-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KP4R/mk0DgTHvtpYgPx+FRQQj2aX4gCa8pEWtCZi7qE+YdrW4g3TunXDVs6l8lVK oZr9lkqaTYJL36u50CvZqQ== 0000927405-96-000250.txt : 19960613 0000927405-96-000250.hdr.sgml : 19960613 ACCESSION NUMBER: 0000927405-96-000250 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960719 FILED AS OF DATE: 19960612 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED INCOME FUND INC CENTRAL INDEX KEY: 0000868578 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954305694 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-06179 FILM NUMBER: 96579774 BUSINESS ADDRESS: STREET 1: 301 E COLORADO BLVD STE 720 STREET 2: C/O FLAHERTY & CRUMRINE INC CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187957300 MAIL ADDRESS: STREET 1: 301 COLORADO BLVD STREET 2: STE 720 CITY: PASADENA STATE: CA ZIP: 91101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED INCOME OPPORTUNITY FUND INC CENTRAL INDEX KEY: 0000882071 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954355600 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-06495 FILM NUMBER: 96579775 BUSINESS ADDRESS: STREET 1: 301 E COLORADO BLVD STE 720 STREET 2: C/O FLAHERTY & CRUMRINE INC CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187957300 MAIL ADDRESS: STREET 1: 301 COLORADO BLVD STREET 2: STE 720 CITY: PASADENA STATE: CA ZIP: 91101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED INCOME MANAGEMENT FUND INC CENTRAL INDEX KEY: 0000895422 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954405635 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-07390 FILM NUMBER: 96579776 BUSINESS ADDRESS: STREET 1: C/O FLAHERTY & CRUMRINE INC STREET 2: 301 E COLORADO BLVD STE 720 CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187957300 MAIL ADDRESS: STREET 1: 301 COLORADO BLVD STREET 2: STE 720 CITY: PASADENA STATE: CA ZIP: 91101 DEF 14A 1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12 PREFERRED INCOME FUND INCORPORATED (Name of Registrant as Specified In Its Charter) CHRISTINE P. RITCH ASSISTANT SECRETARY (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box.) [ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(4) and 0-11. 1) Title of each class of securities to which transactions 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:* 4) Proposed maximum aggregate value of transaction: *Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identity 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: SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12 PREFERRED INCOME OPPORTUNITY FUND INCORPORATED (Name of Registrant as Specified In Its Charter) CHRISTINE P. RITCH ASSISTANT SECRETARY (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box.) [ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(4) and 0-11. 1) Title of each class of securities to which transactions 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:* 4) Proposed maximum aggregate value of transaction: *Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identity 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: SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12 PREFERRED INCOME MANAGEMENT FUND INCORPORATED (Name of Registrant as Specified In Its Charter) CHRISTINE P. RITCH ASSISTANT SECRETARY (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box.) [ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(4) and 0-11. 1) Title of each class of securities to which transactions 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:* 4) Proposed maximum aggregate value of transaction: *Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identity 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: PREFERRED INCOME FUND INCORPORATED PREFERRED INCOME OPPORTUNITY FUND INCORPORATED PREFERRED INCOME MANAGEMENT FUND INCORPORATED 301 E. Colorado Boulevard, Suite 720 Pasadena, California 91101 NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS To Be Held on July 19, 1996 To the Shareholders: Notice is hereby given that the Annual Meetings of Shareholders of Preferred Income Fund Incorporated, Preferred Income Opportunity Fund Incorporated and Preferred Income Management Fund Incorporated (each a "Fund" and collectively the "Funds"), each a Maryland corporation, will be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, for the following purposes: 1. To elect Directors of each Fund (Proposal 1). 2. To ratify the selection of Coopers & Lybrand L.L.P. as independent accountants for each Fund for the fiscal year ending November 30, 1996 (Proposal 2). 3. To transact such other business as may properly come before the Meetings or any adjournments thereof. The Board of Directors of each Fund has fixed the close of business on May 23, 1996 as the record date for the determination of shareholders of the Funds entitled to notice of and to vote at the Annual Meetings. By Order of the Board of Directors, DONALD F. CRUMRINE Secretary June 3, 1996 SEPARATE PROXY CARDS ARE ENCLOSED FOR EACH FUND IN WHICH YOU OWN SHARES. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETINGS ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD OR CARDS IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER. INSTRUCTIONS FOR SIGNING PROXY CARDS The following general rules for signing proxy cards may be of assistance to you and may avoid the time and expense to the Fund(s) involved in validating your vote if you fail to sign your proxy card(s) properly. 1. Individual Accounts: Sign your name exactly as it appears in the registration on the proxy card(s). 2. Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to a name shown in the registration. 3. All Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example: Registration Valid Signature Corporate Accounts (1) ABC Corp. ABC Corp. (2) ABC Corp. John Doe, Treasurer (3) ABC Corp., c/o John Doe Treasurer John Doe (4) ABC Corp. Profit Sharing Plan John Doe, Trustee Trust Accounts (1) ABC Trust Jane B. Doe, Trustee (2) Jane B. Doe, Trustee, u/t/d 12/28/78 Jane B. Doe Custodian or Estate Accounts (1) John B. Smith, Cust., John B. Smith f/b/o John B. Smith, Jr. UGMA (2) John B. Smith John B. Smith, Jr., Executor PREFERRED INCOME FUND INCORPORATED PREFERRED INCOME OPPORTUNITY FUND INCORPORATED PREFERRED INCOME MANAGEMENT FUND INCORPORATED 301 E. Colorado Boulevard, Suite 720 Pasadena, California 91101 ANNUAL MEETINGS OF SHAREHOLDERS July 19, 1996 JOINT PROXY STATEMENT This document is a joint proxy statement ("Joint Proxy Statement") for Preferred Income Fund Incorporated ("Preferred Income Fund" or "PFD"), Preferred Income Opportunity Fund Incorporated ("Preferred Income Opportunity Fund" or "PFO") and Preferred Income Management Fund Incorporated ("Preferred Income Management Fund" or "PFM") (each a "Fund" and collectively the "Funds"). This Joint Proxy Statement is furnished in connection with the solicitation of proxies by each respective Fund's Board of Directors (each a "Board" and collectively, the "Boards") for use at the Annual Meeting of Shareholders of each Fund to be held on July 19, 1996, at 8:30 a.m., at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 and at any adjournments thereof (each a "Meeting" and collectively, the "Meetings"). A Notice of Annual Meetings of Shareholders and proxy card for each Fund of which you are a shareholder accompany this Joint Proxy Statement. Proxy solicitations will be made, beginning on or about June 3, 1996, primarily by mail, but proxy solicitations may also be made by telephone, telegraph or personal interviews conducted by officers and employees of the Funds; Flaherty & Crumrine Incorporated ("Flaherty & Crumrine"), the investment adviser of each Fund; and First Data Investor Services Group, Inc. ("FDISG"), the transfer agent and administrator of each Fund and a wholly-owned subsidiary of First Data Corporation. The costs of proxy solicitation and expenses incurred in connection with the preparation of this Joint Proxy Statement and its enclosures will be paid by the Funds in proportion to each Fund's net assets. Each Fund also will reimburse brokerage firms and others for their expenses in forwarding solicitation material to the beneficial owners of its shares. The Annual Report of each Fund, including audited financial statements for the fiscal year ended November 30, 1995, is available upon request, without charge, by writing FDISG, P.O. Box 1376, Boston, Massachusetts 02104, or calling 1-800-331-1710. If the enclosed proxy is properly executed and returned in time to be voted at the relevant Meeting, the Shares (as defined below) represented thereby will be voted in accordance with the - -1- instructions marked thereon. Unless instructions to the contrary are marked thereon, a proxy will be voted FOR the election of the nominees for Director and FOR the other matters listed in the accompanying Notice of Annual Meetings of Shareholders. Any shareholder who has given a proxy has the right to revoke it at any time prior to its exercise either by attending the relevant Meeting and voting his or her Shares in person or by submitting a letter of revocation or a later-dated proxy to the appropriate Fund at the above address prior to the date of the Meeting. In the event that a quorum is not present at a Meeting or in the event that a quorum is present but sufficient votes to approve any of the proposals are not received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies. Any such adjournment will require the affirmative vote of a majority of those shares represented at the Meeting in person or by proxy. If a quorum is present, the persons named as proxies will vote those proxies which they are entitled to vote FOR any proposal in favor of such an adjournment and will vote those proxies required to be voted AGAINST any proposal against any such adjournment. A shareholder vote may be taken on one or more of the proposals in the Joint Proxy Statement prior to any such adjournment if sufficient votes have been received for approval. Under the By-Laws of each Fund, a quorum is constituted by the presence in person or by proxy of the holders of a majority of the outstanding shares of the Fund entitled to vote at the Meeting. If a proposal is to be voted upon by only one class of a Fund's shares, a quorum of that class of shares must be present at the Meeting in order for the proposal to be considered. All Funds have two classes of capital stock: common stock, par value $0.01 per share (the "Common Stock"); and Money Market Cumulative PreferredTM Stock, par value $0.01 per share ("MMP"; together with the Common Stock, the "Shares"). On the record date, May 23, 1996, the following number of Shares of each Fund were issued and outstanding: Common Stock MMP Name of Fund Outstanding Outstanding Preferred Income Fund 9,838,571 575 Preferred Income Opportunity Fund 11,151,287 700 Preferred Income Management Fund 9,416,743 775 As of May 23, 1996, to the knowledge of each Fund and its Board, no single shareholder or "group," as that term is used in Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act"), beneficially owned more than 5% of the Fund's outstanding Shares. Information as to beneficial ownership is based on reports filed with the Securities and Exchange Commission (the "SEC") by such holders. As of May 23, 1996, Cede & Co., a nominee partnership of Depository Trust Company, held - -2- 9,156,573 Shares or 93.1% of Shares of Preferred Income Fund outstanding, 10,528,407 Shares or 94.4% of Shares of Preferred Income Opportunity Fund outstanding, and 8,840,422 Shares or 93.4% of Preferred Income Management Fund outstanding. This Joint Proxy Statement is being used in order to reduce the preparation, printing, handling and postage expenses that would result from the use of a separate proxy statement for each Fund. Other than as described below under Proposal 1, shareholders of each Fund will vote as a single class and will vote separately on each proposal on which shareholders of that Fund are entitled to vote. Separate proxy cards are enclosed for each Fund in which a shareholder is a record owner of Shares. Thus, if a proposal is approved by shareholders of one Fund and disapproved by shareholders of any other Fund, the proposal will be implemented for the Fund that approved the proposal and will not be implemented for any Fund that did not approve the proposal. It is therefore essential that shareholders complete, date and sign each enclosed proxy card. Shareholders of each Fund will vote on all proposals pertaining to that Fund. In order that your Shares may be represented at the Meetings, you are requested to vote on the following matters: PROPOSAL 1: ELECTION OF DIRECTORS The first proposal to be considered at the Meetings is the election of Directors of the Funds. Each nominee has consented to serve as a Director if elected at the relevant Meeting. If a designated nominee declines or otherwise becomes unavailable for election, however, the proxy confers discretionary power on the persons named therein to vote in favor of a substitute nominee or nominees. The Board of each Fund is divided into three classes, each class having a term of three years. Each year the term of office of one class expires and the successor or successors elected to such class serve for a three-year term. The classes of Directors are the same for each Fund and are indicated below: Class I Director Class II Directors Martin Brody Donald F. Crumrine Robert F. Wulf Class III Directors Robert T. Flaherty Morgan Gust - -3- Class I Directors of Preferred Income Fund, Class III Directors of Preferred Income Opportunity Fund and the Class II Directors of Preferred Income Management Fund, each of whose current term expires on the date of the Meetings, have been nominated for a three-year term to expire at each Fund's 1999 Annual Meeting of Shareholders and until their successors are duly elected and qualified. The Class II Directors of Preferred Income Fund, Class I Directors of Preferred Income Opportunity Fund and Class III Directors of Preferred Income Management Fund serve until each Fund's Annual Meeting of Shareholders in 1997 and Class III Directors of Preferred Income Fund, the Class II Directors of Preferred Income Opportunity Fund and Class I Directors of Preferred Income Management Fund serve until each Fund's Annual Meeting of Shareholders in 1998. Each Director has served in such capacity since each Fund's commencement of operations. Under each Fund's Articles of Incorporation, Articles Supplementary and the Investment Company Act of 1940, as amended (the "1940 Act"), holders of Shares of MMP, voting as a single class, will be entitled to elect two Directors, and holders of the Common Stock will be entitled to elect the remaining Directors, subject to the provisions of the 1940 Act and the Fund's Articles of Incorporation, which permit the holders of Shares of MMP to elect the minimum number of additional Directors that when combined with the two Directors elected by the holders of Shares of MMP would give the holders of Shares of MMP a majority of the Directors when dividends are in arrears for two full years. Donald F. Crumrine and Morgan Gust currently represent holders of Shares of MMP of each Fund. A quorum of the MMP shareholders of a Fund must be present at the Meeting of that Fund in order for Proposal 1 as it relates to Mr. Crumrine or Mr. Gust to be considered. No Director or officer owned any shares of MMP on May 23, 1996. Each Director serves in the same capacity for each Fund. As of the Record Date, the officers and Directors of each Fund as a group beneficially owned less than 1% of the Shares of that Fund. "Beneficial Ownership" is defined under Section 13(d) of the 1934 Act. Set forth in the following table are the existing Directors and nominees for election to the Board of Directors of the Funds, together with certain other information: Name, Business Common Stock Address and Experience Beneficially Age During Owned on May the Past Five 23, 1996 Years Class I Director Martin Director of the 917 Shares of PFD Brody Funds; Director 711 Shares of PFO Three ADP of 0 Shares of PFM Boulevard Jaclyn, Inc., Roseland Director of NJ 07068 several other Age: 73 investment companies. - -4 Class II Directors Donald F. Director, Chief 10,304 Shares of PFD Crumrine* Financial 12,389 Shares of PFO 301 E. Officer, 8,169 Shares of PFM Colorado Chief Boulevard Accounting Suite 720 Officer, Vice Pasadena, President and CA 91101 Secretary of Age: 48 the Funds; Vice President and a Director, Flaherty & Crumrine. Robert F. Director of the 1,224 Shares of PFD Wulf Funds; since 1,000 Shares of PFO 3466 Cherokee March 1984, 1,006 Shares of PFM Drive South Financial Salem, OR 97301 Consultant Age: 59 . Class III Directors Robert T. Director, 9,269 Shares of PFD Flaherty* Chairman of the 11,103 Shares of PFO 301 E. Colorado Board, President 9,169 Shares of PFM Boulevard Suite 720 and Chief Executive Pasadena, CA 91101 Officer if the Funds; Age 58 President and Director, Flaherty & Crumrine. Morgan Gust Director of the 1,238 Shares of PFD Giant Industries, Funds; since 1,352 Shares of PFO Inc. August 1990, 1,212 Shares of PFM 23733 N. Vice President, Scottsdale Road General Scottsdale, AZ Counsel and 85255 Corporate Age: 49 Secretary, and since 1992, also Vice President- Administration, Giant Industries, Inc. * "Interested person" of the Fund as defined in the 1940 Act. 7,169 Shares of PFD, 8,603 Shares of PFO and 7,169 Shares of PFM are held by Flaherty & Crumrine of which the reporting person is a shareholder and director and, therefore, is deemed to have an indirect beneficial interest in the respective share amounts. - -5- Each Director of each Fund who is not a director, officer or employee of Flaherty & Crumrine or any of their affiliates receives a fee of $9,000 per annum plus $500 for each in-person meeting, and $100 for each telephone meeting. Each Director of each Fund is reimbursed for travel and out-of-pocket expenses associated with attending Board and committee meetings. The Board of Directors of each Fund held 7 meetings (3 of which were held by telephone conference call) during the fiscal year ended November 30, 1995, and all of the Directors of each Fund attended in-person at least 75% of the meetings. The aggregate remuneration paid to the Directors of each Fund for the fiscal year ended November 30, 1995, amounted to $41,088, $41,088 and $40,788 for PFD, PFO and PFM, respectively (including reimbursement for travel and out-of-pocket expenses for both "interested" and "non-interested" Directors). Each Board of Directors has an Audit Committee consisting of all of the Directors who are not "interested persons" (as defined in the 1940 Act) of the Fund. The Audit Committee reviews the scope and results of each Fund's annual audit with the Fund's independent accountants and recommends the engagement of such accountants. Each Audit Committee met twice during the fiscal year ended November 30, 1995. The names of the officers of each Fund (other than Messrs. Flaherty and Crumrine who are described above) are listed in the table below. Each officer was first elected to office at the organization of each Fund. This table also shows certain additional information. Each officer will hold such office until a successor has been elected by the Board of Directors of a Fund. Name Positions Held Principal Within each Fund Occupations and Other Affiliations During The Past Five Years Robert Vice President Vice President M. and Assistant and Director, Ettinger Treasurer Flaherty & Age: 37 Crumrine Peter C. Vice President, Vice President, Stimes Treasurer and Flaherty & Age: 40 Assistant Crumrine Secretary Section 16(a) of the 1934 Act requires each Fund's officers and directors, and persons who beneficially own more than ten percent of the Fund's Common Stock, to file reports of ownership with the Securities and Exchange Commission (the "SEC"), the New York Stock Exchange, Inc. and the Fund. Based solely upon its review of the copies of such forms received by it and written representations from certain of such persons, each Fund believes that during 1995, all filing requirements applicable to such persons were met. - -6- The following table sets forth certain information regarding the compensation of each Fund's Directors during the fiscal year ended November 30, 1995. No executive officer or person affiliated with the Fund received compensation from the Fund during the fiscal year ended November 30, 1995 in excess of $60,000. Directors of the Funds do not receive pension or retirement benefits from the Funds. COMPENSATION TABLE Name of Aggregate Total Person and Compensation Compensation Position from each Fund From the Fund and Fund Complex Paid to Directors* Robert T. $0 $0 (3) Flaherty Director, Chairman of the Board, President and Chief Executive Officer Donald F. $0 $0 (3) Crumrine Director, Chief Financial Officer, Chief Accounting Officer, Vice President and Secretary Martin $11,700 PFD $35,000 (3) Brody $11,700 PFO Director $11,600 PFM Morgan $12,300 PFD $36,800 (3) Gust $12,300 PFO Director $12,200 PFM Robert F. $12,300 PFD $36,800 (3) Wulf $12,300 PFO Director $12,200 PFM * Represents the total compensation paid to such persons by the Funds during the fiscal year ended November 30, 1995, which are considered part of the same "fund complex" because they have a common adviser. The parenthetical number represents the number of such investment companies, including the Funds. - -7- Required Vote Election of each of the listed nominees for Director of each Fund (other than Messrs. Crumrine and Gust) will require the affirmative vote of a plurality of the votes of common shareholders cast at the Meeting in person or by proxy, voting as a single class. Election of Mr. Crumrine by MMP holders of PFM and election of Mr. Gust by MMP holders of PFO will require the affirmative vote of a plurality of the votes cast by MMP holders of the relevant Fund in person or by proxy, voting as a single class. THE DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS, UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 1. PROPOSAL 2: RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS The firm of Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts 02109, has served as independent accountants for each Fund since the Fund's commencement of operations, and has been selected to serve in such capacity for the Fund's fiscal year ending November 30, 1996 by the Directors of the Fund, including those Directors who are not "interested persons" (as defined in the 1940 Act) of the Fund or Flaherty & Crumrine (the "Non-Interested Directors"). Coopers & Lybrand L.L.P. has informed the Funds that it has no direct or indirect financial interest in the Funds. A representative of Coopers & Lybrand L.L.P. will not be present at the Meetings but will be available by telephone and will have an opportunity to make a statement if the representative so desires and will be available to respond to appropriate questions. Required Vote Ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for a Fund requires the affirmative vote of the holders of a majority of the shares of Common Stock and MMP represented at the Meeting in person or by proxy voting as a single class. THE BOARD OF DIRECTORS OF EACH FUND, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS, RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2. SUBMISSION OF SHAREHOLDER PROPOSALS All proposals by shareholders of each Fund that are intended to be presented at the Fund's next Annual Meeting of Shareholders to be held in 1997 must be received by the Fund for consideration for inclusion in the Fund's proxy statement relating to the meeting no later than February 6, 1997. - -8 ADDITIONAL INFORMATION Investment Adviser and Administrator Flaherty & Crumrine Incorporated serves as the Investment Adviser to the Funds and its business address is 301 E. Colorado Boulevard, Suite 720, Pasadena, California 91101. First Data Investor Services Group, Inc. acts as the administrator to the Funds and is located at One Exchange Place, Boston, Massachusetts 02109. Broker Non-Votes and Abstentions A proxy which is properly executed and returned accompanied by instructions to withhold authority to vote represents a broker "non-vote" (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or the persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter). Proxies that reflect abstentions or broker non-votes (collectively "abstentions") will be counted as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum. Under Maryland law, abstentions do not constitute a vote "for" or "against" a matter and will be disregarded in determining the "votes cast" on an issue. OTHER MATTERS TO COME BEFORE THE MEETING The Funds do not intend to present any other business at the Meetings, nor are they aware that any shareholder intends to do so. If, however, any other matters are properly brought before the Meetings, the persons named in the accompanying form of proxy will vote thereon in accordance with their judgment. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETINGS ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN ALL PROXY CARDS AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE- PAID ENVELOPE. - -9- PREFERRED INCOME FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned holder of shares of Money Market Cumulative Preferred Stock ("MMP"), of Preferred Income Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of MMP, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. A majority of the proxies present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal. 1. ELECTION OF DIRECTOR Not Applicable 2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR * AGAINST * ABSTAIN * independent accountants for the Fund. The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. PREFERRED INCOME OPPORTUNITY FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS Preferred Stock ("MMP"), of Preferred Income Opportunity Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of MMP, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. A majority of the proxies present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEE AS DIRECTOR AND FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal. 1. ELECTION OF DIRECTOR FOR nominee listed * WITHHOLD AUTHORITY * to vote for nominee Morgan Gust 2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR * AGAINST * ABSTAIN * independent accountants for the Fund. The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. PREFERRED INCOME MANAGEMENT FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned holder of shares of Money Market Cumulative Preferred Stock ("MMP"), of Preferred Income Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of MMP, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. A majority of the proxies present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEE AS DIRECTOR AND FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal. 1. ELECTION OF DIRECTOR FOR nominee listed * WITHHOLD AUTHORITY * to vote for nominee Donald F. Crumrine 2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR * AGAINST * ABSTAIN * independent accountants for the Fund. The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. PREFERRED INCOME FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned holder of shares of Common Stock, of Preferred Income Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Common Stock, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. A majority of the proxies present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEE AS DIRECTOR AND FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal. 1. ELECTION OF DIRECTOR FOR nominee listed * WITHHOLD AUTHORITY * to vote for nominee Martin Brody 2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR * AGAINST * ABSTAIN * independent accountants for the Fund. The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. PREFERRED INCOME OPPORTUNITY FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned holder of shares of Common Stock, of Preferred Income Opportunity Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Common Stock, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. A majority of the proxies present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing asattorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEE AS DIRECTOR AND FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal 1. ELECTION OF DIRECTOR FOR nominee listed * WITHHOLD AUTHORITY * to vote for nominee Robert T. Flaherty 2. To ratify the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. FOR * AGAINST * ABSTAIN * The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. PREFERRED INCOME MANAGEMENT FUND INCORPORATED PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned holder of shares of Common Stock, of Preferred Income Fund Incorporated, a Maryland corporation (the "Fund"), hereby appoints Robert T. Flaherty, Donald F. Crumrine and Christine P. Ritch, attorneys and proxies for the undersigned, with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Common Stock, which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, 47th Floor, New York, New York 10022 at 8:30 a.m., on July 19, 1996, and any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may present and acting at the Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give your full title. DATE: Signature(s) (Title(s), if applicable) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE Please indicate your vote by an "X" in the appropriate box below. This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEE AS DIRECTOR AND FOR PROPOSAL 2. Please refer to the Proxy Statement for a discussion of the Proposal. 1. ELECTION OF DIRECTOR FOR nominee listed * WITHHOLD AUTHORITY * to vote for nominee Donald F. Crumrine 2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR * AGAINST * ABSTAIN * independent accountants for the Fund. The Board of Directors recommends that the shareholders vote "FOR" ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants for the Fund. 3 -----END PRIVACY-ENHANCED MESSAGE-----