<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-11(c) or Section 240.14a-12
Pacific Global Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 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.
[x] No fee required.
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) 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> 2
PACIFIC ADVISORS FUND INC.
206 North Jackson Street
Suite 201
Glendale, California 91206
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
April 1, 1997
To the Shareholders:
The Special Meeting of Shareholders ("Meeting") of the Income Fund of
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund Inc. (the "Corporation")
will be held at the offices of the Corporation, 206 North Jackson Street, Suite
201, Glendale, California 91206, on Friday, April 25, 1997, at 9:00 a.m., for
the purpose of approving or disapproving the Co-Management Agreement by and
among the Corporation, on behalf of the Income Fund, Pacific Global Investment
Management Company and Hamilton & Bache, Inc., and transacting any other
business that may properly come before the Meeting.
The close of business on March 21, 1997 has been fixed as the record date
for the determination of Shareholders entitled to notice of and to vote at the
Meeting.
By Order of the Board of Directors
Thomas H. Hanson
Secretary
WE NEED YOUR PROXY VOTE IMMEDIATELY.
<PAGE> 3
PACIFIC ADVISORS FUND INC.
206 North Jackson Street
Suite 201
Glendale, California 91206
April 1, 1997
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Pacific Global Fund, Inc.
d/b/a/ Pacific Advisors Fund Inc. ("Corporation") for use at the Special
Meeting of Shareholders of the Income Fund ("Fund") to be held at the offices
of the Corporation, 206 North Jackson Street, Suite 201, Glendale, California
91206, on April 25, 1997, at 9:00 a.m. ("Meeting"), and any adjournment or
adjournments thereof, for the purposes set forth in the accompanying Notice of
Meeting. This Proxy Statement is being first mailed to shareholders on or
about April 1, 1997.
The Fund's shareholders of record as of the close of business on March 21, 1997
("Record Date"), are entitled to notice of and to vote at the Meeting. Each
shareholder of the Fund is entitled to one vote for each full share and an
appropriate fraction of a vote for each fractional share held. As of the
Record Date, the Fund had ____________ shares issued and outstanding.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated thereon if your proxy is received,
properly executed by you or by your duly appointed agent or attorney-in-fact.
If you properly execute your proxy card and give no voting instructions, your
shares will be voted in favor of the proposal described in this Proxy Statement.
You may revoke your proxy at any time prior to its exercise at the Meeting by
written notice to the Secretary of the Corporation, by executing a subsequent
proxy, or by voting in person at the Meeting.
All costs associated with the Meeting, including the solicitation of proxies,
will be borne by the Fund. Solicitation will be made primarily by mail but
also may be made by telephone, facsimile, telegraph and/or personal contact of
regular employees of the Corporation or Pacific Global Investment Management
Company ("Pacific Global"), the Fund's investment manager. The Fund will also
reimburse brokers and other nominees for their reasonable out-of-pocket
expenses in communicating with the person(s) for whom they hold shares of the
Fund.
Under the Fund's By-Laws, a quorum is constituted by the presence in person or
by proxy of a majority of the outstanding shares of common stock of the Fund
entitled to vote at the Meeting. In the absence of a quorum or in the event
that a quorum is present at the Meeting but sufficient votes to approve the
proposal are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of those shares represented
at the Meeting in person or by proxy. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote FOR
the proposal in favor of such an adjournment, and will vote those proxies
required to be voted AGAINST any such proposal against such adjournment.
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Broker non-votes are shares held in street name for which the broker indicates
that instructions have not been received from the beneficial owners or persons
entitled to vote and the broker does not have discretionary voting power.
Abstentions and broker non-votes will be counted as shares that are present for
purposes of determining whether a quorum is present but will not be voted for
or against any adjournment or proposal. Abstentions and broker non-votes will
not be counted, however, as votes cast for purposes of determining whether
sufficient votes have been received to approve the proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against
adjournment or against the proposal, for which the required vote is a
percentage of the shares present.
THE CORPORATION WILL FURNISH TO SHAREHOLDERS OF THE FUND, WITHOUT CHARGE, A
COPY OF THE FUND'S MOST RECENT ANNUAL REPORT, AND THE MOST RECENT SEMI-ANNUAL
REPORT SUCCEEDING SUCH ANNUAL REPORT, IF ANY, ON REQUEST. REQUESTS FOR SUCH
REPORTS SHOULD BE DIRECTED TO PACIFIC ADVISORS FUND INC., 206 NORTH JACKSON
STREET, SUITE 201, GLENDALE, CALIFORNIA 91206 OR BY CALLING, TOLL FREE
1-800-989-6693 DURING NORMAL BUSINESS HOURS.
PROPOSAL: CONSIDERATION OF THE PROPOSED CO-MANAGEMENT AGREEMENT
BACKGROUND
Pacific Global serves as the investment manager of the Fund pursuant to an
investment management agreement with the Corporation dated October 16, 1992
("Investment Management Agreement") and has actively managed the portfolio
securities of the Fund since the resignation of Expansion Funds of Arizona,
Inc. (formerly MMG Money Management Group, Inc.) as sub-adviser to the Fund on
December 31, 1996. Under the Investment Management Agreement, Pacific Global
is authorized to act as sole investment manager of the Corporation with respect
to the Fund and, in its discretion, to engage the services of a sub-adviser to
provide investment advisory and other services to the Fund. The continuance of
the Investment Management Agreement was most recently approved by the Board of
Directors ("Board") of the Corporation on August 2, 1996. For the period
February 8, 1993 (commencement of operations) through December 31, 1996, the
Manager has waived its management fees and reimbursed expenses for the Fund.
At a meeting held on February 28, 1997, the Board, including a majority of the
directors who are not "interested persons" of the Corporation, as defined in
the Investment Company Act of 1940 ("1940 Act"), considered a recommendation by
Pacific Global that Hamilton & Bache, Inc. ("Hamilton") be appointed as
co-manager for the Fund. After considering Pacific Global's recommendation and
other information presented at that meeting, the Board approved submission of
the proposed co-management agreement ("Co-Management Agreement") to the Fund's
shareholders at the Meeting, and determined to recommend that the Fund's
shareholders approve the proposed Co-Management Agreement.
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<PAGE> 5
DESCRIPTION OF THE PROPOSED CO-MANAGEMENT AGREEMENT
The parties to the Co-Management Agreement are the Corporation, on behalf of
the Fund, Pacific Global and Hamilton. Pacific Global will continue to
provide investment management services to the Fund pursuant to the Investment
Management Agreement in addition to its duties under the proposed Co-Management
Agreement. The Co-Management Agreement provides that Pacific Global and
Hamilton, subject to the supervision and control of the Board, shall co-manage
the investment and reinvestment of the Fund's assets and shall jointly
establish the overall investment program for the management of the Fund's
assets. The Fund determined that a Co-Management Agreement rather than a
sub-advisory agreement better reflected the equal responsibility of Pacific
Global and Hamilton to manage the Fund's assets.
Under the Co-Management Agreement, Pacific Global and Hamilton each will
receive the following monthly fee from the Fund for their services:
<TABLE>
<CAPTION>
Annual Rate of Current Investment Management
Agreement as a Percentage of Net Assets,
which equals the Annual Fee Rate Payable to
Annual Rate of Co-Management Fee Pacific Global and Hamilton Under the
Name as a Percentage of Net Assets Co-Management Agreement
---- ----------------------------------- --------------------------------------------
<S> <C> <C>
Pacific Global Annual rate of .40% of the first $100 Annual rate of .75% of the first $100
million of the average daily net assets; million of the average daily net assets;
.37% of average daily net assets up to .70% of average daily net assets up to the
the next $100 million; .34% of average next $100 million; .65% of average daily net
daily net assets up to the next $100 assets up to the next $100 million; .60% of
million; .31% of average daily net average daily net assets up to the next $100
assets up to the next $100 million; .28% million; .55% of average daily net assets up
of average daily net assets up to the to the next $100 million; and .50% of
next $100 million; and .25% of average average daily net assets in excess of $500
daily net assets in excess of $500 million.
million.
Hamilton Annual rate of .35% of the first $100
million of the average daily net assets;
.33% of average daily net assets up to
the next $100 million; .31% of average
daily net assets up to the next $100
million; .29% of average daily net
assets up to the next $100 million; .27%
of average daily net assets up to the
next $100 million; and .25% of average
daily net assets in excess of $500
million.
</TABLE>
The fees payable to Pacific Global and Hamilton by the Fund pursuant to the
Investment Management Agreement and Co-Management Agreement are the same as
those that would be payable to Pacific Global solely pursuant to the Investment
Management Agreement, as indicated in the table above. Accordingly, the Fund
will not be subject to the payment of additional management fees if the
Co-Management Agreement is approved by the Fund's shareholders.
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<PAGE> 6
If approved by the Shareholders at the Meeting, the Co-Management Agreement
will remain in effect for two years after its effective date and thereafter
will continue from year to year, provided that such continuance is approved
annually (i) by the Board of Directors of the Corporation, including a majority
of the directors who are not "interested persons" of the Corporation, or (ii)
by the vote of the holders of a majority of the outstanding voting securities
of the Fund. The Co-Management Agreement automatically terminates upon its
assignment or upon termination of the Investment Management Agreement. In
addition, the Co-Management Agreement may be terminated without penalty by the
(i) Board of Directors, (ii) by the vote of a majority of the outstanding
voting securities of the Fund, (iii) by Pacific Global on 60 days' prior
written notice to the Fund or (iv) by Hamilton on 60 days' prior written notice
to the Fund. In the event the Co-Management Agreement is terminated, Pacific
Global will reassume full responsibility for management of the Fund unless
otherwise determined by the Board.
The Co-Management Agreement provides that Pacific Global and Hamilton will not
be liable for any loss or losses sustained by reason of any investment
including the purchase, holding or sale of any security as long as Pacific
Global and Hamilton shall have acted in good faith and with due care. The
Co-Management Agreement also provides that Pacific Global and Hamilton shall,
in any event, be liable for their willful misfeasance, bad faith, or negligence
in the performance of their investment management duties or for failure to
exercise due care in rendering other services under the Co-Management
Agreement.
A copy of the proposed Co-Management Agreement is attached to this Proxy
Statement as Exhibit A.
INFORMATION ABOUT HAMILTON
Hamilton is a California corporation, the equity interest of which is held by
Mary N. Hamilton (51%) and Stephen K. Bache (49%). It is located at 206 North
Jackson Street, Suite 201, Glendale, CA 91206. Hamilton is registered as an
investment adviser with the Securities and Exchange Commission ("SEC") and
currently serves as sub-adviser for the Balanced Fund, another series of the
Corporation. As of February 28, 1997, Hamilton had approximately $93.5 million
in assets under management. The chief executive officers of Hamilton are
identified in the table below:
<TABLE>
<CAPTION>
Name Principal Occupation Address
- ---- -------------------- -------
<S> <C> <C>
Mary Norwood Hamilton Chairman 206 North Jackson Street
Hamilton Suite 201
Glendale, CA 91206
Stephen Kenneth Bache Chief Investment Officer & Vice President 206 North Jackson Street
Hamilton Suite 201
Glendale, CA 91206
Gerald Michael Bache Vice President/Financial Planner 135 Princeton Avenue
Hamilton Lavallette, NJ 08735-2639
</TABLE>
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The table below sets forth certain information with respect to the Balanced
Fund:
<TABLE>
<CAPTION>
Annual Rate of Investment
Net Assets as of Sub-Advisory Fee as a Percentage
Name February 28, 1997 of Net Assets
---- ----------------- --------------------------------------------
<S> <C> <C>
Balanced Fund(1) $3.7 million Annual rate of .40% of the first $200 million
of the average daily net assets; .37% of
average daily net assets up to the next $200
million; .34% of average daily net assets up to
the next $200 million; .31% of average daily
net assets up to the next $200 million; .28% of
average daily net assets up to the next $200
million; and .25% of average daily net assets
in excess of $1 billion.
</TABLE>
INFORMATION ABOUT PACIFIC GLOBAL
Pacific Global, a registered investment adviser, was incorporated on December
17, 1991 under the laws of the State of California and has served as the
investment manager for the Corporation and each of its four series (including
the Fund) since its inception. The principal offices of Pacific Global are
located at 206 North Jackson Street, Suite 201, Glendale, CA 91206. George A.
Henning, the President of Pacific Global, owns a controlling interest in the
firm. Directors and officers of Pacific Global and outside investors,
including chief executive officers of Hamilton, also own common stock in the
firm.(2) February 28, 1997, Pacific Global had approximately $21 million in
assets under management. The chief executive officers and directors of Pacific
Global are identified in the table below:
<TABLE>
<CAPTION>
Name/Position with
Pacific Global Position with Fund Principal Occupation Address
---------------------- ------------------ -------------------- -------
<S> <C> <C> <C>
George A. Henning President, Chairman President, Director and 206 North Jackson Street
President, Director and and Director Secretary Pacific Global Suite 201
Secretary Glendale, CA 91206
Marjorie Derby Registered Representative 600 Hampshire Road
Director (Retired) Thousand Oaks, CA
Financial West Group
</TABLE>
__________________________________
(1) Hamilton has waived a portion of its sub-advisory fees.
(2) Pursuant to a private offering on or about October 13, 1994, Pacific
Global received investments from Mary N. Hamilton and Stephen K.
Bache, Chairman and Chief Investment Officer and Vice President of
Hamilton, respectively, in the amounts of $5,000 and $2,500,
respectively. Pursuant to a private offering on or about October 9,
1996, Pacific Global received investments in the amounts of $1,000
each from Mary N. Hamilton and Stephen Bache. Such investments
represent an interest of less than 1% in Pacific Global.
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<PAGE> 8
<TABLE>
<CAPTION>
Name/Position with
Pacific Global Position with Fund Principal Occupation Address
---------------------- ------------------ -------------------- -------
<S> <C> <C> <C>
William Hubbard McCary Agent, Representative, 21800 Oxnard
Director Financial Planner, Sun Woodland Hills, PA 91367
Financial Group
Independent Contractor 16133 Ventura Boulevard
Mell Nachman & Suite 1140
Associates, Inc. d/b/a Encino, CA 91436
Professional Planning
Victoria Breen Director Branch Manager 603 West Ojai Avenue
Assistant Secretary and Derby & Derby Inc. Ojai, CA 93023
Director
General Agent 603 West Ojai Avenue
Transamerica Life Ojai, CA 93023
Companies
Registered Principal 603 West Ojai Avenue
Transamerica Financial Ojai, CA 93023
Resources, Inc.
Registered Principal 600 Hampshire Road
Financial West Group Thousands Oaks, CA
John Perry Willoughby Chairman, Registered 600 Hampshire Road
Director Representative Thousand Oaks, CA
Financial West Group
Thomas H. Hanson Vice President and Owner, Chairman, P.O. Box 30
Executive Vice President Secretary President and Chief Santa Barbara, CA 93102
and Director Executive Officer
TriVest Capital
Management, Inc.
Executive Vice President 104 West Anapamu Street
Investors Research Suite H
Company Santa Barbara CA 93101
Paul H. Henning Treasurer Treasurer 206 North Jackson Street
Treasurer Pacific Global Suite 201
Glendale, CA 91206
Assistant Controller 701 North Marr Road
AdminaStar Defense Columbus, IN 47201
Services
Siegfred Kagawa Director Chairman 1163 South Beretania St.
Director Occidental Underwriters Honolulu, HI 96814
of Hawaii, Ltd.
Manabi Hirasaki Owner 862 Camino Concordia
Director Manabi Farms, Inc. Camarillo, CA 93010
</TABLE>
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<PAGE> 9
The table below sets forth certain information with respect to the
other investment companies(3) managed by Pacific Global, each of which is a
separate series of the Corporation:
<TABLE>
<CAPTION>
Annual Rate of Investment
Net Assets As of Advisory Fee as a Percentage
Name February 28, 1997 of Net Assets
---- ----------------- ---------------------------------
<S> <C> <C>
Balanced Fund $3.7 million Annual rate of .75% of the first $200 million
of the average daily net assets; .70% of
average daily net assets up to the next $200
million; .65% of average daily net assets up to
the next $200 million; .60% of average daily
net assets up to the next $200 million; .55% of
average daily net assets up to the next $200
million; and .50% of average daily net assets
in excess of $1 billion.
Government Securities $6.9 million Annual rate of .65% of the first $200 million
Fund of the average daily net assets; .60% of
average daily net assets up to the next $100
million; .55% average daily net assets up to of
the next $200 million; .50% of average daily
net assets up to the next $250 million; .45% of
average daily net assets up to the next $250
million; and .40% of average daily net assets
in excess of $1 billion.
Small Cap Fund $8.9 million Annual rate of .75% of the first $200 million
of the average daily net assets; .72% of
average daily net assets up to the next $200
million; .69% of average daily net assets up to
the next $200 million; and .66% of the average
daily net assets in excess of $600 million.
</TABLE>
1. Information About the Investment Management Agreement
As previously stated, Pacific Global will continue to provide management,
investment and administrative services to the Fund pursuant to the Investment
Management Agreement, after the Fund's shareholders approve the Co-Management
Agreement.
The Investment Management Agreement provides that neither Pacific Global nor
any of its directors, officers, or employees performing services for the
Corporation at the direction or request of Pacific Global in connection with
Pacific Global's discharge of its obligations with
__________________________________
(3) Pacific Global has waived certain management fees and reimbursed
expenses for the investment companies.
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<PAGE> 10
respect to the Investment Management Agreement, shall be liable for any error
of judgment or mistake of law or for any loss suffered by the Corporation, with
respect to the Fund, in connection with the matters to which the Investment
Management Agreement relates. The Investment Management Agreement also
provides that nothing therein shall be construed to protect Pacific Management
or any such persons against any liability to the Corporation or its
shareholders to which Pacific Global or such persons would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its or their duties on behalf of the Corporation or for failure
by Pacific Global or any such persons to exercise due care in rendering other
services to the Corporation.
DIRECTORS' CONSIDERATIONS AND RECOMMENDATIONS
At the meeting held on February 28, 1997, the Board of Directors, including the
directors who are not "interested persons" of the Corporation, after a full
evaluation of the matters described above, approved the proposed Co-Management
Agreement. During its deliberations, the Board considered among other
information the quality of the sub-advisory services that had been provided by
Hamilton to the Balanced Fund. Specifically, the Board noted that the
investment performance of the Balanced Fund during the past fiscal year had
been above average compared to the average indices by which Pacific Management
measures performance and that the Balanced Fund was ranked in the top quintal
for performance in 1996. The Board of Directors determined that Hamilton's
investment experience in bonds and large cap stocks would supplement Pacific
Global's abilities and enable the Fund to improve its performance. The Board
also noted that the management fee paid by the Fund would remain the same as
before, and determined that the terms of the Co-Management Agreement and the
co-management fee were fair.
The Board also considered the fact that consistent with the interests of the
Fund and subject to the review of the Board, Pacific Global and Hamilton may
cause the Fund to purchase and sell portfolio securities through brokers who
provide Pacific Global and Hamilton with research, analysis, advice and similar
services. In return for such services, the Fund may pay to those brokers a
higher commission than may be charged by other brokers, provided that the
Pacific Global and Hamilton determine in good faith that such commission is
reasonable in terms either of that particular transaction or of the overall
responsibility of Pacific Global and Hamilton to the Fund and their other
clients and that the total commissions paid by the Fund will be reasonable in
relation to the benefits to the Fund over the long term. Although Pacific
Global and Hamilton may receive certain research or execution services in
connection with purchases or sales with broker-dealer firms that act as
principal, Pacific Global and Hamilton will seek best execution and will not
purchase securities at a higher price or sell securities at a lower price than
would otherwise be paid if no weight was attributed to the services provided by
the executing dealer. Research services furnished by brokers or dealers
through which or with which the Fund effects securities transactions may be
used by Pacific Global and Hamilton in advising other funds or accounts they
advise and, conversely, research services furnished to Pacific Global and
Hamilton in connection with other funds or accounts they advise may be used by
Pacific Global and Hamilton in advising the Fund. Information and research
received from brokers and dealers will be in addition to, and not in lieu of,
the services required to be performed by Pacific Global and Hamilton under the
Co-Management Agreement.
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<PAGE> 11
REQUIRED VOTE
The Board of Directors recommends that the shareholders approve the
Co-Management Agreement. The affirmative vote of the holders of a majority of
the outstanding shares of the Fund is required to approve the Co-Management
Agreement. "Majority" for this purpose under the 1940 Act means the lesser of:
(i) 67% of the shares of the Fund represented at the Meeting if the holders of
more than 50% of the outstanding shares are represented, or (ii) more than 50%
of the outstanding shares of the Fund.
If the Co-Management Agreement is not approved, Pacific Global will continue to
provide portfolio management services to the Fund and the Board of Directors
will consider whether it should take any other action appropriate to obtain an
investment co-manager or sub-adviser for the Fund.
GENERAL INFORMATION
BROKERAGE COMMISSIONS
Mr. George Henning, President and Chairman of the Board of the Corporation, and
the principal stockholder and President and Secretary and Director of Pacific
Global, also serves as Chairman and Secretary and Director of Pacific Global
Fund Distributors, Inc. ("PGFD"), the Corporation's and the Fund's Distributor.
Mr. Hanson, Vice President and Secretary of the Corporation, and an Executive
Vice President and Director of Pacific Global, also serves as President and
Director of PGFD. Mr. Paul Henning, also Treasurer of the Corporation and
Pacific Global, serves as Treasurer and Director of PGFD. PGFD is a wholly
owned subsidiary of Pacific Global. Pacific Global and PGFD are affiliates of
the Corporation and of each other. Mr. George Henning, Mr. Paul Henning and
Mr. Hanson are affiliates of all three persons. PGFD is located at 206 North
Jackson Street, Suite 201, Glendale, California 91206.
For the fiscal year ended December 31, 1996, the Fund paid brokerage
commissions in the amount of $0 to PGFD. This amount represented 0% of the
Fund's aggregate brokerage commissions paid during the most recent fiscal year.
OTHER FEES PAYABLE BY THE FUND
Pacific Global Investor Services, Inc. ("PGIS") is the Corporation's transfer
agent, dividend disbursing agent, and administrative services agent pursuant to
a Transfer Agency, Dividend Disbursing Agency and Administrative Service
Agreement. Mr. George A. Henning serves as Chairman and Director of PGIS. Mr.
Hanson serves as President, Secretary and Director of PGIS. Ms. Victoria Breen,
Assistant Secretary and Director of Pacific Global, serves as Assistant
Secretary and Director of PGIS. Mr. Paul Henning serves as Treasurer of PGIS.
PGIS is a wholly owned subsidiary of Pacific Global. The Corporation, Mr.
Henning, Mr. Hanson, Ms. Breen, Pacific Global and PGFD are affiliates of PGIS.
PGIS is located at 206 North Jackson Street, Suite 201, Glendale, California
91206.
The services provided pursuant to the Transfer Agent, Dividend Disbursing Agent
and Administrative Service Agent Agreement will continue to be provided if the
Co-Management
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<PAGE> 12
Agreement is approved. For the fiscal year ended December 31, 1996, the Fund
paid fees in the amount of $543 to PGIS.
SHARE OWNERSHIP
The name, address, amount and percentage of ownership of each person who owns
of record or beneficially five percent or more of the Fund's shares as of March
21, 1996 are listed below:
<TABLE>
<CAPTION>
Name Address Amount Percentage
---- ------- ------ ----------
<S> <C> <C> <C> <C>
[ %]
[ %]
[ %]
[ %]
</TABLE>
As of March 21, 1997, the officers and directors of the Corporation owned, as a
group, less than 1% of the outstanding shares of the Fund.
The name, address and percentage of ownership of (i) each director and officer
of the Fund who owns of record or beneficially securities of Pacific Global and
(ii) each other person who owns of record or beneficially ten percent or more
of Pacific Global's securities are listed below:
<TABLE>
Name Address Percentage
---- ------- ----------
<S> <C> <C>
</TABLE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not know of any other matters to be presented at the Meeting
other than those described in this Proxy Statement. If other business should
properly come before the Meeting, it is the intention of the persons named in
the proxy to vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
As a general matter, the Corporation does not hold regular annual or other
meetings of shareholders. Any shareholder who wishers to submit proposals to
be considered at a special meeting of the Corporation's shareholders should
send such proposals to the Corporation at 206 North Jackson Street, Suite 201,
Glendale, California 91206, so as to be received a reasonable
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<PAGE> 13
time before the proxy solicitation for that meeting is made. Shareholder
proposals that are submitted in a timely fashion will not necessarily be
included in the Corporation's proxy materials. Inclusion of such proposals is
subject to limitations under the federal securities laws.
Thomas H. Hanson
Secretary
Dated: April 1, 1997
IMPORTANT: SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT TO PACIFIC ADVISORS FUND INC. IMMEDIATELY.
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<PAGE> 14
EXHIBIT A
CO-MANAGEMENT AGREEMENT
CO-MANAGEMENT AGREEMENT, made as of the --- day of April, 1997, by and among
PACIFIC GLOBAL FUND, INC., a Maryland corporation doing business as Pacific
Advisors Fund Inc. (the "Corporation"), PACIFIC GLOBAL INVESTMENT MANAGEMENT
COMPANY, a California corporation ("PGIMC") and HAMILTON & BACHE, INC., a
California corporation ("H&B").
WITNESSETH
WHEREAS, the Corporation is engaged in business as an open-end investment
management company and is registered as such under the Investment Company Act
of 1940, as amended (the "1940 Act"); and
WHEREAS, the Corporation is a series type investment company currently
consisting of four series, the Balanced Fund, the Income Fund, the Government
Securities Fund, and the Small Cap Fund, each with its own investment
objectives, investment program, policies, and restrictions; and
WHEREAS, PGIMC is engaged principally in the business of rendering investment
management services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act"); and
WHEREAS, H&B is engaged principally in the business of rendering investment
advisory services and is registered as an investment adviser under the Advisers
Act; and
WHEREAS, PGIMC and the Corporation on behalf of its separately designated
series, the Income Fund (the "Fund"), have entered into an Investment
Management Agreement dated as of October 16, 1992 (the "Investment Management
Agreement") pursuant to which PGIMC is authorized to act as sole investment
manager of the Corporation with respect to the Fund and, in its discretion, to
engage the services of a sub-adviser to provide investment advisory and other
services to the Fund; and
WHEREAS, PGIMC shall continue to provide investment management services to the
Fund pursuant to the Investment Management Agreement in addition to its duties
under this Agreement; and
WHEREAS, the Corporation proposes to engage H&B as co-manager ("Co-manager") of
the Fund's assets and to authorize PGIMC to serve as Co-manager along with H&B
of the Fund's assets; and
WHEREAS, H&B and PGIMC are willing to perform co-management services for the
Fund upon the terms and conditions and for the compensation hereinafter set
forth;
<PAGE> 15
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Corporation hereby employs H&B to serve as Co-manager and
authorizes PGIMC to serve as Co-manager with respect to the assets of the Fund
and to perform the services hereinafter set forth. H&B and PGIMC hereby accept
such employment and authorization and agree for the compensation herein
provided to assume all obligations herein set forth and to bear all expenses of
their performance of such obligations (but no other expenses).
2. Subject to the supervision and control of the Corporation's
Board of Directors, H&B and PGIMC shall co-manage the investment end
reinvestment of the Fund's assets in accordance with applicable law, including
the Internal Revenue Code of 1986, as amended, and the investment objectives,
investment program, policies, and restrictions set forth in the then-current
Prospectus and then-current Statement of Additional Information relating to the
Fund contained in the Corporation's Registration Statement under the 1940 Act,
and the Securities Act of 1933, as amended from time to time, and subject to
such further limitations as the Corporation may from time to time impose by
written notice to H&B and PGIMC. H&B and PGIMC shall jointly establish the
overall investment program for the management of the Fund's assets. H&B and
PGIMC, shall amend and update such investment program from time to time as
financial and other economic conditions warrant.
3. Subject to the supervision and control of the Corporation's
Board of Directors, H&B and PGIMC shall jointly have the authority to make
determinations with respect to the investment and reinvestment of the assets of
the Fund and to take such steps as may be necessary to implement the same.
Consistent with their duties hereunder, H&B and PGIMC shall advise the
Corporation's Board of Directors of the manner in which voting rights, rights
to consent to corporate action, and any other non-investment decisions
pertaining to the Fund's portfolio securities should be exercised.
4. H&B, shall regularly furnish such reports to PGIMC as it may
request for PGIMC's use in discharging its obligations under the Investment
Management Agreement, which reports may be distributed by PGIMC to the
Corporation at periodic meetings of the Corporation's Board of Directors and at
such other times as may be reasonably requested by the Corporation's Board of
Directors. Such reports shall include: H&B's economic outlook and investment
research and strategy of H&B; a discussion of the Fund's portfolio activity,
including a schedule of the Fund's investments and other assets and a statement
of all purchases and sales for the Fund during the period since the last
preceding report, and the Fund's performance since the last report and for such
other relevant periods as shall be mutually agreed upon; and any other
information about material developments affecting the Fund. Copies of all such
reports shall be furnished to PGIMC for examination and review within a
reasonable time prior to the presentation of such reports to the Corporation's
Board of Directors.
5. (a) H&B and PGIMC shall select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the Fund
and place, in the name of the Fund or its nominee, all such orders. Such
brokers or dealers may include brokers or dealers affiliated
<PAGE> 16
with H&B, PGIMC and the Corporation ("affiliated brokers or dealers"). All
purchases and sales of portfolio securities for the Fund placed with affiliated
brokers or dealers shall be executed in compliance with procedures established
by the Corporation's Board of Directors. When placing all orders, H&B and PGIMC
shall use their best efforts to obtain the best available price and most
favorable execution for the Fund. H&B and PGIMC shall use their best efforts to
recapture all available tender and exchange offer solicitation fees and similar
payments in connection with tenders or exchanges of the securities of the Fund.
H&B or PGIMC shall send, by facsimile or comparable means, copies of all
portfolio transactions to the Corporation's custodian on the date such
portfolio transactions are executed. H&B and PGIMC shall advise the Board of
Directors of the Corporation of any fees or payments of whatever type that may
be possible for H&B or PGIMC or any of their affiliates to receive in
connection with the purchase or sale of investment securities for the Fund.
(b) Subject to the appropriate policies, procedures,
and/or guidelines established by the Corporation's Board of Directors, H&B and
PGIMC may also effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if H&B and PGIMC determine in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage or research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of H&B and PGIMC with respect to the Fund and H&B's other
advisory clients. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise.
(c) H&B and PGIMC shall promptly communicate to the
Corporation's Board of Directors such information relating to portfolio
transactions as the Board of Directors may reasonably request.
(d) The parties understand that the Fund shall bear all
brokerage commissions in connection with purchases and sales of portfolio
securities for the Fund and all ordinary and reasonable transaction costs in
connection with purchases of such securities in private placements and
subsequent sales thereof.
6. H&B and PGIMC shall:
(a) provide, without charge, persons to render such
reasonable clerical, administrative, and other services (other than services
described in any other sub-paragraphs of this paragraph 6) to the Fund as the
Corporation's Board of Directors may from time to time reasonably request;
(b) furnish the Corporation, for the Fund, without
charge, such reasonable administrative and management supervision and office
facilities, which may be their own offices, as shall be appropriate or as the
Corporation's Board of Directors may reasonably request, subject to the
requirements of any regulatory authority to which H&B or PGIMC may be subject;
(c) generally assist in all other aspects of the Fund's
operations as the Corporation's Board of Directors may reasonably request;
<PAGE> 17
(d) provide, as the Corporation's Board of Directors may
reasonably request and without charge, persons satisfactory to the Board of
Directors to serve as the Corporation's officers;
(e) provide, at a cost to the Fund to be agreed upon from
time to time by the Corporation, H&B and PGIMC, persons, who may be employees
of H&B, PGIMC or their respective affiliates, satisfactory to the Corporation's
Board of Directors, to provide other services for the Fund, and such facilities
and equipment as may be necessary for such persons to carry out their duties
hereunder, including without limitation office space and facilities, telephone
and CRT terminals and equipment (including telephone lines) necessary for
access to the Fund's records;
(f) provide data processing services, recordkeeping, and
clerical services, internal auditing and regulatory compliance services,
internal executive and administrative services, and stationery and office
supplies;
(g) provide information to the Corporation as necessary
to prepare reports to shareholders, tax returns, and reports to and filings
with the Securities and Exchange Commission and any other regulatory and
administrative bodies that have jurisdiction over the operations of the Fund
and shall submit to all such regulatory and administrative bodies such
information, reports, or other material as necessary to comply with applicable
laws or regulations; and
(h) maintain records relating to the services provided
under this Agreement, which records shall be the property of, and under control
of, the Corporation.
H&B may (at its cost except as contemplated by paragraph 5 and 6(e) of this
Agreement) employ, retain, or otherwise avail itself of the services and
facilities of persons and entities within its own organization or any other
organization for the purpose of providing PGIMC, the Corporation or the Fund
with such information, advice or assistance, including but not limited to
advice regarding economic factors and trends and advice as to transactions in
specific securities, as H&B may deem necessary, appropriate, or convenient for
the discharge of its obligations hereunder or otherwise helpful to PGIMC, the
Corporation or the Fund, or in the discharge of H&B's overall responsibilities
with respect to the other accounts which it serves as investment manager.
7. H&B and PGIMC shall cooperate with and make available to the
Corporation and any agents engaged by the Corporation, their expertise relating
to matters affecting the Fund which involve markets, securities or individual
companies. Such matters shall include, but shall not be limited to, the pricing
of certain securities owned by the Fund for the purpose of pricing Fund shares
and the selection of agents engaged by the Corporation on behalf of the Fund.
8. (a) As compensation for all services under the Investment
Management Agreement and this Agreement PGIMC shall receive a fee calculated at
the annual rate of .40% on the first $100 million of the average daily net
asset value of the Fund, .37% of
<PAGE> 18
the next $100 million, .34% of the next $100 million, .31% of the next $100
million, .28% of the next $100 million, and .25% of average daily net asset
value in excess of $500 million, subject to its obligation to pay H&B the
amounts specified in (b) hereof.
(b) As compensation for all services rendered by H&B
under this Agreement, the Corporation shall pay to H&B a co-management fee
calculated at the annual rate of .35% on the first $100 million of the average
daily net asset value of the Fund, .33% of the next $100 million, .31% of the
next $100 million, .29% of the next $100 million, .27% of the next $100
million, and .25% of average daily net asses value in excess of $500 million.
The co-management fee shall accrue on each calendar day, and the sum of the
daily fee accruals shall be paid monthly to H&B on the first business day of
the next succeeding calendar month. The daily fee accruals shall be computed by
multiplying the fraction of one over the number of calendar days in the year by
the applicable annual co-management fee rate described above, and multiplying
this product by the net assets of the Fund as determined in accordance with the
Fund's then-current Prospectus as of the close of business on the previous
business day on which the Fund's net asset value was determined. The
co-management fee shall be payable through the date of termination of this
Agreement.
H&B shall promptly reduce its co-management fee by the amount of any
commissions, tender and exchange offer solicitation fees, other fees, or
similar payments received by H&B, or any affiliated person of H&B, in
connection with the Fund's portfolio transactions, less the amount of any
direct expenses incurred by H&B, or any affiliated persons of H&B, in obtaining
such commissions, fees, or payments. Such "commissions" or "other fees" shall
exclude those charged by brokers or dealers affiliated with H&B, PGIMC and the
Corporation as referred to in paragraph 5(a). Such "tender and exchange offer
solicitation fees" shall exclude those received by H&B acting in the capacity
of manager for any such offer.
(c) H&B shall not be entitled to receive any payment for
the performance of its services hereunder from the Corporation or the Fund and
shall look solely and exclusively to PGIMC for payment of all fees for such
services.
(d) H&B and PGIMC shall bear all expenses in connection
with the performance of their services under this Agreement, except as
otherwise provided herein. Expenses incurred in connection with the investment
operations of the Fund, including brokers' commissions, transfer and capital
gains or other income taxes, and fees relating to purchases, sales, or loans of
investments, shall be paid out of the assets of the Fund. Other expenses
incurred in the operation of the Fund shall also be paid by the Fund, as
described in the then-current Prospectus and Statement of Additional
Information and as provided in the Investment Management Agreement between the
Corporation, on behalf of the Fund, and PGIMC.
9. H&B and PGIMC shall not be liable for any loss or losses
sustained by reason of any investment including the purchase, holding or sale
of any security as long as H&B an) PGIMC shall have acted in good faith and
with due care; and, in any event, H&B and PGIMC shall be liable for their
willful misfeasance, bad faith, or negligence in the performance of their
investment management duties or for failure to exercise due care
<PAGE> 19
in rendering other services under this Agreement. A good faith mistake in
judgment shall not be deemed to be the absence of due care.
10. (a) This Agreement shall become effective on the day and
year first above written and unless sooner terminated as hereinafter provided,
shall continue in effect through June 9, 1997. Thereafter, this Agreement shall
continue in effect from year to year, so long as its continuance is approved in
the manner required by the 1940 Act.
(b) This Agreement may be terminated at any time without
the payment of any penalty, (a) by the Board of Directors of the Corporation,
including the vote or written consent of a majority of the directors of the
Corporation who are not parties to this Agreement or the Investment Management
Agreement or interested persons of any such party, (b) by the vote of a
majority of the outstanding voting securities of the Fund, (c) by PGIMC on
sixty (60) days' prior written notice to the Fund, or (d) by H&B on sixty (60)
days' prior written notice to the Fund. This Agreement shall terminate
automatically in the event of its assignment, or upon termination of the
Investment Management Agreement between the Corporation and PGIMC.
(c) As used in this Agreement, the terms "assignment",
"interested person", and "vote of a majority of the outstanding voting
securities" of the Fund shall have the meanings set forth for such terms in the
1940 Act.
(d) In the event of termination of this Agreement, H&B
shall promptly return to the Corporation all records maintained by H&B with
respect to the Fund and H&B shall be free from any claim or retention of rights
therein. H&B may retain copies of such records that it maintains pursuant to
the requirements of the 1940 Act. H&B and PGIMC shall not disclose or use any
records or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by this Agreement and applicable law.
H&B and PGIMC shall keep confidential any information obtained in connection
with their duties hereunder and shall disclose such information only if the
Corporation, on behalf of the Fund, has authorized such disclosure or if such
disclosure is expressly required by applicable law or federal or state
regulatory authorities. H&B, PGIMC, and the Corporation shall furnish to the
other parties any documents and other materials prepared for distribution which
refer to the other party prior to use, and each party shall have the right to
limit use of such documents to which it reasonably objects.
(e) Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid (a) if to H&B, to Hamilton
& Bache, Inc., 206 North Jackson Street, Suite 201, Glendale, CA 91206; (b) if
to PGIMC, to Pacific Global Investment Management Company, 206 North Jackson
Street, Suite 201, Glendale, CA 91206; and (c) if to the Corporation, at the
foregoing office of PGIMC.
11. Nothing in this Agreement shall limit or restrict the right of
any director, officer, or employee of H&B to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of H&B to engage in any other business or to
render services of any kind to any other corporation, firm, individual, or
association.
<PAGE> 20
12. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule, or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. Except insofar as the 1940 Act or other federal laws and
regulations may be controlling, this Agreement shall be governed by, and
construed and enforce in accordance with, the laws of the State of California.
14. This Agreement contains the entire agreement among the parties
hereto, and shall, as of the effective date hereof, supersede all prior
agreements, oral or written, among the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and Year first above written.
<TABLE>
<S> <C>
PACIFIC GLOBAL
ATTEST: INVESTMENT MANAGEMENT COMPANY
__________________ ___________________________________
ATTEST: HAMILTON & BACHE, INC.
__________________ ___________________________________
PACIFIC GLOBAL FUND, INC. d/b/a
ATTEST: PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE INCOME FUND
__________________ ___________________________________
</TABLE>
<PAGE> 21
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies, hereby appoint(s) George
A. Henning and Thomas H. Hanson, or any one or more of them, attorney(s) with
full power of substitution in each, to vote all the shares of the Income Fund,
a separate series of Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc. (the "Corporation"), which the undersigned is (are) entitled to vote at
the Special Meeting of Shareholders of the Income Fund to be held at the
offices of the Corporation, 206 North Jackson Street, Glendale, California
91206, on Friday, April 25, 1997, at 9:00 a.m., and at any adjournment thereof.
All powers may be exercised by a majority of said proxy holders or substitutes
voting or acting, or, if only one votes and acts, then by that one. Receipt of
the Proxy Statement, dated April 1, 1997, is hereby acknowledged. If not
revoked, this proxy shall be voted to:
Approve the Co-Management Agreement by and among the Corporation, on
behalf of the Income Fund, Pacific Global Investment Management
Company and Hamilton & Bache, Inc.;
For [ ] Against [ ] Abstain [ ]
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) THE PROPOSAL IF NO SPECIFICATION IS
MADE ABOVE. AS TO ANY OTHER MATTER, SAID ATTORNEY(S) SHALL VOTE IN ACCORDANCE
WITH THEIR BEST JUDGMENT.
_______________ _____________________________
Date Name
_______________ _____________________________
Account No. Signature(s)
NOTE: Signature(s) should agree with
name(s) as printed herein.
Executors, Administrators,
Trustees, etc., should so
indicate.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
