SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE PBHG FUNDS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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PBHG LARGE CAP 20 FUND
OF
THE PBHG FUNDS, INC.
P.O. Box 419534
Kansas City, MO 64141-6534
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
November 3, 1997
TO THE SHAREHOLDERS:
A special meeting of the holders of shares of Common Stock of The PBHG
Funds, Inc. (the "Company") representing interests in the PBHG Large Cap 20 Fund
(the "Fund") will be held on December 11, 1997, at ________ at _________________
_____________________________________. The meeting will be held for the
following purpose:
To approve or disapprove a change to the Fund's
subclassification under the Investment Company Act of 1940
from a diversified investment company to a non-diversified
investment company.
Shareholders of record at the close of business on October 24, 1997,
are entitled to vote at the special meeting and any adjournments. If you attend
the meeting, you may vote your shares in person. If you do not expect to attend
the meeting, please fill in, date, sign and return the proxy in the enclosed
envelope which requires no postage if mailed in the United States.
It is important that you return your signed proxy promptly so that a
quorum may be assured.
By order of the Board of Directors,
Harold J. Baxter
Chairman
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PBHG LARGE CAP 20 FUND
OF
THE PBHG FUNDS, INC.
P.O. Box 419534
Kansas City, MO 64141-6534
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
December 11, 1997
The accompanying proxy is solicited by the Board of Directors of The
PBHG Funds, Inc. (the "Company"). A shareholder can revoke the proxy prior to
its use by appearing at the December 11, 1997, special meeting of shareholders
(such meeting and any adjournments thereof are hereinafter collectively called
the "Meeting") and voting in person, by giving written notice of such revocation
to the Secretary of the Company or by returning a subsequently dated proxy. It
is anticipated that the proxies will be solicited primarily by mail. The
officers and directors of the Company and the Company's service providers may
also solicit proxies by telephone, telegraph or personal interview. The Company
may retain a proxy solicitation firm to assist in soliciting proxies. The cost
of soliciting proxies will be borne by the Company. The Company may also pay
persons holding stock in their names, or those of their nominees, for their
expenses in sending proxies and proxy materials to beneficial owners or
principals. It is expected that this proxy statement and accompanying proxy will
be first sent to shareholders on or about November 3, 1997.
VOTING
At the Meeting, a proposal will be presented to change the
subclassification of the PBHG Large Cap 20 Fund (the "Fund") under the
Investment Company Act of 1940, as amended (the "1940 Act"), from a diversified
investment company to a non-diversified investment company (the "Proposal"). The
affirmative vote of the holders of a "majority of the outstanding voting
securities" of the Fund, as defined in the 1940 Act, is required to approve the
Proposal. The 1940 Act defines a "majority of the outstanding voting securities"
to mean the lesser of (a) the vote of holders of 67% or more of the shares of
Common Stock of the Fund present in person or by proxy at the Meeting, if the
holders of more than 50% of the outstanding voting shares of the Fund are
present in person or represented by proxy, or (b) the vote of the holders of
more than 50% of the outstanding Common Stock of the Fund. The Board of
Directors knows of no matters other than the Proposal that will be presented at
the meeting.
Owners of record holding shares of Common Stock of the Company
representing interests in the Fund (the "Shares") at the close of business on
October 24, 1997 (the "Record Date") will be entitled to vote at the Meeting. On
the Record Date, there were _________ Shares outstanding. Each shareholder is
entitled to one vote for each full Share held and a proportionate fractional
vote for any fractional Shares held.
Abstentions and broker non-votes (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other person entitled to vote shares with respect to which
the broker or nominee does not have discretionary power) will be counted for
purposes of determining whether a quorum is present at the Meeting. Abstentions
and broker non-votes do not count as votes cast but have the same effect as
casting a vote against the Proposal, provided a quorum exists.
The Board of Directors has named Harold J. Baxter and John M. Zerr, and
each of them, with power of substitution as attorneys and proxies. Unless
otherwise directed by the accompanying proxy, the proxies will vote in favor of
the Proposal.
<PAGE>
PROPOSAL
CHANGE OF SUBCLASSIFICATION OF THE FUND FROM A DIVERSIFIED INVESTMENT
COMPANY TO A NON-DIVERSIFIED INVESTMENT COMPANY
On October 2, 1997, the Board of Directors, by unanimous written
consent in lieu of a meeting of the Board, approved and recommended that the
shareholders approve the Proposal. Pursuant to the Proposal, the
subclassification of the Fund under Section 5(b) of the 1940 Act will be changed
from a diversified investment company to a non-diversified investment company.
To be classified as a diversified investment company, the Fund, with respect to
75% of the Fund's total assets, may not purchase securities of any issuer
(except securities issued by the United States, its agencies and
instrumentalities and repurchase agreements involving such securities) if, as a
result, more than 5% of the total assets of the Fund would be invested in
securities of such issuer or the Fund would hold more than 10% of the
outstanding securities of such issuer. If the Proposal is approved, the Fund
will no longer be subject to these limitations. However, the Fund intends to
continue to conduct its operations so as to qualify as a "regulated investment
company" for purposes of the Internal Revenue Code of 1986, as amended, which
requires that, at the end of each quarter of the taxable year, (i) at least 50%
of the market value of the Fund's total assets be invested in cash, U.S.
Government securities, the securities of other regulated investment companies,
and other securities, with such other securities of any one issuer limited for
the purposes of this calculation to an amount not greater than 5% of the value
of the Fund's total assets, and (ii) not more than 25% of the value of its total
assets be invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies).
The Fund seeks to achieve its objective of long-term growth of capital
by investing a large percentage of its total assets in equity securities of a
limited number of large capitalization companies that have a strong earnings
growth outlook and potential for capital appreciation. Under normal market
conditions, the Fund will invest at least 65% of its total assets in no more
than 20 stocks. Currently, the Fund invests almost 100% of its total assets in
20 stocks. As a result, each such security represents approximately 5% of the
Fund's total assets at the time of its acquisition. Subsequent market
appreciation has caused certain securities to now represent more than 5% of the
Fund's total assets. As a result of this market appreciation and because of the
Fund's present status as a diversified investment company, it has limited
flexibility to increase its holdings in any security that represents more than
5% of the Fund's total assets.
Management of the Company believes that approving the Proposal would
give the Fund's investment adviser more flexibility to focus the Fund's
investments in stocks that it views as offering the best potential to achieve
the Fund's investment objectives. Under the current limitation, the Fund's
investment adviser, under certain circumstances, may be precluded from
purchasing additional securities of those issuers which the investment adviser
believes offer the most attractive prospects for future earnings growth and
capital appreciation. If the Proposal is approved, the Fund could concentrate
its investments in a more limited number of issuers than is permitted under the
current limitation. As a result, the Fund's investment portfolio may be more
sensitive to changes in the market value of a single issuer.
The Board of Directors recommends that you vote FOR the Proposal.
2
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OTHER INFORMATION
The Adviser
The investment adviser to the Fund is Pilgrim Baxter & Associates, Ltd.
(the "Adviser") which has its principal business address at 1255 Drummers Lane,
Suite 300, Wayne, Pennsylvania 19087.
The Distributor
The distributor of the Fund's Shares is SEI Investments Distribution
Co. (the "Distributor") which has its principal business address at One Freedom
Valley Road, Oaks, PA 19456.
The Administrator and Sub-Administrator
The Fund's administrator is PBHG Fund Services (the "Administrator"), a
wholly owned subsidiary of the Adviser, which has its principal business address
at 1255 Drummers Lane, Suite 300, Wayne, Pennsylvania 19087. SEI Fund Resources
(the "Sub-Administrator"), an affiliate of the Distributor, assists the
Administrator in providing administrative services to the Fund. The
Sub-Administrator has its principal business address at One Freedom Valley Road,
Oaks, PA 19456.
Annual Reports
The Fund will furnish, without charge, a copy of the Fund's Annual
Report and the most recent Semi-Annual Report to a shareholder upon request.
Copies of the reports can be requested by calling 1-800-433- 0051 or by writing
to The PBHG Funds, Inc., P.O. Box 419534, Kansas City, Missouri 64141-6534.
Principal Holders of the Fund's Outstanding Common Stock
A single class of the Fund's Common Stock, known as the PBHG Class, is
currently outstanding. The following table sets forth as of October 24, 1997,
those known by the Company to be the owners of record of more than 5% of any
class of the Fund's outstanding Common Stock. The Company has no knowledge
regarding the beneficial ownership of such shares.
Percent of
Outstanding
Names and Addresses Number of Shares Shares of
of Record Owners Owned of Record Class Owned
- ------------------- ----------------- ------------
[TABLE TO BE COMPLETED]
Ownership of the Company's Stock by Directors and Officers
As of October 24, 1997, the officers and directors of the Company
beneficially owned less than 1% of the outstanding shares of the Fund.
3
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SHAREHOLDER PROPOSALS
The Company does not hold annual meetings of shareholders except as
required by the 1940 Act or other applicable law. Any shareholder who wishes to
submit proposals for consideration at a shareholders' meeting should send such
proposals to the Fund at the address set forth on the first page of this Proxy
Statement. To be considered for presentation at the next shareholders' meeting,
proposals must be received a reasonable time before a solicitation is made.
By order of the Board of Directors,
Harold J. Baxter
Chairman
November 3, 1997
4
<PAGE>
APPENDIX
PBHG LARGE CAP 20 FUND
a Portfolio of
THE PBHG FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 11, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold J. Baxter and John M. Zerr,
and each of them, attorneys and proxies, with power of substitution in each of
them, to vote and act on behalf of the undersigned at the Special Meeting of
Shareholders of the PBHG Large Cap 20 Fund (the "Fund"), a portfolio of The PBHG
Funds, Inc., at _______________________________________ on December 11, 1997, at
___________, and at all adjournments thereof, according to the number of shares
of Common Stock which the undersigned would be entitled to vote if then
personally present, upon such subjects as may properly come before the meeting,
as set forth in the notice of meeting and the proxy statement furnished
herewith. Unless otherwise marked on the reverse hereof, this proxy is given
with authority to vote FOR the proposal to change the subclassification of the
Fund and discretion to vote on any other matters that may be presented at the
Meeting.
PLEASE COMPLETE, DATE AND SIGN THE PROXY ON THE REVERSE SIDE
OF THIS CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE
<PAGE>
The Board of Directors recommends voting FOR the proposal to change the
subclassification of the Fund.
Proposal to change the subclassification of the Fund
FOR AGAINST ABSTAIN
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Signature _________________________________________ Date _____________________
Signature _________________________________________ Date _____________________
Please sign exactly as name appears hereon. When shares are held jointly, each
owner should sign. When signing as attorney or as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
