Edgar Filing: TRANSAMERICA INCOME SHARES INC

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

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[ ] Confidential, for use of the Commissioner only (as permitted by Rule
14a-6(e)(2).

TRANSAMERICA INCOME SHARES, INC.
(Name of Registrant as Specified in its Charter)

N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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TRANSAMERICA INCOME SHARES, INC.
570 CARILLON PARKWAY
ST. PETERSBURG, FL 33716

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 12, 2007

To the Shareholders of Transamerica Income Shares, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of Transamerica
Income Shares, Inc. (the "Fund") will be held on July 12, 2007, at 570 Carillon
Parkway, St. Petersburg, FL 33716, beginning at 11:00 a.m., Eastern Time, or as
adjourned from time to time (the "Meeting"). At the Meeting, shareholders of the
Fund will be called upon to consider the following proposals:

PROPOSAL 1: To elect ten Directors to the Board of Directors; and

PROPOSAL 2: To conduct such other business as may properly come before the
Meeting.

After careful consideration, the Directors of the Fund unanimously approved and
recommend that you vote "For" Proposal 1. Shareholders of record as of the close
of business on April 13, 2007 are entitled to vote at the Meeting. Each share is
entitled to one vote, with fractional votes for fractional shares.

By Order of the Board of Directors of Transamerica Income Shares, Inc.,

Dennis P. Gallagher, Esq.
Senior Vice President, Secretary
and General Counsel

May 29, 2007

YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWNED ON
THE RECORD DATE. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR
FOLLOW THE ENCLOSED INSTRUCTIONS RELATING TO INTERNET OR TELEPHONE VOTING.
INSTRUCTIONS FOR THE PROPER EXECUTION OF THE PROXY ARE SET FORTH IN THE ENCLOSED
MATERIALS. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY, OR VOTE USING
THE INTERNET OR BY TELEPHONE. IF YOU VOTE VIA THE INTERNET OR BY TELEPHONE,
PLEASE DO NOT RETURN YOUR PROXY UNLESS YOU LATER DECIDE TO CHANGE YOUR VOTE.

PROXY STATEMENT

TRANSAMERICA INCOME SHARES, INC.

ANNUAL MEETING OF SHAREHOLDERS
JULY 12, 2007

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of Proxies
by the Board of Directors (the "Board" or "Directors") of Transamerica Income
Shares, Inc. (the "Fund" or "TIS"), a closed-end management investment company
organized as a Maryland corporation, for use at the Annual Meeting of
Shareholders of the Fund to be held at 11:00 a.m. on July 12, 2007, at 570
Carillon Parkway, St. Petersburg, FL 33716, and any adjournments thereof (the
"Meeting"). The Board is soliciting Proxies from shareholders of the Fund with
respect to the proposals set forth in the accompanying Notice. A Proxy also
accompanies this Proxy Statement. It is anticipated that the Proxy and Proxy
Statement will first be mailed to shareholders on or about May 29, 2007.

SHAREHOLDER REPORTS. The Fund's most recent annual report for the year ended
March 31, 2007 is mailed with this Proxy Statement and is available to you upon
request without charge from the Fund's transfer agent, Mellon Investor Services,
LLC, Newport Office Center VII, 480 Washington Boulevard, Jersey City, NJ 07310;
telephone toll free: 1-800-454-9575.

PROPOSAL 1
ELECTION OF DIRECTORS

Shareholders are asked to consider the election of ten Nominees as Directors of
the Fund. Each Nominee currently serves as a Director of the Fund. Nine of the
Nominees were elected as Directors by Fund shareholders at last year's meeting.
Each Nominee has indicated his or her willingness to serve as Director, if
elected.

The persons named as proxies intend to vote to elect the Nominees, unless
authority to vote for the election of all or specified Nominees is withheld by
so marking the Proxy. If any Nominees are unable to serve, the persons named as
proxies may vote for other persons or vote to fix the number of Directors at
less than ten. Election is by a majority vote of the shares represented at the
Meeting.

The term "fund complex" in the tables below consists of the Fund,
AEGON/Transamerica Series Trust ("ATST") and Transamerica IDEX Mutual Funds ("TA
IDEX"). The mailing address of each Nominee is 570 Carillon Parkway, St.
Petersburg, Florida 33716. The name, age and principal occupation for the past
five years of the Nominees are:

INDEPENDENT DIRECTOR NOMINEES*:

NUMBER OF
PORTFOLIOS IN OTHER
FUND COMPLEX DIRECTORSHIPS
TERM OF OFFICE OVERSEEN BY HELD BY
POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION OR EMPLOYMENT NOMINEE FOR NOMINEE
NAME AND AGE WITH FUND TIME SERVED IN THE PAST 5 YEARS DIRECTOR FOR DIRECTOR
------------ ---------------- -------------- ---------------------------------- ------------- -----------------

Peter R. Brown Chairman, 2002 - present Chairman & Trustee, TA IDEX and 91 N/A
(DOB: 5/10/28) Director ATST (1986-present); Director,
Transamerica Index Funds, Inc.
(TIF) (2002-2004); Chairman of the
Board, Peter Brown Construction
Company (1963- 2000); Rear Admiral
(Ret.) U.S. Navy Reserve, Civil
Engineer Corps

Daniel Calabria Director 2002 - present Trustee, TA IDEX (1996 - present); 91 N/A
(DOB: 3/5/36) ATST (2001 - present); Member of
Investment Committee, Ronald
McDonald House Charities of Tampa
Bay, Inc. (1997 - present);
Trustee, The Hough Group of Funds
(1993 - 2004); prior to 1996,
served in senior executive
capacities for several mutual fund
management companies for more than
30 years

Janice B. Case Director 2002 - present Trustee, TA IDEX (2002 - present); 91 Director, Central
(DOB: 9/27/52) ATST (2001 - present); Senior Vice Vermont Public
President, Florida Power Service Corp
Corporation (1996-2000); Director, (2001-present);
Cadence Network, Inc. (1997-2004); Director, Western
Trustee, Morton Plant Mease Electricity
Healthcare (1999-2005); Director Coordinating
Arts Center & Theatre Council (2002-
(2001-present) present)

Charles C. Harris Director 2002 - present Trustee, TA IDEX (1994 - present); 91 N/A
(DOB: 7/15/30) ATST (1986 - present)

Leo J. Hill Director 2002 - present Trustee, TA IDEX (2002 - present); 91 N/A
(DOB: 3/27/56) ATST (2001 - present); Owner &
President, Prestige Automotive
Group (2001 - 2005); President, L.
J. Hill & Company (1999 -
Present); Market President,
Nations Bank of Sun Coast Florida
(1998 - 1999); President & CEO,
Barnett Banks of Treasure Coast
Florida (1994 - 1998); EVP & Sr.
Credit Officer, Barnett Banks of
Jacksonville, Florida (1991 -
1994); Sr. Vice President & Sr.
Loan Administration Officer,
Wachovia Bank of Georgia (1976 -
1991)

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* Independent director (the "Independent Directors") means a director who is
not an "interested person" (as defined under the Investment Company Act of
1940, as amended (the "1940 Act") of the Fund.

Russell A. Kimball, Jr. Director 2002 - present Trustee, TA IDEX (2002 - present); 91 N/A
(DOB: 8/17/44) ATST (1986 - present); General
Manager, Sheraton Sand Key Resort
(1975 - present)

Norm R. Nielsen Director 2006 - present Trustee, TA IDEX (2006-present); 91 Iowa Student Loan
(DOB 5/11/39) ATST (2006-present); President, Liquidity
Kirkwood Community College Corporation (1998
(1985-2005); Director, Iowa Health -present); Buena
Systems (1994-2003); Director, Vista University
Iowa City Area Development Board of Trustees
(1996-2004) (2004-present);
U.S. Bank (1988 -
present)

William W. Short, Jr. Director 2002 - present Trustee, TA IDEX (1986 - present); 91 N/A
(DOB: 2/25/36) ATST (2000 - present); Retired CEO
and Chairman of the Board, Shorts,
Inc.

John W. Waechter Director 2004 - present Trustee, TA IDEX (2005 - present); 91 N/A
(DOB: 2/25/52) ATST (2004 - present); Executive
Vice President, Chief Financial
Officer, Chief Compliance Officer,
William R. Hough & Co. (1979 -
2004); Treasurer, The Hough Group
of Funds (1993 - 2004)

INTERESTED DIRECTOR**
NOMINEE:

John K. Carter Director, 2006 - present Trustee (September 2006 - 91 N/A
(DOB: 4/24/61) President & present), President & CEO (July
Chief Executive 2006 - present), Sr. Vice
Officer President (1999 - June 2006),
Chief Compliance Officer, General
Counsel & Secretary (1999 - August
2006), TA IDEX; Trustee (September
2006 - present), President & CEO
(July 2006 - present), Sr. Vice
President (1999 - June 2006),
Chief Compliance Officer, General
Counsel & Secretary (1999 - August
2006), ATST; Sr. Vice President
(2002 - June 2006), General
Counsel, Secretary & Chief
Compliance Officer (2002 - August
2006), TIS; President, CEO (July
2006 - present), Sr. Vice
President (1999 - June 2006),
Director (2000 - present), General
Counsel, & Secretary (2000 -
August 2006), Chief Compliance
Officer, (2004-August 2006),
Transamerica Fund Advisors, Inc.
(TFAI); President, CEO (July 2006
- present), Sr. Vice President
(1999 - June 2006), Director (2001
- present), General Counsel, &
Secretary (2001- August 2006),
Transamerica Fund Services, Inc.
(TFS); Vice President, AFSG
Securities Corporation (AFSG)
(2001-present); CEO (July 2006 -
present), Vice President,
Secretary & Chief Compliance
Officer (2003-August 2006),
Transamerica Investors, Inc.
(TII); Sr. Vice President, General
Counsel & Secretary, TIF (2002 -
2004); Vice President,
Transamerica Investment Services,
Inc. (TISI) (2003-2005) &
Transamerica Investment
Management, LLC (TIM) (2001-2005)

----------
** Such Nominee may be deemed an "interested person" of the Fund as that term
is defined in the 1940 Act due to his employment with the Fund's investment
advisor or its affiliates.

The Board of Directors met six times during the fiscal year ended March 31,
2007.

NOMINEE OWNERSHIP OF EQUITY SECURITIES

As of December 31, 2006, the Nominees beneficially owned shares of the Fund and
any of the funds overseen by the Nominees in the same family of investment
companies as set forth in the following table:

AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL FUNDS OVERSEEN
DOLLAR RANGE OF EQUITY BY NOMINEE IN FAMILY OF
NAME OF NOMINEE SECURITIES IN THE FUND INVESTMENT COMPANIES*
--------------- ---------------------- --------------------------------

Peter R. Brown........... $1 - $10,000 Over $100,000
Daniel Calabria.......... $0 Over $100,000
John K. Carter**......... $0 $0
Janice B. Case........... $0 Over $100,000
Charles C. Harris........ $0 Over $100,000
Leo J. Hill.............. $0 Over $100,000
Russell A. Kimball, Jr... $0 Over $100,000
Norm R. Nielsen.......... $0 $10,001 - $50,000
William W. Short, Jr..... $0 Over $100,000
John W. Waechter......... $10,001 - $50,000 Over $100,000

* The family of investment companies consists of the Fund, ATST and TA IDEX.

** Such Nominee may be deemed an "interested person" of the Fund, as discussed
above.

The following table sets forth information as of December 31, 2006 about
securities owned beneficially or of record by each Nominee, who is not or would
not be an "interested person" of the Fund within the meaning of section 2(a)(19)
of the Investment Company Act of 1940 ("Independent Director"), or members of
his or her immediate family, representing interests in the investment adviser,
sub-advisers or distributor of the Fund, or any person controlling, controlled
by or under common control with such persons. For this purpose, "immediate
family member" includes the Nominee's spouse, children residing in the Nominee's
household and dependents of the Nominee.

NAME OF OWNERS AND TITLE OF VALUE OF
NAME OF NOMINEE RELATIONSHIPS TO NOMINEE COMPANY CLASS SECURITIES PERCENT OF CLASS
--------------- ------------------------ ------- -------- ---------- ----------------

Peter R. Brown N/A N/A N/A N/A N/A
Daniel Calabria N/A N/A N/A N/A N/A
Janice B. Case N/A N/A N/A N/A N/A
Charles C. Harris N/A N/A N/A N/A N/A
Leo J. Hill N/A N/A N/A N/A N/A
Russell A. Kimball, Jr. N/A N/A N/A N/A N/A
William W. Short, Jr. N/A N/A N/A N/A N/A
John W. Waechter N/A N/A N/A N/A N/A
Norm R. Nielsen N/A N/A N/A N/A N/A

REMUNERATION OF DIRECTORS

The Fund pays each Independent Director an annual retainer of $7,200 plus $800
for Board Committee fee(s). Effective January 1, 2007, a Board member serving on
one Board Committee will receive an annual fee of $400 and a Board member that
serves on two or more Board Committees will receive an annual fee of $800.

The Fund also reimburses each Independent Director for reasonable expenses
incurred in connection with such meetings. For the fiscal year ended March 31,
2007, the Independent Directors, as a group, received compensation in the amount
of $69,400.

The following table sets forth the compensation paid to each Independent
Director of the Fund for the fiscal year ended March 31, 2007. Directors who are
"interested persons" of the Fund do not receive any compensation from the Fund.

AGGREGATE PENSION OR RETIREMENT ESTIMATED TOTAL COMPENSATION
COMPENSATION BENEFITS ACCRUED AS ANNUAL BENEFIT FROM FUND AND FUND
NAME FROM FUND PART OF FUND EXPENSES UPON RETIREMENT COMPLEX
---- ------------ --------------------- --------------- ------------------

Peter R. Brown $8,000 N/A N/A $208,000
Daniel Calabria $8,000 N/A N/A $168,000
Janice B. Case $8,000 N/A N/A $168,000
Charles C. Harris $8,000 N/A N/A $168,000
Leo J. Hill $8,000 N/A N/A $168,000
Russell A. Kimball, Jr. $8,000 N/A N/A $168,000
Norm R. Nielsen $5,400 N/A N/A $119,600
William W. Short, Jr. $8,000 N/A N/A $168,000
John W. Waechter $8,000 N/A N/A $178,000

As of December 31, 2006, the Independent Trustees of ATST received the following
compensation in pension or retirement benefits: Messrs. Brown, Calabria, Harris,
Hill, Kimball and Short received $260,000, $160,500, $210,000, $84,000, $210,000
and $84,000, respectively and Ms. Case $84,000.

As of October 31, 2006, the Independent Trustees of TA IDEX received the
following compensation in pension or retirement benefits: Messrs. Brown,
Calabria, Harris, Hill, Kimball and Short received $210,000, $150,775, $98,900,
$64,000, $105,000, $160,000 and $160,000 and Ms. Case $64,000, respectively.

Under a retirement plan (the "Emeritus Plan") available to the Independent
Trustees, each Independent Trustee is deemed to have elected to serve as Trustee
Emeritus of ATST and TA IDEX upon his or her termination of service, other than
removal for cause, for a maximum period of five years determined by his or her
years of service as a Trustee, calculated as follows:

Years of Service as Trustee Years Eligible for Service as Trustee Emeritus ("Eligible Years")
--------------------------- -----------------------------------------------------------------

5 2
10 3
15 5

In a year in which a Independent Trustee earns an eligibility benefit (years 5,
10 and 15), ATST and TA IDEX shall accrue and the Independent Trustee shall be
credited an amount equal to 50% of his or her then-current annual retainer for
the appropriate number of Eligible Years (2, 3 or 5). Such amounts shall be
accrued by ATST and TA IDEX on a pro rata basis allocable to each ATST portfolio
and TA IDEX fund based on the relative assets of the portfolio and fund. The
Chairman and the Audit Committee's Financial Expert will also earn 50% of the
additional retainers designated for such positions. If retainers increase in the
future, past accruals (and credits) will be adjusted upward so that 50% of the
Trustee's current retainer is accrued and credited at all times. Upon death,
disability or termination of service, other than removal for cause, amounts
deferred become payable to an Emeritus Trustee (or his/her beneficiary). Upon
the commencement of service as Trustee Emeritus, compensation will be paid on a
quarterly basis during the time period that the Trustee Emeritus is allowed to
serve as such. In addition, a Trustee Emeritus may be invited by the Board, but
is not required, to attend meetings, and shall be available for consultation by
the Trustees, ATST and TA IDEX officers and counsel. A Trustee Emeritus will
receive reimbursement of actual and reasonable expenses incurred for attendance
at Board meetings.

Amounts deferred and accrued under the Deferred Compensation and Emeritus Plans
are unfunded and unsecured claims against the general assets of ATST and TA
IDEX.

The Board of Trustees of ATST and TA IDEX established a deferred compensation
plan ("Deferred Compensation Plan") for the Independent Trustees. Under the
Amended and Restated Trustees' Deferred Compensation Plan, the Independent
Trustees may elect to defer all or a portion of the fees that, absent deferral,
would be paid to him or her for services rendered during the next following
calendar year by completing an Initial Deferred Election Form and returning it
to the compensation committee on or before December 31 preceding the calendar
year during which the amounts to be deferred, absent, deferral, would be paid to
the Trustee.

ATST and TA IDEX benefits are not paid by TIS.

COMMITTEES

The Audit Committee

The Board has a standing Audit Committee, that currently consists of John W.
Waechter, Peter R. Brown, Daniel Calabria, Janice B. Case and Leo J. Hill, each
of whom is an Independent Director and qualifies as an "independent" director
for purposes of New York Stock Exchange Listing Standards. Mr. Waechter
currently serves as chairperson of the Audit Committee. The functions performed
by the Audit Committee include the approval and recommendation for appointment
of the independent public accountants for the Fund, the review of the scope and
results of audit services, the review of the adequacy of internal accounting and
financial controls, determining the independence of the public accounting firm
and ensuring the rotation of its partners, meeting with the Fund's internal
auditor, frequent meetings with Management to discuss the financial statements
of the Fund, and the review of material changes in accounting principles and
practices and other matters when requested from time to time by the Board. The
Audit Committee met five times during the fiscal year ended March 31, 2007. The
Board has adopted a written charter for the Fund's Audit Committee, which
appears as Appendix B to this Proxy Statement.

The Audit Committee has reviewed and discussed the audited financial statements
for the fiscal year ended March 31, 2007 with Fund management, and discussed
certain matters with the Fund's independent public accountant addressed by
Statement on Auditing Standards No. 61. The Audit Committee has received written
disclosures and the letter required by Independence Standards Board No. 1 from
the Fund's independent public accountant and has discussed with the independent
public accountant its independence. Based on the foregoing, the Audit Committee
recommended to the Board of Directors that the Fund's audited financial
statements be included in the Fund's Annual Report for the fiscal year ended
March 31, 2007 for filing with the Securities and Exchange Commission (the
"SEC").

The Governance/Nominating Committee

The Board's Governance/Nominating Committee recommends nominations for
membership on the Board. The Governance/Nominating Committee nominates and
evaluates Independent Director candidates. The Governance/Nominating Committee
meets periodically, as necessary, and is solely responsible for the selection
and nomination of potential candidates to serve on the Board. The members of the
Fund's Governance/Nominating Committee are Messrs. Hill, Brown, Kimball,
Waechter and Ms. Case each of whom is an Independent Director and qualifies as
an "independent" director for purposes of the New York Stock Exchange Listing
Standards. Mr. Hill currently serves as chairperson of the Governance/Nominating
Committee. The Board has a Governance/Nominating Committee charter, a copy of
which is included as Appendix C to this Proxy Statement.

While the Governance/Nominating Committee is solely responsible for the
selection and nomination of potential candidates to serve on the Board, the
Governance/Nominating Committee may consider and evaluate nominations properly
submitted by shareholders of the Fund. Nominations proposed by shareholders will
be properly submitted for consideration by the Committee only if shareholder
submits their considerations in accordance with the qualifications and
procedures set forth in the charter of the Nominating Committee. It is in the
Nominating Committee's sole discretion whether to seek corrections of a
deficient submission or to exclude a nominee from consideration.

A candidate for nomination as Director submitted by a shareholder will not be
deemed to be properly submitted to the Committee for the Committee's
consideration unless the following requirements have been met and procedures
followed:

1. Each eligible shareholder or shareholder group may submit no more than one
nominee each calendar year.

2. The nominee must satisfy all qualifications provided herein and in the
Fund's organizational documents, including qualification as a possible
Independent Director if the nominee is to serve in that capacity.

- The nominee may not be the nominating shareholder, a member of the
nominating shareholder group or a member of the immediate family of
the nominating shareholder or any member of the nominating shareholder
group.(1)

- Neither the nominee nor any member of the nominee's immediate family
may be currently employed or employed within the year prior to the
nomination by any nominating shareholder entity or entity in a
nominating shareholder group.

- Neither the nominee nor any immediate family member of the nominee is
permitted to have accepted directly or indirectly, during the year of
the election for which the nominee's name was submitted, during the
immediately preceding calendar year, or during the year when the
nominee's name was submitted, any consulting, advisory, or other
compensatory fee from the nominating shareholder or any member of a
nominating shareholder group.

- The nominee may not be an executive officer, director or person
fulfilling similar functions of the nominating shareholder or any
member of the nominating shareholder group, or of an affiliate of the
nominating shareholder or any such member of the nominating
shareholder group.

- The nominee may not control the nominating shareholder or any member
of the nominating shareholder group (or, in the case of a holder or
member that is a fund, an interested person of such holder or member
as defined by Section 2(a)(19) of the 1940 Act).

- A shareholder or shareholder group may not submit for consideration a
nominee which has previously been considered by the Committee.

3. In order for the Committee to consider shareholder submissions, the
following requirements must be satisfied regarding the shareholder or
shareholder group submitting the proposed nominee:

- Any shareholder or shareholder group submitting a proposed nominee
must beneficially own, either individually or in the aggregate, more
than 5% of the Fund's securities that are eligible to vote both at the
time of submission of the nominee and at the time of the Board member
election. Each of the securities used for purposes of calculating this
ownership must have been held continuously for at least two years as
of the date of the nomination. In addition, such securities must
continue to be held through the date of the meeting. The nominating
shareholder or shareholder group must also bear the economic risk of
the investment.

- The nominating shareholder or shareholder group must also submit a
certification which provides the number of shares which the person or
group has (a) sole power to vote or direct the vote; (b) shared power
to vote or direct the vote; (c) sole power to dispose or direct the
disposition of such shares; and (d) shared power to dispose or direct
the disposition of such shares. In addition the certification shall
provide that the shares have been held continuously for at least two
years.

4. Shareholders or shareholder groups submitting proposed nominees must
substantiate compliance with the above requirements at the time of
submitting their proposed nominee as part of their written submission to
the attention of the Funds' Secretary, who will provide all submissions to
the Committee. This submission to the Funds must include:

- the shareholder's contact information;

- the nominee's contact information and the number of applicable Fund
shares owned by the proposed nominee;

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(1) Terms such as "immediate family member" and "control" shall be interpreted
in accordance with the federal securities laws.

- all information regarding the nominee that would be required to be
disclosed in solicitations of proxies for elections of directors
required by Regulation 14A under the Securities Exchange Act of 1934;
and

- a notarized letter executed by the nominee, stating his or her
intention to serve as a nominee and be named in a Fund's proxy
statement, if so designated by the Committee and the Fund's Board.

5. The Committee will consider all submissions meeting the applicable
requirements stated herein that are received by December 31 of the most
recently completed calendar year.

The Governance/Nominating Committee met three times during the fiscal year ended
March 31, 2007.

Compensation Committee

The Board has a Compensation Committee. Ms. Case currently serves as chairperson
of the Compensation Committee, and Messrs. Brown, Harris, Hill and Kimball also
serve as members of the Compensation Committee. The Compensation Committee
reviews compensation arrangements for each Director. The Compensation Committee
meets periodically, as necessary. The Compensation Committee met two times
during the fiscal year ended March 31, 2007.

Valuation Oversight Committee

The Board has a Valuation Oversight Committee. Mr. Kimball currently serves as
chairperson of the Valuation Oversight Committee, and Messrs. Robert L.
Anderson(2), Brown, Harris and Short also serve as members of the Valuation
Oversight Committee. The Valuation Oversight Committee oversees the process by
which the Fund calculates its net asset value to verify consistency with the
Fund's valuation policies and procedures, industry guidance, interpretative
positions issued by the SEC and its staff, and industry best practices. The
Valuation Oversight Committee intends to meet periodically, as necessary. The
Valuation Oversight Committee met three times during the fiscal year ended March
31, 2007.

Proxy Voting/Marketing Committee

The Board has a Proxy Voting/Marketing Committee. Mr. Anderson(2) currently
serves as chairperson of the Proxy Voting Committee, and Messrs. Brown, Short,
Nielsen and Jack Zimmerman(2) also serve as members of the Proxy Voting
Committee. The Proxy Voting/Marketing Committee provides the Fund's consent to
vote in matters where Transamerica Fund Advisors, Inc. ("TFAI") seeks such
consent because of a conflict of interest that arises in connection with a
particular vote, or for other reasons. The Proxy Voting Committee also may
review TFAI's proxy voting policies and procedures in lieu of submission of the
policies and procedures to the entire Board for approval. The Proxy Voting
Committee intends to meet periodically, as necessary. The Proxy Voting/Marketing
Committee met twice during the fiscal year ended March 31, 2007.

Contract Review Committee

The Board has a Contract Review Committee. Mr. Harris currently serves as
chairperson of the Contract Review Committee, and Messrs. Brown, Calabria,
Nielsen and Zimmerman(2) also serve as members of the Contract Review Committee.
The Contract Review Committee provides oversight of the Fund's contracts to
ensure that the interests of its shareholders are served by the terms of these
contracts. The Contract Review Committee intends to meet periodically, as
necessary. The Contract Review Committee met once during the fiscal year ended
March 31, 2007.

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(2) Serves as a Transamerica IDEX Trustee and not a Director of TIS.

SHAREHOLDER COMMUNICATIONS WITH THE BOARD

Shareholders may mail written communications to the Board, addressed to the care
of the Secretary of the Fund, at the Fund's address. Each shareholder
communication must (i) be in writing and be signed by the shareholder, and (ii)
identify the full name of the Fund. The Secretary is responsible for collecting,
reviewing and organizing all properly submitted shareholder communications.
Except as provided below, with respect to each properly submitted shareholder
communication, the Secretary will either (i) provide a copy of the communication
to the Board at the next regularly scheduled Board meeting, or (ii) if the
Secretary determines that the communication requires more immediate attention,
forward the communication to the Board promptly after receipt. The Secretary
may, in good faith, determine that a shareholder communication should not be
provided to the Board because the communication, among other things, (i) does
not reasonably relate to the Fund or its operations, management, activities,
policies, service providers, Board, officers, shareholders or other matters
relating to an investment in the Fund, or (ii) is ministerial in nature (such as
a request for Fund literature, share data or financial information). The Fund
does not have a policy with regard to attendance at the Fund's annual
shareholder meeting and no Director attended last year's annual shareholder
meeting.

FUND OFFICERS

The following table shows the executive officers of the Fund their date of
birth, positions with the Fund and principal occupations during the past five
years:

POSITION(S) TERM OF OFFICE
NAME, ADDRESS* HELD AND LENGTH OF
AND AGE WITH FUND TIME SERVED** PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
------------------- ----------- -------------- ----------------------------------------------------------------------------

John K. Carter Director, 2006 - present Trustee (September 2006 - present), President & CEO (July 2006 - present),
(DOB: 4/24/61) President & Sr. Vice President (1999 - June 2006), Chief Compliance Officer, General
Chief Counsel & Secretary (1999 - August 2006), TA IDEX; Trustee (September 2006 -
Executive present), President & CEO (July 2006 - present), Sr. Vice President (1999 -
Officer June 2006), Chief Compliance Officer, General Counsel & Secretary (1999 -
August 2006), ATST; Sr. Vice President (2002 - June 2006), General Counsel,
Secretary & Chief Compliance Officer (2002 - August 2006), TIS; President,
CEO (July 2006 - present), Sr. Vice President (1999 - June 2006), Director
(2000 - present), General Counsel, & Secretary (2000 - August 2006), Chief
Compliance Officer, (2004-August 2006), Transamerica Fund Advisors, Inc.
(TFAI); President, CEO (July 2006 - present), Sr. Vice President (1999 -
June 2006), Director (2001 - present), General Counsel, & Secretary (2001-
August 2006), Transamerica Fund Services, Inc. (TFS); Vice President, AFSG
Securities Corporation (AFSG) (2001-present); CEO (July 2006 - present),
Vice President, Secretary & Chief Compliance Officer (2003-August 2006),
Transamerica Investors, Inc. (TII); Sr. Vice President, General Counsel &
Secretary, TIF (2002 - 2004); Vice President, Transamerica Investment
Services, Inc. (TISI) (2003-2005) & Transamerica Investment Management, LLC
(TIM) (2001-2005)

Dennis P. Gallagher Sr. Vice 2006 - present Sr. Vice President, General Counsel & Secretary, TA IDEX & ATST (September
(DOB: 12/19/70) President, 2006 - present); Vice President & Secretary, TII (September 2006 - present);
General Director, Sr. Vice President, General Counsel & Secretary, TFAI & TFS
Counsel & (September 2006 - present); Director, Deutsche Asset Management (1998 -
Secretary 2006)

Joseph P. Interim 2007 - present President, Diversified Investors Securities Corp. (January 2007 - present);
Carusone*** Principal Vice President, Diversified Investment Advisors (1999 - present); Principal
(DOB: 9/8/65) Financial Financial Officer & Treasurer, Diversified Investors Funds Group (2001 -
Officer present); Trustee, Transamerica Financial Life Insurance Company (2004 -
present)

T. Gregory Sr. Vice 2006 - present Chief Compliance Officer & Sr. Vice President, TA IDEX, TFAI & ATST
Reymann, II President & (September 2006 - present); Chief Compliance Officer (September 2006 -
(DOB: 5/13/58) Chief present) & Vice President (2005 - present), TII; Vice President & Senior
Compliance Counsel, TFS (2005 - 2006); Vice President & Counsel, ATST, TA IDEX, TFAI,
Officer TIS (2004 - 2006), TFS (2004 - 2005) & TIF (2004); Attorney, Gould, Cooksey,
et. al. (2002 -2004)

* The business address of each officer is 570 Carillon Parkway, St.
Petersburg, FL 33716.

** The executive officers are elected and appointed by the Directors and hold
office until they resign, are removed or are otherwise disqualified to
serve.

*** The business address of Mr. Carusone is 4 Manhattanville Road, Purchase, NY
10577.

THE BOARD OF DIRECTORS OF THE FUND, INCLUDING THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 1.

OTHER BUSINESS

The Board and Fund management know of no business to be presented to the Meeting
other than the matters set forth in this Proxy Statement, but should any other
matter requiring a vote of shareholders arise, the proxies will vote thereon
according to their best judgment.

OTHER INFORMATION

INFORMATION ON INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM.
PricewaterhouseCoopers LLP ("PwC") has been selected by the Board as the
independent registered certified public accounting firm to examine the financial
statements of the Fund for the fiscal year ending March 31, 2008.
Representatives from PwC are not expected to attend the Meeting or be available
to respond to questions during the Meeting, but they will have the opportunity
to issue a statement in advance of the Meeting if they desire to do so.

Fees

The following table sets forth the aggregate fees billed for professional
services rendered by PwC to the Fund during the two most recent fiscal years:

AUDIT-RELATED ALL OTHER
FISCAL YEAR ENDED AUDIT FEES FEES TAX FEES FEES TOTALS
----------------- ---------- ------------- -------- --------- -------

March 31, 2007 $39,670 $0 $2,000 $0 $41,670
March 31, 2006 $37,782 $0 $1,145 $0 $38,927

All of the services described in the table above were approved by the Audit
Committee pursuant to its pre-approval policies and procedures listed below.

Non-Audit Service

For the fiscal years ended March 31, 2007 and March 31, 2006, PwC did not
provide any non-audit services to the Fund (other than tax services), the Fund's
investment adviser ("TFAI" or "Adviser") or any entity controlling, controlled
by or under common control with TFAI.

Pre-approval Policies and Procedures

The pre-approval policies and procedures of the Fund contained in the Fund's
Audit Committee Charter require that the Fund's Audit Committee pre-approve all
audit services and non-audit services provided by PwC or any other independent
public accountant engaged by the Fund (the "Auditor"). The Audit Committee must
pre-approve any engagement of the Auditor to provide non-audit services to (i)
the Adviser, and (ii) any entity controlling, controlled by, or under common
control with the Adviser that provides ongoing services to the Fund (entities in
(i) and (ii), hereinafter "Service Affiliates") if the services directly relate
to the operations and financial reporting of the Fund ("Covered Non-Audit
Services"). The policies and procedures permit the Audit Committee to
pre-approve the provision of types or categories of non-audit services to the
Fund and Covered Non-Audit Services to the Service Affiliates. The Chairperson
of the Audit Committee is authorized to give such pre-approvals on behalf of the
Audit Committee.

The Audit Committee pre-approved 100% of the audit and non-audit fees listed in
the table above.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934. Applicable
laws require the Fund's officers, Directors and the Adviser, the affiliated
persons of the Adviser, and the beneficial owners of more than 10% of the Fund's
shares (collectively, "Reporting Persons") to file initial reports of ownership
and reports of changes in ownership with the SEC and the New York Stock
Exchange, and to provide copies of these reports to the Fund. Based solely on
its review of the copies of such forms received by it and written
representations of certain Reporting Persons, the Fund believes that during the
fiscal year ended March 31, 2007, no person owns beneficially more than 10% of
its shares and that its Reporting Persons complied with all applicable filing
requirements.

FUND SERVICE PROVIDERS. The Fund's investment adviser, TFAI, is located at 570
Carillon Parkway, St Petersburg, Florida 33716. The Fund's investment
sub-adviser, Transamerica Investment Management, LLC ("TIM"), is located at 1111
Santa Monica Boulevard, Suite 820, Los Angeles, California 90025. The Fund's
Administrator, Transamerica Fund Services, Inc, is located at 570 Carillon
Parkway, St. Petersburg, Florida 33716.

VOTING INFORMATION

PROXY SOLICITATION. In order to obtain the necessary quorum at the Meeting, in
addition to solicitations of proxies by mail, proxy solicitations may also be
made by telephone, e-mail or personal interviews conducted by officers of the
Fund, regular employees of TFAI, or other representatives of the Fund. The Fund
has retained Broadridge as the Fund's proxy solicitor for the Meeting.

EXPENSES. The expense of preparing, printing and mailing the accompanying Proxy,
the Notice and the Proxy Statement will be borne by the Fund. The cost of
retaining Broadridge as the Fund's proxy solicitor for the Meeting is expected
to cost approximately $12,000.

SHAREHOLDER VOTING. The Board has fixed the close of business on April 13, 2007
as the record date (the "Record Date") for the determination of Fund
shareholders entitled to notice of and to vote at the Meeting. Shareholders of
record, as to any matter on which they are entitled to vote, will be entitled to
one vote per share on all business of the Meeting and an appropriate fraction of
a vote for each fractional share. There were 6,318,771 shares outstanding on the
Record Date.

Appendix A sets forth the shareholders entitled to cast 5% or more of the Fund's
votes. To the best of the Fund's knowledge, as of the Record Date, no
shareholder was entitled to cast 5% or more of the Fund's votes, except as
stated in Appendix A. As of the Record Date, the officers and the Directors of
the Fund as a group beneficially owned less than 1% of the Fund's shares.

A quorum constituting a majority of the Fund's shares outstanding as of the
Record Date represented in person or by proxy, must be present for the
transaction of business at the Meeting. If a quorum is not present at the
Meeting, or if a quorum is present but sufficient votes to approve a proposal
are not received, the persons named as proxies on the enclosed Proxy may propose
one or more adjournments of the Meeting to permit further solicitation of
Proxies. In determining whether to adjourn the Meeting, the following factors
may be considered: the nature of the proposals that are the subject of the
Meeting, the percentage of votes actually cast, the percentage of negative votes
actually cast, the nature of any further solicitation and the information to be
provided to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. A shareholder vote may be
taken on the proposal in this Proxy Statement if sufficient votes have been
received for approval.

VOTING. In order that your shares may be represented at the Meeting, you are
requested to:

-- indicate your instructions on the enclosed Proxy;

-- date and sign the Proxy;

-- mail the Proxy promptly in the enclosed envelope, which requires no
postage if mailed in the United States; and

-- allow sufficient time for the Proxy to be received on or before 5:00
p.m., Eastern Time, June 29, 2007.

If the enclosed Proxy is properly executed and returned in time to be voted at
the Meeting, the shares represented by the Proxy will be voted in accordance
with the instructions marked therein. Unless instructions to the contrary are
marked on the Proxy, it will be voted FOR the matters listed in the accompanying
Notice and Proxy. Any shareholder who has given a Proxy has the right to revoke
it at any time prior to its exercise either by attending the Meeting and voting
his or her shares in person, or by submitting a letter of revocation or a
later-dated Proxy to the Fund at the above address prior to the date of the
Meeting. However, attendance at the Meeting, by itself, will not revoke a
previously-tendered Proxy.

You may also vote via the Internet, or by telephone. Instructions are enclosed
in these materials. If you elect to vote using one of these methods, do not
return your Proxy unless you later elect to change your vote.

REQUIRED VOTE. Approval of Proposal 1, election of the Directors, requires an
affirmative vote of a majority of shares present at the Meeting in person or by
Proxy. Fund shareholders will vote together as a single class on Proposal 1.

Abstentions and broker non-votes will be counted as present at the Meeting.
Accordingly, assuming the presence of a quorum, abstentions and broker non-votes
have the effect of a negative vote on Proposal 1. Broker "non-votes" occur when
the Fund receives a Proxy from a broker or nominee who does not have
discretionary power to vote on a particular matter and the broker or nominee has
not received instructions from the beneficial owner or other person entitled to
vote the shares represented by the Proxy.

SHAREHOLDERS' PROPOSALS. Shareholders wishing to submit proposals for inclusion
in a Proxy Statement for a subsequent shareholders' meeting should send their
written proposals to the Secretary of the Fund at 570 Carillon

Parkway, St. Petersburg, Florida 33716 no later than January 29, 2008 in order
to be included in the Fund's Proxy statement and form of Proxy relating to that
subsequent meeting. Notice of a proposal will be considered untimely if it is
submitted after April 9, 2008. However, timely submission of a proposal does not
necessarily mean that the proposal will be included in the Fund's Proxy
Statement. If a shareholder fails to give timely notice, then the persons named
as proxies in the proxies solicited by the Board for the Fund's annual meeting
of shareholders in 2008 may exercise discretionary voting power, to the extent
permitted by New York Stock Exchange rules, with respect to any such proposal.

THE FUND IS REQUIRED TO HOLD ANNUAL MEETINGS OF SHAREHOLDERS. TO ENSURE THE
PRESENCE OF A QUORUM AT THE MEETING AND TO HELP SAVE THE COST OF FOLLOW-UP
MAILINGS, PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED.

By Order of the Board of Directors,

Dennis P. Gallagher, Esq.
Senior Vice President, Secretary
and General Counsel

May 29, 2007

APPENDIX A

SHAREHOLDERS ENTITLED TO CAST 5% OR MORE
OF FUND VOTES

Name and Address of Shareholder Number of Votes % of Fund
------------------------------- --------------- ---------

Wilmington Trust Company 479,575 7.59%
1100 N. Market Street
Wilmington, DE 19801

CEDE & Co. 5,081,200 78.85%
P.O. Box 20
Bowling Green Station
New York, NY 10274-0020

A-1

APPENDIX B

TRANSAMERICA INCOME SHARES, INC.

AUDIT COMMITTEE CHARTER

ORGANIZATION AND MEMBERSHIP

There shall be a committee of the Board of Directors of the Transamerica Income
Shares, Inc. (the "Fund") to be known as the Audit Committee. The Audit
Committee shall be composed of at least three Directors. Audit Committee members
shall be independent of the Fund and free of any relationship that, in the
opinion of the Directors, would interfere with their exercise of independent
judgment as a committee member. In particular, each member must meet the
independence and experience requirements of the New York Stock Exchange, Rule
10A-3(b)(1) under the Securities Exchange Act of 1934 (the "Exchange Act"), and
the rules and regulations of the Securities and Exchange Commission (the "SEC").

The Chairman of the Board shall appoint one or more Independent Board member(s)
to serve as the Chairman of the Committee, to serve at the pleasure of the
Chairman of the Board, or until he or she resigns such position, is no longer a
member of the Committee, or is removed by a majority of the Board members. The
Chairman of the Board shall promptly appoint an Independent Board member to fill
a vacancy in the position of Committee Chairman. The Chairman of the Board will
select additional Independent Board members to serve on the Committee. The
members will serve at the pleasure of the Chairman of the Board, who may, at his
discretion, change the composition of the members of the Committee. The Chairman
of the Board, in his capacity as such, will serve as a member of the Committee
and will be notified in advance of any and all Committee meetings.

Each member of the Audit Committee shall have a basic understanding of finance
and accounting and be able to read and understand fundamental financial
statements. At least one member of the Audit Committee must have accounting or
related financial management expertise, in the judgment of the Board. The Board
may presume that an Audit Committee member that is an "audit committee financial
expert" (as set out in Item 401(h) of Regulation S-K) has accounting or related
financial management expertise.

The Board shall at least annually determine whether any Audit Committee member
is an "audit committee financial expert."

STATEMENT OF POLICY

The Audit Committee shall assist Board oversight of (1) the integrity of the
Fund's financial statements, (2) the Fund's compliance with legal and regulatory
requirements; (3) the independent auditors' qualifications and independence; (4)
the performance of the independent auditors; (5) approve and recommend for
appointment or replacement the Fund's independent auditors, and (6) prepare an
audit committee report as required by the SEC to be included in the Fund's
annual proxy statement. In doing so, the Audit Committee shall seek to maintain
free and open means of communication among the Directors, the independent
auditors and the management of the Fund's Adviser. The Audit Committee shall
meet periodically with management of the Adviser and the Fund's independent
auditors in separate executive sessions. The independent auditors for the Fund
shall report directly to the Audit Committee.(1)

----------
(1) The members of the Audit Committee shall not be subject to greater
fiduciary obligations and shall not be subject to a higher standard of care
than the other members of the Board because of their work for the
Committee.

B-1

Although the Audit Committee shall have the authority and responsibilities set
forth in this Charter, it is not the responsibility of the Audit Committee to
plan or conduct audits or to determine that the Fund's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. That is the responsibility of management and the independent
auditors. Nor is it the duty of the Audit Committee to conduct investigations or
to ensure compliance with laws and regulations. In discharging its duties, the
Audit Committee may rely on the independent auditors, Fund's Chief Compliance
Officer or any legal or accounting consultant it retains to advise it.

RESPONSIBILITIES

Fund management has the primary responsibility to establish and maintain systems
for accounting, reporting and internal control.

The Fund's independent auditors have the primary responsibility to plan and
implement an audit, with proper consideration given to the accounting, reporting
and internal controls. The independent auditors are ultimately accountable to
the Board and Audit Committee. It is the direct responsibility of the Audit
Committee to approve and recommend for appointment or replacement, review and
evaluate the independent auditors and to determine their compensation.

In carrying out its responsibilities the Audit Committee believes its policies
and procedures should remain flexible, in order to react to changing conditions
and requirements applicable to the Fund.

The Audit Committee may delegate any portion of its authority, including the
authority to grant pre-approvals of audit and permitted non-audit services, to
one or more members or a subcommittee. Any decision of the subcommittee to grant
pre-approvals shall be presented to the full Audit Committee at its next
regularly scheduled meeting.

The Audit Committee is responsible for the following:

Fund Financial Statements:

1. Discussing the Fund's annual audited financial statements with Fund
management and the independent auditors.

2. Discussing with management the Fund's press releases regarding dividends,
as well as financial information and guidance provided to analysts and
rating agencies.

3. Reviewing and discussing (a) major issues regarding accounting principles
and financial statement presentations, including any significant changes in
the Fund's selection or application of accounting principles, and major
issues as to the adequacy of the Fund's internal controls and any special
audit steps adopted in light of material control deficiencies; (b) analyses
prepared by management and/or the independent auditors setting forth
significant financial reporting issues and judgments made in connection
with the preparation of the financial statements, including analyses of the
effects of alternative GAAP methods on the financial statements; (c) the
effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Fund; and (d) the type
and presentation of information to be included in dividend press releases
(paying particular attention to any use of "pro forma," or "adjusted"
non-GAAP, information), as well as review any financial information and
guidance provided to analysts and rating agencies.

4. Reviewing and discussing any reports from the independent auditors
regarding (a) all critical accounting policies and practices to be used;
(b) all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with management,
ramifications of the use of such alternative

B-2

treatments and disclosures, and the treatment preferred by the independent
auditors; and (c) other material written communications between the
independent auditors and management, such as any management letter or
schedule of unadjusted differences.

5. Discussing policies with respect to risk assessment and risk management.

6. Reviewing disclosures made to the Audit Committee by the Fund's principal
executive officer and principal financial officer during their
certification process for the Fund's periodic reports about any significant
deficiencies or material weaknesses in the design or operation of internal
controls and any fraud involving management or other employees who have a
significant role in the Fund's internal controls.

With respect to the independent auditors:

1. Having the authority to approve and recommend for appointment or
replacement the independent auditors, subject, if applicable, to
shareholder ratification; and compensating and overseeing the work of the
independent auditors (including the resolution of disagreements between
management and the independent auditors regarding financial reporting), who
shall report directly to the Audit Committee, for the purpose of preparing
or issuing an audit report or related work.

2. Meeting with the independent auditors and Fund management to review the
scope, fees, audit plans and staffing for the audit, for the current year
and to approve the fees. At the conclusion of the audit, reviewing such
audit results, including the independent auditors' evaluation of the Fund's
financial and internal controls, any comments or recommendations of the
independent auditors, any audit problems or difficulties and management's
response, any significant changes required from the originally planned
audit programs and any adjustments to such statements recommended by the
auditors.

3. Approving, prior to appointment, the engagement of the auditors to provide
other audit services to the Fund or to provide non-audit services to the
Fund, the Adviser or any entity controlling, controlled by, or under common
control with the Adviser ("Adviser affiliate") that provides ongoing
services to the Fund, if the engagement relates directly to the operations
and financial reporting of the Fund. The Chairman of the Audit Committee
shall be authorized to give such pre-approvals on behalf of the Audit
Committee.

Developing appropriate policies and procedures for the pre-approval of the
engagement of the Fund's independent auditors to provide any of the
services described above.

Considering whether the non-audit services the Fund's auditors provides to
the Adviser or any Adviser affiliate that provides ongoing services to the
Fund, to the extent not pre-approved, are compatible with maintaining the
auditors' independence.

Considering the controls the auditors use and any measures management takes
to assure that all items requiring the Audit Committee's preapproval are
identified and referred to the Audit Committee in a timely manner.

4. Obtaining and reviewing a report from the independent auditors at least
annually (including a formal written statement delineating all
relationships between the auditors and the Fund) regarding (a) the
independent auditors' internal quality-control procedures; (b) any material
issues raised by the most recent internal quality-control review, or peer
review, of the audit firm, or by any inquiry or investigation by
governmental or professional authorities, including but not limited to the
Public Company Accounting Oversight Board ("PCAOB"), within the preceding
five years, respecting one or more independent audits carried out by the
audit firm; (c) any steps taken to deal with any such issues; and (d) all
relationships between the independent auditors and the Fund and their

B-3

respective affiliates; and evaluating the qualifications, performance and
independence of the independent auditors, including their membership in the
SEC practice section of the AICPA and their compliance with all applicable
requirements for independence and peer review, and a review and evaluation
of the lead partner, taking into account the opinions of management and
discussing such reports with the independent auditors. The Audit Committee
shall present its conclusions with respect to the independent auditors to
the Board.

5. Reviewing any reports from the independent auditors mandated by Section
10A(b) of the Exchange Act regarding any illegal act detected by the
independent auditors (whether or not perceived to have a material effect on
the Fund's financial statements) and obtaining from the independent
auditors any information about illegal acts in accordance with Section
10A(b).

6. Monitoring the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law, and further considering the
rotation of the independent auditor firm itself.

7. Recommending to the Board of Directors policies for the Fund's or the
Adviser's hiring of employees or former employees of the independent
auditors who participated in the audit of the Fund.

Other responsibilities:

1. Reviewing with the Fund's and the Adviser's counsel legal matters that may
have a material impact on the Fund's financial statements or compliance
policies.

2. Receiving and reviewing periodic or special reports issued on
exposure/controls, irregularities and control failures related to the Fund.

3. Unless handled by the Board itself, reviewing with the independent auditors
and with Fund management, the adequacy and effectiveness of the accounting
and financial controls of the Fund, and eliciting any recommendations for
the improvement of internal control procedures or particular areas where
new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose payments, transactions or procedures that might be deemed illegal or
otherwise improper.

4. Discussing with management and the independent auditors any correspondence
with regulators or governmental agencies that raise material issues
regarding the Fund's financial statements or accounting policies.

5. Performing an annual performance evaluation of the Audit Committee.

6. Reporting to the Directors on the results of the activities of the Audit
Committee.

7. Performing any special reviews, investigations or oversight
responsibilities requested by the Directors.

8. Establishing procedures for the receipt, retention and treatment of
complaints received by the Fund regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing
matters.

9. Reviewing any report required by the Statement of Policy section of this
Audit Committee Charter pursuant to the rules of the SEC to be included in
a proxy statement for a fund (i.e., concise statement of Audit Committee's
functions, names of Audit Committee members, and number of meetings held in
the last year).

B-4

OTHER POWERS AND RESPONSIBILITIES

1. The Committee shall meet as necessary to carry out its responsibilities
hereunder, and otherwise from time to time as the Chairman of the Board or
the Chairman of the Committee deems appropriate.

2. The Audit Committee ordinarily shall meet in person, but members may attend
telephonically, and the Audit Committee may act by written consent to the
extent permitted by law and the Fund's bylaws.

3. The Audit Committee shall have the authority to meet privately and to
invite non-members to attend its meetings.

4. The Audit Committee shall meet regularly, in separate executive sessions,
with representatives of Fund management and the Fund's independent
auditors. The Audit Committee may also request to meet with internal legal
counsel and compliance personnel of the Fund's Adviser and with entities
that provide significant accounting or administrative services to the Fund
to discuss matters relating to the Fund's accounting and compliance as well
as other Fund-related matters. The Audit Committee may also request any
officer or employee of the Fund's Adviser or the Fund's independent
auditors or outside counsel to attend a meeting of the Audit Committee or
to meet with any members of, or consultants to, the Audit Committee. The
Fund's independent auditors shall have unrestricted access at any time to
Audit Committee members.

5. The Audit Committee shall prepare and keep minutes of its meetings and
document decisions made outside of its meetings by delegated authority.

6. A majority of the members of the Audit Committee shall constitute a quorum
for the transaction of business at any meeting of the Audit Committee. The
action of a majority of members of the Audit Committee present at a meeting
at which a quorum is present shall be the action of the Audit Committee.

7. The Audit Committee shall, subject to a limit of $2,500 per occurrence for
legal fees, have the authority and resources in its discretion to retain
special legal, accounting or other consultants to advise the Audit
Committee.

8. The Board shall adopt this charter and may amend it upon its own motion.
The Audit Committee shall review this Charter at least annually and
recommend to the Board any changes the Audit Committee deems appropriate.

B-5

APPENDIX C

TRANSAMERICA IDEX MUTUAL FUNDS
AEGON/TRANSAMERICA SERIES TRUST
TRANSAMERICA INCOME SHARES, INC.
(EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS")

GOVERNANCE AND NOMINATING COMMITTEE CHARTER

A. COMMITTEE MEMBERSHIP

The Governance and Nominating Committee (the "Committee") of the Funds' Boards
of Directors/Trustees (the "Boards") shall be composed solely of directors (or
trustees where the fund is organized as a business trust) who are not
"interested persons" of the Funds as defined in Section 2(a)(19) of the
Investment Company Act of 1940 (the "Independent Directors"). Other members of
the Boards, while not serving as members of the Committee, may assist the
Committee in the discharge of its responsibilities, e.g., identify and recommend
potential candidates. In addition, at the request of the Committee, the Funds'
investment advisers and other service providers will provide administrative
support and other assistance to the Committee.

B. OBJECTIVES OF THE COMMITTEE

The primary purposes and responsibilities of the Committee are to (i) identify
individuals qualified to become members of the Boards in the event that a
position is vacated or created, (ii) consider all candidates proposed to become
members of the Boards, subject to the procedures and policies set forth in this
Charter, the Funds' Bylaws or resolutions of the Boards, (iii) select and
nominate, or recommend for nomination by the Boards, candidates for election as
Directors and (iv) set any necessary standards or qualifications for service on
the Boards. The Committee's objective shall further be to provide oversight and
leadership regarding the operations of the Boards (and its committees)
generally, and to provide oversight and monitoring of certain specific issues
that particularly affect the duties of the Independent Directors.(2)

C. BOARD NOMINATIONS AND FUNCTIONS

1. In the event of any vacancies on the Boards, the Committee shall
oversee the process for the identification, evaluation and nomination
of potential candidates to serve on the Boards. The Committee may
solicit suggestions for nominations from any source it deems
appropriate.

2. The Committee shall evaluate each candidate's qualifications for Board
membership, and, with respect to nominees for Independent Director
membership, their independence from the Funds' investment

----------
(2) The members of the Committee shall not be subject to greater fiduciary
obligations and shall not be subject to a higher standard of care than the
other members of the Boards because of their work for the Committee.

C-1

advisers and other principal service providers. The Committee shall
consider the effect of any relationships beyond those delineated in
the 1940 Act that might impair the independence of a prospective
Independent Director.

3. In assessing the qualifications of a potential candidate for
membership on the Boards, the Committee may consider the candidate's
potential contribution to the operation of the Boards and its
committees, and such other factors as it may deem relevant. Specific
desired (but not required) qualities of Independent Director
candidates are set forth in Schedule A to this Charter. All equally
qualified nominees will be treated equally in consideration by the
Nominating Committee. No person shall be qualified to be a Board
member unless the Committee, in consultation with legal counsel, has
determined that such person, if elected as a Director, would not cause
the Funds to be in violation of or not in compliance with (a)
applicable law, regulation or regulatory interpretation, (b) its
organizational documents, or (c) any policy adopted by the Boards
regarding either the retirement age of any Board member or the
percentage of a Board that would be composed of Independent Directors.

4. While the Committee is solely responsible for the selection and
nomination of potential candidates to serve on the Boards, the
Committee may consider and evaluate nominations properly submitted by
shareholders of the Funds. Nominations proposed by shareholders will
be properly submitted for consideration by the Committee only if the
qualifications and procedures set forth in Schedule B of this Charter,
as it may be amended from time to time by the Committee or the Boards,
are met and followed. It shall be in the Committee's sole discretion
whether to seek corrections of a deficient submission or to exclude a
nominee from consideration.

5. The Committee shall evaluate, as necessary, the operations and
effectiveness of the Boards as a whole and shall evaluate the
composition of the Boards to determine whether it may be appropriate
to add individuals with different backgrounds or skills from those
already on the Boards.

D. COMMITTEE NOMINATIONS

The Committee shall make nominations for membership on all committees of the
Boards and shall review committee assignments as necessary.

E. OVERSIGHT RESPONSIBILITIES

1. The Committee, in consultation with the Chief Compliance Officer
("CCO") and Independent Directors' counsel, will have oversight
responsibilities and monitor certain issues that affect the duties of
independent members of the Boards including, but not limited to the
following:

- Adviser and Sub-Adviser Codes of Ethics

- Shareholder communications and shareholder complaint resolution
(reported as necessary)

- Disaster Recovery Policies and issues relating to Disaster
Recovery (reported on an annual basis or as necessary)

2. The Committee shall monitor the performance of legal counsel to the
Independent Directors and the Funds, respectively, as well as other
service providers (with the exception of the independent auditors,
which are monitored by the Audit Committee) that are chosen by the
Independent Directors.

C-2

F. BOARD OPERATIONS

1. The Committee shall, with the assistance of its counsel, define and
clarify the legal and fiduciary duties of members, including
expectations regarding preparation, attendance and participation at
meetings.

2. It is contemplated that the Committee will regularly consult with and
rely upon the CCO and Independent Directors' counsel for guidance and
direction in fulfilling its duties to the Boards and Fund
shareholders. It is also contemplated that the oversight
responsibilities of the Committee may evolve over time. It is not the
intention or desire of the Committee, or its members, to
"micro-manage" the activities of the adviser or any sub-advisers, nor
is it the intention or desire of the Committee, or its members, to act
as an executive committee. All matters between the members of the
Committee, the CCO and independent counsel are considered at all times
to be privileged and confidential.

3. The Committee shall periodically review and make recommendations
relative to education and related information for incumbent Board
members, including appropriate orientation of new directors.

G. OTHER POWERS AND RESPONSIBILITIES

The Committee shall meet as necessary to carry out its responsibilities
hereunder, and otherwise from time to time as the Chairman of the Board or the
Chairman of the Committee deems appropriate.

The Committee shall, subject to a limit of $2,500 per occurrence for legal fees,
have the resources and authority appropriate to discharge its responsibilities,
including the ability to engage and compensate third party consultants from each
Fund's assets.

The Committee shall periodically assess this Charter and recommend to the Boards
any revisions or modifications that the Committee deems necessary or appropriate
to the effective discharge of its responsibilities.

C-3

SCHEDULE A

RESPONSIBILITIES AND DESIRED QUALITIES
OF INDEPENDENT DIRECTORS

A. PRIMARY RESPONSIBILITIES

The Independent Directors' primary responsibility is management oversight of the
Funds on behalf of shareholders. Diverse responsibilities include review and
negotiation of contractual arrangements with management and other service
providers; and oversight and review of service provider performance, investment
performance, compliance, shareholder services and communication with
shareholders.

B. PERSONAL ATTRIBUTES

- Public or private sector stature sufficient to instill confidence.

- High personal and professional integrity.

- Good business sense.

- Able to commit the necessary time to prepare for and attend meetings.

- Not financially dependent on Director retainer and meeting fees.

C. SKILLS, EXPERIENCE AND QUALIFICATIONS FOR DECISION MAKING

- General understanding of financial issues, investing, financial
markets and technology.

- General understanding of balance sheets and operating statements.

- First-hand knowledge of investing.

- Experience in working in highly regulated and complex legal framework.

- Demonstrated ability to maintain "independence" of management and
other service agents while maintaining a constructive working
relationship.

- Ability to be critical, but not confrontational.

- Demonstrated ability to contribute to Board and committee process.

- Ability to consider diverse issues and make timely, well-informed
decisions.

- Familiarity with the securities industry.

- Qualification as an "Audit Committee Financial Expert."

Note: The Personal Attributes listed in Section B above should be possessed by
all Directors. The Skills, Experience and Qualifications listed in Section C
include items that should be possessed by all Directors as well as items that
should be possessed by at least some Directors.

SCHEDULE B

PROCEDURES FOR THE NOMINATING COMMITTEE'S CONSIDERATION OF
CANDIDATES SUBMITTED BY SHAREHOLDERS

6. Each eligible shareholder or shareholder group may submit no more than one
nominee each calendar year.

7. The nominee must satisfy all qualifications provided herein and in the
Funds' organizational documents, including qualification as a possible
Independent Director if the nominee is to serve in that capacity.

- A shareholder or shareholder group may not submit for consideration a
nominee which has previously been considered by the Committee.

8. In order for the Committee to consider shareholder submissions, the
following requirements must be satisfied regarding the shareholder or
shareholder group submitting the proposed nominee:

- Any shareholder or shareholder group submitting a proposed nominee
must beneficially own, either individually or in the aggregate, more
than 5% of a Fund's (or a series thereof) securities that are eligible
to

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(3) Terms such as "immediate family member" and "control" shall be interpreted
in accordance with the federal securities laws.

vote both at the time of submission of the nominee and at the time of
the Board member election. Each of the securities used for purposes of
calculating this ownership must have been held continuously for at
least two years as of the date of the nomination. In addition, such
securities must continue to be held through the date of the meeting.
The nominating shareholder or shareholder group must also bear the
economic risk of the investment.

9. Shareholders or shareholder groups submitting proposed nominees must
substantiate compliance with the above requirements at the time of
submitting their proposed nominee as part of their written submission to
the attention of the Funds' Secretary, who will provide all submissions to
the Committee. This submission to the Funds must include:

- the shareholder's contact information;

- the nominee's contact information and the number of applicable Fund
shares owned by the proposed nominee;

- a notarized letter executed by the nominee, stating his or her
intention to serve as a nominee and be named in a Fund's proxy
statement, if so designated by the Committee and the Funds' Board.

10. The Committee will consider all submissions meeting the applicable
requirements stated herein that are received by December 31 of the most
recently completed calendar year.

TIF-PRX-0507

TRANSAMERICA INCOME SHARES, INC. (THE "FUND")
570 CARILLON PARKWAY
ST. PETERSBURG, FL 33716

The undersigned hereby appoints each of John K. Carter and Dennis P. Gallagher
as attorney and proxy with full power of substitution to vote, as designated
below, all shares of the Fund, that the undersigned is entitled to provide
instructions for at the Annual Meeting of Shareholders to be held July 12, 2007
at 11:00 a.m., at 570 Carillon Parkway, St. Petersburg, FL 33716, and at any and
all adjournments thereof, and instructs him to vote as indicated with respect to
the matters set forth below and described in the Notice of Meeting and Proxy
Statement dated May 29, 2007.

Please mark boxes in blue or black ink.

Proposal 1: To elect ten Directors to the Board of Directors as listed below:

For All [ ] Against All [ ] For All Except _____________________

(1) Peter R. Brown
(2) Daniel Calabria
(3) John K. Carter
(4) Janice B. Case
(5) Charles C. Harris
(6) Leo J. Hill
(7) Russell A. Kimball, Jr.
(8) Norm R. Nielsen
(9) William W. Short, Jr.
(10) John W. Waechter

In their discretion, John K. Carter and/or Dennis P. Gallagher, on behalf of the
Fund, may transact such other business as may properly come before the meeting
and any adjournment(s) thereof.

THIS PROXY IS SOLICITED BY THE FUND'S BOARD OF DIRECTORS AND WILL BE VOTED FOR
THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED. The Board recommends that you
vote "For" the proposal.

Signature(s) should be exactly as name or names appearing on this proxy. If
shares are held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee or guardian, please give full title.

Dated:
---------------------------------

----------------------------------------
Signature(s)

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.