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 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PENN CAPITAL 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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 the date of its filing.
1) Amount previously paid:__________________________________
2) Form, Schedule or Registration Statement No.:____________
_________________________________________________________
3) Filing Party:____________________________________________
4) Date Filed:______________________________________________
<PAGE>
PENN CAPITAL FUNDS, INC.
216 Boulevard of the Allies
Pittsburgh, PA 15222
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of
Penn Capital Funds, Inc. (the "Fund") will be held at the offices of
the Fund's counsel, Pluumer, Beaman & DeWalt, L.L.P., 3800 Gulf Tower,
707 Grant Street, Pittsburgh, PA 15219, on Friday, May 20, 1996 at
11:00 a.m., Eastern time for the following purposes:
1. To elect three (3) directors to serve until the next Annual
Meeting of Shareholders, or until their successors are duly elected
and have qualified;
2. To approve the Advisory Agreement between the Asset Allocation
Fund of the Fund and International Investments, Inc.;
3. To approve the Fund's Distribution Plan and related
Distribution Assistance Agreement;
4. To ratify the selection of McCurdy & Associates CPA's, Inc. as
auditors of the Fund for the fiscal year ending September 30, 1996;
5. To approve an amendment to the Fund's Restated Articles of
Incorporation to change the name of the Fund to "Triumph Funds, Inc.";
6. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Only shareholders of record at the close of business on April 29,
1996, the record date for this meeting, will be entitled to notice of
and to vote at the meeting or any adjournments thereof. If you attend
the meeting, you may vote your shares in person. IF YOU DO NOT EXPECT
TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE. Sending in
your proxy will not prevent you from personally voting your shares at
the meeting since you may revoke your proxy by advising the Secretary
of the Fund in writing (by subsequent proxy or otherwise) of such
revocation at any time before it is voted.
By order of the Board of Directors,
James M. Beimel, Jr., President
May , 1996
Pittsburgh, Pennsylvania
<PAGE>
PENN CAPITAL FUNDS, INC.
216 Boulevard of Allies
Pittsburgh, PA 15222
PROXY STATEMENT
Annual Meeting of Shareholders to be held on May 20, 1996
The enclosed proxy is being solicited by and on behalf of the
Board of Directors of Penn Capital Funds, Inc. (the "Fund") for use at
its Annual Meeting Of Shareholders to be held at the offices of its
counsel, Plummer, Beaman & DeWalt, L.L.P., 3800 Gulf Tower, 707 Grant
Street, Pittsburgh, Pennsylvania on May 20, 1996 at 11:00 am, Eastern
time and at any adjournments thereof (the "Meeting"), for the purposes
set forth in the attached Notice of Annual Meeting of Shareholders.
The Fund's investment adviser is Investments International, Inc.,
100 South Ashley Drive, Suite 1260, Tampa, Florida 36602-5310. The
Fund's principal distributor is Dunwoody Brokerage Services, Inc.,
8309 Dunwoody Place, Atlanta, Georgia 30350-3307. The Fund's
administrator is James M. Beimel, Jr., 216 Boulevard of the Allies,
6th Floor, Pittsburgh, Pennsylvania 15222, with American Data
Services, Inc., 24 West Carver Street, Huntington, New York 11743 as
sub-administrator.
Whether you expect to be personally present at the Meeting or
not, please complete, sign, date and return the accompanying form of
proxy. Timely executed proxies will be voted as you instruct. If no
choice is indicated, proxies will be voted FOR the election of the
nominees for directors and FOR each of the proposals set forth in the
Notice of Annual Meeting of Shareholders. If any nominee for Director
should withdraw or otherwise become unavailable for election
(something which the Board does not anticipate happening), your shares
will be voted in favor of such other nominee or nominees as management
may recommend. Any shareholder giving a proxy has the power to revoke
it at any time before it is exercised by giving notice thereof to the
Fund in writing (by subsequent proxy or otherwise), but if not so
revoked, the shares represented by the proxy will be voted at the
Meeting. Presence at the Meeting of a shareholder who has signed a
proxy does not in itself revoke a proxy.
In the event that a quorum is not present at the Meeting, or if a
quorum is present at the Meeting but sufficient votes to approve any
of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any adjournment will require the affirmative
vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those
proxies which they are entitled to vote FOR any proposal for
adjournment.
Proxies will be solicited by mail, and certain officers of the
Fund may solicit by telephone and personally. These officers will not
be paid for these services. The cost of solicitation, including
preparing, assembling and mailing the proxy material, will be borne by
the Fund. The Notice of Annual Meeting of Shareholders, this Proxy
Statement and the accompanying form of proxy were first mailed to
shareholders of the Fund on or about May , 1996.
Only shareholders of record at the close of business on April 29,
1996 will be entitled to notice of and to vote at the Meeting. On
that date, there were issued and outstanding shares of Common
Stock, without par value, of the Fund. The record holder of each
outstanding share is entitled to one vote on all matters submitted to
shareholders. As of the record date, no shareholder owned 5% or more
of the outstanding shares of the Common Stock.
Copies of the Fund's most recent annual and semi-annual reports,
including financial statements, have previously been delivered to
shareholders. Shareholders may request copies of those annual and
semi-annual reports by writing the Fund at 216 Boulevard of the
Allies, 6th Floor, Pittsburgh, PA 15222, or by calling 1-800-314-4339.
1. ELECTION OF DIRECTORS
Three directors are to be elected at the Meeting, each of whom is
to hold office until the next annual meeting of shareholders or until
his or her successor is elected and qualified. The table set forth
below identifies the three nominees for election as directors of the
Fund and provides information given as of April 1, 1996 as to the age,
principal occupation and background for the last five years and the
number of shares of the Fund beneficially owned by each person. All
of the nominees for director have been appointed as directors since
the beginning of the current fiscal year on October 1, 1995. The
Board of Directors held one meeting during the fiscal year ended
September 30, 1995 which was attended by Joseph Jacobs, the only
current director who was a director at that time. The Board has not
audit, nominating or similar committees. It is not expected that the
Board will ordinarily consider nominees recommended by shareholders.
Each nominees has consented to be named in this Proxy Statement
and to serve if elected. In the election of directors, shareholders
have the unconditional right of cumulative voting. This means that
each shareholder will be entitled to as many votes as equals the
number of shares registered in the shareholder's name multiplied by
the number of directors to be elected at the Meeting. A shareholder
may cast all of such votes for one nominee or distribute them among
any two or more nominees. Directors are elected by a plurality of the
votes cast by the holders of the Fund's Common Stock entitled to vote
in the election of directors at a meeting at which a quorum is
present. "Plurality" means that the individuals who receive the
largest number of votes cast are elected as directors up to the
maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention or
otherwise) have no effect on the election of directors except to the
extent the failure to vote for an individual results in that
individual receiving a sufficient number of votes to be elected.
Name of Nominee* Age Principal Occupation
Kathleen A. Donnelly 35 Attorney in private practice
James M. Beimel, Jr.** 45 President of the Fund
Richard J. Kowalski 49 Chief Financial Officer, US Home
Mortgage (mortgage broker)
division of JMB Holdings, Inc.,
a business holding company.
*All of the nominees are presently serving as directors of the Fund.
Ms. Donnelly and Mr. Beimel since 1995 and Mr. Kowalski since April,
1996.
** This director is deemed to be an "interested person" of the Fund
because he is an officer of the Fund.
None of the nominees, nor any of the officers of the Fund, own
any shares of the Fund.
Ms. Donnelly has been in her present position since September,
1995. From May, 1995 to September, 1995, she was employed as an
attorney at Penn Capital Management, Inc., Pittsburgh, Pennsylvania (a
financial services holding company). From May, 1990 to May, 1995, she
was employed by Equitable Resources, Inc., Pittsburgh, Pennsylvania (a
natural gas utility holding company) as a budget analysis. Mr. Beimel
has been consulting with the Fund on all aspects of its operations
since August, 1995. From January, 1993 to August, 1995, he was
employed by the Vanguard Group, Valley Forge, Pennsylvania, a major
mutual fund group, where he worked primarily on marketing and related
matters. From January, 1991 to January, 1993, he was employed by, and
worked as a consultant in the area of financial management for Unisys,
Inc., a major computer manufacturer located in Blue Bell,
Pennsylvania. Mr. Kowalski has been in his present position since
January, 1996. From July, 1993 to December, 1995, he was employed as
an insurance agent with Menhorn Associates, Inc., an insurance agency
located in Greensburg, Pennsylvania, and, starting in July, 1994 was
also a registered representative with Penn Capital Financial Services,
Inc., a stock broker located in Penn Hills, Pennsylvania. From July,
1992 to July, 1993, he was employed as an insurance agent by American
General Life and Accident Company, an insurance company. Prior to
that he was an insurance agent for Metropolitan Life Insurance
Companies, an insurance company.
During the fiscal year ended September 30, 1995, the Fund did not
pay any directors' fees or reimburse director expenses. The Fund's
standard arrangement with directors is to reimburse each director who
is not an "interested person" of the Fund for expenses incurred in
connection with attendance of meetings of the Board of directors and
to pay each such director an annual fee of $2,000 and $250 for each
meeting of the Board of Directors attended.
COMPENSATION TABLE
The Fund has no employees and did not have any during the fiscal
year ended September 30, 1995. As a result, during that year it paid
no compensation to any officer or director of the Fund. The Fund,
with the approval of the Board, including the approval of all of the
independent directors, has entered into an Administrative Services
Agreement with Mr. Beimel, the President of the Fund and a Director,
pursuant to which Mr. Beimel will perform all the needed
administrative services for the Fund (other than accounting services
which are provided by American Data Services, Inc, ("ADS") under a
separate agreement), including providing space for the Fund's offices
in Pittsburgh. Mr. Beimel has entered into a sub-administrator
agreement with ADS whereby it will perform certain of the
administrative functions needed by the Fund. The total monthly fee
for both Mr. Beimel and ADS under these agreements is the greater
$5,000 (or $6,000 if the Fund adds another portfolio, as it is in the
process of doing) or 1/12 of 0.5% of the combined average net assets
of all of the funds offered by the Fund. The fees are subject to
annual increase to reflect the Consumer Price Index for the Northeast
region. Of the total fee amount, Mr. Beimel will receive each month
minimum of $4,000 ($5,000 is there are two funds). Mr. Beimel and ADS
will be reimbursed for their out-of-pocket expenses in connection with
performing the agreements, other than those costs which Mr. Beimel has
specifically agreed to pay pursuant to the Administrative Services
Agreement. If and when a second fund is offered by the Fund, the
costs of this Agreement will be split between the two funds based upon
their proportional shares of the aggregate daily net assets of the
Fund.
The officers of the fund are elected annually by the Board of
Directors. The officers of the Fund are Mr. Beimel (President) and
Karl Beimel (Secretary-Treasurer), who is 26 and his brother.
THE BOARD, INCLUDING THE INDEPENDENT BOARD MEMBERS, RECOMMEND
THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES LISTED ABOVE.
2. APPROVAL OF ADVISORY AGREEMENT
Shareholders are being ask to approve International Investments,
Inc. (the "Adviser") as the investment adviser to the Asset Allocation
Fund and the related Advisory Agreement between the Adviser and the
Fund. This change is necessitated by the fact that by letter dated
October 5, 1995, Dollins Symons Management, Inc. ("Dollins Symons"),
the previous adviser to the Asset Allocation Fund, exercised its
option under the Investment Advisory Agreement dated February 22,
1994, between it and the Fund to terminate the agreement. That
contract was approved by the shareholders of the Fund at a meeting
held on July 29, 1994. During the fiscal year ended September 30,
1995, the Fund paid Dollins Symons a total of $5,132 in fees.
Pending Shareholder approval, the Fund entered into the Advisory
Agreement dated December 1, 1995 with the Adviser (the "New
Agreement"). The Board's decision to hire the Adviser was based on
two factors. First, the Board (and the Adviser) believes that the
Adviser's approach to managing investments is very compatible with the
investment objectives of the Asset Allocation Fund. The Adviser uses
several mathematical models which it has developed to allocate
investments. These models help the Adviser to decided when to switch
the portfolio from a growth orientation to a value orientation. This
frees the Adviser from being tied to one approach or the other, as
many other funds are. This flexibility is in keeping with the
investment philosophy of the Asset Allocation Fund. Second, the
Fund's principal distributor, Dunwoody Brokerage Services, Inc.
("Dunwoody") is familiar with the Adviser and likes its approach to
investing. The Board believes that it is very important for the
principal distributor of a fund to believe in the investment approach
of the investment adviser of any fund which it is trying to sell. If
the brokers do not believe that the investment adviser will do a good
job for a fund, they will not recommend that their clients invest in
it. The Board believes that Dunwoody's familiarity with the Adviser
will be very important in helping the Asset Allocation Fund to grow,
which would reduce the Fund's current high expense ratio.
The Adviser, which is located at 100 South Ashley Drive, Suite
1260, Tampa, Florida 36602-5310, was incorporated in 1989. The
Adviser is wholly owned by John J. Bartoletta, who is its President
and the principal manager of the Asset Allocation Fund's portfolio.
From December, 1991 to the present he has worked for the Adviser.
From February, 1991 to December, 1991, he worked as a pension
consultant for The Hannah Group, Boston, Massachusetts. As of
February 1, 1996, the Adviser managed or administered approximately
$21 million in assets for various individual and institutional
clients.
Under the Advisory Agreement, a copy of which is attached hereto
as Exhibit A, the Adviser, is to be paid an advisory fee at an annual
rate of 1.00% of the average daily net asset value of the Asset
Allocation Fund on the first $25 million of average daily net asset
value; 0.75% on the next $75 million of average daily net asset value;
and 5/8th of 1% on any amounts over $100 million in average daily net
asset value. The previous investment adviser was being paid at a fee
at an annual rate of 0.75% of the daily net assets of the Asset
Allocation Fund, with a minimum monthly payment of $200. If the New
Agreement had been in effect during the last fiscal year, the Adviser
would have been paid a total of $5,295 in fees under it. With the
exception of the change in fees structure, the New Agreement is
substantially similar to the old agreement.
The Advisory Agreement with the Adviser will remain in effect for
two years and from year-to-year thereafter, as long as its continuance
is specifically approved at least annually by (i) the Board of
Directors of the Fund, or by the vote of a majority (as defined in the
Investment Company Act of 1940) of the outstanding shares of the Fund,
and (ii) by the vote of a majority of the directors of the Fund who
are not parties to the Advisory Agreement or interested persons of the
Adviser, cast in person at a meeting called for the purpose of voting
on such approval. The Adviser may terminate the Advisory Agreement by
giving the Fund written notice at least 60 days prior to any
anniversary date of it. The Advisory Agreement may also be terminated
at any time without the payment of any penalty, by the Board of
Directors of the Fund or by vote of a majority of the Fund's
shareholders, on sixty day's written notice to the Adviser. It will
automatically terminate if it is assigned.
The Advisory Agreement provides that the Adviser will not be
liable to the Fund for any error of judgement or for any loss arising
out of any investment or recommendation or out of any other act or
omission in the performance of the Advisory Agreement, except for
negligence, willful malfeasance, bad faith or violation of applicable
law.
The directors of the Adviser are: Dr. Peter Karas, Finance
Professor, University of Souther Florida; Dr. David Brown, Dean of the
Business School, University of Florida; Richard Cope, Chief Executive
Officer, Prudential Florida Realty; and James Harper, Chief Executive
Officer, Accordia Insurance Company.
Required Vote. Approval of Proposal 2 requires the affirmative
vote of the lesser of (i) the majority of the Fund's shares entitled
to vote or (ii) 67% of the shares present at the Meeting if more than
50% of the outstanding shares are present. The failure to vote
(whether by broker non-vote or otherwise, except abstention), assuming
more than 50% of the outstanding shares of the Fund are present, has
the same effect as a vote against the proposal if (i) above is
applicable and has no effect if (ii) above is applicable. In the
event the new Advisory Agreement is not approved at the Meeting by the
requisite majority, the Board of Directors will immediately enter into
a new investment advisory agreement with the Adviser on an interim
basis until presents to the shareholders for their approval another
proposed investment advisory agreement, which presentation will be
made as promptly as possible.
THE BOARD, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
3. APPROVAL OF DISTRIBUTION PLAN AND RELATED
DISTRIBUTION ASSISTANCE AGREEMENT
The shareholders are being asked to approve a new Distribution
Plan (the "Plan") pursuant to the requirements of Rule 12b-1 under the
Investment Company Act of 1940, as amended, (the "Rule") to replace
the current plan with the Fund's former principal distributor. No
money was ever spent under the old plan.
The Board has adopted the Plan to permit the Fund to spend some
money on activities which would otherwise be considered impermissible
advertising activities under the Rule. Although the Board expects
Dunwoody, as the new principal underwriter, to be the primary sales
agency for the Fund and its series funds, it wants the flexibility to
do some advertising on its own. Therefore, it is proposing that Mr.
Beimel, as the Administrator of the Fund, be permitted to spend up to
a specified amount of money to help market shares of the Fund.
Because Mr. Beimel has a background in marketing mutual funds, the
Board believes that he will be able to create and carry out an
effective marketing plan, if the need arises.
The Plan provides that Mr. Beimel, on behalf of the Fund, may
incur certain costs relating to the distribution of the Fund's shares.
Mr. Beimel is to be reimbursed by the Fund for these costs provided
that the costs may not exceed 0.25% per annum of the Fund's daily net
assets. The Plan is intended to benefit the Fund through increased
sales of shares, thereby reducing the Fund's expense ratio and
providing an asset size that allows the Adviser greater flexibility
and more opportunity in its management. Amounts paid under the Plan
and related Distribution Assistance Agreement are paid to Mr. Beimel
to reimburse permitted expenses and may be spent by him on any
activities or expenses primarily intended to result in the sale of the
Fund's shares, including but not limited to, expenses of printing of
prospectuses and reports for other than existing shareholders,
advertising and preparation and distribution of sales literature.
Distribution expenses incurred in a fiscal year which are in excess of
the minimum amount permitted to be borne by the Fund under the Plan
will be borne by Mr. Beimel (i.e., they cannot be carried forward and
paid in a subsequent year). Further, the Plan does not permit
expenses incurred in one year to be paid out of amounts authorized to
be spent in another year.
The Plan and related Distribution Assistance Agreement will
continue in effect as long as their continuance is specifically
approved at least annually by the Board of Directors, including the
Directors of the Fund who are not interested persons of the Fund and
who have no direct or indirect financial interest in the Plan or any
agreement related thereto (the "Rule 12b-1 Directors"). The Plan may
be terminated at any time by a vote of the Rule 12b-1 Directors or by
a vote of a majority of the outstanding shares of the Fund. Any
change in the Plan that would materially increase the distribution
expenses of the Fund provided for in the Plan requires approval of the
shareholders and the Board of Directors, including the Rule 12b-1
Directors. While the Plan is in effect, the selection and nomination
of Directors who are not interested persons of the Fund will be
committed to the discretion of the directors of the Fund who are not
interested persons of the Fund. The Board of Directors must review
the amount and purposes of expenditures pursuant to the Plan quarterly
as reported to it by Mr. Beimel.
Required Vote. Approval of Proposal 3 requires the affirmative
vote of the lesser of (i) the majority of the Fund's shares entitled
to vote or (ii) 67% of the shares present at the Meeting if more than
50% of the outstanding shares are present. The failure to vote (other
than by Abstention) assuming more than 50% of the outstanding shares
of the Fund are present, has the same effect a vote against the
proposal if (i) above is applicable and has no effect if (ii) above is
applicable.
THE BOARD, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
4. RATIFICATION OF SELECTION OF AUDITORS
Shareholders are being asked to ratify the Board's selection of
McCurdy & Associates CPA's, Inc. ("Auditors") as auditors for the Fund
for the fiscal year ending September 30, 1996. The Auditors are
located at 27955 Clemens Road, Westlake, Ohio 44145.
The Auditors audited the Fund's financial statements for the
fiscal year ended September 30, 1995, as a result of the resignation
of the previous auditors, McGladrey & Pullen, LLP, after the end of
that fiscal year. Since the Auditors serve as the auditors for
approximately 30 other investment companies, the Board believes they
have the experience necessary to properly act as the Fund's auditors.
The Fund also believes that use of the Auditors will result in a cost
savings for the Fund. The reports of McGladrey & Pullen, LLP on the
Fund's financial statements for its two most recent fiscal years prior
to October 1, 1994 did not contain adverse opinions, disclaimers,
qualifications or modifications of opinion. McGladrey & Pullen, LLP
did not disagree during the two most recent fiscal years on any matter
of accounting principles or practices, financial statement or
disclosure, auditing scope or procedure, which disagreements, if not
resolved to its satisfaction, would have caused it to make reference
to the subject matter of the disagreements in connection with its
reports on those financial statements.
Representatives of the Auditors are not expected to be present at
the Meeting but have been given the opportunity to make a statement if
they so desire, and will be available should any matters arise
requiring their presence. The Auditors have informed the Fund that
they have no material direct or indirect financial interest in the
Fund.
The persons named in the accompanying proxy will vote FOR
ratification of the selection of the Auditors unless contrary
instructions are given.
Required Vote. Approval of Proposal 4 requires a majority of the
votes cast with respect to Proposal 4 at the Meeting, provided a
quorum is present.
THE BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4.
5. PROPOSED AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
The shareholders are being asked to approve an amendment to the
Fund's Restated Articles of Incorporation which would change the name
of the Fund to "Triumph Funds, Inc." This amendment was been approved
by the Board at a meeting held on April 1, 1996.
The Board believes that a change in the Fund's name would be
beneficial because there are several companies located in Pennsylvania
which are involved in the financial services area and which have the
words "Penn Capital" or something very similar in their name or call
themselves Penn Capital as a shortened form of their full legal name.
Since the Fund has no connection with any of these companies, the
Board feels that adopting a new name would enable it to avoid any
confusion as to any possible relationship with any of these other
companies.
The full text of the proposed amendment is as follows: "Article
I of the Corporation's Restated Articles of Incorporation is hereby
amended to read in full as follows: 'The name of the corporation
(hereinafter called "Corporation") is: Triumph Funds, Inc.'"
Required Vote. Approval of proposal 5 requires the affirmative
vote of an majority of the Fund's outstanding shares of Common Stock
entitled to vote at the Meeting. Any shares not voted at the Meeting
(whether by broker non-vote or otherwise, except abstention), will
have no impact on the vote. If adopted, the amendment would become
effective upon being filed with the Secretary of State of the
Commonwealth of Pennsylvania.
THE BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 5.
6. OTHER MATTERS
The Board of Directors of the Fund 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.
SHAREHOLDER PROPOSALS
Any shareholder proposals to be presented at the 1997 annual
meeting of shareholders must be received at the executive offices of
the Fund on or before September 19, 1996. Notwithstanding the
foregoing, the Fund is not required to include a shareholder proposal
in its proxy statement unless the shareholder has complied with the
requirements of Rule 14a-8 under the Securities Act of 1934, as
amended.
By Order Of The Board Of Directors
James M. Beimel, Jr.
President
Pittsburgh, Pennsylvania
May , 1996
<PAGE>
Exhibit A
ADVISORY CONTRACT
THIS AGREEMENT made this 1st day of December, 1995, by and
between INTERNATIONAL INVESTMENTS, INC., a/k/a ADS/INTERNATIONAL
INVESTMENTS, a Florida corporation, (hereinafter referred to as the
"Adviser"), and PENN CAPITAL FUNDS, INC. a Pennsylvania corporation
(hereinafter referred to as the "Fund").
WHEREAS, the Fund is an open-end management investment company as
that term is defined in the Investment Company Act of 1940, as
amended, and is registered as such with the U.S. Securities and
Exchange Commission; and
WHEREAS, the Adviser is in the business of rendering investment
advisory, statistical and research services, and is registered as an
investment adviser with the U.S. Securities and Exchange Commission
under the Investment Adviser's Act of 1940, as amended; and
WHEREAS, the parties desire to provide for continuing services by
the Adviser to the Fund pursuant to the terms and conditions
hereinafter set forth,
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. The Fund hereby retains and appoints the Adviser as its
investment adviser and portfolio manager to render research,
statistical and advisory services to the Fund, and to supervise the
investments of the Fund for the period and upon the terms herein set
forth, subject to the direction and control of the Board of Directors
of the Fund. The Advisor accepts such employment and agrees during
such period to render the services and to assume the obligation herein
set forth for the compensation herein provided.
2. The Adviser in its supervision of the investments of the
Fund will be guided by the Fund's fundamental investment policies and
the provisions and restrictions contained in the Charter and By-Laws
of the Fund as set forth in the Fund's registration statement, and
exhibits thereto, as may be filed with the U.S. Securities and
Exchange Commission (the "Commission"), all subject to the applicable
provisions of the Investment Company Act of 1940, as amended (the
"Act").
3. The Fund will pay and is solely responsible for its own
expenses including, without limitation, interest charges, taxes, costs
of purchasing and selling securities for its portfolio, rent expenses
of redemption of shares, auditing and legal expenses; expenses
attributable to printing prospectuses directors' fees and expenses
necessarily incurred by a director in attendance at directors'
meeting; expenses of administrative personnel and administrative
series, custodian fees; fees of transfer agents, registrar and
dividend disbursing agents; the cost of stock certificates and
corporate reports; all other printing expenses; costs in connection
with Board of Director's meetings and the annual or special meetings
of shareholders, including proxy material preparation and
distribution, filing fees, dues, insurance premiums, miscellaneous
management and operating expenses and expenses of an extraordinary and
nonrecurring nature.
In no event shall the Adviser be responsible for the payment or
reimbursement of any Fund expense of any king what-so-ever.
4. Fund Management is solely responsible for the day-to-day
operations of the Fund, maintaining compliance with the Securities Act
of 1933, the Investment Company Act of 1940, Section 851 of the
Internal Revenue Code of 1986, as amended, and any law or regulation
of any governmental agency having jurisdictional over the Fund. The
Adviser shall be held harmless and the Fund will indemnify the Adviser
for any fines or damages that may be levied or charged to the Adviser
and for any expenses incurred by the Adviser, including but not
limited to legal fees, that may arise as a result of any violation or
error committed by Fund Management to any party.
5. Subject to the provision of Paragraph 7 hereof, the Fund
agrees to pay to the Adviser for its services rendered during the
preceding month thereunder on the first business day each month during
the term of the Agreement a cash fee in an amount determined by
applying the following monthly rates to the average daily net asset
value of the Fund during the preceding month, determined in the manner
used for the determination of the offering price of the Fund's shares:
Equivalent Average Daily
Monthly Rate Annual Rate Net Asset Values
1/12 of 1% 1% On the first
$25 million
1/16 of 1% 3/4 of 1% On the next
$75 million
5/96 of 1% 5/8 of 1% On amounts over
$100 million
6. The term of this Agreement shall begin on the date first
above written and shall continue in effect for two years from that
date and from year-to-year thereafter, subject to the provisions for
termination and all of the other terms and conditions hereof, if; (a)
such continuation shall be specifically approved at least annually by
the vote of a majority of the directors who are not parties to such
contract or interested persons of any such party to such contract
(other than as directors of the Fund) cast in person at a meeting
called for that purpose, or by a vote of the majority of the
outstanding voting securities of the Fund, and (b) the Adviser shall
not have notified the Fund in writing at least sixty (60) days prior
to the anniversary date of this Agreement in any year hereafter that
it does not desire such continuation.
7. Notwithstanding anything to the contrary herein, the
Agreement may be terminated at any time, without the payment of any
penalty, by the directors of the Fund or by a vote of a majority of
the outstanding voting securities of the Fund on sixty (60) days
written notice to the Adviser.
8. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the 1940 Act.
9. The Adviser may employ or contract with such other person or
persons, corporation or corporations at its own cost and expense as it
shall determine in order to assist it in carrying out this Agreement;
provided, however, that to the extent that any such employment or
contract constitutes such other person or persons, corporation or
corporations to be an investment adviser to the Fund within the
meaning of the 1940 Act, such employment or contracts shall be subject
to the approval of the Fund's shareholders in the manner provided by
such Act, prior to its effectiveness.
10. The adviser shall not be liable to the Fund for anything
done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties imposed on it by this Agreement.
11. The services of the Adviser herein provided are not to be
deemed exclusive and, so long as its services hereunder shall not be
impaired thereby, should the Adviser so desire, it may sponsor,
promote, and provide investment advisory and management series to one
or more investment companies other than the Fund.
12. This Agreement may be amended at any time by agreement of
the parties, provided that the amendment shall be approved by the vote
of a majority of directors of the Fund, including a majority of
directors who are not parties to this Agreement or interested persons
of any such party to this Agreement (other than as directors of the
Fund) cast in person at a meeting called for that purpose.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Investment
Advisory Contract to be executed on their behalf by their duly
authorized officers and their corporate seals to be affixed hereto as
of the date first above written.
The Adviser: The Fund:
INTERNATIONAL INVESTMENTS, INC. PENN CAPITAL ASSET
ALLOCATION FUND
By:_/s/ John J. Bartoletta___ By:_/s/ Karl T. Beimel____________
John J. Bartoletta, President Karl T. Beimel
<PAGE>
PENN CAPITAL FUNDS, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1996
PROXY CARD
The undersigned constitutes and appoints JAMES M. BEIMEL, JR. and
KATHLEEN A DONNELLY, and each of them with full power of substitution,
the true and lawful proxies of the undersigned, to represent and vote,
as designated below, all shares of Common Stock of Penn Capital Funds,
Inc. (the "Fund") that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Fund to be held at 3800 Gulf
Tower, 707 Grant Street, Pittsburgh, Pennsylvania 15219, on Friday,
the 20th of May, 1996, at 11:00 a.m., local time, and at any
adjournment thereof:
The shares represented by this proxy will be voted in the manner
directed herein by the undersigned. If no direction is given, the
shares represented by this proxy will be voted FOR the election of the
nominees proposed by the Board of Directors and FOR Items 2, 3, 4, and
5. Shares to be voted FOR the election of the nominees proposed by
the Board of Directors may be voted cumulatively in the discretion of
the Proxies, for any nominees other than nominees with respect to whom
authority to vote FOR has been withheld.
1. Election of Directors FOR all nominees WITHHOLD authority
listed below to vote for all
(except as marked nominees listed
to the contrary below.
below).
Kathleen A. Donnelly, Richard Kowalski and James M. Beimel,
Jr.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
_________________________________________________________________
2. Proposal to approve the Advisory Agreement between the Fund and
International Investment, Inc.
___ For ___ Against ___ Abstain
3. Proposal to approve the Fund's Distribution Plan and related
Distribution Assistance Agreement.
___ For ___ Against ___ Abstain
4. Proposal to ratify the appointment of McCurdy & Associates CPA's,
Inc.
___ For ___ Against ___ Abstain
5. Proposal to approve an amendment to the Fund's Restated Articles
of Incorporation to change its name to Triumph Funds, Inc.
___ For ___ Against ___ Abstain
6. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Directors recommends a vote FOR items 1, 2, 3, 4, 5
and 6.
The undersigned acknowledges receipt
of the Notice of said Annual Meeting
and the accompanying Proxy Statement.
Dated: _______________, 19__
Signed: _____________________________
_____________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your stock certificate.
Joint owners should each sign
personally. A corporation should sign
full corporate name by duly authorized
officers and affix corporate seal. When
signing as attorney, executor,
administrator, trustee or guardian, give
full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF PENN CAPITAL FUNDS, INC.
