SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
THE PAYDEN & RYGEL INVESTMENT GROUP
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(Name of Registrant as Specified In Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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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PAYDEN & RYGEL GLOBAL FIXED INCOME FUND
PAYDEN & RYGEL INTERNATIONAL BOND FUND
333 South Grand Avenue
Los Angeles, California 90071
Notice of Special Meeting of Shareholders
Meeting Date: June 28, 1996
To the Shareholders:
A Special Meeting of Shareholders of Payden & Rygel Global Fixed
Income Fund and Payden & Rygel International Bond Fund (each a "Fund") will
be held on June 28, 1996 at 9:00 A.M. at the offices of The Payden & Rygel
Investment Group located at 333 South Grand Avenue, 32nd Floor, Los
Angeles, California 90071 for the following purposes:
1. To approve amendments to the Investment Management Agreement
between The Payden & Rygel Investment Group and Payden & Rygel, revising
the fee schedule with respect to each Fund, as more fully described in the
proxy statement;
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The proposed amendment will result in decreases in the advisory
fees paid by the Funds at current asset levels. The details of the
decrease are noted on page 3 of the proxy statement. When a Fund exceeds
$900 million in assets, the fee will increase over the levels currently
contemplated by the Fund's investment management agreement. However, the
total fee will increase by .02% or less of total assets until a Fund's
assets exceed $1.6 billion. THE TRUSTEES UNANIMOUSLY RECOMMEND APPROVAL OF
THE PROPOSED AMENDMENTS TO THE INVESTMENT MANAGEMENT AGREEMENT.
Shareholders of record of the Funds at the close of business on
May 3, 1996 are entitled to vote at the meeting or any adjournment thereof.
IT IS IMPORTANT THAT YOU RETURN YOUR SIGNED PROXY PROMPTLY, REGARDLESS OF
THE SIZE OF YOUR HOLDINGS, SO THAT A QUORUM MAY BE ASSURED.
By Order of the Board of Trustees
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Secretary
May , 1996
Your vote is important! Please indicate your voting instructions
on the enclosed proxy, date and sign it, and return it in the accompanying
postage prepaid envelope. If you sign, date and return the proxy but give
no voting instructions, your shares will be voted to approve the proposed
amendments to the Investment Management Agreement and as the proxies
determine with respect to any other business that properly comes before the
Meeting.
PAYDEN & RYGEL GLOBAL FIXED INCOME FUND
PAYDEN & RYGEL INTERNATIONAL BOND FUND
333 South Grand Avenue
Los Angeles, California 90071
PROXY STATEMENT
Special Meeting of Shareholders
June 28, 1996
This proxy statement is furnished in connection with the
solicitation by the Board of Trustees of The Payden & Rygel Investment
Group (the "Trust") of proxies to be voted at a Special Meeting of
Shareholders (the "Meeting") of Payden & Rygel Global Fixed Income Fund
(the "Global Fund") and Payden & Rygel International Bond Fund (the
"International Fund"), each of which is a series of the Trust, to be held
on June 28, 1996, and any adjournment thereof. The International Fund and
the Global Fund are each referred to below from time to time as a "Fund"
and collectively as the "Funds".
The time, location and purposes of the Meeting are set forth in
the accompanying Notice of Special Meeting of Shareholders dated May ,
1996. Proxies will be solicited primarily by mailing this proxy statement
and the accompanying proxy card to shareholders commencing on or about May
, 1996. Supplementary solicitations may be made by telephone or telegram
or by personal interview. Officers of the Trust and of the Trust's
investment adviser, Payden & Rygel, who participate in such solicitations
will receive no compensation for their services other than their regular
salaries. The expenses of preparing and mailing this proxy statement and
its enclosures and all other solicitation expenses will be paid by the
Funds.
The Trust will furnish without charge a copy of its most recent
annual report to any shareholder upon request. Such request may be made by
calling the Trust during business hours at (213) 625-1900 or (800) 5-PAYDEN
(800-572-9336), or by writing the Trust at the address set forth above.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on April
30, 1996 as the record date for the Meeting and any adjournments thereof.
Only shareholders of record of the Funds at the close of business on that
date are entitled to notice of and to vote at the Meeting. Each such
shareholder of a Fund is entitled to one vote for each full share, and a
proportionate vote for each fractional share, of the Fund held on the
record date.
As of May 3, 1996, 1,988,984 shares of the International Fund and
66,010,343 shares of the Global Fund were issued and outstanding. As of
such date, the following persons were known to hold of record more than 5%
of the outstanding shares of the Funds:
<TABLE>
Percentage of
Name and Address Number of Shares Outstanding Shares
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<S> <C> <C>
GLOBAL FIXED INCOME FUND
Public Service Electric 7,354,679 11.1%
& Gas Company
Jersey City, NJ 07302
Unihealth America 4,859,631 7.4%
Pittsburgh, PA 15230
All Officers and 412,132 0.6%
Trustees as a group
INTERNATIONAL BOND FUND
Conseulo Zobel Alger 1,459,634 73.4%
Foundation
Honolulu, HI 96813
Fleetwood Retirement 363,446 18.3%
Plan
Riverside, CA 92523
All Officers and 104,888 5.2%
Trustees as a group
</TABLE>
The holders of 30% of the outstanding shares of a Fund must be
present in person or represented by proxy at the Meeting in order to
constitute a quorum for the transaction of any business with respect to
such Fund. If a quorum of a Fund is present at the Meeting but sufficient
votes to approve the proposed amendment to the Investment Management
Agreement with respect to such Fund are not received, the persons named as
proxies may propose one or more adjournments of the Meeting with respect to
such Fund to permit further solicitation of proxies. In so doing, the
persons named as proxies will attempt to determine if an adjournment and
additional shareholder solicitation are reasonable and in the best interest
of shareholders, and will vote for or against adjournment accordingly. Any
such adjournment will require the affirmative vote of a majority of the
shares of the Fund present at the Meeting or represented by proxy.
If the enclosed proxy card is executed properly and returned in
time to be voted at the Meeting, and is not revoked, the shares represented
thereby will be voted according to the instructions marked on the card.
The persons appointed as proxies will use their best judgment in voting in
connection with the transaction of any other business that may properly
come before the Meeting or any adjournment thereof. A shareholder giving a
proxy may revoke it at any time before it is exercised by giving written
notice of its revocation to the Secretary of the Trust at the address
indicated on the Notice of Special Meeting, by executing and delivering to
the Trust another proxy dated subsequent to the proxy to be revoked, or by
attending the Meeting and voting in person.
Abstentions and broker "non-votes" (proxies from brokers or
nominees indicating that such persons have not received instructions from
the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the broker or nominee does not have
discretionary power) will not be counted for or against any proposal to
which they relate, but will be counted for purposes of determining the
shares present at the Meeting. Abstentions and broker non-votes will
therefore have the effect of a "no" vote for purposes of obtaining the
requisite approval of any proposal before the Meeting.
PROPOSAL 1
APPROVAL OF AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT
At the Meeting, the shareholders of each Fund will be asked to
approve an amendment (the "Amendment") to the Investment Management
Agreement between the Trust and Payden & Rygel with respect to the Fund. A
copy of the Investment Management Agreement, as amended by the Amendment,
is set forth as Exhibit A to this Proxy Statement, with changes from the
current Investment Management Agreement indicated in bold face type. The
provisions of the Investment Management Agreement will remain the same,
with the exception of the new fee schedule set forth in Exhibit A of the
Investment Management Agreement (discussed further below).
Pursuant to the Investment Management Agreement, Payden & Rygel
renders investment advice and provides supervisory management services to
each Fund, subject to the control and overall supervisory authority of the
Trust's Board of Trustees. For these services, Payden & Rygel currently
receive fees at the following annual rates, as a percentage of each Fund's
average daily net assets: 0.37% of the first $200,000,000, 0.29% of the
next $500,000,000, 0.25% of the next $800,000,000, and 0.18% of the excess
over $1,500,000,000. If the Amendment is approved by the shareholders of a
Fund, the annual advisory fee to be paid to Payden & Rygel with respect to
such Fund will be amended to 0.30% of the first $2,000,000,000 and 0.25% of
the excess over $2,000,000,000 of the Fund's average daily net assets.
For the fiscal year ended October 31, 1995, the aggregate amounts
of Payden & Rygel's fees under the Investment Management Agreement with
respect to the Global Fund and the International Fund were $1,533,836 and
$25,777, respectively. If the proposed fee structure under the Amendment
had been in effect with respect to each Fund for such fiscal year, the
aggregate amount of Payden & Rygel's fees would have been $ 1,420,375 with
respect to the Global Fund, which represents a 7.3% DECREASE over the
amount of fees actually paid, and $20,900 with respect to the International
Fund, which represents a 18.9% decrease over the amount of fees actually
paid.
Management believes that the current advisory fee schedule is too
complex. Shareholders may have difficulty calculating a Fund's average
management fee. The new structure is much easier to understand.
Furthermore, the proposed new fee structure is similar to (and only
slightly higher than) that of the Trust's seven domestic fixed income
funds. The proposed fee structure will continue to be one of the lowest
fee structures currently available to investors in non-index global and
international mutual funds.
GENERAL INFORMATION REGARDING THE INVESTMENT MANAGEMENT AGREEMENT
The Investment Management Agreement is dated as of June 24, 1992
with respect to the Global Fund. The International Fund was added to the
Agreement by amendment on December 31, 1994. The Agreement was approved by
the shareholders of the Global Fund on January 29, 1993 and by the initial
shareholder of the International Fund on March 31, 1995, and was last
approved by the Board of Trustees of the Trust on June 13, 1995.
Except as described below, each Fund will continue to pay all of
its expenses, including commissions, interest, taxes, legal and accounting
fees, fees of custodians, transfer agents, registrars and dividend
disbursing agents, registration and filing fees, and costs in connection
with meetings of shareholders, including the preparation and distribution
of proxy soliciting materials, and a pro rata portion of other Trust
expenses, including fees and expenses of Trustees who are not "interested
persons" of Payden & Rygel or of the principal underwriter of the Fund,
insurance premiums, printing costs (which do not include the costs of
printed material sent to persons who are not shareholders), salaries and
related compensation of all non-officer employees, postage, association
dues and extraordinary and nonrecurring expenses.
Payden & Rygel will continue to limit each Fund's operating
expenses (other than interest, taxes, brokerage commissions and other
portfolio transaction expenses, capital expenditures and extraordinary
expenses) to 0.70% of the average daily net assets of the Fund's Class A
shares and 0.95% of the average daily assets of the Fund's Class B shares.
For the year ended October 31, 1995, total expenses for the Global Fixed
Income Fund and International Bond Fund were 0.50% and 0.70% of average
daily net assets, respectively. In addition, Payden & Rygel will continue
to be obligated to reimburse each Fund if Fund expenses exceed those
expenses set forth in any statutory or regulatory formula prescribed by any
state in which Fund shares are registered at such time.
The Investment Management Agreement provides that neither Payden
& Rygel nor any of its officers, directors or employees will be liable for
any error of judgment or mistake of law, or for any loss suffered by a Fund
in connection with the matters to which the Investment Management Agreement
relates, except for losses resulting from Payden & Rygel's willful
misfeasance, bad faith or gross negligence in the performance of its duties
on behalf of the Fund or from its reckless disregard of its duties under
the Investment Management Agreement.
Treasury Plus, Inc., a wholly-owned subsidiary of Payden & Rygel,
provides administration services to the Trust pursuant to a Management and
Administration Agreement with the Trust which became effective on January
1, 1996.
CONSIDERATION OF AMENDMENT BY THE BOARD
The Board of Trustees of the Trust, including all of the Trustees
who are not "interested persons" of the Trust within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), has concluded
that approval of the Amendment is in the best interests of each Fund and
its shareholders. The Board, therefore, recommends approval of the
Amendment by the shareholders of each Fund.
In making this recommendation, the Trustees carefully evaluated
the following factors with respect to each Fund, among others: (1) the
excellent performance of the Fund under the management of Payden & Rygel;
(2) that the level of the annual advisory fees paid to Payden & Rygel will
decrease at the Fund's current level of assets and until its assets exceed
approximately $900 million, and will be low compared to the fees charged to
many other non-index global and international and mutual funds; (3) the
continuing agreement of Payden & Rygel to limit annual Fund operating
expenses to 0.70% and 0.95% of the average daily net assets of the Fund's
Class A and Class B shares, respectively; (4) that the other terms of the
Investment Management Agreement will remain unchanged; (5) the history,
reputation, qualification, and background of Payden & Rygel; and (6) the
capabilities of Payden & Rygel Distributors, the affiliate of Payden &
Rygel which acts as distributor of the Fund's shares, to increase the
assets of the Fund, thereby potentially resulting in greater economies of
scale and portfolio diversity.
REQUIRED VOTE
The affirmative vote of the holders of "a majority of the
outstanding securities" of a Fund, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), is required to approve the Amendment
with respect to such Fund. "Majority of the outstanding voting securities"
of a Fund for this purpose under the 1940 Act means the lower of (i) 67% of
the shares of the Fund represented at the Meeting, if more than 50% of the
outstanding shares of the Fund are represented at the Meeting, or (ii) more
than 50% of the outstanding shares of the Fund.
THE INVESTMENT ADVISER
Payden & Rygel serves as investment adviser to the Trust pursuant
to the Investment Management Agreement. Payden & Rygel is an investment
counseling firm founded in 1983, and currently has over $20 billion of
assets under management. It is registered as an investment adviser with
the Securities and Exchange Commission and as a commodity trading adviser
with the Commodities Futures Trading Commission.
The following table provides a summary of certain information
with respect to the principal executive officers and directors of Payden &
Rygel. The principal business address of such persons is 333 South Grand
Avenue, Los Angeles, California 90071.
<TABLE>
Position with
Name Trust Office Payden & Rygel
- ---- ------------ --------------
<S> <C> <C>
Joan A. Payden Chairman of the Board President and
and President Director
Lynda L. Faber Trustee Senior Vice
President and
Director
John P. Isaacson Trustee Executive Vice
President and
Director
James P. Sarni - Vice President
Brian W. Matthews - Vice President
Christopher N. Orndorff Trustee Vice President
Lynn M. Bowker Vice President and Vice President and
Treasurer Treasurer
Scott A. King Executive Vice Executive Vice
President President and
Director
</TABLE>
Payden & Rygel is controlled by Joan A. Payden, who owns a
majority of its outstanding shares.
OTHER BUSINESS
As of the date of this Proxy Statement, the Trust's management
knows of no business to come before the Meeting other than as set forth in
the Notice of Meeting. If any other business is properly brought before
the meeting or any adjustment thereof, the persons named as proxies will
vote on such business in their sole discretion.
NEXT MEETING OF SHAREHOLDERS
The Meeting is a special meeting of shareholders of the Funds.
The Trust is not required, and does not intend, to hold annual or other
periodic meetings of shareholders of the Funds except as required by the
1940 Act. The next meeting of shareholders of one or more Funds will be
held at such time as the Board of Trustees may determine or at such time as
may be legally required. A proposal which a shareholder wishes to have
included in the Trust's proxy materials for any such meeting must be
received by the Trust at its principal office within a reasonable time
before the release of the Trust's proxy soliciting materials with respect
to such meeting, as determined by the Board of Trustees. Any such proposal
must comply with the requirements of applicable law and regulations
governing both the eligibility of the proponent and the form and substance
of the proposal.
Please execute and return the enclosed proxy promptly to ensure
that a quorum is present at the meeting. A self-addressed, postage-paid
envelope is enclosed for your convenience.
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Joan A. Payden
President
May , 1996
Los Angeles, California
PAYDEN & RYGEL FUND
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PROXY SOLICITED BY MANAGEMENT
The undersigned hereby appoint(s) , and
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each of them, as proxies of the undersigned, each with full power of
substitution, to vote at the Special Meeting of Shareholders of Payden &
Rygel Fund (the "Fund") to be held on June 28, 1996 at
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9:00 a.m., and any adjournment thereof, all the shares of the Fund standing
in the name of the undersigned.
When properly executed, this Proxy will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is
given, this Proxy will be voted FOR approval of the proposed amendment to
the Investment Management Agreement. In their discretion, the proxies are
each authorized to vote upon such other business as may properly come
before the Special Meeting and any adjournments thereof.
(1) For [ ] Against [ ] Abstain [ ]
With respect to approval of the amendment to the Investment Management
Agreement between The Payden & Rygel Investment Group and Payden &
Rygel with respect to the Fund, as more fully described in the proxy
statement (the Board of Directors recommends a vote FOR)
The undersigned hereby acknowledge(s) receipt of a copy of the Notice
of Special Meeting of Shareholders and the Proxy Statement with respect
thereto, and hereby revoke(s) any proxy or proxies heretofore given. This
Proxy may be revoked at any time before it is exercised.
Dated: , 1996
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Signature(s) should be exactly as name or names
appear on this proxy. If stock is held
jointly, each holder should sign. If signing
as attorney, executor, administrator, trustee
or guardian, please give us full name and
capacity in which signing.
THIS PAGE MUST BE KEPT AS THE LAST PAGE OF THE DOCUMENT.
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