SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Pinnacle Fund
(Name of Registrant as Specified in Its Charter)
Pinnacle Fund
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box:)
[x] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l), 14a-
6(i)2 or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
____________________________________________________________
2) Aggregate number of securities to which transaction
applies:
____________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
____________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________
5) Total fee paid:
____________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form of
Schedule and the date of its filing.
1) Amount Previously Paid:
____________________________________________________________
2) Form, Schedule or Registration Statement No.:
____________________________________________________________
3) Filing party:
____________________________________________________________
4) Date filed:
____________________________________________________________
NOTICE AND PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
PINNACLE FUND
Notice of Annual Meeting
To the Shareholders of Pinnacle Fund:
You are hereby notified that the Annual Meeting of holders of
shares of beneficial interest of Pinnacle Fund, an Indiana business
trust (the "Fund"), will be held at the offices of Heartland
Capital Management, Inc., 36 South Pennsylvania Street, Suite 610,
Indianapolis, Indiana on Tuesday, March 12, 1996, at 9:00 a.m.
(Indianapolis time) for the following purposes:
1. To elect trustees for a term of one year, as
described in Part I of the attached Proxy
Statement.
2. To approve or disapprove the continuation of the
existing Investment Advisory Agreement between the
Fund and Heartland Capital Management, Inc., as
described in Part II of the attached Proxy
Statement.
3. To ratify or reject the appointment of Geo. S.
Olive & Co. LLC as independent auditors for the
current fiscal year ending December 31, 1996, as
described in part III of the attached Proxy
Statement.
4. To transact such other business as may properly
come before the meeting.
The holders of record at the close of business on February 20,
1996 are entitled to notice of and to vote at the meeting. PLEASE
MARK, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If you attend the meeting,
you may, if you so desire, withdraw your proxy and vote in person.
Robert D. Markley
Secretary
Indianapolis, Indiana
February 27, 1996
<PAGE>
PINNACLE FUND
An Indiana Business Trust
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, MARCH 12, 1996
All holders of record of shares of beneficial interest (the
"Shares") of Pinnacle Fund (the "Fund") on February 20, 1996 (the
"Shareholders") are entitled to vote at the Annual Meeting of
Shareholders to be held at the offices of Heartland Capital
Management, Inc., 36 South Pennsylvania Street, Suite 610,
Indianapolis, Indiana, on Tuesday, March 12, 1996, at 9:00 a.m.
All Shareholders unable to attend such meeting who wish to vote
their shares upon the business to be transacted at such meeting are
requested to mark, sign and date the accompanying form of proxy and
return it in the addressed, postage-paid envelope enclosed for your
convenience. The proxy is revocable by you at any time before it
is voted, and the signing of such proxy will not affect your right
to vote in person if you attend the meeting. All proxies returned,
and not so revoked, will be voted in accordance with their terms.
As stated in the Notice, the matters to be considered at the
meeting are (i) the election of trustees, (ii) the approval or
disapproval of the continuation of the Investment Advisory
Agreement between the Fund and Heartland Capital Management, Inc.
("Heartland"), (iii) the ratification or rejection of the
appointment of independent auditors, and (iv) the transaction of
such other business as may properly come before the Annual Meeting.
If the enclosed proxy is duly executed and received in time for the
Annual Meeting and if no contrary specification is made as provided
therein, the Shares represented thereby will be voted FOR election
of the six nominees listed herein, FOR approval of the continuation
of the Investment Advisory Agreement, and FOR the ratification of
the appointment of the independent auditors listed herein.
The solicitation of the accompanying form of proxy is made on
behalf of the Board of Trustees of the Fund. The expense of the
solicitation of the proxies for this meeting will be borne by the
Fund. The solicitation will be made through the use of the mails
and by personal solicitation through regular employees of the Fund
who will not be additionally compensated therefor.
The mailing address of the principal executive offices of the
Fund is Pinnacle Fund, 36 South Pennsylvania Street, Suite 610,
Indianapolis, Indiana 46204. This Proxy Statement and the enclosed
form of proxy were first sent or given to Shareholders on
approximately February 27, 1996.
Outstanding Shares
As of February 6, 1996, the Fund had 648,895.951 Shares issued
and outstanding. Each Shareholder is entitled to one vote upon any
proposal submitted to the meeting for each full Share standing of
record in his name on February 20, 1996, and a fractional vote for
any fractional Share held of record in his name on February 20,
1996. As far as the Fund is advised, the following table sets
forth, as of February 6, 1996, the persons known to be beneficial
owners of more than 5% of the Fund's outstanding Shares:
Amount and
Name and Nature of
Address of Beneficial Percent
Beneficial Owner Ownership(1) of Class
Barry F. Ebert
36 S. Pennsylvania, Suite 610 77,011.978 11.87%
Indianapolis, Indiana Shares (2)
Robert D. Markley
36 S. Pennsylvania, Suite 610 95,233.467 14.68%
Indianapolis, Indiana Shares (3)
(1) Unless otherwise indicated, the persons shown have sole voting
and investment power over the Shares listed.
(2) Includes 67,222.384 Shares owned by the Heartland Capital
Management, Inc. Profit Sharing Trust Plan, as to which
Shares Messrs. Ebert and Markley, as co-trustees, have voting
control, and 908.576 Shares owned by Mr. Ebert's wife and her
individual retirement account as to which Mr. Ebert disclaims
beneficial ownership.
(3) Includes 3,311.526 Shares held in Mr. Markley's individual
retirement account, 949.338 Shares owned by Mr. Markley's
children, and 23,750.219 Shares owned by Mr. Markley's wife
and her individual retirement account. Mr. Markley disclaims
beneficial ownership of the Shares owned by his wife. Also
includes the 67,222.384 Shares owned by the Heartland Capital
Management, Inc. Profit Sharing Trust Plan referred to in
footnote (2) above.
Fund Custodian and Transfer Agent
The Fund's custodian, transfer agent and disbursing agent is
Firstar Trust Company, 615 East Michigan, 3rd Floor, Milwaukee,
Wisconsin 53202.
I. ELECTION OF TRUSTEES
The Agreement and Declaration of Trust and the Code of By-Laws
of the Fund set the number of members of the Board of Trustees at
seven, and each Shareholder is entitled thereunder to vote for
seven persons for Trustee. There are presently six duly qualified
Trustees. The Board of Trustees has determined that it is not
necessary for the protection of shareholders to fill the vacancy on
the Board of Trustees at the Annual Meeting. Accordingly, the
Board of Trustees has nominated six persons, each of whom is a
member of the Board of Trustees.
Proxies will be voted only for the six nominees listed below,
unless any nominee shall be unavailable for election at the time of
the meeting (which is not presently anticipated), in which case the
persons named in the proxies will vote the proxies for other
persons in their discretion (but in no event for more than six
persons). There will not be cumulative voting for the election of
Trustees and the affirmative vote of the holders of a majority of
the Shares represented at the Annual Meeting is required to elect
a Trustee.
With respect to each of such nominees, the following
information, including the period served as Trustee and principal
occupation is furnished:
Name, Age, Period Principal Occupation
Served as Trustee During the Past Five Years
Thomas F. Maurath*, 37 Elected President of the Fund in February
Trustee since 1995; Investment officer of Heartland
December 1984 since February 1984; Investment officer
of Merchants Investment Counseling, Inc.
from June 1982 until February 1984.
Barry F. Ebert*, 55 President and Director of Heartland since
Trustee since January 1984. President of the Fund from
December 1984 1984 to February 1995. For more than
five years prior thereto, Mr. Ebert was
President of Merchants Investment
Counseling, Inc., a registered investment
adviser.
Robert D. Markley*, 44 Secretary/Treasurer of the Fund since
Trustee since December 1984; Vice President and
December 1984 Secretary/Treasurer of Heartland since
January 1984. For more than five years
prior thereto, Mr. Markley was Vice
President of Merchants Investment
Counseling, Inc.
Leo G. Watson, M.D., 57 Dr. Watson has been engaged in the
Trustee since private practice of ophthalmology
December 1984 in Kokomo, Indiana for more than five
years
Robert L. Blackburn, 47 Mr. Blackburn has been President of
Trustee since Columbus Automotive Group, a Columbus,
December 1984 Indiana automobile dealer, for more than
five years.
Thomas D. Rush, 55, Mr. Rush has been President and CEO of
Trustee since Trinity Homes, Inc., an Indianapolis,
January 1992 Indiana builder of single family homes,
since May 1991. From 1973 to 1991,
Mr. Rush was President and CEO of the
Jonathan Group, a single family home
builder in Indianapolis.
* Messrs. Ebert, Markley and Maurath are "interested persons" in
Heartland, as that term is defined in the Investment Company
Act of 1940 (the "Act"). Messrs. Maurath and Markley are the
only executive officers of the Fund.
Shares Beneficially Owned by Nominees
The Shares beneficially owned as of February 6, 1996, by each
nominee for Trustee of the Fund and by all Trustees and officers of
the Fund as a group (6 persons) are shown below.
Amount and Nature Percentage
of Beneficial of Shares
Nominee Ownership (1) Outstanding
Thomas F. Maurath 5,735.269 Shares (2) 0.88%
Barry F. Ebert 77,011.978 Shares (3) 11.87%
Robert D. Markley 95,233.467 Shares (4) 14.68%
Leo G. Watson 2,012.706 Shares (5) 0.31%
Robert L. Blackburn 3,616.626 Shares (6) 0.56%
Thomas D. Rush 1,648.471 Shares 0.25%
All Trustees and officers
as a group (6 persons) 118,036.133 Shares 18.19%
(1) Unless otherwise indicated, the persons shown have sole voting
and investment power of the Shares listed.
(2) Includes 2,136.946 Shares held in Mr. Maurath's individual
retirement account, 1,576.256 Shares held in the individual
retirement account of Mr. Maurath's wife, and 1,217.387 Shares
owned by Mr. Maurath's children.
(3) Includes 67,222.384 Shares owned by the Heartland Capital
Management, Inc. Profit Sharing Trust Plan, as to which
Shares Messrs. Ebert and Markley, as co-trustees, have voting
control, and 908.576 Shares owned by Mr. Ebert's wife and her
individual retirement account as to which Mr. Ebert disclaims
beneficial ownership.
(4) Includes 3,311.526 Shares held in Mr. Markley's individual
retirement account, 949.338 Shares owned by Mr. Markley's
children, and 23,730.219 Shares owned by Mr. Markley's wife
and her individual retirement account. Mr. Markley disclaims
beneficial ownership of the Shares owned by his wife. Also
includes the 67,222.384 Shares owned by the Heartland Capital
Management, Inc. Profit Sharing Trust Plan referred to in
footnote (2) above.
(5) Represents 2,012.706 Shares owned by Dr. Watson's wife. (6)
Represents 3,616.626 Shares owned by a partnership between Mr.
Blackburn and Lynne B. Weir.
Meetings of Trustees
The Board of Trustees met two times during 1995 and has no
committees. Messrs. Watson and Rush each attended one meeting of
the Board during 1995.
Trustee and Executive Officer Compensation
The following table shows the compensation paid by the Fund to
each trustee and executive officer of the Fund in 1995:
Name of Person, Position Aggregate Compensation from Fund
Thomas F. Maurath, 0
President and Trustee
Barry F. Ebert 0
Trustee
Robert D. Markley 0
Secretary/Treasurer and Trustee
Leo G. Watson $100
Trustee
Robert L. Blackburn $200
Trustee
Thomas D. Rush $100
Trustee
II. RATIFICATION OR REJECTION OF INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement
Heartland Capital Management, Inc., 36 South Pennsylvania
Street, Suite 610, Indianapolis, Indiana 46204, serves as manager
of the Fund pursuant to the Investment Advisory Agreement (the
"Agreement") between the Fund and Heartland dated December 19,
1984. Pursuant to the Agreement, the Fund pays Heartland an annual
fee, payable monthly, of 8/10 of 1% of the Fund's average daily net
assets, as determined by valuations made at the close of each
business day. For the fiscal year ended December 31, 1995, the
Fund paid Heartland management fees pursuant to the Agreement in
the aggregate amount of $110,245.11.
Under the Agreement, Heartland is primarily responsible for
investment decisions affecting the Fund's portfolio. Also,
Heartland, at its own expense and without reimbursement from the
Fund, furnishes office space, office facilities, equipment,
executive officers and executive expenses, and bears all sales and
promotional expenses of the Fund. The Fund pays all operating
expenses of the Fund including the costs of preparing this proxy
Statement and various reports to Shareholders, interest charges,
taxes, legal expenses, fees of Trustees who are not interested
persons of Heartland, salaries of administrative or clerical
personnel, auditing and accounting services, fees and expenses of
any custodian, printing and mailing expenses, postage, and charges
and expenses of the disbursing agents, registrar and transfer
agent, including the cost of keeping all necessary Shareholder
records and accounts and handling.
The Agreement obligates Heartland to reimburse the Fund to the
extent that the Fund's aggregate annual expenses, including the
investment advisory fee but excluding interest, taxes, and
brokerage commissions, exceed the sum of (i) 2% of the first
$10,000,000 of the Fund's average net assets, (ii) 1-1/2% of the
next $20,000,000 of the Fund's average net assets, and (iii) 1% of
the Fund's average net assets in excess of $30,000,000 for each
year, as determined by valuations made as of the close of each
business day of the year. Heartland shall, on a quarterly basis,
reimburse the Fund by offsetting against its monthly fee all
expenses in excess of such sum, prorated on an annual basis.
The Agreement is not assignable and may be terminated by
either party, without penalty, on sixty days' notice. Unless
sooner terminated, the Agreement will continue in effect as long as
it is approved annually by (a) the Trustees or by a vote of a
majority of the outstanding Shares of the Fund and (b) in either
case, by the affirmative vote of a majority of Trustees who are not
interested persons of Heartland, cast in person at a meeting called
for the purpose of voting for such approval. The Agreement
provides that Heartland is not liable for any error of judgment or
of law or of loss in connection with the Agreement except as to
those resulting from willful misfeasance, bad faith or gross
negligence.
The Agreement was last submitted to a vote of the Shareholders
at the Fund's last Annual Meeting held on March 14, 1995.
The members of the Board of Directors of Heartland are Barry
F. Ebert, who serves as a Trustee of the Fund and as President of
Heartland, Robert D. Markley, who serves as Secretary/Treasurer and
a Trustee of the Fund and as Vice President of Heartland and Thomas
F. Maurath, who serves as President and a Trustee of the Fund. Mr.
Ebert owns 55.2%, Mr. Markley owns 36.8%, and Mr. Maurath owns 8%,
of the outstanding common shares of Heartland.
Recommendation of Board of Directors
The Board of Trustees of the Fund, including all independent
Trustees present, unanimously approved continuation of the
Agreement at a meeting held on February 20, 1996. The Board of
Trustees recommends a vote FOR ratification of the continuation of
the Agreement.
In arriving at its recommendation, the Board of Trustees
considered the long-term performance of the Fund, the stability of
the management of Heartland, the pecuniary interest of the
management of Heartland in the success of the Fund, the Fund's
ratio of expenses to net assets, and the financial condition of
Heartland.
From the fund's inception on March 6, 1985, to December 31,
1995, a hypothetical $10,000 investment would have grown to
$40,633.00, assuming reinvestment of dividends, a compound annual
return of 13.8%. The Board of Trustees considered the Fund's long-
term performance to be adequate.
The employees of Heartland principally responsible for the
management of the Fund are, and have been since the inception of
the Fund, Messrs. Ebert, Markley and Maurath. Each of them
beneficially owns a substantial number of shares of the Fund. See
"ELECTION OF TRUSTEES - Shares Beneficially Owned by Nominees"
above. None of them has ever redeemed shares of the Fund
beneficially owned by him. The Board of Trustees considered the
stability of the management of Heartland and the identity of
interest of such management with the other shareholders of the Fund
to be favorable.
The Board of Trustees found the Fund's ratio of expenses to
average net assets to be similar to the ratios of other funds of
the same size and investment objectives. The Board of Trustees
also reviewed the financial condition of Heartland and found it
sound.
Heartland allocates a portion of Fund brokerage to
unaffiliated brokers who provide investment research services to
the Fund and Heartland. Such investment research may be used for
the benefit of other clients of Heartland. Research services
acquired by allocation of brokerage of other clients may also be
used for the benefit of the Fund.
Required Vote
The affirmative vote of a majority of the outstanding Shares
is required to approve the continuation of the Agreement. If the
Shareholders of the Fund do not approve the continuance of the
existing Agreement, it will continue in effect for the time being
until the Trustees take such further action as they deem to be in
the best interests of the Shareholders of the Fund.
III. APPOINTMENT OF INDEPENDENT AUDITORS
The Act requires independent certified public accountants to
be selected annually and such selection to be ratified or rejected
by the Shareholders at each annual meeting of the Fund. The Board
of Trustees of the Fund, including a majority of the Trustees who
are not interested persons of the Fund, by consent resolution dated
February 20, 1996, selected Geo. S. Olive & Co. LLC as independent
certified public accountants and auditors to the Fund, to examine
the financial statements of the Fund for the current fiscal year
ending December 31, 1996, subject to ratification or rejection by
the Shareholders. Geo. S. Olive & Co. LLC served as independent
certified public accountants and auditors to the Fund for the past
fiscal year and is considered by the Trustees to be well qualified.
The affirmative vote of the majority of the Shares represented at
the Annual Meeting is required for ratification of the appointment.
A representative of Geo. S. Olive & Co. LLC is expected to be
present at the Annual Meeting to respond to appropriate questions
regarding the services performed for the Fund and will have the
opportunity to make a statement if he desires to do so.
The Board of Trustees therefore recommends a vote FOR
ratification of the appointment of Geo. S. Olive & Co. LLC
IV. OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the
"Notice of Annual Meeting." The Board of Trustees has not been
informed of any matters other than those stated in the Notice which
are to be presented at the meeting. If any other business is
brought before the Annual Meeting, the persons named in the
attached proxy will vote according to their discretion.
Shareholder Proposals
October 30, 1996 is the date by which shareholder proposals
intended to be presented at the 1997 Annual Meeting of Shareholders
must be received by the Fund to be considered for inclusion in the
proxy materials relating to that meeting.
BY ORDER OF THE BOARD OF TRUSTEES.
___________________________________
Robert D. Markley
Secretary
IMPORTANT:
Please immediately mark, sign, date and return your Proxy in
the enclosed stamped, addressed envelope. If you attend the
meeting and if you so desire, you may withdraw your proxy and vote
in person. THANK YOU FOR ACTING PROMPTLY.
PROXY PINNACLE FUND
ANNUAL MEETING OF SHAREHOLDERS
March 12, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby constitutes and appoints Thomas F.
Maurath and Robert D. Markley, and each of them, proxies with full
power of substitution to vote for the undersigned all shares of
beneficial interest of Pinnacle Fund, an Indiana business trust
(the "Fund"), which the undersigned would be entitled to vote if
personally present at the annual meeting of shareholders to be held
on March 12, 1996, at 9:00 a.m. (Indianapolis time), and at any
adjournment thereof, upon the matters described in the accompanying
Proxy Statement and upon any other business that may properly come
before the meeting or any adjournment thereof. Said proxies are
directed to vote or to refrain from voting as checked below upon
the following matters, and otherwise in their discretion:
The Board of Trustees recommends a vote FOR each of the following:
1. Election of Trustees
Nominees: Barry F. Ebert, Robert D. Markley, Thomas F.
Maurath, Leo G. Watson, M.D., Robert L. Blackburn,
Thomas D. Rush.
( ) FOR all nominees listed above except authority is
withheld to vote for the following named nominee or
nominees (if any).
_______________________________________________________
( ) WITHHOLD AUTHORITY to vote for all nominees listed above.
2. Approval of the continuation of the existing Investment
Advisory Agreement between the Fund and Heartland Capital
Management, Inc.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. Ratification of the appointment of Geo. S. Olive & Co. LLC as
independent auditors for the current fiscal year ending
December 31, 1996.
( ) FOR ( ) AGAINST ( ) ABSTAIN
THIS PROXY WILL BE VOTED AS DIRECTED OR IF NO DIRECTION IS
INDICATED, WILL BE VOTED "FOR" ELECTION OF SAID SIX NOMINEES, "FOR"
APPROVAL OF THE CONTINUATION OF THE INVESTMENT ADVISORY AGREEMENT,
AND "FOR" RATIFICATION OF THE APPOINTMENT OF GEO. S. OLIVE & CO. AS
INDEPENDENT AUDITORS.
The undersigned acknowledges receipt with this Proxy of a copy
of the Notice of Annual Meeting and Proxy Statement dated February
27, 1996, and the Fund's annual report to shareholders for the year
ended December 31, 1995. The under-signed hereby revokes any proxy
or proxies heretofore given.
DATED: _______________
Number of Shares of
Beneficial Interest of the
Fund owned on
February 20, 1996: Signature of Shareholder or Shareholders
__________________________________________
__________________________________________
__________________________________________
IMPORTANT: Please date this Proxy and sign
exactly as your name or names appear hereon. If
shares of beneficial interest of the Fund are held
jointly, signature should include both names. Execu-
tors, administrators, trustees, guardians and others
signing in a representative capacity, please give full
titles.
