<PAGE> 1
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
12a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 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:
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2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
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3) FILING PARTY:
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4) DATE FILED:
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<PAGE> 2
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
March __, 1998
Dear Shareholder:
Enclosed is a notice of a Special Meeting of Shareholders of all
shareholders of Principal Preservation Portfolios, Inc. ("Principal
Preservation") to be held on May 15, 1998, 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
electing five Directors to serve in accordance with Principal Preservation's
Bylaws and the provisions of the Investment Company Act of 1940 (the "1940 Act")
until their successors are duly elected and qualified. As discussed below, Mr.
R. D. Ziegler has elected to retire from his position as a member of Principal
Preservation's Board of Directors. Under provisions of the 1940 Act, the vacancy
created by Mr. Ziegler's resignation can be filled only be a vote of the
shareholders. For this reason, the Board of Directors has directed the calling
and holding of this Special Meeting.
Mr. Ziegler announced his retirement from Principal Preservation's
Board of Directors effective as of the date of the Special Meeting. Mr. Ziegler
was the driving force behind establishing the Principal Preservation family of
funds, and has served as President and the Chairman of the Board of Directors
from its inception in 1983. In 1996 Mr. Ziegler stepped down as President of
Principal Preservation, and Mr. Robert J. Tuszynski succeeded to that office.
Since that time Mr. Ziegler has continued to serve as Chairman of the Board and
a Director of Principal Preservation. We are sure all of our shareholders join
us in thanking Mr. Ziegler for his years of dedicated service and wise guidance
to Principal Preservation.
The Board of Directors has nominated Mr. Richard J. Glaisner for
election as a Director to fill the vacancy being created by Mr. Ziegler's
retirement. Mr. Glaisner is the President and Chief Executive Officer of GS2
Securities, Inc., an investment management and investment banking firm that was
acquired by The Ziegler Companies, Inc. in 1997. Mr. Glaisner comes to us with
extensive background in the investment management and securities industries,
including experience as a Managing Director with Kidder Peabody and Company in
New York and as an Executive Vice President with Kemper Securities Group in
Milwaukee, prior to co-founding and successfully managing a private investment
management and investment banking firm. We believe Mr. Glaisner's background,
experience and abilities will make an important contribution to the Principal
Preservation family of mutual funds.
<PAGE> 3
At the Special Meeting, shareholders also will be asked to approve a
proposal to make the Portfolio's fundamental investment restrictions
nonfundamental. Fundamental investment restrictions may be changed or eliminated
only with the approval of the relevant Portfolio's shareholders, whereas
nonfundamental investment restrictions may be changed by action of the Board of
Directors without shareholder approval. Many of the fundamental investment
restrictions that the Portfolios have adopted in the past reflect business or
industry conditions or practices or federal or state laws that no longer are in
effect. Other fundamental restrictions reflect regulatory requirements that
remain in effect, but the regulatory requirements do not mandate that the
fundamental restriction be stated as fundamental, or, in some cases, even as
nonfundamental.
The Board of Directors has no present intention to modify or eliminate
any of these investment restrictions in the near future. However, it is possible
that the Board of Directors may consider it desirable to change or eliminate
some of these investment restrictions in response to presently unforseen
developments in the capital markets or the economy or changes in laws and
regulations. If the investment restrictions were made nonfundamental at this
time, Principal Preservation would have more flexibility promptly to react to
any such future developments and could avoid the costs and delays associated
with the calling and holding of a Special Meeting to obtain required shareholder
approval. For these reasons, your Board of Directors is recommending that these
fundamental investment restrictions be made nonfundamental.
Finally, at the Special Meeting, shareholders also will be requested to
ratify the Board of Directors' selection of Arthur Andersen LLP to serve as
independent accountants for each of the Portfolios for the fiscal year ending
December 31, 1998.
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.
Robert J. Tuszynski
President
<PAGE> 4
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
ON MAY 15, 1998
To shareholders of all Portfolios of Principal Preservation Portfolios,
Inc.:
A Special Meeting of Shareholders of Principal Preservation Portfolios,
Inc. ("Principal Preservation") will be held on Friday, May 15, 1998 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 elect five directors to serve on the Board of Directors
until the next annual meeting and until their successors shall
have been duly elected and qualified;
2. To approve or disapprove a proposal to make each Portfolio's
fundamental investment restrictions nonfundamental, meaning
the restrictions could be changed in the future by the Board
of Directors without shareholder approval;
3. To ratify or reject the selection of Arthur Andersen LLP as
independent accountants for each Portfolio for the year ending
December 31, 1998; and
4. To transact such other business as may properly come before
the Special Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 27,
1998, 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. CHARLES O'MEARA
Secretary
West Bend, Wisconsin
March ____, 1998
<PAGE> 5
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.
<PAGE> 6
PROXY STATEMENT
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
215 North Main Street
West Bend, Wisconsin 53095-3317
(414) 334-5521
SOLICITATION AND VOTING
The enclosed Proxy is being solicited by the Board of Directors of
Principal Preservation Portfolios, Inc. ("Principal Preservation"), a Maryland
corporation which is a series management investment company. Principal
Preservation presently offers eight separate mutual funds, namely the Tax-Exempt
Portfolio, Government Portfolio, S&P 100 Plus Portfolio, Dividend Achievers
Portfolio, Select Value Portfolio, PSE Tech 100 Index Portfolio, Wisconsin
Tax-Exempt Portfolio and Cash Reserve Portfolio (each, a "Portfolio" and
collectively the "Portfolios"). The Proxy relates to matters to be voted upon by
shareholders which are described in detail in this joint Proxy Statement. The
vote will be taken at a Special Meeting of Shareholders (the "Special Meeting"),
or any adjournment thereof, which will be held on Friday, May 15, 1998, 3:00
P.M. local time, at the West Bend Inn, 2520 West Washington Street, West Bend,
Wisconsin. You are encouraged to read carefully this Proxy Statement and mark
and return the accompanying Proxy.
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 of each Portfolio will be voted "FOR" Proposals 1, 2, and 3,
and in the discretion of the persons named in the Proxy on Proposal 4. If a form
of proxy withholds authority to vote on Proposal 1 for one or more of the
director nominees, the shares represented thereby will be counted as votes cast
against such nominee(s). A shareholder may revoke his 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.
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. In tabulating votes
on any matter, 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, but will not be counted as votes cast.
Shareholders of record at the close of business on March 27, 1998 will
be entitled to one vote on each matter presented for each share so held. Please
see Exhibit A attached to this Proxy Statement for the number of shares of each
Portfolio outstanding on that date.
<PAGE> 7
UPON REQUEST AND AT NO COST TO A REQUESTING SHAREHOLDER,
PRINCIPAL PRESERVATION WILL MAIL, BY FIRST-CLASS MAIL, A COPY OF ITS ANNUAL
REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1997. 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
___, 1998.
2
<PAGE> 8
PROPOSAL 1 - ELECTION OF DIRECTORS
Principal Preservation's Bylaws provide that there shall be five
directors elected annually for a term of one year or until their successors are
elected and qualified. It is the intention of the persons named in the enclosed
Proxy to vote the shares represented by them for the election of the nominees
listed below, unless otherwise specified by a shareholder in the Proxy. The
nominees have consented to being named in the Proxy Statement and to serve if
elected.
Information regarding nominees is set forth in the following table. If
any of the nominees should decline or be unable to act as a director, which
eventuality is not foreseen, Proxies may be voted with discretionary authority
for a substitute nominee designated by the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NOMINEES AGE AND BUSINESS EXPERIENCE(1) DIRECTOR SINCE(2)
- -------- --- -------------------------- --------------
<S> <C> <C>
Richard J. Glaisner* 55 President and Chief Executive New Nominee
Officer of GS2 Securities, Inc., a
subsidiary of The Ziegler
Companies, Inc., since July 1997;
from 1993 to 1997, President and
Chief Executive Officer of
Glaisner, Schilffarth, Grande &
Schnoll, Ltd., an investment
management and investment banking
firm acquired by The Ziegler
Companies, Inc. in 1997; prior
thereto, Managing Director, Kidder
Peabody and Company in New York
(investment banking), and prior
to that, Executive Vice President,
Kemper Securities Group (securi-
ties brokerage and investment
banking).
</TABLE>
3
<PAGE> 9
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NOMINEES AGE AND BUSINESS EXPERIENCE(1) DIRECTOR SINCE(2)
- -------- --- -------------------------- --------------
<S> <C> <C> <C>
Robert J. Tuszynski* 39 President, Principal Preservation, 1988
since July, 1996; Senior Vice
President, B.C. Ziegler and
Company, since 1996; prior
thereto, Vice President, Director
of Mutual Funds, B.C. Ziegler and
Company from 1987 to 1996;
Trustee, Chairman of the Board and
President, Prospect Hill Trust and
The Prime Portfolios (registered
investment companies) from 1994 to
1996.
Richard H. Aster, 67 Since June 1996, Senior Investi- 1983
M.D. gator and Professor of Medicine,
Medical College of Wisconsin;
prior to June 1996, President
and Director of Research, The
Blood Center of Southeastern
Wisconsin, Inc
Augustine J. English 68 Retired; President, Tupperware 1983
North America from 1990 to
1994 (manufacturing); prior to
1990, President, The West Bend
Company (manufacturing), a
division of Dart Industries, a
subsidiary of Premark
International, Inc., of which Mr.
English was a Group Vice Pres-
ident.
</TABLE>
4
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NOMINEES AGE AND BUSINESS EXPERIENCE(1) DIRECTOR SINCE(2)
- -------- --- -------------------------- --------------
<S> <C> <C> <C>
Ralph J. Eckert 69 Chairman Emeritus and Director 1992
of Trustmark Insurance Cos.
(Mutual Life Insurance Company)
since April, 1997; from 1991 to
1997, Chairman, Trustmark
Insurance Cos.; from 1971 to 1991,
Chairman, President and Chief
Executive Officer Trustmark
Insurance Cos.; Trustee of the
Board of Pensions of the
Evangelical Lutheran Church of
America since 1989; and Trustee
of The Prime Portfolios
(registered investment company)
from 1993 to 1996.
</TABLE>
- --------------------
*An "interested person" as defined in the Investment Company Act of 1940 (the
"1940 Act").
(1) Unless otherwise noted, all directors have been employed by the
principal occupation listed above for the past five years.
(2) Except as to Messrs. Tuszynski and Eckert, includes service as a
director of Principal Preservation Tax-Exempt Fund, Inc. and Principal
Preservations Tax-Exempt Portfolios, Inc. prior to their merger into
Principal Preservation in 1987.
The Board of Directors held six meetings during 1997. Each Director
attended all of the meetings. The Board of Directors has no standing audit,
compensation, or nominating committees, or any other committee. No policy or
procedure has been established as to the recommendation of director nominees by
shareholders, except that nomination of the Directors who are not "interested"
persons of Principal Preservation is required to be made and approved by a
majority of the Directors who are themselves not "interest" persons of Principal
Preservation.
Principal Preservation pays the compensation of the three Directors who
are not "interested persons," officers, directors or employees of Ziegler Asset
Management, Inc. (the "Advisor"). Principal Preservation pays each of these
Directors an annual fee of $12,000 and an additional $450 for each Board or
committee meeting he attends. Principal Preservation may also retain
consultants, who will be paid a fee, to provide the Board with advice and
research on investment matters. Each Portfolio pays a proportionate amount of
these expenses
5
<PAGE> 11
based on its total assets. The table below shows Director fees paid by Principal
Preservation for the year ended December 31, 1997.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS ACCRUED TOTAL COMPENSA-
NAME OF PERSON AND AGGREGATE AS PART OF TION FROM
POSITION WITH COMPENSATION PRINCIPAL ESTIMATED ANNUAL BEN- PRINCIPAL
PRINCIPAL FROM PRINCIPAL PRESERVATION'S EFITS UPON RETIREMENT PRESERVATION
PRESERVATION PRESERVATION EXPENSES ---------- PAID TO DIRECTORS
------------ ------------ -------- -----------------
<S> <C> <C> <C> <C>
R. D. Ziegler $-0- $-0- $-0- $-0-
Chairman of the Board and
Director
Robert J. Tuszynski, -0- -0- -0- -0-
President and Director
Richard H. Aster, 14,700 -0- -0- 14,700
Director
Augustine J. English, 14,700 -0- -0- 14,700
Director
Ralph J. Eckert 14,700 -0- -0- 14,700
Director
</TABLE>
The following table sets forth information with respect to each officer
of Principal Preservation who is not a Director. The term of office of all
officers of Principal Preservation expires on the day of the Annual Meeting of
Directors. The address of each officer is 215 North Main Street, West Bend,
Wisconsin 53095.
<TABLE>
<CAPTION>
POSITION AND OFFICES
WITH PRINCIPAL
NAME AGE PRESERVATION PRINCIPAL OCCUPATION
- ---- --- ------------ --------------------
<S> <C> <C> <C>
John H. Lauderdale 32 Vice President, Direc- Wholesaler, B.C. Ziegler and
tor of Marketing Company since 1991; prior thereto
Marketing Account Executive, the
Patten Company.
Franklin P. Ciano 46 Chief Financial Of- Manager of Principal Preservation
ficer and Treasurer operations since 1996; prior thereto,
Vice President, Fixed Income
Department, Firstar Bank (commer-
cial banking).
</TABLE>
6
<PAGE> 12
<TABLE>
<CAPTION>
POSITION AND OFFICES
WITH PRINCIPAL
NAME AGE PRESERVATION PRINCIPAL OCCUPATION
- ---- --- ------------ --------------------
<S> <C> <C> <C>
Marc J. Dion 40 Vice President Vice President - Portfolio Manager
and Chief Investment Officer,
Ziegler Asset Management, Inc.
since 1993; prior thereto, Vice Pres-
ident, Ziegler Asset Management,
Inc.
S. Charles O'Meara 47 Secretary Senior Vice President and General
Counsel, B.C. Ziegler and Company
since 1993; prior thereto, Partner,
O'Meara, Eckert, Pouros & Gonring
(law firm).
</TABLE>
For information about the number of shares of each Portfolio
beneficially owned by the officers, Directors and Director Nominees of Principal
Preservation as a group (10 persons), see Exhibit B attached to this Proxy
Statement.
VOTE REQUIRED
In order to be elected as a Director, a nominee must receive a
"majority" of the votes cast by the holders of shares of Principal Preservation
(including all Portfolios voting together) represented in person or by proxy and
entitled to vote at the Special Meeting, assuming a quorum. Votes attempted to
be cast against a Director nominee are not given legal effect and are not
counted as votes cast in an election of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
EACH DIRECTOR AS NAMED.
7
<PAGE> 13
PROPOSAL 2 - CONVERSION OF FUNDAMENTAL INVESTMENT
RESTRICTIONS TO BECOME NONFUNDAMENTAL RESTRICTIONS
The Board of Directors is recommending that shareholders of each
Portfolio approve a proposal whereby the fundamental investment restrictions
under which the Portfolios presently operate would be made nonfundamental,
meaning they could be changed by Principal Preservation's Board of Directors
without a shareholder vote.
Each Portfolio has a unique investment objective which is fundamental,
meaning that it can be changed only with the approval of the shareholders of the
relevant Portfolio. The proposal that shareholders are being asked to approve
will not affect the fundamental investment nature of the investment objective of
each Portfolio.
Each Portfolio attempts to achieve its objective pursuant to investment
programs and policies described in its Prospectus and Statement of Additional
Information. Except as noted otherwise in a Portfolio's Prospectus and Statement
of Additional Information, these policies and programs generally are
nonfundamental, which means the Board of Directors may make changes in them
without seeking approval from the shareholders of the affected Portfolio(s).
Each Portfolio is subject to specified investment restrictions and limitations,
most of which are fundamental. The fundamental investment restrictions that
apply to each Portfolio are listed in Exhibit C attached to this Proxy
Statement.
Some of these investment restrictions are required by the 1940 Act or
the Internal Revenue Code of 1986, as amended (the "Code"), but are not required
to be fundamental as opposed to nonfundamental. The greater part of the balance
of these investment restrictions were adopted by the Portfolios in order to
comply with legal requirements of states in which the Portfolios offer their
shares. On October 11, 1996, Congress adopted the National Securities Markets
Improvement Act of 1996 ("NSMIA"). NSMIA created a national system for
regulating mutual funds by preempting certain state securities or "blue sky"
laws that previously applied to mutual funds, including laws which imposed
investment restrictions on mutual funds. With the enactment of NSMIA, there no
longer is any requirement that the Portfolios comply with the investment
restrictions that they adopted to comply with state laws.
In proposing that these fundamental investment restrictions be made
nonfundamental, the Board of Directors is not suggesting that these investment
restrictions will be eliminated. To the contrary, the Board of Directors
presently anticipates that each Portfolio will continue to comply with these
investment restrictions in the immediate future. Rather, the Board of Directors;
recommendation is designed to preserve the flexibility of each Portfolio to
react promptly to unforeseen future developments or changes in laws. For
example, the provisions of the 1940 Act or the Code which give rise to certain
of the fundamental investment restrictions could be changed. If the
corresponding investment restriction were non fundamental, the Board of
Directors would have the flexibility to revise the affected investment
restriction to conform to the change in the law, without the delays and costs
associated with the calling and holding of a special meeting to seek shareholder
approval.
8
<PAGE> 14
Additionally, it is possible that future developments in the investment
markets might make it advisable for a Portfolio to engage in investment
strategies and techniques which presently are prohibited by a fundamental
investment restriction adopted in response to state laws that no longer apply.
If the investment restriction were made nonfundamental, the Board of Directors
again would have the flexibility promptly to authorize the Advisor to engage in
such strategies and techniques without first having to call and hold a special
meeting of shareholders. Furthermore, by making all of these investment
restrictions nonfundamental at this time, Principal Preservation will avoid the
risk of multiple shareholder meetings that otherwise might be called from time
to time to consider changes to the various fundamental investment restrictions
on a case-by-case basis in response to specific developments.
For these reasons shareholders of each Portfolio are being asked to
approve eliminating the fundamental nature of all of the investment restrictions
of the Portfolio listed in the table below. Shareholders will not be permitted
to approve making certain of these investment restrictions nonfundamental, and
retaining others as fundamental. If shareholders of any Portfolio approve making
that Portfolio's investment restrictions nonfundamental, then those investment
restrictions will be deemed nonfundamental as of June 1, 1998, but will continue
to be fundamental until that date. The shareholders of a Portfolio, the Board of
Directors would provide shareholders with 30 days' notice prior to materially
changing or eliminating any of the resulting nonfundamental investment
restrictions of a Portfolio.
The following table identifies generally the nature of the fundamental
restrictions and the Portfolios affected. Please see Exhibit C for the full text
of the current fundamental investment restrictions for each of the Portfolios.
9
<PAGE> 15
<TABLE>
<CAPTION>
FUNDAMENTAL TAX DIVIDEND SELECT WISCONSIN TAX- CASH
POLICIES RESTRICT: EXEMPT(1) GOVERNMENT S&P 100 ACHIEVERS VALUE PSE TECH 100 EXEMPT (2) RESERVE
----------------- ------ ---------- ------- --------- ----- ------------ -------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage ownership of X X X X X X X X
issuers and purchasing to
manage or control
Investment in other invest- X X X X X X X
ment companies
Investment in real estate X X X X X X X
Borrowing and lending X X X X X X X X
Purchase of securities as X X X X X X X X
an underwriter
Purchase of restricted X X X X X X X
securities
Issuance of securities X X X X X X X X
senior to outstanding
securities
Purchase of Warrants X X X X X X
Investment in commodi- X X X X X X X
ties
</TABLE>
- -----------------------------------
(1) The Tax-Exempt Portfolio also is subject to a fundamental investment
restriction that it will invest at least 90% of its total assets in
tax-exempt municipal securities, under normal conditions. The Board of
Directors is not proposing to make this investment restriction
nonfundamental. Accordingly, if shareholders of the Tax-Exempt
Portfolio approve Proposal 2, the Tax-Exempt Portfolio nonetheless will
continue to be subject to this restriction, and it could not be changed
unless the shareholders of the Tax-Exempt Portfolio approved the
change.
(2) The Wisconsin Tax-Exempt Portfolio also is subject to a fundamental
investment restriction that requires the Portfolio, under normal market
conditions, to invest its assets so at least 80% of its income
distributions are exempt from federal and Wisconsin personal income
taxes, and also will be exempt from federal and applicable state
alternative minimum taxes. The Board of Directors is not proposing that
this investment restriction be made nonfundamental. Accordingly, if
shareholders of the Wisconsin Tax-Exempt Portfolio approve Proposal 2,
the Portfolio nonetheless will continue to be subject to this
investment restriction unless and until further approval of the
shareholders of the Wisconsin Tax-Exempt Portfolio is obtained for a
change in this investment restriction.
10
<PAGE> 16
VOTE REQUIRED
Each Portfolio will vote separately on this Proposal 2. In order for
the fundamental investment restrictions of any Portfolio to be made
nonfundamental, this proposal must be approved by the shareholders of that
Portfolio. Approval with respect to any Portfolio requires the affirmative vote
of at least a majority of the outstanding shares of that Portfolio, 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 Portfolio are present or
represented by Proxy. If Proposal 2 is not approved by the shareholders of any
Portfolio, then the fundamental investment restrictions of that Portfolio will
remain fundamental, meaning they cannot be altered or eliminated in the future
without approval by the Portfolio's shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL SHAREHOLDERS
VOTE "FOR" APPROVAL OF PROPOSAL 2.
PROPOSAL 3 - RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP has been selected by the Board of Directors as
each Portfolio's independent public accountants and auditors for Principal
Preservation's current fiscal year. The shareholders of each Portfolio are being
asked to ratify the selection of Arthur Andersen LLP. Arthur Andersen LLP has
served as Principal Preservation's independent accountants and auditors since
commencement of the operations of the earliest Portfolio in 1985, with the
exception of the Cash Reserve Portfolio for which Arthur Andersen first served
in this capacity in 1996.
Arthur Andersen LLP has advised Principal Preservation that neither it
nor any of its partners has any direct or indirect financial interest or
connection (other than as independent accountants) in or with Principal
Preservation, any of the Portfolios or any of Principal Preservation's
affiliates. Arthur Andersen LLP will be given the opportunity to make a
statement at the Special Meeting if it so desires. Arthur Andersen LLP is
expected to have a representative available at the Meeting to make any such
statement and/or to address any shareholder questions.
VOTE REQUIRED
Each Portfolio will vote separately on this Proposal 3. Approval of
this Proposal as to any Portfolio requires the affirmative vote of a majority of
the shares of the Portfolio cast at a meeting where a quorum of the Portfolio's
outstanding shares is represented in person or by proxy. Since abstentions and
broker non-votes are counted for purposes of determining whether a quorum is
present, but are not considered votes cast, abstentions and broker non-votes
will have no bearing on the outcome of this matter.
11
<PAGE> 17
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
ACCOUNTANTS FOR EACH PORTFOLIO.
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
ADVISORS, ADMINISTRATOR AND DISTRIBUTOR
Ziegler Asset Management, Inc. serves as the investment advisor for
each of the Portfolios. B.C. Ziegler and Company serves as the distributor for
the shares of each Portfolio, and also serves as the depository,
accounting/pricing agent and transfer and dividend disbursing agent for each
Portfolio. Ziegler Asset Management and B.C. Ziegler are each wholly-owned
subsidiaries of The Ziegler Companies, Inc. The principal address of each is 215
North Main Street, West Bend, Wisconsin 53095.
Skyline Asset Management, L.P. serves as the sub-advisor to the Select
Value Portfolio. Skyline's principal address is 311 South Wacker Drive, Suite
4500, Chicago, Illinois 60606.
PRINCIPAL SHAREHOLDERS AND CERTAIN BENEFICIAL OWNERS
As of March 27, 1998, the voting record date for the Special Meeting,
the following were the only persons known to own of record or beneficially five
percent (5%) or more of the outstanding shares of any Portfolio:
NAME AND ADDRESS NUMBER PERCENT OF OUT-
PORTFOLIO OF BENEFICIAL OWNER OF SHARES(1) STANDING(1)
- --------- ------------------- ------------ -----------
Government Ottawa County __________ ________%
P.O. Box 705
Suite 28, 414 Washington
Grand Haven, MI
Washtenah Community __________ _________%
College
P.O. Box D1
Ann Arbor, MI
12
<PAGE> 18
NAME AND ADDRESS NUMBER PERCENT OF OUT-
PORTFOLIO OF BENEFICIAL OWNER OF SHARES(1) STANDING(1)
- --------- ------------------- ------------ -----------
Dividend Achievers Ms. Barbara Wilson __________ _________%
700 San Antonia Street
Ojai, CA
Select Value Ziegler Growth Retirement __________ _________%
Plan
215 North Main Street
West Bend, WI
B. C. Ziegler and Company __________ _________%
215 North Main Street
West Bend, WI
PSE Tech 100 Index Hamac & Co. _________ _________%
P.O. Box 26246
Richmond, VA
- ------------------
(1) 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.
Information as to the number of outstanding shares of each Portfolio,
as of the Record Date, is set forth in Exhibit A. A listing of the beneficial
ownership of each current Director and Director Nominee, and of all Directors,
Director nominees and officers as a group, is set forth in Exhibit B. To the
knowledge of Principal Preservation management, the officers, Directors and
Director Nominees of Principal Preservation, as a group, owned less than 1% of
the outstanding shares of each Portfolio as of March 27, 1998.
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 B.C. Ziegler and Company or Ziegler Asset Management, Inc.,
Principal Preservation's distributor and Advisor 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 Principal Preservation.
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<PAGE> 19
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 Principal Preservation.
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 Principal Preservation, under the 1940 Act.
Meetings of shareholders of Principal Preservation 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.
14
<PAGE> 20
EXHIBIT A
NUMBER OF OUTSTANDING SHARES OF EACH FUND
(AS OF MARCH 27, 1998)
SHARES
OUTSTANDING
PORTFOLIO AS OF RECORD DATE
- --------- -----------------
Tax-Exempt Portfolio
Government Portfolio
S&P 100 Plus Portfolio
Dividend Achievers Portfolio
Select Value Portfolio
PSE Tech 100 Index Portfolio
Wisconsin Tax-Exempt Portfolio
Cash Reserve Portfolio
A-1
<PAGE> 21
EXHIBIT B
OWNERSHIP OF PORTFOLIO SHARES BY NOMINEES AND CURRENT BOARD MEMBERS
Number of Shares Held
as of
March 27, 1998
<TABLE>
<CAPTION>
PORTFOLIO NAME OF DIRECTOR OR DIRECTOR NOMINEE(1)
- --------- ---------------------------------------
Mr. Tuszynski(2) Mr. Aster Mr. English Mr. Eckert
------------- --------- ----------- ----------
<S> <C> <C> <C> <C>
S&P 100 Plus
Tax Exempt
Government
Dividend Achievers
Select Value
PSE Tech 100 Index
Wisconsin Tax-Exempt
Cash Reserve ___________ ___________ ___________ __________
TOTAL
<CAPTION>
All Directors and
Officers As a Group
Mr. R. D. Ziegler(2) Mr. Glaisner(2) (10 Persons)
----------------- ------------ ------------
<S> <C> <C> <C>
S&P 100 Plus
Tax Exempt
Government
Dividend Achievers
Select Value
PSE Tech 100 Index
Wisconsin Tax-Exempt
Cash Reserve ___________ ___________ _______________
TOTAL
</TABLE>
- ------------
(1) These figures are based on information furnished by the respective
individuals and by Ziegler, Principal Preservation's Transfer Agent.
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 Principal Preservation.
(2) Is an "interested person" (as defined in the 1940 Act) of Principal
Preservation as a result of his affiliation(s) with Ziegler and/or
ZAMI.
(3) 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.
B-1
<PAGE> 22
EXHIBIT C
EXISTING INVESTMENT RESTRICTIONS PROPOSED
TO BE CHANGED FROM FUNDAMENTAL TO
NONFUNDAMENTAL
INVESTMENT RESTRICTIONS
Fundamental Restrictions for the Following Portfolios: Tax-Exempt Portfolio,
Government Portfolio, S&P 100 Plus Portfolio and Dividend Achievers Portfolio
The Portfolios listed above have each adopted fundamental investment
restrictions providing that the Portfolio may not:
(1) Invest more than 5% of the fair market value of its assets in
securities of any one issuer, except for U.S. Government Securities, which may
be purchased without limitation (for the purposes of this limitation, the
Tax-Exempt Portfolio will regard the entity which has the ultimate
responsibility for payment of principal and interest as the issuer); and, with
respect to the S&P 100 Plus Portfolio, except as necessary to parallel the
composition of the S&P 100 Stock Index.
(2) Purchase more than 10% of the outstanding voting securities of an
issuer, or invest in a company to get control or manage it.
(3) Invest 25% or more of its total assets, based on current market
value at the time of purchase, in securities of issuers in any single industry;
provided that there shall be no limitation on the purchase of U.S. Government
securities or on municipal securities.
(4) Invest more than 5% of its total assets in securities of companies
which, including any predecessors, have a record of less than three years of
continuous operations.
(5) Invest in securities of other investment companies, except by
purchases as a result of which not more than 10% of the Portfolio's total assets
(taken at current value) would be invested in such securities, or except as they
may be acquired as part of a merger, consolidation, reorganization or
acquisition of assets.
(6) Buy or sell real estate, real estate investment trusts, interests
in real estate limited partnerships, oil, gas and mineral interests, or oil, gas
and mineral leases, but this shall not prevent the Tax-Exempt Portfolio from
investing in municipal securities secured by real estate or interests therein.
(7) Borrow money or property except for temporary or emergency
purposes. If a Portfolio ever should borrow money it would only borrow from
banks and in an amount not
C-1
<PAGE> 23
exceeding 10% of the market value of its total assets (not including the amount
borrowed). The Portfolio will not pledge more than 15% of its net assets to
secure such borrowings. In the event a Portfolio's borrowing exceeds 5% of the
market value of its total assets the Portfolio will not invest in any additional
portfolio securities until its borrowings are reduced to below 5% of its total
assets. For purposes of these restrictions, collateral arrangements for premium
and margin payments in connection with a Portfolio's hedging activities are not
to be deemed to be a pledge of assets.
(8) Make loans, except that a Portfolio may lend its portfolio
securities, subject to the conditions and limitations established in the current
Prospectus for the relevant Portfolio. For the purposes of this restriction,
investments in publicly-traded debt securities or debt securities of the type
customarily purchased by institutional investors and investments in repurchase
agreements are not considered loans.
(9) Underwrite the securities of other issuers, except that the
Tax-Exempt Portfolio may bid, separately or as part of a group, for the purchase
of municipal securities directly from an issuer for its own portfolio in order
to take advantage of the lower purchase price available.
(10) Purchase securities with legal or contractual restrictions on
resale.
(11) Issue senior securities.
(12) Purchase securities on margin, make short sales or write or
purchase put and call options, except for the purposes and subject to the
conditions and limitations described in the current Prospectus for the relevant
Portfolio.
(13) Buy or sell commodities or commodity contracts.
(14) Invest in illiquid securities.
(15) Purchase warrants, valued at lower of cost or market, in excess of
5% of the value of the Portfolio's net assets; included within the 5%, but not
to exceed 2% of the Portfolio's net assets, may be warrants which are not listed
on the New York or American Stock Exchange.
Fundamental Investment Restrictions for the Select Value Portfolio
The Select Value Portfolio has adopted fundamental investment
restrictions which provide that the Portfolio may not:
(1) Invest more than 5% of the fair market value of its assets in
securities of any one issuer, except for U.S. Government securities or bank
certificates of deposit and bankers' acceptances, which may be purchased without
such limitation.
C-2
<PAGE> 24
(2) Acquire securities of any one issuer which at the time of
investment (i) represent more than 10% of the outstanding voting securities of
such issuer, or (ii) have a value greater than 10% of the value of the
outstanding voting securities of such issuer.
(3) Invest 25% or more of its total assets, based on current market
value at the time of purchase, in securities of issuers in any single industry;
provided that there shall be no limitation on the purchase of securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities.
(4) Invest more than 5% of its total assets in securities of companies
which, including any predecessors, have a record of less than three years of
continuous operations.
(5) Purchase securities on margin or effect short sales of securities
(but the Portfolio may obtain such short-term credits as may be necessary for
the clearance of transactions and may make margin payments in connection with
transactions in options, futures and options on futures).
(6) Buy or sell real estate (although it may purchase securities
secured by real estate or interests therein, or securities issued by companies
which invest in real estate or interests therein, except that it may not invest
over 10% of the value of its assets in real estate investment trusts).
(7) Borrow money or property except for temporary or emergency purposes
and in connection with transactions in options, futures or futures options. If
the Portfolio ever should borrow money it would only borrow from banks and in an
amount not exceeding 10% of the market value of its total assets (not including
the amount borrowed). The Portfolio will not pledge more than 15% of its net
assets to secure such borrowings. In the event the Portfolio's borrowing exceeds
5% of the market value of its total assets, the Portfolio will not invest in any
portfolio securities until its borrowings are reduced to below 5% of its total
assets.
(8) Make loans to other persons. For the purposes of this restriction,
investments in publicly-traded debt securities or debt securities of the type
customarily purchased by institutional investors and investments in repurchase
agreements are not considered loans.
(9) Underwrite the securities of other issuers except where it might
technically be deemed to be an underwriter for purposes of the Securities Act of
1933 upon the disposition of certain securities.
(10) Issue senior securities (other than the borrowings permitted
above).
C-3
<PAGE> 25
Fundamental Investment Restrictions for the PSE Tech 100 Index Portfolio
The PSE Tech 100 Index Portfolio has adopted fundamental investment
restrictions which provide that the Portfolio may not:
(1) Purchase more than 10% of the outstanding voting securities of an
issuer or invest in a company to get control or manage it.
(2) Borrow money or property except for temporary or emergency
purposes. If the Portfolio ever should borrow money it would only borrow from
banks and in an amount not exceeding 10% of the market value of its total assets
(not including the amount borrowed). The Portfolio will not pledge more than 15%
of its net assets to secure such borrowings. In the event the Portfolio's
borrowing exceeds 5% of the market value of its total assets, the Portfolio will
not invest in any portfolio securities until its borrowings are reduced to below
5% of its total assets. For purposes of these restrictions, collateral
arrangements for premium and margin payments in connection with hedging
activities, if any, are not to be deemed to be a pledge of assets.
(3) Make loans, except that it may lend its portfolio securities. For
the purposes of this restriction, investments in publicly-traded debt securities
or debt securities of the type customarily purchased by institutional investors
and investments in repurchase agreements are not considered loans.
(4) Underwrite the securities of other issuers, except where it might
technically be deemed to be an underwriter for purposes of the Securities Act of
1933 upon the disposition of certain securities.
(5) Issue senior securities.
(6) Purchase a security if, as a result, more than 10% of the value of
the Portfolio's net assets would be invested in: (i) securities with legal or
contractual restrictions on resale (other than investments and repurchase
agreements); (ii) securities for which market quotations are not readily
available; and (iii) repurchase agreements which do not provide for payment
within 7 days.
(7) Invest in commodities, but the Portfolio may invest in futures
contracts and options.
(8) Purchase securities on margin or effect short sales of securities,
except short sales "against the box" (but the Portfolio may obtain such
short-term credits as may be necessary for the clearance of transactions and may
make margin payments in connection with transactions in options and futures
transactions).
(9) Buy or sell real estate, real estate investment trusts, real estate
limited partnerships, or oil and gas interests or leases.
C-4
<PAGE> 26
Fundamental Investment Restrictions for the Wisconsin Tax-Exempt Portfolio.
The Wisconsin Tax-Exempt Portfolio has adopted fundamental investment
restrictions which provide that the Portfolio may not:
(1) Purchase more than 10% of the outstanding voting securities of an
issuer, or invest in a company to get control or manage it.
(2) Invest 25% or more of its total assets, based on current market
value at the time of purchase, in securities of issuers in any single industry
(except that it may invest without limitation, in circumstances in which other
appropriate available instruments may be in limited supply, in housing, health
care and/or utility obligations); provided that there shall be no limitation on
the purchase of Tax Exempt Obligations and securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities.
(3) Borrow money or property except for temporary or emergency
purposes. If the Portfolio ever should borrow money it would only borrow from
banks and in an amount not exceeding 10% of the market value of its total assets
(not including the amount borrowed). The Portfolio will not pledge more than 15%
of its net assets to secure such borrowings. In the event the Portfolio's
borrowing exceeds 5% of the market value of its total assets the Portfolio will
not invest in any portfolio securities until its borrowings are reduced to below
5% of its total assets. For purposes of these restrictions, collateral
arrangements for premium and margin payments in connection with hedging
activities, if any, are not to be deemed to be a pledge of assets.
(4) Make loans, except that it may lend its portfolio securities,
subject to the conditions and limitations established in the Prospectus. For the
purposes of this restriction, investments in publicly-traded debt securities or
debt securities of the type customarily purchased by institutional investors and
investments in repurchase agreements are not considered loans.
(5) Underwrite the securities of other issuers, except where it might
technically be deemed to be an underwriter for purposes of the Securities Act of
1933 upon the disposition of certain securities.
(6) Issue senior securities.
(7) Purchase a security if, as a result, more than 10% of the value of
the Portfolio's net assets would be invested in: (i) securities with legal or
contractual restrictions on resale (other than investments and repurchase
agreements); (ii) securities for which market quotations are not readily
available; and (iii) repurchase agreements which do not provide for payment
within 7 days.
(8) Invest in commodities, but the Portfolio may invest in futures
contracts, options on futures, and options.
C-5
<PAGE> 27
Fundamental Investment Restrictions of the Cash Reserve Portfolio (Class X
(Retail) Common Stock and Class Y (Institutional) Common Stock).
The Cash Reserve Portfolio has adopted fundamental investment
restrictions which provide that the Portfolio may not:
1. Issue senior securities.
2. Borrow money, except from banks or through repurchase agreements for
temporary or emergency (not leveraging) purposes in an amount up to 33 1/3% of
the value of the Portfolio's total assets (including the amount borrowed), less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the value of the Portfolio's total assets,
the Portfolio will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except (i) to secure borrowings for temporary or emergency purposes and (ii) in
connection with the purchase of securities on a forward commitment basis and the
entry into reverse repurchase agreements or for similar transactions.
4. Invest in puts, calls, straddles, spreads or any combination thereof
if, by reason of such investment, the value of the Portfolio's investments in
all such classes of securities would exceed 5% of the Portfolio's total assets.
5. Sell securities short or purchase securities on margin.
6. Act as underwriter of securities of other issuers, except insofar as
the Portfolio may be deemed an underwriter in connection with the disposition of
a portfolio security.
7. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are not readily
marketable (which securities would include participation interests that are not
subject to the demand feature described in the then-current Prospectus and
floating and variable rate demand obligations as to which no secondary market
exists and the Portfolio cannot exercise the demand feature described in the
then-current Prospectus on not more than seven days' notice), if, in the
aggregate, more than 10% of its net assets would be so invested. The Portfolio
may not invest in time deposits maturing in more than seven days.
8. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests, except for any of the
foregoing acquired as a result of ownership of another portfolio or security.
9. Make short term loans to others, except through the purchase of debt
obligations and through repurchase agreements referred to in the Prospectus, and
except that the Portfolio may lend its portfolio securities in an amount not to
exceed 33 1/3% of the value of its total
C-6
<PAGE> 28
assets. Any loans of portfolio securities will be made according to guidelines
established by the SEC and Principal Preservation's Board of Directors.
10. Invest more than 5% of its assets in the obligations of any other
issuer, except that up to 25% of the value of the Portfolio's total assets may
be invested without regard to any such limitations. Notwithstanding the
foregoing, to the extent required by the rules of the SEC, the Portfolio will
not invest more than 5% of its assets in the obligations of any one bank.
11. Invest more than 25% of its assets in the securities of issuers in
any industry other than banking, provided that there shall be no limitation on
the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
12. Invest in companies for the purpose of exercising control.
13. Purchase securities of other investment companies if the purchase
would cause more than 10% of the value of the total assets of the Portfolio to
be invested in investment company securities, provided that: (i) the Portfolio
will not make any investment in the securities of any single investment company
if, immediately after such investment, more than 3% of the outstanding voting
securities of such investment company would be owned by the Portfolio or more
than 5% of the value of the total assets of the Portfolio would be invested in
such investment company; and (ii) no such restrictions shall apply to a purchase
by the Portfolio of investment company securities as a part of a merger,
consolidation, acquisition of assets or reorganization.
14. Purchase securities of unseasoned issuers, including their
predecessors, which have been in operation for less than three years, or
purchase equity securities of issuers which are not readily marketable if, by
reason thereof, the value of the Portfolio's aggregate investment in all classes
of such securities will exceed 5% of its total assets.
C-7
<PAGE> 29
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
TAX-EXEMPT PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the
Tax-Exempt Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 30
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
GOVERNMENT PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the
Government Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 31
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
S&P 100 PLUS PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, 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 of Principal Preservation Portfolios, Inc. that the undersigned
is entitled to vote at the Special Meeting of Shareholders 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, May 15, 1998,
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: __________________, 1998
(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)
[FRONT]
<PAGE> 32
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
DIVIDEND ACHIEVERS PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the Dividend
Achievers Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 33
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
SELECT VALUE PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the Select
Value Portfolio of Principal Preservation Portfolios, Inc. that the undersigned
is entitled to vote at the Special Meeting of Shareholders 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, May 15, 1998,
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: __________________, 1998
(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)
[FRONT]
<PAGE> 34
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
PSE TECH 100 INDEX PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the PSE Tech
100 Index Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 35
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the Wisconsin
Tax-Exempt Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 36
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
CASH RESERVE PORTFOLIO
REVOCABLE PROXY FOR 1998 SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Tuszynski, S. Charles O'Meara
and Franklin P. Ciano, and each of them, Proxy, with full power of substitution,
to represent and vote, as designated below, all shares of stock of the Cash
Reserve Portfolio of Principal Preservation Portfolios, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders 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, May 15,
1998, 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: __________________, 1998
(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)
[FRONT]
<PAGE> 37
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 FOR A PROPOSAL, THE PROXY WILL BE VOTED FOR THAT
PROPOSAL.
1. To elect as Directors Robert J. Tuszynski; Richard H. Aster, M.D.;
Augustine J. English; Ralph J. Eckert and Richard J. Glaisner.
|_| For All Nominees |_| Withhold Authority As To All Nominees
To withhold authority to vote for any one or more (but less than all)
of the nominees, print the name(s) of that nominee(s) on the line
below.
___________________________________________________________
2. To approve the proposal to make the Portfolio's fundamental
investment restrictions nonfundamental.
|_| For |_| Against |_| Abstain
3. To ratify the selection of Arthur Andersen LLP as the Portfolio's
independent accountants for the year ending December 31, 1998.
|_| For |_| Against |_| Abstain
[BACK]
