SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Reynolds Funds, Inc.
(Name of Registrant as Specified in its Charter)
_________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and date of its filing.
1) Amount Previously Paid
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
REYNOLDS FUNDS, INC.
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 23, 1998
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of Reynolds Funds, Inc. (the "Company"), will be held at 80
East Sir Francis Drake Boulevard, Larkspur, California 94939, on
Wednesday, September 23, 1998, at 10:00 A.M., Pacific Time. The Company
consists of four mutual funds, the Reynolds Blue Chip Growth Fund, (the
"Blue Chip Fund"), the Reynolds Opportunity Fund (the "Opportunity Fund"),
the Reynolds U.S. Government Bond Fund (the "Bond Fund") and the Reynolds
Money Market Fund (the "Money Market Fund"). (The Blue Chip Fund, the
Opportunity Fund, the Bond Fund and the Money Market Fund are collectively
referred to as the "Funds"). The purposes of the Meeting are:
1. With respect to the shareholders of all of the Funds, to elect 3
directors to serve an indefinite term until their successors are chosen
and qualified (Proposal No. 1).
2. With respect to the shareholders of each of the Blue Chip Fund
and Opportunity Fund, to consider and act upon a proposal to approve the
Reynolds Funds 12b-1 Plan (Proposal Nos. 2(a) and 2(b)).
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
IMPORTANT
Please mark, sign, date and return the enclosed proxy in the
accompanying envelope as soon as possible in order to ensure a full
representation at the Meeting.
The Meeting will have to be adjourned without conducting any business
if less than a majority of the eligible shares is represented, and the
Company will have to continue to solicit votes until a quorum is obtained.
The Meeting also may be adjourned, if necessary, to continue to solicit
votes if less than the required shareholder vote has been obtained to
approve Proposal Nos. 2(a) and 2(b).
Your vote, then, could be critical in allowing the Company to hold
the Meeting as scheduled. By marking, signing and promptly returning the
enclosed proxy, you may eliminate the need for additional solicitation.
Your cooperation is appreciated.
By Order of the Board of Directors,
Frederick L. Reynolds
President
Larkspur, California
August __, 1998
Only shareholders of record of the Company at the close of business
on July 31, 1998, the record date for the Meeting, will be entitled to
notice of, and to vote at, the Meeting or any adjournments thereof.
<PAGE>
REYNOLDS FUNDS, INC.
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 23, 1998
INTRODUCTION
The enclosed proxy is being solicited by the Board of Directors (the
"Board" or the "Directors") of Reynolds Funds, Inc. (the "Company") for
use in connection with the special meeting of shareholders (the "Meeting")
to be held at 10:00 A.M. Pacific Time, on Wednesday, September 23,1998, at
80 East Sir Francis Drake Boulevard, Larkspur, California 94939, and at
any adjournment(s) thereof for the purpose set forth in the foregoing
notice. The Company consists of four mutual funds, the Reynolds Blue Chip
Growth Fund, (the "Blue Chip Fund"), the Reynolds Opportunity Fund (the
"Opportunity Fund"), the Reynolds U.S. Government Bond Fund (the "Bond
Fund") and the Reynolds Money Market Fund (the "Money Market Fund"). (The
Blue Chip Fund, the Opportunity Fund, the Bond Fund and the Money Market
Fund are collectively referred to as the "Funds").
The Company will present the following proposals to the shareholders
at the Meeting:
Proposal No. 1 Election of Directors
Proposal Nos. 2(a) Approval of the Reynolds Funds 12b-1 Plan (the
and 2(b) "Plan")
The record holder of each outstanding share of a Fund is entitled to
one vote on all matters submitted to shareholders of that Fund. The table
below sets forth the Proposals for which shareholders of each Fund are
being solicited:
Proposal Blue Chip Opportunity Money Market
No. Fund Fund Bond Fund Fund
1 Yes Yes Yes Yes
2(a) Yes No No No
2(b) No Yes No No
See "Vote Required" under each Proposal for information as to the
required vote on each Proposal.
Only shareholders of record of the Funds on the close of business on
July 31, 1998 are entitled to notice of and to vote at the Meeting. On
that date there were issued and outstanding ___________ shares of the Blue
Chip Fund, __________ shares of the Opportunity Fund, __________ shares of
the Bond Fund and __________ shares of the Money Market Fund.
Whether you expect to be personally present at the Meeting or not,
please complete, sign, date and return the accompanying form of proxy. If
the enclosed form of proxy is duly executed and returned in time to be
voted at the Meeting, and not subsequently revoked, all shares represented
by the proxy will be voted in accordance with your instructions marked
thereon. If no instructions are given, proxies will be voted FOR the
election of the nominees for the Board of Directors of the Company
(Proposal No. 1) and FOR approval of the Plan (Proposal Nos. 2(a) and
2(b)). A majority of the outstanding shares of the Funds, represented in
person or by proxy, will constitute a quorum at the Meeting.
Execution of the enclosed proxy card will not affect a shareholder's
right to attend the Meeting and vote in person, and a shareholder giving a
proxy has the power to revoke it (by written notice to the Company,
execution of a subsequent proxy card, or oral revocation at the Meeting)
at any time before it is exercised. Presence at the Meeting of a
shareholder who has signed a proxy does not in itself revoke a proxy.
In addition to the solicitations or proxies by use of the mail,
proxies may be solicited by officers of the Company. The cost of
soliciting proxies will be borne by the Funds. The Funds do not
anticipate specifically engaging anyone to solicit proxies or to pay any
special compensation for that purpose.
The Board may seek one or more adjournments of the Meeting to solicit
additional shareholders, if necessary, to obtain a quorum for the Meeting,
or to obtain the required vote to approve Proposal Nos. 2(a) and 2(b). An
adjournment would require the affirmative vote of the holders of a
majority of the shares present at the Meeting (or an adjournment thereof)
in person or by proxy and entitled to vote. If adjournment is proposed in
order to obtain the required vote on Proposal Nos. 2(a) and 2(b), the
persons named as proxies will vote in favor of adjournment those shares
which they are entitled to vote in favor of such proposal and will vote
against adjournment those shares which they are required to vote against
such proposal.
The Notice of Special Meeting of Shareholders, this Proxy Statement
and the accompanying form of proxy were first mailed to shareholders of
the Funds on or about August __, 1998.
THE COMPANY WILL FURNISH WITHOUT CHARGE, ITS ANNUAL REPORT FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 1997 AND ITS SEMIANNUAL REPORT FOR THE
FISCAL PERIOD ENDED MARCH 31,1998 TO ANY SHAREHOLDER UPON REQUEST.
REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO FREDERICK L. REYNOLDS AT
WOOD ISLAND, THIRD FLOOR, 80 EAST SIR FRANCIS DRAKE BOULEVARD, LARKSPUR,
CALIFORNIA 94939 OR BY CALLING 1-800-773-9665.
1. PROPOSAL TO ELECT THREE DIRECTORS
Three Directors are to be elected at the Meeting to serve an
indefinite term until their respective successors are chosen and
qualified. The table set forth below identifies the three nominees for
election as Directors of the Company and provides information as to their
ages, principal occupations and background for the last five years. All
of the nominees, Messrs. Reynolds, Snader and Stauder, are members of the
present Board of Directors. Messrs. Reynolds and Stauder have been
Directors of the Company since its incorporation on April 21, 1988 and Mr.
Snader was appointed to the Board of Directors on February 3, 1994 to
fill a vacancy.
The table below sets forth information regarding the nominees for the
Board of Directors:
Name of Nominee Position with the Principal Occupation
and Age Company During Past 5 Years
Frederick L. Reynolds* President, Sole Proprietor of Reynolds
55 Treasurer and Capital Management, the
Director investment adviser to the
Funds, (the "Adviser")
Robert E. Snader Director President of R.E. Snader &
57 Associates, a distributor
of professional, industrial
and broadcast video and
computer/video equipment
Robert E. Stauder Director Retired; formerly a
67 principal of Robinson Mills
& Williams, an
architectural and interior
design firm
____________________________
* Interested person as defined in the Investment Company Act of 1940.
Mr. Reynolds is deemed to be an "interested person" of the Company as
that term is defined in the Investment Company Act of 1940 because he is
an officer of the Company and the sole proprietor of the Adviser.
The officers of the Company are Mr. Frederick L. Reynolds, 55,
President and Treasurer, and Ms. Camille F. Wildes, 45, Secretary. Both
Mr. Reynolds and Ms. Wildes serve for an indefinite term. Mr. Reynolds
has served in such capacities since 1988 and Ms. Wildes has served in such
capacity since December 9, 1989.
The Company does not compensate any of its officers or Directors for
their services to the Company, except those Directors who are not
"interested persons" of the Company. The Company's standard method of
compensating the Directors who are not "interested persons" of the Company
is to pay each such Director a fee of $550 for each meeting of the Board
of Directors attended. The Company does not provide pension or retirement
benefits to its Directors or officers.
The table below sets forth the compensation paid to Directors during
the fiscal year ended September 30, 1997:
<TABLE>
<CAPTION>
Pension or
Retirement
Aggregate Benefits Accrued
Compensation as Part of the Estimated Annual Total Compensation
Name of Person, from the Company's Benefits Upon from the Company
Position Company Expenses Retirement Paid to Directors
<S> <C> <C> <C>
Frederick L. Reynolds, $0 $0 $0 $0
President, Treasurer
and Director
Robert E. Snader, $2,200 $0 $0 $2,200
Director
Robert E. Stauder, $2,200 $0 $0 $2,200
Director
</TABLE>
The Board of Directors has no audit, nominating, compensation or
other similar committees. The Board of Directors met four times during
the fiscal year ended September 30, 1997. All of the nominees attended
each meeting. None of the Directors serve on the board of directors of
any reporting companies other than the Company.
Vote Required
Each nominee has consented to being named in this Proxy Statement and
to serve if elected. The Company has no reason to believe that any of the
nominees will be unable to serve as Director. However, in such event, the
persons named as proxies will have discretionary authority to select and
vote for substituted nominees. It is the intention of the persons named
in the enclosed proxy to vote the shares represented by the proxies FOR
the election of the nominees named below, unless shareholders specify that
their vote be withheld as to all nominees or individual nominees. The
Company's Board of Directors recommends a vote FOR all nominees.
Directors will be elected by a plurality of votes of the shareholders
(assuming a quorum is present). "Plurality" means that the individuals
receiving the largest number of votes are elected as Directors, up to the
maximum number of Directors to be chosen at the Meeting. Consequently,
any shares not voted at the Meeting, whether due to abstentions, broker
non-votes or otherwise, will have no impact on the election of Directors.
2. PROPOSAL TO APPROVE THE PLAN
Description of the Plan
On July 21, 1998 the Board of Directors adopted the Plan. The Plan
permits each Fund whose shareholders approve the Plan to use Fund assets
to finance the distribution of its shares. (Funds whose shareholders have
approved the Plan are referred to as "Approving Funds"). The Plan permits
each Approving Fund to pay a distribution and service fee on an annualized
basis of up to 0.25% of such Approving Fund's average daily net assets.
The distribution and servicing fee may be spent on any activities
primarily intended to result in the sale of shares of the Approving Fund.
Examples of such activities include:
- Compensation of securities dealers, financial institutions or
similar persons ("Shareholder Organizations") who render
personal service to shareholders, assist in the maintenance of
shareholder accounts or who render assistance in distributing or
promoting the sale of shares
- Advertising, including maintenance of a website on the Internet
- Printing and distributing prospectuses to prospective investors
- Purchasing and distributing other promotional material
The Plan contains a number of safeguards that are intended to insure
that payments pursuant to the Plan accomplish the objectives of the Plan.
All agreements with Shareholder Organizations must be approved by the
Board of Directors of the Company, including a majority of those Directors
who are not interested persons of the Company (the "12b-1 Directors").
Assuming their election at the Meeting, Messrs. Snader and Stauder will be
the 12b-1 Directors. The Directors anticipate that substantially all
agreements with Shareholder Organizations will provide for compensation
based on a percentage of the value of their clients' investments in the
applicable Approving Fund. Other expenditures under the Plan, such as
advertising, printing and mailing costs must be authorized by an officer
of the Company.
The Adviser will provide to the Board on a quarterly basis, and the
Board will review, a written report of amounts expended pursuant to the
Plan and the purpose of the expenditures. The Plan further provides that
with respect to each Approving Fund, it may be terminated by a vote of the
majority of the 12b-1 Directors or by a vote of a majority of the
outstanding voting securities of the Approving Fund. The Board must
approve the continuation of the Plan annually, and if it does not, the
Plan will terminate automatically. So long as the Plan continues in
effect, the selection and nomination of Directors who are not interested
persons of the Company will be committed to the discretion of the Rule
12b-1 Directors. The Plan may not be amended to increase materially the
permitted amount of payments with respect to an Approving Fund without the
approval of a majority of the 12b-1 Directors and a majority of the
outstanding voting securities of the Approving Fund. Any material
amendments to the Plan not related to increasing the amount of permitted
payments must be approved by the Rule 12b-1 Directors.
Because of the small size of the Bond Fund and the Money Market Fund,
the Board of Directors has determined not to seek the approval of the
shareholders of these Funds for adoption of the Plan at this time.
However if the assets of these Funds increase significantly, it may do so
in the future.
Factors Considered by the Board of Directors
In voting to approve the Plan and submitting it to the shareholders
of the Blue Chip Fund and the Opportunity Fund for their approval, the
Directors, including the 12b-1 Directors, considered a number of factors.
Prior to approving the Plan, the Directors had the opportunity to review a
draft of the Plan and discuss with the Adviser possible expenditures that
might be made pursuant to the Plan. The Company's legal counsel reviewed
with the Directors the provisions of the Plan and legal and regulatory
considerations in adopting the Plan.
Initially the Board considered the nature of the problems or
circumstances that made implementation of the Plan necessary or
appropriate. The Adviser reviewed with the Directors the performance of
the Blue Chip Fund and the Opportunity Fund and their growth in net
assets. The Adviser noted that despite the positive performance of these
Funds, their net assets had grown slowly. The Adviser noted that a faster
growth in net assets might enable the Funds to offer the following
benefits to shareholders:
- Lower per share transaction costs that would result if the
Adviser were able to effect larger transactions
- More efficient portfolio management as it is easier for the
Funds to process redemption requests without disrupting their
investment strategy if they have net cash inflows
- Increased flexibility of the Funds in pursuing their investment
objectives in that they may be able to establish meaningful
positions in the various stocks in which the Adviser would like
to invest without reducing positions then currently held by the
Funds
- Lowering the Funds' expense ratios with respect to its fixed
expenses which would be spread over a larger base
- Increased communications with shareholders and prospective
shareholders such as by maintenance of a website on the Internet
The Board then considered the causes of the slow growth in net assets
of the Blue Chip Fund and the Opportunity Fund. The Adviser informed the
Board that no-load mutual funds were increasingly being sold through the
efforts of third parties such as brokerage firms, banks, investment
advisers, consultants and others. No-load mutual funds have increasingly
employed 12b-1 plans to compensate these third parties. Since the Funds
have not had a 12b-1 plan, they have been at a competitive disadvantage in
attracting the interest of third parties to promote the Funds. The
Adviser also informed the Board that advertising in financial publications
continues to be a means employed by no-load mutual funds to promote the
sale of their shares and that a source of funds for such advertising is
payment made pursuant to 12b-1 plans. This funding source has heretofore
not been available to the Funds and the Adviser has not had the resources
to commit to an advertising program in financial publications.
The Board then considered whether the Plan would address the
aforementioned problems and alleviate them. The Adviser informed the
Board that if the Plan were approved, it would undertake on behalf of the
Blue Chip Fund and the Opportunity Fund marketing efforts similar to those
undertaken by other no-load mutual funds. The Adviser indicated that it
would undertake to identify Shareholder Organizations that would
distribute shares of the Funds and, in appropriate circumstances, would be
willing to supplement the Funds' payments to Shareholder Organizations
with payments from its own resources. Additionally the Board determined
that the Funds should advertise in financial publications to supplement
the Adviser's promotional activities. The Adviser represented to the
Board that it would not reduce its effort to promote sales of shares of
the Funds and that through advertising the increased name recognition of
the Fund would afford the Adviser additional marketing opportunities. In
approving the Plan, the Directors determined, in the exercise of their
business judgment and in light of their fiduciary duties under state law
and the Investment Company Act of 1940, that the Plan is reasonably likely
to benefit the Funds and their shareholders.
Although the Board concluded that the Plan is reasonably likely to
benefit the Funds and their shareholders, it also considered possible
alternatives. The Board considered the possibility of the Funds imposing
a front-end sales load and retaining a brokerage firm to serve as
principal underwriter for them. The Board concluded that adoption of the
Plan would be more likely to result in increased sales than converting the
Funds to load funds.
The Board recognized that the Adviser would benefit from increased
management fees as a result of growth in the Funds' assets. The Board
concluded that such benefits would not be disproportionate to the above-
described anticipated benefits to each Fund and its shareholders because
the Adviser would have increased portfolio management responsibilities as
a result of the growth of the assets of the Funds. The Board also
recognized that the Adviser had heretofore utilized its own resources to
finance distribution of shares of the Funds and would continue to do so if
the Plan is approved by the shareholders of the Blue Chip Fund and the
Opportunity Fund. The Board determined that payments by the Fund of
investment advisory fees to the Adviser did not constitute indirect
financing of distribution of the Funds because the advisory fees paid by
the Funds were not out of line with the investment advisory fees paid by
comparable funds.
a. Proposal to Approve the Plan (Blue Chip Fund)
In addition to considering the potential benefits of the Plan to the
Blue Chip Fund and the Opportunity Fund and their shareholders, the Board
also considered the impact of the Plan on the expenses of both the Blue
Chip Fund and the Opportunity Fund.
The following table shows the actual operating expenses expressed as
a percentage of average net assets incurred by the Blue Chip Fund during
the fiscal year ended September 30, 1997, and the expenses expressed as a
percentage of average net assets that would have been incurred had the
Plan been in effect for such period:
Actual Pro Forma
Management Fees 1.00% 1.00%
12b-1 Fees 0.00% 0.25%
Other Expenses 0.38% 0.38%
----- -----
Total Fund Operating Expenses 1.38% 1.63%
===== =====
Example
The following example illustrates the expenses on a $1,000 investment
in the Blue Chip Fund both without the Plan and with the Plan assuming (i)
a 5% annual return and (ii) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
Without the Plan $14 $44 $76 $166
With the Plan 17 51 89 193
The purpose of the above example and table is to assist you in
understanding how the various costs and expenses of the Blue Chip Fund
will change as a result of the adoption of the Plan. The example should
not be considered a representation of past or future expenses. The Blue
Chip Fund's actual expenses and investment performance vary from year to
year and will result in expenses that may be higher or lower than those
shown above.
The Board concluded that the modest increase in the expenses of the
Blue Chip Fund resulting from implementation of the Plan did not outweigh
the potential benefits of the Plan described above.
b. Proposal to Approve the Plan (Opportunity Fund)
The following table shows the actual operating expenses expressed as
a percentage of average net assets incurred by the Opportunity Fund during
the fiscal year ended September 30, 1997, and the expenses expressed as a
percentage of average net assets that would have been incurred had the
Plan been in effect for such period:
Actual Pro Forma
Management Fees 1.00% 1.00%
12b-1 Fees 0.00% 0.25%
Other Expenses 0.50% 0.50%
----- -----
Total Fund Operating Expenses 1.50% 1.75%
===== =====
Example
The following example illustrates the expenses on a $1,000 investment
in the Opportunity Fund both without the Plan and with the Plan assuming
(i) a 5% annual return and (ii) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
Without the Plan $15 $47 $82 $179
With the Plan 18 55 95 206
The purpose of the above example and table is to assist you in
understanding how the various costs and expenses of the Opportunity Fund
will change as a result of the adoption of the Plan. The example should
not be considered a representation of past or future expenses. The
Opportunity Fund's actual expenses and investment performance vary from
year to year and will result in expenses that may be higher or lower than
those shown.
Again the Board concluded that the modest increase in the expenses of
the Opportunity Fund resulting from the implementation of the Plan did not
outweigh the potential benefits of the Plan described above.
Vote Required
The favorable vote of the holders of a "majority" (as defined in the
Investment Company Act of 1940) of the outstanding shares of the Blue Chip
Fund is required for the approval of the Plan by the Blue Chip Fund.
Similarly the favorable vote of a "majority" of the outstanding shares of
the Opportunity Fund is required for the approval of the Plan by the
Opportunity Fund. Under the Investment Company Act of 1940, the vote of
the holders of a "majority" of the outstanding shares of a Fund means the
vote of the holders of the lesser of (a) 67% or more of its shares present
at the Meeting or represented by proxy if the holders of 50% or more of
its shares are so present or represented; or (b) more than 50% of its
outstanding shares. Abstentions and broker non-votes will not be counted
for or against the proposal but will be counted as votes present for
purposes of determining whether or not more than 50% of the outstanding
shares are present or represented at the Meeting. The failure to vote
(other than by broker non-votes or abstentions), assuming more than 50% of
the outstanding shares of a Fund are present, has no effect if (a) above
is applicable and has the same effect as a vote against the proposal if
(b) above is applicable. Abstentions and broker non-votes have the same
effect as a vote against the proposal.
If the Plan is approved by either the Blue Chip Fund or the
Opportunity Fund, but not both, the Plan will be implemented with respect
to the Approving Fund. With respect to an Approving Fund, the Plan will
take effect on the first business day of the month following the month in
which shareholder approval is received.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH OF THE BLUE CHIP FUND AND THE OPPORTUNITY FUND VOTE
FOR THE APPROVAL OF THE PLAN.
PRINCIPAL SHAREHOLDERS
As of July 31, 1998, no person is known to the Company to own
beneficially more than 5% of the outstanding shares of any Fund except as
indicated below:
Name and Address of Number of Percent
Fund Beneficial Owner Shares of Fund
Opportunity Fund Frederick L. Reynolds _______ ____%
Wood Island, Third Floor
80 East Sir Francis Drake Blvd.
Larkspur, CA 94939
Bond Fund The Joel W. Renbaum, M.D., Inc. _______ ____%
Profit Sharing Trust
1145 Bush Street
San Francisco, CA 94109
Chambers Family Insurance Trust _______ ____%
650 California Street, Floor 33
San Francisco, CA 94108
Forest Resources Profit-Sharing _______ ____%
Plan
200 Tamal Plaza #200
Corte Madera, CA 94925
Louise Posner Test Trust _______ ____%
P. O. Box 1077
Ross, CA 94957
DDS Inc. Profit Sharing Trust _______ ____%
476 West 25th Avenue
San Mateo, CA 94403
Money Market Hollis Bascom _______ ____%
Fund 1558 San Remo Street
Livermore, CA 94550
Lynn M. Sedway _______ ____%
Three Embarcadero Center #1150
San Francisco, CA 94111
As of July 31, 1998 the Directors and executive officers of the Company
beneficially owned shares of the Funds as set forth below:
Name of Beneficial Number Percent
Fund Owner of Shares of Fund
Blue Chip Fund Frederick L. Reynolds _______ ____%
Robert E. Snader _______ ____%
Robert E. Stauder _______ ____%
Camille F. Wildes _______ ____%
Officers and Directors _______ ____%
as a Group (Four
Persons)
________________
*Less than 1%
Number Percent
Fund Name of Beneficial Owner of Shares of Fund
Opportunity Fund Frederick L. Reynolds _______ ____%
Robert E. Snader _______ ____%
Robert E. Stauder _______ ____%
Camille F. Wildes _______ ____%
Officers and _______ ____%
Directors as a Group
(Four Persons)
________________
*Less than 1%
Name of Beneficial Number Percent
Fund Owner of Shares of Fund
Bond Fund Frederick L. Reynolds _______ ____%
Robert E. Snader _______ ____%
Robert E. Stauder _______ ____%
Camille F. Wildes _______ ____%
Officers and Directors _______ ____%
as a Group (Four
Persons)
________________
*Less than 1%
Name of Beneficial Number Percent
Fund Owner of Shares of Fund
Money Market Fund Frederick L. Reynolds _______ ____%
Robert E. Snader _______ ____%
Robert E. Stauder _______ ____%
Camille F. Wildes _______ ____%
Officers and Directors _______ ____%
as a Group (Four
Persons)
________________
*Less than 1%
INVESTMENT ADVISER AND ADMINISTRATOR
The Company's investment adviser is Reynolds Capital Management, Wood
Island, Third Floor, 80 East Sir Francis Drake Boulevard, Larkspur,
California 94939. Reynolds Capital Management is a sole proprietorship
for which Frederick L. Reynolds is sole proprietor.
The administrator of the Company is Fiduciary Management, Inc., 225
East Mason Street, Milwaukee, Wisconsin 53202.
The Company has no principal underwriter.
RECEIPT OF SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange Commission,
shareholder proposals meeting tests contained in those rules may, under
certain conditions, be included in the Company's proxy materials for a
particular meeting of shareholders. One of these conditions relates to
the timely receipt by the Company of any such proposal. Since the Company
does not have regular annual meetings of shareholders, under these rules,
proposals submitted for inclusion in the proxy materials for a particular
meeting must be received by the Company a reasonable time before the
solicitation of proxies for the meeting is made. The fact that the
Company receives a shareholder proposal in a timely manner does not insure
its inclusion in the Company's proxy materials since there are other
requirements in the proxy rules relating to such inclusion.
OTHER MATTERS
The Company's Board of Directors knows of no other matters that may
come before the Meeting. If any other matters properly come before the
Meeting, it is the intention of the persons acting pursuant to the
enclosed form of proxy to vote the shares represented by said proxies in
accordance with their best judgment with respect to such matters.
By Order of the Board of Directors
FREDERICK L. REYNOLDS
President
Larkspur, California
August __, 1998
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
Reynolds Funds, Inc.
Reynolds U.S. Government Bond Fund
September 23, 1998
The undersigned constitutes and appoints Frederick L. Reynolds,
with power of substitution, attorney and proxy for and in the name and
place of the undersigned, to appear and vote with the same effect as the
undersigned at the Special Meeting of shareholders of Reynolds Funds,
Inc., as an owner of shares of the Reynolds U.S. Government Bond Fund (the
"Bond Fund"), to be held at 80 East Sir Francis Drake Boulevard, Larkspur,
California 94939, on Wednesday, September 23, 1998, at 10:00 A.M., Pacific
Time, and at any adjournments or postponements thereof, all shares of
stock of the Bond Fund which the undersigned is entitled to vote as
follows:
1. To elect three directors to the Fund's Board of Directors.
FOR all nominees listed below (except as marked to the
contrary) [_]
WITHHOLD AUTHORITY to vote for nominees listed below [_]
(Instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN
THE LIST BELOW.)
FREDERICK L. REYNOLDS ROBERT E. SNADER ROBERT E. STAUDER
2. Upon such other business as may properly come before the meeting
or any adjournment thereof.
This proxy will be voted as specified.
IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL AND IN THE
DISCRETION OF THE PROXY UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
The signature on this proxy should
correspond exactly with the name of the
shareholder as it appears on the proxy.
If stock is issued in the name of two or
more persons, each should sign the proxy.
If a proxy is signed by an administrator,
trustee, guardian, attorney or other
fiduciary, please indicate full title as
such.
Dated:
Signed:
Signed:
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF
REYNOLDS FUNDS, INC.
[_] Please check here if you WILL be
attending the meeting.
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
Reynolds Funds, Inc.
Reynolds Money Market Fund
September 23, 1998
The undersigned constitutes and appoints Frederick L. Reynolds,
with power of substitution, attorney and proxy for and in the name and
place of the undersigned, to appear and vote with the same effect as the
undersigned at the Special Meeting of shareholders of Reynolds Funds,
Inc., as an owner of shares of the Reynolds Money Market Fund (the "Money
Market Fund"), to be held at 80 East Sir Francis Drake Boulevard,
Larkspur, California 94939, on Wednesday, September 23, 1998, at 10:00
A.M., Pacific Time, and at any adjournments or postponements thereof, all
shares of stock of the Money Market Fund which the undersigned is entitled
to vote as follows:
1. To elect three directors to the Fund's Board of Directors.
FOR all nominees listed below (except as marked to the
contrary) [_]
WITHHOLD AUTHORITY to vote for nominees listed below [_]
(Instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN
THE LIST BELOW.)
FREDERICK L. REYNOLDS ROBERT E. SNADER ROBERT E. STAUDER
2. Upon such other business as may properly come before the
meeting or any adjournment thereof.
This proxy will be voted as specified.
IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL AND IN THE
DISCRETION OF THE PROXY UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
The signature on this proxy should
correspond exactly with the name of the
shareholder as it appears on the proxy.
If stock is issued in the name of two or
more persons, each should sign the proxy.
If a proxy is signed by an administrator,
trustee, guardian, attorney or other
fiduciary, please indicate full title as
such.
Dated:
Signed:
Signed:
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF
REYNOLDS FUNDS, INC.
[_] Please check here if you WILL be
attending the meeting.
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
Reynolds Funds, Inc.
Reynolds Opportunity Fund
September 23, 1998
The undersigned constitutes and appoints Frederick L. Reynolds,
with power of substitution, attorney and proxy for and in the name and
place of the undersigned, to appear and vote with the same effect as the
undersigned at the Special Meeting of shareholders of Reynolds Funds,
Inc., as an owner of shares of the Reynolds Opportunity Fund (the
"Opportunity Fund"), to be held at 80 East Sir Francis Drake Boulevard,
Larkspur, California 94939, on Wednesday, September 23, 1998, at 10:00
A.M., Pacific Time, and at any adjournments or postponements thereof, all
shares of stock of the Opportunity Fund which the undersigned is entitled
to vote as follows:
1. To elect three directors to the Fund's Board of Directors.
FOR all nominees listed below (except as marked to the
contrary) [_]
WITHHOLD AUTHORITY to vote for nominees listed below [_]
(Instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S
NAME IN THE LIST BELOW.)
FREDERICK L. REYNOLDS ROBERT E. SNADER ROBERT E. STAUDER
2. (b) To approve the Reynolds Funds 12b-1 Plan for the
Opportunity Fund.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Upon such other business as may properly come before the meeting
or any adjournment thereof.
This proxy will be voted as specified.
IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR EACH PROPOSAL AND IN
THE DISCRETION OF THE PROXY UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
The signature on this proxy should
correspond exactly with the name of the
shareholder as it appears on the proxy.
If stock is issued in the name of two or
more persons, each should sign the proxy.
If a proxy is signed by an administrator,
trustee, guardian, attorney or other
fiduciary, please indicate full title as
such.
Dated:
Signed:
Signed:
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF
REYNOLDS FUNDS, INC.
[_] Please check here if you WILL be
attending the meeting.
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
Reynolds Funds, Inc.
Reynolds Blue Chip Growth Fund
September 23, 1998
The undersigned constitutes and appoints Frederick L. Reynolds,
with power of substitution, attorney and proxy for and in the name and
place of the undersigned, to appear and vote with the same effect as the
undersigned at the Special Meeting of shareholders of Reynolds Funds,
Inc., as an owner of shares of the Reynolds Blue Chip Growth Fund (the
"Blue Chip Fund"), to be held at 80 East Sir Francis Drake Boulevard,
Larkspur, California 94939, on Wednesday, September 23, 1998, at 10:00
A.M., Pacific Time, and at any adjournments or postponements thereof, all
shares of stock of the Blue Chip Fund which the undersigned is entitled to
vote as follows:
1. To elect three directors to the Fund's Board of Directors.
FOR all nominees listed below (except as marked to the
contrary) [_]
WITHHOLD AUTHORITY to vote for nominees listed below [_]
(Instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST BELOW.)
FREDERICK L. REYNOLDS ROBERT E. SNADER ROBERT E. STAUDER
2. (a) To approve the Reynolds Funds 12b-1 Plan for the Blue Chip
Fund.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Upon such other business as may properly come before the meeting
or any adjournment thereof.
This proxy will be voted as specified.
IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR EACH PROPOSAL AND IN
THE DISCRETION OF THE PROXY UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
The signature on this proxy should
correspond exactly with the name of the
shareholder as it appears on the proxy.
If stock is issued in the name of two or
more persons, each should sign the proxy.
If a proxy is signed by an administrator,
trustee, guardian, attorney or other
fiduciary, please indicate full title as
such.
Dated:
Signed:
Signed:
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF
REYNOLDS FUNDS, INC.
[_] Please check here if you WILL be
attending the meeting.
