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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
TRANSAMERICA OCCIDENTALS SEPARATE ACCOUNT B
(Name of Registrant as Specified In Its Charter)
NAME OF COMPANY
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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:
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TRANSAMERICA INCOME SHARES, INC.
1150 SOUTH OLIVE STREET
LOS ANGELES, CA 90015
(800) 288-9541
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Annual Meeting") of Transamerica Income Shares, Inc., a Maryland corporation
(the "Corporation"), will be held on June 16, 1999, at 10 a.m. (Pacific Time) at
the executive offices of the Corporation, 1150 South Olive Street, Los Angeles,
CA 90015. At the Annual Meeting, you and the other shareholders of the
Corporation will be asked to consider and vote on the following matters:
1. To approve a new investment advisory agreement between
Transamerica Investment Services, Inc. and the Corporation as
discussed in Part I of the attached Proxy Statement.
2. To elect the Board of Directors of the Corporation, as
discussed in Part II of the attached Proxy Statement.
3. To ratify or reject the selection by the Board of Directors of
Ernst & Young LLP as independent public accountants to the
Corporation for the fiscal year ending December 31, 1999, as
discussed in Part III of the attached Proxy Statement.
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on May 10, 1999 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. Regardless of whether you plan to attend the Annual Meeting, please
complete, sign and return promptly the enclosed proxy card so that a quorum will
be present and the maximum number of shares may be voted.
By Order of the Board of Directors
_______________________________________
Secretary
Los Angeles, California
May 6, 1999
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TRANSAMERICA INCOME SHARES, INC.
1150 South Olive Street
Los Angeles, CA 90015
(800) 288-9541
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Transamerica Income
Shares, Inc. (the "Corporation") for use at the Annual Meeting of Shareholders
of the Corporation, to be held at the executive offices of the Corporation, 1150
South Olive Street, Los Angeles, California 90015, on June 16, 1999 at 10 a.m.
(Pacific Time), and at any and all adjournments thereof (the "Annual Meeting").
This Proxy Statement, the Notice of Annual Meeting and the proxy card
are first being mailed to shareholders on or about May 17, 1999 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary at the principal executive office of the
Corporation, c/o Transamerica Investment Services, Inc., at the address shown at
the beginning of this Proxy Statement) or in person at the Annual Meeting, by
executing a superseding proxy or by submitting a notice of revocation to the
Corporation. All properly executed proxies received in time for the Annual
Meeting will be voted as specified in the proxy or, if no specification is made,
in favor of the Proposals referred to in the Proxy Statement.
Shareholders will vote together as a single class on Proposal 1
(approval of a new investment advisory agreement), Proposal 2 (election of
directors) and Proposal 3 (ratification of independent public accountants).
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the votes entitled to be cast shall be necessary and
sufficient to constitute a quorum for the transaction of business. For purposes
of determining the presence of a quorum, abstentions will be counted as present.
Broker "nonvotes" occur when the Corporation receives a proxy from a broker or
nominee who does not have discretionary power to vote on a particular matter and
the broker or nominee has not received instructions from the beneficial owner or
other person entitled to vote the shares represented by the proxy. Proposal 1
requires the approval of a "majority of the outstanding voting securities" of
the Corporation, as defined in the Investment Company Act of 1940, as amended
(the "1940 Act"). Abstentions and broker "nonvotes" will have the effect of a
vote against Proposal 1. See "Proposal 1 -- Required Vote." Proposal 2 requires
a plurality vote for the election of each director, and Proposal 3 requires a
majority of the votes cast at the Annual Meeting for approval. Abstentions and
broker nonvotes will not be counted in favor of or against Proposals 2 and 3.
See "Proposal 2 -- Required Vote" and "Proposal 3 -- Required Vote."
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The solicitation will be made primarily by mail, but may be
supplemented by telephone calls, telegrams, personal interviews and other
communications by officers, employees and agents of the Corporation and its
affiliates. Authorization to execute proxies may be obtained telephonically or
by electronically transmitted instructions. The Corporation has retained
Georgeson & Company Inc., 88 Pine Street, New York, NY 10005 to aid in the
solicitation of proxies. The costs of retaining Georgeson & Company Inc., which
are anticipated to be approximately $10,000, and other expenses incurred in
connection with the solicitation of proxies and the holding of the Annual
Meeting, will be borne by Transamerica Corporation ("Transamerica") or its
affiliates and not by the Corporation.
Holders of record of the shares of the Corporation at the close of
business on May 10, 1999 (the "Record Date"), as to any matter on which they are
entitled to vote, will be entitled to one vote per share on all business of the
Annual Meeting. There were [_____] shares outstanding as of the Record Date.
Appendix 1 sets forth the beneficial owners of at least 5% of the
Corporation's shares. To the best of the Corporation's knowledge, as of May 10,
1999, no person owned beneficially more than 5% of the Corporation's outstanding
shares, except as stated in Appendix 1.
Appendix 2 hereto sets forth the number of shares of the Corporation
owned directly or beneficially by the directors, nominees for director or
executive officers of the Corporation. To the best of the Corporation's
knowledge, as of May 10, 1999, no director, nominee for director or executive
officer of the Corporation owned beneficially any shares of the Corporation,
except as stated in Appendix 2.
The Corporation provides periodic reports to all of its shareholders
which highlight relevant information, including investment results and a review
of portfolio changes. You can receive an additional copy of the most recent
annual report and a copy of any more recent semi-annual report, without charge,
by calling 800-288-9541 or writing the Corporation's transfer agent, ChaseMellon
Shareholder Services, L.L.C., Overpeck Centre, 85 Challenger Road, Ridgefield
Park, NJ 07660.
I. APPROVAL OF NEW
INVESTMENT ADVISORY AGREEMENT
(PROPOSAL 1)
INTRODUCTION
Transamerica Investment Services, Inc. ("TIS") acts as the investment
adviser to the Corporation pursuant to an investment advisory agreement entered
into by the Corporation and TIS. The investment advisory agreement in effect
between the Corporation and TIS prior to the consummation of the transaction
described below between AEGON N.V. ("AEGON"), Tony Merger Corp. ("Merger Sub")
and Transamerica (the "AEGON-Transamerica Transaction" or the
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"Transaction") is referred to in this Proxy Statement as the "Former Investment
Advisory Agreement." The investment advisory agreement proposed to become
effective between the Corporation and TIS as of the consummation of the
AEGON-Transamerica Transaction is referred to in this Proxy Statement as the
"New Investment Advisory Agreement" (together with the Former Investment
Advisory Agreement, the "Investment Advisory Agreements," and each an
"Investment Advisory Agreement").
The AEGON-Transamerica Transaction. TIS is a direct wholly-owned
subsidiary of Transamerica. On February 17, 1999, AEGON, Merger Sub, a
wholly-owned subsidiary of AEGON, and Transamerica entered into an Agreement and
Plan of Merger and Reorganization (the "Merger Agreement"). Pursuant to the
Merger Agreement, Transamerica will merge with and into Merger Sub. Merger Sub
will be the surviving corporation in the Transaction, and the separate corporate
existence of Transamerica will cease. The Certificate of Incorporation of Merger
Sub will be amended to change the name of Merger Sub from Tony Merger Corp. to
Transamerica Corporation. The result of the Transaction will be that
Transamerica will become a wholly-owned subsidiary of AEGON.
Consummation of the Transaction may be deemed to constitute an
"assignment," as that term is defined in the 1940 Act, of the Former Investment
Advisory Agreement with TIS. As required by the 1940 Act, the Former Investment
Advisory Agreement provides for its automatic termination in the event of its
assignment. Accordingly, a New Investment Advisory Agreement between the
Corporation and TIS was approved by the Board and is now being proposed for
approval by the shareholders of the Corporation. TIS is seeking an exemptive
order from the Securities and Exchange Commission (the "SEC" or the
"Commission") permitting the Corporation to obtain shareholder approval of its
New Investment Advisory Agreement within 150 days after the consummation of the
Transaction, which is expected to occur in mid-June (and, consequently, within
150 days after the termination of its Former Investment Advisory Agreement).
Pursuant to the exemptive order, should TIS choose to rely on it, the investment
advisory fees would be held in escrow until the earlier of (i) shareholder
approval of the New Investment Advisory Agreement and (ii) the expiration of the
150-day period. A copy of the form of New Investment Advisory Agreement is
attached hereto as Exhibit A. THE NEW INVESTMENT ADVISORY AGREEMENT IS
SUBSTANTIALLY IDENTICAL TO THE FORMER INVESTMENT ADVISORY AGREEMENT, EXCEPT FOR
THE DATE OF EXECUTION AND THE TERMINATION DATE. The material terms of the
Investment Advisory Agreement are described under "Description of the Investment
Advisory Agreement" below.
BOARD'S RECOMMENDATION
The Board met on May 7, 1999, and the Board members, including the
Board members who are not parties to the New Investment Advisory Agreement or
"interested persons" (as defined in the 1940 Act) (the "Non-Interested
Directors" or "Non-Interested Board members") of
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any such party, voted to approve the New Investment Advisory Agreement and to
recommend approval to the shareholders of the Corporation.
BOARD'S EVALUATION
On May 7, 1999, the Board met with senior management personnel of TIS.
As a result of its review and consideration of the Transaction and the proposed
New Investment Advisory Agreement, the Board voted unanimously to approve the
New Investment Advisory Agreement and to recommend it to the shareholders of the
Corporation for their approval.
In connection with its review, TIS and AEGON represented to the Board
that: although integration of the businesses of Transamerica and AEGON may occur
and therefore some changes may result, it is the current intention that the
Transaction will have no material effect on the operational management of the
Corporation and that it will not result in any material change in the management
or operations of TIS as they relate to the Corporation; there will not be any
increase in the advisory fee or any change in any other provision, other than
the date of execution and the termination date, of the Investment Advisory
Agreement as a result of the Transaction; and the Transaction will not adversely
affect TIS's financial condition.
In connection with its deliberations, the Board obtained such
information as it deemed reasonably necessary to evaluate the New Investment
Advisory Agreement and other agreements, including certain assurances from each
of AEGON, Transamerica and TIS, including the following:
- The Transaction will not result in any change in the
Corporation's investment objectives or policies.
- It is the current intention that the Transaction will not
result in any material change in the management or operations
of TIS as they relate to the Corporation.
- There is a commitment to the continuance, without
interruption, of services to the Corporation of the type and
quality currently provided by TIS.
- The current plan is to maintain TIS's facilities and
organization.
Transamerica informed the Board that it intends to comply with Section
15(f) of the 1940 Act, which provides a non-exclusive safe harbor for an
investment adviser to an investment company or any of the investment adviser's
affiliated persons (as defined in the 1940 Act) to receive any amount or benefit
in connection with a change in control of the investment adviser so long as two
conditions are met. First, for a period of three years after the transaction, at
least 75% of the board members of the investment company must not be "interested
persons" of the investment company's investment adviser or its predecessor
adviser. On or prior to the consummation of the Transaction, the Board will be
in compliance with this provision of Section
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15(f). Second, an "unfair burden" must not be imposed upon the investment
company as a result of such transaction or any express or implied terms,
conditions or understandings applicable thereto. The term "unfair burden" is
defined in Section 15(f) to include any arrangement during the two-year period
after the transaction whereby the investment adviser, or any interested person
of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its shareholders (other
than fees for bona fide investment advisory or other services) or from any
person in connection with the purchase or sale of securities or other property
to, from or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such investment company). Transamerica
has advised the Board that it is not aware of any express or implied term,
condition, arrangement or understanding that would impose an "unfair burden" on
the Corporation as a result of the Transaction. Transamerica has agreed that it,
and its affiliates, will take no action that would have the effect of imposing
an "unfair burden" on the Corporation as a result of the Transaction. In
furtherance thereof, Transamerica has undertaken to pay the costs of preparing
and distributing proxy materials to, and of holding the meeting, of the
Corporation's shareholders, as well as other fees and expenses in connection
with the Transaction.
In evaluating the New Investment Advisory Agreement, the Board took
into account that the fees and expenses payable by the Corporation under its New
Investment Advisory Agreement are the same as under its Former Investment
Advisory Agreement, that the services provided to the Corporation are the same
and that the other terms are, except for the date of execution and the
termination date, identical. The Board also took into consideration that the
current intention is that the portfolio managers and research personnel would
continue their functions with TIS after the Transaction. The Board noted that,
in previously approving the Former Investment Advisory Agreement, the Board had
considered a number of factors, including the nature and quality of services
provided by TIS; investment performance, both that of the Corporation itself and
relative to that of competitive investment companies; the investment advisory
fees and expense ratios of the Corporation and competitive investment companies;
TIS's profitability from managing the Corporation; fallout benefits to TIS from
its relationship to the Corporation, including revenues derived from services
provided to the Corporation by affiliates of TIS; and the potential benefits to
TIS and to the Corporation and its shareholders of receiving research services
from broker-dealer firms in connection with the allocation of portfolio
transactions to such firms.
The Board discussed the Transaction with the senior management of TIS,
Transamerica and AEGON and among themselves. The Board considered that AEGON and
Transamerica are large, well-established companies with substantial resources.
AS A RESULT OF ITS REVIEW AND CONSIDERATION OF THE TRANSACTION
AND THE NEW INVESTMENT ADVISORY AGREEMENT, AT ITS MEETING
THE BOARD VOTED TO APPROVE THE NEW INVESTMENT ADVISORY
AGREEMENT AND TO RECOMMEND ITS APPROVAL
TO THE SHAREHOLDERS.
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DESCRIPTION OF THE INVESTMENT ADVISORY AGREEMENT
Except as disclosed below, the Former Investment Advisory Agreement and
New Investment Advisory Agreement are substantially identical.
Pursuant to the Investment Advisory Agreement, the Corporation employs
TIS to provide investment advisory, statistical and research facilities and
services, and to supervise the composition of the Corporation's investment
portfolio, subject to supervision by the Board. The Agreement provides that TIS
shall: (a) furnish research and statistical and other factual information and
reports; (b) furnish advice, information and recommendations with respect to the
acquisition, holding or disposal by the Corporation of eligible securities; (c)
furnish necessary assistance in the preparation of required reports,
prospectuses, registration statements and amendments to the same; (d) furnish,
at TIS's expense, office space, facilities and equipment; and (e) arrange, if
desired by the Corporation for members of TIS to serve without compensation by
the Corporation as officers, directors or employees of the Corporation.
Under the Investment Advisory Agreement, TIS makes decisions to buy and
sell securities, selects brokers and dealers, and negotiates commissions.
Securities orders are placed with brokers or dealers selected for their ability
to give execution at prices and commission rates favorable to the Corporation
and, in some instances, for the ability to provide research and other services.
As part of the process of brokerage allocation, TIS is authorized to pay
commissions that may exceed what another broker might charge. If portfolio
business is transacted with brokers or dealers that provide research,
comparative performance data, pricing quotations or other services, the
Corporation pays any cost of such services and TIS and other investment
companies advised by TIS may benefit.
Except for the expenses paid by TIS as set forth above, the Corporation
pays all of its own expenses, including registration fees and costs, taxes,
brokerage, transfer agent fees, custodial fees, stock exchange listing costs,
shareholder reports, postage, auditing and legal fees, and the fees and travel
expenses of the Non-Interested Directors. Under the Investment Advisory
Agreement, TIS has agreed to reimburse the Corporation to the extent that
certain expenses exceed 1.5% of the first $30 million of average net assets and
1% of average net assets over $30 million. The expenses subject to this expense
limitation exclude the incentive fee, interest, taxes, brokerage and certain
costs and expenses incident to the public offering of shares.
In return for the services provided by TIS and the expenses it assumes
under the Investment Advisory Agreement, the Corporation pays TIS an advisory
fee at the annual rate of 0.50% of average net assets. The advisory fee is
accrued weekly and payable monthly. As of the Corporation's last fiscal year
ended December 31, 1998, the Corporation had net assets of $[________] and paid
an aggregate advisory fee to TIS during such fiscal year of $[_________].
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The Investment Advisory Agreement provides that it may be terminated
without penalty upon sixty (60) days' written notice by the Corporation, either
by majority vote of the Board or by vote of a majority of the outstanding voting
securities, or by TIS. As stated above, the Agreement provides for its automatic
termination in the event of its assignment unless such automatic termination
shall be prevented by an exemptive order of the SEC.
TIS has acted as the investment adviser for the Corporation since its
commencement of operations on August 1, 1972. The effective date of the Former
Investment Advisory Agreement was August 1, 1972. The Board last approved the
continuance of the Former Investment Advisory Agreement on May 14, 1998. The
shareholders last approved the Former Investment Advisory Agreement on July 30,
1998 for the purpose of ratifying such continuance.
THE NEW INVESTMENT ADVISORY AGREEMENT
The New Investment Advisory Agreement, if approved by the shareholders,
would be dated the date of the consummation of the Transaction, which is
expected to occur in mid-June. The New Investment Advisory Agreement would be in
effect for an initial term of two years, and would be continued thereafter from
year to year only if specifically approved at least annually by the vote of a
"majority of the outstanding voting securities" of the Corporation, or by the
Board and, in either event, the vote of a majority of the Non-Interested
Directors, cast in person at a meeting called for such purpose. In the event
that the shareholders do not approve the New Investment Advisory Agreement, the
Board will take such action as it deems to be in the best interests of the
Corporation and the shareholders.
DIFFERENCES BETWEEN THE FORMER AND NEW INVESTMENT ADVISORY AGREEMENT
The New Investment Advisory Agreement is identical to the Former
Investment Advisory Agreement, except for the date of execution and the
termination date.
TIS AND OTHER SERVICE PROVIDERS
TIS is a Delaware corporation that is an investment adviser registered
under the Investment Advisers Act of 1940, as amended. TIS has been in existence
since 1967 and has provided investment services to investment companies since
1968 and to Transamerica and affiliated companies since 1981. TIS is a direct
wholly-owned subsidiary of Transamerica. TIS's address is 1150 South Olive
Street, Los Angeles, California 90015. Appendix 3 includes information regarding
each director and officer of the Corporation who is associated with TIS.
The following table shows the address and principal occupation of the
principal executive officer and each director of TIS:
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NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
Richard N. Latzer * Director, President & Chief Executive Officer
Gary U. Rolle * Executive Vice President
Thomas J. Cusak * Director
Edgar H. Grubb * Director
Frank C. Herringer * Director
* c/o Transamerica Investment Services, Inc., 1150 South Olive Street, Los
Angeles, CA 90015
Transamerica is a financial services company with approximately $58.5
billion in assets. Its principal offices are located at The Transamerica
Pyramid, 600 Montgomery Street, 24th Floor, San Francisco, California 94111.
Transamerica's two major lines of business are life insurance (including asset
management) and finance. As a result of the AEGON-Transamerica Transaction,
Transamerica will become a direct wholly-owned subsidiary of AEGON.
AEGON is headquartered in The Hague, The Netherlands, and is a holding
corporation of one of the world's ten largest life insurance groups ranked by
market capitalization and assets. Over 80% of AEGON's existing business is in
life insurance, pensions and related savings and investment products. AEGON's
address is Mariahoeveplain 50, 2591 TV The Hague, The Netherlands.
Vereniging AEGON ("Association AEGON") controls a majority voting
interest in AEGON through its minority holding of common stock plus its holding
of all the issued and outstanding preferred stock of AEGON. Association AEGON
currently intends to increase gradually its ownership of AEGON common stock to
40% by purchasing shares of common stock on the open market. At the same time,
Association AEGON intends to decrease its holding of preferred stock. It is
currently contemplated that, at all times, Association AEGON will maintain the
majority of voting rights of AEGON. Association AEGON is registered in The
Hague, The Netherlands.
Directors, officers and employees of TIS from time to time may enter into
transactions with various banks, including the Corporation's custodian bank. It
is TIS's opinion that the terms and conditions of those transactions will not be
influenced by existing or potential custodial or other relationships of the
Corporation.
State Street Bank and Trust Company ("State Street"), located at 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian to the
Corporation.
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ChaseMellon Shareholder Services, L.L.C., located at Overpeck Centre, 85
Challenger Road, Ridgefield Park, NJ 07660, serves as transfer agent to the
Corporation.
Ernst & Young LLP, located at 725 South Figueroa Street, Los Angeles,
California 90017, performs audits of the Corporation's financial statements.
REQUIRED VOTE
Approval of the New Investment Advisory Agreement will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Corporation (as defined in the 1940 Act), which means the affirmative vote of
the lesser of (i) more than 50% of the outstanding shares or (ii) 67% or more of
the shares present at the meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy.
THE BOARD MEMBERS RECOMMEND THAT THE
SHAREHOLDERS VOTE IN FAVOR OF THIS PROPOSAL 1.
II. ELECTION OF DIRECTORS
(PROPOSAL 2)
It is proposed that the three persons currently serving as directors of
the Corporation ("Directors") be re-elected and that a fourth person be newly
elected to the Board. The nominees for Director (the "Nominees") who are
proposed for election at the Annual Meeting are Gary U. Rolle, Peter J. Sodini,
Jon C. Strauss and [Nominee].
The term of office of each person elected as a Director will be until the
next annual meeting and until his successor is elected and qualified (or until
such Director's earlier retirement, resignation, death or disqualification). The
Nominees have agreed to serve as Directors if elected. If any of the Nominees
should be unavailable for election at the time of the Annual Meeting (which is
not presently anticipated), the persons named as proxies may vote for another
person in their discretion.
The principal occupations and business experience for the last five years
of each Nominee, each Director, and each executive officer of the Corporation
are as indicated in the table below.
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NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS INFORMATION
Position Principal Occupation
Name, Address** and Age with the Corporation During the Past Five Years
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Gary U. Rolle (58) * President, Chairman, Executive Vice President and Chief
Board of Directors Investment Officer of Transamerica
Investment Services, Inc.; Director and
Chief Investment Officer of Transamerica
Occidental Life Insurance Company;
Director, Transamerica Investors, Inc.
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Peter J. Sodini (58) Board of Directors Associate, Freeman Spogli & Co. (a private
investor); President, Chief Executive
Officer and Director, The Pantry, Inc. (a
supermarket); Director Pamida Holdings Corp.
(a retail merchandiser) and Buttrey Food and
Drug Co. (a supermarket).
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Jon C. Strauss (59) Board of Directors President of Harvey Mudd College; Previously
Vice President and Chief Financial Officer
of Howard Hughes Medical Institute;
President of Worcester Polytechnic
Institute; Vice President and Professor of
Engineering at University of Southern
California; Vice President Budget and
Finance, Director of Computer Activities and
Professor of Computer and Decision Sciences
at University of Pennsylvania.
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[Nominee] Board of Directors [Principal Occupation]
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Susan A. Silbert (55) Vice President Senior Vice President of Transamerica
Investment Services, Inc.
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Susan R. Hughes (43) Treasurer Vice President and Chief Financial Officers,
Transamerica Investment
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Position Principal Occupation
Name, Address** and Age with the Corporation During the Past Five Years
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Services, Inc. since 1997; Independent
Financial Consultant 1992-1997
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Thomas M. Adams (64) Secretary Partner in the law firm of Lanning, Adams &
Peterson
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* Director who is an "interested person" (as defined in the 1940 Act) of
the Corporation or TIS. Mr. Rolle is an "interested person" by reason of his
positions with TIS.
** Except as otherwise noted, the mailing address for each Nominee,
Director and executive officer is 1150 South Olive Street, Los Angeles,
California 90015.
The principal occupations of the Nominees, Directors and executive
officers for the last five years have been with the employers as shown in the
table above, although in some cases they have held different positions with such
employers.
As of May 10, 1999, those shares of the Corporation that are known to be
beneficially owned by the Nominees, Directors and executive officers of the
Corporation are set forth on Appendix 2. Also set forth on Appendix 2, as of May
10, 1999, are those shares of the Corporation known to be beneficially owned by
the Directors and executive officers of the Corporation as a group.
The Board of Directors met [____] times during the fiscal year ended
December 31, 1998. Each Director attended at least 75% of such meetings, except
for [_______], who attended [____] of the [____] meetings. The Corporation has a
standing Audit Committee composed of Messrs. [_________], which is responsible
for the selection of the Corporation's auditors and for the monitoring of the
audit process and its results. Messrs. [__________] attended [___] Audit
Committee meetings held during the fiscal year ended December 31, 1998. The
Corporation has a standing Corporate Responsibility Committee composed of
Messrs. [___________], which reviews nominees for appointment or election of
directors. Messrs. [__________] attended [___] Corporate Responsibility
Committee meetings held during the fiscal year ended December 31, 1998.
The Corporation pays the Directors, other than those who are interested
persons of TIS, an annual fee of $[ ] plus $[250] for each meeting attended. The
Corporation does not pay any pension or retirement benefits for its Directors.
The following table sets forth the amount of the compensation paid to the
Directors (or deferred in lieu of current payment) by the Corporation during its
fiscal year ended December 31, 1998:
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COMPENSATION TABLE
(2) (3)
(1) AGGREGATE COMPENSATION FROM TOTAL COMPENSATION FROM
NAME OF PERSON, POSITION CORPORATION COMPLEX*
------------------------ --------------------------- -----------------------
Donald E. Cantlay [$1,500] $6,000
Richard N. Latzer -0- -0-
Jon C. Strauss [$1,500] $6,250
Gary U. Rolle -0- -0-
Peter J. Sodini [$1,500] $4,750
* During fiscal year 1998, each Board member was also a member of
the Board of Transamerica Occidental's Separate Account Fund B and
of Transamerica Variable Insurance Fund, Inc. Mr. Rolle is a
director of Transamerica Investors, Inc. These registered
investment companies comprise the "Fund Complex."
REQUIRED VOTE
The election of directors of the Corporation will be by a plurality of
the shares of the Corporation present at the Annual Meeting in person or by
proxy. Shares represented by duly-executed proxies will be voted for the
election of the persons named herein as Nominees, unless such authority has been
withheld in accordance with the instructions on the form of proxy. If no
instructions are made, the proxy will be voted for such Nominees.
THE BOARD MEMBERS RECOMMEND A VOTE FOR THE ELECTION OF THE NOMINEES.
III. RATIFICATION OF ACCOUNTANTS
(PROPOSAL 3)
The Board of Directors has selected Ernst & Young LLP as the auditors for
the Corporation for the fiscal year ending December 31, 1999, subject to removal
by a majority of the outstanding voting securities of the Corporation. Upon the
reasonable request of any shareholder of the Corporation, representatives of
Ernst & Young LLP will attend the meeting, and will, as they see fit, make a
statement and/or respond to appropriate questions.
REQUIRED VOTE
The ratification of the selection of Ernst & Young LLP as the independent
public accountants for the Corporation will require a majority of votes cast at
the Annual Meeting in person or by proxy, if a quorum is present.
-13-
15
THE BOARD MEMBERS RECOMMEND THAT SHAREHOLDERS VOTE
FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CORPORATION.
ADDITIONAL INFORMATION
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a Proxy
Statement for a shareholder meeting subsequent to the Annual Meeting, if any,
should send their written proposals to the Secretary of the Corporation, c/o
Transamerica Investment Services, Inc., at the address shown at the beginning of
this Proxy Statement, within a reasonable time before the solicitation of
proxies for such meeting. The timely submission of a proposal does not guarantee
its inclusion.
OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING
No Board member is aware of any matters that will be presented for action
at the Annual Meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy in the accompanying
form will confer upon the person or persons entitled to vote the shares
represented by such proxy the discretionary authority to vote the shares as to
any such other matters in accordance with their best judgment in the interest of
the Corporation.
ADJOURNMENT
In the event that sufficient votes in favor of any of the proposals set
forth in the Notice of the Annual Meeting of Shareholders are not received by
the time scheduled for the Annual Meeting, the persons named as proxies may
propose one or more adjournments of the Annual Meeting after the date set for
the original Annual Meeting to permit further solicitation of proxies with
respect to any such proposals. In addition, if, in the judgment of the persons
named as proxies, it is advisable to defer the action on one or more proposals,
the persons named as proxies may propose one or more adjournments of the Annual
Meeting. Any such adjournments will require the affirmative vote of a majority
of the votes cast on the question in person or by proxy at the session of the
Annual Meeting as permitted by the Corporation's By-Laws. The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of such proposals. They will vote against any such
adjournment those proxies required to be voted against any of such proposals.
The costs of any additional solicitation and of any adjourned session will be
borne by Transamerica or its affiliates. Any proposals for which sufficient
favorable votes have been received by the time of the Annual Meeting will be
acted upon and such action will be final regardless of whether the Annual
Meeting is adjourned to permit additional solicitation with respect to any other
proposal.
-14-
16
IMPORTANT--WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ENCLOSED ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE AND IS INTENDED FOR
YOUR CONVENIENCE. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD MAY SAVE THE
NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO ENSURE A QUORUM AT THE ANNUAL
MEETING. IF YOU CAN ATTEND THE ANNUAL MEETING AND WISH TO VOTE YOUR SHARES IN
PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
-15-
17
APPENDIX 1
BENEFICIAL OWNERS OF 5% OR MORE OF SHARES
- --------------------------------------------------------------------------------
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Corporation
- --------------------------------------------------------------------------------
-16-
18
APPENDIX 2
SHARES OWNED BY
DIRECTORS, NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Corporation
- --------------------------------------------------------------------------------
[All directors and executive officers of the Corporation as a group...]
-17-
19
APPENDIX 3
DIRECTORS AND OFFICERS ASSOCIATED WITH TIS
- --------------------------------------------------------------------------------
Name Position with the Corporation
- --------------------------------------------------------------------------------
Richard N. Latzer Board of Directors
- --------------------------------------------------------------------------------
Gary U. Rolle President, Chairman, Board of Directors
- --------------------------------------------------------------------------------
Susan A. Silbert Vice President
- --------------------------------------------------------------------------------
Susan R. Hughes Treasurer
- --------------------------------------------------------------------------------
-18-
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Exhibit A
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this __________ day of ________________, 1999 by and between
TRANSAMERICA INCOME SHARES, INC., a Delaware corporation (hereinafter called
the "Fund"), and TRANSAMERICA INVESTMENT MANAGEMENT COMPANY, a Delaware
corporation (hereinafter called the "Manager").
WHEREAS, the Fund proposes to engage in business as a closed-end
management investment company and is registered as such under the Investment
Company Act of 1940; and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Adviser Act of 1940, and engages in the business of acting as
investment adviser for one or more investment companies and others; and
WHEREAS, the Fund desires to retain the Manager to render such services in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, the Manager desires to perform such services in the manner and on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, this agreement
WITNESSETH:
that in consideration of the foregoing and of the premises and covenants
hereinafter contained, the Fund and the Manager agree as follows:
1. The Fund hereby employs the Manager to provide investment advisory,
statistical and research facilities and services, to supervise the composition
of the Fund's portfolio and to determine the nature and timing of changes
therein and the manner of effectuating such changes, subject to supervision
21
of the Fund's Board of Directors and for the period and on the terms set forth
in this Agreement. The Manager hereby accepts such employment and agrees to
render the services and to assume the obligations herein set forth, for the
compensation herein provided.
2. The Manager shall:
(a) Furnish to the Fund research and statistical and other factual
information and reports with respect to securities held by the Fund
or which the Fund might purchase. It will also furnish to the Fund
such information as may be appropriate concerning developments which
may affect issuers of securities held by the Fund or which the Fund
might purchase or the businesses in which such issuers may be
engaged. Such statistical and other factual information and reports
shall include information and reports on industries, businesses,
corporations and all types of securities, whether or not the Fund has
at any time any holdings in such industries, businesses, corporations
or securities.
(b) Furnish to the Fund, from time to time, advice, information and
recommendations with respect to the acquisition, holding, or disposal
by the Fund of eligible securities.
(c) Furnish to the Fund necessary assistance in:
(i) The preparation of all reports now or hereafter required by
Federal or other laws.
(ii) The preparation of prospectuses, registration statements and
amendments thereto that may
-2-
22
be required by Federal or other laws or by the rule or regulation of
any duly authorized commission or administrative body. However, nothing
herein shall obligate the Manager to pay the costs of preparation,
printing, or mailing of prospectuses being used in connection with
sales of the Fund's shares or otherwise.
(d) Furnish to the Fund at the Manager's expense, office space in the offices
of the Manager or in such other place or places as may be agreed upon from
time to time, and all necessary office facilities, simple business
equipment, supplies, utilities and telephone service for managing the
affairs and investments and keeping the general accounts and records of
the Fund (exclusive of the necessary records of the transfer agent,
registrar or custodian), and shall arrange, if desired by the Fund, for
members of the Manager's organization to serve without compensation from
the Fund as officers, directors or employees of the Fund. Manager agrees
to advance registration fees in connection with initial Federal and state
registration of Fund shares and to assume sole responsibility for such
fees unless and until such shares are sold; provided, however, that
registration fees in connection with all subsequent Federal and other
registrations of Fund shares shall be paid by the Fund without any advance
of such fees from the Manager.
23
(e) Utilize the services of Transamerica Fund Sales, Inc. whenever practicable
to tender portfolio securities which the Fund owns and wishes to tender to
a company making an offer for those securities. When Fund portfolio
securities are tendered by Transamerica Fund Sales, Inc., the Manager will
arrange to receive the solicitation fees, less expenses, received by
Transamerica Fund Sales and will deduct that net amount from the
management fee payable by the Fund to the Manager.
(f) In the performance of its duties hereunder the Manager may in its
discretion, purchase without additional cost to the Fund statistical
information and other services from other sources, including affiliates
of Transamerica Corporation, a Delaware corporation, ("Transamerica"). The
Manager has provided the Fund with a conformed copy of the Investment
Research Agreement dated August 1, 1972 between the Manager and
Transamerica Investment Research, Inc. ("Research") a subsidiary of
Transamerica, pursuant to which (1) Research provides the Manager with
statistical and analytical research and other information and reports with
respect to the economy, particular industries, and securities held by the
Fund, to the extent that such research or other information is sought on
behalf of the Fund, (2) as well as information concerning developments
affecting issuers, or the businesses thereof, of securities held
-4-
24
by the Fund or securities which the Fund might purchase.
3. Except as otherwise expressly provided herein, the Fund assumes and
shall pay or cause to be paid all expenses of the Fund, including, without
limitation: (a) all costs and expenses incident to any public offering of shares
of the Fund, for cash or otherwise, including those relating to the registration
of shares under the Securities Act of 1933, as amended, the qualification of
shares of the Fund under state securities laws, the printing or other
reproduction and distribution of any registration statement (and all amendments
thereto) under the Securities Act of 1933, the preliminary and final
prospectuses included therein, and any other necessary documents incident to any
public offering, the advertising of shares of the Fund, the appointment of a
depositary or forwarding agents to receive securities being tendered in exchange
for shares of the Fund, the services rendered by any securities dealers or
brokers, the review by the National Association of Securities Dealers, Inc. of
any underwriting arrangements, and the services of any evaluator of securities
exchangeable for shares of the Fund; (b) the charges and expenses of any
registrar and any custodian or depositary appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property; (c) the
charges and expenses of auditors; (d) the charges and expenses of any stock
transfer or dividend agent or agents appointed by the Fund; (e) broker's
commissions chargeable to the Fund in connection with portfolio securities
transactions to which the Fund is a party; (f) all taxes, including securities
issuance and transfer taxes, and corporate fees payable by the Fund to Federal,
state or other governmental agencies; (g) the cost and expense of engraving or
25
printing of stock certificates representing shares of the Fund; (h) fees
involved in registering and maintaining registrations of the Fund and of its
shares with the Securities and Exchange Commission and various states and other
jurisdictions; (i) all expenses of shareholders' and directors' meetings and
of preparing, printing and mailing proxy statements and quarterly, semi-annual
and annual reports to shareholders; (j) fees and travel expenses of directors
who are not "interested persons" (as defined in the Investment Company Act of
1940) of the Fund; (k) all expenses incident to any dividend or distribution
program; (l) charges and expenses of legal counsel in connection with matters
relating to the Fund, including without limitation, legal services rendered in
connection with the Fund's corporate and financial structure and relations with
its shareholders, issuance of Fund shares, and registrations and qualifications
of securities under Federal, state and other laws; (m) association dues; (n)
interest payable on Fund borrowings; (o) fees and expenses incident to the
listing of the Fund shares on any stock exchange; and (p) postage.
4. For the services to be rendered, the Fund shall pay to the Manager
compensation at the annual rate of one-half (1/2) of one percent (1%) of the
value of the net assets of the Fund, calculated as hereinafter set forth,
commencing on the day following effectiveness hereof. Except as hereinafter
set forth, compensation under this Agreement shall be calculated and accrued
weekly by applying the annual rate to the net assets of the Fund as of the
close of the last business day of the week for which the fee is being calculated
and dividing the sum so computed by the number of weeks in the fiscal year. At
the request of the Manager, compensation
26
hereunder shall be calculated and accrued at more frequent intervals in a manner
consistent with the calculation of fees on a weekly basis. If the contract
becomes effective subsequent to the first day of a week or shall terminate
before the last day of a week, compensation for such weeks shall be computed in
a manner consistent with the calculation of the fees payable on a weekly basis.
Subject to the provisions of paragraph 5 hereof, the accrued fees will be
payable monthly as promptly as possible after completion of the computations
contemplated by paragraph 5 hereof.
5. (a) In the event the expenses of the Fund, including amounts payable to
the Manager pursuant to paragraph 4 hereof (but excluding interest, taxes,
amounts paid or payable to the Manager pursuant to clause (v) of this
subparagraph (a), and the following costs and expenses incident to the public
offerings of shares of the Fund contemplated by the prospectus (the
"Prospectus") forming a part of the Fund's registration statement (the
"Registration Statement") filed under the Securities Act of 1933 (No. 2-43188)
in the form in which it becomes effective under said Act: filing fees for the
registration and qualification of the Fund's shares under the Securities Act of
1933 and the securities laws of various states, legal and auditing fees and
expenses incurred in the preparation and filing of all documents incident to
such registration and qualification, fees payable in connection with the
valuations described in the Prospectus of the securities described under "List
of Acceptable Securities" therein, Depositary and Forwarding Agent fees incident
to the exchange transaction described in the Prospectus, fees payable to the
Dealer Managers and Soliciting Dealers as described in the Prospectus, the costs
of printing
27
the Registration Statement, the preliminary and final prospectuses forming a
part thereof, the Underwriting Agreement and Dealer Managers' Agreements filed
as exhibits to the Registration Statement, or any blue sky surveys or memoranda
incident to the offerings to be made by the Prospectus, fees payable to the
National Association of Securities Dealers, Inc. in connection with the
offerings described in the Registration Statement, and the costs of lawfully
advertising the offerings described in the Registration Statement prior to the
effective date thereof) for any fiscal year ending on a date on which this
Agreement is in effect exceed one and one-half percent (1-1/2%) of the first
thirty million dollars ($30,000,000) of the average net assets of the Fund, plus
one percent (1%) of the average net assets of the Fund in excess of $30,000,000,
in each case as computed below, the Manager will pay such excess to the Fund.
Such expense limitation shall be computed and settlements made monthly as
follows:
(i) Not later than the fifth business day after the end of each month
ending on a day on which this Agreement is in effect, there shall be computed,
on an accrual basis, all of the Fund's expenses which are includable within the
expense limitation described in this subparagraph (a), for the period commencing
with the first day of the then current fiscal year of the Fund and ending on the
last day of the month just ended. The amount of such expenses shall then be
annualized based upon the number of months then remaining in such fiscal year.
Such annualized amount is hereinafter in this paragraph 5 called "Actual
Expenses."
(ii) The amount of the maximum annual expenses
28
of the Fund, as set forth in this paragraph 5, shall then be computed, based
upon the average of all of the valuations of the net assets of the Fund as of
the close of business on the last day of each week within a completed month of
the then current fiscal year of the Fund. Such computation is hereinafter in
this paragraph 5 called "Maximum Annual Expenses."
(iii) There shall next be computed the sum of amounts, if any, previously
deducted from the Manager's monthly fee plus amounts, if any, previously paid
by the Manager to the Fund, in each case in accordance with the provisions of
clause (iv) of this subparagraph (a), during the period commencing with the
second month of the then current fiscal year of the Fund and ending with the
month just ended; there shall be deducted therefrom the sum of amounts, if any,
previously paid by the Fund to the Manager during the same period in
accordance with the provisions of clause (v) of this subparagraph (a). The net
amount remaining, if any, is hereinafter in this paragraph 5 called the "Net
Credit."
(iv) For any month that Actual Expenses exceed Maximum Annual Expenses,
the difference between (A) one-twelfth (1/12) of such excess, multiplied by the
number of completed months within the then current fiscal year of the Fund, and
(B) Net Credit shall be deducted from the next monthly fee payable to the
Manager. If the amount of such fee is not sufficient to cover the entire amount
to be deducted, the Manager shall promptly pay to the Fund the difference.
(v) For any month that the sum of Maximum Annual
-9-
29
Expenses plus Net Credit, if any, exceeds Actual Expenses, the Fund will pay to
the Manager the lesser of Net Credit or the amount of such excess at the time of
payment to the Adviser of its monthly fee.
(vi) As promptly as possible after the end of a fiscal year of the Fund
ending on a date on which this Agreement is in effect, there shall be computed
all of the Fund's expenses for such fiscal year which are includable within the
expense limitation described in this subparagraph (a). If the amount thereof,
reduced by the amount of Net Credit, if any, existing in the last month of such
fiscal year, after settlements made during such month by virtue of the
provisions of clauses (iv) or (v) of this subparagraph (a), exceeds one and
one-half percent (1-1/2%) of the first thirty million dollars ($30,000,000) of
the average net assets of the Fund, plus one percent (1%) of the average net
assets of the Fund in excess of such $30,000,000, in each case computed on the
basis of the average of all of the valuations of the net assets of the Fund as
of the close of business on the last day of each week ending within such fiscal
year, the Manager shall pay the amount of such excess to the Fund promptly, and
in all events prior to the publication of the annual report of the Fund for such
fiscal year. In the same manner, should such computation show that the Fund owes
money to the Manager, such amount shall be promptly paid by the Fund to the
Manager.
(b) If, for any fiscal year of the Fund ending on a date on which this
Agreement is in effect, the expenses of the Fund which are includable within the
expense limitation
-10-
30
described in subparagraph (a) of this paragraph 5, and which are to be paid by
the Fund after application of the limitation calculation in this subparagraph
(a) of this paragraph 5 exceed twenty-five percent (25%) of the gross income of
the Fund for such fiscal year, the Manager will pay the amount of such excess
to the Fund promptly and in all events prior to the publication of the Fund's
annual report for such fiscal year. For purposes of this subparagraph (b),
"gross income of the Fund" shall include, but not be limited to, gains from the
sale of securities, without offset or deduction for losses from the sale of
securities, unpaid interest on debt securities in the Fund's portfolio, accrued
to and including the last day of such fiscal year, and dividends declared but
not paid on equity securities in the Fund's portfolio, the record dates for
which fall on or prior to the last day of such fiscal year.
6. The services of the Manager to the Fund are not to be deemed
exclusive, and the Manager shall be free to engage in any other business or to
render similar services to others so long as its services hereunder be not
impaired thereby. The Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder in good faith, and shall
not be responsible for any action of the Board of Directors of the Fund, or any
committee thereof, in the following or declining to follow any advice or
recommendation of the Manager. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Manager to
engage in any other business or to devote his time and attention in part to
the Management or other aspects of any other business, whether of a similar or
dissimilar nature.
-11-
31
7. This Agreement shall remain in effect for two years from the date
hereof, unless sooner terminated as hereinafter provided. This Agreement shall
continue in effect from year to year thereafter provided it is approved
annually by vote of a majority of the outstanding voting securities of the Fund
or by vote of the Board of Directors of the Fund and by a majority of the
Directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940) of any party to
this Agreement, which vote must be cast in person at a meeting called for the
purpose of voting on approval of the terms of this Agreement and its
continuance; provided, however, that (a) the Fund may, at any time and without
the payment of any penalty, terminate this Agreement upon sixty days written
notice to the Manager either by majority vote of the Board of Directors of the
Fund or by the vote of a majority of the outstanding voting securities of the
Fund; (b) this Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Investment Company Act of 1940) unless
such automatic termination shall be prevented by an exemptive order of the
Securities and Exchange Commission; and (c) the Manager may terminate this
Agreement without payment of penalty on sixty days written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at the principal office of
such party.
-12-
32
8. This Agreement and any amendment hereto shall become effective
when approved by a majority of (a) the outstanding voting securities of the
Fund and (b) the Directors of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act of 1940) of any
such party, whichever occurs later.
9. For purposes of this Agreement, a "majority of the outstanding
voting securities of the Fund" shall be determined in accordance with the
applicable provisions of the Investment Company Act of 1940.
10. This Agreement shall be construed in accordance with the laws of
the State of California and the applicable provisions of the Investment Company
Act of 1940. To the extent applicable law of the State of California, or any of
the provisions herein, conflict with applicable provisions of the Investment
Company Act of 1940, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the day and year first above written in Los Angeles,
California.
ATTEST: TRANSAMERICA INCOME SHARES, INC.
By
- -------------------------------- -----------------------------
Secretary President
ATTEST: TRANSAMERICA INVESTMENT MANAGEMENT
COMPANY
By
- -------------------------------- ------------------------------
Secretary Vice President
33
AMENDMENT
TO
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
THIS AMENDMENT TO MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT made this
6th day of November, 1972, by and between Transamerica Income Shares, Inc., a
Delaware corporation (hereinafter called the "Fund"), and Transamerica
Investment Management Company, a Delaware corporation (hereinafter called the
"Manager"),
W I T N E S S E T H:
--------------------
WHEREAS, the Fund and the Manager entered into a Management and Investment
Advisory Agreement dated August 1, 1972 (the "Advisory Agreement") under which
the Manager is to provide investment advisory and certain administrative
services to the Fund; and
WHEREAS, paragraph 5(a) of the Advisory Agreement requires that the
Manager pay certain expenses of the Fund, excluding the expenses therein
enumerated; and
WHEREAS, it is intended that the expenses of the Fund which the Manager is
not to pay is to include brokerage commissions and fees payable by the Fund in
respect of the purchase and sale of portfolio securities; and
WHEREAS, the Manager and the Fund desire to amend the Advisory Agreement
to expressly provide that such brokerage fees and commissions be excluded from
the expenses of the Fund payable by the Manager,
NOW, THEREFORE, the Fund and the Manager agree as follows:
34
1. That part of the first sentence of subparagraph (a) of
paragraph 5 of the Advisory Agreement which presently reads:
"In the event the expenses of the Fund, including amounts
payable to the Manager, pursuant to paragraph 4 hereof (but
excluding interest, taxes, . . . ."
be and the same is hereby amended to read as follows:
"In the event the expenses of the Fund, including amounts
payable to the Manager pursuant to paragraph 4 hereof (but
excluding interest, taxes, brokerage fees and commissions payable
by the Fund in connection with the purchase or sale of portfolio
securities, . . .".
2. This amendment to the Advisory Agreement shall become
effective when approved by a majority of (a) the outstanding voting
securities of the Fund, and (b) the directors of the Fund who are not
parties to the Advisory Agreement or "interested persons" (as defined
in the Investment Company Act of 1940) of any such party, whichever
occurs later.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment to Management and Investment Advisory
Agreement on the day and year first above written, at Los Angeles,
California.
TRANSAMERICA INCOME SHARES, INC.
By_____________________________
President
TRANSAMERICA INVESTMENT MANAGEMENT COMPANY
By_____________________________
Vice President
35
TRANSAMERICA INCOME SHARES, INC.
1150 South Olive Street
Los Angeles, CA 90015
The undersigned hereby appoints [____________] and [____________], and each of
them, as proxies of the undersigned (the "Proxies"), each with full power to
appoint his substitute, and hereby authorizes each of them to represent and vote
all the shares of common stock of Transamerica Income Shares, Inc. (the
"Corporation") held of record as of May 10, 1999 at the Annual Meeting of
Shareholders to be held at the executive offices of the Corporation, 1150 South
Olive Street, Los Angeles, CA 90015 on June 16, 1999, at 10 a.m. (Pacific Time),
and at any and all of the adjournments(s) or postponements(s) thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT, FOR ELECTION OF THE
DIRECTORS AND FOR RATIFICATION OF THE SELECTION OF THE INDEPENDENT PUBLIC
ACCOUNTANTS. In their discretion, the Proxies are each authorized to vote upon
such other business as may properly come before the meeting and any adjournments
or postponements of the meeting unless otherwise prohibited by the undersigned.
A shareholder wishing to vote in accordance with the Board of Directors'
recommendation need only sign and date this proxy and return it in the envelope
provided.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of the Annual Meeting of Shareholders and the Proxy Statement with
respect thereto and hereby revoke(s) any proxy or proxies heretofore given. This
proxy may be revoked at any time before it is exercised.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND PROMPTLY RETURN THIS PROXY IN
THE ENCLOSED ENVELOPE.
Note: Please sign exactly as the name(s) appear(s) on this proxy card.
When signing as attorney, executor, administrator, trustee, or guardian,
please give full title as such. If signing for a corporation, please sign
in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
36
PLEASE MARK VOTES AS IN THIS
EXAMPLE [X]
FOR AGAINST ABSTAIN
TRANSAMERICA INCOME SHARES, INC. 1. To approve the new investment advisory agreement [ ] [ ] [ ]
between the Corporation and Transamerica Investment
Services, Inc..
- ------------------------------------------------
2. To elect as directors the nominees listed
below:
Mark box at right if an address change or FOR
comment has been noted on the reverse side THE
of this card [ ] NOMINEE ABSTAIN
GARY U. ROLLE [ ] [ ]
PETER J. SODINI [ ] [ ]
JON C. STRAUSS [ ] [ ]
[NOMINEE] [ ] [ ]
FOR AGAINST ABSTAIN
3. To ratify the selection by the Board of [ ] [ ] [ ]
Directors of Ernst & Young LLP as independent
public accountants for the fiscal year ending
December 31, 1999.
Please be sure to sign and date proxy. Date
- ------------------------------------------------
Please sign exactly as name appears to the left.
When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as
such. If signing for a corporation, please sign in
full corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
RECORD DATE SHARES:
Shareholder signs here Co-owner signs here
- ------------------------------------------------
-2-