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] No fee required.
[ ] 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 18, 1997, 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, 1997, 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, 1997
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.
/s/ Robert D. Markley
________________________
Robert D. Markley
Secretary
Indianapolis, Indiana
February 27, 1997
PINNACLE FUND
An Indiana Business Trust
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, MARCH 18, 1997
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 18, 1997, 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, 1997.
Outstanding Shares
As of February 6, 1997, the Fund had 688,312.518 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, 1997, and a fractional vote for any fractional
Share held of record in his name on February 20, 1997. As far as the
Fund is advised, the following table sets forth, as of February 6, 1997,
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 72,067.996 10.4%
Indianapolis, Indiana Shares (2)
Robert D. Markley
36 S. Pennsylvania, Suite 610 92,990.670 13.5%
Indianapolis, Indiana Shares (3)
Butler Fairman and Seufert, Inc. 43,273.457 6.3%
Profit Sharing and 401(k) Plan Shares
9405 Delegates Row
Indianapolis, Indiana 46250
(1) Unless otherwise indicated, the persons shown have sole voting and
investment power over the Shares listed.
(2) Includes 60,827.427 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
1,042.748 Shares owned by Mr. Ebert's wife and her individual
retirement account as to which Mr. Ebert disclaims beneficial
ownership.
(3) Includes 3,801.987 Shares held in Mr. Markley's individual
retirement account, 1,090.098 Shares owned by Mr. Markley's
children, and 27,271.158 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
60,827.427 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. Abstentions, broker
non-votes and instructions to withhold authority to vote for a nominee on
the accompanying proxy will therefore have the effect of votes cast
against the nominee.
With respect to each of such nominees, the following information,
including the period served as Trustee and principal occupation is
furnished:
Name, Age, Period
Served as Trustee Principal Occupation
During the Past Five Years
Thomas F. Maurath*, 38 Elected President of the Fund in February
Trustee since December 1984 1995; Investment officer of Heartlnad since
February 1984; Investment officer of
Merchants Investment Counseling, Inc. from
June 1982 until February 1984.
Barry F. Ebert*, 56 Presidnet and Director of Heartland since
Trustee since December 1984 January 1984; President of the Fund from
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*, 45 Secretary/Treasurer of the Fund since
Trustee since December 1984 December 1984; Vice President and 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., 58 Dr. Watson has been engage in the private
Trustee since December 1984 practice of ophthalmology in Kokomo, Indiana
for more than five years.
Robert L. Blackburn, 48 Mr. Blackburn has been President of Columbus
Trustee since December 1984 Automotive Group, a Columbus, Indiana
automobile dealer, for more than five years.
Thomas D. Rush, 56 Mr. Rush has been President and CEO of
Trustee since January 1992 Homes, Inc., an Indianapolis, 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, 1997, 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 6,690.741 Shares (2) 1.0%
Barry F. Ebert 72,067.996 Shares (3) 10.4%
Robert D. Markley 92,990.670 Shares (4) 13.5%
Leo G. Watson 2,012.706 Shares (5) 0.3%
Robert L. Blackburn 4,152.870 Shares (6) 0.6%
Thomas D. Rush 1,897.893 Shares 0.3%
All Trustees and officers
as a group (6 persons) 118,980.449 Shares 17.3%
(1) Unless otherwise indicated, the persons shown have sole voting and
investment power of the Shares listed.
(2) Includes 2,453.250 Shares held in Mr. Maurath's individual
retirement account, 1,809.426 Shares held in the individual
retirement account of Mr. Maurath's wife, and 1,504.074 Shares
owned by Mr. Maurath's children.
(3) Includes 60,827.427 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
1,042.748 Shares owned by Mr. Ebert's wife and her individual
retirement account as to which Mr. Ebert disclaims beneficial
ownership.
(4) Includes 3,801.987 Shares held in Mr. Markley's individual
retirement account, 1,090.098 Shares owned by Mr. Markley's
children, and 27,271.158 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
60,827.427 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 4,152.870 Shares owned by a partnership between Mr.
Blackburn and Lynne B. Weir.
Meetings of Trustees
The Board of Trustees met two times during 1996 and has no
committees. Messrs. Blackburn 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 1996:
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 $200
Trustee
Robert L. Blackburn $100
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, 1996, the Fund paid Heartland management fees
pursuant to the Agreement in the aggregate amount of $126,100.23.
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 affirma-
tive 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 12, 1996.
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 18, 1997. 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, 1996,
a hypothetical $10,000 investment would have grown to $49,751, assuming
reinvestment of dividends, a compound annual return of 14.5%. 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 18, 1997,
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,
1997, 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 27, 1997 is the date by which shareholder proposals
intended to be presented at the 1998 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.
/s/ Robert D. Markley
___________________________________
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 18, 1997
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 18, 1997, 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 discre-
tion:
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, 1997.
( ) 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,
1997, and the Fund's annual report to shareholders for the year ended
December 31, 1996. The undersigned hereby revokes any proxy or proxies
heretofore given.
DATED: ___________
Number of Shares of Signature of Shareholder or Shareholders
Beneficial Interest
of the Fund owned on
February 20, 1997: ______________________________________________
______________________________________________
______________________________________________
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. Executors,
administrators, trustees, guardians and
others signing in a representative
capacity, please give full titles.
