-----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, KTh92YNP5QGWN5v7fS1uFnqZc2FfhCc7uR4U4p9jFpnJu9IgfRST5OQAfAKcq2a/ CyLPRzBuHFdV5IVQC3t9Cg== 0000890337-99-000004.txt : 19990802 0000890337-99-000004.hdr.sgml : 19990802 ACCESSION NUMBER: 0000890337-99-000004 CONFORMED SUBMISSION TYPE: NSAR-B/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990531 FILED AS OF DATE: 19990730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYPERION 2002 TERM TRUST INC CENTRAL INDEX KEY: 0000890337 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133680910 STATE OF INCORPORATION: DE FISCAL YEAR END: 0530 FILING VALUES: FORM TYPE: NSAR-B/A SEC ACT: SEC FILE NUMBER: 811-07070 FILM NUMBER: 99673462 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 BUSINESS PHONE: 212-549-8400 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 FORMER COMPANY: FORMER CONFORMED NAME: HYPERION TERM TRUST B INC DATE OF NAME CHANGE: 19600201 NSAR-B/A 1 ANNUAL REPORT FORM N-SAR SEMI-ANNUAL REPORT FOR REGISTERED INVESTMENT COMPANIES Registrant Name HYPERION 2002 TERM TRUST, INC. File Number 811-7070 Registrant CIK Number: 0000890337 Press F1 for general help. Header Screen Report as of the end of semiannual period: / / (a) or fiscal year: 05/31/99 (b) Is this a transition report? (Y or N): N Is this form being completed by the registrant? (Y or N): Y Is this an amendment to a previous filing? (Y or N): N Is this a change to a previous filing? (Y or N): N 1.A) Registrant Name: HYPERION 2002 TERM TRUST, INC. B) File Number: 811-7070 C) Telephone Number: 2125498400 2.A) Street: ONE LIBERTY PLAZA, 165 BROADWAY, 36TH FL B) City: NEW YORK C) State: NY D) Zip Code: 10006 Zip Ext.: 1404 E) Foreign Country: Foreign Postal Code: 3. Is this the first filing on this form by the Registrant?(Y or N) ----- N 4. Is this the last filing on this form by the Registrant?(Y or N) ------ N 5. Is Registrant a small business investment company (SBIC)?(Y or N) ---- N 6. Is Registrant a unit investment trust (UIT)?(Y or N) ----------------- N 7.A) Is Registrant a series or multiple portfolio company?(Y or N) ----- N B) How many separate series or portfolios did Registrant have at the end of the period? ----------------------------------------- 0 SCREEN NUMBER: 1 7.C) List the name of each series or portfolio and give a consecutive number to each series or portfolio starting with the number 1. USE THIS SAME NUMERICAL DESIGNATION FOR EACH SERIES OR PORTFOLIO IN THE SERIES INFORMATION BLOCK IN THE TOP RIGHT CORNER OF THE SCREENS SUBMITTED IN THIS FILING AND IN ALL SUBSEQUENT FILINGS ON THIS FORM. THIS INFORMATION IS REQUIRED EACH TIME THE FORM IS FILED. Is this the Series last filing Number Series Name for this series? (Y or N) 1 2 3 4 5 6 7 8 9 10 Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more series. SCREEN NUMBER: 2 This page is being INVESTMENT ADVISER/SUB-ADVISER filed for series 0. 8.A) Adviser Name (if any): HYPERION CAPITAL MANAGEMENT, INC. B) Is this an Adviser or Sub-adviser? (A/S): A C) File Number: 801-34605 D) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404 Foreign Country: Foreign Postal Code: 8.A) Adviser Name (if any): B) Is this an Adviser or Sub-adviser? (A/S): C) File Number: 801- D) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 8.A) Adviser Name (if any): B) Is this an Adviser or Sub-adviser? (A/S): C) File Number: 801- D) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 3 This page is being ADMINISTRATOR filed for series 0. 10.A) Administrator Name (if any):HYPERION CAPITAL MANAGEMENT, INC. B) File Number (if any): 801-34605 C) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404 Foreign Country: Foreign Postal Code: 10.A) Administrator Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 10.A) Administrator Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 10.A) Administrator Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 4 This page is being PRINCIPAL UNDERWRITER filed for series 0. 11.A) Underwriter Name (if any): PRUDENTIAL SECURITIES INCORPORATED B) File Number: 8-27154 C) City: NEW YORK State: NY Zip Code: 10292 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. B) File Number: 8-7221 C) City: NEW YORK State: NY Zip Code: 10281 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): OPPENHEIMER & CO., INC. B) File Number: 8-18333 C) City: NEW YORK State: NY Zip Code: 10281 Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 5 This page is being PRINCIPAL UNDERWRITER filed for series 0. 11.A) Underwriter Name (if any): PAINE WEBBER INCORPORATED B) File Number: 8-16267 C) City: NEW YORK State: NY Zip Code: 10019 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): SALOMON SMITH BARNEY B) File Number: 8-8177 C) City: NEW YORK State: NY Zip Code: 10019 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): ADVEST, INC. B) File Number: 8-21409 C) City: HARTFORD State: CT Zip Code: 06103 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): CROWELL, WEEDON & CO. B) File Number: 8-3710 C) City: LOS ANGELES State: CA Zip Code: 90017 Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 5 This page is being PRINCIPAL UNDERWRITER filed for series 0. 11.A) Underwriter Name (if any): DAIN BOSWORTH, INC. B) File Number: 8-3259 C) City: MINNEAPOLIS State: MN Zip Code: 55402 Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 5 This page is being PRINCIPAL UNDERWRITER filed for series 0. 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 11.A) Underwriter Name (if any): B) File Number: 8- C) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 5 This page is being SHAREHOLDER SERVICING AGENT filed for series 0. 12.A) Agent Name (if any): BOSTON EQUISERVE, L.P. B) File Number (if any): 85-00 C) City: CANTON State: MA Zip Code: 02021 Zip Ext.: 12.A) Agent Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: 12.A) Agent Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: 12.A) Agent Name (if any): B) File Number (if any): C) City: State: Zip Code: Zip Ext.: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 6 This page is being INDEPENDENT PUBLIC ACCOUNTANT filed for series 0. 13.A) Accountant Name: PRICEWATERHOUSECOOPERS LLP B) City: NEW YORK State: NY Zip Code: 10036 Zip Ext.: Foreign Country: Foreign Postal Code: 13.A) Accountant Name: B) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 13.A) Accountant Name: B) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: 13.A) Accountant Name: B) City: State: Zip Code: Zip Ext.: Foreign Country: Foreign Postal Code: Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 7 This page is being AFFILIATED BROKER/DEALER filed for series 0. 14.A) Broker/Dealer Name (if any):RANIERI & CO., INC. B) File Number: 8-39678 14.A) Broker/Dealer Name (if any): B) File Number: 8- 14.A) Broker/Dealer Name (if any): B) File Number: 8- 14.A) Broker/Dealer Name (if any): B) File Number: 8- 14.A) Broker/Dealer Name (if any): B) File Number: 8- Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 8 This page is being CUSTODIAN/SUB-CUSTODIAN filed for series 0. 15.A) Custodian/Sub-custodian: STATE STREET BANK & TRUST COMPANY B) Is this a Custodian or Sub-custodian? (C/S): C C) City: BOSTON State: MA Zip Code: 02116 Zip Ext.: D) Foreign Country: Foreign Postal Code: E) Mark ONE of the following with an 'X': TYPE OF CUSTODY Member Nat'l Foreign Insurance Co. Bank Sec. Exchg. Self Custodian Sponsor Sec.17(f)(1) Rule 17f-1 Rule 17f-2 Rule 17f-5 Rule 26a-2 Other ------------ ------------ ---------- ---------- ------------- ----- X Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 9 This page being filed for series 0. 18. Does Registrant's/Series' custodian(s) maintain some or all of Registrant's/Series' securities in a central depository or book-entry system pursuant to Rule 17f-4? (Y or N) Y 19. Family of investment companies information: A) Is Registrant part of a family of investment companies? (Y or N) Y B) If 'Y' (Yes), state the number of registered management investment companies in the family: 9 (NOTE: Count as a separate company each series of a series company and each portfolio of a multiple portfolio company; exclude all series of unit investment trusts from this number.) C) Identify the family using 10 letters: HYPERIONXX (NOTE: In filing this form, use this identification consistently for all investment companies in the family including any unit investment trusts. This designation is for purposes of this form only.) SCREEN NUMBER: 10 20. Brokerage commissions paid on portfolio transactions of Registrant: List the 10 brokers which received the largest amount of brokerage commissions (excluding dealer concessions in underwritings) by virtue of direct or indirect participation in Registrant's portfolio transactions, set forth in order of size of gross commissions during the current reporting period: (FOR SERIES COMPANIES, ITEMS 20 & 21 MUST BE ANSWERED IN TOTAL FOR ALL SERIES) Commissions Name of Broker IRS Number Received (000's omitted) 0 0 0 0 0 0 0 0 0 0 21. Aggregate brokerage commissions paid by Registrant during current reporting period (000's omitted): 0 SCREEN NUMBER: 11 22. Registrant's portfolio transactions with entities acting as principals: List the 10 entities acting as principals with whom Registrant did the largest amount of portfolio transactions (include all short-term obligations, and U.S. Gov't. & tax-free securities) in both the secondary market & in underwritten offerings set forth in order of size based upon total value of principal transactions during the current reporting period: (FOR SERIES COMPANIES, ITEMS 22 AND 23 MUST BE ANSWERED IN TOTAL FOR ALL SERIES) Registrant Sales by Name of Entity IRS Number Purchases Registrant (000's omitted) MORGAN STANLEY AND CO., INC. 13-2655998 339090 0 STATE STREET BANK & TRUST COMPANY 04-1867445 283138 0 LEHMAN BROTHERS, INC. 13-2518466 153669 126404 PAINEWEBBER, INC. 13-2638166 66822 52772 BEAR STEARNS & CO. 13-3299429 9999 77126 MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 13-5674085 81700 0 NATIONSBANK 75-0520130 43226 27329 SALOMON SMITH BARNEY INC. 22-1660266 46775 23305 DONALDSON LUFKIN & JENRETTE SECURITIES CORP. 13-2741729 30225 27815 GOLDMAN SACHS & CO. 13-5108880 33473 17158 23. Aggregate principal purchase/sale transactions of Registrant during current reporting period. C. Total Purchases: 1089698 D. Total Sales: 356859 (000's omitted) SCREEN NUMBER: 12 This page being filed for series 0. 24. At the end of the current period, did the Registrant/Series hold any securities of the Registrant's/Series' regular brokers or dealers or of the parents of such brokers or dealers that derive more than 15% of gross revenue from securities-related activities? (Y or N): N NOTE: If answer is 'N' (No), please go on to screen 15. SCREEN NUMBER: 13 This page being filed for series 0. 25. List below the information requested about Registrant's/Series' holdings of the securities of the Registrant's/Series' regular brokers or dealers or of their parents that derive more than 15% of gross revenues from securities-related activities: Type of Value of any Name of Regular Broker or IRS Security Securities Dealer or Parent (Issuer) Number Owned Owned at end D=debt of current E=equity period (000's omitted) 0 0 0 0 0 0 0 0 Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 14 26. Considerations which affected the participation of brokers or dealers or other entities in commissions or other compensation paid on portfolio transactions of Registrant: [ FOR SERIES COMPANIES THIS ITEM IS TO BE ANSWERED IN TOTAL FOR ALL SERIES ] Answer each of the following with 'Y' or 'N'. A) Sales of Registrant's/Series' shares -------------------------------- N B) Receipt of investment research and statistical information ---------- Y C) Receipt of quotations for portfolio valuations ---------------------- Y D) Ability to execute portfolio transactions to obtain best price and execution --------------------------------- Y E) Receipt of telephone line and wire services ------------------------- Y F) Broker or dealer which is an affiliated person ---------------------- N G) Arrangement to return or credit part or all of commissions or profits thereon: (i) To investment adviser, principal underwriter, or an affiliated person of either ---------------------------- N (ii) To Registrant ------------------------------------------------ N H) Other --------------------------------------------------------------- N SCREEN NUMBER: 15 SALES AND REPURCHASES 27. Is Registrant an open-end investment company? (Y or N): N NOTE: If answer is 'N' (No), please delete any answers you may have entered for questions 28 through 44. If you have done this already or not yet responded to question 28 through 44, please jump to Screen Number 23. SCREEN NUMBER: 16 This page being 28. Monthly Sales and Repurchases of filed for series 0. Registrant's/Series' Shares: Total NAV Total NAV Total NAV of Shares of Shares Total NAV of Shares Sold: New Sold: Reinv. of Shares Redeemed and Month of Sales (Incl. of Dividends Sold: Repurchased Current Period Exchanges) & Distributions Other (Incl. Exchanges) (000's omitted) (000's omitted) A) First month of period $ 0 $ 0 $ 0 $ 0 B) Second month of period $ 0 $ 0 $ 0 $ 0 C) Third month of period $ 0 $ 0 $ 0 $ 0 D) Fourth month of period $ 0 $ 0 $ 0 $ 0 E) Fifth month of period $ 0 $ 0 $ 0 $ 0 F) Sixth month of period $ 0 $ 0 $ 0 $ 0 G) Total $ 0 $ 0 $ 0 $ 0 H) Total NAV of Registrant's/Series' share sales during the period subject to a sales load (000's omitted) $ 0 (Note: 28H is the total of six months and must be less than or equal to 28G1 + 28G2 + 28G3) SCREEN NUMBER: 17 This page being filed for series 0. 29. Was a front-end sales load deducted from any share sales during the reporting period? (Y or N) ------------------------- NOTE: If answer is 'N' (No), please jump to Screen Number 20. 30.A) Total front-end sales loads collected from sales (including exchanges) by principal underwriter or by any underwriter which is an affiliated person of the principal underwriter, of Registrant's/Series' shares during the current period (000's omitted) ------------------------------ $ 0 B) What is the maximum sales load rate in effect at the end of the period as a percentage of the offering price? ----------- 0.00% C) What is the minimum sales load rate in effect at the end of the period as a percentage of the offering price? ----------- 0.00% SCREEN NUMBER: 18 This page being filed for series 0. 31.A) Net amount retained by Registrant's/Series' principal underwriter or by any underwriter or dealer which is an affiliated person of the principal underwriter thereof from front-end sales loads collected from sales of Registrant's/Series' shares during the current period ($000's omitted). ------------------------------------ $ 0 31.B) Amount by which payout by Registrant's/Series' principal underwriter or by any underwriter which is an affiliated person of the principal underwriter thereof to persons or entities selling Registrant's/Series' shares exceeded that reported in Item 30 ($000's omitted). -- $ 0 32.Amount Registrant's/Series' principal underwriter and any underwriters or dealers which are affiliated persons of the principal underwriter paid to dealers which are not affiliated persons of the principal underwriter for selling Registrant's/Series' shares that were sold with a front-end sales load during current period ($000's omitted). --- $ 0 33.Amount paid to a captive retail sales force of Registrant's/Series' principal underwriter or of any underwriter or dealer which is an affiliated person of the principal underwriter for selling Registrant's shares that were sold with a front-end sales load during current period ($000's omitted). ------------------------------------ $ 0 SCREEN NUMBER: 19 This page being filed for series 0. 34. Did Registrant/Series impose a deferred or contingent deferred sales load during the reporting period? (Y or N) ------ NOTE: If answer is 'N' (No), skip the remaining questions on this screen and proceed to Screen Number 21. 35. Total deferred or contingent deferred sales loads collected during current period from redemptions and repurchases of Registrant's/Series' shares ($000's omitted) ------------------ $ 0 36.A) Did Registrant/Series retain all monies collected from the deferred or contingent deferred sales loads during the reporting period? (Y or N) ----------------------------------- B) If the answer to sub-item 36A is 'N' (No), state the net amount Registrant/Series retained from deferred or contingent deferred sales loads ($000's omitted) ------------ $ 0 SCREEN NUMBER: 20 This page being filed for series 0. 37. Did Registrant/Series impose a redemption fee other than a deferred or contingent sales load during the reporting period? (Y or N) --- NOTE: If answer is 'N' (No), go to item 39. 38. Total amount of redemption fees other than deferred or contingent deferred sales loads collected from redemptions and repurchases of Registrant's/Series' shares during the current period. ($000's omitted) ------------------------------------------------- $ 0 39. Were any account maintenance fees or other administrative fees imposed directly on shareholders during the current period? (Y or N) ----- 40. During the period, did the Registrant/Series have a plan of distribution adopted pursuant to rule 12b-1? (Y or N) ------------ NOTE: If answer is 'N' (No), jump to Screen 23 for your next screen. 41. During the period, did Registrant/Series use its assets directly to make payments under the 12b-1 plan? (Y or N) ------------------ NOTE: If answer is 'N' (No), go to next screen (Screen 22) and begin answering at question 44. SCREEN NUMBER: 21 This page being 42. For the current period, indicate the filed for series 0. percentage of total dollars paid directly by Registrant/Series under the 12b-1 plan for each of the following: (Round to the nearest whole percent) A) Advertising ------------------------------------------------- 0% B) Printing and mailing of prospectuses to other than current shareholders ---------------------------------------- 0% C) Payments to underwriters ------------------------------------ 0% D) Payments to brokers or dealers ------------------------------ 0% E) Direct payments to sales personnel -------------------------- 0% F) Payments to banks and savings and loans --------------------- 0% G) Other uses, incl. payments to investment adviser separate from the advisory fee ------------------------------ 0% H) Unallocated payments made for a combination of such services 0% 43. Total amount paid directly by Registrant/Series pursuant to its 12b-1 plan ($000's omitted) ---------------------------- $ 0 44. If an investment adviser or other affiliated person of Registrant/Series made unreimbursed payments pursuant to Registrant's/Series' 12b-1 plan, state the total amount of such payments. ($000's omitted) ----- $ 0 SCREEN NUMBER: 22 Contracts This page being filed for series 0. 45. Did Registrant/Series have an advisory contract during the period? (If 'N' (No), jump to screen 26 for your next screen.) --------------- Y 46. Did Registrant/Series pay more than one investment adviser directly for investment advice during the period? (If 'Y' (Yes), answer items 47-52 in the aggregate for all such investment advisers.) ------------ N 47. Was Registrant's/Series' advisory fee based solely on a percentage of its assets? (Y or N) ------------------------------------------------- Y 48. If answer to 47 is 'Y' (Yes), fill in the table or the single fee rate applied to Registrant's/Series' assets based on the advisory contract. SINGLE FEE RATE ------- 0.500% STEP: ASSET VALUE ($000's omitted) ANNUAL FEE RATE A) first - $ 0 0.000% B) of next - $ 0 0.000% C) of next - $ 0 0.000% D) of next - $ 0 0.000% E) of next - $ 0 0.000% F) of next - $ 0 0.000% G) of next - $ 0 0.000% H) of next - $ 0 0.000% I) of next - $ 0 0.000% J) of next - $ 0 0.000% K) over - $ 0 0.000% SCREEN NUMBER: 23 This page being ADVISORY FEE filed for series 0. (Y or N) 49. Was Registrant's/Series' advisory fee during the period based solely on a percentage of its income? -------------------------- N 50. Was Registrant's/Series' advisory fee during the period based on some combined percentage of its income & assets? ------------ N 51. Was Registrant's/Series' advisory fee during the period based in whole or in part on its investment performance? ------------- N 52. Was Registrant's/Series' advisory fee during the period based in whole or in part upon the assets, income or performance of other registrants? --------------------------------------------- N 53.A) Were the expenses of the Registrant/Series limited or reduced at any time during the period by some agreement or understanding other than by blue sky laws? ------------------- N [ If 53A is 'Y' (Yes), was limitation that applied during current period based upon: ] B) Assets? C) Income? (Y or N) SCREEN NUMBER: 24 This page being filed for series 0. 54. Indicate below whether services were supplied or paid for wholly or in substantial part by investment adviser(s) or administrator(s) in connection with the advisory or administrative contract(s) but for which the adviser(s) or administrator(s) are not reimbursed by the Registrant: (Y or N) A) Occupancy and office rental ------------------------------------------ Y B) Clerical and bookkeeping services ------------------------------------ Y C) Accounting services -------------------------------------------------- Y D) Services of independent auditors ------------------------------------- N E) Services of outside counsel ------------------------------------------ N F) Registration and filing fees ----------------------------------------- N G) Stationery, supplies and printing ------------------------------------ N H) Salaries & compensation of Registrant's interested directors --------- Y I) Salaries & compensation of Registrant's disinterested directors ------ N J) Salaries & compensation of Registrant's officers who are not directors Y K) Reports to current shareholders -------------------------------------- N L) Determination of offering and redemption prices ---------------------- N M) Trading department --------------------------------------------------- Y N) Prospectus preparation and printing for current shareholders --------- N O) Other ---------------------------------------------------------------- N SCREEN NUMBER: 25 This page being filed for series 0. MISCELLANEOUS INFORMATION 55. Did Registrant/Series have any of the following outstanding at any time during the current period (Y or N) which exceeded 1% of aggregate net assets? A) Overdrafts -------------------------------------------------- N B) Bank Loans -------------------------------------------------- N 56. During the period did the Registrant's/Series' investment adviser(s) have advisory clients other than investment companies? --------- Y 57. Did the Registrant/Series adjust the number of its shares outstanding by means of a stock split or stock dividend? ------- N SCREEN NUMBER: 26 This page being CLASSIFICATION filed for series 0. (Y or N) 58.A) Is Registrant/Series a separate account of an insurance company? N If answer is 'Y' (Yes), are any of the following types of contracts funded by the Registrant: B) Variable annuity contracts? --------------------------------- C) Scheduled premium variable life contracts? ------------------ D) Flexible premium variable life contracts? ------------------- E) Other types of insurance products registered under the Securities Act of 1933? --------------------------------- 59. Is Registrant/Series a management investment company? ------------ Y 60.A) Was Registrant/Series a diversified investment company at any time during the reporting period? ------------------------------ Y B) Is Registrant/Series a diversified investment company as of the end of the reporting period? ----------------------------------- Y 61. What is the lowest minimum initial investment required by Registrant/Series from an investor that is not an employee or otherwise affiliated with the Registrant/Series, its adviser, principal underwriter or other affiliated entity? $ 0 SCREEN NUMBER: 27 62.A) Does the Registrant/Series invest primarily in This page being debt securities, including convertible debt filed for series 0. securities, options & futures on debt securities or indices of debt securities? (Y or N) ----------- Y NOTE: If answer is 'N' (No), jump to Screen Number 30. If answer is 'Y' (Yes), state the percentage of net assets in each type at the end of the current period: SHORT-TERM MATURITIES B) U.S. Treasury 0.0% C) U.S. Government Agency 0.0% D) Repurchase agreements 1.4% F) Bank Certificates of E) State and Municipal tax-free 0.0% deposit-Domestic 0.0% G) Bank Certificates of deposit-Foreign 0.0% H) Bankers acceptances 0.0% I) Commercial paper taxable 0.0% J) Time deposits 0.0% K) Options 0.0% L) All other 0.0% INTERMEDIATE & LONG-TERM MATURITIES M) U.S. Treasury 0.0% N) U.S. Government Agency 72.6% O) State and Municipal tax-free 13.2% P) Corporate 0.0% Q) All other 61.6% R) Investments other than debt securities 0.0% SCREEN NUMBER: 28 This page being filed for series 0. 63. State the dollar weighted average portfolio maturity at the end of the period covered by this report in days or, if longer than 1 yr., in years to one decimal place: A: 0 days B: 3.0 years 64.A) Is the timely payment of principal and interest on any of the instruments listed in item 62 insured or guaranteed by an entity other than the issuer? (Y or N) ----------------------------------- Y B) Is the issuer of any instrument covered in item 62 delinquent or in default as to payment of principal or interest at the end of the current period? (Y or N) -------------------------------------- N [If answer is 'N' (No), jump to screen 30 for your next screen.] 65. In computations of NAV per share, is any part of the value attributed to instruments identified in sub-item 64B derived from insurance or guarantees? (Y or N) ------------------------------ SCREEN NUMBER: 29 66.A) Is the Registrant/Series a fund that This page being usually invests in equity securities, filed for series 0. options & futures on equity securities, indices of equity securities or securities convertible into equity securities? ----------------------------- N If answer is 'N', go to item 67. Otherwise place a 'Y' on the line below which best describes its primary investment objective (place an 'N' on other lines). B) Aggressive capital appreciation --------------------------- C) Capital appreciation -------------------------------------- D) Growth ---------------------------------------------------- E) Growth and income ----------------------------------------- F) Income ---------------------------------------------------- G) Total return ---------------------------------------------- 67. Is the Registrant/Series a balanced fund? (Y or N) ---------------- N 68. Does the Registrant/Series have more than 50% of its net assets at the end of the current period invested in: A) The securities of issuers engaged primarily in the pro- duction or distribution of precious metals? (Y or N) ------ N B) The securities of issuers located primarily in countries other than the United States? (Y or N) -------------------- N 69. Is the Registrant/Series an index fund? (Y or N) ------------------ N SCREEN NUMBER: 30 This page being INVESTMENT PRACTICES filed for series 0. 70. Activity Permitted by invest- Engaged in ment policies? this period? (Y or N) (Y or N) A) Writing or investing in repurchase agreements Y Y B) Writing or investing in options on equities N N C) Writing or investing in options on debt securities Y N D) Writing or investing in options on stock indices N N E) Writing or investing in interest rate futures Y N F) Writing or investing in stock index futures N N G) Writing or investing in options on futures Y N H) Writing or investing in options on stock index futures N N I) Writing or investing in other commodity futures N N J) Investments in restricted securities Y Y K) Investments in shares of other investment companies N N L) Investments in securities of foreign issuers Y N M) Currency exchange transactions N N N) Loaning portfolio securities Y N O) Borrowing of money Y Y P) Purchases/sales by certain exempted affiliated persons Y N Q) Margin purchases N N R) Short selling Y N SCREEN NUMBER: 31 This page being 71. Portfolio turnover rate for the current filed for series 0. reporting period A) Purchases ($000's omitted) ---------------------------------- $ 367450 B) Sales [including all maturities] ($000's omitted) ----------- $ 356859 C) Monthly average value of portfolio ($000's omitted) --------- $ 404327 D) Percent turnover (use lesser of 71A) or 71B) divided by 71C)) 88% NOTE: Item 71D) should be a whole number; round if necessary. FINANCIAL INFORMATION 72.A) How many months do the answers to 72 and 73 cover? ----------- 12 months INCOME (000's omitted) B) Net interest income ----------------------------------------- $ 24676 C) Net dividend income ----------------------------------------- $ 0 D) Account maintenance fees ------------------------------------ $ 0 E) Net other income -------------------------------------------- $ 0 EXPENSES F) Advisory fees ----------------------------------------------- $ 1401 G) Administrator(s) fees --------------------------------------- $ 424 (Negative answers are allowed) H) Salaries and other compensation ----------------------------- $ 0 SCREEN NUMBER: 32 This page being FINANCIAL INFORMATION (Cont. from Screen 32) filed for series 0. EXPENSES (Negative answers are allowed) For the period covered by this form ($000's omitted) 72.I) Shareholder servicing agent fees ------------------- $ 24 J) Custodian fees ------------------------------------- $ 83 K) Postage -------------------------------------------- $ 0 L) Printing expenses ---------------------------------- $ 36 M) Directors' fees ------------------------------------ $ 50 N) Registration fees ---------------------------------- $ 32 O) Taxes ---------------------------------------------- $ 0 P) Interest ------------------------------------------- $ 6470 Q) Bookkeeping fees paid to anyone performing this service ---------------------------- $ 0 R) Auditing fees -------------------------------------- $ 29 S) Legal fees ----------------------------------------- $ 14 T) Marketing/distribution payments including payments pursuant to a rule 12b-1 plan ------------- $ 0 U) Amortization of organization expenses -------------- $ 0 V) Shareholder meeting expenses ----------------------- $ 0 W) Other expenses ------------------------------------- $ 182 X) Total expenses ------------------------------------- $ 8745 SCREEN NUMBER: 33 This page being FINANCIAL INFORMATION (Cont. from Screen 33) filed for series 0. EXPENSES (Negative answers are allowed For the period covered by this form on this screen for 72Z only) ($000's omitted) 72.Y) Expense reimbursements ----------------------------- $ 0 Z) Net investment income ------------------------------ $ 15931 AA) Realized capital gains ----------------------------- $ 5714 BB) Realized capital losses ---------------------------- $ 0 CC) 1. Net unrealized appreciation during the period --- $ 0 2. Net unrealized depreciation during the period --- $ 9706 DD) 1. Total income dividend passed during the period ------------------------ $ 14531 2. Dividends for a second class of open-end company shares -----------------------------------$ 0 EE) Total capital gains distributions for which record date passed during the period --------------- $ 0 73. Distributions per share for which record date passed during the period: NOTE: Show in fractions of a cent if so declared. A) 1. Dividends from net investment income ------------ $ 0.4750 2. Dividends for a second class of open-end company shares ---------------------------------- $ 0.0000 B) Distribution of capital gains ---------------------- $ 0.0000 C) Other distributions -------------------------------- $ 0.0000 SCREEN NUMBER: 34 This page being filed for series 0. As of the end of current reporting 74. Condensed balance sheet data: period (000's omitted except for per share amounts) A) Cash ----------------------------------------------- $ 0 B) Repurchase agreements ------------------------------ $ 3810 C) Short-term debt securities other than repurchase agreements ------------------------------ $ 0 D) Long-term debt securities including convertible debt------------------------------------ $ 404684 E) Preferred, convertible preferred, and adjustable rate preferred stock -------------------- $ 0 F) Common stock --------------------------------------- $ 0 G) Options on equities -------------------------------- $ 0 H) Options on all futures ----------------------------- $ 0 I) Other investments ---------------------------------- $ 0 J) Receivables from portfolio instruments sold -------- $ 0 K) Receivables from affiliated persons ---------------- $ 0 L) Other receivables ---------------------------------- $ 1604 M) All other assets ----------------------------------- $ 224 N) Total assets --------------------------------------- $ 410322 SCREEN NUMBER: 35 This page being (Continued from Screen 35) filed for series 0. Condensed balance sheet data: As of the end of current reporting period (000's omitted except for per share amounts and number of accounts) 74.O) Payables for portfolio instruments purchased ----------------- $ 20118 P) Amounts owed to affiliated persons --------------------------- $ 0 Q) Senior long-term debt ---------------------------------------- $ 0 R) Other liabilities: 1. Reverse repurchase agreements --------- $ 115409 2. Short sales --------------------------- $ 0 3. Written options ----------------------- $ 0 4. All other liabilities ----------------- $ 217 S) Senior equity ------------------------------------------------ $ 0 T) Net assets of common shareholders ---------------------------- $ 274578 U) 1. Number of shares outstanding ------------------------------ 30447 2. Number of shares outstanding of a second class of shares of open-end company --------------------------------------- 0 V) 1. Net asset value per share (to nearest cent) --------------- $ 9.02 2. Net asset value per share of a second class of open-end company shares (to nearest cent) -------------------------- $ 0.00 W) Mark-to-market net asset value per share for money market funds only (to 4 decimals) ------------------ $ 0.0000 X) Total number of shareholder accounts ------------------------- 10159 Y) Total value of assets in segregated accounts ----------------- $ 119713 SCREEN NUMBER: 36 This page being filed for series 0. 75. Average net assets during the current reporting period ($000's omitted). Answer only one: A) Daily average (for money market funds) ----------------------- $ 0 B) Monthly average (for all other funds) ----------------------- $ 280269 76. Market price per share at end of period (closed-end funds only) $ 8.38 SCREEN NUMBER: 37 77.A) Is the Registrant filing any of the following attachments with the current filing of Form N-SAR? (ANSWER FOR ALL SERIES AS A GROUP) (Y or N) ------------------------------- Y NOTE: If answer is 'Y' (Yes), mark those items below being filed as an attachment to this Filed as form or incorporated by reference. Attachment B) Accountant's report on internal control ------------------- Y C) Matters submitted to a vote of security holders ----------- D) Policies with respect to security investment -------------- E) Legal proceedings ----------------------------------------- F) Changes in security for debt ------------------------------ G) Defaults and arrears on senior securities ----------------- H) Changes in control of Registrant -------------------------- I) Terms of new or amended securities ------------------------ J) Revaluation of assets or restatement of capital share account ------------------------------------- K) Changes in Registrant's certifying account ---------------- L) Changes in accounting principles and practices ------------ M) Mergers --------------------------------------------------- N) Actions required to be reported pursuant to Rule 2a-7 ----- O) Transactions effected pursuant to Rule 10f-3 -------------- P) Information required to be filed pursuant to exemptive orders --------------------------------------- (Item 77 continued on next screen) SCREEN NUMBER: 38 77. (Continued) Mark those items below being filed as an attachment to this form or incorporated form Filed as or incorporated by reference. Attachment Q1) Exhibits -------------------------------------------------- Y Q2) Any information called for by instructions to sub-item 77Q2 --------------------------------------------- N Q3) Any information called for by instructions to sub-item 77Q3 --------------------------------------------- N 78. Does the Registrant have any wholly-owned investment company subsidiaries whose operating & financial data are consolidated with that of Registrant in this report? (Y or N) N NOTE: If answer is 'N' (No), jump to Screen 41. SCREEN NUMBER: 39 79. List the '811' numbers and names of Registrant's wholly owned investment company subsidiaries consolidated in this report. 811 Number Subsidiary Name 811- 811- 811- 811- 811- 811- 811- 811- 811- 811- Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more. SCREEN NUMBER: 40 ANNUAL SUPPLEMENT This page being filed for series 0. Screens 41 & 42 are to be filed only once each year, at the end of Registrant's/Series' fiscal year. 80. Fidelity bond(s) in effect at the end of the period: A) Insurer name: RELIANCE INSURANCE COMPANY B) Second insurer: C) Aggregate face amount of coverage for Registrant/Series on all bonds on which it is named as an insured (000's omitted): $ 4000 81. A) Is the bond part of a joint fidelity bond(s) shared with other investment companies, or other entities? (Y or N) - Y B) If answer to 81A is 'Y' (Yes), how many other investment companies, or other entities are covered by the bond? (Count each series as a separate investment company.) -------- 3 82. A) Does the mandatory coverage of the fidelity bond have a deductible? (Y or N) ---------------------------------- Y B) If the answer to 82A is 'Y' (Yes), what is the amount of the deductible? ($000's omitted) ------------------ $ 25 SCREEN NUMBER: 41 ANNUAL SUPPLEMENT (Continued) This page being filed for series 0. 83.A) Were any claims with respect to this Registrant/ Series filed under the bond during the period? (Y or N) -------- N B) If the answer to 83 A) is 'Y' (Yes), what was the total amount of such claims? ($000's omitted) ----------------- $ 0 84.A) Were any losses incurred with respect to this Registrant/Series that could have been filed as a claim under the fidelity bond but were not? (Y or N) ----------- N B) If the answer to 84 A) is 'Y' (Yes), what was the total amount of such losses? ($000's omitted) ----------------- $ 0 85.A) Are Registrant's/Series' officers and directors covered as officers and directors of Registrant/Series under any errors and omissions insurance policy owned by the Registrant/Series or anyone else (Y or N) --------- Y B) Were any claims filed under such policy during the period with respect to the Registrant/Series? (Y or N) --------- N SCREEN NUMBER: 42 Closed-End Investment Companies Only 86. Sales, repurchases, and redemptions of Registrant's securities: Number of Shares Net or Principal Consideration Amount of Debt Received or Paid ($000's omitted) ($000's omitted) Common Stock: A) Sales 0 $ 0 B) Repurchases 442 $ 3690 Preferred Stock: C) Sales 0 $ 0 D) Repurchases and Redemptions 0 $ 0 Debt Securities E) Sales $ 0 $ 0 F) Repurchases and Redemptions $ 0 $ 0 SCREEN NUMBER: 43 Closed-End Investment Companies Only 87. Securities of Registrant registered on a national securities exchange or listed on NASDAQ: CUSIP or Ticker Title of each class of securities NASDAQ No. Symbol A) COMMON STOCK 448915108 HTB B) C) 88. Did Registrant have any of the following outstanding which exceeded 1% of aggregate net assets at any time during the period? (Y or N) A) Notes or bonds ------------------------------ N B) Uncovered options --------------------------- N C) Margin loans -------------------------------- N D) Preferred stock ----------------------------- N SCREEN NUMBER: 44 EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000890337 HYPERION 2002 TERM TRUST, INC. 0 HYPERION 2002 TERM TRUST, INC. 1000 12-MOS MAY-31-1999 JUN-01-1998 MAY-31-1999 409911 408494 1604 224 0 410322 20118 0 115626 135744 0 295691 30447 30888 9587 0 (29283) 0 (1417) 274578 0 24676 0 8745 15931 5714 (9706) 11939 0 14531 0 0 0 441 0 (6282) 8128 (34948) 0 0 1401 6470 8745 280269 9.09 0.52 (0.12) (0.47) 0 0 9.02 0.81 [AVG-DEBT-OUTSTANDING] 121344 [AVG-DEBT-PER-SHARE] 3.97
EX-99 3 PROXY HYPERION 2002 TERM TRUST, INC. One Liberty Plaza o New York, New York 10006-1404 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS July 30, 1999 To the Stockholders: The Annual Meeting of Stockholders of Hyperion 2002 Term Trust, Inc. (the "Trust") will be held at The Millenium Hilton, 55 Church Street (next to the World Trade Center), New York, New York 10007, on Tuesday, October 12, 1999, at 9:45 a.m., for the following purposes: 1. To elect directors (Proposal 1). 2. To ratify or reject the selection of PricewaterhouseCoopers LLP as the independent accountants of the Trust for the fiscal year ending May 31, 2000 (Proposal 2). 3. To transact any other business that may properly come before the meeting. The close of business on July 23, 1999 has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the meeting. By Order of the Board of Directors, Patricia A. Sloan Secretary WE NEED YOUR PROXY VOTE IMMEDIATELY. YOU MAY THINK YOUR VOTE IS NOT IMPORTANT, BUT IT IS VITAL. THE MEETING OF STOCKHOLDERS OF THE TRUST WILL BE UNABLE TO CONDUCT ANY BUSINESS IF LESS THAN A MAJORITY OF THE SHARES ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, THE TRUST, AT STOCKHOLDERS' EXPENSE, WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE TRUST 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 eliminate the time and expense to the Trust 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: 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 John B. Doe, Trustee (2) Jane B. Doe, Trustee u/t/d 12/28/78 Jane B. Doe Custodial or Estate Accounts (1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA John B. Smith (2) John B. Smith John B. Smith, Jr., Executor
HYPERION 2002 TERM TRUST, INC. One Liberty Plaza o New York, New York 10006-1404 PROXY STATEMENT This proxy statement is furnished in connection with a solicitation by the Board of Directors of Hyperion 2002 Term Trust, Inc. (the "Trust") of proxies to be used at the Annual Meeting of Stockholders of the Trust to be held at The Millenium Hilton, 55 Church Street (next to the World Trade Center), New York, New York 10007, at 9:45 a.m. on Tuesday, October 12, 1999, and at any adjournment or adjournments thereof for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This proxy statement and the accompanying form of proxy are first being mailed to stockholders on or about July 30, 1999. Stockholders who execute proxies retain the right to revoke them by written notice received by the Secretary of the Trust 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 directors, and FOR the ratification of the selection of PricewaterhouseCoopers LLP as the independent accountants of the Trust for the fiscal year ending May 31, 2000. The close of business on July 23, 1999 has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the meeting. Each stockholder is entitled to one vote for each share held. Abstentions will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum but as unvoted for purposes of determining the approval of any matters submitted to stockholders for a vote. Broker non-votes will not be counted for purposes of determining the presence of a quorum or determining whether a proposal has been approved. On the record date there were 30,446,839 shares outstanding. PROPOSAL 1: ELECTION OF DIRECTORS The Trust's Articles of Incorporation provide that the Trust's Board of Directors 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, 2000, Class II, 2001, and Class III,1999. 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 the Trust by delaying the replacement of a majority of the Board of Directors. The terms of Harry E. Petersen, Jr. and Leo M. Walsh, Jr., members of Class III currently serving on the Board of Directors, expire at this year's Annual Meeting. The persons named in the accompanying form of proxy intend to vote at the Annual Meeting (unless directed not to so vote) for the re-election of Mr. Petersen and Mr. Walsh, and for the election of Mr. Robert F. Birch to serve until the 2002 Annual Meeting of Stockholders or termination of the Trust. On December 8, 1998, the Board elected Mr. Birch as a Class III director to fill a newly created position. Each nominee has indicated that he will serve if elected, but if any nominee should be unable to serve, the proxy or proxies will be voted for any other person or persons, as the case may be, determined by the persons named in the proxy in accordance with their judgment. As described above, there are two nominees for re-election and one nominee for election to the Board of Directors at this time. Proxies cannot be voted for a greater number of persons than the three nominees currently proposed to serve on the Board of Directors. The following table provides information concerning each of the eight members and nominees of the Board of Directors of the Trust: Shares of Common Stock Beneficially Owned Directly or Name and Office Principal Occupation During Past Five Years, Indirectly, on With the Trust Other Directorships and Age Director Since May 31, 1999(**) -------------- --------------------------- -------------- --------------- Class III Nominees to serve until 2002 Annual Meeting of Stockholders: Robert F. Birch Director, Member of the Audit Chairman and President, New America High Income Fund Committee (1992-Present). Chairman of the Board and Co-Founder, The China Business Group, Inc. (1996-President). Formerly, Director and Strategic Planning Consultant, Dewe Rogerson, Ltd. (1994-1998); Chairman and Chief Executive Officer, Memtek Corporation (1990-1991); Associated with Finn Wishengrad Warnke & Gayton, a consulting firm specializing in work-outs of financially distressed companies (1988-1989); President and Chief Executive Officer, Gardner and Preston Moss, Inc. (1969-1987). Age 63 December 1998 - Harry E. Petersen, Jr. Director, Member of the Audit Director and/or Trustee of several investment companies Committee advised by Hyperion Capital Management, Inc. or by its affiliates (1992-Present). Senior Advisor to Cornerstone Equity Advisors, Inc. (1998-Present). Formerly, Senior Advisor to Potomac Babson Inc. (1995-1998); Director of Equitable Real Estate Hyperion Mortgage Opportunity Fund, Inc. and Equitable Real Estate Hyperion High Yield Commercial Mortgage Fund, Inc. (1995-1997); Director of Lexington Corporate Properties, Inc. (1993-1997); Consultant to Advisers Capital Management, Inc. (1992-1995); Consultant on public and private pension funds (1991-1993); President of Lepercq Realty Advisors (1988-1990). Member of Advisory Council of Polytechnic University. Age 74 July 1992 200
Shares of Common Stock Beneficially Owned Directly or Name and Office Principal Occupation During Past Five Years, Indirectly, on With the Trust Other Directorships and Age Director Since May 31, 1999(**) -------------- --------------------------- -------------- ---------------- Leo M. Walsh, Jr. Director, Chairman of the Director and/or Trustee of several investment companies Audit Committee advised by Hyperion Capital Management, Inc. or by its affiliates (1989-Present). Financial Consultant for Merck-Medco Managed Care L.L.C. (formerly Medco Containment Services Inc.) (1994-Present). Formerly, Director of Equitable Real Estate Hyperion Mortgage Opportunity Fund, Inc. and Equitable Real Estate Hyperion High Yield Commercial Mortgage Fund, Inc. (1995-1997); Financial Consultant for Synetic Inc., a manufacturer of porous plastic materials for health care uses (1989-1994); President, WW Acquisition Corp. (1989-1990); Senior Executive Vice President and Chief Operating Officer of The Equitable Life Assurance Society of the United States ("The Equitable") (1986-1988); Director of The Equitable and Chairman of Equitable Investment Corporation, a holding company for The Equitable's investment oriented subsidiaries (1983-1988); Chairman and Chief Executive Officer of EQUICOR-Equitable HCA Corporation (1987-1988). Age 66 July 1992 7,000 Class I Directors to serve until 2000 Annual Meeting of Stockholders: Kenneth C. Weiss* Director Director and/or Trustee of several investment companies advised by Hyperion Capital Management, Inc. or by its affiliate (1992-Present) and former President and Chief Executive Officer of Hyperion Capital Management, Inc. (February 1992-December 1998). Former Chairman of the Board, and/or officer of several investment companies advised by Hyperion Capital Management, Inc. or by its affiliates (February 1992-December 1998). Formerly, Director and President of Lend Lease Hyperion Mortgage Opportunity Fund, Inc. and Lend Lease Hyperion High Yield Commercial Mortgage Fund, Inc. and their Investment Advisor (1995-December 1998); Director of First Boston Asset Management (1988-February 1992); Director of The First Boston Corporation (until 1988). Age 47 July 1992 13,799
Shares of Common Stock Beneficially Owned Directly or Name and Office Principal Occupation During Past Five Years, Indirectly, on With the Trust Other Directorships and Age Director Since May 31, 1999(**) -------------- --------------------------- -------------- -------------- Lewis S. Ranieri* Director Chairman and Chief Executive Officer of Ranieri & Co., Inc. (since 1988); in addition, President of LSR Hyperion Corp., a general partner of the limited partnership that is the general partner of Hyperion Partners L.P. ("Hyperion Partners") (since 1988). Director and Vice Chairman of the Board of Hyperion Capital Management, Inc. (since December 1998); Director and Chairman of the Board of Hyperion Capital Management, Inc. (1989-November 1998); Chairman of the Board (1989-December 1998) and/or Director (since 1989) of several investment companies advised by Hyperion Capital Management, Inc. or by its affiliates; Director of Lend Lease Hyperion Mortgage Opportunity Fund, Inc. (formerly Equitable Real Estate Hyperion Mortgage Opportunity Fund, Inc.) and Lend Lease Hyperion High Yield Commercial Mortgage Fund, Inc. (formerly Equitable Real Estate Hyperion High Yield Commercial Mortgage Fund, Inc.) (since 1995); Director and Chairman of Bank United Corp., and Director of Bank United; Director and President of Hyperion Funding 1993 Corp., the general partner of the limited partnership that is the general partner of Hyperion 1993 Fund L.P.; and also Chairman and President of various other direct and indirect subsidiaries of Hyperion Partners (since 1989). Formerly Vice Chairman of Salomon Brothers Inc (until 1987). Age 52 July 1992 6,250 Patricia A. Sloan* Director, Secretary Managing Director of Ranieri & Co., Inc. (1988-Present). Secretary, Director and/or Trustee of several investment companies advised by Hyperion Capital Management, Inc. or by its affiliates (1989-Present). Director of Bank United Corp., the parent of Bank United (formerly Bank United of Texas FSB) (1988-Present). Formerly Director of the Financial Institutions Group of Salomon Brothers Inc. (1972-1988). Age 55. July 1992 300
Shares of Common Stock Beneficially Owned Directly or Indirectly, on Name and Office Principal Occupation During Past Five Years, May 31, 1999(**) ---------------- with the Trust Other Directorships and Age Director Since Class II Directors to serve until 2001 Annual Meeting of Stockholders: Rodman L. Drake Director, Member of the Audit President, Continuation Investments Group Inc. Committee (1997-Present). Director and/or Trustee of several investment companies advised by Hyperion Capital Management, Inc. (1989-Present). Director, Alliance Group Services, Inc., Parsons Brinckerhoff, Inc. (1995-Present) and Parsons Brinckerhoff Energy Systems, Inc. (1995-Present). Formerly, Co-Chairman of KMR Power Corporation (1993-1997); President, Mandrake Group (1993-1997); Managing Director and Chief Executive Officer of Cresap (1980-1990). Trustee of Excelsior Funds (1994-Present). Age 56 July 1992 317 Andrew M. Carter* Director, Chairman of the Board Chairman and Chief Executive Officer of Hyperion Capital Management, Inc. (November 1998-Present). Vice Chairman of The China Business Group (1996-Present), and presently officer of four charitable boards: The New England Conservatory, The Loomis Chaffee School, The William E. Simon Graduate School of Business Administration at the University of Rochester, and The Big Brother Association of Boston. Director of several investment companies advised by Hyperion Capital Management, Inc. (July 1998-Present). Formerly President and Founding Principal, Andrew M. Carter & Company (1994-1998); Director and Senior Vice President, Jennison Associates Capital Corp. (1975-1993); Founder, Standard & Poor's/Carter, Doyle (1972-1975); Vice President, Head of Fixed Income Group, Wellington Management Co. (1968-1972); and Manager of the Harvard Endowment bond portfolio, Harvard Treasurer's Office (1964-1968). Age 58 July 1998 - * Interested persons as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), because of affiliations with Hyperion Capital Management, Inc., the Trust's Investment Advisor. ** The holdings of no director or nominee represented more than 1% of the outstanding shares of the Trust.
Officers of the Trust. The officers of the Trust are chosen each year at the first meeting of the Board of Directors of the Trust following the Annual Meeting of Stockholders, to hold office at the discretion of the Board of Directors until the meeting of the Board following the next Annual Meeting of Stockholders and until their successors are chosen and qualified. The Board of Directors has elected five officers of the Trust. Except where dates of service are noted, all officers listed below served as such throughout the 1999 fiscal year. The following sets forth information concerning each officer of the Trust who served during all or part of the last fiscal year of the Trust: Name and Principal Occupation Office Age Officer Since Andrew M. Carter Chairman 58 December 1998 See information under "ELECTION OF DIRECTORS." Kenneth C. Weiss Chairman 47 July 1992- December 1998 See information under "ELECTION OF DIRECTORS." Clifford E. Lai President/ 45 June 1997 President (since December 1998) and Chief Investment Officer, Hyperion Capital Senior Vice (April 1993-June 1997) Management, Inc. (March 1993-Present). President of several investment President companies advised by Hyperion Capital Management, Inc. or by its affiliates (1993-Present). Formerly Managing Director and Chief Investment Strategist for Fixed Income, First Boston Asset Management (1989-1993); Vice President, Morgan Stanley & Co. (1987-1989). Patricia A. Botta Vice President 42 March 1997 Director of Hyperion Capital Management, Inc. (1989-Present). Formerly with the Davco Group (1988-1989) and with Salomon Brothers Inc (1986-1988). Patricia A. Sloan Secretary 55 February 1993 See information under "ELECTION OF DIRECTORS." Thomas F. Doodian Treasurer 40 February 1998 Chief Operating Officer (since December 1998) and Director of Finance and Operations, Hyperion Capital Management, Inc. (July 1995-November 1998). Treasurer of several investment companies advised by Hyperion Capital Management, Inc. (February 1998-Present). Formerly, Vice President in Mortgage Backed Trading at Mabon Securities Corporation (1994-1995); fixed income analyst, trader, and Vice President and Controller at Credit Suisse First Boston (1984-1994).
Security Ownership of Certain Beneficial Owners at May 31, 1999 - ------------------- ------------------------------------------------ ----------------------------- ---------------- ----------- Title of Name and Address of Amount and Nature of Percent Of Class Beneficial Owner Beneficial Ownership Class Source - ------------------- ------------------------------------------------ ----------------------------- ---------------- ----------- Tattersall Advisory Group, Inc. 10,271,500 shares 33.74% 13G Common 6802 Paragon Place, Suite 200 Stock Richmond, Virginia 23230-1655 Karpus Management, Inc. 2,589,010 shares 8.50% 13D Common 17 Tobey Village Office Park Stock Pittsford, New York, 14534 - ------------------- ------------------------------------------------ ----------------------------- ---------------- -----------
At May 31, 1999, directors and officers of the Trust as a group owned beneficially less than 1% of the outstanding shares of the Trust. No person, other than those listed above, to the knowledge of management, owned beneficially more than 5% of the Trust's outstanding shares at that date. The business address of the Trust, its officers and directors is One Liberty Plaza, New York, New York 10006-1404. Interested Persons. Mr. Ranieri serves as a Director and Vice Chairman of the Board of the Advisor. Mr. Carter serves as the Chairman and Chief Executive Officer of the Advisor. Mr. Weiss formerly served as a Director, President and Chief Executive Officer of the Advisor. Ms. Sloan is a special limited partner of Hyperion Ventures, the sole general partner of Hyperion Partners L.P., of which the Advisor is a wholly-owned subsidiary. As a result of their service with the Advisor and certain affiliations with the Advisor as described below, the Trust considers Messrs. Ranieri, Carter, Weiss and Ms. Sloan to be "interested persons" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act. Committees and Board of Directors' Meetings. The Trust has a standing Audit Committee presently consisting of Messrs. Walsh, Drake, Petersen, and Birch, all of whom are members of the Board of Directors and are currently non-interested persons of the Trust. The principal functions of the Trust's Audit Committee are to recommend to the Board the appointment of the Trust's accountants, to review with the accountants the scope and anticipated costs of their audit and to receive and consider a report from the accountants concerning their conduct of the audit, including any comments or recommendations they might want to make in that connection. During the last fiscal year of the Trust, the full Board of Directors met five times, and the Audit Committee met one time. All of the members of the Audit Committee attended the Audit Committee meeting and all of the directors attended at least 75% of the aggregate of the Board meetings and the Audit Committee meeting. The Trust has no nominating, compensation or similar committees. Compensation of Directors and Executive Officers. No remuneration was paid by the Trust to persons who were directors, officers or employees of Hyperion Capital Management, Inc. or any affiliate thereof for their services as directors or officers of the Trust. Each director of the Trust, other than those who are officers or employees of Hyperion Capital Management, Inc. or any affiliate thereof, is entitled to receive a fee of $7,500 per year plus $1,000 for each Board of Directors' meeting attended. Members of the Audit Committee receive $750 for each Audit Committee meeting attended, other than meetings held on days when there is also a Board of Directors' meeting. Directors' Compensation Table For The Twelve Month Period Ended 5/31/99 Directors' Total Directors' Compensation Compensation from the Trust and the Fund from the Trust Complex Robert F. Birch.......................................................... $ 5,750 $23,000 Rodman L. Drake...................................................... $11,500 $46,000 . $ Garth Marston*......................................................7,188 $28,750 Harry E. Petersen, Jr................................................ $11,500 $46,000 Leo M. Walsh, Jr. ................................................... $11,500 $46,000 ------- ------- $47,438 $189,750 ======= ========
*Mr. Marston resigned as Director of the Trust on June 10, 1998, and currently serves as a Director Emeritus. Pursuant to the Director Emeritus Plan adopted by the Board of Directors, a Director Emeritus receives compensation from the Trust at a rate equal to one-half of the compensation paid to directors. Required Vote Election of the listed nominees for director requires the affirmative vote of the holders of a majority of the shares of Common Stock of the Trust present or represented by proxy at the Annual Meeting. PROPOSAL 2: RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS The Board of Directors of the Trust will consider, and it is expected that they will recommend, the selection of PricewaterhouseCoopers LLP as independent accountants of the Trust for the fiscal year ending May 31, 2000 at a meeting scheduled to be held on September 21, 1999. The appointment of accountants is approved annually by the Audit Committee of the Board of Directors and is subsequently submitted to the stockholders for ratification or rejection. The Trust has been advised by PricewaterhouseCoopers LLP that at May 31, 1999 neither that firm nor any of its partners had any direct or material indirect financial interest in the Trust. A representative of PricewaterhouseCoopers LLP will be at the meeting to answer questions concerning the Trust's financial statements and will have an opportunity to make a statement if he or she chooses to do so. Required Vote Ratification of the selection of PricewaterhouseCoopers LLP as independent accountants of the Trust requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Trust present or represented by proxy at the Annual Meeting. ADDITIONAL INFORMATION Investment Advisor The Trust has engaged Hyperion Capital Management, Inc. (the "Advisor") to provide professional investment management for the Trust pursuant to an Advisory Agreement dated September 29, 1993. The Advisor is a Delaware corporation which was organized in February 1989. The Advisor is 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 One Liberty Plaza, New York, New York 10006-1404. The Trust has also engaged Hyperion Capital Management, Inc. as the Trust's administrator. The administrator's address is the same as that of the Advisor. The Advisor is a subsidiary of Hyperion Partners L.P., a Delaware limited partnership ("Hyperion Partners"). The sole general partner of Hyperion Partners is Hyperion Ventures L.P., a Delaware limited partnership ("Hyperion Ventures"). Corporations owned principally by Lewis S. Ranieri, Salvatore A. Ranieri and Scott A. Shay are the general partners of Hyperion Ventures. Lewis S. Ranieri, a former Vice Chairman of Salomon Brothers Inc ("Salomon Brothers"), is a Vice Chairman of the Board of the Advisor and director of the Trust. Messrs. Salvatore Ranieri and Shay are directors of the Advisor, but have no other positions with either the Advisor or the Trust. Messrs. Salvatore Ranieri and Shay are principally engaged in the management of the affairs of Hyperion Ventures and its affiliated entities. Mr. Carter is the Chairman and Chief Executive Officer of the Advisor and Chairman of the Trust. Since January 1, 1990, Patricia A. Sloan, Secretary of the Trust, has been a special limited partner of Hyperion Ventures and, since July 1993, she has been a limited partner of Hyperion Partners. Mr. Lai, the President of the Trust and the Advisor, may be entitled, in addition to receiving a salary from the Advisor, to receive a bonus based upon a portion of the Advisor's profits, including any profit from a sale of the Advisor. Ms. Botta, Vice President of the Trust, and Mr. Doodian, Treasurer of the Trust, are also employees of the Advisor. The business address of Hyperion Partners and Hyperion Ventures is 50 Charles Lindbergh Boulevard, Suite 500, Uniondale, New York 11553. The Advisor provides advisory services to several other registered investment companies and one offshore fund, all of which invest primarily in mortgage-backed securities. Its management includes several individuals with extensive experience in creating, evaluating and investing in Mortgage-Backed Securities, Derivative Mortgage-Backed Securities and Asset-Backed Securities, and in using hedging techniques. Lewis S. Ranieri, Vice Chairman of the Advisor and Director of the Trust, was instrumental in the development of the secondary mortgage-backed securities market and the creation and development of secondary markets for conventional mortgage loans, CMOs and other mortgage-related securities. While at Salomon Brothers, Mr. Ranieri directed that firm's activities in the mortgage, real estate and government guaranteed areas. Clifford E. Lai, President and Chief Investment Officer of the Advisor and President of the Trust, was formerly Managing Director and Chief Investment Strategist for Fixed Income for First Boston Asset Management Corporation. Investment Advisory Agreement On September 22, 1998, the Board of Directors of the Trust, including those persons identified as interested persons and a majority of the directors who are not parties to the Advisory Agreement or interested persons (as such term is defined in the 1940 Act) of any such party (the "Disinterested Directors"), approved extension of the Advisory Agreement through September 30, 1999. At the time of the Board's approval of the latest extension of the Advisory Agreement, Messrs. Lewis Ranieri, Weiss and Ms. Sloan were interested persons of the Trust. The Advisory Agreement was last submitted to a vote of the Stockholders of the Trust at the Annual Meeting of the Stockholders of the Trust held on September 29, 1993. At that meeting, the Stockholders approved the continuance of the revised Advisory Agreement. The Advisory Agreement provides that it will continue from year to year, but only so long as such continuation is specifically approved at least annually by both (1) the vote of a majority of the Board of Directors or the vote of a majority of the outstanding voting securities of the Trust (as provided in the 1940 Act) and (2) by the vote of a majority of the Disinterested Directors cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement may be terminated at any time without the payment of any penalty, upon the vote of a majority of the Board of Directors or a majority of the outstanding voting securities of the Trust or by the Advisor, on 60 days' written notice by either party to the other. The Agreement will terminate automatically in the event of its assignment (as such term is defined in the 1940 Act and the rules thereunder). The Board of Directors will consider continuance of the Advisory Agreement until October 1, 2000 at a meeting scheduled for September 21, 1999. Pursuant to the Advisory Agreement, the Trust has retained the Advisor to manage the investment of the Trust's assets and to provide such investment research, advice and supervision, in conformity with the Trust's investment objective and policies, as may be necessary for the operations of the Trust. The Advisory Agreement provides, among other things, that the Advisor will bear all expenses of its employees and overhead incurred in connection with its duties under the Advisory Agreement, and will pay all salaries of the Trust's directors and officers who are affiliated persons (as such term is defined in the 1940 Act) of the Advisor. The Advisory Agreement provides that the Trust shall pay to the Advisor a monthly fee for its services which is equal to .50% per annum of the Trust's average weekly net assets, which, for purposes of determining the Advisor's fee, shall be the average weekly value of the total assets of the Trust, minus the sum of accrued liabilities (including accrued expenses) of the Trust and any declared but unpaid dividends on the Common Shares and any Preferred Shares (if such shares are issued in the future) and any accumulated dividends on any Preferred Shares (but without deducting the aggregate liquidation value of any Preferred Shares). Investment advisory fees paid by the Trust to the Advisor during the last fiscal year of the Trust amounted to $1,401,344. Administration Agreement The Trust has entered into an Administration Agreement with Hyperion Capital Management, Inc. (the "Administrator"). The Administrator performs administrative services necessary for the operation of the Trust, including maintaining certain books and records of the Trust, and preparing reports and other documents required by federal, state, and other applicable laws and regulations, and provides the Trust with administrative office facilities. For these services, the Trust pays a monthly fee at an annual rate of 0.17% of the first $100 million of the Trust's average weekly net assets, 0.145% of the next $150 million and 0.12% of any amounts above $250 million. The Advisor, in its capacity as Administrator, has entered into a Sub-Administration Agreement with Investors Capital Services, Inc., pursuant to which the Advisor delegates certain of its administrative responsibilities. For these services, the Advisor pays out of its own assets the fee to be paid to the Sub-Administrator, computed at the average rate of 0.075% per annum of the first $650 million of the Trust's average weekly net assets and 0.005% of any amounts above $650 million. For the twelve month period ended May 31, 1999, the Administrator earned $423,822 in Administration fees. In addition, the Administrator has entered into Administration Agreements with the other investment companies listed below, generally under the same fee structure as noted above. The only exception is the fee structure for services rendered to The Hyperion Total Return Fund, Inc., which stipulates a fee paid monthly at an annual rate of 0.20% of its average weekly assets. Investment Companies Managed by Hyperion Capital Management, Inc. In addition to acting as advisor to the Trust, Hyperion Capital Management, Inc. acts as investment advisor to the following other investment companies at the indicated annual compensation. Investment Advisory Fee Approximate Net Assets at May 31,1999 (In Millions) The Hyperion Total Return Fund, Inc.* 0.65% of the Fund's average weekly net assets $224.7 Hyperion 1999 Term Trust, Inc. 0.50% of the Trust's average weekly net assets $448.7 Hyperion 2005 Investment Grade Opportunity Term T0.65% of the Trust's average weekly Inc. net assets $161.3
*The Advisor and The Hyperion Total Return Fund, Inc. (the "Fund") have entered into a sub-advisory agreement with Pacholder Associates, Inc., an Ohio corporation organized in 1983, to serve as an investment advisor with respect to a portion of this Fund's assets. Brokerage Commissions Because it buys its portfolio securities in dealer markets, the Trust did not pay any brokerage commissions on its securities purchases during its last fiscal year. 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 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 Trust. It is expected that securities will ordinarily be purchased in primary markets, and that in assessing the best net price and execution available to the Trust, the Advisor will consider all factors they deem relevant, including the price, dealer spread, the size, type and difficulty of the transaction involved, the firm's general execution and operation facilities and the firm's 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. In selecting brokers or dealers to execute particular transactions and in evaluating the best net price and execution available, the Advisor is authorized to consider "brokerage and research services" (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934). The Advisor is also authorized to cause the Trust to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction. The Advisor must determine in good faith, however, that such commission was reasonable in relation to the value of the brokerage and research services provided, viewed in terms of that particular transaction or in terms of all the accounts over which the Advisor exercises investment discretion. Research services furnished by brokers through whom the Trust effects securities transactions may be used by the Advisor in servicing all of the accounts for which investment discretion is exercised by the Advisor, and not all such services may be used by the Advisor in connection with the Trust. Compliance With Section 16 Reporting Requirements Section 16(a) of the Securities Exchange Act of 1934 requires the Trust's officers and directors and persons who own more than ten percent of a registered class of the Trust's 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 shareholders are required by SEC regulations to furnish the Trust with copies of all Section 16(a) forms they file. Based solely on its review of the copies of such forms received by the Trust and written representations from certain reporting persons that all applicable filing requirements for such persons had been complied with, the Trust believes that, during the fiscal year ended May 31, 1999, all filing requirements applicable to the Trust's officers, directors, and greater than ten-percent beneficial owners were complied with. OTHER BUSINESS The Board of Directors of the Trust 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 All proposals by stockholders of the Trust that are intended to be presented at the Trust's next Annual Meeting of Stockholders to be held in 2000 must be received by the Trust for inclusion in the Trust's proxy statement and proxy relating to that meeting no later than April 28, 2000. EXPENSES OF PROXY SOLICITATION The cost of preparing, assembling and mailing material in connection with this solicitation of proxies will be borne by the Trust. In addition to the use of the mails, proxies may be solicited personally by regular employees of the Trust, Hyperion Capital Management, Inc., or Corporate Investor Communications, Inc., paid solicitors for the Trust, or by telephone or telegraph. The anticipated cost of solicitation by the paid solicitors will be nominal. The Trust's agreement with Corporate Investor Communications, Inc. provides that such paid solicitors will perform a broker search and deliver proxies in return for the payment of their fee plus the expenses associated with this proxy solicitation. 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 Trust for out-of-pocket expenses incurred in this connection. July 30, 1999 HYPERION 2002 TERM TRUST, INC. PROXY SOLICITED ON BEHALF OF THE DIRECTORS The undersigned hereby appoints Andrew M. Carter and Clifford E. Lai, and 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 Hyperion 2002 Term Trust, Inc. (the "Trust") which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Trust to be held at The Millenium Hilton, 55 Church Street (next to the World Trade Center), New York, New York 10007, on Tuesday, October 12, 1999 at 9:45 a.m., and at any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of 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 and may exercise all of the power of authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. NOTE: Please sign exactly as your name appears on the Proxy. If joint owners, EITHER may sign this Proxy. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, please give full title. Date , 1999 Signature(s), (Title(s), if applicable) PLEASE SIGN, DATE, AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE I PLAN/DO NOT PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS ON OCTOBER 12, 1999 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 stockholder. If no direction is made, this Proxy will be voted FOR election of the nominees as Directors in Proposal 1 and FOR Proposal 2. Please refer to the Proxy Statement for a discussion of the Proposals. 1. ELECTION OF DIRECTORS: FOR all nominees listed (except WITHHOLD authority to vote for all as marked to the contrary below) nominees Class III: Harry E. Petersen, Jr. Leo M. Walsh, Jr. Robert F. Birch (Instruction: To withhold authority to vote for any individual nominee(s), write the name(s) of the nominee(s) on the line below.) 2. Ratification or rejection of the selection of independent accountants (a vote "FOR" is a vote for ratification) FOR AGAINST ABSTAIN PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. EX-99 4 REPORT OF INDEPENDENT ACCOUNTANTS Report of Independent Accountants To the Shareholders and Board of Directors of Hyperion 2002 Term Trust, Inc. In planning and performing our audit of the financial statements of Hyperion 2002 Term Trust, Inc. (the "Trust") for the year ended May 31, 1999, we considered its internal control, including controls for safeguarding securities, in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, not to provide assurance on internal control. The management of the Trust is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. Generally, controls that are relevant to an audit pertain to the entity's objective of preparing financial statements for external purposes that are fairly presented in conformity with generally accepted accounting principles. Those controls include the safeguarding of assets against unauthorized acquisition, use or disposition. Because of inherent limitations in internal control, errors or fraud may occur and not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that it may become inadequate because of changes in conditions or that the effectiveness of the design and operation may deteriorate. Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving internal control and its operation, including controls for safeguarding securities, that we consider to be material weaknesses as defined above as of May 31, 1999. This report is intended solely for the information and use of management and the Board of Directors of the Trust and the Securities and Exchange Commission. July 20, 1999 EX-99 5 SIGNATURE PAGE HYPERION 2002 TERM TRUST, INC. (the "Registrant") Amended Form N-SAR for the period ending May 31, 1999 File Number 811-07070 This report is signed on behalf of the Registrant in the City of New York and the State of New York on the 29th day of July, 1999. HYPERION 2002 TERM TRUST, INC. By: /s/ Clifford E. Lai Clifford E. Lai President Witness: /s/ Joseph Tropeano Joseph Tropeano Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----