Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities and Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
permitted by Rule
14a-6(e)(2))
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x
Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HELIOS STRATEGIC MORTGAGE INCOME FUND, INC.
Payment of Filing Fee (Check the appropriate box:)
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transactions applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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HELIOS STRATEGIC MORTGAGE INCOME FUND, INC.
HELIOS TOTAL RETURN FUND, INC.
Three World Financial Center, 200 Vesey Street
New York, New York 10281-1010
NOTICE OF JOINT ANNUAL MEETING OF STOCKHOLDERS
February 1, 2012
To the Stockholders:
The Joint Annual Meeting of Stockholders of each of Helios Strategic Mortgage Income Fund, Inc. and
Helios Total Return Fund, Inc. (each, a Fund, and collectively, the Funds), will be held at the offices of Brookfield Investment Management Inc., Three World Financial Center, 200 Vesey Street, 26
th
Floor, on February 27, 2012, starting at 12:45 p.m., for the
following purposes:
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1.
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To elect Class I directors (Proposal 1).
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2.
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To transact any other business that may properly come before the meeting.
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The Board of Directors recommends that you vote in favor of Proposal 1.
Stockholders of record as of the close of business on Thursday, December 29, 2011, are entitled to notice of, and to
vote at, the meeting or any adjournment or postponement thereof. If you attend the meeting, you may vote your shares in person. If you do not expect to attend the meeting, please complete, date, sign and return promptly in the enclosed envelope the
accompanying proxy ballot(s). This is important to ensure a quorum at the meeting.
In addition to voting by
mail, you may also vote via the Internet, as follows:
To vote by the Internet
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(1)
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Read the Joint Proxy Statement and have the enclosed proxy card at hand.
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(2)
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Go to the website that appears on the enclosed proxy card.
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(3)
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Enter the control number set forth on the enclosed proxy card and follow the simple
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instructions.
We encourage you to vote your shares via the Internet using the control number that appears on your enclosed proxy card. Use of Internet voting will reduce the time and costs associated with this proxy
solicitation. Whichever method you choose, please read the enclosed Joint Proxy Statement carefully before you vote. If you should have any questions about this Notice or the proxy materials, we encourage you to call us at (800) 497-3746.
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By Order of the Boards of Directors,
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/s/ Jonathan C. Tyras
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Jonathan C. Tyras
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Secretary
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON FEBRUARY 27, 2012
The Funds Notice of Joint Annual Meeting of Stockholders, Joint Proxy Statement and Form of Proxy are available on
the Internet at www.brookfieldim.com
WE NEED YOUR PROXY VOTE IMMEDIATELY
.
YOU MAY THINK YOUR VOTE IS NOT IMPORTANT, BUT IT IS VITAL. THE MEETING OF STOCKHOLDERS OF EACH FUND WILL BE UNABLE TO CONDUCT ANY
BUSINESS IF LESS THAN A MAJORITY OF THE SHARES ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, SUCH FUND, AT THE STOCKHOLDERS EXPENSE, WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO
ENABLE THE FUND TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense involved
in validating your vote if you fail to sign your proxy card properly.
1.
Individual Accounts.
Sign your
name exactly as it appears in the registration on the proxy card.
2.
Joint Accounts.
Either party may
sign, but the name of the party signing should conform exactly to the 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:
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Registration
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Valid Signature
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Corporate Accounts
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(1) ABC Corp.
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ABC Corp. (by John Doe, Treasurer)
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(2) ABC Corp.
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John Doe, Treasurer
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(3) ABC Corp. c/o John Doe, Treasurer
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John Doe
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(4) ABC Corp. Profit Sharing Plan
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John Doe, Trustee
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Trust Accounts
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(1) ABC Trust
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Jane B. Doe, Trustee
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(2) Jane B. Doe, Trustee u/t/d 12/28/78
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Jane B. Doe
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Custodial or Estate Accounts
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(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.
UGMA
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John B. Smith
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(2) John B. Smith
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John B. Smith, Jr., Executor
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YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR
SHARES PROMPTLY, NO MATTER HOW MANY SHARES YOU OWN.
HELIOS STRATEGIC MORTGAGE INCOME FUND, INC.
HELIOS TOTAL RETURN FUND, INC.
Three World Financial Center, 200 Vesey Street
New York, New York 10281-1010
JOINT PROXY STATEMENT
This Joint Proxy Statement is furnished to stockholders in connection with a solicitation by the Board of Directors (each, a Board, and collectively, the Boards) of each of Helios
Total Return Fund, Inc. and Helios Strategic Mortgage Income Fund, Inc. (each, a Fund, and collectively, the Funds) of proxies to be used at the Joint Annual Meeting of Stockholders (the Meeting) of the Funds to
be held at the office of Brookfield Investment Management Inc., Three World Financial Center, 200 Vesey Street, New York, NY 10281-1010 at 12:45 p.m. on February 27, 2012 (and at any adjournment or adjournments thereof) for the purposes set
forth in the accompanying Notice of Joint Annual Meeting of Stockholders. This Joint Proxy Statement and the accompanying form of proxy are first being mailed to stockholders on or about February 1, 2012.
Stockholders who execute proxies retain the right to revoke them by written notice received by the Secretary of the
respective Fund at any time before they are voted. Unrevoked proxies will be voted in accordance with the specifications thereon and, unless specified to the contrary, will be voted FOR the election of the director nominee or Class I Directors. The
close of business on Thursday, December 29, 2011, has been fixed as the record date (the Record Date) for the determination of stockholders entitled to receive notice of, and to vote at, the Meeting. Each stockholder is entitled to
one vote for each share of stock of a Fund validly issued and outstanding and held by such stockholder. Information as to the number of outstanding shares of common stock of each Fund as of the Record Date is set forth below:
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Total Number of Shares
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Helios Total Return Fund, Inc.
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30,953,974
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Helios Strategic Mortgage Income Fund, Inc.
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10,172,131
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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 shares of the Fund entitled to vote at the Meeting. In the event that a quorum is not present at the Meeting, the stockholders entitled to vote at the Meeting, present in person or by proxy, may adjourn the
Meeting from time to time, without notice other than announcement thereat, to a date not more than one hundred twenty (120) days from the Record Date until the stockholders of the requisite amount of shares of the Fund shall be so present.
For purposes of determining the presence of a quorum for transacting business related to Proposal 1 at the
Meeting, abstentions, if any, will be treated as shares that are present, but not as votes cast, at the Meeting. Accordingly, for purposes of counting votes, shares represented by abstentions will have no effect on Proposal 1, for which the required
vote is a plurality of all the votes cast. Since banks and brokers will have discretionary authority to vote shares in the absence of voting instructions from stockholders with respect to Proposal 1, there will be no broker non-votes
(that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not
have discretionary power).
Stockholders may request copies of the Funds most recent annual and
semi-annual reports, including the financial statements, without charge, by writing to Investor Relations, Helios Funds, Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010. These reports also are available on
the Funds website at
www.brookfieldim.com
. These
documents also have been filed with the Securities and Exchange Commission and are available at www.sec.gov.
1
PROPOSAL 1: ELECTION OF DIRECTORS
Each Funds Articles of Incorporation provides that its Board shall be divided into three classes: Class I, Class II
and Class III. The terms of office of the present Directors in each class expire at the Annual Meeting in the year indicated or thereafter in each case when their respective successors are elected and qualified: Class I 2012, Class II 2013 and Class
III 2014. At each subsequent annual election, Directors chosen to succeed those whose terms are expiring will be identified as being of that same class and will be elected for a three-year term. The effect of these staggered terms is to limit the
ability of other entities or persons to acquire control of a Fund by delaying the replacement of a majority of its Board.
The persons named in the accompanying form of proxy intend to vote at the Meeting (unless directed not to so vote) for the re-election of Stuart A. McFarland and Diana H. Hamilton, the Class I Director
nominees for each Fund. Mr. McFarland and Ms. Hamilton have indicated that each will serve if elected, but if any of them should be unable to serve, the proxy or proxies will be voted for any other person determined by the persons named in
the proxy in accordance with their judgment.
Each Funds Board has determined that Mr. McFarland
and Ms. Hamilton, as well as Messrs. Drake and Salvatore, are independent under the criteria for independence set forth in the listing standards of the New York Stock Exchange, and therefore, upon the election of the Class I Directors nominee
by each Fund, each Fund will meet the requirements of the New York Stock Exchange that a majority of Directors be independent.
As described above, there are two nominees for election to each Board at this time. Proxies cannot be voted for a greater number of persons than the number of nominees currently proposed to serve on each
Board.
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Information Concerning Nominee and Directors
The following table provides information concerning each of the Directors and the Class I Director nominees of each
Board, as of the date of this Joint Proxy Statement. The nominees are listed first in the table under Class I Disinterested Director Nominees. The terms of the Class II and the Class III Directors do not expire this year. Each Fund has a
retirement policy which sets a mandatory retirement age of 75 for the Directors.
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Name, Address
and Age
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Position(s) Held with Fund
and Term of Office and
Length of Time Served
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Principal Occupation(s)
During Past 5 Years and
Other Directorships Held by Director
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Number of
Portfolios in
Fund Complex
Overseen by
Director
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Class I Disinterested Directors - Term Expires at 2012 Annual Meeting of Stockholders
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Stuart A. McFarland
c/o Three World
Financial Center,
200 Vesey Street,
New York, New
York 10281-1010
Age 64
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Director, Member of the Audit Committee, Member of the Nominating and Compensation Committee
Elected since 2006
Elected for Three Year Term
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Director/Trustee of several investment
companies advised by the Advisor (2006-
Present); Director of United Guaranty Corporation (July
2011 Present); Director of Brandywine Funds (2003-Present); Director of New Castle Investment Corp. (2000-Present); Chairman and Chief Executive Officer of Federal City Bancorp, Inc. (2005-2007); Managing Partner of Federal City Capital
Advisors (1997-Present).
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7
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Diana H. Hamilton
c/o Three
World
Financial Center
200 Vesey
Street,
New York, New
York
10281-1010
Age 55
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Trustee, Member of the Audit Committee, Member of the Nominating and Compensation Committee
Elected since 2010
Elected for Three Year Term
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Director of several investment companies advised by the Advisor (2009-Present); President, Sycamore Advisors, LLC, a municipal finance advisory firm (2004-Present).
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7
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3
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Class II Disinterested Director - Term Expires at 2013 Annual Meeting of Stockholders
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Rodman L. Drake
c/o Three
World
Financial Center
200 Vesey
Street,
New York, New
York
10281-1010
Age 68
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Director and Chairman of the Board, Member of the Audit Committee, Chairman of the Nominating and Compensation Committee, Member of
Executive Committee
Elected since 1989 (HTR) and 2002 (HSM)
Elected for Three Year Term
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Chairman (since 2003) and Director/Trustee of several investment companies advised by the Advisor (1989-Present); Director and/or Lead Director of Crystal River Capital, Inc. (2005-
2010); Chairman of Board (2005-2010), Interim President and Chief Executive Officer of Crystal River Capital, Inc. (2009-2010); Director of Celgene Corporation (2006-Present); Director of Student Loan Corporation (2005-2010); Director of Apex Silver
Mines Limited (2007-2009); Co-founder, Baringo Capital LLC (2002-Present); Director of Jackson Hewitt Tax Services Inc. (2004-2011); Director of Animal Medical Center (2002-Present); Director and/or Lead Director of Parsons Brinckerhoff, Inc.
(1995-2008); Trustee and Chairman of Excelsior Funds (1994-2007); Trustee of Columbia Atlantic Funds (2007-2009); Chairman of Columbia Atlantic Funds (2009-Present).
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Class III Disinterested Director - Term Expires at
2014 Annual Meeting of Stockholders
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Louis P. Salvatore
c/o Three
World Financial Center,
200 Vesey Street, New York, New York 10281-1010
Age 65
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Director, Chairman of the Audit Committee, Member of the Nominating and Compensation Committee
Elected since September 2005
Elected for Three Year Term
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Director/Trustee of several investment companies advised by the Advisor (2005-Present); Director of Crystal River Capital, Inc. (2005-2010); Director of Turner Corp. (2003-Present);
Director of Jackson Hewitt Tax Services, Inc. (2004-2011); Employee of Arthur Andersen LLP (2002-Present).
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4
Officers of the Funds
The officers of each Fund are elected by its Board either at its annual meeting, or at any subsequent regular or special
meeting of the Board. The Board of each Fund has elected six officers, to hold office at the discretion of the Board until their successors are chosen and qualified or until his or her resignation or removal. Except where dates of service are noted,
all officers listed below served the Funds as such throughout the fiscal year ended November 30, 2011. The following table sets forth information concerning each officer of the Funds as of the date of this Joint Proxy Statement:
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Name, Address
and Age
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Position(s) Held
with Fund
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Term of Office and
Length of Time Served
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Principal Occupation(s)
During Past 5 Years
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Kim G. Redding*
c/o Three World Financial
Center, 200 Vesey Street,
New
York, New York 10281-1010
Age 56
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President
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Elected Annually
Since
February 2010
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President of several investment companies advised by the Advisor (2010-Present); Chief Executive Officer and Chief Investment Officer of the Advisor (2010-Present); Co-Chief
Executive Officer and Chief Investment Officer of the Advisor (2009-2010); Director, Brookfield Investment Management (UK) Limited (2011-Present); Director and Chairman of the Board of Directors, Brookfield Investment Management (Canada) Inc.
(2011-Present); Director, Brookfield Investment Funds (UCITS) plc (October 2011-Present); Founder and Chief Executive Officer of Brookfield Redding LLC (2001-2009).
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Michelle Russell-Dowe*
c/o Three World Financial Center, 200 Vesey Street,
New York, New York
10281-1010
Age 40
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Vice President
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Elected Annually
Since
September 2009
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Portfolio Manager/Managing Director of the Advisor (2005-Present).
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Steven M. Pires*
c/o Three World Financial
Center, 200 Vesey Street,
New
York, New York
10281-1010
Age 55
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Treasurer
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Elected Annually
Since April
2009
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Treasurer of several investment companies advised by the Advisor (2009-Present); Vice President the Advisor (2011-Present); Vice
President of Brookfield Operations and Management Services LLC (2008-2011); Assistant Vice President of Managers Investment
Group LLC
(2004-2008).
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Name, Address
and Age
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Position(s) Held
with Fund
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Term of Office and
Length of Time Served
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Principal Occupation(s)
During Past 5 Years
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Jonathan C. Tyras*
c/o Three World Financial
Center,
200 Vesey Street, New York, New York 10281-1010
Age 43
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Secretary
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Elected Annually
Since
November 2006
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Managing Director and Chief Financial Officer of the Advisor (2010-Present); Director of the Advisor (2006-2010); Chief Financial Officer of Brookfield Investment Management (UK)
Limited (2011-Present); Chief Financial Officer of Brookfield Investment Management (Canada) Inc. (2011-Present); General Counsel and Secretary of the Advisor (2006-Present); Vice President and General Counsel (2006-Present) and Secretary
(2007-2010) of Crystal River Capital, Inc.; Secretary of several investment companies advised by the Advisor (2006-Present); Chief Executive Officer, AMP Capital Brookfield (US) LLC (December 2011-Present); Managing Director, AMP Capital Brookfield
Pty Limited (December 2011-Present).
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Seth Gelman*
c/o Three World Financial Center, 200 Vesey Street, New York, New York 10281-1010
Age 36
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Chief Compliance Officer (CCO)
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Elected Annually Since May 2009
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CCO of several investment companies advised by the Advisor (2009-Present); Director and CCO of the Advisor (2009-Present); Vice President, Oppenheimer Funds, Inc. (2004-
2009).
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Lily Wicker*
c/o Three World Financial
Center, 200 Vesey Street,
New
York, New York
10281-1010
Age 33
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Assistant Secretary
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Elected Annually
Since
September 2009
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Assistant Secretary (2009-Present) and Interim CCO (March-May 2009) of several investment companies advised by the Advisor; Vice
President (2010-Present); Assistant Vice President (2009-2010) and Associate (2007-2009)
of the Advisor; Chief Compliance Officer, Brookfield
Investment Management (UK) Limited (May 2011-Present); Juris Doctor, Boston University School of Law (2004-2007).
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Designates individuals who are interested persons of the Funds, as defined by the 1940 Act, because of affiliations with the Advisor.
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Share Ownership
As of the Record Date, the Director nominee, Directors and officers of the Funds beneficially owned individually and collectively as a group less than 1% of the outstanding shares of each Fund.
The following table sets forth the aggregate dollar range of equity securities owned by each Director of the
Funds and of all funds overseen by each Director in the Advisors family of investment companies (the Fund Complex) as of November 30, 2011. The Fund Complex is comprised of the Funds, Helios Advantage Income Fund, Inc., Helios
High Income Fund, Inc., Helios Multi-Sector High Income Fund, Inc., Helios Strategic Income Fund, Inc., Helios High Yield Fund, Brookfield Global Listed Infrastructure Income Fund, Inc. and Brookfield Investment Funds and its four series; Brookfield
Global Listed Real Estate Fund, Brookfield Global Listed Infrastructure Fund, Brookfield Global High Yield Fund and Brookfield High Yield Fund. The cost of each
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Directors investment in the Fund Complex may vary from the current dollar range of equity securities shown below, which is calculated on a market value basis as of December 31, 2011.
The information as to beneficial ownership is based on statements furnished to the Funds by each Director.
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Name of
Nominee/Director
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Dollar Range of Equity Securities in the Funds
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Aggregate Dollar Range
of Equity Securities in
All Funds Overseen by
Director in Family of
Investment Companies
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Helios Strategic Mortgage
Income Fund, Inc.
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Helios Total Return Fund,
Inc.
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Disinterested Director Nominees
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Stuart A. McFarland
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$1 - $10,000
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$1 - $10,000
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$10,001 - $50,000
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Diana H. Hamilton
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None
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None
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$10,001 - $50,000
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Disinterested Directors
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Rodman L. Drake
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$10,001 - $50,000
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Over $100,000
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Over $100,000
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Louis P. Salvatore
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$10,001 - $50,000
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$10,001 - $50,000
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Over $100,000
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Information Regarding the Boards and their Committees
The Role of the Board
Each Funds Board provides oversight of the management and operations of the respective Fund. As is the case with virtually all investment companies (as distinguished from operating companies), the
day-to-day management and operation of the Fund is performed by various service providers to the Fund, such as the Funds investment adviser and administrator, the sub-administrator, custodian, and transfer agent. The Board has appointed senior
employees of the Advisor as officers of the Fund, with responsibility to monitor and report to the Board on the Funds day-to-day operations. In conducting this oversight, the Board receives regular reports from these officers and service
providers regarding the Funds operations. For example, the Treasurer of the Fund provides reports as to financial reporting matters, and investment personnel of the Advisor report on the Funds investment activities and performance. The
Board has appointed a Chief Compliance Officer who administers the Funds compliance program and regularly reports to the Board as to compliance matters. Some of these reports are provided as part of formal Board meetings which are
typically held quarterly, in person, and involve the Boards review of recent Fund operations. From time to time, one or more members of the Board may also meet with management in less formal settings, between scheduled Board
meetings, to discuss various topics. In all cases, however, the role of the Board and of any individual Director is one of oversight and not of management of the day-to-day affairs of the Fund and its oversight role does not make the Board a
guarantor of the Funds investments, operations or activities.
Board Leadership Structure
Each Funds Board has structured itself in a manner that it believes allows it to perform its oversight
function effectively. Currently, all of the members of the Board, including the Chairman of the Board, are not interested persons, as defined in the 1940 Act, of the Fund (the Disinterested Directors), which are Directors
that are not affiliated with the Advisor or its affiliates. The Board has established four standing committees, an Audit Committee, a Nominating and Compensation Committee, an Executive Committee and a Qualified Legal Compliance Committee
(collectively, the Committees), which are discussed in greater detail below. Each of the Disinterested Directors helps identify matters for consideration by the Board and the Chairman has an active role in the agenda setting process for
Board meetings. The Audit Committee Chairman also has an active role in the agenda setting process for the Audit Committee meetings. The Disinterested Directors have engaged their own independent counsel to advise them on matters relating to their
responsibilities to the Fund. Each Funds Board has adopted Fund Governance Policies and Procedures to ensure that the Board is properly constituted in accordance with the 1940 Act and to set forth examples of certain of the significant matters
for consideration by the Board and/or its Committees in order to facilitate the Boards oversight function. For example, although the 1940 Act requires that at least 40% of a funds directors not be interested persons, as
defined in the 1940 Act, the Board has
7
determined that the Disinterested Directors should constitute at least 75% of the Board. The Board reviews its structure annually. The Board also has determined that the structure, function and
composition of the Committees are appropriate means to provide effective oversight on behalf of Fund stockholders.
Board Oversight of Risk Management
As part of its oversight function,
each Board receives and reviews various risk management reports and assessments and discusses these matters with appropriate management and other personnel. Because risk management is a broad concept comprised of many elements, Board oversight of
different types of risks is handled in different ways. For example, the full Board receives and reviews reports from senior personnel of the Advisor (including senior compliance, financial reporting and investment personnel) or their affiliates
regarding various types of risks, including, but not limited to, operational, compliance, investment, and business continuity risks, and how they are being managed. From time to time, the full Board meets with the Funds Chief Compliance
Officer to discuss compliance risks relating to the Fund, the Advisor and the Funds other service providers. The Audit Committee supports the Boards oversight of risk management in a variety of ways, including meeting regularly with the
Funds Treasurer and with the Funds independent registered public accounting firm and, when appropriate, with other personnel employed by the Advisor to discuss, among other things, the internal control structure of the Funds
financial reporting function and compliance with the requirements of the Sarbanes-Oxley Act of 2002. The Audit Committee also meets regularly with the Funds Chief Compliance Officer to discuss compliance and operational risks and receives
reports from the Advisors internal audit group as to these and other matters.
Information about Each
Directors Qualification, Experience, Attributes or Skills
Each Board believes that each existing
Director and Director nominee has the qualifications, experience, attributes and skills (Director Attributes) appropriate to serve as a Director of the Funds in light of the Funds business and structure. In addition to a
demonstrated record of business and/or professional accomplishment, each Director has served on boards for organizations other than the Funds, as well as having served on the Boards of the Funds. They therefore have substantial board experience and,
in their service to the Funds, have gained substantial insight as to the operations of the Funds and have demonstrated a commitment to discharging their oversight responsibilities as Directors. Each Board, with the assistance of the Nominating and
Compensation Committee, annually conducts a self-assessment wherein the performance of the Board and the effectiveness of the Boards committee structure are reviewed.
In addition to the information provided above, certain additional information regarding the existing Directors and
Director nominees and their Director Attributes is provided below. Although the information is not all-inclusive, the information describes some of the specific experiences, qualifications, attributes or skills that each Director possesses to
demonstrate that the Directors have the appropriate Director Attributes to serve effectively as Directors of the Funds. Many Director Attributes involve intangible elements, such as intelligence, integrity and work ethic, the ability to work
together, to communicate effectively, to exercise judgment and ask incisive questions, and commitment to stockholder interests.
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Rodman L. Drake
In addition to his tenure as a Director of the Fund, Mr. Drake has extensive business experience with particular
expertise in financial services, financial reporting, strategic planning and risk management disciplines, including serving on the board of directors for various public and private companies, which include other investment management companies. Mr.
Drake serves as the Chairman of the Board, and is a member of the Audit, Nominating and Compensation, and Executive Committees.
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Diana H. Hamilton
In addition to her tenure as a Director of the Fund, Ms. Hamilton has business experience as an executive in
the public sector, including serving six years as Director of Public Finance for the State of Indiana, as well as corporate governance experience gained from serving on the board of directors of another investment management company. In addition,
Ms. Hamilton currently serves as President of a municipal finance advisory firm and on the board of directors of various non-profit entities. Ms. Hamilton previously served as chair of the Indiana Transportation Finance Authority.
Ms. Hamilton is a member of the Audit and Nominating and Compensation Committees.
|
8
|
|
|
Stuart A. McFarland
In addition to his tenure as a Director of the Fund, Mr. McFarland has extensive experience in executive
leadership, business development and operations, corporate restructuring and corporate finance. He previously served in senior executive management roles in the private sector, including serving as Executive Vice President and General Manager of GE
Capital Mortgage Services, Corp. Mr. McFarland currently serves on the board of directors for various other investment management companies and non-profit entities, and is the Managing Partner of Federal City Capital Advisors.
Mr. McFarland is a member of the Audit and Nominating and Compensation Committees.
|
|
|
|
Louis P. Salvatore
In addition to his tenure as a Director of the Fund, Mr. Salvatore has extensive business experience in
financial services and financial reporting, including serving on the board of directors/trustees and as audit committee chairman for several other investment management companies. Mr. Salvatore previously spent thirty years in public
accounting. He holds a Professional Director Certification from the American College of Corporate Directors, a public company director education organization. Mr. Salvatore serves as Chairman of the Audit Committee and is a member of the
Nominating and Compensation Committee.
|
Nominating and Compensation Committee
Considerations for Disinterested Directors
The Nominating and Compensation Committee evaluates
candidates qualifications for Board membership. When evaluating candidates, the Nominating and Compensation Committee considers a number of attributes including leadership, independence, interpersonal skills, financial acumen, integrity and
professional ethics, educational and professional background, prior director or executive experience, industry knowledge, business judgment and specific experiences or expertise that would complement or benefit the Board as a whole. The Nominating
and Compensation Committee also may consider other factors/attributes as they may determine appropriate in their own judgment. The Nominating and Compensation Committee believes that the significance of each nominees background, experience,
qualifications, attributes or skills must be considered in the context of the Board as a whole. As a result, the Nominating and Compensation Committee has not established a litmus test or quota relating to these matters that must be satisfied before
an individual may serve as a Director. The Nominating and Compensation Committee believes that board effectiveness is best evaluated at a group level, through the annual self-assessment process. Through this process, the Nominating and Compensation
Committee considers whether the Board as a whole has an appropriate level of sophistication, skill, and business acumen and the appropriate range of experience and background. The diversity of a candidates background or experiences, when
considered in comparison to the background and experiences of other members of the Board, may or may not impact the Nominating and Compensation Committees view as to the candidate. In accessing these matters, the Nominating and Compensation
Committee typically considers the following minimum criteria:
|
|
|
With respect to nominations for Disinterested Directors, nominees shall be independent of the Advisor and other principal service providers. The
Nominating and Compensation Committee of each Fund shall also consider the effect of any relationship beyond those delineated in the 1940 Act that might impair independence, such as business, financial or family relationships with the investment
adviser or its affiliates.
|
|
|
|
Disinterested Director nominees must qualify for service on each Funds Audit Committee under the rules of the New York Stock Exchange
(including financial literacy requirements) or of another applicable securities exchange.
|
|
|
|
With respect to all Directors, a proposed nominee must qualify under all applicable laws and regulations.
|
|
|
|
The proposed nominee must agree to invest in an amount equal to 1.5 years worth of director compensation in the Funds within three years of becoming
Director.
|
|
|
|
The Nominating and Compensation Committee of each Fund may also consider such other factors as it may determine to be relevant.
|
9
Board Meetings
Each Funds Board held four regular meetings and one special meeting during the 12 month period ended
November 30, 2011. During the fiscal year ended November 30, 2011, each Director attended at least 75% of the aggregate of the meetings of each Funds Board of Directors. Each Funds Fund Governance Policies and Procedures
provide that the Chairman of the Board of Directors, who is elected by the Disinterested Directors, will preside at each executive session of the Board, or if one has not been designated, the chairperson of the Nominating and Compensation Committee
shall serve as such.
Executive Committee
Each Fund has an Executive Committee. The Executive Committee presently consists of Mr. Drake. The function of the
Executive Committee is to take any action permitted by Maryland law when the full Board of Directors cannot meet. The Executive Committees of the Funds did not need to meet during the fiscal year ended November 30, 2011.
Audit Committee
Each Fund has a standing Audit Committee that was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, which currently consists of Messrs. Drake,
McFarland, and Salvatore and Ms. Hamilton, all of whom are Disinterested Directors. The principal functions of the Audit Committee are to review the Funds audited financial statements, to select the Funds independent auditor, to
review with the Funds auditor the scope and anticipated costs of their audit and to receive and consider a report from the auditors concerning their conduct of the audit, including any comments or recommendations they might want to make in
connection therewith. During the last fiscal year of the Funds, each Audit Committee met two times and all of the members of each Audit Committee attended all of the Audit Committee meetings. Mr. Salvatore serves as a Chairman of the Audit
Committee and each Board has determined that Mr. Salvatore is an audit committee financial expert, as defined in Item 401(h) of Regulation S-K promulgated by the Securities and Exchange Commission.
Each Funds Board of Directors has adopted a written charter for its Audit Committee, which is available on each
Funds website at
www.brookfieldim.com.
A copy of each
Funds Audit Committee Charter is also available free of charge, upon request directed to Investor Relations, Helios Funds, Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010.
Nominating and Compensation Committee
Each Fund has a Nominating and Compensation Committee, which currently consists of Messrs. Drake, McFarland, and
Salvatore and Ms. Hamilton, all of whom are Disinterested Directors and independent as independence is defined in New York Stock Exchange, Inc.s listing standards. The Nominating and Compensation Committee of each Fund met twice during
the fiscal year ended November 30, 2011 and the meeting was attended by all of the members of the Nominating and Compensation Committee. The function of each Funds Nominating and Compensation Committee is to recommend candidates for
election to its Board as Disinterested Directors. Each Funds Nominating and Compensation Committee evaluates each candidates qualifications for Board membership and their independence from the Advisor and other principal service
providers.
The Nominating and Compensation Committee will consider nominees recommended by stockholders who,
separately or as a group, own at least one percent of a Funds shares. For a list of the minimum criteria used by the Nominating and Compensation Committee to assess a candidates qualifications, please see Nominating and
Compensation Committee Considerations for Disinterested Directors above.
When identifying and
evaluating prospective nominees, the Nominating and Compensation Committees review all recommendations in the same manner, including those received by stockholders. The Nominating and Compensation Committees first determine if the prospective
nominee meets the minimum qualifications set forth above. Those proposed nominees meeting the minimum qualifications as set forth above are then be considered by the Nominating and Compensation Committees with respect to any other qualifications
deemed to be important.
10
Those nominees meeting the minimum and other qualifications and determined by the Nominating and Compensation Committees as suitable are included on the Funds proxy cards.
Stockholder recommendations should be addressed to the Nominating and Compensation Committee in care of the Secretary of
the respective Fund and sent to Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010. Stockholder recommendations should include biographical information, including business experience for the past nine
years and a description of the qualifications of the proposed nominee, along with a statement from the nominee that he or she is willing to serve and meets the requirements to be a Disinterested Director, if applicable. Each Funds Nominating
and Compensation Committee also determines the compensation paid to the Disinterested Directors. Each Funds Board of Directors has adopted a written charter for its Nominating and Compensation Committee, which is available on each Funds
website at
www.brookfieldim.com
. A copy of each Funds
Nominating and Compensation Committee Charter is also available free of charge, upon request directed to Investor Relations, Helios Funds, Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010.
Each Funds Nominating and Compensation Committee has recommended Mr. McFarland and Ms. hamilton as
nominees for re-election and each Funds Board of Directors has nominated Mr. Salvatore to serve as the Class I Disinterested Directors.
Qualified Legal Compliance Committee
Each Fund has a
standing Qualified Legal Compliance Committee (QLCC). The QLCC was formed for the purpose of compliance with Rules 205.2(k) and 205.3(c) of the Code of Federal Regulations, regarding alternative reporting procedures for attorneys
retained or employed by an issuer who appear and practice before the Securities and Exchange Commission on behalf of the issuer (the issuer attorneys). An issuer attorney who becomes aware of evidence of a material violation by the
Funds, or by any officer, Director, employee, or agent of the Funds, may report evidence of such material violation to the QLCC as an alternative to the reporting requirements of Rule 205.3(b) (which requires reporting to the chief legal officer and
potentially up the ladder to other entities). The QLCC meets as needed. During the fiscal year ended November 30, 2011, each Funds QLCC did not meet. The QLCC currently consists of Messrs. Drake, McFarland, and Salvatore and
Ms. Hamilton.
Code of Ethics
Code of Ethics
. Each Fund has adopted a code of ethics that applies to all of its Directors and officers and any employees of the Funds external manager or its affiliates who are involved in
the Funds business and affairs. This code of ethics is designed to comply with Securities and Exchange Commission regulations and New York Stock Exchange listing standards related to codes of conduct and ethics and is available on each
Funds website at
www.brookfieldim.com
. A copy of each
Funds code of ethics also is available free of charge, upon request directed to Investor Relations, Helios Funds, Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010.
There is no family relationship between any of the Funds current officers or Directors. There are no orders,
judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular
security or temporarily or permanently restraining any of the Funds officers or Directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of
any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony, nor are any of the officers or directors of any corporation or entity affiliated with the Funds so enjoined.
Compensation of Directors and Executive Officers
No remuneration was paid by any of the Funds to persons who were directors, officers or employees of the Advisor or any affiliate thereof for their services as Directors or officers of such Fund. Each
Director of the Funds, other than those who are officers or employees of the Advisor or any affiliate thereof, is entitled to receive from each Fund a fee of $18,000 per year plus $5,000 for the Chairman of the Board and $2,500 for the Chairman of
the
11
Audit Committee. The following table sets forth information concerning the compensation received by Directors for the fiscal year ended November 30, 2011 for the Funds, which we refer to as
fiscal 2011.
|
|
|
|
|
|
|
Directors Aggregate Compensation
from the Funds
|
|
Total Directors Compensation
from the Funds and the Fund Complex
|
Rodman L. Drake
|
|
$46,000
|
|
$104,000
|
Stuart A. McFarland
|
|
$36,000
|
|
$86,000
|
Louis P. Salvatore
|
|
$41,000
|
|
$104,250
|
Diana H. Hamilton*
|
|
$27,500
|
|
$77,000
|
*
|
Diana Hamilton was elected as Director of each Fund on February 24, 2011.
|
Stockholder Communications with Board of Directors and Board Attendance at Annual Meetings
Each Funds Board of Directors provides a process for stockholders to send communications to the Board. Any
stockholder who wishes to send a communication to the Board of Directors of a Fund should send the communication to the attention of the Funds Secretary at Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York
10281-1010. If a stockholder wishes to send a communication directly to an individual Director or to a Committee of a Funds Board of Directors, then the communication should be specifically addressed to such individual Director or Committee
and sent in care of the Funds Secretary at the same address. All communications will be immediately forwarded to the appropriate individual(s).
The Funds policy with respect to Directors attendance at annual meetings is to encourage such attendance.
Audit Committee Report
On January 26, 2012, the
Audit Committee of each Fund reviewed and discussed with management the Funds audited financial statements as of and for the fiscal annual year ended November 30, 2011. The Audit Committees discussed with BBD, LLP (BBD), the
Funds independent registered public accounting firm, the matters required to be discussed by Rule 3526, Ethics and Independence, Communication with Audit Committees Concerning Independence.
The Audit Committees received and reviewed the written disclosures and the letter from BBD required by Rule 3520, Auditor
Independence, and discussed with BBD, its independence.
Based on the reviews and discussions referred to
above, each Audit Committee recommended to its Board of Directors that the audited financial statements referred to above be included in such Funds Annual Report to Stockholders as required by Section 30(e) of the 1940 Act and Rule 30d-1
promulgated thereunder for the fiscal year ended November 30, 2011.
Louis P. Salvatore Audit
Committee Chairman
Rodman L. Drake Audit Committee Member
Stuart A. McFarland Audit Committee Member
Diana H. Hamilton Audit Committee Member
Required Vote
The election of the listed nominee for
Director requires the approval of a plurality of all the votes cast at each Meeting, in person or by proxy, at which a quorum is present.
The Board of Directors of each Fund recommends a vote For approval of the election of the
nominees to such Funds Board of Directors.
12
GENERAL INFORMATION
MANAGEMENT AND SERVICE PROVIDERS
The Advisor
Each Fund has entered into an Investment
Advisory Agreement with Brookfield Investment Management Inc. (the Advisor). The Advisor, a wholly owned subsidiary of Brookfield Asset Management Inc., is a Delaware corporation organized in February 1989 and a registered investment
advisor under the Investment Advisers Act of 1940, as amended. The business address of the Advisor and its officers and directors is Three World Financial Center, 200 Vesey Street, 24th Floor, New York, New York 10281-1010. Subject to the authority
of the Board of Directors, the Advisor is responsible for the overall management of each Funds business affairs. As of November 31, 2011, the Advisor and its subsidiaries had approximately $21 billion in assets under management. The
Advisors clients include pensions, foundations and endowments, insurance companies, real estate investment trusts and closed-end funds. The Advisor specializes in equities and fixed income and its investment philosophy incorporates a
value-based approach towards investment.
Mr. Kim G. Redding, the President of each Fund, is Chief
Investment Officer and Chief Executive Officer of the Advisor. Ms. Michelle Russell-Dowe, the Vice President of each Fund, Mr. Jonathan C. Tyras, the Secretary of each Fund, Mr. Seth Gelman, the CCO of each Fund,
Mr. Steven M. Pires, the Treasurer of each Fund and Ms. Lily Wicker, the Assistant Secretary of each Fund, are employees of the Advisor.
The Advisor provides advisory services to several other registered investment companies, some of which invest in MBS. Its management includes several individuals with extensive experience in creating,
evaluating and investing in MBS, derivative MBS and ABS, and in using hedging techniques. Michelle Russell-Dowe is responsible for the day to day management of each Funds portfolio. Ms. Russell-Dowe is a Managing Director of the Advisor
and a Portfolio Manager with over 15 years of industry experience. She joined the Advisor in 1999, and as Head of the Structured Products Investment Team, Ms. Russell-Dowe is responsible for the Advisors CMBS/RMBS/ABS exposures and the
establishment of portfolio objectives and strategies. Investment advisory fees paid by the Funds to the Advisor during fiscal 2011 are the following:
|
|
|
Fund Name
|
|
Investment Advisory Fees Paid during Fiscal Year 2011
|
Helios Strategic Mortgage Income Fund, Inc.
|
|
$444,966
|
Helios Total Return Fund, Inc.
|
|
$1,247,562
|
13
In addition to acting as advisor to the Funds, the Advisor acts as
investment advisor to the following other investment companies at the indicated annual compensation.
|
|
|
|
|
Fund Name
|
|
Investment Advisory Management Fees
(of each Funds average weekly net assets)
|
|
Approximate Net Assets
At 11/31/11
|
Helios Advantage Income Fund, Inc.
|
|
0.65%
|
|
$56.4 million
|
Helios High Income Fund, Inc.
|
|
0.65%
|
|
$39.8 million
|
Helios Multi-Sector High Income Fund, Inc.
|
|
0.65%
|
|
$44.9 million
|
Helios Strategic Income Fund, Inc.
|
|
0.65%
|
|
$38.0 million
|
Helios High Yield Fund
|
|
0.70%
|
|
$66.0 million
|
Brookfield Global Listed Infrastructure Income Fund Inc.
|
|
1.00%
|
|
$149.8 million
|
Brookfield Investment Funds and its four separate series:
|
|
|
|
|
Brookfield Global Listed Real Estate Fund
|
|
0.75%
|
|
$ 0 million
|
Brookfield Global Listed Infrastructure Fund
|
|
0.85%
|
|
$ 0 million
|
Brookfield Global High Yield Fund
|
|
0.75%
|
|
$ 0 million
|
Brookfield High Yield Fund
|
|
0.75%
|
|
$ 0 million
|
The Administrator
Each Fund has entered into an Administration Agreement with the Advisor. The Advisor has entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC ( the
Sub-Administrator ) to replace State Street Bank and Trust Company effective December 1, 2011, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202. The Advisor and Sub-Administrator perform administrative services
necessary for the operation of the Funds, including maintaining certain books and records of the Funds, preparing reports and other documents required by federal, state, and other applicable laws and regulations, and providing the Funds with
administrative office facilities. For these services, each Fund pays a monthly fee at an annual rate of 0.20% of its average weekly assets. During the fiscal year ended November 30, 2011, the Advisor earned $520,778 in the aggregate in
administration fees from the Funds. The Advisor is responsible for any fees due to the Sub-Administrator, In addition, the Advisor has entered into Administration Agreements with sevenother investment companies, with the following fee structures:
|
|
|
Fund Name
|
|
Administration Fee
|
Helios Advantage Income Fund, Inc.
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Helios High Income Fund, Inc.
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Helios Multi-Sector High Income Fund, Inc.
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Helios Strategic Income Fund, Inc.
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Helios High Yield Fund
|
|
Included in Management Fee
|
14
|
|
|
Fund Name
|
|
Administration Fee
|
Brookfield Global Listed Infrastructure Income Fund Inc.
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Brookfield Investment Funds and its four separate series:
|
|
|
Brookfield Global Listed Real Estate Fund
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Brookfield Global Listed Infrastructure Fund
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Brookfield Global High Yield Fund
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Brookfield High Yield Fund
|
|
A monthly fee paid at an annual rate of 0.15% of its average weekly net assets
|
Brokerage Commissions
The Funds paid the following aggregate amounts in brokerage commissions, each of which included futures commissions, on the Funds securities purchases during the last fiscal year. All of the
commissions were paid to entities not affiliated with either Fund or the Advisor. The Funds do not participate and do not in the future intend to participate in soft dollar or directed brokerage arrangements.
|
|
|
Fund Name
|
|
Brokerage Commission Paid during Fiscal Year 2011
|
Helios Strategic Mortgage Income Fund, Inc.
|
|
$5,213
|
Helios Total Return Fund, Inc.
|
|
$21,990
|
The Advisor has discretion to select brokers and dealers to execute portfolio
transactions initiated by the Advisor and to select the markets in which such transactions are to be executed. The Investment Advisory Agreement provides, in substance, that in executing portfolio transactions and selecting brokers or dealers, the
primary responsibility of the Advisor is to seek the best combination of net price and execution for the Funds. It is expected that securities ordinarily will be purchased in primary markets, and that in assessing the best net price and execution
available to a Fund, the Advisor will consider all factors deemed relevant, including the price, dealer spread, the size, type and difficulty of the transaction involved, the firms general execution and operation facilities and the firms
risk in positioning the securities involved. Transactions in foreign securities markets may involve the payment of fixed brokerage commissions, which are generally higher than those in the United States.
The Funds Auditor
At a meeting held on January 26, 2012, the Audit Committee of each Fund unanimously recommended the selection of BBD as each Funds independent registered public accounting firm for the current
fiscal year ending November 30, 2012. Representatives of BBD are not expected to be present at the Meeting.
The aggregate fees billed by BBD and associated expenses incurred for professional services tendered for the audit of the Funds financial statements for the fiscal year ended November 30, 2011
and fees billed by BBD for the fiscal year ended November 30, 2010 are as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
BBD 2011
|
|
BBD 2010
|
Audit fees
|
|
|
$
|
120,000
|
|
|
|
$
|
120,000
|
|
Audit-related fees
1
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
Tax fees
2
|
|
|
$
|
8,000
|
|
|
|
$
|
8,000
|
|
All other fees
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
(1)
|
Audit-related fees consist of administrative costs related to completion of the audit.
|
|
(2)
|
Tax fees consist of fees for review of tax returns and tax distribution requirements.
|
As indicated above, the Board of Directors of each Fund has adopted a written charter for the Audit Committee
(Charter), which is available on each Funds website at
www.brookfieldim.com
. Each
Funds Audit
15
Committee reviews its Charter at least annually and may recommend changes to the Board. Each member of the Audit Committee of each Fund is independent as independence is defined in the listing
standards of the New York Stock Exchange. The Audit Committees have adopted policies and procedures for pre-approval of the engagement of the Funds auditors. Each Funds Audit Committee evaluates the auditors qualifications,
performance and independence at least annually by reviewing, among other things, the relationship between the auditor and the Fund, as well as the Advisor or any control affiliate of the Advisor, any material issues raised by the most recent
internal quality control review and the auditors internal quality control procedures.
COMPLIANCE WITH SECTION 16
REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
each Funds officers and Directors and persons who own more than ten-percent of a registered class of each Funds equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the
New York Stock Exchange. Officers, directors and greater than ten-percent stockholders are required by regulations of the Securities and Exchange Commission to furnish the Funds with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by the Funds and written representations from
certain reporting persons that all applicable filing requirements for such persons had been complied with, the Funds believe that during the fiscal year ended November 30, 2011, all filing requirements applicable to the Funds officers,
Directors and greater than ten-percent beneficial owners were complied with.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of November 30, 2011, the following persons owned beneficially 5% or more of the shares of the Funds set forth
below:
|
|
|
|
|
|
|
Fund Name
|
|
Name and Address
|
|
Amount of Shares
Beneficially Owned and
Nature of Ownership
1
|
|
Percentage of
Class Owned
1
|
Helios Strategic Mortgage Income Fund, Inc.
|
|
Sit Investment Associates Inc.
3300 IDS Center, 80 S. Eighth Street, Minneapolis, MN 55402
|
|
1,371,334
|
|
13.49%
|
|
|
|
|
Helios Total Return Fund, Inc.
|
|
Sit Investment Associates Inc.
3300 IDS Center, 80 S. Eighth Street, Minneapolis, MN 55402
|
|
2,554,363
|
|
8.26%
|
|
|
|
|
Helios Total Return Fund, Inc.
|
|
Guggenheim Funds Distributors, Inc., as sponsor for several filing entities.
2455 Corporate West Drive
Lisle, IL 60532
|
|
2,324,189
|
|
7.51%
|
1
|
The number of shares are those beneficially owned as determined under the
rules of the Securities Exchange and Commission, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which a person has sole or shared
voting power or investment power and any shares which the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of
attorney or revocation of a trust, discretionary account or similar arrangement.
|
OTHER BUSINESS
The Board of Directors of each Fund does not know of any other matter which may come before the meeting.
If any other matter properly comes before the meeting, it is the intention of the persons named in the proxy to vote the proxies in accordance with their judgment on that matter.
PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS
Stockholders wishing to nominate directors or submit other proposals must provide notice in writing to the Secretary of the applicable Fund, Three World Financial Center, 200 Vesey Street, 24th Floor, New
York, New York 10281-1010. All proposals by stockholders of a Fund that are intended to be presented at such Funds next annual or special meeting of stockholders must be received by such Fund for inclusion in such Funds proxy statement
and form of proxy relating to that meeting in reasonable time before any such meeting. The chairperson of the meeting may refuse to acknowledge a nomination or other proposal by a stockholder that is not made in the manner described above.
EXPENSES OF PROXY SOLICITATION
The cost of preparing, mailing and assembling material in connection with this solicitation of proxies will be borne by
the Funds ratably, based on their relative net asset values. In addition to the use of the mail, proxies may be solicited personally by officers of the Funds or by regular employees of the Advisor. Brokerage houses, banks and other fiduciaries will
be requested to forward proxy solicitation material to their principals to obtain authorization for the execution of proxies, and they will be reimbursed by the Funds for out-of-pocket expenses incurred in connection therewith.
February 1, 2012
17
PROXY
HELIOS STRATEGIC MORTGAGE INCOME FUND, INC.
THIS PROXY SOLICITED ON
BEHALF OF THE DIRECTORS
The undersigned hereby appoints SETH A. GELMAN and STEVEN M. PIRES, each of them attorneys and
proxies for the undersigned, with full power of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Helios Strategic Mortgage Income Fund, Inc. (the Fund) which the undersigned
is entitled to vote at the Annual Meeting of Stockholders of the Fund to be held at the offices of Brookfield Investment Management Inc., Three World Financial Center, 200 Vesey Street, 26th Floor, New York, New York 10281-1010, on Monday,
February 27, 2012 at 12:45 p.m., and at any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying 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 any, and may exercise all of the power or authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given.
(Continued and to be signed on the reverse side)
14475
ANNUAL MEETING OF STOCKHOLDERS OF
HELIOS STRATEGIC MORTGAGE INCOME FUND, INC.
February 27, 2012
You may vote via the Internet, by phone or by
mailing this proxy card.
To vote via the Internet:
|
(1)
|
Read the Proxy Statement and have the proxy card at hand.
|
|
(2)
|
Go to www.proxyvote.com.
|
|
(3)
|
Enter the control number set forth on the proxy card and follow the simple instructions.
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To vote by phone: 1-800-690-6903
Or detach your proxy card below and mail in the envelope provided
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE.
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1.
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Election of Nominees of Class I Directors
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FOR ALL NOMINEES
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NOMINEE
O
Diana H. Hamilton (Class I)
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WITHHOLD AUTHORITY
FOR ALL NOMINEES
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O
Stuart A. McFarland (Class I)
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FOR ALL EXCEPT
(See instructions below)
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Instruction: To withhold authority to vote for any individual nominee(s), mark FOR ALL
EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here:
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This proxy, if properly executed, will be voted in the manner directed by the stockholder. If no direction is made, this proxy will be
voted FOR the re-election of the two Class I nominees as Directors in Proposal 1. Please refer to the Proxy Statement for a discussion of the Proposal.
PLEASE VOTE, DATE AND SIGN THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
To change the address on your
account, please check the box at the right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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Please check if you plan on attending the
meeting.
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Signature of
Stockholder
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Date:
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Signature of Stockholder
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Date:
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Note: This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
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