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
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 12A-
6(E)(2))
[X ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SECTION 240.14A-11(C) OR SECTION 240.14A-12
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(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)(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 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:
------------------------------------------------------------------
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
S&P 100 PLUS PORTFOLIO
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
March 14, 1997
RE: SPECIAL MEETING OF SHAREHOLDERS OF THE S&P 100 PLUS PORTFOLIO
Dear Shareholder:
Enclosed is a notice of a Special Meeting of Shareholders of the S&P 100
Plus Portfolio (the "Fund"), of the Principal Preservation Portfolios, Inc.
("Principal Preservation") to be held on April 25, 1997, together with a Proxy
Statement and Form of Proxy relating to the business to be transacted at the
meeting.
The Special Meeting of Shareholders is being called for the purpose of
considering and acting upon a change to the investment objective of the S&P 100
Plus Portfolio being recommended by the Board of Directors. The objective of
the Fund presently is to obtain a total return from dividends and unrealized and
realized capital gains which exceeds that of the S&P 100 Index. Under this
objective, the Fund attempts to achieve a total return which, after deducting
-----
the Fund's operating expenses, still exceeds the total return of the S&P 100
Index. The modified objective of the Fund being proposed by the Board of
Directors would be to obtain a total return from dividends and capital gains
which, before deducting the operating expenses of the Fund, exceeds the total
------
return of the S&P 100 Index.
The Board of Directors has been monitoring for some time the small, but
continuing, negative variation of the S&P 100 Plus Portfolio from the total
return of the S&P 100 Index. While the Fund's performance has been very good as
compared to other stock funds, it has not achieved its objective to obtain a
total return from dividends and capital gains which exceeds that of the S&P 100
Index. The Board of Directors believes this investment objective would be very
difficult to achieve under current and anticipated market conditions, unless the
Fund were to more aggressively utilize the options, futures and related
enhancement strategies described in its current Prospectus. More aggressive use
of these strategies exposes the Fund to greater volatility relative to the S&P
100 Index, and potentially could require the Fund to pay higher management fees.
Management and the Board of Directors of Principal Preservation have
concluded that a more prudent course would be to modify the investment objective
of the Fund, as described above. We believe this modified objective is a more
appropriate one for the Fund, and can be attained primarily through
overweighting/underweighting strategies, with less emphasis on more complex and
riskier options and futures strategies.
Reduced reliance on options and futures strategies would eliminate the
necessity for the Fund to employ the specialized services of PanAgora Asset
Management, Inc. in this area. Accordingly, the Board of Directors has
determined that, effective as of the opening of business on May 1, 1997, the
Fund no longer will retain the services of PanAgora Asset Management, Inc. as
sub-adviser. Instead, Ziegler Asset Management, Inc., the Fund's adviser, will
directly manage the Fund's investments. Mr. Jay Ferrara, who presently manages
the investments of Principal Preservation's PSE Tech 100 Portfolio, will be
responsible for the day-to-day management of the assets of the Fund. Ziegler
Asset Management, Inc. has agreed that, at least for the one-year period from
May 1, 1997 through April 30, 1998, it will reimburse the Fund for all operating
expenses in excess of 0.80% of the Fund's average daily net assets.
Because the Fund's investment objective is a "fundamental policy," the
proposed change must be approved by the Fund's shareholders. The Board of
Directors recommends that the shareholders approve the proposed change in the
Fund's investment objective.
Thank you for your continued confidence in Principal Preservation
Portfolios, Inc. Your cooperation and participation in completing and returning
the enclosed proxy will ensure that your vote is counted.
Very truly yours,
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
/s/ Robert J. Tuszynski
Robert J. Tuszynski
President
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
S&P 100 PLUS PORTFOLIO
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
ON APRIL 25, 1997
To shareholders of the S&P 100 Plus Portfolio of PRINCIPAL PRESERVATION
PORTFOLIOS, INC.:
A Special Meeting of Shareholders of the S&P 100 Plus Portfolio (the
"Fund") of Principal Preservation Portfolios, Inc. will be held on Friday, April
25, 1997 at 3:00 P.M., local time, at the West Bend Inn, 2520 West Washington
Street, West Bend, Wisconsin for the following purposes:
1. To approve or disapprove a proposed change to the investment
objective of the S&P 100 Plus Portfolio, so that its investment objective
would be to obtain a total return from dividends and capital gains which,
before deducting the operating expenses of the Fund, exceeds the total
return of the S&P 100 Index; and
2. To transact such other business as properly may come before the
meeting or an adjournment thereof.
The Board of Directors has fixed the close of business on March 7, 1997, as
the record date for determining shareholders entitled to notice of, and to vote
at, the Special Meeting and any adjournment thereof. Only shareholders of
record at the close of business on that date will be entitled to vote.
Your attention is invited to the Proxy Statement accompanying this notice
for a more complete statement regarding the matters to be acted upon at the
Special Meeting.
By Order of the Board of Directors
/s/ S. Charles O'Meara
S. CHARLES O'MEARA
Secretary
West Bend, Wisconsin
March 14, 1997
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF A SECOND
SOLICITATION, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POST-PAID ENVELOPE.
PROXY STATEMENT
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
S&P 100 PLUS PORTFOLIO
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
SOLICITATION, PURPOSES AND VOTING
SOLICITATION
The enclosed Proxy is being solicited by the Board of Directors of the
Principal Preservation Portfolios, Inc. ("Principal Preservation") in connection
with the Special Meeting of Shareholders of the S&P 100 Plus Portfolio (the
"Fund") to be held on April 25, 1997 (the "Special Meeting"). You are
encouraged to read carefully this Proxy Statement and mark and return the
accompanying proxy.
PURPOSES
The purpose of the Special Meeting is to consider and vote upon a proposed
modification to the investment objective of the Fund, so that the Fund's
objective would be "to obtain a total return from dividends and capital gains
which, before deducting the operating expenses of the Fund, exceeds the total
return of the S&P 100 Index" (the "Modified Objective"). The Fund's present
investment objective is "to obtain a total return from dividends and unrealized
and realized capital gains which exceeds that of the S&P 100 Index" (the
"Present Objective"). The difference between the Modified Objective and the
Present Objective is that, under the Present Objective, the Fund seeks a total
return which, on a net basis, after deducting all of the Fund's operating
-------------------------------------------
expenses, exceeds that of the S&P 100 Index. Under the Modified Objective, the
- --------
Fund would seek to obtain a total return that exceeds that of the S&P 100 Index
on a gross basis, before deducting any of the Fund's operating expenses.
-----------------------------------------------------
QUORUM AND VOTING
The presence at the meeting, in person or by proxy, of shareholders
representing one-third of all shares outstanding and entitled to vote on a
matter constitutes a quorum for the transaction of business. Abstentions and
broker non-votes (i.e., proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owners or other
persons entitled to vote shares as to a matter with respect to which the brokers
or nominees do not have discretionary power to vote) are treated as present for
purposes of determining the presence of absence of a quorum.
Shares represented by properly executed proxies received by Principal
Preservation will be voted at the Special Meeting and any adjournment thereof in
accordance with the terms of such proxies. However, if no instructions are
specified, shares will be voted "FOR" approval of the Modified Objective under
Proposal 1, and in the discretion of the persons named in the proxy on proposal
2. A shareholder may revoke his or her proxy at any time prior to the voting
thereof by filing a written notice of revocation with the Secretary of Principal
Preservation or by delivering a duly executed proxy bearing a later date.
Because the Present Objective of the Fund is fundamental, it may be changed
only with the approval of the Fund's shareholders. Approval of the Modified
Objective requires the affirmative vote of "a majority of the outstanding voting
securities" of the Fund, defined under the Investment Company Act of 1940 (the
"1940 Act") to mean at least a majority of the outstanding voting shares of the
Fund or, if less, 67% of the voting shares represented at a meeting at which the
holders of 50% or more of the outstanding voting shares of the Fund are present
or represented by proxy. Accordingly, abstentions and broker non-votes will
have the same effect as votes cast against approval of the Modified Objective.
Shareholders of record of the S&P 100 Plus Portfolio at the close of
business on March 7, 1997 will be entitled to one vote on each matter presented
for each share so held. At that date, there were 3,559,548 shares of the
Fund outstanding.
UPON REQUEST AND AT NO COST TO A REQUESTING SHAREHOLDER, THE FUND WILL
MAIL, BY FIRST-CLASS MAIL, A COPY OF ITS ANNUAL REPORT TO SHAREHOLDERS FOR THE
YEAR ENDED DECEMBER 31, 1996. REQUESTS SHOULD BE DIRECTED TO THE ATTENTION OF
MR. ROBERT J. TUSZYNSKI, PRESIDENT, AT PRINCIPAL PRESERVATION PORTFOLIOS, INC.,
215 NORTH MAIN STREET, WEST BEND, WISCONSIN 53095, TELEPHONE: 1-800-826-4600.
This proxy material is being mailed to shareholders on or about March 14,
1997.
PROPOSAL 1 - APPROVAL OF MODIFIED OBJECTIVE
BACKGROUND
Under the Present Objective, the Fund seeks to obtain a total return from
dividends and capital gains which, on a net basis after deducting operating
expenses of the Fund, exceeds the total return of the S&P 100 Index. To achieve
its Present Objective, the Fund invests in a portfolio of common stocks which
make up the S&P 100 Index, in approximately the same relative proportion as
those stocks are represented in the Index. For example, if Exxon comprised
approximately 5.0% of the S&P 100 Index, approximately 5.0% of the portfolio of
common stocks in which the Fund invests generally would consist of shares of
Exxon's common stock. As the composition of the S&P 100 Index changes, the Fund
adjusts the composition of its portfolio of common stocks accordingly.
The Fund employs certain hedging and enhancement strategies
designed to enhance its total return and thereby achieve its objective
to outperform the S&P 100 Index on a net basis. These strategies
historically have emphasized the use of options and futures contracts,
including sales of covered call options and put options and purchases of call
options and put options on individual stocks and on stock indices, and
purchases of exchange-traded futures contracts. There are significant risks
associated with these strategies and their successful use depends on the
ability of the investment manager to predict correctly the direction of
movement in stock prices and other economic factors. The Fund historically has
retained the services of a sub-adviser with specialized skills and experience
in this area to assist the Fund's adviser in implementing the Fund's hedging
and enhancement strategies. Since April of 1989, the Fund has retained
PanAgora Asset Management, Inc. ("PanAgora") and its predecessor, The Boston
Company Institutional Investors, Inc., as sub-adviser, to develop and implement
such enhancement and hedging strategies.
The Board of Directors has been monitoring for some time the small, but
continuing, negative variation of the Fund's total return, on a net basis after
deducting the Fund's operating expenses, as compared to the total return of the
S&P 100 Index. While the Fund's performance has been very good compared to
other stock funds, its enhancement strategies have not successfully added value
sufficient to overcome the Fund's operating expenses. As a result, in recent
years the Fund has not successfully achieved its Present Objective.
The Board of Directors has been investigating and considering factors that
potentially may have contributed to the relative ineffectiveness of the Fund's
enhancement strategies, in order to identify changes in the Fund's investment
program that potentially might improve its performance. PanAgora has advised
that premiums associated with the Fund's options and futures strategies
recently have been at levels that diminish the potential upside return to the
Fund, as compared to potential rewards historically achievable for the
same level of premium dollars. At the same time, the risk of market
losses associated with those strategies have not changed appreciably.
As a result, it has become more difficult to add value through these
strategies that is sufficient to enhance the ability of the Fund to
meet its Present Objective.
In response, the Board of Directors sought lower cost/higher benefit
enhancement strategies. Effective May 1, 1996, the Fund began employing
overweighting/underweighting strategies to enhance performance, and placed less
emphasis on options and futures strategies. An overweighting/underweighting
strategy involves judgment by the investment managers as to which stocks
represented in the S&P 100 Index likely will outperform the Index and which
likely will underperform the Index. The Fund's portfolio of common stocks then
is adjusted so that those stocks which the investment managers anticipate will
outperform the S&P 100 Index comprise a greater percentage of the Fund's common
stock portfolio as compared to the percentage of the S&P 100 Index represented
by those same stocks (overweighting), and so that those stocks which the
investment managers anticipate will underperform the S&P 100 Index comprise a
lower percentage of the Fund's common stock portfolio as compared to the
percentage of the S&P 100 Index represented by those same stocks
(underweighting). While use of these strategies does not significantly increase
the Fund's operating costs, PanAgora's use of these techniques during 1996 did
not improve the Fund's performance relative to the S&P 100 Index.
The Board of Directors has considered numerous other alternatives to
enhance the ability of the Fund to achieve its Present Objective. At the
direction of the Board of Directors, management of Principal Preservation
initiated preliminary discussions with several investment managers with proven
enhancement capabilities regarding their interest in assisting with the
management of the Fund's assets. In response, such managers typically suggested
more aggressive use of options and futures enhancement strategies and, in most
cases, indicated they would insist on fees greater than those presently being
paid by the Fund to PanAgora to assist in this manner. After further
consideration, the Board of Directors concluded that it is unlikely that the
Fund can achieve its Present Objective under current and anticipated market
conditions, unless it more aggressively utilizes options, futures and related
enhancement strategies, which likely would require the Fund to pay higher
advisory fees. Such an increase in fees would make it even more difficult for
the Fund to achieve the Present Objective. Moreover, the Board of Directors
believes more aggressive use of these strategies would expose the Fund to
greater volatility relative to the S&P 100 Index. The Board of Directors does
not believe that such increased risk and the potential payment of higher
advisory fees is in the best interests of the Fund and its shareholders.
The Board of Directors concluded that a more prudent course would be to
lower the Fund's performance target, and accordingly recommends that the Fund's
investment objective be modified to obtain a total return from dividends and
capital gains which, before deducting the operating expenses of the Portfolio,
exceeds the total return of the S&P 100 Index. The Board of Directors believes
this Modified Objective is a more appropriate one for the Portfolio, and can be
attained primarily through the use of overweighting/ underweighting strategies,
with less emphasis on more complex and riskier enhancement techniques such as
options and futures strategies.
APPROVAL REQUIRED
Because the Fund's Present Objective is fundamental, it may be changed only
upon approval by the Fund's shareholders. In order to be approved, the Modified
Objective must receive the affirmative vote of at least a majority of the
outstanding shares of the Fund, or, if less, 67% of the shares represented at a
meeting of shareholders at which the holders of 50% or more of the outstanding
shares of the Fund are present or represented by proxy. If the Modified
Objective is approved, it will become effective and replace the Present
Objective on May 1, 1997 or, if later, on the first business day following
receipt of such shareholder approval. Like the Present Objective, the Modified
Objective will be considered fundamental, meaning it cannot be changed further
without a "majority vote of the shareholders" of the Fund. If the Modified
Objective is not approved by the Fund's shareholders, then the Present Objective
will continue to be the investment objective of the Fund.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL SHAREHOLDERS OF THE
S&P 100 PLUS PORTFOLIO VOTE "FOR" APPROVAL OF THE MODIFIED OBJECTIVE.
OTHER BUSINESS
Management of Principal Preservation is not aware of any other matters that
will come before the Special Meeting. However, if any other business should
come before the Special Meeting, your proxy, if signed and returned, will give
discretionary authority to the persons designated in it to vote according to
their best judgment on such matters.
ADDITIONAL INFORMATION
INVESTMENT ADVISER
Ziegler Asset Management, Inc. ("ZAMI"), 215 North Main Street, West Bend,
Wisconsin 53095, serves as the Fund's investment adviser. ZAMI is a wholly-
owned subsidiary of The Ziegler Companies, Inc. PanAgora, 260 Franklin Street,
Boston, Massachusetts 02110, assists as sub-adviser with the management of the
Fund's assets.
The Board of Directors has concluded that the investment programs and
strategies being utilized by PanAgora in managing the assets of the Fund will
not likely achieve the Fund's Present Objective under existing and anticipated
market conditions. Accordingly, the Board determined that PanAgora's
specialized skills and experience in this area no longer are necessary for the
Fund. Effective May 1, 1997, the Fund no longer will retain PanAgora's services
as sub-adviser, regardless of whether the Modified Objective is approved.
If the Modified Objective is approved, ZAMI will manage the Fund's assets
directly, without the assistance of a sub-adviser, using overweighting/
underweighting strategies as enhancement and hedging techniques. Mr. Jay
Ferrara will serve as the portfolio manager of the Fund. Mr. Ferrara has been
with Principal Preservation for approximately one and one-half years, and
presently serves as the portfolio manager of Principal Preservation's PSE
Tech 100 Index Portfolio. The PSE Tech 100 Index Portfolio, which commenced
operations on June 10, 1996, is an index mutual fund. However, the PSE
Tech 100 Index Portfolio's objective is to obtain a total return, before
operating expenses, that replicates the total return of the relevant stock
----------
index, as opposed to the S&P 100 Plus Portfolio which, under the Modified
Objective, would seek a total return that exceeds the S&P 100 Index.
-------
Accordingly, the PSE Tech 100 Index Portfolio does not use hedging and
enhancement strategies to the same degree as will the S&P 100 Plus Portfolio
under the Modified Objective.
Mr. Ferrara has more than ten years of experience in the mutual fund
industry. Prior to joining Principal Preservation, he served as Senior
Portfolio Accountant for Wells Fargo Nikko Investment Advisors and, from 1993 to
1994, as Controller of the California Investment Trust. Mr. Ferrara attended
Brown University where he earned a Bachelor of Arts in Management and a Bachelor
of Arts in Political Science. In addition to previously attending the
University of San Francisco, Mr. Ferrara presently is completing a Masters of
Business Administration in Finance from Marquette University, Milwaukee,
Wisconsin.
If the Modified Objective is not approved, the Board of Directors would
consider alternatives to assure availability to the Fund of investment
management personnel who possess skills and expertise necessary to develop and
implement strategies capable of achieving the Fund's Present Objective.
Possibilities include ZAMI's employment of one or more portfolio managers who
possess such skills and expertise, or the Fund's retention of a new sub-adviser
with requisite experience and demonstrated success in managing enhanced index
funds. The latter of these two alternatives would require further approval by
the Fund's shareholders. Until acceptable terms could be negotiated with a
qualified new sub-adviser and approved by the shareholders of the Fund
(including fees), the Board would make arrangements to assure that, on an
interim basis, the Fund continues to receive appropriate advisory services.
The termination of PanAgora's services as sub-adviser, and the assumption
by ZAMI of direct responsibility for the management of the Fund's assets, will
not affect the investment advisory fees paid by the Fund. The Fund will
continue paying ZAMI an annual fee, in monthly installments, in an amount equal
to 0.575 of 1% of the Fund's first $20 million in average daily assets, 0.450 of
1% of the Fund's next $30 million in average daily net assets, 0.400 of 1% of
the Fund's next $50 million in average daily net assets, 0.350 of 1% of the
Fund's next $400 million in average daily net assets, and 0.300 of 1% of the
Fund's average daily net assets in excess of $500 million. ZAMI has committed
that, at least for the one-year period from May 1, 1997 through April 30, 1998,
it will reimburse all operating expenses to the Fund in excess of 0.80 of 1% of
the Fund's average daily net assets.
THE DISTRIBUTOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
B.C. Ziegler and Company ("Ziegler"), another wholly-owned subsidiary of
The Ziegler Companies, Inc., serves as the Distributor of shares of the Fund
pursuant to a Distribution Agreement; provides accounting and other
administrative services, including daily valuation of the shares of the Fund,
pursuant to an Accounting/Pricing Agreement; provides depository and custodial
services with respect to the portfolio securities of the Fund pursuant to a
Depository Contract; and provides transfer agent services pursuant to a Transfer
and Dividend Disbursing Agency Agreement. Among other terms, each of these
service agreements describes the services to be provided by Ziegler, defines
Ziegler's duties and obligations, and specifies the compensation that Ziegler is
entitled to receive from the Fund for such services. Ziegler is registered with
the Securities and Exchange Commission as a securities broker/dealer and is a
member of the National Association of Securities Dealers. Ziegler has been
engaged in the underwriting of debt securities for more than 75 years.
AUDITORS
The firm of Arthur Andersen LLP has served as the Fund's independent
accountants and auditors since its commencement of operations in 1985. Arthur
Andersen LLP has no direct or indirect financial interest in Principal
Preservation or the Fund except as auditors and independent public accountants.
No representative of Arthur Andersen LLP is expected to be present at the
Special Meeting.
PRINCIPAL SHAREHOLDERS AND CERTAIN BENEFICIAL OWNERS
As of the March 7, 1997 voting record date for the Special Meeting, no
person was known to own of record or beneficially five percent (5%) or more of
the outstanding shares of the Fund. Information as to beneficial
ownership was obtained from information on file with the Securities and
Exchange Commission or furnished by the specified person or the transfer agent.
The following table shows shares of the Fund as to which each Director, and
the group consisting of all Directors and executive officers of Principal
Preservation, had or shared power over voting or disposition at the March 7,
1997 voting record date for the Special Meeting.
NUMBER OF SHARES OF
NAME AND POSITION(S) WITH PRINCIPAL PRESERVATION THE FUND(1)<F1>
- ------------------------------------------------ -------------------
R.D. Ziegler; President and Director(2)<F2> 14,272
Robert J. Tuszynski; Vice President and Director(2)<F2> 1,811(3)<F3>
Richard H. Aster, M.D.; Director 622
Augustine J. English; Director 0
Ralph J. Eckert; Director 0
John Lauderdale; Vice President, Director of Marketing(2)<F2> 622(3)<F3>
Franklin P. Ciano; Treasurer(2)<F2> 129
S. Charles O'Meara; Secretary(2)<F2> 151(3)<F3>
Marc Dion; Vice President(2)<F2> 0
ALL DIRECTORS AND OFFICERS AS A GROUP (9 PERSONS) 17,647
(1)<F1>These figures are based on information furnished by the respective
individuals and by Ziegler, Principal Preservation's Transfer Agent, as of
March 7, 1997. Certain of the individuals listed share voting and
investment power with his spouse with respect to some or all of the shares
listed opposite his name. Each individual Director or executive
officer beneficially owns less than 1% of the shares of the Fund.
(2)<F2>Is an "interested person" (as defined in the 1940 Act) of the Fund as a
result of his affiliation(s) with Ziegler and/or ZAMI.
(3)<F3>Includes shares held in the Ziegler Growth Retirement Plan for the
account of the named person. The terms of that Plan allow the named person
to direct the disposition of shares held in his account.
COST OF SOLICITATION
In addition to this solicitation of proxies by use of the mails, proxies
may be solicited by officers of Principal Preservation and by officers and
employees of Ziegler or ZAMI, personally or by telephone or telegraph, without
special compensation. Proxies may also be solicited by a professional proxy
solicitation service should management of Principal Preservation determine that
solicitation by such means is advisable. The cost of preparing and mailing
proxy materials, of the Special Meeting, and of soliciting proxies will be borne
by the Fund.
ADJOURNMENT
In the event that sufficient votes in favor of the proposal set forth in
the Notice of Special Meeting which accompanies this Proxy Statement are not
received by the time scheduled for the Special Meeting, the persons named as
proxies may propose one or more adjournments of the Special meeting to permit
further solicitation of proxies with respect to such proposal. Any such
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxy will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of such proposal. They
will vote against any such adjournment those proxies required to be voted
against any such proposal. The costs of any such additional solicitation and of
any adjourned session will be borne by the Fund.
SHAREHOLDER MEETINGS
Principal Preservation is organized as a Maryland corporation, and as such
is not required to hold annual meetings of shareholders. Principal
Preservation's Bylaws provide that Principal Preservation is not required to
hold an annual meeting of shareholders in any year in which the election of
Directors, approval of an investment advisory agreement (or any sub-advisory
agreement) or ratification of the selection of independent public accountants is
not required to be acted upon by shareholders of Principal Preservation or of
any of its series, including the Fund, under the 1940 Act. Meetings of
shareholders of the Fund will be held when and as determined necessary by the
Board of Directors of Principal Preservation and in accordance with the 1940
Act. However, shareholders of any portfolio series wishing to submit proposals
for inclusion in a proxy statement for any future shareholder meetings should
send their written proposals to the Secretary of Principal Preservation at 215
North Main Street, West Bend, Wisconsin 53095.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
S&P 100 PLUS PORTFOLIO
REVOCABLE PROXY FOR 1997 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R.D. Ziegler, Robert J. Tuszynski and S. Charles
O'Meara, and each of them, proxy, with full power of substitution, to represent
and vote, as designated below, all shares of stock of the S&P 100 Plus Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the S&P 100 Plus Portfolio of Principal Preservation Portfolios, Inc. to be
held at the West Bend Inn, 2520 West Washington Street, West Bend, Wisconsin
at 3:00 P.M., on Friday, April 25, 1997, or at any adjournment thereof, with
respect to the matters set forth on the reverse side and described in the
accompanying Notice of Special Meeting and Proxy Statement, receipt of which is
hereby acknowledged.
DATE: ----------------, 1997
(If this account is
owned by more than
one person, all
owners should sign.
Persons signing as
executors,
administrators,
trustees or in
similar capacities
should so indicate.)
(Please sign
exactly as name
appears at left)
Please place an "X" in the desired box for each item.
Shares represented by this Proxy will be voted as directed by the shareholder.
IF NO DIRECTION IS SUPPLIED, THE PROXY WILL BE VOTED FOR PROPOSAL 1.
---
FOR AGAINST ABSTAIN
--- ------- -------
----- ----- -----
1. Proposal to approve a change to the investment objective of the S&P
100 Plus Portfolio so that it would be to obtain a total return from
dividends and capital gains which, before deducting the operating
expenses of the S&P 100 Plus Portfolio, exceeds the total return of
the S&P 100 Index.
2. In their discretion on such other matters as may properly come before
the meeting or any adjournment thereof.
