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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
American Municipal Term Trust Inc.--III
Minnesota Municipal Term Trust Inc.--II
American Municipal Income Portfolio Inc.
Minnesota Municipal Income Portfolio Inc.
American Income Fund, Inc.
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(Name of Registrant as Specified in its Charter)
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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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] 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:
AMERICAN MUNICIPAL TERM TRUST INC.--III
MINNESOTA MUNICIPAL TERM TRUST INC.--II
AMERICAN MUNICIPAL INCOME PORTFOLIO INC.
MINNESOTA MUNICIPAL INCOME PORTFOLIO INC.
AMERICAN INCOME FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 5, 2002
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
American Municipal Term Trust Inc.--III, Minnesota Municipal Term Trust
Inc.--II, American Municipal Income Portfolio Inc., Minnesota Municipal Income
Portfolio Inc. and American Income Fund, Inc. (individually, a "Fund" and
collectively, the "Funds") will be held at 10:00 a.m., Central Time, on
Thursday, September 5, 2002, at 800 Nicollet Mall on the 5th floor. The purposes
of the meeting are as follow:
1. To elect directors.
o Shareholders of American Income Fund are being asked to
elect three individuals to Class II of the Board of
Directors and one individual to Class III of the Board
of Directors.
o Shareholders of the other Funds are being asked to elect
eight individuals to the Board of Directors. For each
Fund, common shareholders and preferred shareholders,
voting together as a single class, will elect six
directors and preferred shareholders, voting alone, will
elect two directors.
2. To ratify the selection of Ernst & Young LLP as independent
public accountants of each Fund for the current fiscal year.
3. For each of American Municipal Term Trust Inc.--III and
Minnesota Municipal Term Trust Inc.--II, to approve a Plan of
Liquidation and Dissolution for the Fund, providing for the
sale of all of the assets of the Fund and the distribution of
the proceeds to Fund shareholders on or shortly before April
15, 2003.
4. To transact any other business properly brought before the
meeting.
EACH FUND'S BOARD OF DIRECTORS RECOMMENDS APPROVAL OF EACH ITEM LISTED
ON THIS NOTICE OF ANNUAL MEETING OF SHAREHOLDERS.
Shareholders of record as of the close of business on July 9, 2002 are
entitled to notice of, and to vote at, the meeting or any adjournment(s)
thereof.
You can vote easily and quickly by toll-free telephone call, by internet or by
mail. Just follow the instructions that appear on your enclosed proxy card.
Please help the Funds avoid the cost of a follow-up mailing by voting today.
_______, 2002 James D. Alt
Secretary
PROXY STATEMENT
AMERICAN MUNICIPAL TERM TRUST INC.--III
MINNESOTA MUNICIPAL TERM TRUST INC.--II
AMERICAN MUNICIPAL INCOME PORTFOLIO INC.
MINNESOTA MUNICIPAL INCOME PORTFOLIO INC.
AMERICAN INCOME FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS -- SEPTEMBER 5, 2002
The enclosed proxy is solicited by the Board of Directors of American
Municipal Term Trust Inc.--III, Minnesota Municipal Term Trust Inc.--II,
American Municipal Income Portfolio Inc., Minnesota Municipal Income Portfolio
Inc. and American Income Fund, Inc. (sometimes referred to individually as a
"Fund" and collectively as the "Funds") in connection with each Fund's annual
meeting of shareholders to be held Thursday, September 5, 2002, and any
adjournments thereof.
The investment adviser for the Funds is U.S. Bancorp Asset Management,
Inc. (the "Adviser"). U.S. Bancorp Asset Management also acts as a
co-administrator for the Funds, along with U.S. Bancorp Fund Services, Inc.
("Fund Services"). The address of the Funds and the Adviser is 800 Nicollet
Mall, Minneapolis, Minnesota 55402. The address of Fund Services is 615 E.
Michigan Street, Milwaukee, Wisconsin 53202.
The costs of solicitation, including the cost of preparing and mailing
the Notice of Annual Meeting of Shareholders and this Proxy Statement, will be
allocated among and borne by the Funds. Mailing of the Notice of Annual Meeting
of Shareholders and this Proxy Statement will take place on approximately July
19, 2002. Representatives of the Adviser may, without cost to the Funds, solicit
proxies on behalf of management of the Funds by means of mail, telephone or
personal calls. The Adviser may also arrange for an outside firm, Georgeson
Shareholder Communications Inc., to solicit shareholder votes by telephone on
behalf of American Municipal Term Trust III and Minnesota Municipal Term Trust
II. This procedure is expected to cost American Municipal Term Trust III and
Minnesota Municipal Term Trust II approximately $3,500 each.
In order for the shareholder meeting to go forward for a Fund, there
must be a quorum. This means that at least a majority of that Fund's shares must
be represented at the meeting -- either in person or by proxy.
For American Municipal Term Trust III, Minnesota Municipal Term Trust
II, American Municipal Income Portfolio and Minnesota Municipal Income Portfolio
(the "Municipal Bond Funds"), all returned proxies count toward a quorum,
regardless of how they are voted. An abstention will be counted as shares
present at the meeting in determining whether a proposal has been approved, and
will have the same effect as a vote against the proposal. If a shareholder
withholds authority to vote on a director, the shareholder will not be
considered as present and entitled to vote on the election of that director.
Similarly, if a proxy is returned with a broker non-vote on a proposal, the
shareholder will not be counted as present and entitled to vote with respect to
that proposal. (Broker non-votes are shares for which (a) the underlying owner
has not voted and (b) the broker holding the shares does not have discretionary
authority to vote on the particular matter.)
For American Income Fund, shares represented by proxies that withhold
authority to vote or that reflect abstentions or broker non-votes are counted as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Abstentions and broker non-votes will have
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no effect on the proposal to elect directors, but will have the same effect as a
vote against the proposal to ratify the Fund's independent accountants.
If a quorum is not obtained or if sufficient votes to approve any of
the proposals are not received for any Fund, the persons named as proxies may
propose one or more adjournments of the meeting for that Fund to permit further
solicitation of proxies. In determining whether to adjourn the meeting, the
following factors may be considered: the nature of the proposal; the percentage
of votes actually cast; the percentage of negative votes actually cast; the
nature of any further solicitation; and the information to be provided to
shareholders with respect to the reasons for the solicitation. Any adjournment
will 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 adjourned
meeting).
You may revoke your proxy at any time up until voting results are
announced at the shareholder meeting. You can do this by writing to the Funds'
Secretary, or by voting in person at the meeting and notifying the election
judge that you are revoking your proxy. In addition, you can revoke a prior
proxy simply by voting again -- using your original proxy card or by internet or
toll-free telephone call. If you return an executed proxy card without
instructions, your shares will be voted "for" each proposal.
So far as the Board of Directors 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 to vote upon
such matters according to their best judgment.
The following table indicates which shareholders are solicited with
respect to each proposal:
AMERICAN MINNESOTA
AMERICAN MINNESOTA MUNICIPAL MUNICIPAL
MUNICIPAL TERM MUNICIPAL TERM INCOME INCOME AMERICAN
PROPOSAL TRUST III TRUST II PORTFOLIO PORTFOLIO INCOME FUND
-------- --------- -------- --------- --------- -----------
Elect directors X X X X X
Ratify the selection of X X X X X
independent public
accountants
Approve a Plan of X X N/A N/A N/A
Liquidation and
Dissolution
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Only shareholders of record of each Fund on July 9, 2002 may vote at
the meeting or any adjournment thereof. As of that date, the Funds had the
following numbers of issued and outstanding common and preferred shares:
AMERICAN MINNESOTA AMERICAN MINNESOTA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST INCOME INCOME AMERICAN
III II PORTFOLIO PORTFOLIO INCOME FUND
--- -- --------- --------- -----------
Common Shares 5,300,000 3,460,000 5,756,267 4,146,743 9,454,221
Preferred Shares 464 294 1,740 1,244 None
Each shareholder of a 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 cumulative voting or appraisal rights. No person, to the knowledge of Fund
management, was the beneficial owner of more than 5% of any class of voting
shares of any Fund as of July 9, 2002, except as follows:
NUMBER OF PERCENTAGE
SHARES OF OWNERSHIP OF
FUND* NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
- ---- ------------------------------------ ------------ ------------
American Municipal Term Trust III Karpus Management, Inc. ("Karpus Management")
14 Toby Village Office Park 697,550 13.16%
Pittsford, NY
Sit Investment Associates, Inc. and affiliated entities
("Sit Investment Associates") 322,000 6.08%
4600 Wells Fargo Center
Minneapolis, MN
Minnesota Municipal Term Trust II Sit Investment Associates 380,099 10.99%
American Income Fund Karpus Management 658,457 6.96%
Sit Investment Associates 673,842 7.13%
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* For each of the Funds, the directors, nominees for director and executive
officers, as a group, beneficially owned less than 1% of each class of
outstanding shares as of July 9, 2002.
COPIES OF EACH FUND'S MOST RECENT ANNUAL REPORT AND SUBSEQUENT
SEMI-ANNUAL REPORT, IF ANY, ARE AVAILABLE TO SHAREHOLDERS UPON REQUEST. IF YOU
WOULD LIKE TO RECEIVE A COPY, PLEASE CONTACT THE FUNDS AT 800 NICOLLET MALL,
MINNEAPOLIS, MINNESOTA 55402, OR CALL 800-677-FUND AND ONE WILL BE SENT, WITHOUT
CHARGE, BY FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS OF YOUR REQUEST.
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PROPOSAL ONE
ELECTION OF DIRECTORS
AMERICAN INCOME FUND. The Restated and Amended Articles of
Incorporation of American Income Fund provide that the Fund's Board of Directors
shall be divided into three classes, each having a term of three years. Each
year, the term of office of one class will expire. The term of office of the
Class II directors expires at this year's annual meeting. Shareholders will be
asked to elect Leonard W. Kedrowski, John M. Murphy, Jr. and Richard K. Riederer
to serve as Class II directors for a three-year term to expire at the 2005
annual meeting of shareholders. In addition, shareholders will be asked to elect
James M. Wade as a Class III director of the Fund whose term will expire at the
2003 annual meeting of shareholders. It is intended that the enclosed proxy for
American Income Fund will be voted for the election of Messrs. Kedrowski, Murphy
and Riederer as Class II directors of the Fund and of Mr. Wade as a Class III
director of the Fund unless such authority has been withheld in the proxy.
MUNICIPAL BOND FUNDS. The directors of the Municipal Bond Funds do not
have staggered terms. Each director serves until the next annual meeting of
shareholders. The shareholders of each Municipal Bond Fund will be asked to
elect eight nominees to the Fund's Board of Directors. Each Municipal Bond
Fund's preferred shareholders are entitled to elect two of the Fund's directors,
and the remaining six directors are to be elected by the preferred shareholders
and the common shareholders, voting together as a single class. The nominees for
director to be elected by the Municipal Bond Fund preferred shareholders are
Roger A. Gibson and Leonard W. Kedrowski. Messrs. Hunter, Murphy, Riederer,
Strauss and Wade and Ms. Stringer are to be elected by the preferred
shareholders and the common shareholders of each Municipal Bond Fund, voting
together. It is intended that the enclosed proxy will be voted for the election
of each of these individuals as directors of the Municipal Bond Funds unless
such authority has been withheld in the proxy.
BIOGRAPHICAL INFORMATION. Biographical information regarding each
nominee is set forth below. Each nominee also serves as a director of the other
closed-end and open-end investment companies managed by the Adviser (the "Fund
Complex"). The Fund Complex currently consists of nine closed-end funds (each of
which is a registered investment company) and 58 open-end funds (which are
portfolios of four registered investment companies).
NOMINEES FOR ELECTION AS NON-INTERESTED DIRECTORS
NUMBER OF OTHER
PORTFOLIOS IN DIRECTOR-
POSITION PRINCIPAL OCCUPATION FUND COMPLEX SHIPS
HELD WITH TERM OF OFFICE* AND LENGTH DURING LAST OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE THE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR**
- --------------------- --------- -------------- ------- -------- ----------
Roger A. Gibson 1020 Director Mr. Gibson has served as a Vice President - Cargo, 67 None
15th Street, Suite director of each of the United Airlines, since
41A, Denver, CO 80202 Municipal Bond Funds since July 2001; Vice
(Age 55) August 1998. Municipal Bond President, North
Fund directors serve for a America - Mountain
one-year term that expires Region for United
at the next annual meeting Airlines (1995 - 2001)
of shareholders. Mr. Gibson
has served as a Class I
director of American Income
Fund since October 2000.
His current term expires at
the 2004 annual meeting of
shareholders.
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NUMBER OF OTHER
PORTFOLIOS IN DIRECTOR-
POSITION PRINCIPAL OCCUPATION FUND COMPLEX SHIPS
HELD WITH TERM OF OFFICE* AND LENGTH DURING LAST OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE THE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR**
- --------------------- --------- -------------- ------- -------- ----------
Andrew M. Hunter III Director Mr. Hunter has served as a Chairman, Hunter, Keith 67 None
537 Harrington Road, director of each of the Industries, a
Wayzata, MN 55391 Municipal Bond Funds since diversified
(Age 54) August 1998. Municipal Bond manufacturing and
Fund directors serve for a services management
one-year term that expires company, since 1975.
at the next annual meeting
of shareholders. Mr. Hunter
has served as a Class I
director of American Income
Fund since October 2000. His
current term expires at the
2004 annual meeting of
shareholders.
Leonard W. Kedrowski Director Mr. Kedrowski has served as Owner, Executive and 67 None
16 Dellwood Avenue, a director of each of the Management Consulting,
Dellwood, MN 55110 Municipal Bond Funds since Inc., a management
(Age 60) August 1998. Municipal Bond consulting firm, since
Fund directors serve for a 1992; Chief Executive
one-year term that expires Officer, Creative
at the next annual meeting Promotions
of shareholders. Mr. International, LLC, a
Kedrowski has served as a promotional award
Class II director of programs and products
American Income Fund since company, since 1999:
October 2000. His current Board member, GC
term expires at the 2002 McGuiggan Corporation
annual meeting of (dba Smyth Companies),
shareholders. He has been manufacturer of
nominated for a three year designer doors; acted
term that will expire at the as CEO of Graphics
2005 annual meeting of Unlimited from 1996 to
shareholders. 1998.
Richard K Riederer+ Director Mr. Riederer has served as a Retired; President and 67 None
741 Chestnut Road, director of each of the Chief Executive
Sewickley, PA 15143 Funds since August 2001. As Officer, Weirton Steel
(age 57) a Municipal Bond Fund (1995 - 2001);
director he serves for a Director, Weirton Steel
one-year term that expires (1993 - 2001).
at the next annual meeting
of shareholders. For
American Income Fund, Mr.
Riederer has been nominated
as a Class III director with
a term that will expire at
the 2003 annual meeting of
shareholders.
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NUMBER OF OTHER
PORTFOLIOS IN DIRECTOR-
POSITION PRINCIPAL OCCUPATION FUND COMPLEX SHIPS
HELD WITH TERM OF OFFICE* AND LENGTH DURING LAST OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE THE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR**
- --------------------- --------- -------------- ------- -------- ----------
Joseph D. Strauss Director Mr. Strauss has served as a Owner and President, 67 None
8525 Edinbrook director of each of the Excensus(TM), LLC, a
Crossing Municipal Bond Funds since consulting firm, since
Suite 5, Brooklyn August 1998. Municipal Bond 2001, owner and
Park, MN 55443 Fund directors serve for a President, Strauss
(Age 61) one-year term that expires Management Company, a
at the next annual meeting Minnesota holding
of shareholders. Mr. company for various
Strauss has served as a organizational
Class III director of management business
American Income Fund since ventures, since 1993;
October 2000. His term owner, Chairman and
expires at the 2003 annual Chief Executive
meeting of shareholders. Officer, Community
Resource Partnerships,
Inc., a strategic
planning, operations
management, government
relations,
transportation planning
and public relations
organization, since
1993; attorney at law.
Virginia L. Stringer Chair; Ms. Stringer has served as a Owner and President, 67 None
712 Linwood Avenue, Director director of each of the Strategic Management
St. Paul, MN 55105 Municipal Bond Funds since Resources, Inc., a
(Age 57) August 1998. Municipal Bond management consulting
Fund directors serve for a firm, since 1993;
one-year term that expires Executive Consultant
at the next annual meeting for State Farm
of shareholders. She has Insurance Company since
served as a Class III 1997; formerly
director of American Income President and director
Fund since October 2000. of The Inventure Group,
Her term expires at the 2003 a management consulting
annual meeting of and training company,
shareholders. President of Scott's,
Inc., a transportation
company, and Vice
President of Human
Resources of The
Pillsbury Company.
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NUMBER OF OTHER
PORTFOLIOS IN DIRECTOR-
POSITION PRINCIPAL OCCUPATION FUND COMPLEX SHIPS
HELD WITH TERM OF OFFICE* AND LENGTH DURING LAST OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE THE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR**
- --------------------- --------- -------------- ------- -------- ----------
James M. Wade+ Director Mr. Wade has served as a Owner and President, 67 None
2802 Wind Bluff director of each of the Jim Wade Homes, a
Circle, Wilmington, Funds since August 2001. As homebuilding company,
NC 28409 a Municipal Bond Fund since 1999; Vice
(Age 58) director he serves for a President and Chief
one-year term that expires Financial Officer,
at the next annual meeting Johnson Controls, Inc.,
of shareholders. For a controls
American Income Fund, he has manufacturing company,
been nominated as a Class II (January 1987-May 1991).
director with a term that
will expire at the 2005
annual meeting of
shareholders.
NOMINEE FOR ELECTION AS INTERESTED DIRECTOR
NUMBER OF OTHER
PORTFOLIOS IN DIRECTOR-
POSITION PRINCIPAL OCCUPATION FUND COMPLEX SHIPS
HELD WITH TERM OF OFFICE* AND LENGTH DURING LAST OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE THE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR**
- --------------------- --------- -------------- ------- -------- ----------
John M. Murphy, Jr.++ Director Mr. Murphy has served as a Minnesota State 67 None
800 Nicollet Mall director of each of the Chairman - U.S. Bancorp
Minneapolis, MN 55402 Municipal Bond Funds since since 2000; Executive
(age 60) June 1999. Municipal Bond Vice President of U.S.
Fund directors serve for a Bancorp since January
one-year term that expires 1999; Chairman and
at the next annual meeting Chief Investment
of shareholders. Mr. Murphy Officer of First
has served as a Class II American Asset
director of American Income Management and U.S.
Fund since October 2000. Bank Trust, N.A., and
His current term expires at Executive Vice
the 2002 annual meeting of President of U.S.
shareholders. He has been Bancorp (1991-1999).
nominated for a three year
term that will expire at the
2005 annual meeting of
shareholders.
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* Each director serves for the term specified or, if earlier, until his or
her death, resignation, removal or disqualification.
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** Includes only directorships in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act or
subject to the requirements of Section 15(d) of the Securities Exchange
Act, or any company registered as an investment company under the
Investment Company Act.
+ Mr. Riederer and Mr. Wade were elected as directors of American Income Fund
at the 2001 annual meeting of shareholders, but no class was specified.
Therefore, they are standing for re-election at the 2002 annual meeting
of shareholders as Class II and Class III directors, respectively.
++ Mr. Murphy is considered an "interested" director because of his employment
with U.S. Bancorp, U.S. Bancorp Asset Management (and its predecessor,
First American Asset Management) and U.S. Bank Trust National
Association, and his ownership of securities issued by U.S. Bancorp.
During the last fiscal year of each Fund there were nine meetings of
the Board of Directors. During each such fiscal year, each incumbent director
attended at least 75% of all meetings of the Board of Directors and of
committees of which he or she was a regular member that were held while he or
she was serving on the Board of Directors or on such committee, except as
follows: (a) Mr. Gibson attended 73% of such meetings during the last fiscal
year of American Income Fund and 70% of such meetings during the last fiscal
years of the other Funds; (b) Mr. Murphy attended 69% of such meetings during
the last fiscal year of American Income Fund, and (c) following his election to
the Board in August 2001, Mr. Riederer attended two out of three of the Board of
Directors meetings held during the remainder of American Income Fund's fiscal
year ended October 31, 2001.
STANDING COMMITTEES. The Board of Directors of each Fund currently has
three standing committees: an Audit Committee, a Pricing Committee and a
Nominating Committee.
The function of the Funds' Audit Committee is to recommend annually to
the Board of Directors a firm of independent certified public accountants to
audit the books and records of the Funds for the ensuing year. In connection
therewith, the Committee will monitor that firm's performance, including a
review of each audit and a review of fees paid, confer with that firm as to the
Funds' financial statements and internal controls, evaluate the firm's
independence, review procedures to safeguard portfolio securities, review the
purchase by the Funds from the firm of nonaudit services, facilitate
communications with management and service providers and review the Funds'
back-up procedures and disaster recover plans. The Audit Committee has adopted a
written charter setting forth, among other things, requirements with respect to
the composition of the Committee, the purposes of the Committee, and the
Committee's duties and powers. The Audit Committee currently consists of Messrs.
Gibson and Riederer, Ms. Stringer (ex officio) and Mr. Kedrowski, who serves as
its chairperson. Each member of the Audit Committee has been determined by the
Board of Directors to be "independent" within the meaning of the listing
standards of the New York and American Stock Exchanges. The Audit Committee met
six times during the fiscal year of American Municipal Term Trust III and
Minnesota Municipal Term Trust II ended December 31, 2001, seven times during
the fiscal year of American Municipal Income Portfolio and Minnesota Municipal
Income Portfolio ended January 31, 2002 and seven times during the fiscal year
of American Income Fund ended October 31, 2001.
The Nominating Committee of each Fund's Board of Directors is
responsible for recommending to the Board (i) nominees for election as
directors, (ii) a successor to the Chair when a vacancy occurs, and (iii)
compensation plans and arrangements for the directors, and for reviewing with
the Chair the Chair's recommended Committee assignments. Current members of the
Nominating Committee are Messrs. Gibson and Riederer, Ms. Stringer (ex officio),
and Mr. Hunter, who serves as its chairperson. The Nominating Committee met six
times during each Fund's last fiscal year. Any recommendations for nominees
should be directed to the Secretary of the Funds, who will forward them to the
Nominating Committee. The Nominating Committee will consider nominees
-8-
recommended by shareholders if the Committee is considering other nominees at
the time of the recommendation and if the nominee meets the Committee's
criteria.
The Pricing Committee of each Fund's Board of Directors is responsible
for valuing portfolio securities for which market quotations are not readily
available, pursuant to procedures established by the Board of Directors. Current
members of the Pricing Committee are Messrs. Hunter and Murphy, Ms. Stringer (ex
officio), and Mr. Strauss, who serves as its chairperson. The Pricing Committee
met two times during the fiscal year of American Municipal Term Trust III and
Minnesota Municipal Term Trust II ended December 31, 2001, two times during the
fiscal year of American Municipal Income Portfolio and Minnesota Municipal
Income Portfolio ended January 31, 2002 and three times during the fiscal year
of American Income Fund ended October 31, 2001.
DIRECTOR COMPENSATION. No compensation is paid by the Funds to any
director who is an officer or employee of the Adviser or any of its affiliates.
Each director, other than the Chair, currently receives from the Fund Complex a
fee of $40,000 per year ($60,000 in the case of the Chair) plus $10,000 ($15,000
in the case of the Chair) per meeting of the full Board of Directors attending
and $2,500 per Nominating Committee or Audit Committee meeting attended ($3,750
in the case of a committee chair). Directors are also reimbursed for their
travel expenses to attend meetings. In the event of telephonic Board meetings,
each participating director receives a fee of $5,000 ($7,500 in the case of the
Chair), and in the event of telephonic Nominating or Audit Committee meetings,
each participating director receives a fee of $1,250 ($1,875 in the case of the
Committee chair). In addition, directors may receive a per diem fee of $2,500
per day, plus travel expenses, when directors travel out of town on Fund
business. However, directors do not receive the $2,500 per diem amount plus the
foregoing Board or Committee fee for an out-of-town Committee or Board meeting
but instead receive the greater of the total per diem fee or meeting fee. The
amounts specified in this paragraph are allocated among the Funds and the other
closed- and open-end investment companies in the Fund Complex on the basis of
net assets.
The directors may elect to defer payment of up to 100% of the fees they
receive in accordance with a Deferred Compensation Plan (the "Plan"). Under the
Plan, a director may elect to have his or her deferred fees treated as if they
had been invested in shares of one or more funds and the amount paid to the
director under the Plan will be determined based on the performance of such
investments. Distributions may be taken in a lump sum or over a period of years.
The Plan will remain unfunded for federal income tax purposes under the Internal
Revenue Code of 1986, as amended. Deferral of director fees in accordance with
the Plan will have a negligible impact on Fund assets and liabilities and will
not obligate the Funds to retain any director or pay any particular level of
compensation. The Funds do not provide any other pension or retirement benefits
to directors.
-9-
The following table sets forth the compensation received by each
director from each Fund for its most recent fiscal year, as well as the total
compensation received by each director from the Fund Complex for the twelve
months ended December 31, 2001. Mr. Murphy did not receive any compensation from
any of the Funds during these periods.
AGGREGATE AGGREGATE AGGREGATE AGGREGATE
COMPENSATION COMPENSATION COMPENSATION COMPENSATION AGGREGATE TOTAL
FROM FROM FROM FROM COMPENSATION COMPENSATION
AMERICAN MINNESOTA AMERICAN MINNESOTA FROM FROM FUND
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL AMERICAN COMPLEX PAID
NAME OF TERM TRUST TERM TRUST INCOME INCOME INCOME FUND TO DIRECTORS
DIRECTOR III (1) II (2) PORTFOLIO (3) PORTFOLIO (4) (5) (6)(7)
- -------- ------- ------ ------------- ------------- --- ------
Roger A. 216 136 321 231 217 60,600
Gibson
Andrew M. 333 210 495 356 334 65,550
Hunter
Leonard W. 411 259 612 440 413 81,000
Kedrowski
Richard K. 52 33 78 56 52 25,500
Riederer
Joseph D. 192 121 285 205 192 72,300
Strauss
Virginia L. 494 311 735 528 496 97,250
Stringer
James M. 40 25 59 43 40 19,500
Wade
- --------------------
(1) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $154; Hunter, $333; Kedrowski, $411; Strauss, $73; and
Stringer, $494..
(2) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $97; Hunter, $210; Kedrowski, $295; Strauss, $46; and Stringer,
$311.
(3) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $229; Hunter, $495; Kedrowski, $612; Strauss, $109; and
Stringer, $735.
(4) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $164; Hunter, $356; Kedrowski, $440; Strauss, $78; and
Stringer, $528.
(5) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $154; Hunter, $334; Kedrowski, $413; Strauss, $74; and
Stringer, $496.
(6) Includes amounts deferred pursuant to the Deferred Compensation Plan as
follows: Gibson, $30,000; Hunter, $65,550; Kedrowski, $81,000; Strauss, $14,460;
and Stringer, $97,250.
(7) As of December 31, 2001, the Fund Complex consisted of four open-end and 11
closed-end investment companies, totaling 83 funds, managed by the Adviser,
including the Funds.
-10-
DIRECTOR SHAREHOLDINGS. The following table discloses the dollar range
of equity securities beneficially owned by each director (i) in each Fund and
(ii) on an aggregate basis in any of the funds in the Fund Complex.
Dollar Range of Equity Aggregate Dollar Range of Equity
Name of Director Securities in the Funds Securities in the Fund Complex
- ---------------- ----------------------- ------------------------------
Roger A. Gibson None
Andrew M. Hunter III None
Leonard W. Kedrowski None
John M. Murphy, Jr. None
Richard K. Riederer None
Joseph D. Strauss None
Virginia L. Stringer None
James M. Wade None
- ----------------------------------------
The dollar range disclosed is based on the value of the securities as of May 31,
2002.
To the knowledge of the Funds, as of July 9, 2002, the officers and
directors of each Fund as a group beneficially owned less than 1% of the
outstanding shares of each Fund.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR
OF ALL NOMINEES TO SERVE AS DIRECTORS. For each Municipal Bond Fund, (i) the
vote of a majority of the preferred shares represented at the meeting is
sufficient for the election of Mr. Gibson and Mr. Kedrowski, provided at least a
quorum (a majority of the outstanding preferred shares) is represented in person
or by proxy, and (ii) the vote of a majority of the preferred shares and common
shares represented at the meeting, voting together as a single class, is
sufficient for the election of each of the other nominees, provided at least a
quorum (a majority of the outstanding preferred shares and common shares) is
represented in person or by proxy. For American Income Fund, the vote of a
plurality of the shares voted at the meeting is sufficient for the election of
each of the nominees, provided at least a quorum (a majority of the outstanding
shares) is represented in person or by proxy. Unless otherwise instructed, the
proxies will vote for all nominees. In the event any of the above nominees are
not candidates for election at the meeting due to events not now known or
anticipated, the proxies will vote for such other persons as the Board of
Directors may designate.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
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. This selection is
being submitted for ratification or rejection by the shareholders of each Fund.
-11-
Based on the Audit Committee's recommendation, as discussed below under
"Audit Committee Report," the directors, including a majority who are not
interested persons of the Adviser or the Funds, have selected Ernst & Young LLP
("Ernst & Young") to be the Funds' independent public accountants for each
Fund's current fiscal year. Ernst & Young examines the annual financial
statements of the Funds and provides certain other non-audit and tax-related
services to the Funds. Representatives of Ernst & Young are expected to be
present at the meeting. These representatives will have the opportunity to make
a statement to shareholders if they choose to do so and are expected to be
available to respond to appropriate questions.
AUDIT COMMITTEE REPORT
The Audit Committee recommends to the Funds' Board of Directors the
appointment of each Fund's independent accountants. Management is responsible
for the Funds' internal controls and the financial reporting process. The Funds'
independent accountants are responsible for performing an independent audit of
the Funds' financial statements in accordance with generally accepted auditing
standards and to issue a report on the Funds' financial statements. The Audit
Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
management and the independent accountants. Management represented to the Audit
Committee that the Funds' financial statements were prepared in accordance with
generally accepted accounting principles, and the Audit Committee has reviewed
and discussed the financial statements with management and the independent
accountants. The Audit Committee discussed with the independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees).
The Funds' independent accountants also provided to the Audit Committee
the written disclosure required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants the accounting firm's independence.
The Committee also considered whether non-audit services provided by the
independent accountants during the last fiscal year were compatible with
maintaining the independent accountants' independence.
-12-
Based upon the Audit Committee's discussion with management and the
independent accountants and the Audit Committee's review of the representation
of management and the report of the independent accountants to the Audit
Committee, the Audit Committee recommended to the Board of Directors that, with
respect to each Fund, the audited financial statements for the Fund's most
recent fiscal year be included in the Fund's Annual Report for that fiscal year
filed with the Securities and Exchange Commission.
Members of the Audit Committee
Leonard W. Kedrowski, Chair
Roger A. Gibson
Richard K. Riederer
Virginia L. Stringer
FEES PAID TO ERNST & YOUNG
AUDIT FEES. Ernst & Young billed $________ to each Fund during its most
recently ended fiscal year for professional services rendered for the audit of
the Fund's annual financial statements.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Ernst &
Young did not provide any financial information systems design and
implementation services to the Funds during their most recently ended fiscal
years.
ALL OTHER FEES. Ernst & Young billed $_____ to each Fund for
tax-related services and $_____ to each Fund for audit-related services during
such Fund's most recently ended fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR
OF THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG. For each Fund, the vote
of a majority of the shares represented at the meeting is sufficient for the
ratification of the selection of the independent public accountants, provided at
least a quorum (a majority of the outstanding shares) is represented in person
or by proxy. For the Municipal Bond Funds, the preferred shareholders and the
common shareholders vote together as a single class. Unless otherwise
instructed, the proxies will vote for the ratification of the selection of Ernst
& Young as each Fund's independent public accountants.
PROPOSAL THREE
APPROVAL OF A PLAN OF LIQUIDATION AND DISSOLUTION
FOR AMERICAN MUNICIPAL TERM TRUST INC.--III
AND MINNESOTA MUNICIPAL TERM TRUST INC.--II
Common shares of American Municipal Term Trust III were first offered
to the public in November 1992 and have been listed on the New York Stock
Exchange since that time under the symbol "CXT." Common shares of Minnesota
Municipal Term Trust II were first offered to the public in April 1992 and have
been listed on the American Stock Exchange since that time under the symbol
"MNB." The investment objectives of American Municipal Term Trust III are to
provide high current income exempt from regular federal income tax and to return
to investors $10 per share of common stock then outstanding (the initial
offering price per share) upon termination of the Fund. The investment
objectives of Minnesota Municipal Term Trust II are to provide high current
income exempt from both regular federal income tax and State of Minnesota
personal income tax and to return $10 per share (the initial offering price per
-13-
share) to the holders of common stock outstanding upon termination of the Fund.
Termination of each Fund is expected to occur on or shortly before April 15,
2003, although each Fund's termination may be extended to a date no later than
April 15, 2008 to assist the Fund in meeting its objective of returning $10 per
share of common stock.
As of December 31, 2001, the net asset value per share of common stock
was $11.01 for American Municipal Term Trust III and $10.46 for Minnesota
Municipal Term Trust II. The components of this net asset value can be
summarized as follows:
American Minnesota
Municipal Term Municipal
Trust III Term Trust II
-------------- -------------
Initial offering price $10.00 $10.00
Initial offering and underwriting expenses (common and preferred stock) ($ 0.67) ($0.67)
Accumulated realized gains or losses at 12/31/01 $ 0.01 $ 0.00
------ ------
SUBTOTAL $ 9.34 $9.33
------ -----
Dividend reserve (undistributed net investment income) at 12/31/01 $ 0.73 $0.57
Unrealized appreciation on investments at 12/31/01 $ 0.94 $0.56
------ -----
NET ASSET VALUE PER SHARE ON 12/31/01 $11.01 $10.46
====== ======
Each Fund's net asset value per share is expected to decline as the
Fund nears its targeted termination date. Several factors are expected to
contribute to this decline. A number of bonds currently held by the Funds have
market values in excess of their maturity or redemption values. As the maturity
and/or refunding dates of these bonds approach, their market prices will
converge toward prices that are at or near their maturity or refunding prices.
In addition, as the Funds approach termination and as opportunities arise, the
Adviser may continue to sell longer maturity bonds in favor of bonds with
shorter maturities, and lower coupons, that come due closer to the Funds'
targeted termination date. Any gains realized as a result of these sales will be
distributed to shareholders, reducing the respective Fund's net asset value. In
addition, if the newly purchased, shorter-maturity bonds in a Fund's portfolio
pay insufficient income to maintain the Fund's current dividend, the Fund's
dividend reserve may be used to supplement dividends on the common and/or
preferred stock. Nevertheless, the Adviser currently anticipates that each Fund
will be able to return at least $10 per share to common shareholders on or
shortly before April 15, 2003. However, in order for a Fund to do so,
shareholder approval of the Fund's liquidation is required.
On June 4, 2002, the Funds' Board of Directors held a meeting at which
the liquidation of the Funds was discussed. Because of the likelihood that each
Fund will be able to distribute $10 per share to common shareholders on or
shortly before its targeted termination date of April 15, 2003, the Board
adopted a Plan of Liquidation and Dissolution ("Liquidation Plan") for each
Fund, subject to shareholder approval. A form of Liquidation Plan is attached as
Appendix A to this Proxy Statement. If the Liquidation Plan is approved by
shareholders of a Fund, the portfolio securities and other assets of the Fund
will be sold, creditors will be paid or reserves for such payments will be
established, and the net proceeds of such sales will be distributed to common
shareholders in cash, pro rata in accordance with their shareholdings. These
processes will commence at such time as the Adviser determines is necessary to
result in the distribution of the Fund's assets to common shareholders in cash
on or shortly before April 15, 2003.
-14-
Before commencing the liquidation of a Fund, the Fund will redeem any
shares of preferred stock that remain outstanding at a liquidation preference of
$25,000 per share. American Municipal Term Trust III redeemed 400 shares of its
preferred stock on May 6, 2002 and 200 shares on July 8, 2002. Minnesota
Municipal Term Trust II redeemed 400 shares of its preferred stock on April 5,
2002 and has announced that it will redeem 160 shares on August 21, 2002. The
remainder of the shares of preferred stock of both Funds will be redeemed over
time, as market conditions dictate. To date, having preferred stock outstanding
has worked to the benefit of the common shareholders of both Funds.
Intermediate- and long-term interest rates that the Funds have earned on
investments made with the proceeds from the sale of preferred stock have
generally been higher than the short-term rates the Funds have had to pay on the
preferred stock. However, as longer-term bonds in each Fund's portfolio have
matured, the Funds have reinvested the proceeds in shorter-term bonds maturing
closer to the Funds' anticipated liquidation date, which have paid lower rates.
Going forward, it is anticipated that proceeds from maturing bonds will be
invested at rates that are lower than the interest rates the Funds are currently
required to pay on their outstanding preferred stock. Thus, it will be
advantageous to common shareholders for the Funds to redeem preferred shares.
Each Liquidation Plan provides that, if the Adviser does not believe
that the Fund will be able to distribute at least $10 per share to common
shareholders on April 15, 2003, the Adviser, in its sole discretion, may delay
the commencement of liquidation in an attempt to enable the Fund to meet this
objective, provided that the final distribution of the Fund's assets to common
shareholders may occur no later than April 15, 2008. However, the Adviser
currently anticipates that each Fund will be able to return at least $10 per
share to common shareholders on or shortly before April 15, 2003. EVEN IF THE
ADVISER BELIEVES, AT THE COMMENCEMENT OF THE LIQUIDATION PROCESS, THAT A FUND
WILL BE ABLE TO DISTRIBUTE $10 PER SHARE, THERE CAN BE NO GUARANTEE THAT THIS
WILL OCCUR.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE
FOR THE LIQUIDATION PLAN.
DESCRIPTION OF THE LIQUIDATION PLAN AND RELATED TRANSACTIONS
With respect to each of American Municipal Term Trust III and Minnesota
Municipal Term Trust II, if the Liquidation Plan is approved by the Fund's
shareholders, the Fund will file a notice of intent to dissolve with the
Minnesota Secretary of State at such time as the Adviser determines is necessary
to result in the distribution of the Fund's asset to shareholders on or shortly
before April 15, 2003, or such later date as the Adviser believes is necessary
to assist the Fund in meeting its objective of returning $10 per share to common
shareholders. The determination of this date will be in the sole discretion of
the Adviser, provided that in no event will the final distribution of the Fund's
assets to common shareholders be delayed to a date later than April 15, 2008.
When such notice of intent to dissolve has been filed, the Fund will cease to
carry on its business and will proceed to sell all of its portfolio securities
and other assets for cash at one or more public or private sales and at such
prices and on such terms and conditions as the Adviser determines to be
reasonable and in the best interests of the Fund and its shareholders. The Fund
then will apply its assets to the payment, satisfaction and discharge of all
existing debts and obligations of the Fund, and distribute in one or more
payments the remaining assets among the shareholders of the Fund, with each
shareholder receiving his or her proportionate share of each liquidation
distribution in cash. Thereafter, the Fund will file articles of dissolution
with the Minnesota Secretary of State in accordance with Minnesota law. Upon
such filing, the Fund will be statutorily dissolved and will cease to exist, and
no shareholder will have any interest whatsoever in the Fund. The expenses of
liquidation of the Fund will be borne by the Fund.
If the Liquidation Plan for a Fund is adopted by the Fund's
shareholders, the Adviser currently estimates that the liquidation distributions
will be paid to shareholders on or before April 15, 2003. However, the exact
date of the liquidation distributions will depend on the time required to
-15-
liquidate the Fund's assets. The Fund may, if deemed appropriate, hold back
sufficient assets to deal with any disputed claims or other contingent
liabilities which may then exist against the Fund. Any amount that is held back
relating to any such claim will be deducted pro rata from the net assets
distributable to shareholders and held until the claim is settled or otherwise
determined. The Adviser does not anticipate, however, that it will be necessary
to hold back any assets to deal with disputed claims or other contingent
liabilities. Articles of dissolution may not be filed by the Fund until claims
of all known creditors and claimants have been paid or adequately provided for.
In the event that claims are not adequately provided for or are brought after
dissolution by previously unknown creditors or claimants, Fund directors and
officers could be held personally liable. In addition, claims possibly could be
pursued against shareholders to the extent of distributions received by them in
liquidation.
Neither Fund currently intends to create a trust to administer
liquidation distributions; however, in the event a Fund is unable to distribute
all of its assets pursuant to the Liquidation Plan because of its inability to
locate shareholders to whom liquidation distributions are payable, the Fund may
create a liquidating trust with a financial institution and deposit any
remaining assets of the Fund in such trust for the benefit of the shareholders
that cannot be located. The expenses of any such trust will be charged against
the liquidation distributions held therein.
As soon as practicable after the distribution of all of a Fund's assets
in complete liquidation, the officers of the Fund will close the books of the
Fund and prepare and file, in a timely manner, any and all required income tax
returns and other documents and instruments. The Fund will also file a Form N-8F
with the Securities and Exchange Commission when it has distributed
substantially all of its assets to shareholders and has effected, or is in the
process of effecting, a winding up of its affairs in order to deregister the
Fund under the 1940 Act, and file, or cause to be filed, any and all other
reports, documents and instruments necessary to terminate the regulation of the
Fund and its business and affairs by the Commission.
If shareholders of either Fund do not approve the Liquidation Plan, the
Fund's Board of Directors will consider other options, including asking
shareholders to approve conversion of the Fund to a "perpetual" fund without a
termination date, or resubmitting the Liquidation Plan to shareholders.
EXCHANGE OF STOCK CERTIFICATES FOR LIQUIDATION DISTRIBUTIONS
Prior to completion of the liquidation of a Fund, the Fund will send to
its shareholders of record (shareholders with stock certificates) a letter of
transmittal form for the purpose of exchanging each shareholder's Fund shares
for liquidation distributions. Shareholders whose shares are held in the name of
their broker or other financial institution will receive their distributions
through their nominee firms. No amount will be distributed by the Fund to a
shareholder of record unless and until such shareholder delivers to the Fund a
signed letter of transmittal form and the certificates representing the
shareholder's Fund shares or, in the event a share certificate has been lost, a
lost certificate affidavit and such surety bonds and other documents and
instruments as are reasonably required by the Fund, together with appropriate
forms of assignment, endorsed in blank and with any and all signatures thereon
guaranteed by a financial institution reasonably acceptable to the Fund.
If the Liquidation Plan is adopted, each Fund anticipates that its
shares will stop trading on the New York Stock Exchange, in the case of American
Municipal Term Trust III, and the American Stock Exchange, in the case of
Minnesota Municipal Term Trust II, shortly before the respective Fund's final
liquidation distribution. Prior to that time, the right of a shareholder to sell
his or her Fund shares on the Exchange will not be impaired. Each Fund expects
-16-
that on or about the date of its final liquidation distribution, the listing of
the Fund's shares on the Exchange will terminate.
FEDERAL INCOME TAX CONSEQUENCES
PAYMENT BY A FUND OF LIQUIDATION DISTRIBUTIONS TO SHAREHOLDERS WILL BE
A TAXABLE EVENT. BECAUSE THE INCOME TAX CONSEQUENCES FOR A PARTICULAR
SHAREHOLDER MAY VARY DEPENDING ON INDIVIDUAL CIRCUMSTANCES, EACH SHAREHOLDER IS
URGED TO CONSULT HIS OR HER OWN TAX ADVISER CONCERNING THE FEDERAL, STATE AND
LOCAL TAX CONSEQUENCES OF RECEIPT OF A LIQUIDATION DISTRIBUTION.
Each Fund currently qualifies, and intends to continue to qualify
through the end of the liquidation period, for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so that
it will be relieved of federal income tax on any investment company taxable
income or net capital gain (the excess of net long-term capital gain over net
short-term capital loss) from the sale of its assets to the extent that it
distributes such investment company taxable income and net capital gain to
shareholders.
The payment of liquidation distributions will be a taxable event to
shareholders. Each shareholder will be viewed as having sold his or her Fund
shares for an amount equal to the liquidation distribution(s) he or she
receives. Each shareholder will recognize gain or loss in an amount equal to the
difference between (a) the shareholder's adjusted basis in the Fund shares, and
(b) such liquidation distribution(s). The gain or loss will be capital gain or
loss to the shareholder if the Fund shares were capital assets in the
shareholder's hands and generally will be long-term if the Fund shares were held
for more than one year before the liquidation distribution is received.
Each Fund generally will be required to withhold tax at the rate of 30%
with respect to any liquidation distribution paid to individuals and certain
other non-corporate shareholders who fail to certify to the Fund that their
social security number or taxpayer identification number provided to the Fund is
correct and that the shareholder is not subject to back-up withholding.
The foregoing summary is generally limited to the material federal
income tax consequences to shareholders who are individual United States
citizens and who hold shares as capital assets. It does not address the federal
income tax consequences to shareholders who are corporations, trusts, estates,
tax-exempt organizations or non-resident aliens. This summary also does not
address state or local tax consequences. Shareholders 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 liquidation distribution, as well as
any tax consequences under any applicable state, local or foreign laws.
-17-
FINANCIAL HIGHLIGHTS
The following financial highlights for the Funds for the fiscal years
ended December 31, 1999, 2000 and 2001 have been audited by Ernst & Young LLP,
independent auditors, whose report thereon appears in the Funds' annual reports
to shareholders for such year. Financial highlights for each of the two years in
the period ended December 31, 1998 were audited by KPMG LLP, whose report dated
February 12, 1999 expressed an unqualified opinion.
AMERICAN MUNICIPAL TERM TRUST INC.--III
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2001 2000 1999 1998(g) 1997
-------- -------- -------- -------- --------
PER-SHARE DATA
Net asset value, common stock, beginning of period ............. $ 10.97 $ 10.75 $ 11.46 $ 11.39 $ 10.92
-------- -------- -------- -------- --------
Operations:
Net investment income ........................................ 0.81 0.81 0.83 0.81 0.82
Net realized and unrealized gains (losses) on investments .... (0.03) 0.20 (0.81) 0.08 0.47
-------- -------- -------- -------- --------
Total from operations ....................................... 0.78 1.01 0.02 0.89 1.29
-------- -------- -------- -------- --------
Distributions to shareholders:
From net investment income
Paid to common shareholders ................................. (0.60) (0.59) (0.57) (0.57) (0.57)
Paid to preferred shareholders .............................. (0.13) (0.20) (0.16) (0.17) (0.16)
From net realized gains on investments
Paid to common shareholders ................................. (0.01) -- -- (0.06) (0.07)
Paid to preferred shareholders .............................. -- -- -- (0.02) (0.02)
-------- -------- -------- -------- --------
Total distributions to shareholders .................... (0.74) (0.79) (0.73) (0.82) (0.82)
-------- -------- -------- -------- --------
Net asset value, common stock, end of period ................... $ 11.01 $ 10.97 $ 10.75 $ 11.46 $ 11.39
======== ======== ======== ======== ========
Market value, common stock, end of period ...................... $ 11.00 $ 10.44 $ 9.94 $ 11.25 $ 10.94
======== ======== ======== ======== ========
SELECTED INFORMATION
Total return, common stock, net asset value (a) ................ 6.07% 7.73% (1.23)% 6.28% 10.42%
Total return, common stock, market value (b) ................... 11.35% 11.19% (6.81)% 8.86% 11.93%
Net assets at end of period (in millions) ...................... $ 856 $ 85 $ 84 $ 87 $ 87
Ratio of expenses to average weekly net assets
applicable to common stock (c) ................................ 1.02% 1.03% 1.03% 0.95% 0.99%
Ratio of net investment income to average weekly net
assets applicable to common stock (d) (e) ..................... 6.08% 5.62% 5.98% 5.67% 5.91%
Portfolio turnover rate (excluding short-term securities) ...... 5% 1% 1% 5% 7%
Remarketed preferred stock outstanding end of period
(in millions) ................................................. $ 277 $ 27 $ 27 $ 27 $ 27
Asset coverage per share (in thousands) (f) .................... $ 809 $ 80 $ 78 $ 82 $ 82
Liquidation preference and market value per share (in
thousands) .................................................... $ 255 $ 25 $ 25 $ 25 $ 25
- ------------------
(a) Assumes reinvestment of distributions at net asset value and does not
reflect a sales charge.
(b) Assumes reinvestment of distributions at actual prices pursuant to the
Fund's dividend reinvestment plan.
-18-
(c) Ratio of expenses to total average weekly net assets is 0.70%, 0.70%,
0.71%, 0.66% and 0.68% for fiscal years 2001, 2000, 1999, 1998 and 1997,
respectively. Dividend payments to preferred shareholders are not
considered an expense.
(d) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common stock.
(e) Ratio of net investment income to total average weekly net assets is 5.01%,
5.08%, 5.10%, 4.94% and 5.09% for fiscal years 2001, 2000, 1999, 1998 and
1997, respectively.
(f) Represents total net assets divided by preferred stock outstanding.
(g) Effective August 10, 1998, the advisor was changed from Piper Capital
Management Incorporated to U.S. Bank.
-19-
MINNESOTA MUNICIPAL TERM TRUST INC. - II
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2001 2000 1999 1998(g) 1997
-------- -------- -------- -------- --------
PER-SHARE DATA
Net asset value, common stock, beginning of period ............. $ 10.42 $ 10.17 $ 10.90 $ 10.94 $ 10.71
-------- -------- -------- -------- --------
Operations:
Net investment income ........................................ 0.77 0.78 0.73 0.80 0.81
Net realized and unrealized gains (losses) on investments .... (0.01) 0.25 (0.68) -- 0.23
-------- -------- -------- -------- --------
Total from operations ....................................... 0.76 1.03 0.05 0.80 1.04
-------- -------- -------- -------- --------
Distributions to shareholders:
From net investment income
Paid to common shareholders ................................. (0.59) (0.59) (0.60) (0.59) (0.59)
Paid to preferred shareholders .............................. (0.13) (0.19) (0.14) (0.15) (0.16)
From net realized gains on investments
Paid to common shareholders ................................. -- -- (0.03) (0.08) (0.05)
Paid to preferred shareholders .............................. -- -- (0.01) (0.02) (0.01)
-------- -------- -------- -------- --------
Total distributions to shareholders .................... (0.72) (0.78) (0.78) (0.84) (0.81)
-------- -------- -------- -------- --------
Net asset value, common stock, end of period ................... $ 10.46 $ 10.42 $ 10.17 $ 10.90 $ 10.94
======== ======== ======== ======== ========
Market value, common stock, end of period ...................... $ 10.61 $ 10.13 $ 9.56 $ 11.31 $ 10.69
======== ======== ======== ======== ========
SELECTED INFORMATION
Total return, common stock, net asset value (a) ................ 6.14% 8.51% (1.03)% 5.95% 8.34%
Total return, common stock, market value (b) ................... 10.75% 12.32% (10.33)% 12.56% 10.78%
Net assets at end of period (in millions) ...................... $ 54 $ 53 $ 53 $ 55 $ 55
Ratio of expenses to average weekly net assets
applicable to common stock (e) ................................ 1.12% 1.12% 1.17% 1.06% 1.09%
Ratio of net investment income to average weekly net
assets applicable to common stock (c) (f) ..................... 6.11% 5.75% 5.53% 5.87% 6.06%
Portfolio turnover rate (excluding short-term securities) ...... 20% 29% 18% 9% 10%
Remarketed preferred stock outstanding end of period
(in millions) ................................................. $ 17 $ 17 $ 17 $ 17 $ 17
Asset coverage per share (in thousands) (d) .................... $ 77 $ 77 $ 76 $ 79 $ 80
Liquidation preference and market value per share (in
thousands) .................................................... $ 25 $ 25 $ 25 $ 25 $ 25
- ----------------
(a) Assumes reinvestment of distributions at net asset value and does not
reflect a sales charge.
(b) Assumes reinvestment of distributions at actual prices pursuant to the
Fund's dividend reinvestment plan.
(c) Ratio reflects total net investment income less dividends paid to preferred
shareholders from net investment income divided by average net assets
applicable to common stock.
(d) Represents total net assets divided by preferred stock outstanding.
(e) Ratio of expenses to total average weekly net assets is 0.76%, 0.75%,
0.79%, 0.73% and 0.74% for fiscal years 2001, 2000, 1999, 1998 and 1997,
respectively. Dividends paid to preferred shareholders are not considered
an expense.
(f) Ratio of net investment income to total average weekly net assets is 4.95%,
5.12%, 4.68%, 4.98% and 5.13% for fiscal years 2001, 2000, 1999, 1998 and
1997, respectively.
-20-
(g) Effective August 10, 1998, the advisor was changed from Piper Capital
Management Incorporated to U.S. Bank.
NET ASSET VALUE AND MARKET PRICE
The shares of American Municipal Term Trust III and Minnesota Municipal
Term Trust II currently trade on the New York Stock Exchange and the American
Stock Exchange, respectively. The following tables show the history of public
trading of the Funds' shares, by quarter, for the last two fiscal years and for
each full fiscal quarter since the beginning of the current fiscal year, as
reported on the New York or the American Stock Exchange, as the case may be.
MINNESOTA MUNICIPAL TERM TRUST INC. - III
PERCENTAGE PERCENTAGE
NET ASSET VALUE MARKET PRICE DISCOUNT PREMIUM
------------------- -------------------- -------------------- -------------------
QUARTER ENDED HIGH LOW HIGH LOW HIGH LOW HIGH LOW
- ------------- -------- -------- -------- -------- -------- -------- -------- --------
03/31/00 $ 10.79 $ 10.68 $10.1875 $ 9.9375 7.47% 4.97% n/a n/a
06/30/00 10.79 10.55 10.2500 10.0000 6.80% 3.89% n/a n/a
09/30/00 10.96 10.66 10.5625 10.0625 6.77% 3.49% n/a n/a
12/31/00 11.00 10.81 10.5000 10.2500 5.96% 3.14% n/a n/a
03/31/01 11.20 11.07 10.8300 10.4375 5.15% 2.70% n/a n/a
06/30/01 11.12 11.02 11.0900 10.7200 3.51% 1.00% 0.18% 0.18%
09/30/01 11.26 11.08 11.0800 10.7800 3.84% 0.90% n/a n/a
12/31/01 11.26 11.00 11.2200 10.8900 2.05% 0.36% 0.09% 0.09%
03/31/02 11.18 10.97 11.1800 10.9000 1.18% 0.09% 0.36% 0.36%
06/30/02
On July __, 2002, the high, low and closing prices of the shares of
Minnesota Municipal Term Trust III quoted on the American Stock Exchange were
$_____, $_____ and $_____, respectively. The closing price on such date was at a
[discount] [premium] of ____% from the net asset value of $_____ per share.
-21-
MINNESOTA MUNICIPAL TERM TRUST INC. - II
PERCENTAGE PERCENTAGE
NET ASSET VALUE MARKET PRICE DISCOUNT PREMIUM
------------------- -------------------- -------------------- -------------------
QUARTER ENDED HIGH LOW HIGH LOW HIGH LOW HIGH LOW
- ------------- -------- -------- -------- -------- -------- -------- -------- --------
03/31/00 $ 10.22 $ 10.10 $10.1250 $ 9.4375 6.59% 1.19% n/a n/a
06/30/00 10.19 10.01 10.0625 9.6250 5.02% 1.45% n/a n/a
09/30/00 10.36 10.25 10.1250 9.7500 5.25% 1.83% n/a n/a
12/31/00 10.44 10.24 10.1250 9.8125 4.96% 3.56% n/a n/a
03/31/01 10.62 10.52 10.7500 10.1500 3.39% 0.19% 1.23% 1.23%
06/30/01 10.54 10.44 10.6800 10.1700 2.76% 0.28% n/a n/a
09/30/01 10.71 10.49 10.6500 10.2600 2.90% 0.38% 1.53% 0.86%
12/31/01 10.75 10.44 10.7900 10.3800 3.08% 0.38% 1.63% 0.95%
03/31/02 10.63 10.43 10.7500 10.4000 1.61% 0.09% 2.01% 0.57%
06/30/02
On July __, 2002, the high, low and closing prices of the shares of
Minnesota Municipal Term Trust II quoted on the American Stock Exchange were
$_____, $_____ and $_____, respectively. The closing price on such date was at a
[discount] [premium] of ____% from the net asset value of $_____ per share.
REQUIRED VOTE
For each Fund, the affirmative vote of a majority of the Fund's
outstanding common and preferred shares, voting together as a single class, is
required to approve the Liquidation Plan. THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE LIQUIDATION PLAN.
-22-
OFFICERS OF THE FUNDS
Information about each officer's position and term of office with the
Funds and business experience during the past five years is set forth below.
Unless otherwise indicated, all positions have been held more than five years.
No officer receives any compensation from the Funds. Unless otherwise indicated,
the address of each of the officers is U.S. Bancorp Asset Management, Inc., 800
Nicollet Mall, Minneapolis, Minnesota 55402.
NAME AND AGE POSITION HELD TERM OF OFFICE* AND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------ WITH THE FUNDS LENGTH OF TIME SERVED ----------------------------------------------
-------------- ---------------------
Thomas S. President Since February 2001 Chief Executive Officer of the Adviser since
Schreier, Jr. May 2001; prior thereto, Chief Executive
(Age 39) Officer of First American Asset Management
since December 2000 and of Firstar Investment
& Research Management Company ("FIRMCO") since
February 2001; Senior Managing Director and
Head of Equity Research of U.S. Bancorp Piper
Jaffray from October 1998 through December
2000; Senior Airline Analyst and Director of
Equity Research of Credit Suisse First Boston
from 1996 to 1998.
Mark S. Jordahl Vice President Since September 2001 Chief Investment Officer of the Adviser since
(Age 41) -- Investments September 2001; prior thereto, President and
Chief Investment Officer, ING Investment
Management - Americas, September 2000 to June
2001, Senior Vice President and Chief
Investment Officer, ReliaStar Financial Corp,
January 1998 to September 2000, Executive Vice
President and Managing Director, Washington
Square Advisers, January 1996 to December
1997.
Peter O. Torvik Vice President Since September 2000 Executive Vice President of the Adviser since
(Age 47) -- Marketing May 2001; prior thereto, Executive Vice
President of First American Asset Management
since February 2001; President and Partner,
DPG Group, a Florida-based partnership engaged
in affinity marketing, through 2000.
Jeffrey M. Wilson Vice President Since March 2000 Senior Vice President of the Adviser since May
(Age 45) -- Administration 2001; prior thereto, Senior Vice President of
First American Asset Management.
Robert H. Nelson Treasurer Since 1995 Senior Vice President of the Adviser since May
(Age 38) 2001; prior thereto, Senior Vice President of
First American Asset Management since 1998 and
of FIRMCO since February 2001; Senior Vice
President of Piper Capital Management Inc.
from 1994 to 1998.
-23-
NAME AND AGE POSITION HELD TERM OF OFFICE* AND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------ WITH THE FUNDS LENGTH OF TIME SERVED ----------------------------------------------
-------------- ---------------------
James D. Alt Secretary Since June 2002; Partner, Dorsey & Whitney LLP, a Minneapolis
(Age 50) Assistant Secretary based law firm
50 South Sixth of the Funds from
Street, Suite September 1998 to
1500 June 2002.
Minneapolis, MN
55402
Kathleen L. Assistant Since September 1998 Partner, Dorsey & Whitney LLP, a Minneapolis
Prudhomme Secretary based law firm
(Age 49)
50 South Sixth
Street, Suite
1500
Minneapolis, MN
55402
Michael J. Radmer Assistant Since March 2000; Partner, Dorsey & Whitney LLP, a Minneapolis
(Age 57) Secretary Secretary of the based law firm
50 South Sixth Funds from September
Street, Suite 1999 to March 2000
1500
Minneapolis, MN
55402
- ------------------
* Officers serve at the pleasure of the Board of Directors and are re-elected by
the Board annually.
-24-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on Fund records and other information, the Funds believe that all
Securities and Exchange Commission filing requirements applicable to their
directors and officers, the Adviser and companies affiliated with the Adviser,
pursuant to Section 16(a) of the Securities Exchange Act of 1934, with respect
to each Fund's fiscal year end were satisfied.
SHAREHOLDER PROPOSALS
Under the Securities Exchange Act of 1934, Fund shareholders may submit
proposals to be considered at the next Annual Meeting. Rule 14a-8 under the
Exchange Act sets forth the procedures and requirements for requesting that a
Fund include these proposals in its proxy statement. Any proposal submitted
under Rule 14a-8 must be received at the Funds' offices, 800 Nicollet Mall,
Minneapolis, Minnesota 55402, no later than _______, 2003. Shareholders also may
submit proposals to be voted on at the next Annual Meeting without having the
proposals included in the Funds' proxy statement. These proposals are known as
"non-Rule 14a-8 proposals." The Funds' proxies will be able to exercise their
discretionary authority to vote all proxies with respect to any non-Rule 14a-8
proposal, unless written notice of the proposal is presented to the Fund not
later than ______, 2003.
Dated: July ___, 2002
James D. Alt
Secretary
-25-
Appendix A
PLAN OF LIQUIDATION AND DISSOLUTION
OF [AMERICAN MUNICIPAL TERM TRUST INC.--III]
[MINNESOTA MUNICIPAL TERM TRUST INC.--II]
(a) After the date of approval of this Plan of Liquidation and
Dissolution by the shareholders of [American Municipal Term Trust Inc.--III]
[Minnesota Municipal Term Trust Inc.--II] (the "Corporation"), and at such time
as is necessary to result in the distribution of the Corporation's assets to
shareholders on or shortly before April 15, 2003, the proper officers of the
Corporation shall perform such acts, execute and deliver such documents, and do
all things as may be reasonably necessary or advisable to complete the
liquidation and dissolution of the Corporation, including, but not limited to,
the following: (i) file a notice of intent to dissolve with the Minnesota
Secretary of State; (ii) sell all of the portfolio securities and any and all
other property and assets of the Corporation for cash at one or more public or
private sales and at such prices and on such terms and conditions as such
officers shall determine to be reasonable and in the best interests of the
Corporation and its shareholders; (iii) to the extent possible, prosecute,
settle or compromise all claims or actions of the Corporation or to which the
Corporation is subject; (iv) file Form 966 with the Internal Revenue Service,
together with certified copies of the directors' and shareholders' resolutions
approving this Plan; and (v) execute in the name and on behalf of the
Corporation those contracts of sale, deeds, assignments, notices and other
documents as in the judgment of such officers may be necessary, desirable or
convenient in connection with the carrying out of the liquidation and
dissolution of the Corporation. (All references in this Plan of Liquidation and
Dissolution to the "proper officers of the Corporation" shall include, where
appropriate, proper officers of the Corporation's investment adviser, acting on
behalf of the Corporation.) Notwithstanding anything to the contrary set forth
in this Plan of Liquidation and Dissolution, the proper officers of the
Corporation may delay taking the foregoing actions if the Corporation's
investment adviser does not believe that the Corporation will be able to return
at least $10 per share to common shareholders on or shortly before April 15,
2003, provided that the final distribution of the Corporation's assets to
shareholders may occur no later than April 15, 2008.
(b) The proper officers of the Corporation then shall apply the assets
of the Corporation to the payment, satisfaction and discharge of all existing
debts and obligations of the Corporation and distribute in one or more payments
the remaining assets among the shareholders of the Corporation, with each
shareholder receiving his or her proportionate share of each payment.
(c) The proper officers of the Corporation may, if such officers deem
it appropriate, establish a reserve to meet any contingent liabilities of the
Corporation, including any claims or actions to which the Corporation is
subject, and any amount that is placed in such reserve shall be deducted from
the net assets distributable to shareholders until the contingent liabilities
have been settled or otherwise determined and discharged.
(d) In the event the Corporation is unable to distribute all of the net
assets distributable to shareholders because of the inability to locate
shareholders to whom liquidation distributions are payable, the proper officers
of the Corporation may create in the name and on behalf of the Corporation a
liquidation trust with a
-26-
financial institution and, subject to applicable abandoned property laws,
deposit any remaining assets of the Corporation in such trust for the benefit of
the shareholders that cannot be located. The expenses of any such trust shall be
charged against the assets held therein.
(e) As soon as practicable after the foregoing, the proper officers of
the Corporation shall file articles of dissolution with the Secretary of State
of the State of Minnesota in accordance with Minnesota law.
-27-
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
TIME:
Thursday, September 5, 2002
at 10:00 a.m.
PLACE:
800 Nicollet Mall
5th Floor
Minneapolis, Minnesota
IMPORTANT:
Please date and sign your
proxy card and return it promptly
using the enclosed reply envelope.
Book 1
Cusip Numbers:
027654-10-2 027654-20-1
604066-10-0 604066-20-9
027649-10-2 027649-20-1
604062-10-9 027649-30-0
604062-20-8 604062-30-7
02672T-10-9
USBAM-PS-02
[AMERICAN MUNICIPAL INCOME PORTFOLIO]
[MINNESOTA MUNICIPAL INCOME PORTFOLIO]
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE TODAY BY MAIL, TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-____________
OR LOG ONTO www._____________
The undersigned appoints Thomas S. Schreier, Robert H. Nelson, Peter O.
Torvik and Jeffery M. Wilson 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 common shares of [INSERT NAME OF FUND] (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
September 5, 2002, 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: Andrew M. Hunter III, John M. Murphy, Jr., Richard K.
Riederer, Joseph D. Strauss, Virginia L. Stringer and James M. Wade.
(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 Ernst & Young 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: _______________________________, 2002
____________________________________________
____________________________________________
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.
[AMERICAN MUNICIPAL INCOME PORTFOLIO INC.]
[MINNESOTA MUNICIPAL INCOME PORTFOLIO INC.]
PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE TODAY BY MAIL, TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-____________
OR LOG ONTO www._____________
The undersigned appoints Thomas S. Schreier, Robert H. Nelson, Peter O.
Torvik and Jeffery M. Wilson, 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 preferred shares of [INSERT NAME OF FUND] (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
September 5, 2002, 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: Roger A. Gibson, Andrew M. Hunter III, Leonard W. Kedrowski,
John M. Murphy, Jr., Richard K. Riederer, Joseph D. Strauss, Virginia L.
Stringer and James M. Wade. (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 Ernst & Young 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: _______________________________, 2002
____________________________________________
____________________________________________
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.
AMERICAN INCOME FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE TODAY BY MAIL, TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-____________
OR LOG ONTO www._____________
The undersigned appoints Thomas S. Schreier, Robert H. Nelson, Peter O.
Torvik and Jeffery M. Wilson, 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 of the shares of American Income Fund, Inc. (the "Fund"), held by
the undersigned at the annual meeting of shareholders of the Fund to be held on
September 5, 2002, 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 for the term specified in
the proxy statement (except as marked to the contrary
below)
______ WITHHOLD AUTHORITY to vote for all nominees listed below
NOMINEES: Leonard W. Kedrowski, John M. Murphy, Jr., Richard K.
Riederer, and James M. Wade. (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 Ernst & Young 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: _______________________________, 2002
____________________________________________
____________________________________________
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.
[AMERICAN MUNICIPAL TERM TRUST INC.--III]
[MINNESOTA MUNICIPAL TERM TRUST INC.--II]
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE TODAY BY MAIL, TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-____________
OR LOG ONTO www._____________
The undersigned appoints Thomas S. Schreier, Robert H. Nelson, Peter O.
Torvik and Jeffery M. Wilson, 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 common shares of [INSERT NAME OF FUND] (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
September 5, 2002, 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: Andrew M. Hunter III, John M. Murphy, Jr., Richard K.
Riederer, Joseph D. Strauss, Virginia L. Stringer and James M. Wade.
(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 Ernst & Young LLP as independent public accountants for the Fund.
3. To vote: FOR ___ AGAINST ___ ABSTAIN ___ the Plan of Liquidation and
Dissolution.
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: _______________________________, 2002
____________________________________________
____________________________________________
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.
[AMERICAN MUNICIPAL TERM TRUST INC.--III]
[MINNESOTA MUNICIPAL TERM TRUST INC.--II]
PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE TODAY BY MAIL, TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-____________
OR LOG ONTO www._____________
The undersigned appoints Thomas S. Schreier, Robert H. Nelson, Peter O.
Torvik and Jeffery M. Wilson, 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 preferred shares of [INSERT NAME OF FUND] (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
September 5, 2002, 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: Roger A. Gibson, Andrew M. Hunter III, Leonard W. Kedrowski,
John M. Murphy, Jr., Richard K. Riederer, Joseph D. Strauss, Virginia L.
Stringer and James M. Wade. (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 Ernst & Young LLP as independent public accountants for the Fund.
3. To vote: FOR ___ AGAINST ___ ABSTAIN ___ the Plan of Liquidation and
Dissolution.
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: _______________________________, 2002
____________________________________________
____________________________________________
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.