ENDOWMENTS, INC.
Four Embarcadero Center
P.O. Box 7650
San Francisco, California 94120
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 21, 1996
To the Shareholders of Endowments, Inc.:
The Annual Meeting of Shareholders of Endowments, Inc. (the "fund") will
be held at the offices of Capital Research and Management Company, 333 South
Hope Street, 55th Floor, Los Angeles, California, on Thursday, November 21,
1996, at 10:00 a.m., local time, to consider and vote on the following matters
described under the corresponding numbers in the accompanying Proxy Statement:
(1) election of a board of eight (8) directors;
(2) approval of a proposed amendment of investment objective to include
preservation of capital as a secondary objective;
(3) ratification of the selection by the Board of Directors of Deloitte &
Touche LLP as independent auditors for the fund for the fiscal year ending July
31, 1997; and
(4) such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on October 3, 1996
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the annual meeting.
THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE ANNUAL MEETING UNLESS THE
HOLDERS OF A MAJORITY OF THE SHARES OF THE FUND ARE PRESENT IN PERSON OR BY
PROXY. THEREFORE, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY, WHICH
IS SOLICITED BY THE BOARD OF DIRECTORS. THE PROXY IS REVOCABLE AND WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.
By Order of the Board of Directors
Patrick F. Quan
Secretary
San Francisco, California
October 9, 1996
IT IS IMPORTANT THAT YOU MARK, DATE, SIGN, AND
PROMPTLY MAIL THE ENCLOSED PROXY.
PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of the fund in
connection with the Annual Meeting of Shareholders to be held on Thursday,
November 21, 1996. Every Proxy returned in time to be voted at the meeting
will be voted, and, if a specification is made with respect to any proposal,
the Proxy will be voted accordingly. Anyone giving a Proxy may revoke it prior
to its exercise, either by filing with the fund a written notice of revocation,
by delivering a duly executed Proxy bearing a later date, or by attending the
meeting and voting in person.
At the close of business on October 3, 1996, the record date fixed by the
Board of Directors for the determination of shareholders entitled to notice of
and to vote at the meeting, there were outstanding 3,217,438 common shares of
capital stock, $1 par value, the only authorized class of voting securities of
the fund. Each share is entitled to one vote. There is no provision for
cumulative voting. As of August 31, 1996 the shareholders who owned 5% or more
of the fund's outstanding stock were: California Institute of the Arts,
246,298 shares (7.73%); St. Mark's School of Texas, 1,082,822 shares (33.98%);
and San Francisco Opera Association, 200,905 shares (6.30%). As St. Mark's
School of Texas owns in excess of 25% of the voting shares of the fund, it is,
pursuant to the Investment Company Act of 1940 (the "1940 Act"), presumed to be
a controlling person of the fund.
This Proxy Statement was first mailed to shareholders on or about October
9, 1996. The fund's Annual Report for the fiscal year ended July 31, 1996
including financial statements has been mailed to each shareholder entitled to
vote at the meeting. The report is not to be regarded as proxy soliciting
material or as part of this Proxy Statement.
With respect to the election of directors (Item 1), the eight nominees
receiving the highest number of votes shall be deemed to be elected. The vote
required to approve Item 2 is the affirmative vote of the lesser of (a) 67% or
more of all shares present in person or by proxy, provided the holders of more
than 50% of all outstanding voting shares are present or represented by proxy,
or (b) more than 50% of all outstanding voting shares on the record date. The
vote required to approve Item 3 is the affirmative vote of more than 50% of all
outstanding voting shares on the record date.
In the event that sufficient votes are not received by the meeting date, a
person named as proxy may propose one or more adjournments of the meeting for a
period or periods of not more than 30 days in the aggregate to permit further
solicitation of proxies. The persons named as proxies may vote all Proxies in
favor of such adjournment, but only if such persons also consider it reasonable
and in the interest of shareholders to adjourn such meeting. Signed but
unmarked Proxies will be voted for the below nominated directors and in favor
of all proposals. Proxies marked as abstaining from voting on one or more
proposals are treated as being present at the meeting for purposes of obtaining
the quorum necessary to hold the meeting, but are not counted as part of the
vote necessary to approve the proposal(s).
1. ELECTION OF DIRECTORS
Eight directors are to be elected at the meeting to hold office until the
next annual meeting of shareholders and until their successors are elected and
qualified. All of the nominees were elected by the shareholders at a meeting
held November 16, 1995. The directors were nominated for re-election at a
meeting of the Board held August 16, 1996. Each of the nominees has agreed to
serve as a director if re-elected. The Certificate of Incorporation provides
that each director, except for the Chairman of the Board or the President,
shall be a designated representative of at least one charitable institution
which is a shareholder of the fund or of Bond Portfolio for Endowments, Inc.
If, due to present unforeseen circumstances, any nominee should not be
available for election, the persons named as proxies will vote the signed but
unmarked Proxies and those marked for the nominated directors for such other
nominee as the present directors shall recommend. The table on the following
page sets forth certain information regarding the nominees.
<TABLE>
<CAPTION>
Name of Nominee Current Principal Year First Memberships on
(Position with Occupation and Elected a Boards of Other
Fund) Principal Employment Director Registered Investment
and Age During Past Five Years /1/ Companies and Publicly
Held Companies
<S> <C> <C> <C>
/2/ Robert B. Egelston Senior Partner, The 1989 Bond Portfolio for Endowments
(Chairman of the Capital Group Emerging Markets Growth
Board) Partners L.P.; former Fund
65 Chairman of the Board, The New Economy Fund
The Capital Group SMALLCAP World Fund
Companies, Inc.
/3/ /4/ /5/ Frank L. President, Independent 1992 Anchor Pathway Fund
Ellsworth (Director) Colleges of Southern Bond Portfolio for Endowments
53 California; former The Polaris Trust
President, Pitzer College. The Seasons Fund
Designated Representative:
Independent Colleges of
Southern California.
/3/ /4/ Steven D. Lavine President, California 1994 Bond Portfolio for Endowments
(Director) Institute of the Arts.
49 Designated Representative:
California Institute of the Arts.
/3/ /4/ Patricia A. Chief Financial Officer, 1988 Bond Portfolio for Endowments
McBride (Director) Kevin L. McBride,
53 D.D.S., Inc.
Designated Representative:
St. Mark's School of
Texas.
/3/ /4/ John R. Metcalf Private investor; former 1971 Bond Portfolio for Endowments
(Director) Vice President,
80 Alexander and Alexander.
Designated Representative:
Alpine Winter Foundation.
/3/ /4/ Charles R. Chairman, Pfaffinger 1988 Bond Portfolio for Endowments
Redmond (Director) Foundation; former President
70 and Chief Executive Officer,
Times Mirror Foundation; and
former Executive Vice
President and Member of the
Management Committee, The
Times Mirror Company.
Designated Representative:
Loyola Marymount University.
/2/ Thomas E. Terry Consultant. Former Vice 1994 American Variable Insurance Series
(President and President and Secretary, Bond Portfolio for Endowments
Director) Capital Research and
58 Management Company.
Designated Representative:
Citizens' Scholarship Foundation of America.
/3/ /4/ Robert C. Ziebarth Management Consultant, 1993 Bond Portfolio for Endowments
(Director) Ziebarth Company.
60 Designated Representative:
Foundation for Reproductive
Research & Education.
</TABLE>
______________________
/1/ Corporate positions, in some instances, may have changed during the period.
/2/ Is considered an "interested person" of the fund within the meaning of the
1940 Act, on the basis of his affiliation with Capital Research and Management
Company (the "Investment Adviser").
/3/ The fund has an Audit Committee comprised of the above-designated
directors. The function of the Committee includes such specific matters as
recommending the independent auditors to the Board of Directors, reviewing the
audit plan and results of audits and considering matters deemed appropriate by
the Board of Directors and/or the Committee.
/4/ The fund has a Contracts Committee comprised of the above-designated
directors who are not considered to be "interested persons" of the fund within
the meaning of the 1940 Act. The Committee's function is to request, review
and consider the information deemed necessary to evaluate the terms of the
investment advisory agreement that the fund proposes to enter into, renew or
continue prior to voting thereon, and to make its recommendations to the full
Board of Directors on these matters.
/5/ Mr. Ellsworth serves as a director or trustee on the boards of a total of
three funds, which are managed by Capital Research and Management Company.
Only Anchor Pathway Fund pays a director's fee. His total compensation from
that fund for the 12 months through July 31, 1996 was $13,000.
Shares of the fund may be purchased only by institutional investors exempt
from taxation under Section 501(c)(3) of the Internal Revenue Code. Therefore,
none of the directors owns any shares of the fund. Furthermore, the fund pays
no salaries or other compensation to its directors. No other director, except
for Mr. Ellsworth (as noted above), receives any compensation from funds
managed by Capital Research and Management Company.
There were four Board of Directors, one Contracts Committee, and two Audit
Committee meetings in the fiscal year 1996. Each of the nominees, except Mr.
Lavine, attended at least 75% of all meetings of the Board and of the
committees of which he or she was a member.
OTHER EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C>
Name Principal Occupation Officer
(Position with Fund) for Last Five Years /1/ Continuously
and Age Since/2/
Abner D. Goldstine Senior Vice President and Director, 1995
(Senior Vice President) Capital Research and Management
66 Company.
Robert G. O'Donnell Senior Vice President and Director, 1995
(Senior Vice President) Capital Research and Management
52 Company.
Steven N. Kearsley Vice President and 1975
(Vice President and Treasurer, Capital
Treasurer) Research and Management
55 Company.
Patrick F. Quan Vice President - Fund 1986
(Secretary) Business Management Group,
38 Capital Research and
Management Company.
</TABLE>
__________________
/1/ The occupation shown reflects the principal employment of each individual
during the past five years. Corporate positions, in some instances, may have
changed during the period.
/2/ Officers are elected to hold office until their respective successors are
elected, or until they resign or are removed.
No officers, directors, or employees of Capital Research and Management
Company, its parent, or its subsidiaries received any remuneration directly
from the fund.
2. APPROVAL OR DISAPPROVAL OF AN ADDITIONAL SECONDARY INVESTMENT OBJECTIVE
Currently, the primary investment objective of the fund is long-term
growth of principal with income as a secondary objective. It is proposed that
an additional secondary objective of preservation of capital be added. Thus,
if the proposed modification is approved, the fund will seek primarily
long-term growth of principal with income and preservation of capital as
secondary objectives. Notwithstanding this modification, the fund would
continue to invest primarily in common stocks or securities convertible into
common stock.
While the proposed change will not substantially alter the direction of
the fund, the Investment Adviser believes that it is important to stress, given
the fund's role as an investment vehicle for non-profit organizations, that
preservation of capital is considered an important factor in selecting
investments.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL
TO ADD AN ADDITIONAL SECONDARY OBJECTIVE OF PRESERVATION OF CAPITAL TO THE
FUND.
3. RATIFICATION OF THE SELECTION BY THE BOARD OF DIRECTORS OF DELOITTE &
TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR 1997
Shareholders are requested to ratify the selection by the Board of
Directors (including a majority of directors who are not "interested persons"
of the fund as that term is defined in the 1940 Act) of the firm of Deloitte &
Touche LLP as independent auditors for the fund for the fiscal year 1997. In
addition to the normal audit services, Deloitte & Touche LLP will provide
services in connection with the preparation and review of federal and state tax
returns for the fund. Deloitte & Touche LLP has served as the fund's
independent auditors since February 13, 1991 and has advised the fund that it
has no material direct or indirect financial interest in the fund or its
affiliates. No representative of the firm of Deloitte & Touche LLP is expected
to be available to answer questions or attend the meeting of shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THEIR
SELECTION OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
Neither the persons named in the enclosed Proxy nor the Board of Directors
are aware of any matters that will be presented for action at the meeting other
than matters set forth herein. Should any other matters properly requiring a
vote of shareholders arise, the Proxy in the accompanying form will confer upon
the person or persons entitled to vote the shares represented by such Proxy
discretionary authority to vote the shares in respect of any such matters in
accordance with their best judgment in the interest of the fund and its
shareholders.
SHAREHOLDER PROPOSALS
Notice is hereby given that any shareholder proposals for inclusion in the
proxy solicitation materials for the next annual meeting, presently scheduled
for November 20, 1997, must be received by the fund at its principal executive
offices, Four Embarcadero Center, Suite 1800, San Francisco, CA 94111, not less
than 120 days in advance of the first anniversary of the date of this Proxy
Statement. Any such proposals must comply with the requirements of Rule 14a-8
promulgated under the Securities Exchange Act of 1934.
GENERAL INFORMATION
Capital Research and Management Company is the investment adviser to the
fund and is located at 333 South Hope Street, Los Angeles, CA 90071 and 135
South State College Boulevard, Brea, CA 92821.
The cost of solicitation of the enclosed Proxies will be borne by the
fund. If necessary to ensure satisfactory representation at the meeting, the
officers of the fund may solicit proxies to a limited extent by telephone or
fax. Any such additional solicitation would be undertaken without cost to the
fund, except actual out-of-pocket communication charges which are estimated not
to exceed $1,000. ALL SHAREHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN
THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT MAY BE OBTAINED, WITHOUT
CHARGE, BY WRITING TO THE SECRETARY OF THE FUND AT FOUR EMBARCADERO CENTER,
SUITE 1800, SAN FRANCISCO, CA 94111, OR BY TELEPHONING 415/421-9360. THESE
REQUESTS WILL BE HONORED WITHIN THREE BUSINESS DAYS OF RECEIPT.
By Order of the Board of Directors
Patrick F. Quan
Secretary
October 9, 1996
PROXY
ENDOWMENTS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
FUND FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD NOVEMBER 21, 1996
The undersigned hereby appoints Thomas E. Terry and Patrick F. Quan as
lawful agents and proxies, each with full power to appoint a substitute to
represent the undersigned at the aforesaid Annual Meeting of Shareholders to be
held at the offices of Capital Research and Management Company, 333 South Hope
Street, 55th Floor, Los Angeles, California, on Thursday, November 21, 1996, at
10:00 a.m., on all matters coming before said meeting.
1. ELECTION OF DIRECTORS
Nominees: Robert B. Egelston, Frank L. Ellsworth, Steven D. Lavine,
Patricia A. McBride, John R. Metcalf, Charles R. Redmond, Thomas E. Terry, and
Robert C. Ziebarth
[ ] VOTE FOR all nominees listed above, except vote withheld from the
following nominees (if any):
OR
[ ] VOTE WITHHELD from all nominees.
2. APPROVAL OF A PROPOSED AMENDMENT OF INVESTMENT OBJECTIVE TO INCLUDE
PRESERVATION OF CAPITAL AS A SECONDARY OBJECTIVE
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, upon other matters as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEMS 2 AND 3.
_______________________________
________________________, 1996 _______________________________
(Date) (Please sign exactly as name appears below)
SHAREHOLDER: ________________________________
SHARES HELD OCTOBER 3, 1996: __________________
