (the “Fund,” “we” or “us”), to be held at the office of Nicholas Company, Inc. (“NCI”) at411 East Wisconsin Center, 411 E. Wisconsin Avenue, Lobby Conference Room, Milwaukee, Wisconsin 53202, at 10:00 a.m. Central time, on July 20, 2020, to the holders of record as of the close of business on June 26, 2020(the “Record Date”) of shares of beneficial interest in the Fund. This Information Statement and the notice of meeting are first being mailed to stockholders on July 6, 2020.
The purpose of the special meeting is to consider a Plan of Liquidation and Dissolution (the “Plan”)previously adoptedby the Fund’s Board of Directors (the “Board”) following a determination that a completeliquidation and dissolution of the Fund is in the best interests of the Fund and its stockholders. The Board determined, after considering various options concerningthe Fund’s future, that liquidating the Fund was in the best interest of theFund’s shareholders. In reaching this decision,the Board considered, among other things, that: (i) NCI, as the Fund's adviser, has stated that it intends to resign as the Fund’s adviser; (ii)the Fund’s recent performance; (iii) the Fund’stotal assets are relatively small, and because of its size and performance, the potential of attracting a suitable investment adviser of managing the Fund is limited because of the potential profitability for any such investment adviser; (iv) increased regulatory requirements have increased the expense ratio, diminishing the likelihood ofadditional sales of the Fund’s shares; and (v) based onthe foregoing, it is unlikely that additional sales of the Fund’sshares will increase the assets to a more viable level. Accordingly, the Board determined that continued operation of the Fund was not economically feasible or in the best interests of the Fund or its stockholders and adopted the Plan.
Nancy J. Nicholas, the Nicholas Family Foundation, Lynn S. Nicholas, Trustee, and Susan N. Fasciano(collectively, the “Requisite Stockholders”) have the power to vote at least two-thirds (2/3) of the outstanding shares of the Fund, which consists of 7,985,100.854 shares of beneficial interest in the Fund, or 70.61% of the outstanding shares as of the Record Date. The Requisite Stockholders have informed us that they intend to cast the votes of all of their outstanding shares for the Plan. Such a vote would constitute the approval of two-thirds (2/3) of the Fund’soutstanding shares of beneficial interest and is sufficient under the Amended and Restated Articles of Incorporation(“Articles”) and theAmended and RestatedBylaws (the “Bylaws”) for the Fund to liquidate and dissolve the Fund.Accordingly, your vote is not being solicited in connection with the liquidation and dissolution of the Fund.
The effective date of the Plan (“Effective Date”) will be at least ten (10) days after this Information Statement is first sent to stockholders and immediately upon receipt of approval of stockholders at the special meeting, which Effective Date will be on July 20, 2020. On the Effective Date, or as soon as is reasonable and practicable after the Effective Date, the Fund's investment adviser may engage in such transactions as may be necessary or appropriate toeffect the complete liquidation of the Fund (such date, the “Liquidation Date”).
At this time, we know of no other business to be brought before the special meeting.
This Information Statement is being furnished to provide you with certain information concerning the liquidation and dissolution of the Fund in accordance with the requirements of the Investment Company Act of 1940,as amended (the “1940 Act”), and the Securities Exchange Act of 1934, as amended (the “1934 Act”), and theregulations promulgated thereunder, including Regulation 14C.
1
We Are Not Asking You for a Proxy and You Are Requested Not to Send Us a Proxy.
As of the close of business on the Record Date, 11,308,965.342 shares of beneficial interest in the Fund were issued and outstanding.
2
VOTING REQUIREMENTS
Record Date and Outstanding Shares
Only those stockholders owning shares as of the close of business on June 26, 2020, the Record Date, may vote at the meeting or any adjournments or postponements of the meeting. Shares of the Fund will vote as a single class as to the Plan. On the Record Date, 11,308,965.342 shares of common stock of the Fund were outstanding and the Fund had no other class of equity securities outstanding.
Quorum and Required Vote
In order for the Special Meeting to go forward, there must be a quorum. This means that at least one-third (1/3)of the Fund’s outstanding shares must be represented at the meeting either in personor by proxy. The approval of the Plan by stockholders of the Fund requires the affirmative vote of two-thirds (2/3) of all the votes entitled to be cast on the matter. No stockholder is entitled to cumulative voting or appraisal rights.
The Requisite Stockholders have informed the Fund that they intend to cast the votes of all of their outstanding shares for the Plan, and as a result, two-thirds (2/3) of the shares entitled to be cast on the matter will be voted affirmatively at the special meeting.
THE FUND
About the Fund and Certain Service Providers
The Fund is an open-end investment management company organized as a Maryland corporation. TheFund’s primary investment objectives historically have been seeking high current income and capital appreciation when consistent with seeking high current income and investing primarily in a diversified portfolio of high yield corporate bonds. The Fund currently is closed to new investors, and no sales of shares will be made to investors. The principal executive offices of the Fund are located at 411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202.
NCI has served as the Fund's investment adviser since 1977 when the Fund was acquired. NCI is an independent investment management firm known for its independent research, disciplined valuation process and long-term investment philosophy. Pursuant to an investment advisory agreement with the Fund, NCI provides continuous investment service and is responsible for overall management of the Fund's business affairs, subject to supervision by the Board.
NCI is the investment adviser to four other mutual funds and to numerous institutions and individuals with substantial investment portfolios. The additional mutual funds it advises are: Nicholas Fund, Inc., Nicholas II, Inc., Nicholas Limited Edition, Inc. and Nicholas Equity Income Fund, Inc. As of December 31, 2019, NCI had approximately $5.0 billion in assets under management. The principal business address of NCI is 411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202.
Mr. Lawrence J. Pavelec is a Senior Vice President, Secretary and Portfolio Manager of the Fund and is primarily responsible for the day-to-day management of the Fund’s portfolio.
THE PLAN OF LIQUIDATION AND DISSOLUTION
Reasons for the Liquidation and Dissolution of the Fund
On May 4, 2020, the Board, including a majority of the directors who are not “interested persons” of the Fund under the 1940 Act (the “Independent Directors”), considered and concluded that it would be in the best interestsof the Fund's stockholders that the Fund be liquidated and dissolved. In reaching its decision, the Board considered information provided by NCI, including:
| ª | the Fund’s outflows and expense ratio; |
| ª | the performance of the Fund; |
| ª | the potential profitability to any investment advisor of managing the Fund; |
3
| ª | the Fund’s total assets;and |
| ª | the likelihood that additional sales of the Fund's shares could increase the assets to a more viable level. |
After analyzing these and other factors and considering other alternatives to liquidating the Fund, the Board, including all of the Independent Directors, unanimously approved and adopted resolutions declaring that a liquidation and termination of the Fund was in the best interests of the Fund and its stockholders and approved the Plan, the form of which is attached to this Information Statement as Annex A.
Liquidating Distributions
Stockholders who do not exchange or redeem their shares prior to the Liquidation Date will have the cash proceeds of their account sent to them at their address of record when the liquidation occurs. The proportionate interest of stockholders in the assets of the Fund will be fixed on the basis of their holdings of Fund shares on the Liquidation Date.
The Fund strongly encourages stockholders who hold Fund shares directly with the Fund in an individualretirement account (“IRA”), Roth IRA, SEP, SARSEP,Coverdell Education Savings Account, custodial accounts, orcertain other retirement plan accounts (such accounts, collectively “Qualified Accounts”) to take one of the followingactions prior to the Liquidation Date:
| ª | instruct the Fund to redeem the shares and transfer the proceeds to a qualified account with adifferent custodian or trustee (this type of transfer is commonly referred to as a “trustee-to-trustee transfer” or “direct transfer”); |
| ª | instruct the Fund to transfer the shares to a qualified account in another mutual fund; or |
| ª | roll over the distribution within 60 days of the date of the distribution to another qualified account. |
Description of the Plan and Related Transactions
The Board has approved the plan and the Requisite Stockholders have indicated their intent to vote all of their shares in favor of the Plan, which is summarized below. The following summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Plan, which is attached to this Information Statement as Annex A. Stockholders are urged to read the Plan in its entirety.
Effective Date of the Plan and Cessation of the Fund's Activities as an Investment Company.The Effective Date will be on July 20, 2020, at least ten (10) days after this Information Statement is first sent to stockholders and immediately upon receipt of stockholder approval. The Fund will cease to conduct business as soon as reasonably practicable following the Effective Date.
Payments of Debts; Expenses of the Termination and Liquidation. As soon as practicable after the Effective Date, the Fund shall determine and shall pay, or set aside in U.S. cash or U.S. cash equivalents or otherwise provide for, the amount of all known or reasonably ascertainable liabilities of the Fund incurred or expected to be incurred prior to the date of the final liquidating distribution described below. NCI will bear all of the expenses incurred by the Fund in carrying out the Plan including, but not limited to, all printing, legal, accounting, and transfer agency fees, and the expenses of any reports to or meeting of stockholders, whether or not the liquidation contemplated by the Plan is effected.
4
Liquidation and Distribution. On the Liquidation Date, the Fund’s assets will be liquidated at market pricesand on such terms and conditions as determined to be reasonable and in the best interests of the Fund and its stockholders in light of the circumstances in which they are sold. After satisfactory resolution of any claims pending against the Fund and the payment of, or provision for, all of the Fund's expenses, the Fund's remaining assets will be distributed to Fund stockholders on a pro rata basis in liquidation of the Fund. In accordance with Section 331 of theInternal Revenue Code of 1986, as amended (the “Code”), the distribution of the Fund's net assets is expected to be made in complete cancellation of all of the Fund's outstanding shares of beneficial interest. The distribution of the Fund's net assets is expected to consist of cash representing substantially all the assets of the Fund, less an estimated amount necessary to discharge any unpaid liabilities and obligations of the Fund. On the Liquidation Date, stockholders who do not exchange or redeem their shares prior to the Liquidation Date will have the cash proceeds of their account sent to them at their address of record when the liquidation occurs.
Amendments. The Board may authorize variations from, or amendments of, the provisions of this Plan that it deems necessary or appropriate to effect such distributionsand the Fund’s liquidation and termination.
Redemptions.Stockholders may continue to redeem or exchange shares of the Fund up to and including theLiquidation Date, consistent with the Fund’s current prospectus.
Certain U.S. Federal Income Tax Consequences
The following is only a general summary of certain anticipated material United States Federal income tax consequences of the Plan. This summary does not address all of the tax consequences that may be relevant to a particular stockholder or to stockholders subject to special treatment under U.S. federal income tax law. Furthermore, this summary does not address state or local tax consequences. Stockholders are urged to consult their own tax advisers to determine the extent of the federal income tax liability they would incur as a result of receiving a liquidating distribution under the Plan, as well as any tax consequences under any applicable state, local or foreign tax law. Please note that this Information Statement was not intended or written to be used and that it cannot be used for the purpose of avoiding federal income tax penalties.
General.The liquidating distributions received by a stockholder under the Plan will be treated for Federal income tax purposes as full payment in exchange for the stockholder’s shares. Thus, a stockholder who is a UnitedStates resident or citizen will be subject to Federal income tax only to the extent the amount of the balance of the distribution exceeds his or her basis in such shares; if the amount received is less than his or her basis, the stockholder will realize a loss. The stockholder's gain or loss will be a capital gain or capital loss if such shares are held as capital assets, and treated as long-term if such stockholder’s holding period is more than one year, and short-term if such stockholder’s holding period is one year or less.
Corporate stockholders should note that there is no preferential Federal income tax rate applicable to capital gains for corporations under the Code. Accordingly, all income recognized by a corporate stockholder pursuant to the Plan will be subject to Federal income tax at the same Federal income tax rate as applicable to ordinary income.
Under certain provisions of the Code, some stockholders may be subject to a 24% withholding tax on theliquidating distribution (“backup withholding”). Generally, stockholders subject to backup withholding will be thosefor whom no taxpayer identification number is on file with the Fund, who, to the Fund's knowledge, have furnished an incorrect number, or who underreport their tax liability.
Each stockholder’s tax consequences differ, and stockholders are urged to consult their tax advisor todetermine the tax consequences of the Plan.
IRAs and Other Qualified Accounts.If your Fund shares are held in a Qualified Account, you must reinvest the liquidating distribution(s) you receive through that Qualified Account to avoid possible penalties and adverse federal income tax consequences. In addition, if your Fund shares are held in a Qualified Account and the redemption check is mailed directly to you, the amount you receive may be reduced by any required federal or state income tax withholding. Such a distribution would be taxable as ordinary income to you for federal income tax purposes for the year in which you receive the distribution. In addition, if you have not attained the age of 59 1/2, such distribution generally would be subject to an additional 10% early withdrawal penalty. Nonetheless, in such a situation, federal income tax consequences may be avoided by, on or prior to the Liquidation Date:
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| ª | instructing the Fund to redeem the shares and transfer the proceeds to a qualified account with a differentcustodian or trustee (this type of transfer is commonly referred to as a “trustee-to-trustee transfer” or “direct transfer”); |
| ª | instructing the Fund to transfer the shares to a qualified account in another mutual fund; or |
| ª | rolling over the distribution within 60 days of the date of the distribution to another qualified account. |
There are many rules governing qualified plans and the transfer and rollover treatment of assets held by a qualified plan. These rules may be found in the law and in plan language. In addition, federal income tax consequences may vary depending on the status of the owner of the qualified plan. Therefore, owners of Qualified Accounts that will receive liquidating distributions should consult with their own tax advisers for more complete information regarding the federal income tax consequences of liquidating distributions under the Plan.
No tax ruling has been or will be requested from the Internal Revenue Service regarding the payment or receipt of a liquidation distribution under the Plan. The statements above are not binding on the Internal Revenue Service, and there can be no assurance that the Internal Revenue Service will concur with this summary.
Impact of the Plan on the Fund's Status under the Investment Company Act
After the Effective Date, the Fund will carry on no business as an investment company except for the purpose of winding up its affairs. As soon as practicable after the final liquidating distribution to Fund stockholders, the Fund will apply for deregistration under the Investment Company Act. It is expected that the Securities and Exchange Commission will issue an order approving the deregistration of the Fund if the Fund is no longer doing business as aninvestment company. Accordingly, the Plan provides for the eventual cessation of the Fund’s activities as aninvestment company and its deregistration under the Investment Company Act. Until the Fund’s withdrawal as aninvestment company becomes effective, the Fund will continue to be subject to, and will comply with, the Investment Company Act.
Procedure for Termination and Liquidation of the Fund
On the Effective Date, the Fund shall cease its operations and thereafter shall not engage in any business activities except for the purposes of managing the sale of securities and the Fund's cash levels. Within a reasonable period after the Effective Date (taking into account market conditions and other relevant factors), the directors and officers of the Fund shall proceed to:
| ª | wind up the affairs of the Fund; |
| ª | pay or make provision for thepayment of the Fund’s debts and liabilities; and |
| ª | reduce the remaining assets of the Fund to distributable form in cash and to distribute the proceeds to or for the account of the stockholders of the Fund. |
Board Conclusion and Stockholder Approval
The Board has concluded that the proposed Plan is advisable and in the best interests of the Fund and its stockholders. The Requisite Stockholders have advised us that they intend to vote all of their shares in favor of the liquidation and dissolution of the Fund in accordance with the Plan.
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OWNERSHIP OF SHARES OF BENEFICIAL INTEREST
As of the Record Date, there were 11,308,965.342 shares of the Fund issued and outstanding. The persons who are the record owners of at least two-thirds (2/3) of the Fund’s outstanding shares as of the Record Date (i.e., the Requisite Stockholders) are set forth below. Except as set forth below, the address of all stockholders is c/o Nicholas Company, Inc. 411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202.
| Percentage | |||
| Name and Address of Owner | Number of Shares | Ownership | |
| Principal Stockholders: | |||
| Nancy J. Nicholas | 6,855,611.006 | 60.62 | % |
| Nicholas Family Foundation | 668,172.100 | 5.91 | % |
| Lynn S. Nicholas, Trustee | |||
| Susan N. Fasciano | 461,317.748 | 4.08 | % |
| Directors and Executive Officers: | |||
| David O. Nicholas. Director and President(1) | 410,486.013 | 3.63 | % |
| John A. Hauser, Director | 13,022.358 | 0.11 | % |
| David P. Pelisek, Director | 12,586.082 | 0.11 | % |
| Jay H. Robertson, Director | None | None | |
| David L. Johnson, Executive Vice President | 20,636.390 | 0.18 | % |
| Jennifer R. Kloehn, Senior Vice President and Treasurer | None | None | |
| Lawrence J. Pavelec, Senior Vice President and Secretary | 580.005 | 0.01 | % |
| Candace L. Lesak, Vice President | None | None | |
| All Executive Officers and Directors as a Group | 457,310.848 | 4.04 | % |
(1) Consists of 154,726.560 shares of common stock held by the Nicholas Company, Inc. Employees Profit-Sharing Plan and Trust. David O. Nicholas serves as the trustee of the Nicholas Company, Inc. Employees Profit-Sharing Trust (the “Trust”). The investment decisions of Trust are made individually by participants in the Trust.David O. Nicholas disclaims beneficial ownership of shares held by the Trust except to the extent of his pecuniary interest therein.
Because Nancy J. Nicholas is the beneficial owner of more than 25% of the issued and outstanding shares of the Fund, she may be deemed to "control" the Fund, as such term is defined in the 1940 Act. To the knowledge of the Fund, as of the Record Date, no Director owned 1% or more of the Fund's outstanding shares of beneficial interest.
INFORMATION STATEMENT AND STOCKHOLDER REPORT DELIVERY
The expenses relating to the matter submitted for stockholder approval herein and the expenses of holding the stockholder meeting will be paid by NCI.
Only one copy of this Information Statement may be mailed to a household, even if more than one person in a household is a Fund stockholder of record. If you would like an additional copy of this Information Statement, please contact us at 1-800-544-6547 or in writing at 411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202.
The Fund will furnish, without charge, a copy of its most recent Annual Report and Semiannual Report to any Fund stockholder upon request. To request a free copy of the current Annual/Semiannual Report to Stockholders or other information about the Fund, or to make stockholder inquiries, please write or call: Nicholas High Income Fund, Inc., 411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202, 1-800-544-6547 (toll-free).
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ANNEX A
PLAN OF LIQUIDATION AND DISSOLUTION
OF
NICHOLAS HIGH INCOME FUND, INC.
This Plan of Liquidation and Dissolution (the “Plan”) of Nicholas High Income Fund, Inc. (the “Fund”), acorporation organized and existing under the laws of Maryland and registered as an open-end management investment company underthe Investment Company Act of 1940, as amended (the “Investment Company Act”), is intended toaccomplish the complete liquidation of the Fund's assets and dissolution of the Fund in conformity with the provisions of the Fund's Amended and Restated Articlesof Incorporation, as amended (the “Articles”), Amended and RestatedBy-Laws (the “By-Laws”) and Maryland law.
1.Approval of Plan and Effective Date. The Fund's Board of Directors on May 4, 2020 approved this Plan, including a majority of thedirectors who are not “interested persons” (as defined in the Investment Company Act). The Board of Directors determined that the Plan is advisable and in the best interests of the Fund’s stockholders. Pending approval by the Fund’s stockholders by an affirmative vote of two-thirds (2/3) of the votes entitled to be cast by the common stockholders of the Fund, voting as a single class, the Plan shall become effective at least ten (10) days after a Proxy Statement filed on Schedule 14A or an Information Statement filed on Schedule 14C, as applicable,is first sent to stockholders and immediately upon receipt of approval of stockholders (the “Effective Date”). On the
Effective Date, or as soon as is reasonable and practicable after the Effective Date, the Fund’s investment adviser mayengage in such transactions as may be necessary or appropriate to effect the complete liquidation of the Fund (suchdate, the “Liquidation Date”).
2.Cessation of Business. On the Effective Date, the Fund shall cease its operations and thereafter shall not engage in any business activities except for the purposes of managing the sale of securities and the Fund's cash levels. On or within a reasonable period after the Effective Date (taking into account market conditions and other relevant factors), the directors and officers of the Fund shall proceed to wind up the affairs of the Fund; to pay or make provision for the payment of the Fund's debts and liabilities; to reduce the remaining assets of the Fund to distributable form in cash and to distribute the proceeds to or for the account of the stockholders of the Fund.
3.Fixing of Interests and Closing of Books. For purposes of determining the stockholders of the Fund entitled to receive payment of all liquidating distributions (as defined below), the proportionate interests of stockholders in the assets of the Fund shall be fixed on the basis of their respective shareholdings at the close of business on the Liquidation Date. On the Liquidation Date, the books of the Fund shall be closed. Thereafter, unless the books are reopened because the Plan cannot be carried into effect under the laws of the State of Maryland or otherwise, the stockholders' respective interests in the Fund's assets shall not be transferable and the Fund's common shares will cease to be traded on the Liquidation Date.
4.Termination of the Fund. The Fund shall be terminated as soon as reasonably practicable after the Effective Date and the completion of the implementation of this Plan, which date of termination of the Fund shall be determined by the President of the Fund or other authorized officer.
5.Liquidation and Notice of Liquidation of the Fund. On the Liquidation Date, the Fund's investment adviser may engage in such transactions as may be necessary or appropriate to effect the complete liquidation of the Fund.
6.Payment of Liabilities and Expenses. Within a reasonable period after the Effective Date, the Fund shall determine, and there shall be paid or otherwise provided for, all charges, taxes, expenses, liabilities and reserves,whether due or accrued or anticipated, of the Fund (collectively, “Debts”).
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7.Liquidating Distributions. As soon as practicable after the payment or adequate provision for the payment of all of the Fund's Debts as described in Section 6 of the Plan and upon receipt of such releases, indemnities, and refunding agreements, as they deem necessary for their protection but in no event earlier than ten (10) days after the filing of a Definitive Information Statement withthe Securities and Exchange Commission (the “SEC”) pursuantto Regulation 14A or 14C under the Securities Exchange Act of 1934 relating to the termination and liquidation of the Fund, the directors or officers of the Fund may distribute the remaining fund assets, in cash or in kind or partly in each, among the stockholders according to their respective rights as described below in this Section 7. In accordancewith Section 331 of the Internal Revenue Code of 1986, as amended (the “Code”), the distributionof the Fund's assets shall be made in complete cancellation of all of the Fund's outstanding shares of beneficial interest. The distribution of the Fund's assets is expected to consist of cash representing all the assets of the Fund, less an estimated amount necessary to discharge any unpaid liabilities and obligations of the Fund. On the Liquidation Date, stockholders who do not exchange or redeem their shares prior to the Liquidation Date will have the cash proceeds of their account sent to them at their address of record when the liquidation occurs.
8.Deregistration under the Investment Company Act. As soon as practicable, the Fund shall take action to become deregistered as an investment company under the Investment Company Act.
9.Dissolution under Maryland Law. At the discretion of the officers of the Fund:
a. Within the time frame set forth above, the officers shall cause to be filed Articles of Dissolution of Nicholas High Income Fund, Inc. with the State Department of Assessments and Taxation of Maryland, pursuant to Sections 3-406 and 3-407 of the Maryland General Corporation Law.
b. Make any other filings or notices that are required under the Maryland General Corporation Law in order for Nicholas High Income Fund, Inc. to be dissolved.
10.Additional Tax Matters.
a. This Plan is intended to, and shall, constitute a plan of liquidation constituting the complete liquidation of the Fund, as described in Section 331 and Section 562(b), to the extent applicable, of the Code.
b. Within thirty (30) days after the Effective Date or such later date as permitted by applicable law, the officers of the Fund shall file a return on Form 966 with the Internal Revenue Service, as required by Section 6043(a) of the Code, for and on behalf of the Fund.
11.Authority of Officers. The officers of the Fund shall have authority to do or authorize any or all acts and things as provided for in this Plan and any and all such further acts and things as they may consider necessary or advisable to carry out the purposes of this Plan, including preparing and executing documents, information returns, tax returns, forms, and other papers which may be necessary or appropriate to implement this Plan or which may be required by the provisions of the Investment Company Act or any other applicable laws. Without limiting the generality of the foregoing, the officers and directors are authorized and empowered:
a. To sell any and all property of the Fund at private or public sales (and if at public sales, then upon such public notices as may be determined to be necessary and appropriate), for such consideration and upon such terms as they may deem proper, and to collect the accounts receivable or to compromise, settle or otherwise convert the same into cash;
b. To declare to or for the accounts of the stockholders a liquidating distribution or liquidating distributions in kind or in cash;
c. To execute for or on behalf of the Fund, in its corporate name and under its corporate seal, such contracts of sale, deeds, assignments, bills of sale and other papers as may be necessary, desirable or convenient in connection with the carrying out of this Plan; and
d. To pay all costs and expenses, including Debts, fees to directors and officers, taxes and other liabilities incurred by the Fund or by such directors or officers in connection with the carrying out of this Plan.
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12.Amendment of Plan. A majority of the Board of Directors shall have the power to authorize such variations from or amendments of the provisions of this Plan as may be necessary or appropriate to effect the complete liquidation and dissolution of the Fund, and the distribution of assets to stockholders in accordance with the purposes to be accomplished by this Plan. Except as provided in the foregoing sentence, this Plan shall be irrevocable.
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