<PAGE>
Registration Nos. 33-50208
811-7062
As filed with the Securities and Exchange Commission on April 30, 1999
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
---
Post-Effective Amendment No. 11 /X/
---
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 12 /X/
---
(Check appropriate box or boxes)
_______________________
Pacific Global Fund, Inc.
d/b/a Pacific Advisors Fund Inc.
(Exact Name of Registrant as Specified in Charter)
206 North Jackson Street, Suite 201
Glendale, California 91206
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
(818) 242-6693
_______________________
George A. Henning
Pacific Global Investment Management Company
206 North Jackson Street, Suite 201
Glendale, California 91206
(Agent for Service)
Copies to:
Joan E. Boros, Esq.
Jorden Burt Boros Cicchetti Berenson & Johnson
1025 Thomas Jefferson St., N.W., Suite 400
Washington, D.C. 20007
<PAGE>
Approximate Date of Proposed Public Offering: Continuous.
It is proposed that this filing will become effective:
Immediately upon filing pursuant to Paragraph (b)
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X On May 3, 1999 at 9:00 a.m. pursuant to Paragraph (b)
- -----
60 days after filing pursuant to Paragraph (a)(1)
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On _________________ pursuant to Paragraph (a)(1)
- -----
75 days after filing pursuant to Paragraph (a)(2)
- -----
On _________________ pursuant to Paragraph (a)(2) of Rule 485.
- -----
The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its five series under the Securities Act of 1933
pursuant to Section 24(f) under the Investment Company Act of 1940.
<PAGE>
PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
CROSS-REFERENCE SHEET
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PART A
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FORM N-1A ITEM NO. CAPTION IN PROSPECTUS
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1 Front and Back Cover Pages Cover Page and Back Cover
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2 Risk/Return Summary; Investments, Introducing Our Funds; The Overview;
Risks, and Performance Which of our Funds is right for you;
What are the main risks in investing
in our Funds; Past Performance
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3 Risk/Return Summary; Fee Table Understanding Expenses; Fee Table; Fee
example
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4 Investment Objectives, Principal Understanding Each Fund; Risk Factors;
Investment Strategies, and Other Investment Practices and
Related Risks Policies of the Funds
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5 Management's Discussion of Fund Provided in the Funds' Annual Reports
Performance
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6 Management, Organization, and Management of the Fund
Capital Structure
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7 Shareholder Information Understanding Earnings and Taxes;
Account Policies and Valuation; How to
Buy, Sell, and Exchange Shares
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8 Distribution Arrangements Understanding Expenses; Rule 12b-1
fees; Sales charges for Class A
shares; How can you reduce sales
charges
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9 Financial Highlights Information Financial Highlights
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PART B
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CAPTION IN
FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
- -------------------------------------------------------------------------------
10 Cover Page and Table of Contents Cover Page and Table of Contents
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11 Fund History The Company and the Funds
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12 Description of the Fund and Its The Company and the Funds; Additional
Investments and Risks Information Concerning Investment
Strategies And Risks; Investment
Policies and Restrictions
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13 Management of the Fund Management of the Company and Its
Funds; Directors and Officers;
Committees of the Board of Directors;
Principal Holders of Securities;
Waiver of Initial Sales Charge on
Class A Shares
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14 Control Persons and Principal Principal Holders of Securities;
Holders of Securities Directors and Officers
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15 Investment Advisory and Other Investment Management and Other
Services Services; Investment Manager, Co-
Manager, and Advisers; Distribution of
Fund Shares; Transfer Agent and
Administrative Services Agent;
Custodian; Independent Auditors
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16 Brokerage Allocation and Other Portfolio Transactions; Distribution
Practices of Fund Shares
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17 Capital Stock and Other Capital Stock
Securities
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18 Purchase, Redemption, and Pricing Distribution of Fund Shares;
of Shares Additional Information Concerning
Purchase, Redemption, and Pricing of
Shares; Valuation of Fund Shares;
Specimen Price Make Up Sheet
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19 Taxation of the Fund Taxes
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20 Underwriters Distribution of Fund Shares
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21 Calculation of Performance Data Performance Information
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22 Financial Statements Financial Statements
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PART C
Information required to be set forth in Part C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.
<PAGE>
Pacific Global Fund, Inc., dba Pacific Advisors Fund Inc., is filing this
Post-Effective Amendment No. 11 under the Securities Act of 1933 and Amendment
No. 12 under the Investment Company Act of 1940 to its Registration Statement on
Form N-1A for the sole purpose of filing electronic copies of Exhibits that
previously have been filed in paper form. Accordingly, this amendment does not
otherwise delete, amend, or supersede any prospectus, statement of additional
information, exhibit, undertaking, or other information contained in the
Registration Statement, as previously amended, except to amend the list of
exhibits included in Item 23 thereto and to refile the attached exhibits.
<PAGE>
PART C. OTHER INFORMATION
Item 23. EXHIBITS
1(a) Articles of Incorporation.
1(b) Amendment One to Articles of Incorporation.
+++ 1(c) Articles of Amendment of the Articles of
Incorporation dated June 28, 1997.
# 1(d) Articles Supplementary to Articles of
Incorporation dated December 10, 1997.
# # 1(e) Articles Supplementary to Articles of
Incorporation dated February 8, 1999.
2 Amended and Restated By-Laws.
3 See Exhibits 1 and 2.
4(a) Investment Management Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Government Securities Fund,
and Pacific Global Investment Management Company.
4(b) Sub-Advisory Agreement by and among Pacific Global
Fund, Inc. d/b/a Pacific Advisors Fund Inc., on
behalf of the Government Securities Fund, Pacific
Global Investment Management Company, and Spectrum
Asset Management, Inc.
4(c) Investment Management Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Income and Equity Fund
(formerly, the Income Fund), and Pacific Global
Investment Management Company.
4(d) Investment Management Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Balanced Fund, and Pacific
Global Investment Management Company.
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4(e) Sub-Advisory Agreement by and among Pacific Global
Fund, Inc. d/b/a Pacific Advisors Fund Inc., on
behalf of Balanced Fund, Pacific Global Investment
Management Company, and Hamilton & Bache, Inc.
4(f) Investment Management Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Small Cap Fund, and Pacific
Global Investment Management Company.
++++ 4(g) Co-Management Agreement by and between Pacific Global
Fund, Inc. d/b/a Pacific Advisors Fund Inc., on
behalf of the Income and Equity Fund, Pacific Global
Investment Management Company and Hamilton & Bache,
Inc.
# # 4(h) Investment Management Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Growth Fund, and Pacific
Global Investment Management Company.
5(a) Distribution Agreement between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc. and Pacific
Global Fund Distributors, Inc.
# 5(b) Amendment to Distribution Agreement between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.
and Pacific Global Fund Distributors, Inc.
# # 5(c) Amendment to Distribution Agreement between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.
and Pacific Global Fund Distributors, Inc.
6 Not applicable.
+ 7(a) Custody Agreement by and between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc. and UMB Bank,
N.A.
# # 7(b) Amendment to Appendix B to Custody Agreement by and
between Pacific Global Fund, Inc. d/b/a Pacific
Advisors Fund Inc. and UMB Bank, N.A.
8(a)(1) Transfer Agency, Dividend Disbursing Agency, and
Administrative Service Agreement by and between
Pacific Global Fund, Inc.
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d/b/a Pacific Advisors Fund Inc. and Pacific Global
Investors Services, Inc.
# 8(a)(2) Amendment to Transfer Agency, Dividend Disbursing
Agency, and Administrative Service Agreement by and
between Pacific Global Fund, Inc. d/b/a Pacific
Advisors Fund Inc. and Pacific Global Investors
Services, Inc.
+ 8(b) Accounting Services Agreement by and between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund, Inc.
and Pacific Global Investors Services, Inc.
+++++ 8(c) Expense Limitation Agreement by and between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.,
on behalf of the Government Securities Fund, Pacific
Global Investment Management Company, and Pacific
Global Investors Services, Inc.
+++++ 8(d) Expense Limitation Agreement by and between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.,
on behalf of the Income and Equity Fund, Pacific
Global Investment Management Company, Hamilton &
Bache, Inc., and Pacific Global Investors Services,
Inc.
+++++ 8(e) Expense Limitation Agreement by and between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.,
on behalf of the Balanced Fund, and Pacific Global
Investment Management Company.
+++++ 8(f) Expense Limitation Agreement by and between Pacific
Global Fund, Inc. d/b/a Pacific Advisors Fund Inc.,
on behalf of the Small Cap Fund, and Pacific Global
Investment Management Company.
# 8(g) Amendment to Expense Limitation Agreement by and
between Pacific Global Fund, Inc. d/b/a Pacific
Advisors Fund Inc., on behalf of the Balanced Fund,
and Pacific Global Investment Management Company.
# # 8(h) Form Of Expense Limitation Agreement by and between
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund
Inc., on behalf of the Growth Fund, Pacific Global
Investment Management Company, and Pacific Global
Investors Services, Inc.
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<PAGE>
# # 9 Opinion and Consent of Counsel regarding the legality
of the securities being registered.
# # 10 Consent of Ernst & Young LLP, Independent Auditors.
11 Not applicable.
# # 12 Form of Subscription Agreement.
13(a) Plan of Distribution Pursuant to Rule 12b-1 for Class
A Shares.
13(b) Agreement Pursuant to Plan of Distribution for Class
A Shares.
+++++ 13(c) Plan of Distribution Pursuant to Rule 12b-1 for Class
C Shares.
+++++ 13(d) Agreement Pursuant to Plan of Distribution for Class
C Shares.
# # 13(e) Form Of Amendment to Agreement Pursuant to the Plan
of Distribution.
# # 13(f) Form Of Amendment to Agreement Pursuant to the Plan
of Distribution for Class C Shares.
14 Financial Data Schedule (not applicable)
+++++ 15(a) Rule 18f-3 Multiple Class Plan.
# # 15(b) Amended Schedule A to Rule 18f-3 Multiple Class Plan.
# # 15(c) Amended Schedule B-1 to Rule 18f-3 Multiple Class
Plan.
- --------------------------
+ Incorporated herein by reference to Post-Effective Amendment No. 4 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
++ Incorporated herein by reference to Post-Effective Amendment No. 5 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
+++ Incorporated herein by reference to Post-Effective Amendment No. 6 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
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++++ Incorporated herein by reference to Post-Effective Amendment No. 7 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
+++++ Incorporated herein by reference to Post-Effective Amendment No. 8 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
# Incorporated herein by reference to Post-Effective Amendment No. 9 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
# # Incorporated herein by reference to Post-Effective Amendment No. 10 to
Registrant's Form N-1A Registration Statement (File No. 33-50208).
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Pacific Global Fund, Inc. d/b/a
Pacific Advisors Fund Inc. has duly caused this Post-Effective Amendment No. 11
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Glendale and State of California, on the 30th day of April, 1999.
Registrant hereby certifies that this amendment meets all of the requirements
for effectiveness under Rule 485(b) under the Securities Act of 1933.
PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
(Registrant)
By: /s/ George A. Henning
---------------------------
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 11 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Victoria Breen Director April 30, 1999
- ---------------------------
Victoria Breen
/s/ Thomas M. Brinker, Sr. Director April 30, 1999
- ---------------------------
Thomas M. Brinker, Sr.
/s/ Kathleen M. Fishkin Director April 30, 1999
- ---------------------------
Kathleen M. Fishkin
/s/ L. Michael Haller, III Director April 30, 1999
- ---------------------------
L. Michael Haller, III
/s/ Thomas H. Hanson Vice President and April 30, 1999
- --------------------------- Secretary
Thomas H. Hanson
/s/ George A. Henning President and April 30, 1999
- --------------------------- Chairman of
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<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
George A. Henning the Board (Principal
Executive Officer)
/s/ Paul W. Henning Treasurer (Principal April 30, 1999
- --------------------------- Financial and
Paul W. Henning Accounting Officer)
/s/ Siegfred Kagawa Director April 30, 1999
- ---------------------------
Siegfred Kagawa
/s/ Takashi Makinodan Director April 30, 1999
- ---------------------------
Takashi Makinodan
/s/ Gerald E. Miller Director April 30, 1999
- ---------------------------
Gerald E. Miller
/s/ Louise K. Taylor Director April 30, 1999
- ---------------------------
Louise K. Taylor
C-7
<PAGE>
EXHIBITS
1(a) Articles of Incorporation.
1(b) Amendment One to Articles of Incorporation.
2 Amended and Restated By-Laws.
4(a) Investment Management Agreement by and between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc., on behalf of the Government
Securities Fund, and Pacific Global Investment Management Company.
4(b) Sub-Advisory Agreement by and among Pacific Global Fund, Inc. d/b/a
Pacific Advisors Fund Inc., on behalf of the Government Securities
Fund, Pacific Global Investment Management Company, and Spectrum
Asset Management, Inc.
4(c) Investment Management Agreement by and between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc., on behalf of the Income and
Equity Fund (formerly, the Income Fund), and Pacific Global
Investment Management Company.
4(d) Investment Management Agreement by and between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc., on behalf of the Balanced
Fund, and Pacific Global Investment Management Company.
4(e) Sub-Advisory Agreement by and among Pacific Global Fund, Inc. d/b/a
Pacific Advisors Fund Inc., on behalf of Balanced Fund, Pacific
Global Investment Management Company, and Hamilton & Bache, Inc.
4(f) Investment Management Agreement by and between Pacific Global Fund,
Inc. d/b/a Pacific Advisors Fund Inc., on behalf of the Small Cap
Fund, and Pacific Global Investment Management Company.
5(a) Distribution Agreement Between Pacific Global Fund, Inc. d/b/a
Pacific Advisors Fund, Inc., and Pacific Global Fund Distributors,
Inc.
8(a)(1) Transfer Agency, Dividend Disbursing Agency, and Administrative
Service Agreement by and between Pacific Global Fund, Inc. d/b/a
Pacific Advisors Fund Inc. and Pacific Global Investors Services,
Inc.
13(a) Plan of Distribution Pursuant to Rule 12b-1 for Class A Shares.
13(b) Agreement Pursuant to Plan of Distribution for Class A Shares.
C-8
<PAGE>
EXHIBIT 1(a)
ARTICLES OF INCORPORATION
OF
PACIFIC GLOBAL FUND, INC.
FIRST: The undersigned, Richard T. Choi, whose address is 1050 Connecticut
Avenue, N.W., Suite 825, Washington, D.C. 20036, being at least eighteen (18)
years of age does hereby file these Articles of Incorporation as set forth
below.
SECOND: The name of the corporation ("Corporation") is:
PACIFIC GLOBAL FUND, INC.
THIRD: The purposes for which the Corporation is formed are as follows:
(A) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations.
(B) In general, to carry on any other business in connection with or
incidental to the foregoing purpose, to have and exercise all the
powers conferred upon corporations by the laws of the State of Maryland
as in force from time to time, to do everything necessary, suitable, or
proper for the attainment of any object or the furtherance of any power
not inconsistent with Maryland law, either alone or in association with
others, and to take any action incidental or appurtenant to or growing
out of or connected with the Corporation's business or purposes,
objects, or powers.
(C) To conduct and carry on its business, or any part thereof, to have
one or more offices, and to exercise any or all of its corporate powers
and rights, in the State of Maryland, in other states, territories,
districts, colonies, and dependencies of the United States, and in any
or all foreign countries.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Corporation.
FOURTH: The address of the principal office of the Corporation in the State
of Maryland is:
Pacific Global Investment Fund, Inc.
c/o The Corporation Trust Incorporated
<PAGE>
32 South Street
Baltimore, Maryland 21202
The name and address of the resident agent of the Corporation in the
State of Maryland is:
The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
The resident agent is a citizen of the State of Maryland, and actually
resides therein.
FIFTH: CAPITAL STOCK.
(A) GENERAL. The total number of shares of stock which the Corporation,
by resolution or resolutions of the Board of Directors, shall have
authority to issue is One Billion (1,000,000,000) shares, par value One
Cent ($0.01) per share, such shares having an aggregate par value of
Ten Million Dollars ($10,000,000). All such shares are herein
classified as "Common Stock," subject, however, to the authority
hereinafter granted to the Board of Directors to classify or reclassify
any such shares, to increase or decrease the aggregate number of shares
of stock or the number of shares of stock of any series or class within
a series ("class") that the Corporation has authority to issue, and to
authorize that all such shares of stock be issued as shares of one or
more series or one or more classes designated as the Board of Directors
may determine. Five hundred million (500,000,000) shares of Common
Stock shall be divided equally among five series as set forth below:
Series Number of Shares
------ ----------------
Balanced Fund 100,000,000
Corporate Bond Fund 100,000,000
Government Securities Fund 100,000,000
Money Market Fund 100,000,000
Small Cap Fund 100,000,000
(B) CREATION OF SERIES OR CLASSES. The balance of shares of stock now
or hereafter authorized but unissued may be issued as Common Stock, in
one or more new series or one or more new classes, each consisting of
such number of shares and having such designations, powers,
preferences, rights, qualifications, limitations, and restrictions,
including variations between different series or classes as to purchase
price, terms and manner of redemption, special and relative rights as
to dividends, and on liquidation conversion rights and conditions of
separate voting rights, as shall be fixed and determined from time to
time by resolution or resolutions providing for the issuance of such
shares adopted by the Board of
2
<PAGE>
Directors, to whom authority so to fix and determine the same is hereby
expressly granted.
(C) DIVIDENDS AND DISTRIBUTIONS. Without limiting the generality of the
foregoing, the dividends and distributions of investment income and
capital gains with respect to Common Stock and any series or class that
may hereafter be created shall be in such amount as may be declared
from time to time by the Board of Directors, and such dividends and
distributions may vary from series to series or class to class to such
extent and for such purposes as the Board of Directors may deem
appropriate, including, but not limited to, the purpose of complying
with any requirements of regulatory or legislative authorities.
(D) CLASSIFICATION. The Board of Directors is hereby expressly granted
authority to (1) classify or reclassify any unissued stock (whether now
or hereafter authorized) from time to time by setting or changing the
preferences, conversion, or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, valuation, or terms or
conditions of redemption of the stock, and (2) pursuant to such
classification or reclassification to increase or decrease the number
of authorized shares of any series or class, but the number of shares
of any series or class shall not be decreased by the Board of Directors
below the number of shares thereof then outstanding, or increased above
the number of shares then authorized; provided however, that nothing
herein shall prohibit the Board of Directors from increasing or
decreasing the aggregate number of shares of stock or the number of
shares of stock of any series or class that the Corporation has
authority to issue.
(E) PROVISIONS FOR SERIES AND CLASSES. In addition to other provisions
of these Articles, the following provisions are applicable regarding
any series or class of shares of stock of the Corporation established
and designated by paragraph (A) of this Article FIFTH and shall be
applicable if the Board of Directors shall establish and designate
additional series or classes as provided in that paragraph:
(i) CLASSIFICATION. The Board of Directors may classify or
reclassify any unissued shares, or any shares previously
issued and reacquired, of any series or class into one or more
series or classes that may be established and designated from
time to time. With respect to any shares of any series or
class reacquired by the Corporation from time to time, the
Corporation may cancel such shares, hold such shares as
treasury shares (of the same or some other series or class),
or reissue such shares for such consideration not less than
the greater of the par value and the net asset value per share
(as described in paragraph (A)(ii) of Article SEVENTH hereof)
and on such terms as they may determine.
(ii) ASSETS BELONGING TO A SERIES OR CLASS. All consideration
received by the Corporation for the issue or sale of shares of
a particular series or class, together with all assets in
which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale,
3
<PAGE>
exchange, or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to
that series or class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books
of account of the Corporation. In the event that there are any
assets, income, earnings, profits, and proceeds thereof,
funds, or payments which are not readily identifiable as
belonging to any particular series or class, the Board of
Directors shall allocate them among any one or more of the
series or classes established and designated from time to time
in such manner and on such basis as they, in their sole
discretion deem fair and equitable. Each such allocation by
the Board of Directors shall be conclusive and binding upon
the shareholders of all series and classes for all purposes.
(iii) LIABILITIES BELONGING TO A SERIES OR CLASS. The assets
belonging to each particular series or class shall be charged
with the liabilities of the Corporation in respect of that
series or class and all expenses, costs, charges, and reserves
attributable to that series or class, and any general
liabilities, expenses, costs, charges, and reserves of the
Corporation that are not readily identifiable as belonging to
any particular series or class shall be allocated, and charged
by the Board of Directors, to and among any one or more of the
series or classes established and designated from time to time
in such manner and on such basis as the Board of Directors in
its sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges, and reserves by the
Board of Directors shall be conclusive and binding upon the
holders of shares of all series and classes for all purposes.
(iv) DIVIDENDS AND DISTRIBUTIONS. The power of the Corporation
to pay dividends and make distributions shall be governed by
paragraph (C) of this Article FIFTH with respect to any one or
more series or classes which represent interests in separately
managed components of the Corporation's assets. Dividends and
distributions on shares of a particular series or class may be
paid with such frequency as the Board of Directors may
determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with
such frequency as the Board of Directors may determine. Such
dividends and distributions may be paid to the holders of
shares of a particular series or class, from such of the
income and capital gains, accrued or realized, attributable to
the assets belonging to that series or class, as the Board of
Directors may determine, after providing for actual and
accrued liabilities belonging to that series or class. All
dividends and distributions on shares of a particular series
or class shall be distributed pro rata to the holders of that
series or class in proportion to the number of shares of that
series or class held by such holders at the date and time of
record established for the payment of such dividends or
distributions. Notwithstanding the provisions of this Article
FIFTH, the Board of Directors may declare and distribute a
stock dividend to holders of shares of any series or class of
shares by the distribution of shares of another series or
class.
4
<PAGE>
(v) EQUALITY. Subject to the provisions of this Article FIFTH,
all shares of all series or classes shall have identical
rights and privileges, except insofar as variations thereof
among series or classes shall have been determined and fixed
by the Board of Directors. Each share of any series or class
shall represent an equal proportionate share in the assets of
that series or class with each other share of that series or
class. The Board of Directors may divide or combine the shares
of any series or class into a greater or lesser number of
shares of the series or class without thereby changing the
proportionate interests of the holders of such shares in the
assets of that series or class.
(vi) CONVERSION OR EXCHANGE RIGHTS. Subject to compliance with
the requirements of the Investment Company Act of 1940, the
Board of Directors shall have the authority to provide that
the holders of shares of any series or class shall have the
right to convert or exchange said shares for or into shares of
one or more other series or classes in accordance with such
requirements and procedures as may be established by the Board
of Directors from time to time.
(vii) ESTABLISHMENT AND DESIGNATION OF SERIES OR CLASSES. The
establishment and designation of any series or class of shares
in addition to those established and designated in paragraph
(A) of this Article FIFTH shall be effective upon the
execution of the appropriate instruments and the proper filing
thereof in accordance with the Maryland General Corporation
Law, setting forth such establishment and designation and the
relative rights, preferences, voting powers, restrictions,
limitations as to dividends, qualifications, valuation, and
terms and conditions of redemption of such series or class or
as otherwise provided in such instruments. At any time that
there are no shares outstanding or subscribed for any
particular series or class previously established and
designated, the Board of Directors may by a similar procedure
abolish that series or class and the establishment and
designation thereof.
(viii) LIQUIDATION. In the event of the liquidation of a
particular series or class, the shareholders of the series or
class that has been established and designated and that is
being liquidated shall be entitled to receive, when and as
declared by the Board of Directors, the excess of the assets
belonging to that series or class over the liabilities
belonging to that series or class. The holders of shares of
any series or class shall not be entitled thereby to any
distribution upon liquidation of any other series or class.
The assets that may be distributed to the shareholders of any
series or class shall be distributed among such shareholders
in proportion to the number of shares of that series or class
held by each such shareholder and recorded on the books of the
Corporation. The liquidation of any particular series or class
in which there are shares then outstanding may be authorized
by an instrument in writing signed by a majority of the
Directors then in office, subject to the affirmative vote of
"a majority of the outstanding voting securities" of that
series or class, as the quoted phrase is defined in the
Investment Company Act of 1940.
5
<PAGE>
(ix) VOTING. Each share of each series or class shall have
equal voting rights with every other share of every other
series or class, and all shares of all series or classes shall
vote as a single group except where a separate vote of any
series or class is required by the Investment Company Act of
1940, the Maryland General Corporation Law, these Articles of
Incorporation, the By-Laws of the Corporation, or as the Board
of Directors may determine in its sole discretion. Where a
separate vote is required with respect to one or more series
or classes, then the shares of all other series or classes
shall vote as a single series or class, provided that, as to
any matter which does not affect the interest of a particular
series or class, only the holders of shares of the one or more
affected series or classes shall be entitled to vote.
SIXTH: NUMBER OF DIRECTORS. The number of Directors of the Corporation shall be
3, or such other number as may from time to time be fixed by the By-Laws of the
Corporation, or pursuant to authorization contained in such By-Laws, but the
number of Directors shall never be less than (A) three (3) or (B) the number of
shareholders of the Corporation, whichever is less. George A. Henning, Gene C.
Valentine, and Victoria Derby-Breen shall serve as directors until the first
meeting of shareholders or until their successors are duly chosen and qualified.
SEVENTH: REGULATION OF THE POWERS OF THE CORPORATION AND ITS DIRECTORS AND
SHAREHOLDERS.
(A) ISSUANCE AND SALE OF THE CORPORATION'S SHARES.
(i) GENERAL. All corporate powers and authority of the
Corporation (except as otherwise provided by statute, by these
Articles of Incorporation, or by the By-Laws of the
Corporation) shall be vested in and exercised by the Board of
Directors. The Board of Directors shall have the power to
determine or cause to be determined the nature, quality,
character, and composition of the portfolio of securities and
investments of each series or class of the Corporation, but
the foregoing shall not limit the ability of the Board of
Directors to delegate such power to a Committee of the Board
of Directors or to an officer of the Corporation, or to enter
into an investment advisory or management contract as
described in paragraph (E)(v) of this Article SEVENTH. The
Board of Directors may from time to time issue and sell or
cause to be issued and sold any of the Corporation's
authorized shares, including any additional shares which it
hereafter authorizes and any shares redeemed or repurchased by
the Corporation, except that only shares previously contracted
to be sold may be issued during any period when the
determination of net asset value is suspended pursuant to the
provisions of paragraph (C)(iii) of this Article SEVENTH. All
such authorized shares, when issued in accordance with the
terms of this paragraph (A) shall be fully paid and
nonassessable. No holder of any shares of the Corporation
shall be entitled, by reason of holding or owning such shares,
to any prior, preemptive, or other right to subscribe to,
purchase, or otherwise acquire any additional shares of the
6
<PAGE>
Corporation subsequently issued for cash or other
consideration or by way of a dividend or otherwise, and any
or all of such shares of the Corporation, whether now or
hereafter authorized or created, may be issued, reissued,
or transferred, if the same have been reacquired and have
treasury status, to such persons, firms, corporations, and
associations, and for such lawful consideration, and on
such terms as the Board of Directors in its discretion may
determine, without first offering the same, or any portion
thereof, to any said holder. Voting power in the election
of Directors and for all other purposes shall be vested
exclusively in the holders of the Corporation's authorized
and issued shares.
(ii) PRICE. No shares of the Corporation shall be issued or
sold by the Corporation, except as a stock dividend
distributed to shareholders, for less than an amount which
would result in proceeds to the Corporation, before taxes
payable by the Corporation in connection with such
transaction, of at least the net asset value per share
determined as set forth in paragraph (C) of this Article
SEVENTH as of such time as the Board of Directors shall have
by resolution theretofore prescribed. In the absence of a
resolution of the Board of Directors applicable to the
transaction, such net asset value shall be that next
determined after receipt of an unconditional purchase order.
(iii) ON MERGER OR CONSOLIDATION. The Board of Directors, in
its sole discretion, may permit shares of the Corporation to
be issued for stock or assets of any kind. In this regard, in
connection with the acquisition of any assets or stock of
another person (as such term is defined in Section 2(a)(28) of
the Investment Company Act of 1940), the Board of Directors
may issue or cause to be issued shares of the Corporation and
accept in payment therefor, in lieu of cash, such assets at
their fair market value, or such stock at the fair market
value of the assets held by such person, either with or
without adjustment for contingent costs or liabilities,
provided that the funds of the Corporation are permitted by
law to be invested in such assets or stock.
(iv) FRACTIONAL SHARES. The Board of Directors may issue and
sell fractions of shares having pro rata all the rights of
full shares, including, without limitation, the right to vote
and to receive dividends.
(v) RESTRICTIONS ON TRANSFER OF SHARES. Shares of any series
or class of the Corporation shall not be transferred until
such transfer shall have been reported to the Board of
Directors and approved by them.
B. REDEMPTION AND REPURCHASE OF THE CORPORATION'S SHARES.
(i) REDEMPTION OF SHARES. The Corporation shall redeem its
shares, subject to the conditions and at the price determined
as hereinafter set forth, upon proper application of the
record holder thereof at such office or agency as may be
designated
7
<PAGE>
from time to time for that purpose by the Board of
Directors. Any such application must be accompanied by the
certificate or certificates, if any, evidencing such shares,
duly endorsed or accompanied by a proper instrument or
transfer. The Board of Directors shall have power to determine
or to delegate to the proper officers of the Corporation the
power to determine from time to time the form and the other
accompanying documents which shall be necessary to constitute
a proper application for redemption.
(ii) PRICE. Such shares shall be redeemed at their net asset
value determined as set forth in paragraph (C) of this Article
SEVENTH as of such time as the Board of Directors shall have
theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of shares deposited shall be
the net asset value of such shares next determined as set
forth in paragraph (C) of this Article SEVENTH after receipt
of such application.
(iii) PAYMENT. Payment for such shares shall be made to the
shareholder of record within seven (7) days after the date
upon which proper application is received, or such other time
period of greater or lesser duration as permitted by
applicable law, subject to the provisions of paragraph (B)(iv)
of this Article SEVENTH. Such payment shall be made in cash or
other assets of the Corporation or both, as the Board of
Directors shall prescribe.
(iv) EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET VALUE.
If, pursuant to paragraph (C)(iii) of this Article SEVENTH,
the Board of Directors shall declare a suspension of the
determination of net asset value, the rights of shareholders
(including those who shall have applied for redemption
pursuant to paragraph (B)(i) of this Article SEVENTH but who
shall not yet have received payment) to have shares redeemed
and paid for by the Corporation shall be suspended until the
termination of such suspension is declared. Any record holder
whose redemption right is so suspended may, during the period
of such suspension, by appropriate written notice of
revocation to the office or agency where application was made,
revoke his application and withdraw any share certificates
which accompanied such application. The redemption price of
shares for which redemption applications have not been
revoked shall be the net asset value of such shares next
determined as set forth in paragraph (C) of this Article
SEVENTH after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which
the proper application was made plus the period after such
application during which the determination of net asset value
was suspended.
(v) REPURCHASE BY AGREEMENT. The Corporation may repurchase
shares of the Corporation directly, or through its principal
underwriter or other agent designated for the purpose, by
agreement with the owner thereof, at a price not exceeding the
net asset value per share determined as of the time when the
purchase or contract of
8
<PAGE>
purchase is made or the net asset value as of any time which
may be later determined pursuant to paragraph (C) of this
Article SEVENTH, provided payment is not made for the shares
prior to the time as of which such net asset value is
determined.
(C) NET ASSET VALUE OF SHARES.
(i) BY WHOM DETERMINED. The Board of Directors shall have the
power and duty to determine the method and time for computing
the net asset value per share of the outstanding shares of
the Corporation and of any such series or class of the
Corporation. It may delegate such power and duty to one or
more of the Directors and officers of the Corporation, to the
custodian or depository of the Corporation's assets, or to
another agent of the Corporation appointed for such purpose.
Any determination made pursuant to this section by the Board
of Directors, or its delegate, shall be binding on all parties
concerned.
(ii) WHEN DETERMINED. The net asset value shall be determined
at such times as the Board of Directors shall prescribe by
resolution, provided that such net asset value shall be
determined at least once each week as of the close of business
on a day the New York Stock Exchange is open for trading and
the Corporation is open for business ("business day"). In the
absence of a resolution of the Board of Directors, the net
asset value shall be determined as of the close of regular
trading on the New York Stock Exchange on each business day.
(iii) SUSPENSION OF DETERMINATION OF NET ASSET VALUE. The
Board of Directors may declare a suspension of the
determination of net asset value for the whole or any part of
any period (a) during which the New York Stock Exchange is
closed other than customary weekend and holiday closings, (b)
during which trading on the New York Stock Exchange is
restricted, (c) during which an emergency exists as a result
of which disposal by the Corporation of securities owned by it
is not reasonably practicable or it is not reasonably
practicable for the Corporation fairly to determine the value
of its net assets, or (d) during which a governmental body
having jurisdiction over the Corporation may by order permit
for the protection of the security holders of the Corporation.
Such suspension shall take effect at such time as the
Board of Directors shall specify, which shall not be later
than the close of business on the business day next following
the declaration, and thereafter there shall be no
determination of net asset value until the Board of Directors
shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on
which (1) the condition giving rise to the suspension shall
have ceased to exist and (2) no other condition exists under
which suspension is authorized under this paragraph (C)(iii)
of Article SEVENTH.
Each declaration by the Board of Directors pursuant to this
paragraph (C)(iii) of Article SEVENTH shall be consistent with
such official rules and regulations, if any,
9
<PAGE>
relating to the subject matter thereof as shall have been
promulgated by the Securities and Exchange Commission or any
other governmental body having jurisdiction over the
Corporation and as shall be in effect at the time. To the
extent not inconsistent with such official rules and
regulations, the determination of the Board of Directors shall
be conclusive.
(iv) COMPUTATION OF NET ASSET VALUE.
(a) NET ASSET VALUE PER SHARE. The net asset value of
each share of each series or class or, where
applicable, of the Corporation, as of any particular
time shall be the quotient obtained by dividing the
value of the net assets of such series or class or,
where applicable, of the Corporation, by the total
number of shares of the series or class or, where
applicable, the Corporation, outstanding.
Notwithstanding the above, the Board of Directors may
determine to maintain the net asset value per share
of any series or class at a designated constant
dollar amount and in connection therewith may adopt
procedures not inconsistent with the Investment
Company Act of 1940 for the continuing declarations
of income attributable to that series or class as
dividends payable in additional shares of that
series or class at the designated constant dollar
amount and for the handling of any losses
attributable to that series or class. Such procedures
may provide that in the event of any loss, each
shareholder shall be deemed to have contributed to
the capital of the Corporation attributable to that
series or class his pro rata portion of the total
number of shares required to be cancelled in order to
permit the net asset value per share of that series
or class to be maintained, after reflecting such
loss, at the designated constant dollar amount. Each
shareholder of the Corporation shall be deemed to
have agreed, by his investment in any series or class
with respect to which the Board of Directors shall
have adopted any such procedure, to make the
contribution referred to in the preceding sentence in
the event of any such loss.
(b) NET ASSET VALUE OF SERIES OR CLASS. The value of
the net assets of any series or class or, where
applicable, of the Corporation, as of any particular
time shall be the value of the assets of the series
or class or, where applicable, the Corporation, less
its liabilities, determined and computed as
prescribed by the Board of Directors.
(D) COMPLIANCE WITH INVESTMENT COMPANY ACT OF 1940. Notwithstanding
any of the foregoing provisions of this Article SEVENTH, the Board of
Directors may prescribe, in its absolute discretion, such other bases
and times for determining the per share net asset value of the shares
of any series or class or, where applicable, of the Corporation, as it
shall deem necessary or desirable to enable the Corporation to comply
with any provision of the Investment Company Act of 1940, or any rule
or regulation thereunder, including any rule
10
<PAGE>
or regulation adopted by any securities association registered under
the Securities Exchange Act of 1934, all as in effect now or as
hereafter amended or added.
(E) MISCELLANEOUS.
(i) COMPENSATION OF DIRECTORS. The Board of Directors shall
have power from time to time to authorize payment of
compensation to the Directors for services to the Corporation,
including fees for attendance at meetings of the Board of
Directors and of committees of the Board of Directors.
(ii) INSPECTION OF CORPORATION'S BOOKS. The Board of Directors
shall have power from time to time to determine whether and to
what extent, and at what times and places, and under what
conditions and regulations the accounts and books of the
Corporation (other than the stock ledger) or any of them shall
be open to the inspection of shareholders; and no shareholder
shall have any right to inspect any account, book, or document
of the Corporation except as at the time and to the extent
required by applicable law, unless authorized by a resolution
of the shareholders or the Board of Directors.
(iii) RESERVATION OF RIGHT TO AMEND. The Corporation reserves
the right to make any amendment of its charter, now or
hereafter authorized by law, including any amendment which
alters the contract rights, as expressly set forth in its
charter, of any outstanding stock, and all rights herein
conferred upon shareholders are granted subject to such
reservation. The Board of Directors shall have the power to
adopt, alter, or repeal the By-Laws of the Corporation, except
to the extent that the By-Laws otherwise provide, or as
otherwise provided by applicable law.
(iv) DETERMINATION OF NET PROFITS, DIVIDENDS, ETC. The Board
of Directors is expressly authorized to determine, in
accordance with generally accepted accounting principles and
practices, what constitutes net profits, earnings, surplus,
or net assets in excess of capital, and to determine what
accounting periods, whether daily, annual, or any other
period, shall be used by the any series or class or, where
applicable, the Corporation, for any purpose; to set apart out
of any funds of any series or class or, where applicable, the
Corporation, such reserves for such purposes as it shall
determine and to abolish the same; to declare and pay
dividends and distributions in cash, securities, or other
property from surplus or any funds legally available therefor,
in such amounts and at such intervals (which may be as
frequently as daily) or on such other periodic basis, as it
shall determine; to declare such dividends or distributions by
means of a formula or other method of determination, at
meetings held less frequently than the frequency of the
effectiveness of such declarations; to establish payment dates
for dividends or any other distributions on any basis,
including dates occurring less frequently than the
effectiveness of the declaration thereof; and to provide for
the payment of declared dividends on a date earlier than the
specified
11
<PAGE>
payment date in the case of shareholders of the Corporation
redeeming their entire ownership of shares of the Corporation.
The Corporation and each of its series intends to qualify as a
"regulated investment company" under the Internal Revenue Code
of 1986, or any successor or comparable statute thereto, and
regulations promulgated thereunder. Inasmuch as the
computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books of
the Corporation, the Board of Directors shall have the power,
in its sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in part
as capital gains distributions, amounts sufficient, in the
opinion of the Board of Directors, to enable the Corporation
and each of its series to qualify as a regulated investment
company and to avoid liability of the Corporation and each of
its series for Federal income tax in respect of that year.
However, nothing in the foregoing shall limit the authority of
the Board of Directors to make distributions greater than or
less than the amount necessary to qualify as a regulated
investment company and to avoid liability of the Corporation
and each of its series for such tax.
(v) CONTRACTS. The Board of Directors may in its discretion
from time to time enter into an exclusive or nonexclusive
underwriting contract or contracts providing for the sale of
the shares of Common Stock of the Corporation to net the
Corporation not less than the amount provided for in paragraph
(A)(ii) of this Article SEVENTH, whereby the Corporation may
either agree to sell the shares to the other party to the
contract or appoint such other party its sales agent for such
shares (such other party being herein sometimes called the
"underwriter"), and in either case, on such terms and
conditions as may be prescribed in the By-Laws, if any, and
such further terms and conditions as the Board of Directors
may in its discretion determine is not inconsistent with the
provisions of this Article SEVENTH or of the By-Laws; and such
contract may also provide for the repurchase of shares of the
Corporation by such other party as agent of the Corporation.
The Board of Directors may in its discretion from time to time
enter into an investment advisory or management contract
whereby the other party to such contract shall undertake to
furnish to a series or class or, where applicable, the
Corporation, such management, investment advisory, statistical
and research facilities and services, and such other
facilities and services, if any, and all upon such terms and
conditions, as the Board of Directors may in its discretion
determine.
Any contract of the character described in the paragraphs
above or for services as custodian, transfer agent, or
disbursing agent or related services may be entered into with
any corporation, firm, trust, or association, although one or
more of the Directors or officers of the Corporation may be an
officer, director, trustee, shareholder, or member of such
other party to the contract, and no such contract shall be
12
<PAGE>
invalidated or rendered voidable by reason of the existence of
any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship
for any loss or expense to the Corporation under or by reason
of said contract or accountable for any profit realized
directly or indirectly therefrom, except as otherwise provided
by applicable law. The same person (including a firm,
corporation, trust, or association) may be the other party to
contracts entered into pursuant to the above paragraphs, and
any individual may be financially interested or otherwise
affiliated with persons who are parties to any or all of the
contracts mentioned in this paragraph, except as otherwise
provided by applicable law.
Any contract entered into pursuant to the first two paragraphs
of this paragraph (E)(v) of Article SEVENTH shall be
consistent with and subject to the requirements of Section 15
of the Investment Company Act of 1940 (including any amendment
thereof or other applicable Act of Congress hereafter enacted)
with respect to its continuance in effect, its termination,
and the method of authorization and approval of such contract
or renewal thereof.
(vi) SHAREHOLDER VOTING. On each matter submitted to a vote of
the shareholders, each holder of a share shall be entitled to
one vote for each whole share and to a proportionate
fractional vote for each fractional share standing in his name
on the books of the Corporation, except as otherwise provided
in paragraph (E)(ix) of Article FIFTH. Notwithstanding any
provision of the Maryland General Corporation Law requiring a
greater proportion than a majority of the votes of all series
or classes, or of any series or class, of stock entitled to be
cast to take or authorize any action, such action may, subject
to other applicable provisions of law, these Articles of
Incorporation, and the By-Laws of the Corporation, be taken or
authorized upon the concurrence of a majority of the aggregate
number of the votes entitled to be cast thereon.
(vii) CERTIFICATES. The Board of Directors of the Corporation
may by resolution authorize the issuance of some or all of the
shares of any series or classes of the Corporation's Common
Stock without certificates.
(viii) INDEMNIFICATION AND LIMITATION OF LIABILITY. To the
fullest extent permitted by Maryland and Federal law, as
amended or interpreted, no Director or officer of the
Corporation shall be personally liable to the Corporation or
the holders of shares of its series or classes for money
damages and each Director and officer shall be indemnified by
the Corporation; PROVIDED, HOWEVER, that nothing herein shall
be deemed to protect any Director or officer of the
Corporation against any liability to the Corporation or the
holders of shares of its series or classes to which such
Director or officer would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his or her
office.
13
<PAGE>
EIGHTH: References in these Articles to the Investment Company Act of 1940 shall
mean the published statute, the rules thereunder, and, where applicable,
published cases and interpretative letters of the Securities and Exchange
Commission.
------------------------------
IN WITNESS WHEREOF, I have signed these Articles of Incorporation and
acknowledge the same to be my act of this 15th day of May, 1992.
/s/ Richard T. Choi
-----------------------
Richard T. Choi
WITNESS:
/s/ Joan E. Boros
- -----------------
14
<PAGE>
EXHIBIT 1(b)
PACIFIC GLOBAL FUND, INC.
AMENDMENT ONE TO THE ARTICLES OF INCORPORATION
Pacific Global Fund, Inc., a Maryland corporation, having its principal
office in Baltimore City, Maryland (hereafter called the "Corporation"), hereby
amends, effective immediately, its Articles of Incorporation for the purpose of
redesignating and reclassifying the one hundred million (100,000,000) unissued
shares of the Corporation that were divided and classified as the series of
common stock bearing the designation Corporate Bond Fund into the series of
common stock bearing the designation Income Fund. All such shares have the same
powers, preferences, other special rights, qualifications, restrictions and
limitations set forth in Article Fifth of the Articles of Incorporation.
ARTICLE Fifth, Section (A) of the Corporation's Articles of Incorporation
is hereby amended by striking out Article Fifth, Section (A) and inserting the
following in lieu thereof:
(A) GENERAL. The total number of shares of stock which the Corporation, by
resolution or resolutions of the Board of Directors, shall have authority
to issue is One Billion (1,000,000,000) shares, par value One Cent ($0.01)
per share, such shares having an aggregate par value of Ten Million
Dollars ($10,000,000). All such shares are herein classified as "Common
Stock," subject, however, to the authority hereinafter granted to the
Board of Directors to classify or reclassify any such shares, to increase
or decrease the aggregate number of shares of stock or the number of
shares of stock of any series or class within a series ("class") that the
Corporation has authority to issue, and to authorize that all such shares
of stock be issued as shares of one or more series of one or more classes
designated as the Board of Directors may determine. Five hundred million
(500,000,000) shares of Common Stock shall be divided equally among five
series as set forth below:
<TABLE>
<CAPTION>
SERIES NUMBER OF SHARES
------ ----------------
<S> <C>
Government Securities Fund 100,000,000
Income Fund 100,000,000
Balanced Fund 100,000,000
Small Cap Fund 100,000,000
Money Market Fund 100,000,000
</TABLE>
The foregoing amendment was approved by a unanimous vote of the Board of
Directors of the Corporation.
<PAGE>
IN WITNESS WHEREOF, Pacific Global Fund, Inc. has caused these presents to
be signed in its name and on its behalf by its President and witnessed by its
Secretary on the 29th day of October, 1992 to be effective immediately.
PACIFIC GLOBAL FUND, INC.
WITNESS:
/s/ Thomas H. Hanson By: /s/ George A.Henning
- ------------------------------------ -----------------------------
Secretary President
2
<PAGE>
THE UNDERSIGNED, President of Pacific Global Fund, Inc., who executed on
behalf of the Corporation Amendment One to the Articles of Incorporation of
which this Certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Amendment One to the Articles of
Incorporation to be the corporate act of said Corporation and hereby certifies
that the matters and facts set forth herein with respect to the authorization
and approval thereof are true in all material respects under the penalties of
perjury.
/s/ George A. Henning
----------------------------
George A. Henning, President
3
<PAGE>
EXHIBIT 2
AMENDED AND RESTATED
BY-LAWS
OF
PACIFIC GLOBAL FUND, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. NAME OF CORPORATION, LOCATION OF
OFFICES, AND SEAL 1
1.01. Name 1
1.02. Principal office 1
1.03. Seal 1
ARTICLE II. SHAREHOLDERS 1
2.01. Annual Meetings 1
2.02. Special Meetings 2
2.03. Place of Meetings 2
2.04. Notice of Meetings 2
2.05. Voting - In General 3
2.06. Shareholders Entitled to Vote 3
2.07. Voting - Proxies 3
2.08. Quorum 4
2.09. Absence of Quorum 4
2.10. Stock Ledger and List of Shareholders 4
2.11. Informal Action by Shareholders 4
ARTICLE III. BOARD OF DIRECTORS 5
3.01. Number and Term of Office 5
3.02. Qualification of Directors 5
3.03. Election of Directors 5
3.04. Removal of Directors 5
3.05. Vacancies and Newly Created Directorships 5
3.06. General Powers 6
3.07. Power to Issue and Sell Stock 6
3.08. Power to Declare Dividends 6
3.09. Corporation's Option to Redeem Shares 7
3.10. Borrowing 8
3.11. Annual and Regular Meetings 8
3.12. Special Meetings 8
3.13. Notice 8
3.14. Waiver of Notice 9
i
<PAGE>
Page
----
3.15. Quorum and Voting 9
3.16. Conference Telephone 9
3.17. Compensation 9
3.18. Action Without a Meeting 9
ARTICLE IV. EXECUTIVE COMMITTEE AND OTHER
COMMITTEES 9
4.01. How Constituted 9
4.02. Powers of the Executive Committee 10
4.03. Other Committees of the Board of Directors 10
4.04. Proceedings, Quorum, and Manner of Acting 10
4.05. Other Committees 10
ARTICLE V. OFFICERS 10
5.01. General 10
5.02. Election, Term of office and Qualifications 11
5.03. Resignation 11
5.04. Removal 11
5.05. Vacancies and Newly Created Offices 11
5.06. Chairman of the Board 11
5.07. President 12
5.08. Vice President 12
5.09. Treasurer and Assistant Treasurers 12
5.10. Secretary and Assistant Secretaries 13
5.11. Subordinate Officers 13
5.12. Remuneration 13
ARTICLE VI. CUSTODY OF SECURITIES AND CASH 14
6.01. Employment of a Custodian 14
6.02. Central Certificate Service 14
6.03. Cash Assets 14
6.04. Free Cash Accounts 14
6.05. Action Upon Termination of Custodian Agreement 15
ii
<PAGE>
Page
----
ARTICLE VII. EXECUTION OF INSTRUMENTS, VOTING OF
SECURITIES 15
7.01. Execution of Instruments 15
7.02. Voting of Securities 15
ARTICLE VIII. CAPITAL STOCK 15
8.01. Certificate of Stock 15
8.02. Transfer of Capital Stock 16
8.03. Transfer Agents and Registrars 16
8.04. Transfer Restriction and Regulations 17
8.05. Fixing of Record Date 17
8.06. Lost, Stolen, or Destroyed Certificates 17
ARTICLE IX. FISCAL YEAR, ACCOUNTANT 18
9.01. Fiscal Year 18
9.02. Accountant 18
ARTICLE X. INDEMNIFICATION, ADVANCE PAYMENT OF
EXPENSES, AND INSURANCE 19
10.01. Indemnification 19
10.02. Advance Payment of Expenses 20
l0.03. Insurance of Officers, Directors, Employees,
and Agents 20
ARTICLE XI. AMENDMENTS 20
11.01. General 20
11.02. By Shareholders Only 21
ARTICLE XII. MISCELLANEOUS 21
12.01 Use of the Term "Annual Meeting" 21
iii
<PAGE>
PACIFIC GLOBAL FUND, INC.
(A Maryland Corporation)
BY-LAWS
ARTICLE I. NAME OF CORPORATION,
LOCATION OF OFFICES, AND SEAL
Section 1.01. NAME: The name of the Corporation is the Pacific Global
Fund, Inc.
Section 1.02. PRINCIPAL OFFICE: The principal office of the Corporation in
the State of Maryland shall be located at 32 South Street, Baltimore, Maryland
21202, c/o The Corporation Trust Incorporated. The Corporation may, in addition,
establish and maintain such other offices and places of business, within or
outside the State of Maryland, as the Board of Directors may from time to time
determine. [MGCL, Sections 2-103(4), 2-108(a)(1)]*
Section 1.03. SEAL: The corporate seal of the Corporation shall be
circular in form, and shall bear the name of the Corporation, the year of its
incorporation, and the words "Corporate Seal, Maryland." The form of the seal
shall be subject to alteration by the Board of Directors and the seal may be
used by causing it or a facsimile to be impressed or affixed or printed or
otherwise reproduced. In lieu of affixing the corporate seal to any document it
shall be sufficient to meet the requirements of any law, rule, or regulation
relating to a corporate seal to affix the word "(Seal)" adjacent to the
signature of the authorized officer of the Corporation. Any officer or Director
of the Corporation shall have authority to affix the corporate seal of the
Corporation to any document requiring the same. [MGCL, Sections 1-304(b),
2-103(3)]
ARTICLE II. SHAREHOLDERS
Section 2.01. ANNUAL MEETINGS: The Corporation shall not be required to
hold an annual meeting of its shareholders in any year in which election of
Directors is not required to be acted upon under the Investment Company Act. In
the event that the Corporation shall be required by the Investment Company Act
to hold an annual meeting of shareholders, such meeting shall be held: (a) at a
date and time set by the Board of Directors in accordance with the Investment
Company Act if the purpose of the meeting is to elect Directors, but in no event
later than one hundred and twenty (120) days after the event requiring the
annual meeting; and (b) on a date and
- -------------------------
*Bracketed citations are to the State of Maryland General Corporation Law
("MGCL") or to the United States Investment Company Act of 1940, as amended (the
"Investment Company Act"), or to Rules of the United States Securities and
Exchange Commission thereunder ("ICA Rules"). The citations are inserted for
reference only and do not constitute a part of the By-Laws.
<PAGE>
time fixed by the Board of Directors during the month of April (i) in the fiscal
year immediately following the fiscal year in which independent accountants were
appointed by the Board of Directors if the purpose of the meeting is to ratify
the selection of such independent accountants or (ii) in any fiscal year if an
annual meeting is to be held for any reason other than as specified in the
foregoing. Any shareholders' meeting held in accordance with the preceding
sentence shall for all purposes constitute the annual meeting of shareholders
for the fiscal year of the Corporation in which the meeting is held. At any such
meeting, the shareholders shall elect Directors to hold the offices of any
Directors who have held office for more than one (1) year or who have been
elected by the Board of Directors to fill vacancies which result from any cause.
Except as the Articles of Incorporation or applicable law provides otherwise,
Directors may transact any business within the powers of the Corporation as may
properly come before the meeting. Any business of the Corporation may be
transacted at the annual meeting without being specially designated in the
notice, except such business as is specifically required by applicable law to be
stated in the notice. [MGCL, Section 2-501]
Section 2.02. SPECIAL MEETINGS: Special meetings of the shareholders may
be called at any time by the Chairman of the Board, if there be such an officer,
the President, any Vice President, or by the Board of Directors. Special
meetings of the shareholders also shall be called by the Secretary on the
written request of shareholders entitled to cast at least ten (10) percent of
all the votes entitled to be cast at such meeting, PROVIDED that (a) such
request shall state the purpose or purposes of the meeting and the matters
proposed to be acted on, and (b) the shareholders requesting the meeting shall
have paid to the Corporation the reasonably estimated cost of preparing and
mailing the notice thereof, which the Secretary shall determine and specify to
such shareholders. Unless requested by shareholders entitled to cast a majority
of all the votes entitled to be cast at the meeting, a special meeting need not
be called to consider any matter which is substantially the same as a matter
voted upon at any annual or special meeting of the shareholders held during the
preceding twelve (12) months. [MGCL, Section 2-502; Investment Company Act,
Section 16(c)]
Section 2.03. PLACE OF MEETINGS: All shareholders' meetings shall be held
at such place within the United States as may be fixed from time to time by the
Board of Directors. [MGCL, Section 2-503]
Section 2.04. NOTICE OF MEETINGS: Not less than ten (10) days, nor more
than ninety (90) days before each shareholders' meeting, the Secretary or an
Assistant Secretary of the Corporation shall give to each shareholder entitled
to vote at the meeting, and each other shareholder entitled to notice of the
meeting, written notice stating (a) the time and place of the meeting, and (b)
the purpose or purposes of the meeting if the meeting is a special meeting or if
notice of the purpose is required by applicable law to be given. Such notice
shall be personally delivered to the shareholder, or left at his residence or
usual place of business, or mailed to him at his address as it appears on the
records of the Corporation. No notice of a shareholders' meeting need be given
to any shareholder who shall sign a written waiver of such notice, whether
before or after the
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meeting, which is filed with the records of shareholders' meetings, or to any
shareholder who is present at the meeting in person or by proxy. Notice of
adjournment of a shareholders' meeting to another time or place need not be
given if such time and place are announced at the meeting, un less the
adjournment is for more than one hundred and twenty (120) days after the
original record date. [MGCL, Sections 2-504, 2-511(d)]
Section 2.05. VOTING - IN GENERAL: Except as otherwise specifically
provided in the Articles of Incorporation or these By-Laws, or as required by
provisions of the Investment Company Act or other applicable law, with respect
to the vote of a series or class, if any, of the Corporation, at every
shareholders' meeting, each shareholder shall be entitled to one (1) vote for
each share of stock of the Corporation validly issued and outstanding and held
by such shareholder, except that no shares held by the Corporation shall be
entitled to a vote. Fractional shares shall be entitled to fractional votes.
Except as otherwise specifically provided in the Articles of Incorporation, or
these By-Laws, or as required by provisions of the Investment Company Act or
other applicable law, a majority of all the votes cast at a meeting at which a
quorum is present is sufficient to approve any matter which properly comes
before the meeting. The vote upon any question shall be by ballot whenever
requested by any person entitled to vote, but, unless such a request is made,
voting may be conducted in any way approved by the meeting. [MGCL, Sections
2-214(a)(1), 2-506(a)(2), 2-507(a), 2-509(b)]
Section 2.06. SHAREHOLDERS ENTITLED TO VOTE: If, pursuant to Section 8.05
hereof, a record date has been fixed for the determination of shareholders
entitled to notice of or to vote at any shareholders' meeting, each shareholder
of the Corporation shall be entitled to vote in person or by proxy, each share
or fraction of a share of stock outstanding in his name on the books of the
Corporation on such record date. If no record date has been fixed for the
determination of shareholders, the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be the close of business on the day on which notice of the meeting is mailed or
the thirtieth (30th) day before the meeting, whichever is the closer date to the
meeting, or, if notice is waived by all shareholders, at the close of business
on the tenth (10th) day next preceding the date of the meeting. [MGCL, Sections
2-507, 2-511]
Section 2.07. VOTING - PROXIES: The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed in
writing by the shareholder himself, or by his attorney thereunto duly authorized
in writing. No proxy shall be valid more than eleven (11) months after its date
unless it provides for a longer period. Unless otherwise agreed to in writing,
the holder of record of a share of stock which actually belongs to another shall
issue a proxy to vote the share to the actual owner on his demand. [MGCL,
Section 2-507(b)]
3
<PAGE>
Section 2.08. QUORUM: The presence at any shareholders' meeting, in person
or by proxy, of shareholders entitled to cast a majority of the votes entitled
to be cast at the meeting shall constitute a quorum. [MGCL, Section 2-506(a)]
Section 2.09. ABSENCE OF QUORUM: In the absence of a quorum, the holders
of a majority of shares entitled to vote at the meeting and present thereat in
person or by proxy, or, if no shareholder entitled to vote is present in person
or by proxy, any officer present who is entitled to preside at or act as
Secretary of such meeting, may adjourn the meeting SINE DIE or from time to
time. Any business that might have been transacted at the meeting originally
called may be transacted at any such adjourned meeting at which a quorum is
present.
Section 2.10. STOCK LEDGER AND LIST OF SHAREHOLDERS: It shall be the duty
of the Secretary or Assistant Secretary of the Corporation to cause an original
or duplicate stock ledger to be maintained at the office of the Corporation's
transfer agent, containing the names and addresses of all shareholders and the
number of shares of each series or class held by each shareholder. Such stock
ledger may be in written form, or any other form capable of being converted into
written form within a reasonable time for visual inspection. One or more
persons, who together and for at least six (6) months have been shareholders of
record of at least five (5) percent of the outstanding capital stock of the
Corporation, may submit (unless the Corporation at the time of the request
maintains a duplicate stock ledger at its principal office) a written request
to any officer of the Corporation or its resident agent in Maryland for a list
of the shareholders of the Corporation. Within twenty (20) days after such a
request, there shall be prepared and filed at the Corporation's principal office
a list, verified under oath by an officer of the Corporation or by its transfer
agent or registrar, which sets forth the name and address of each shareholder
and the number of shares of each series or class which the shareholder holds.
[MGCL, Sections 2-209, 2-513]
Section 2.11. INFORMAL ACTION BY SHAREHOLDERS: Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting, if the following are filed with the records of shareholders' meetings:
(a) A unanimous written consent which sets forth the action and is
signed by each shareholder entitled to vote on the matter; and
(b) A written waiver of any right to dissent signed by each shareholder
entitled to notice of the meeting, but not entitled to vote at it.
[MGCL, Section 2-505]
4
<PAGE>
ARTICLE III. BOARD OF DIRECTORS
Section 3.01. NUMBER AND TERM OF OFFICE: The Board of Directors shall
consist of three (3) Directors, which number may be increased or decreased by a
resolution of a majority of the entire Board of Directors, PROVIDED that the
number of Directors shall not be more than eleven (11) nor less than the lesser
of (i) three (3) or (ii) the number of shareholders of the Corporation. Each
Director (whenever elected) shall hold office until the next annual meeting of
shareholders and until his successor is elected and qualified or until his
earlier death, resignation, or removal. [MGCL, Sections 2-402, 2-404, 2-405]
Section 3.02. QUALIFICATION OF DIRECTORS: No member of the Board of
Directors need be a shareholder of the Corporation, but at least one (1) member
of the Board of Directors shall be a person who is not an interested person (as
such term is defined in the Investment Company Act) of the investment adviser of
the Corporation, nor an officer or employee of the Corporation. [MGCL, Section
2-403; Investment Company Act, Section 10(d)]
Section 3.03. ELECTION OF DIRECTORS: Until the first annual meeting of
shareholders, or until successors are duly elected and qualified, the Board of
Directors shall consist of the persons named as such in the Articles of
Incorporation. Thereafter, except as otherwise provided in Sections 3.04 and
3.05 hereof, at each annual meeting, the shareholders shall elect Directors to
hold office until the next annual meeting and/or until their successors are
elected and qualified. In the event that Directors are not elected at an annual
shareholders' meeting, then Directors may be elected at a special shareholders'
meeting. Directors shall be elected by vote of the holders of a plurality of the
shares present in person or by proxy and entitled to vote. [MGCL, Section 2-404]
Section 3.04. REMOVAL OF DIRECTORS: At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any Director or Directors from office, either with or without
cause, and may elect a successor or successors to fill any resulting vacancies
for the unexpired terms of any removed Directors. [MGCL, Sections 2-406, 2-407]
Section 3.05. VACANCIES AND NEWLY CREATED DIRECTORSHIPS: In the event that
at any time, other than the time preceding the first meeting of shareholders,
any vacancies occur in the Board of Directors by reason of resignation, removal,
or otherwise, or if the authorized number of Directors is increased, the
Directors then in office shall continue to act, and such vacancies (if not
previously filled by the shareholders) may be filled by a majority of the
Directors then in office, whether or not sufficient to constitute a quorum,
PROVIDED that, immediately after filling such vacancy, at least two-thirds of
the Directors then holding office shall have been elected to such office by the
shareholders of the Corporation. In the event that at any time, other than the
time preceding the first meeting of shareholders, less than a majority of the
Directors of the Corporation holding office at that time were so elected by the
shareholders, a meeting of the
5
<PAGE>
shareholders shall be held promptly and in any event within sixty (60) days for
the purpose of electing Directors to fill any existing vacancies in the Board of
Directors unless the Securities and Exchange Commission shall by order extend
such period. Except as provided in Section 3.04 hereof, a Director elected by
the Board of Directors to fill a vacancy shall be elected to hold office until
the next annual meeting of shareholders or until his successor is elected and
qualified. A Director elected by the shareholders to fill a vacancy which
results from the removal of a Director serves for the balance of the term of the
removed Director. [MGCL, Section 2-407; Investment Company Act, Section 16(a)]
Section 3.06. GENERAL POWERS:
(a) The property, business, and affairs of the Corporation shall be
managed under the direction of the Board of Directors, which may exercise all
the powers of the Corporation except such as are by applicable law, by the
Articles of Incorporation, or by these By-Laws conferred upon or reserved to the
shareholders of the Corporation. [MGCL, Section 2-401]
(b) All acts done by any meeting of the Board of Directors or by any
person acting as a Director, so long as his successor shall not have been duly
elected or appointed, shall be treated as valid as if the Directors or such
person, as the case may be, were or was duly elected and qualified to be
Directors or a Director of the Corporation, notwithstanding that it may be
afterwards discovered that there was some defect in the election of the
Directors or such person acting as a Director, or that they or any of them were
disqualified.
Section 3.07. POWER TO ISSUE AND SELL STOCK: The Board of Directors may
from time to time authorize by resolution the issuance and sale of any of the
Corporation's authorized shares to such persons as the Board of Directors shall
deem advisable. Such resolution shall set the minimum price or value of
consideration for the stock or a formula for its determination, and shall
include a fair description of any consideration, other than money, and a
statement of the actual value of such consideration as determined by the Board
of Directors or a statement that the Board of Directors has determined that the
actual value is or will be not less than a certain sum. [MGCL, Section 2-203]
Section 3.08. POWER TO DECLARE DIVIDENDS:
(a) The Board of Directors, from time to time as it may deem advisable,
may declare that the Corporation pay dividends, in cash, property, or shares of
the Corporation available for dividends, out of any source available for
dividends, to the shareholders according to their respective rights and
interests.
(b) The Board of Directors shall cause a written statement to accompany
any dividend payment wholly or partly from any source other than the
Corporation's accumulated undistributed
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<PAGE>
net income not including profits or losses realized upon the sale of securities
or other properties (as determined in accordance with good accounting practice
and the rules and regulations of the Securities and Exchange Commission then in
effect). Such statement shall adequately disclose the source or sources of such
payment and the basis of calculation and shall be otherwise in such form as the
Securities and Exchange Commission may prescribe. [Investment Company Act,
Section 19 and ICA Rule 19a-l]
(c) Notwithstanding the above provisions of this Section 3.08, the Board
of Directors may at any time declare and distribute pro rata among the
shareholders a stock dividend out of the Corporation's authorized but unissued
shares of stock, including any shares previously redeemed by the Corporation.
The shares so distributed may be declared and paid to the holders of shares of
another series or class. The shares so distributed shall be issued at the par
value thereof, and there shall be transferred to stated capital, at the time
such dividend is paid, an amount of surplus equal to the aggregate par value of
the shares issued as a dividend and there may be transferred from earned surplus
to capital surplus such additional amount as the Board of Directors may
determine. [MGCL, Section 2-309]
Section 3.09. CORPORATION'S OPTION TO REDEEM SHARES:
(a) SMALL ACCOUNT. The Corporation shall have the right at any time and
without prior notice to the shareholder to redeem for their then-current net
asset value per share all shares that are held by a shareholder whose shares of
the Corporation or of any and all series or class have an aggregate net asset
value of less than [$500,] or such other amount as the Board of Directors may
from time to time determine.
(b) CESSATION OF OFFERING. If in the sole determination of the Board of
Directors, the continuation of the offering of the shares of any one or more
series or class is no longer in the best interests of the Corporation, E.G.
because market conditions have changed, regulatory problems have developed, or
participation in such series or class is low, the Corporation may cease the
offering of such shares and may by majority vote of the Board of Directors,
require the redemption of all outstanding shares of stock of such series or
class at their then-current net asset value upon thirty (30) days prior written
notice to the stockholders, all subject to the requirements of applicable law.
(c) REIMBURSEMENT. The Corporation shall have the right at any time and
without prior notice to the shareholder to redeem shares in any account,
including any account of any series or class, for their then-current net asset
value per share if and to the extent it shall be necessary to reimburse the
Corporation or its principal underwriter or distributor for any loss sustained
by the Corporation by reason of the failure of the shareholder in whose name
such account is registered to make full payment for shares of the Corporation,
or of any series or class thereof, purchased by such shareholder.
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(d) PERSONAL HOLDING COMPANY. The Corporation shall have the right at any
time and without prior notice to the shareholder to redeem shares in any account
for their then-current net asset value per share if such redemption is, in the
opinion the Board of Directors, desirable in order to avoid the Corporation
being taxed as a "personal holding company" within the meaning of the Internal
Revenue Code of 1986, as amended.
(e) NOTICE. The right of redemption provided by each of foregoing
subsections of this Section 3.09 hereof shall be subject to such terms and
conditions as the Board of Directors may from time to time approve, and subject
to the Corporation's giving general notice of its intention to avail itself of
such right, either by publication in the Corporation's prospectus or Statement
of Additional Information or by such means as the Board of Directors shall
determine.
Section 3.10. BORROWING: The Board of Directors, from time to time as it
may deem advisable, may establish limitations upon the borrowing of money and
pledging of assets by the Corporation.
Section 3.11. ANNUAL AND REGULAR MEETINGS: The annual meeting of the Board
of Directors held for the purpose of choosing officers and transacting other
proper business shall be held after the annual shareholders' meeting at such
time and place as may be specified in the notice of such meeting of the Board of
Directors or, in the absence of such annual shareholders' meeting, at such time
and place as the Board of Directors may provide. The Board of Directors from
time to time may provide by resolution for the holding of regular meetings and
fix their time and place (within or outside the State of Maryland). [MGCL,
Section 2-409(a)]
Section 3.12. SPECIAL MEETINGS: Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, if there be such an
officer, the President (or, in the absence or disability of the President, by
any Vice President), the Treasurer, or two (2) or more Directors, at the time
and place (within or outside the State of Maryland) specified in the respective
notices or waivers of notice of such meetings. [MGCL, Section 2-502]
Section 3.13. NOTICE: Notice of annual, regular, and special meetings
shall be in writing, stating the time and place, and shall be mailed to each
Director at his residence or regular place of business or caused to be delivered
to him personally or to be transmitted to him by telegraph, telecopy, cable, or
wireless at least two (2) days before the day on which the meeting is to be
held. Except as otherwise required by these By-Laws or the Investment Company
Act, such notice need not include a statement of the business to be transacted
at, or the purpose of, the meeting. [MGCL, Section 2-409(b)]
Section 3.14. WAIVER OF NOTICE: No notice of any meeting need be given to
any Director who is present at the meeting or to any Director who signs a waiver
of the notice of the meeting (which waiver shall be filed with the records of
the meeting) whether before or after the meeting. [MGCL, Section 2-409(c)]
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Section 3.15. QUORUM AND VOTING: At all meetings of the Board of Directors
the presence of one-third of the total number of Directors, but not less than
two (2) Directors if there are at least (2) two Directors, shall constitute a
quorum. In the absence of a quorum, a majority of the Directors present may
adjourn the meeting, from time to time, until a quorum shall be present. The
action of a majority of the Directors present at a meeting at which a quorum is
present shall be the action of the Board of Directors unless the concurrence of
a greater proportion is required for such action by applicable law, by the
Articles of incorporation, or by these By-Laws. [MGCL, Section 2-408]
Section 3.16. CONFERENCE TELEPHONE: Members of the Board of Directors or
of any committee designated by the Board of Directors may participate in a
meeting of the Board of Directors or of such committee by means of a conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other at the same time. Participation by such means
shall constitute presence in person at such meeting, unless otherwise prohibited
by applicable law. [MGCL, Section 2-409(d); Investment Company Act, Sections 15
and 32]
Section 3.17. COMPENSATION: Each Director may receive such remuneration
for his services as shall be fixed from time to time by resolution of the Board
of Directors.
Section 3.18. ACTION WITHOUT A MEETING: Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting if a unanimous written consent which sets forth
the action is signed by each member of the Board of Directors or of such
committee and such written consent is filed with the minutes of proceedings of
the Board of Directors or committee, unless otherwise prohibited by applicable
law. [MGCL, Section 2-408(c); Investment Company Act, Sections 15 and 32]
ARTICLE IV. EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 4.01. HOW CONSTITUTED: By resolution adopted by the Board of
Directors, the Board of Directors may appoint from among its members one or more
committees, including an Executive Committee and an Audit Committee, each
consisting of at least two (2) Directors. Each member of a committee shall hold
such position at the pleasure of the Board of Directors. [MGCL, Section 2-411]
Section 4.02. POWERS OF THE EXECUTIVE COMMITTEE: Unless otherwise
provided by resolution of the Board of Directors, the Executive Committee, in
the intervals between meetings of the Board of Directors, shall have and may
exercise all of the powers of the Board of Directors to manage the business and
affairs of the Corporation except the power to:
(a) Declare dividends or distributions on stock;
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(b) Issue stock other than as provided in Section 2-411(b) of the
Maryland General Corporation Law as amended from time to time;
(c) Recommend to the shareholders any action which requires shareholder
approval;
(d) Amend these By-Laws; or
(e) Approve any merger or share exchange which does not require
shareholder approval. [MGCL, Section 2-411(a)]
Section 4.03. OTHER COMMITTEES OF THE BOARD OF DIRECTORS: To the extent
provided by resolution of the Board of Directors, other committees shall have
and may exercise any of the powers that may lawfully be granted to the Executive
Committee. [MGCL, Section 2-411 (a)]
Section 4.04. PROCEEDINGS, QUORUM, AND MANNER OF ACTING: In the absence of
an appropriate resolution of the Board of Directors, each committee may adopt
such rules and regulations governing its proceedings, quorum, and manner of
acting as it shall deem proper and desirable, PROVIDED that the quorum shall not
be less than two (2) Directors. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of Directors to act in
the place of such absent member. [MGCL, Section 2-411(c)]
Section 4.05. OTHER COMMITTEES: The Board of Directors may appoint other
committees, each consisting of one or more persons who need not be Directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Board of Directors, but shall not
exercise any power which may lawfully be exercised only by the Board of
Directors or a committee thereof.
ARTICLE V. OFFICERS
Section 5.01. GENERAL: The officers of the Corporation shall be a
President, one or more Vice Presidents (one or more of whom may be designated
Executive Vice President), a Secretary, and a Treasurer, and may include one or
more Assistant Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 5.11 hereof. The Board of Directors may elect,
but shall not be required to elect, a Chairman of the Board of Directors. [MGCL,
Section 2-412]
Section 5.02. ELECTION, TERM OF OFFICE, AND QUALIFICATIONS: The officers
of the Corporation (except those appointed pursuant to Section 5.11 hereof)
shall be elected by the Board
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of Directors at its first meeting and thereafter at each annual meeting of the
Board of Directors. If any officer or officers are not elected at any such
meeting, such officer or officers may be elected at any subsequent regular or
special meeting of the Board of Directors. Except as provided in Sections 5.03,
5.04, and 5.05 hereof, each officer elected by the Board of Directors shall hold
office until the next annual meeting of the Board of Directors and until his
successor shall have been chosen and qualified. Any person may hold two (2) or
more offices of the Corporation, except that either the Chairman of the Board,
if there be such an officer, nor the President, may hold the office of Vice
President. A person who holds more than one office may not act in more than one
(1) capacity to execute, acknowledge, or verify any instrument required by
applicable law, the Articles of Incorporation, or these By-Laws to be executed,
acknowledged, or verified by two (2) or more officers of the Corporation, except
as otherwise permitted or required by law. The Chairman of the Board of
Directors, if there be such an officer, shall be selected from among the
Directors of the Corporation and may hold such office only so long as he
continues to be a Director. No other officer need be a Director.[MGCL, Sections
2-412, 2-413, 2-415]
Section 5.03. RESIGNATION: Any officer may resign his office at any time
by delivering a written resignation to the Board of Directors, the Chairman of
the Board, if there be such an officer, the President, the Secretary, or any
Assistant Secretary. Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 5.04. REMOVAL: Any officer may be removed from office by the Board
of Directors of Directors whenever in the judgment of the Board of Directors the
best interests of the Corporation will be served thereby. [MGCL, Section
2-413(c)]
Section 5.05. VACANCIES AND NEWLY CREATED OFFICES: If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification,
or other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Board of Directors at any meeting or, in
the case of any office created pursuant to Section 5.11 hereof, by any officer
upon whom such power shall have been conferred by the Board of Directors. [MGCL,
Section 2-413(d)]
Section 5.06. CHAIRMAN OF THE BOARD: Unless otherwise provided by
resolution of the Board of Directors, the Chairman of the Board of Directors, if
there be such an officer, shall be the chief executive and operating officer of
the Corporation, shall preside at all shareholders' meetings, and at all
meetings of the Board of Directors. He shall be ex officio a member of all
standing committees of the Board of Directors. Subject to the supervision of the
Board of Directors, he shall have general charge of the business affairs,
property, and operation of the Corporation and its officers, employees, and
agents. He may sign (unless the President or a Vice President shall have signed)
certificates, if any, representing stock of the Corporation authorized for
issuance by the Board of Directors and shall have such other powers and perform
such other duties as may be assigned to him from time to time by the Board of
Directors.
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Section 5.07. PRESIDENT: Unless otherwise provided by resolution of the
Board of Directors, the President shall, at the request of or in the absence or
disability of the Chairman of the Board, or if no Chairman of the Board has been
chosen, preside at all shareholders' meetings and at all meetings of the Board
of Directors and shall in general exercise the powers and perform the duties of
the Chairman of the Board. He may sign (unless the Chairman of the Board or a
Vice President shall have signed) certificates, if any, representing stock of
the Corporation authorized for issuance by the Board of Directors. Except as the
Board of Directors may otherwise order, he may sign in the name and on behalf of
the Corporation all deeds, bonds, contracts, or agreements. He shall exercise
such other powers and perform such other duties as from time to time may be
assigned to him by the Board of Directors.
Section 5.08. VICE PRESIDENT: The Board of Directors shall, from time to
time, designate and elect one or more Vice Presidents (one or more of whom may
be designated Executive Vice President) who shall have such powers and perform
such duties as from time to time may be assigned to them by the Board of
Directors or the President. At the request or in the absence or disability of
the President, the Vice President (or, if there are two (2) or more Vice
Presidents, the Vice President in order of seniority of tenure in such office or
in such other order as the Board of Directors may determine) may perform all the
duties of the President and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Any Vice President may sign
(unless the Chairman of the Board, the President, or another Vice President
shall have signed) certificates, if any, representing stock of the Corporation
authorized for issuance by the Board of Directors.
Section 5.09. TREASURER AND ASSISTANT TREASURERS: The Treasurer shall be
the principal financial and accounting officer of the Corporation and shall have
general charge of the finances and books of account of the Corporation. Except
as otherwise provided by the Board of Directors, he shall have general
supervision of the funds and property of the Corporation and of the performance
by the custodian of its duties with respect thereto. He may countersign (unless
an Assistant Treasurer or Secretary or Assistant Secretary shall have
countersigned) certificates, if any, representing stock of the Corporation
authorized for issuance by the Board of Directors. He shall render to the Board
of Directors, whenever directed by the Board of Directors, an account of the
financial condition of the Corporation and of all his transactions as Treasurer;
and as soon as possible after the close of each fiscal year he shall make and
submit to the Board of Directors a like report for such fiscal year. He shall
cause to be prepared annually a full and correct statement of the affairs of the
Corporation, including a balance sheet and a financial statement of operations
for the preceding fiscal year, which shall be submitted at the annual meeting of
shareholders and filed within twenty (20) days thereafter at the principal
office of the Corporation or, if no annual meeting is held, then within sixty
(60) days of the end of the fiscal year. He shall perform all the acts
incidental to the office of the Treasurer, subject to the control of the Board
of Directors. Any Assistant Treasurer may perform such duties of the Treasurer
as the Treasurer or the Board of Directors may assign, and, in the absence of
the Treasurer, he may
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perform all the duties of the Treasurer and, when so acting, shall have all the
powers of and be subject to all the restrictions upon the Treasurer. [MGCL,
Section 2-313; Investment Company Act, Section 30 and ICA Rule 30d-1]
Section 5.10. SECRETARY AND ASSISTANT SECRETARIES: The Secretary shall
attend to the giving and serving of all notices of the Corporation and shall
record all proceedings of the meetings of the shareholders and Directors in one
or more books to be kept for that purpose. He shall keep in safe custody the
seal of the Corporation and shall have charge of the records of the Corporation,
including the stock books and such other books and papers as the Board of
Directors may direct, and such books, reports, certificates, and other documents
required by law to be kept, all of which shall, at all reasonable times, be open
to inspection by any Director. He shall countersign (unless the Treasurer, an
Assistant Treasurer, or an Assistant Secretary shall have countersigned)
certificates, if any, representing stock of the Corporation authorized for
issuance by the Board of Directors. He shall perform such other duties as
appertain to his office or as may be required by the Board of Directors. Any
Assistant Secretary may perform such duties of the Secretary as the Secretary or
the Board of Directors may assign, and, in the absence of the Secretary, he may
perform all the duties of the Secretary and, when so acting, shall have all the
powers of and be subject to all the restrictions upon the Secretary.
Section 5.11. SUBORDINATE OFFICERS: The Board of Directors from time to
time may appoint such other officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such period, have such authority and
perform such duties as the Board of Directors may determine. The Board of
Directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities, and duties. [MGCL, Section
2-412 (b)]
Section 5.12. REMUNERATION: The salaries or other compensation of the
officers of the Corporation shall be fixed from time to time by resolution of
the Board of Directors, except that the Board of Directors may by resolution
delegate to any person or group of persons the power to fix the salaries or
other compensation of any subordinate officers or agents appointed in accordance
with the provisions of Section 5.11 hereof.
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ARTICLE VI. CUSTODY OF SECURITIES AND CASH
Section 6.01. EMPLOYMENT OF A CUSTODIAN: The Corporation shall place and
at all times maintain in the custody of a Custodian (including any sub-custodian
for the Custodian) all funds, securities, and similar investments owned by the
Corporation. The Custodian shall be a bank having an aggregate capital, surplus,
and undivided profits of not less than $10,000,000. Subject to such rules,
regulations, and orders as the Securities and Exchange Commission may adopt as
necessary or appropriate for the protection of investors, the Corporation's
Custodian may deposit all or a part of the securities owned by the Corporation
in the custody of a sub-custodian or sub-custodians situated within or without
the United States. The Custodian shall be appointed and its remuneration fixed
by the Board of Directors. [Investment Company Act, Section 17(f)]
Section 6.02. CENTRAL CERTIFICATE SERVICE: Subject to the rules,
regulations, and orders as the Securities and Exchange Commission may adopt as
necessary or appropriate for the protection of investors, the Corporation's
Custodian may deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Securities and Exchange Commission,
pursuant to which system all securities of any particular series or class of any
issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities. [Investment Company Act Section 17(f)]
Section 6.03. CASH ASSETS: The cash proceeds from the sale of securities
and similar investments and other cash assets of the Corporation shall be kept
in the custody of a bank or banks appointed pursuant to Section 6.01 hereof, or
in accordance with such rules and regulations or orders as the Securities and
Exchange Commission may from time to time prescribe for the protection of
investors, except that the Corporation may maintain a checking account or
accounts in a bank or banks, each having an aggregate capital, surplus, and
undivided profits of not less than $10,000,000, PROVIDED that the balance of
such account or the aggregate balances of such accounts shall at no time exceed
the amount of the fidelity bond, maintained pursuant to the requirements of the
Investment Company Act and rules and regulations thereunder, covering the
officers or employees authorized to draw on such account or accounts.
[Investment Company Act, Sections 17 (f) and 17(g)]
Section 6.04. FREE CASH ACCOUNTS: The Corporation may, upon resolution of
its Board of Directors, maintain a petty cash account free of the foregoing
requirements of this Article VI in an amount not to exceed $500, PROVIDED that
such account is operated under the imprest system and is maintained subject to
adequate controls approved by the Board of Directors over disbursements and
reimbursements including, but not limited to, fidelity bond coverage for persons
having access to such funds. [Investment Company Act, Section 17(f) and ICA Rule
17f-3]
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Section 6.05. ACTION UPON TERMINATION OF CUSTODIAN AGREEMENT: Upon
resignation of a custodian of the Corporation or inability of a custodian to
continue to serve, the Board of Directors shall promptly appoint a successor
custodian, but in the event that no successor custodian can be found who has the
required qualifications and is willing to serve, the Board of Directors shall
call as promptly as possible a special meeting of the shareholders to determine
whether the Corporation shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a majority of the
outstanding shares of stock of the Corporation, the custodian shall deliver and
pay over all property of the Corporation held by it as specified in such vote.
ARTICLE VII. EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES
Section 7.01. EXECUTION OF INSTRUMENTS: All deeds, documents, transfers,
contracts, agreements, requisitions or orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Corporation, and
other instruments requiring execution by the Corporation shall be signed by the
Chairman of the Board, if there be such an officer, the President, a Vice
President, or the Treasurer, or as the Board of Directors may otherwise
authorize, from time to time. Any such authorization may be general or confined
to specific instances.
Section 7.02. VOTING OF SECURITIES: Unless otherwise ordered by the Board
of Directors, the Chairman of the Board, if there be such an officer, the
President, or any Vice President shall have full power and authority on behalf
of the Corporation to attend and to act and to vote, or in the name of the
Corporation to execute proxies to vote, at any meeting of shareholders of any
company in which the Corporation may hold stock. At any such meeting such
officer shall possess and may exercise (in person or by proxy) any and all
rights, powers, and privileges incident to the ownership of such stock. The
Board of Directors may by resolution from time to time confer like powers upon
any other person or persons. [MGCL, Section 2-509]
ARTICLE VIII. CAPITAL STOCK
Section 8.01. CERTIFICATE OF STOCK:
(a) The Board of Directors may authorize the issuance of some or all
shares of any or all series or classes of the Corporation stock without
certificates. At the time of the issuance of shares without certificates, the
Corporation shall send to the shareholder a written statement of the information
required to be on certificates by Section 2-211 of the Maryland General
Corporation Law, as amended. [MGCL, Section 2-210]
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(b) In the event certificates of stock of the Corporation are to be
issued, then such certificates shall be in the form approved by the Board of
Directors. Certificates of stock, if any, shall be signed in the name of the
Corporation by the Chairman of the Board, if there be such an officer, or the
President, or any Vice President and countersigned by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, and shall
certify the number and kind of shares owned by the holder thereof in the
Corporation. Such certificate may be sealed with the corporate seal of the
Corporation. Such signatures may be either manual or facsimile signatures and
the seal may be either facsimile or any other form of seal. [MGCL, Sections
2-210(a), 2-212]
(c) In case any officer, transfer agent, or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer, transfer agent or registrar (because
of death, resignation or otherwise) before such certificate is issued, such
certificate may be issued and delivered by the Corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of issue.
[MGCL, Section 2-212(c)]
(d) The number of any certificate issued, the name of the person owning
the shares represented thereby, the number of such shares, and the date of
issuance shall be entered upon the stock books of the Corporation at the time of
issuance.
(e) Every certificate exchanged, surrendered for redemption, or otherwise
returned to the Corporation shall be marked "Cancelled" with the date of
cancellation.
Section 8.02. TRANSFER OF CAPITAL STOCK:
(a) Shares of stock of the Corporation shall be transferable only upon the
books of the Corporation kept for such purpose and, if one or more certificates
representing such shares have been issued, upon surrender to the Corporation or
its transfer agent or agents of such certificate or certificates duly endorsed,
or accompanied by appropriate evidence of assignment, transfer, succession, or
authority to transfer.
(b) The Corporation shall be entitled to treat the holder of record of any
share of stock as the absolute owner thereof for all purposes, and accordingly
shall not be bound to recognize any legal, equitable, or other claim or interest
in such share on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided law.
Section 8.03. TRANSFER AGENTS AND REGISTRARS: The Board of Directors may,
from time to time, appoint or remove transfer agents and registrars of transfers
of shares of stock of the Corporation, and it may appoint the same person as
both transfer agent and registrar. Upon any such appointment being made all
certificates, if any, representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers and shall not be valid unless so countersigned.
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Section 8.04. TRANSFER RESTRICTIONS AND REGULATIONS: The shares of any
series or class within a series of the Corporation may be transferred only upon
the prior approval of the Board of Directors. The Board of Directors may, from
time to time, adopt lawful rules and regulations with reference to the method of
transfer of the shares of stock of the Corporation.
Section 8.05. FIXING OF RECORD DATE: The Board of Directors may fix in
advance a date as a record date for the determination of the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion, or exchange of stock, or for any other proper purpose, PROVIDED
that such record date shall be a date not more than ninety (90) days nor, in the
case of a meeting of shareholders, less than ten (10) days prior to the date on
which the particular action, requiring such determination of shareholders, is to
be taken. In such case, only such shareholders of record on the record date so
fixed shall be entitled to such notice of, and to vote at, such meeting or
adjournment, or to give such consent, or to receive payment of such dividend or
other distribution, or to receive such allotment of rights, or to exercise such
rights, or to take other action, as the case may be, notwithstanding any
transfer of any shares on the books of the Corporation after any such record
date. A meeting of shareholders convened on the date for which it was called may
be adjourned from time to time without notice to a date not more than one
hundred and twenty (120) days after the original record date. [MGCL, Section
2-511]
Section 8.06. LOST, STOLEN, OR DESTROYED CERTIFICATES: Before issuing a
new certificate for stock of the Corporation alleged to have been lost, stolen,
or destroyed the Board of Directors, or any officer authorized by the Board of
Directors, may, in its discretion, require the owner of the lost, stolen, or
destroyed certificate (or his legal representative) to give the Corporation a
bond or other indemnity, in such form and in such amount as the Board of
Directors or any such officer may direct and with such surety or sureties as may
be satisfactory to the Board of Directors or any such officer, sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft, or destruction of any such certificate or
the issuance of such new certificate. The issuance of a new certificate under
such circumstances shall not constitute an overissue of the shares represented
thereby. [MGCL, Section 2-213]
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ARTICLE IX. FISCAL YEAR, ACCOUNTANT
Section 9.01. FISCAL YEAR: The fiscal year of the Corporation shall be
the twelve (12) calendar months beginning on the first day of January in each
year and ending on the last day of the following December, or such other period
of twelve (12) calendar months as the Board of Directors may by resolution
prescribe.
Section 9.02. ACCOUNTANT:
(a) The Corporation shall employ an independent public accountant or firm
of independent public accountants as its accountant to examine the accounts of
the Corporation and to sign and certify the Corporation's financial statements,
which may be filed with various regulatory agencies. The accountant's
certificates and reports shall be addressed both to the Board of Directors and
to the shareholders.
(b) A majority of the members of the Board of Directors who are not
"interested persons" (as such term is defined in Section 2(a)(19) of the
Investment Company Act) of the Corporation shall select the accountant, by vote
cast in person, at any meeting held before the first annual shareholders'
meeting, and thereafter shall select the accountant annually, by vote cast in
person, at a meeting held within thirty (30) days before or ninety (90) days
after the beginning of the fiscal year of the Corporation or within thirty (30)
days before the annual shareholders' meeting, if any, held in that year. Such
selection shall be submitted for ratification or rejection at the next
succeeding annual shareholders' meeting. If the holders of a majority vote of
the outstanding voting securities at such meeting reject such selection, the
accountant shall be selected by majority vote of the Corporation's outstanding
voting securities, either at the meeting at which the rejection occurred or at a
subsequent meeting of shareholders called for that purpose. [Investment Company
Act, Section 32(a) and ICA Rule 32a-3]
(c) Any vacancy occurring between annual meetings, due to the death or
resignation of the accountant, may be filled by the vote of a majority of those
members of the Board of Directors who are not "interested persons" (as such term
is defined in Section 2(a)(19) of the Investment Company Act) of the
Corporation, cast in person at a meeting called for the purpose of voting on
such action.
(d) The employment of the accountant shall be conditioned upon the right
of the Corporation by vote of a majority of the outstanding voting securities at
any meeting called for the purpose to terminate such employment forthwith
without any penalty. [Investment Company Act, Section 32(a)]
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ARTICLE X. INDEMNIFICATION, ADVANCE PAYMENT
OF EXPENSES, AND INSURANCE
Section 10.01. INDEMNIFICATION: The Corporation shall indemnify any
individual ("Indemnitee") who is a present or former Director, officer,
employee, or agent of the Corporation, or who is or has been serving at the
request of the Corporation as a director, officer, partner, trustee, employee,
or agent of another corporation, partnership, joint venture, trust or other
enterprise, who, by reason of his service in that capacity, was, is, or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(hereinafter collectively referred to as a "Proceeding") against any judgments,
penalties, fines, settlements, and reasonable expenses (including attorneys'
fees) incurred by such Indemnitee in connection with any Proceeding, to the
fullest extent that such indemnification may be lawful under the Maryland
General Corporation Law. Subject to any applicable limitations and requirements
set forth in the Corporation's Articles of Incorporation and in these By-Laws,
any payment of indemnification or advance of expenses, as provided below, shall
be made in accordance with the procedures set forth in the Maryland General
Corporation Law. [MGCL, Section 2-418(b)]
Notwithstanding the foregoing, nothing herein shall protect or purport to
protect any Indemnitee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office (such
conduct hereinafter referred to as "Disabling Conduct"). [Investment Company
Act, Section 17(h)]
Anything in this Article X to the contrary notwithstanding, no
indemnification shall be made by the Corporation to any Indemnitee unless:
(a) there is a final decision on the merits by a court or other body
before whom the Proceeding was brought that the Indemnitee was not liable by
reason of Disabling Conduct; or
(b) in the absence of such a decision, there is a reasonable
determination, based upon a review of the facts, that the Indemnitee was not
liable by reason of Disabling Conduct, which determination shall be made by:
(i) the vote of a majority of a quorum of Directors who are neither
"interested persons" of the Corporation as defined in Section
2(a)(19) of the Investment Company Act, nor parties to the
Proceeding; or
(ii) an independent legal counsel in a written opinion. [MGCL, Section
2-418(e)]
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Section 10.02. ADVANCE PAYMENT OF EXPENSES: The Corporation shall pay any
reasonable expenses so incurred by such Indemnitee in defending a Proceeding in
advance of the final disposition thereof to the fullest extent that such advance
payment may be lawful under the Maryland General Corporation Law. [MGCL, Section
2-418 (f)]
Anything in this Article X to the contrary notwithstanding, any advance of
expenses by the Corporation to any Indemnitee shall be made only upon receipt
of: (a) a written affirmation by the Indemnitee of his good faith belief that
the requisite standard of conduct necessary for indemnification under the
Maryland General Corporation Law has been met and (b) a written undertaking by
such Indemnitee to repay the advance if it is ultimately determined that such
standard of conduct has not been met, and if one of the following conditions is
met:
(a) the Indemnitee provides a security for his undertaking; or
(b) the Corporation shall be insured against losses arising by reason of
any lawful advances; or
(c) there is a determination, based on a review of readily available
facts, that there is reason to believe that the Indemnitee will ultimately be
found entitled to indemnification, which determination shall be made by:
(i) a majority of a quorum of Directors who are neither "interested
persons" of the Corporation as defined in Section 2(a)(19) of the
Investment Company Act, nor parties to the Proceeding; or
(ii) an independent legal counsel in a written opinion.
Section 10.03. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS:
To the fullest extent permitted by applicable Maryland law and by Section 17(h)
of the Investment Company Act, as from time to time amended, the Corporation may
purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee, or agent of the Corporation, or who is or was
serving at the request of the Corporation as a director, officer, partner,
trustee, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against any liability asserted against him and
incurred by him in or arising out of his position, whether or not the
Corporation would have the power to indemnify him against such liability. [MGCL,
Section 2-418(k)]
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ARTICLE XI. AMENDMENTS
Section 11.01. GENERAL: Except as provided in Section 11.02 hereof, all
By-Laws of the Corporation, whether adopted by the Board of Directors or the
shareholders, shall be subject to amendment, alteration, or repeal, and new
By-Laws may be made, by the affirmative vote of a majority of either:
(a) the holders of record of the outstanding shares of stock of the
Corporation entitled to vote, at any annual or special meeting the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal, or new By-Law; or
(b) the Directors present at any regular or special meeting at which a
quorum is present if the notice or waiver of notice thereof or material sent to
the Directors in connection therewith on or prior to the last date for the
giving of such notice under these By-Laws shall have specified or summarized the
proposed amendment, alteration, repeal, or new By-Law. [MGCL, Section 2-109]
Section 11.02. BY SHAREHOLDERS ONLY:
(a) No amendment of any section of these By-Laws shall be made except by
the shareholders of the Corporation if the shareholders shall have provided in
the By-Laws that such section may not be amended, altered, or repealed except by
the shareholders.
(b) From and after the issuance of any shares of the Corporation, no
amendment of this Article XI shall be made except by the shareholders of the
Corporation.
ARTICLE XII. MISCELLANEOUS
Section 12.01. USE OF THE TERM "ANNUAL MEETING": The use of the term "annual
meeting" in these By-Laws shall not be construed as implying a requirement that
a shareholder meeting be held annually.
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EXHIBIT 4(a)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT made as of the 16th day of October,
1992, by and between Pacific Global Fund, Inc., a Maryland corporation doing
business as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the
Government Securities Fund (the "Fund"), and Pacific Global Investment
Management Company, a California corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and register as such under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is a separately designated series of shares of Common
Stock of the Corporation; and
WHEREAS, the Investment Manager is engaged principally in the business of
rendering investment management and investment advisory services and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Corporation desires to retain the Investment Manager to
render investment supervisory and administrative services to the Fund in the
manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Corporation and the Investment Manager propose to engage a
subadviser ("Sub-Adviser") to provide certain investment advisory and other
services to the Fund, subject to the approval of the Board of Directors of the
Corporation and, to the extent required by law, subject to the approval of the
shareholders of the Fund;
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1 INVESTMENT SUPERVISORY SERVICES. The Investment Manager shall, subject
to the supervision of the Board of Directors of the Corporation, act as
investment manager of the Corporation with respect to the Fund and, as such,
shall:
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1.1.1 INVESTMENT OF FUND'S ASSETS. Supervise and direct, or cause
the Sub-Adviser to supervise and direct, the investment of the Fund's
assets in accordance with applicable law, and the investment objectives,
investment program, policies, and restrictions set forth in the
then-current prospectus ("Prospectus") and the then-current Statement of
Additional Information ("SAI") relating to the Fund contained in the
Corporation's Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended ("1933 Act"), and subject to such further
limitations as the Board of Directors of the Corporation may, from time to
time, impose by written notice to the Investment Manager.
1.1.2 INVESTMENT PROGRAM. Formulate and implement, or cause the
Sub-Adviser to formulate and implement, a continuing program for the
management of the Fund's assets and resources.
In furtherance of these duties and responsibilities, the Investment
Manager is authorized, in its discretion and without prior consultation
with the Corporation to: (i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and other securities or assets for
the Fund; and (ii) place orders and negotiate the commissions (if any) for
the execution of transactions in securities with or through such brokers,
dealers, underwriters, or issuers as the Investment Manager or Sub-Adviser
may select for the Fund.
1.2 RELATED SERVICES. The Investment Manager shall supervise the Transfer
Agent's performance of the administration of all aspects of the Corporation's
business and affairs with respect to the Fund as performed by the transfer agent
pursuant to an Administrative Services Agreement.
1.2.1 AGENTS. Assist the Corporation and transfer agent in
selecting, coordinating the activities of, supervising, and acting as
liaison with any other persons and agents engaged by the Corporation,
including the Corporation's custodian, accounting services agent, transfer
agent, dividend disbursing agent, shareholder servicing agent, independent
auditors, and independent legal counsel.
1.2.2 DIRECTORS AND OFFICERS. Authorize and permit the Investment
Manager's directors, officers and employees who may be elected or
appointed as directors or officers of the Corporation to serve in such
capacities, without remuneration from or additional cost to the
Corporation.
1.2.3 REPORTS TO THE CORPORATION. Furnish to or place at the
disposal of the Corporation such information, reports, evaluations,
analyses, and opinions relating to its functions as the Corporation may,
at any time or from time to time, reasonably request or as the Investment
Manager may deem helpful to the Corporation.
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2. ALLOCATION OF EXPENSES.
2.1 EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1 SALARIES AND FEES OF DIRECTORS AND OFFICERS. As between the
Corporation, with respect to the Fund, and the Investment Manager, the
Investment Manager shall pay all salaries, expenses, and fees, if any, of
the directors, officers, and employees of the Investment Manager who are
directors, or employees of the Corporation.
2.1.2 WAIVER OR ASSUMPTION AND REIMBURSEMENT OF CORPORATION EXPENSES
BY THE INVESTMENT MANAGER. The waiver or assumption and reimbursement by
the Investment Manager of any expense of the Corporation that the
Investment Manager is not required by this Agreement to waive, or assume
and reimburse, shall not obligate the Investment Manager to waive, or
assume or reimburse, the same or any similar expense of the Corporation on
any subsequent occasion, unless so required pursuant to a separate
agreement between the Corporation and the Investment Manager.
2.2 EXPENSES PAID BY THE CORPORATION. The Corporation, with respect to the
Fund, shall bear all expenses of its organization, operations, and business not
specifically waived, assumed, or agreed to be paid by the Investment Manager as
provided in this Agreement or any other agreement between the Corporation and
the Investment Manager. In particular, the expenses that the Corporation, with
respect to the Fund, shall bear include, but are not limited to:
2.2.1 CUSTODY AND ACCOUNTING SERVICES. All fees and expenses of
depositories, custodians, accounting service agents, and other agents for
the transfer, receipt, safekeeping, servicing of, and accounting for the
Fund's cash, securities, and other property, including, among other
things, fees and expenses for the calculation of standardized effective
and compound yield quotations for the Fund, maintenance of ledgers,
position and income reports, and settlement of Fund purchases and sales.
2.2.2 DISTRIBUTION EXPENSES. Distribution expenses of the Fund paid
pursuant to any plan of distribution adopted in accordance with the
provision of Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan").
2.2.3 TRANSFER AGENCY, SHAREHOLDER SERVICING, AND DIVIDED
DISBURSEMENT. All costs of establishing, maintaining, and servicing
accounts of shareholders of the Fund, including the Fund's proportionate
share of all fees and expenses of the Corporation's transfer agent,
administrative services agent, shareholder services agent, dividend
disbursing agent, and any other agents engaged by the Corporation to
service such Fund accounts. In addition, the Corporation shall reimburse
the Investment Manager and charge to the Fund the Fund's proportionate
share of all expenses incurred by the Investment Manager in responding to
telephonic and written inquiries from, and in mailing information to Fund
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shareholders and others requesting information on behalf of Fund
shareholders, regarding matters such as shareholder account or transaction
status, net asset value of Fund shares, Fund performance and general
information about the Fund.
2.2.4 SHAREHOLDER REPORTS AND OTHER COMMUNICATIONS. All costs of
preparing, setting in type, printing, and distributing reports and other
communications to shareholders of the Fund.
2.2.5 PROSPECTUSES. All cost of preparing, setting in type,
printing, and mailing to shareholders of the Fund annual or more frequent
revisions of the Corporation's Prospectus and SAI and any supplements
thereto.
2.2.6 SHAREHOLDER MEETINGS. All costs incidental to holding meetings
of shareholders of the Fund, including the printing of notices and proxy
materials, and proxy solicitations therefor.
2.2.7 PRICING AND PORTFOLIO VALUATION. All costs of daily valuation
of the individual portfolio securities of the Fund and daily computation
of the net asset value per share of the Fund, including a proportionate
share of the cost of any equipment obtained by the Corporation, the
Investment Manager, or agents of the Corporation, or proportionate share
of the cost of any equipment currently owned by the Investment Manager,
that will be used to price the Fund's shares or value the Fund's assets or
the cost of the services of any agents engaged by the Corporation for the
purpose of pricing Fund shares or valuing the assets of the Fund.
2.2.8 COMMUNICATIONS. All charges for equipment or services used for
communications with respect to the Fund between the Investment Manager or
the Corporation and the custodian, accounting services agent, transfer
agent, shareholder servicing agent, dividend disbursing agent, or any
other agent engaged by the Corporation to provide services to the Fund.
2.2.9 INDEPENDENT LEGAL AND ACCOUNTING FEES. The Fund's
proportionate share of all charges for services and expenses of the
Corporation's independent legal counsel and independent auditors.
2.2.10 DIRECTORS' FEES AND EXPENSES. The Fund's proportionate share
of all compensation of Directors (other than those directors affiliated
with the Investment Manager), all expenses incurred in connection with
their services as directors, and all expenses of meetings of the Board of
Directors of the Corporation and committees of the Board of Directors.
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2.2.11 FEDERAL REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of maintaining the registration of the Corporation
under the 1940 Act and maintaining the registration of the Fund's shares
or registering additional shares of the Fund under the 1933 Act, including
all fees and expenses incurred in connection with the preparation, setting
in type, printing, and filing of any post-effective amendments or
supplements to the Registration Statement, Prospectus, and SAI for the
Corporation under the 1933 Act or the 1940 Act that may be prepared from
time to time.
2.2.12 STATE REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of (i) maintaining the registration and
qualification of the Corporation or the Fund, as appropriate, and of the
Fund's shares for sale under the securities laws of various states and
jurisdictions, (ii) of registering and qualifying additional shares of the
Fund, and (iii) of maintaining the registration and qualification of the
Corporation or the Fund, as appropriate, under all other laws applicable
to the Corporation or the Fund, as appropriate, or its business
activities.
2.2.13 ISSUE, REDEMPTION, AND TRANSFER OF THE FUND'S SHARES. All
expenses incurred in connections with the issue, redemption, and transfer
of the Fund's shares, including the expenses of confirming all share
transactions and of transmitting any share certificates for the Fund.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable
by the Board of Directors of the Corporation, including, without
limitation, such bond, liability, and other insurance expense that may
from time to time be allocated to the Fund in a manner approved by the
Board of Directors of the Corporation.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions, if any, and
other charges incident to the purchase, sale, or lending of the Fund's
portfolio securities.
2.2.16 TAXES. The Fund's proportionate share of all taxes or
governmental fees payable to federal, state, or other governmental
agencies, domestic or foreign, including issue, stamp, or transfer taxes.
2.2.17 TRADE ASSOCIATION FEES. The Fund's proportionate share of all
fees, dues, costs of attendance at meeting and conferences, and other
expenses incurred in connection with the Corporation's membership in any
trade association or other investment organization.
2.2.18 PERFORMANCE INFORMATION. Industry performance reporting
services fees reasonably necessary for Board of Directors of the
Corporation to keep current regarding industry and regulatory
requirements.
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2.2.19 NONRECURRING AND EXTRAORDINARY EXPENSES. The Fund's
proportionate share of such nonrecurring and extraordinary expenses as may
arise, including the costs of actions, suits, or proceedings to which the
Corporation is a party and the expenses the Corporation may incur as a
result of its legal obligation to provide indemnification to its
directors, officers, and employees, and agents.
2.2.20 ORGANIZATIONAL EXPENSES. The Fund shall pay or assume all its
organizational expenses, subject to such expense limitation or
reimbursement arrangements as may be separately agreed to by the
Investment Manager and specified in the Registration Statement pursuant to
which the Fund makes the initial public offering of its shares.
3. MANAGEMENT FEES.
3.1 COMPENSATION. The Corporation, with respect to the Fund, shall pay
the Investment Manager, as compensation for all services rendered, facilities
provided, and expenses waived or assumed and reimbursed by the Investment
Manager, investment management fees at the annual rate of .65% of the first $200
million of average daily net assets of the Fund; .60% of average daily net
assets of the Fund up to the next $200 million; .55% of average daily net assets
of the Fund up to the next $200 million; .50% of average daily net assets of the
Fund up to the next $200 million; .45% of average daily net assets of the Fund
up to the next $200 million; and .40% of average daily net assets of the Fund in
excess of $1 billion.
3.2 METHOD OF COMPUTATION. The investment management fee shall accrue on
each calendar day and the sum of the daily fee accruals for the Fund shall be
paid monthly to the Investment Manager on the first business day of the next
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 rates for the Fund, described in subparagraph 3.1. above, and multiplying
the product by the net assets of the Fund as determined in accordance with the
current Prospectus of the Corporation as of the close of business on the last
preceding business day on which the Corporation was open for business.
3.3 PRORATION OF FEE. If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
4. BROKERAGE.
Subject to seeking best execution, and subject to any policies or
procedures as then approved by the Board of Directors of the Corporation, the
Investment Manager, in carrying out its duties under Paragraph 1.1, may cause,
or permit the sub-Adviser to cause, the Corporation, on behalf of
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the Fund, to pay a broker-dealer that furnishes brokerage or research services
(as such services are defined under Section 28(e) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) a higher commission than that which might
be charged by another broker-dealer that does not furnish brokerage or research
services or that furnishes brokerage or research services deemed to be of lesser
value, if the Investment Manager or Sub-Adviser determines in good faith that
the amount of such commission is reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer viewed in terms of
either that particular transaction or the overall responsibilities of the
Investment Manager or Sub-Adviser with respect to the other accounts, if any, as
to which it exercises investment discretion (as such term is defined under
Section 3(a)(35) of the 1934 Act).
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 of this Agreement) employ, retain, or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Investment Manager, the Corporation, or the Fund with (i) such
statistical and other factual information; (ii) such advice regarding economic
factors and trends; (iii) such advice as to occasional transactions in specific
securities; (iv) or such other information, advice, or assistance as the
Investment Manager may deem necessary, appropriate, or convenient for the
discharge of its obligations hereunder or otherwise helpful to the Investment
Manager, the Corporation, or the Fund, or in the discharge of the Investment
Manager's overall responsibilities with respect to the other accounts which it
serves as an investment manager.
6. OWNERSHIP OF RECORDS.
All records required to be maintained and preserved by the Corporation,
with respect to the Fund, pursuant to the provisions of rules and regulations of
the Securities and Exchange Commission under Section 31(a) of the 1940 Act and
maintained and preserved by the Investment Manager on behalf of the Corporation,
with respect to the Fund, are the property of the Corporation and shall be
surrendered by the Investment Manager promptly on request by the Corporation.
7. REPORTS TO THE INVESTMENT MANAGER.
The Corporation shall furnish or otherwise make available to the
Investment Manager such Prospectuses, Statements of Additional Information,
financial statements, proxy statements, reports, and other information relating
to the business and affairs of the Corporation, with respect to the Fund, as the
Investment Manager may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
8. REPORTS TO THE CORPORATION.
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The Investment Manager shall furnish to or place at the disposal of the
Corporation such information, reports, evaluations, analyses, and opinions as
the Corporation may, at any time or from time to time, reasonably request with
respect to the Fund or as the Investment Manager may deem helpful to the Fund.
9. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment Manager
or any affiliated person of the Investment Manager to render investment
supervisory and corporate administrative services to other investment companies
(including but not limited to one or more series of the Corporation), to act as
investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Corporation.
10. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER.
Neither the Investment Manager nor any of its directors, officers, or
employees performing services for the Corporation, with respect to the Fund, at
the direction or request of the Investment Manager in connection with the
Investment Manager's discharge of its obligations undertaken or reasonably
assumed with respect to this 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 this Agreement
relates; PROVIDED, that nothing herein contained shall be construed to protect
the Investment Manager or any such persons against any liability to the
Corporation or its shareholders to which the Investment Manager 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 the Investment Manager or any such persons to
exercise due care in rendering other services to the Corporation.
11. RETENTION OF SUB-ADVISER.
Subject to the Fund's obtaining the initial and periodic approvals
required under Section 15 of the 1940 Act, the Investment Manager may retain a
Sub-Adviser to perform investment advisory and other services to the Fund. The
retention of a Sub-Adviser shall be at the risk, cost, and expense of the
Investment Manager. The retention of a Sub-Adviser shall in no way reduce the
responsibilities or obligations of the Investment Manager under this Agreement
and the Investment Manager shall be responsible to the Corporation for all acts
or omissions of the Sub-Adviser in connection with the performance of the
Investment Manager's duties hereunder. The Investment Manager shall pay and
shall be solely responsible for the payment of the fees of the Sub-Adviser for
the performance of its services for the Fund.
12. TERM OF AGREEMENT.
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The term of this Agreement shall begin on the day and year first above
written, and unless sooner terminated as hereinafter provided, shall continue in
effect through October 16, 1994. Thereafter, this Agreement shall continue in
effect from year to year, subject to the termination provisions and all other
terms and conditions hereof; PROVIDED, that such continuance is specifically
approved at least annually by the Board of Directors of the Corporation or by
vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act; and PROVIDED FURTHER, that in
either event such continuance also is approved annually by vote, cast in person
at a meeting called for the purpose of voting on such approval of a majority of
the Board of Directors of the Corporation who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act and rules thereunder) of any
such party (hereinafter "non-interested Directors"). In any event, continuance
of this Agreement is subject to the approval of this Agreement by a majority of
the outstanding voting securities of the Fund, as a "series" of the Corporation
(as that term is defined in the 1940 Act and rules thereunder), within sixteen
months after the initial effectiveness of the Corporation's Registration
Statement under the 1933 Act pursuant to which the Corporation makes the initial
public offering of its shares.
Any approval of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act and rules thereunder)
of the Fund shall be effective to continue this Agreement, notwithstanding (i)
that a comparable agreement has not been approved by the holders of a majority
of the outstanding shares of any other series of the Corporation and (ii) that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Corporation, unless such approval shall be required by
any other applicable law or otherwise. The Investment Manager shall furnish to
the Corporation, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal or amendment thereof.
13. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; PROVIDED, that no such material amendment shall be effective
unless authorized on behalf of the Corporation (i) by resolution of the Board of
Directors of the Corporation, including a majority of the non-interested
Directors and (ii) if required by law, by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall automatically and
immediately terminate in the event of its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' prior written notice to the other party;
PROVIDED, that in the case of termination by the Corporation such action shall
have been authorized (i) by resolution of the Board of Directors of the
Corporation, including a majority of the non-interested Directors, or (ii) by
vote of a majority of the outstanding voting securities of the Fund; PROVIDED
FURTHER, that in the case of
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termination by the Investment Manager, such termination shall not be effective
until the Corporation shall have contracted with one or more persons to serve as
successor investment manager for the Fund and such person(s) shall have assumed
such position.
15. MISCELLANEOUS.
15.1 NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, (a) if to the Investment Manager,
to Pacific Global Investment Management Company, 215 North Marengo Avenue, Suite
115, Pasadena, CA 91101, and (b) if to the Corporation, at the foregoing office
of the Investment Manager.
15.2 CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
15.3 INTERPRETATION. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Directors
of its responsibility for and control of the conduct of the affairs of the
Corporation.
15.4 DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested person,"
"assignment," and "affiliated person," shall have the meanings assigned to them
by Section 2(a) of the 1940 Act. In addition, where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is relaxed by a
rule, regulation, or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, or order.
15.5 GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE GOVERNMENT
SECURITIES FUND
/s/ Thomas H. Hanson By: /s/ George A. Henning
- ------------------------ ---------------------------------
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
/s/ George A. Henning By: /S/ Kathleen A. Scott
- ------------------------ ---------------------------------
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Exhibit 4(b)
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, made as of the 16th day of October, 1992, by
and among PACIFIC GLOBAL FUND, INC., a Maryland corporation (the "Corporation"),
PACIFIC GLOBAL INVESTMENT MANAGEMENT COMPANY, a California corporation (PGIMC)
and SPECTRUM ASSET MANAGEMENT, INC., a California corporation (SAMI).
WITNESSETH:
WHEREAS, the Corporation proposes to engage in business as an open-end
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, SAMI 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 Government Securities Fund (the "Fund"), have entered
into an Investment Management Agreement dated as of the date hereof (the
"Investment Management Agreement") pursuant to which PGIMC provides investment
advisory and administrative services to the Fund; and
WHEREAS, PGIMC proposed to engage the services of SAMI as subadviser
("Sub-Adviser") to the Fund as permitted by the Investment Management Agreement;
and
WHEREAS, SAMI is willing to perform sub-advisory services for the Fund
upon the terms and conditions and for the compensation hereinafter set forth;
<PAGE>
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. PGIMC hereby employs SAMI to serve as Sub-Adviser with respect to
the assets of the Fund under management of PGIMC and to perform the services
hereinafter set forth. SAMI hereby accepts such employment and agrees for the
compensation herein provided to assume all obligations herein set forth and to
bear all expenses of its performance of such obligations (but no other
expenses).
2. Subject to the supervision and control of the Corporation's Board of
Directors and of PGIMC, SAMI shall manage the investment and 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, and subject to such further limitations as
the Corporation may from time to time impose by written notice to PGIMC. PGIMC
shall promptly inform SAMI of such further limitations imposed by the
Corporation. PGIMC shall assist in the formulation and implementation of a
continuing investment program for the management of the Fund's assets. SAMI
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 and PGIMC, SAMI shall make all determinations with respect to the
investment and reinvestment of the assets of the Fund and the purchase or sale
of portfolio securities, and shall take such steps as may be necessary to
implement the same. Such determinations and services shall include advising
PGIMC and 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. SAMI shall regularly furnish reports to PGIMC 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: SAMI's economic outlook and investment research and strategy; 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
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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) SAMI 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 with PGIMC and the Corporation. When placing such
orders, SAMI shall use its best efforts to obtain the best available price and
most favorable execution for the Fund. SAMI shall use its 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.
SAMI shall advise the Corporation's Board of Directors of any fees or payments
of whatever type that may be possible for SAMI or any affiliate of SAMI to
receive in connection with the purchase or sale of investment securities for the
Fund.
(b) Subject to prior authorization by PGIMC and to the appropriate
policies, procedures, and/or guidelines established by the Corporation's Board
of Directors, SAMI may also effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if SAMI
determines 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
SAMI's overall responsibilities with respect to the Fund and SAMI'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) SAMI shall promptly communicate to PGIMC and the Corporation's
Board of Directors such information relating to portfolio transactions as PGIMC
or 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. SAMI 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;
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(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 PGIMC or SAMI 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;
(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, PGIMC, and SAMI, persons, who may be employees of PGIMC,
SAMI, 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 or PGIMC 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.
SAMI may (at its cost except as contemplated by paragraphs 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 SAMI, 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 SAMI 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 SAMI's overall responsibilities
with respect to the other accounts which it serves as investment manager.
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7. SAMI shall cooperate with and make available to PGIMC, the
Corporation, and any agents engaged by the Corporation, SAMI's 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 rendered by SAMI under this
Agreement, PGIMC shall have the sole responsibility to pay to SAMI a fee
calculated at the annual rate of .35% on the first $200 million of the average
daily net asset value of the Fund, .32% on the next $100 million, .29% of the
next $100 million, .26% of the next $100 million, .23% of the next $250 million
and .20% in excess of $1 billion of average daily net asset value.
The sub-advisory fee shall accrue on each calendar day, and the sum of the daily
fee accruals shall be paid monthly to SAMI 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 sub-advisory 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.
SAMI shall promptly reduce its fee by the amount of any commissions, tender and
exchange offer solicitation fees, other fees, or similar payments received by
SAMI, or any affiliated person of SAMI, in connection with the Fund's portfolio
transactions, less the amount of any direct expenses incurred by SAMI, or any
affiliated persons of SAMI, in obtaining such commissions, fees, or payments.
Such "commissions" or "other fees" shall exclude those charged by brokers or
dealers affiliated with PGIMC and the Corporation as referred to in paragraph
5(a). Such "tender and exchange offer solicitation fees" shall exclude those
received by SAMI acting in the capacity of manager for any such offer.
(b) SAMI shall not be entitled to receive any payment for the
performance of its services hereunder from the Fund and shall look solely and
exclusively to PGIMC for payment of all fees for such services.
(c) SAMI shall bear all expenses in connection with the performance of
its 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.
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9. SAMI 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 SAMI shall have acted in good faith and with due care; and, in any
event, SAMI shall be liable for its willful misfeasance, bad faith, or
negligence in the performance of its investment advisory duties or for failure
to exercise due care in rendering other services under this Agreement. A good
faith mistake in judgement 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 October 31, 1993. 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 SAMI, or (d) by SAMI on sixty (60) days' prior written
notice to the Fund, provided, that if SAMI terminates this Agreement for any
reason other than the Corporation's decision to make a change in fundamental
investment policies or restrictions applicable to the Fund over SAMI's written
objection to such change, the termination by SAMI will not be effective until
PGIMC shall have contracted with one or more persons to serve as a successor
sub-adviser for the Fund and such person or persons shall have assumed such
position but in no event will the termination be delayed more than one hundred
eighty (180) days after the end of the notice period. 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, SAMI shall promptly
return to the Corporation all records maintained by SAMI with respect to the
Fund and SAMI shall be free from any claim or retention of rights therein. SAMI
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. SAMI 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.
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(e) Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid (a) if to SAMI, to Spectrum Asset
Management, Inc., 369 San Miguel, Suite 300, Newport Beach, CA 92660; (b) if to
PGIMC, to Pacific Global Investment Management Company, 215 North Marengo
Avenue, Suite 115, Pasadena, CA 91101; 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 SAMI 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 SAMI to engage in any other business or to
render services of any kind to any other corporation, firm, individual, or
association.
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 enforced 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PACIFIC GLOBAL
ATTEST: INVESTMENT MANAGEMENT COMPANY
/s/ /s/ George A. Henning
- -------------------------------- --------------------------------
ATTEST: SPECTRUM ASSET MANAGEMENT, INC.
/s/ Marc Kelly /s/ Roland D. Kelly
- -------------------------------- --------------------------------
ATTEST: PACIFIC GLOBAL FUND, INC. d/b/a
PACIFIC ADVISORS FUND INC.
/s/ /s/ Thomas H. Hanson
- -------------------------------- --------------------------------
8
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EXHIBIT 4(c)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT made as of the 16th day of October, 1992,
by and between Pacific Global Fund, Inc., a Maryland corporation doing business
as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the Income Fund
(the "Fund"), and Pacific Global Investment Management Company, a California
corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and register as such under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is a separately designated series of shares of Common
Stock of the Corporation; and
WHEREAS, the Investment Manager is engaged principally in the business of
rendering investment management and investment advisory services and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Corporation desires to retain the Investment Manager to
render investment supervisory and administrative services to the Fund in the
manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Corporation and the Investment Manager propose to engage a
subadviser ("Sub-Adviser") to provide certain investment advisory and other
services to the Fund, subject to the approval of the Board of Directors of the
Corporation and, to the extent required by law, subject to the approval of the
shareholders of the Fund;
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1 INVESTMENT SUPERVISORY SERVICES. The Investment Manager shall, subject
to the supervision of the Board of Directors of the Corporation, act as
investment manager of the Corporation with respect to the Fund and, as such,
shall:
1.1.1 INVESTMENT OF FUND'S ASSETS. Supervise and direct, or cause
the Sub-Adviser to supervise and direct, the investment of the Fund's
assets in accordance with applicable
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law, and the investment objectives, investment program, policies, and
restrictions set forth in the then-current prospectus ("Prospectus") and
the then-current Statement of Additional Information ("SAI") relating to
the Fund contained in the Corporation's Registration Statement under the
1940 Act and the Securities Act of 1933, as amended ("1933 Act"), and
subject to such further limitations as the Board of Directors of the
Corporation may, from time to time, impose by written notice to the
Investment Manager.
1.1.2 INVESTMENT PROGRAM. Formulate and implement, or cause the
Sub-Adviser to formulate and implement, a continuing program for the
management of the Fund's assets and resources.
In furtherance of these duties and responsibilities, the Investment
Manager is authorized, in its discretion and without prior consultation
with the Corporation to: (i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and other securities or assets for
the Fund; and (ii) place orders and negotiate the commissions (if any) for
the execution of transactions in securities with or through such brokers,
dealers, underwriters, or issuers as the Investment Manager or Sub-Adviser
may select for the Fund.
1.2 RELATED SERVICES. The Investment Manager shall supervise the
Transfer Agent's performance of the administration of all aspects of the
Corporation's business and affairs with respect to the Fund as performed
by the transfer agent pursuant to an Administrative Services Agreement.
1.2.1 AGENTS. Assist the Corporation and transfer agent in
selecting, coordinating the activities of, supervising, and acting as
liaison with any other persons and agents engaged by the Corporation,
including the Corporation's custodian, accounting services agent, transfer
agent, dividend disbursing agent, shareholder servicing agent, independent
auditors, and independent legal counsel.
1.2.2 DIRECTORS AND OFFICERS. Authorize and permit the Investment
Manager's directors, officers and employees who may be elected or
appointed as directors or officers of the Corporation to serve in such
capacities, without remuneration from or additional cost to the
Corporation.
1.2.3 REPORTS TO THE CORPORATION. Furnish to or place at the
disposal of the Corporation such information, reports, evaluations,
analyses, and opinions relating to its functions as the Corporation may,
at any time or from time to time, reasonably request or as the Investment
Manager may deem helpful to the Corporation.
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2. ALLOCATION OF EXPENSES.
2.1 EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1 SALARIES AND FEES OF DIRECTORS AND OFFICERS. As between the
Corporation, with respect to the Fund, and the Investment Manager, the
Investment Manager shall pay all salaries, expenses, and fees, if any, of
the directors, officers, and employees of the Investment Manager who are
directors, or employees of the Corporation.
2.1.2 WAIVER OR ASSUMPTION AND REIMBURSEMENT OF CORPORATION EXPENSES
BY THE INVESTMENT MANAGER. The waiver or assumption and reimbursement by
the Investment Manager of any expense of the Corporation that the
Investment Manager is not required by this Agreement to waive, or assume
and reimburse, shall not obligate the Investment Manager to waive, or
assume or reimburse, the same or any similar expense of the Corporation on
any subsequent occasion, unless so required pursuant to a separate
agreement between the Corporation and the Investment Manager.
2.2 EXPENSES PAID BY THE CORPORATION. The Corporation, with respect to the
Fund, shall bear all expenses of its organization, operations, and business not
specifically waived, assumed, or agreed to be paid by the Investment Manager as
provided in this Agreement or any other agreement between the Corporation and
the Investment Manager. In particular, the expenses that the Corporation, with
respect to the Fund, shall bear include, but are not limited to:
2.2.1 CUSTODY AND ACCOUNTING SERVICES. All fees and expenses of
depositories, custodians, accounting service agents, and other agents for
the transfer, receipt, safekeeping, servicing of, and accounting for the
Fund's cash, securities, and other property, including, among other
things, fees and expenses for the calculation of standardized effective
and compound yield quotations for the Fund, maintenance of ledgers,
position and income reports, and settlement of Fund purchases and sales.
2.2.2 DISTRIBUTION EXPENSES. Distribution expenses of the Fund paid
pursuant to any plan of distribution adopted in accordance with the
provision of Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan").
2.2.3 TRANSFER AGENCY, SHAREHOLDER SERVICING, AND DIVIDED
DISBURSEMENT. All costs of establishing, maintaining, and servicing
accounts of shareholders of the Fund, including the Fund's proportionate
share of all fees and expenses of the Corporation's transfer agent,
administrative services agent, shareholder services agent, dividend
disbursing agent, and any other agents engaged by the Corporation to
service such Fund accounts. In addition, the Corporation shall reimburse
the Investment Manager and charge to the Fund the Fund's proportionate
share of all expenses incurred by the Investment Manager in responding to
telephonic and written inquiries from, and in mailing information to Fund
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shareholders and others requesting information on behalf of Fund
shareholders, regarding matters such as shareholder account or transaction
status, net asset value of Fund shares, Fund performance and general
information about the Fund.
2.2.4 SHAREHOLDER REPORTS AND OTHER COMMUNICATIONS. All costs of
preparing, setting in type, printing, and distributing reports and other
communications to shareholders of the Fund.
2.2.5 PROSPECTUSES. All cost of preparing, setting in type,
printing, and mailing to shareholders of the Fund annual or more frequent
revisions of the Corporation's Prospectus and SAI and any supplements
thereto.
2.2.6 SHAREHOLDER MEETINGS. All costs incidental to holding meetings
of shareholders of the Fund, including the printing of notices and proxy
materials, and proxy solicitations therefor.
2.2.7 PRICING AND PORTFOLIO VALUATION. All costs of daily valuation
of the individual portfolio securities of the Fund and daily computation
of the net asset value per share of the Fund, including a proportionate
share of the cost of any equipment obtained by the Corporation, the
Investment Manager, or agents of the Corporation, or proportionate share
of the cost of any equipment currently owned by the Investment Manager,
that will be used to price the Fund's shares or value the Fund's assets or
the cost of the services of any agents engaged by the Corporation for the
purpose of pricing Fund shares or valuing the assets of the Fund.
2.2.8 COMMUNICATIONS. All charges for equipment or services used for
communications with respect to the Fund between the Investment Manager or
the Corporation and the custodian, accounting services agent, transfer
agent, shareholder servicing agent, dividend disbursing agent, or any
other agent engaged by the Corporation to provide services to the Fund.
2.2.9 INDEPENDENT LEGAL AND ACCOUNTING FEES. The Fund's
proportionate share of all charges for services and expenses of the
Corporation's independent legal counsel and independent auditors.
2.2.10 DIRECTORS' FEES AND EXPENSES. The Fund's proportionate share
of all compensation of Directors (other than those directors affiliated
with the Investment Manager), all expenses incurred in connection with
their services as directors, and all expenses of meetings of the Board of
Directors of the Corporation and committees of the Board of Directors.
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2.2.11 FEDERAL REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of maintaining the registration of the Corporation
under the 1940 Act and maintaining the registration of the Fund's shares
or registering additional shares of the Fund under the 1933 Act, including
all fees and expenses incurred in connection with the preparation, setting
in type, printing, and filing of any post-effective amendments or
supplements to the Registration Statement, Prospectus, and SAI for the
Corporation under the 1933 Act or the 1940 Act that may be prepared from
time to time.
2.2.12 STATE REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of (i) maintaining the registration and
qualification of the Corporation or the Fund, as appropriate, and of the
Fund's shares for sale under the securities laws of various states and
jurisdictions, (ii) of registering and qualifying additional shares of the
Fund, and (iii) of maintaining the registration and qualification of the
Corporation or the Fund, as appropriate, under all other laws applicable
to the Corporation or the Fund, as appropriate, or its business
activities.
2.2.13 ISSUE, REDEMPTION, AND TRANSFER OF THE FUND'S SHARES. All
expenses incurred in connections with the issue, redemption, and transfer
of the Fund's shares, including the expenses of confirming all share
transactions and of transmitting any share certificates for the Fund.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable
by the Board of Directors of the Corporation, including, without
limitation, such bond, liability, and other insurance expense that may
from time to time be allocated to the Fund in a manner approved by the
Board of Directors of the Corporation.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions, if any, and
other charges incident to the purchase, sale, or lending of the Fund's
portfolio securities.
2.2.16 TAXES. The Fund's proportionate share of all taxes or
governmental fees payable to federal, state, or other governmental
agencies, domestic or foreign, including issue, stamp, or transfer
taxes.
2.2.17 TRADE ASSOCIATION FEES. The Fund's proportionate share of all
fees, dues, costs of attendance at meeting and conferences, and other
expenses incurred in connection with the Corporation's membership in any
trade association or other investment organization.
2.2.18 PERFORMANCE INFORMATION. Industry performance reporting
services fees reasonably necessary for Board of Directors of the
Corporation to keep current regarding industry and regulatory
requirements.
5
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2.2.19 NONRECURRING AND EXTRAORDINARY EXPENSES. The Fund's
proportionate share of such nonrecurring and extraordinary expenses as may
arise, including the costs of actions, suits, or proceedings to which the
Corporation is a party and the expenses the Corporation may incur as a
result of its legal obligation to provide indemnification to its
directors, officers, and employees, and agents.
2.2.20 ORGANIZATIONAL EXPENSES. The Fund shall pay or assume all its
organizational expenses, subject to such expense limitation or
reimbursement arrangements as may be separately agreed to by the
Investment Manager and specified in the Registration Statement pursuant to
which the Fund makes the initial public offering of its shares.
3. MANAGEMENT FEES.
3.1 COMPENSATION. The Corporation, with respect to the Fund, shall pay the
Investment Manager, as compensation for all services rendered, facilities
provided, and expenses waived or assumed and reimbursed by the Investment
Manager, investment management fees at the annual rate of .75% of the first $100
million of average daily net assets of the Fund; .70% of average daily net
assets of the Fund up to the next $100 million; .65% of average daily net assets
of the Fund up to the next $100 million; .60% of average daily net assets of the
Fund up to the next $100 million; .55% of average daily net assets of the Fund
up to the next $200 million; and .50% of average daily net assets of the Fund in
excess of $500 million.
3.2 METHOD OF COMPUTATION. The investment management fee shall accrue on
each calendar day and the sum of the daily fee accruals for the Fund shall be
paid monthly to the Investment Manager on the first business day of the next
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 rates for the Fund, described in subparagraph 3.1. above, and multiplying
the product by the net assets of the Fund as determined in accordance with the
current Prospectus of the Corporation as of the close of business on the last
preceding business day on which the Corporation was open for business.
3.3 PRORATION OF FEE. If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
4. BROKERAGE.
Subject to seeking best execution, and subject to any policies or
procedures as then approved by the Board of Directors of the Corporation, the
Investment Manager, in carrying out its duties under Paragraph 1.1, may cause,
or permit the sub-Adviser to cause, the Corporation, on behalf of
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the Fund, to pay a broker-dealer that furnishes brokerage or research
services (as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) a higher commission than
that which might be charged by another broker-dealer that does not furnish
brokerage or research services or that furnishes brokerage or research
services deemed to be of lesser value, if the Investment Manager or
Sub-Adviser determines in good faith that the amount of such commission is
reasonable in relation to the value of the brokerage and research services
provided by the broker-dealer viewed in terms of either that particular
transaction or the overall responsibilities of the Investment Manager or
Sub-Adviser with respect to the other accounts, if any, as to which it
exercises investment discretion (as such term is defined under Section
3(a)(35) of the 1934 Act).
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 of this Agreement) employ, retain, or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Investment Manager, the Corporation, or the Fund with (i) such
statistical and other factual information; (ii) such advice regarding economic
factors and trends; (iii) such advice as to occasional transactions in specific
securities; (iv) or such other information, advice, or assistance as the
Investment Manager may deem necessary, appropriate, or convenient for the
discharge of its obligations hereunder or otherwise helpful to the Investment
Manager, the Corporation, or the Fund, or in the discharge of the Investment
Manager's overall responsibilities with respect to the other accounts which it
serves as an investment manager.
6. OWNERSHIP OF RECORDS.
All records required to be maintained and preserved by the Corporation,
with respect to the Fund, pursuant to the provisions of rules and regulations of
the Securities and Exchange Commission under Section 31(a) of the 1940 Act and
maintained and preserved by the Investment Manager on behalf of the Corporation,
with respect to the Fund, are the property of the Corporation and shall be
surrendered by the Investment Manager promptly on request by the Corporation.
7. REPORTS TO THE INVESTMENT MANAGER.
The Corporation shall furnish or otherwise make available to the
Investment Manager such Prospectuses, Statements of Additional Information,
financial statements, proxy statements, reports, and other information relating
to the business and affairs of the Corporation, with respect to the Fund, as the
Investment Manager may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
8. REPORTS TO THE CORPORATION.
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The Investment Manager shall furnish to or place at the disposal of the
Corporation such information, reports, evaluations, analyses, and opinions as
the Corporation may, at any time or from time to time, reasonably request with
respect to the Fund or as the Investment Manager may deem helpful to the Fund.
9. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment Manager
or any affiliated person of the Investment Manager to render investment
supervisory and corporate administrative services to other investment companies
(including but not limited to one or more series of the Corporation), to act as
investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Corporation.
10. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER.
Neither the Investment Manager nor any of its directors, officers, or
employees performing services for the Corporation, with respect to the Fund, at
the direction or request of the Investment Manager in connection with the
Investment Manager's discharge of its obligations undertaken or reasonably
assumed with respect to this 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 this Agreement
relates; PROVIDED, that nothing herein contained shall be construed to protect
the Investment Manager or any such persons against any liability to the
Corporation or its shareholders to which the Investment Manager 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 the Investment Manager or any such persons to
exercise due care in rendering other services to the Corporation.
11. RETENTION OF SUB-ADVISER.
Subject to the Fund's obtaining the initial and periodic approvals
required under Section 15 of the 1940 Act, the Investment Manager may retain a
Sub-Adviser to perform investment advisory and other services to the Fund. The
retention of a Sub-Adviser shall be at the risk, cost, and expense of the
Investment Manager. The retention of a Sub-Adviser shall in no way reduce the
responsibilities or obligations of the Investment Manager under this Agreement
and the Investment Manager shall be responsible to the Corporation for all acts
or omissions of the Sub-Adviser in connection with the performance of the
Investment Manager's duties hereunder. The Investment Manager shall pay and
shall be solely responsible for the payment of the fees of the Sub-Adviser for
the performance of its services for the Fund.
12. TERM OF AGREEMENT.
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The term of this Agreement shall begin on the day and year first above
written, and unless sooner terminated as hereinafter provided, shall continue in
effect through October 16, 1994. Thereafter, this Agreement shall continue in
effect from year to year, subject to the termination provisions and all other
terms and conditions hereof; PROVIDED, that such continuance is specifically
approved at least annually by the Board of Directors of the Corporation or by
vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act; and PROVIDED FURTHER, that in
either event such continuance also is approved annually by vote, cast in person
at a meeting called for the purpose of voting on such approval of a majority of
the Board of Directors of the Corporation who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act and rules thereunder) of any
such party (hereinafter "non-interested Directors"). In any event, continuance
of this Agreement is subject to the approval of this Agreement by a majority of
the outstanding voting securities of the Fund, as a "series" of the Corporation
(as that term is defined in the 1940 Act and rules thereunder), within sixteen
months after the initial effectiveness of the Corporation's Registration
Statement under the 1933 Act pursuant to which the Corporation makes the initial
public offering of its shares.
Any approval of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act and rules thereunder)
of the Fund shall be effective to continue this Agreement, notwithstanding (i)
that a comparable agreement has not been approved by the holders of a majority
of the outstanding shares of any other series of the Corporation and (ii) that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Corporation, unless such approval shall be required by
any other applicable law or otherwise. The Investment Manager shall furnish to
the Corporation, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal or amendment thereof.
13. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; PROVIDED, that no such material amendment shall be effective
unless authorized on behalf of the Corporation (i) by resolution of the Board of
Directors of the Corporation, including a majority of the non-interested
Directors and (ii) if required by law, by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall automatically and
immediately terminate in the event of its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' prior written notice to the other party;
PROVIDED, that in the case of termination by the Corporation such action shall
have been authorized (i) by resolution of the Board of Directors of the
Corporation, including a majority of the non-interested Directors, or (ii) by
vote of a majority of the outstanding voting securities of the Fund; PROVIDED
FURTHER, that in the case of
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termination by the Investment Manager, such termination shall not be effective
until the Corporation shall have contracted with one or more persons to serve as
successor investment manager for the Fund and such person(s) shall have assumed
such position.
15. MISCELLANEOUS.
15.1 NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (a) if to the Investment
Manager, to Pacific Global Investment Management Company, 215 North Marengo
Avenue, Suite 115, Pasadena, CA 91101, and (b) if to the Corporation, at the
foregoing office of the Investment Manager.
15.2 CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
15.3 INTERPRETATION. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Directors
of its responsibility for and control of the conduct of the affairs of the
Corporation.
15.4 DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested person,"
"assignment," and "affiliated person," shall have the meanings assigned to them
by Section 2(a) of the 1940 Act. In addition, where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is relaxed by a
rule, regulation, or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, or order.
15.5 GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE INCOME FUND
/s/ Thomas H. Hanson By: /s/ George A. Henning
- ------------------------ ---------------------------------
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
/s/ George A. Henning By: /s/ Kathleen A. Scott
- ------------------------ ---------------------------------
11
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EXHIBIT 4(d)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT made as of the 16th day of October, 1992,
by and between Pacific Global Fund, Inc., a Maryland corporation doing business
as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the Balanced
Fund (the "Fund"), and Pacific Global Investment Management Company, a
California corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and register as such under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is a separately designated series of shares of Common
Stock of the Corporation; and
WHEREAS, the Investment Manager is engaged principally in the business
of rendering investment management and investment advisory services and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Corporation desires to retain the Investment Manager to
render investment supervisory and administrative services to the Fund in the
manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Corporation and the Investment Manager propose to engage a
subadviser ("Sub-Adviser") to provide certain investment advisory and other
services to the Fund, subject to the approval of the Board of Directors of the
Corporation and, to the extent required by law, subject to the approval of the
shareholders of the Fund;
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1 INVESTMENT SUPERVISORY SERVICES. The Investment Manager shall, subject
to the supervision of the Board of Directors of the Corporation, act as
investment manager of the Corporation with respect to the Fund and, as such,
shall:
1.1.1 INVESTMENT OF FUND'S ASSETS. Supervise and direct, or cause
the Sub-Adviser to supervise and direct, the investment of the Fund's
assets in accordance with applicable
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law, and the investment objectives, investment program, policies, and
restrictions set forth in the then-current prospectus ("Prospectus") and
the then-current Statement of Additional Information ("SAI") relating to
the Fund contained in the Corporation's Registration Statement under the
1940 Act and the Securities Act of 1933, as amended ("1933 Act"), and
subject to such further limitations as the Board of Directors of the
Corporation may, from time to time, impose by written notice to the
Investment Manager.
1.1.2 INVESTMENT PROGRAM. Formulate and implement, or cause the
Sub-Adviser to formulate and implement, a continuing program for the
management of the Fund's assets and resources.
In furtherance of these duties and responsibilities, the Investment
Manager is authorized, in its discretion and without prior consultation
with the Corporation to: (i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and other securities or assets for
the Fund; and (ii) place orders and negotiate the commissions (if any) for
the execution of transactions in securities with or through such brokers,
dealers, underwriters, or issuers as the Investment Manager or Sub-Adviser
may select for the Fund.
1.2 RELATED SERVICES. The Investment Manager shall supervise the Transfer
Agent's performance of the administration of all aspects of the Corporation's
business and affairs with respect to the Fund as performed by the transfer agent
pursuant to an Administrative Services Agreement.
1.2.1 AGENTS. Assist the Corporation and transfer agent in
selecting, coordinating the activities of, supervising, and acting as
liaison with any other persons and agents engaged by the Corporation,
including the Corporation's custodian, accounting services agent, transfer
agent, dividend disbursing agent, shareholder servicing agent, independent
auditors, and independent legal counsel.
1.2.2 DIRECTORS AND OFFICERS. Authorize and permit the Investment
Manager's directors, officers and employees who may be elected or
appointed as directors or officers of the Corporation to serve in such
capacities, without remuneration from or additional cost to the
Corporation.
1.2.3 REPORTS TO THE CORPORATION. Furnish to or place at the
disposal of the Corporation such information, reports, evaluations,
analyses, and opinions relating to its functions as the Corporation may,
at any time or from time to time, reasonably request or as the Investment
Manager may deem helpful to the Corporation.
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2. ALLOCATION OF EXPENSES.
2.1 EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1 SALARIES AND FEES OF DIRECTORS AND OFFICERS. As between the
Corporation, with respect to the Fund, and the Investment Manager, the
Investment Manager shall pay all salaries, expenses, and fees, if any, of
the directors, officers, and employees of the Investment Manager who are
directors, or employees of the Corporation.
2.1.2 WAIVER OR ASSUMPTION AND REIMBURSEMENT OF CORPORATION EXPENSES
BY THE INVESTMENT MANAGER. The waiver or assumption and reimbursement by
the Investment Manager of any expense of the Corporation that the
Investment Manager is not required by this Agreement to waive, or assume
and reimburse, shall not obligate the Investment Manager to waive, or
assume or reimburse, the same or any similar expense of the Corporation on
any subsequent occasion, unless so required pursuant to a separate
agreement between the Corporation and the Investment Manager.
2.2 EXPENSES PAID BY THE CORPORATION. The Corporation, with respect to the
Fund, shall bear all expenses of its organization, operations, and business not
specifically waived, assumed, or agreed to be paid by the Investment Manager as
provided in this Agreement or any other agreement between the Corporation and
the Investment Manager. In particular, the expenses that the Corporation, with
respect to the Fund, shall bear include, but are not limited to:
2.2.1 CUSTODY AND ACCOUNTING SERVICES. All fees and expenses of
depositories, custodians, accounting service agents, and other agents for
the transfer, receipt, safekeeping, servicing of, and accounting for the
Fund's cash, securities, and other property, including, among other
things, fees and expenses for the calculation of standardized effective
and compound yield quotations for the Fund, maintenance of ledgers,
position and income reports, and settlement of Fund purchases and sales.
2.2.2 DISTRIBUTION EXPENSES. Distribution expenses of the Fund paid
pursuant to any plan of distribution adopted in accordance with the
provision of Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan").
2.2.3 TRANSFER AGENCY, SHAREHOLDER SERVICING, AND DIVIDED
DISBURSEMENT. All costs of establishing, maintaining, and servicing
accounts of shareholders of the Fund, including the Fund's proportionate
share of all fees and expenses of the Corporation's transfer agent,
administrative services agent, shareholder services agent, dividend
disbursing agent, and any other agents engaged by the Corporation to
service such Fund accounts. In addition, the Corporation shall reimburse
the Investment Manager and charge to the Fund the Fund's proportionate
share of all expenses incurred by the Investment Manager in responding to
telephonic and written inquiries from, and in mailing information to Fund
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shareholders and others requesting information on behalf of Fund
shareholders, regarding matters such as shareholder account or transaction
status, net asset value of Fund shares, Fund performance and general
information about the Fund.
2.2.4 SHAREHOLDER REPORTS AND OTHER COMMUNICATIONS. All costs of
preparing, setting in type, printing, and distributing reports and other
communications to shareholders of the Fund.
2.2.5 PROSPECTUSES. All cost of preparing, setting in type,
printing, and mailing to shareholders of the Fund annual or more frequent
revisions of the Corporation's Prospectus and SAI and any supplements
thereto.
2.2.6 SHAREHOLDER MEETINGS. All costs incidental to holding meetings
of shareholders of the Fund, including the printing of notices and proxy
materials, and proxy solicitations therefor.
2.2.7 PRICING AND PORTFOLIO VALUATION. All costs of daily valuation
of the individual portfolio securities of the Fund and daily computation
of the net asset value per share of the Fund, including a proportionate
share of the cost of any equipment obtained by the Corporation, the
Investment Manager, or agents of the Corporation, or proportionate share
of the cost of any equipment currently owned by the Investment Manager,
that will be used to price the Fund's shares or value the Fund's assets or
the cost of the services of any agents engaged by the Corporation for the
purpose of pricing Fund shares or valuing the assets of the Fund.
2.2.8 COMMUNICATIONS. All charges for equipment or services used for
communications with respect to the Fund between the Investment Manager or
the Corporation and the custodian, accounting services agent, transfer
agent, shareholder servicing agent, dividend disbursing agent, or any
other agent engaged by the Corporation to provide services to the Fund.
2.2.9 INDEPENDENT LEGAL AND ACCOUNTING FEES. The Fund's
proportionate share of all charges for services and expenses of the
Corporation's independent legal counsel and independent auditors.
2.2.10 DIRECTORS' FEES AND EXPENSES. The Fund's proportionate share
of all compensation of Directors (other than those directors affiliated
with the Investment Manager), all expenses incurred in connection with
their services as directors, and all expenses of meetings of the Board of
Directors of the Corporation and committees of the Board of Directors.
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2.2.11 FEDERAL REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of maintaining the registration of the Corporation
under the 1940 Act and maintaining the registration of the Fund's shares
or registering additional shares of the Fund under the 1933 Act, including
all fees and expenses incurred in connection with the preparation, setting
in type, printing, and filing of any post-effective amendments or
supplements to the Registration Statement, Prospectus, and SAI for the
Corporation under the 1933 Act or the 1940 Act that may be prepared from
time to time.
2.2.12 STATE REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of (i) maintaining the registration and
qualification of the Corporation or the Fund, as appropriate, and of the
Fund's shares for sale under the securities laws of various states and
jurisdictions, (ii) of registering and qualifying additional shares of the
Fund, and (iii) of maintaining the registration and qualification of the
Corporation or the Fund, as appropriate, under all other laws applicable
to the Corporation or the Fund, as appropriate, or its business
activities.
2.2.13 ISSUE, REDEMPTION, AND TRANSFER OF THE FUND'S SHARES. All
expenses incurred in connections with the issue, redemption, and transfer
of the Fund's shares, including the expenses of confirming all share
transactions and of transmitting any share certificates for the Fund.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable
by the Board of Directors of the Corporation, including, without
limitation, such bond, liability, and other insurance expense that may
from time to time be allocated to the Fund in a manner approved by the
Board of Directors of the Corporation.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions, if any, and
other charges incident to the purchase, sale, or lending of the Fund's
portfolio securities.
2.2.16 TAXES. The Fund's proportionate share of all taxes or
governmental fees payable to federal, state, or other governmental
agencies, domestic or foreign, including issue, stamp, or transfer taxes.
2.2.17 TRADE ASSOCIATION FEES. The Fund's proportionate share of all
fees, dues, costs of attendance at meeting and conferences, and other
expenses incurred in connection with the Corporation's membership in any
trade association or other investment organization.
2.2.18 PERFORMANCE INFORMATION. Industry performance reporting
services fees reasonably necessary for Board of Directors of the
Corporation to keep current regarding industry and regulatory
requirements.
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2.2.19 NONRECURRING AND EXTRAORDINARY EXPENSES. The Fund's
proportionate share of such nonrecurring and extraordinary expenses as may
arise, including the costs of actions, suits, or proceedings to which the
Corporation is a party and the expenses the Corporation may incur as a
result of its legal obligation to provide indemnification to its
directors, officers, and employees, and agents.
2.2.20 ORGANIZATIONAL EXPENSES. The Fund shall pay or assume all its
organizational expenses, subject to such expense limitation or
reimbursement arrangements as may be separately agreed to by the
Investment Manager and specified in the Registration Statement pursuant to
which the Fund makes the initial public offering of its shares.
3. MANAGEMENT FEES.
3.1 COMPENSATION. The Corporation, with respect to the Fund, shall pay the
Investment Manager, as compensation for all services rendered, facilities
provided, and expenses waived or assumed and reimbursed by the Investment
Manager, investment management fees at the annual rate of .75% of the first $200
million of average daily net assets of the Fund; .70% of average daily net
assets of the Fund up to the next $200 million; .65% of average daily net assets
of the Fund up to the next $200 million; .60% of average daily net assets of the
Fund up to the next $200 million; .55% of average daily net assets of the Fund
up to the next $200 million; and .50% of average daily net assets of the Fund in
excess of $1 billion.
3.2 METHOD OF COMPUTATION. The investment management fee shall accrue on
each calendar day and the sum of the daily fee accruals for the Fund shall be
paid monthly to the Investment Manager on the first business day of the next
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 rates for the Fund, described in subparagraph 3.1. above, and multiplying
the product by the net assets of the Fund as determined in accordance with the
current Prospectus of the Corporation as of the close of business on the last
preceding business day on which the Corporation was open for business.
3.3 PRORATION OF FEE. If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
4. BROKERAGE.
Subject to seeking best execution, and subject to any policies or
procedures as then approved by the Board of Directors of the Corporation, the
Investment Manager, in carrying out its duties under Paragraph 1.1, may cause,
or permit the sub-Adviser to cause, the Corporation, on behalf of
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the Fund, to pay a broker-dealer that furnishes brokerage or research services
(as such services are defined under Section 28(e) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) a higher commission than that which might
be charged by another broker-dealer that does not furnish brokerage or research
services or that furnishes brokerage or research services deemed to be of lesser
value, if the Investment Manager or Sub-Adviser determines in good faith that
the amount of such commission is reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer viewed in terms of
either that particular transaction or the overall responsibilities of the
Investment Manager or Sub-Adviser with respect to the other accounts, if any, as
to which it exercises investment discretion (as such term is defined under
Section 3(a)(35) of the 1934 Act).
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 of this Agreement) employ, retain, or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Investment Manager, the Corporation, or the Fund with (i) such
statistical and other factual information; (ii) such advice regarding economic
factors and trends; (iii) such advice as to occasional transactions in specific
securities; (iv) or such other information, advice, or assistance as the
Investment Manager may deem necessary, appropriate, or convenient for the
discharge of its obligations hereunder or otherwise helpful to the Investment
Manager, the Corporation, or the Fund, or in the discharge of the Investment
Manager's overall responsibilities with respect to the other accounts which it
serves as an investment manager.
6. OWNERSHIP OF RECORDS.
All records required to be maintained and preserved by the Corporation,
with respect to the Fund, pursuant to the provisions of rules and regulations of
the Securities and Exchange Commission under Section 31(a) of the 1940 Act and
maintained and preserved by the Investment Manager on behalf of the Corporation,
with respect to the Fund, are the property of the Corporation and shall be
surrendered by the Investment Manager promptly on request by the Corporation.
7. REPORTS TO THE INVESTMENT MANAGER.
The Corporation shall furnish or otherwise make available to the
Investment Manager such Prospectuses, Statements of Additional Information,
financial statements, proxy statements, reports, and other information relating
to the business and affairs of the Corporation, with respect to the Fund, as the
Investment Manager may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
8. REPORTS TO THE CORPORATION.
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The Investment Manager shall furnish to or place at the disposal of the
Corporation such information, reports, evaluations, analyses, and opinions as
the Corporation may, at any time or from time to time, reasonably request with
respect to the Fund or as the Investment Manager may deem helpful to the Fund.
9. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment Manager
or any affiliated person of the Investment Manager to render investment
supervisory and corporate administrative services to other investment companies
(including but not limited to one or more series of the Corporation), to act as
investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Corporation.
10. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER.
Neither the Investment Manager nor any of its directors, officers, or
employees performing services for the Corporation, with respect to the Fund, at
the direction or request of the Investment Manager in connection with the
Investment Manager's discharge of its obligations undertaken or reasonably
assumed with respect to this 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 this Agreement
relates; PROVIDED, that nothing herein contained shall be construed to protect
the Investment Manager or any such persons against any liability to the
Corporation or its shareholders to which the Investment Manager 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 the Investment Manager or any such persons to
exercise due care in rendering other services to the Corporation.
11. RETENTION OF SUB-ADVISER.
Subject to the Fund's obtaining the initial and periodic approvals
required under Section 15 of the 1940 Act, the Investment Manager may retain a
Sub-Adviser to perform investment advisory and other services to the Fund. The
retention of a Sub-Adviser shall be at the risk, cost, and expense of the
Investment Manager. The retention of a Sub-Adviser shall in no way reduce the
responsibilities or obligations of the Investment Manager under this Agreement
and the Investment Manager shall be responsible to the Corporation for all acts
or omissions of the Sub-Adviser in connection with the performance of the
Investment Manager's duties hereunder. The Investment Manager shall pay and
shall be solely responsible for the payment of the fees of the Sub-Adviser for
the performance of its services for the Fund.
12. TERM OF AGREEMENT.
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The term of this Agreement shall begin on the day and year first above
written, and unless sooner terminated as hereinafter provided, shall continue in
effect through October 16, 1994. Thereafter, this Agreement shall continue in
effect from year to year, subject to the termination provisions and all other
terms and conditions hereof; PROVIDED, that such continuance is specifically
approved at least annually by the Board of Directors of the Corporation or by
vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act; and PROVIDED FURTHER, that in
either event such continuance also is approved annually by vote, cast in person
at a meeting called for the purpose of voting on such approval of a majority of
the Board of Directors of the Corporation who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act and rules thereunder) of any
such party (hereinafter "non-interested Directors"). In any event, continuance
of this Agreement is subject to the approval of this Agreement by a majority of
the outstanding voting securities of the Fund, as a "series" of the Corporation
(as that term is defined in the 1940 Act and rules thereunder), within sixteen
months after the initial effectiveness of the Corporation's Registration
Statement under the 1933 Act pursuant to which the Corporation makes the initial
public offering of its shares.
Any approval of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act and rules thereunder)
of the Fund shall be effective to continue this Agreement, notwithstanding (i)
that a comparable agreement has not been approved by the holders of a majority
of the outstanding shares of any other series of the Corporation and (ii) that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Corporation, unless such approval shall be required by
any other applicable law or otherwise. The Investment Manager shall furnish to
the Corporation, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal or amendment thereof.
13. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; PROVIDED, that no such material amendment shall be effective
unless authorized on behalf of the Corporation (i) by resolution of the Board of
Directors of the Corporation, including a majority of the non-interested
Directors and (ii) if required by law, by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall automatically and
immediately terminate in the event of its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' prior written notice to the other party;
PROVIDED, that in the case of termination by the Corporation such action shall
have been authorized (i) by resolution of the Board of Directors of the
Corporation, including a majority of the non-interested Directors, or (ii) by
vote
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of a majority of the outstanding voting securities of the Fund; PROVIDED
FURTHER, that in the case of termination by the Investment Manager, such
termination shall not be effective until the Corporation shall have contracted
with one or more persons to serve as successor investment manager for the Fund
and such person(s) shall have assumed such position.
15. MISCELLANEOUS.
15.1 NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, (a) if to the Investment Manager,
to Pacific Global Investment Management Company, 215 North Marengo Avenue, Suite
115, Pasadena, CA 91101, and (b) if to the Corporation, at the foregoing office
of the Investment Manager.
15.2 CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
15.3 INTERPRETATION. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Directors
of its responsibility for and control of the conduct of the affairs of the
Corporation.
15.4 DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested person,"
"assignment," and "affiliated person," shall have the meanings assigned to them
by Section 2(a) of the 1940 Act. In addition, where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is relaxed by a
rule, regulation, or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, or order.
15.5 GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE BALANCED FUND
/s/ Thomas H. Hanson By: /s/ George A. Henning
- ------------------------ ---------------------------------
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
/s/ George A. Henning By: /s/ Kathleen A. Scott
- ------------------------ ---------------------------------
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SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, made as of the 1st day of September, 1994, 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 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, Hamilton & Bache, Inc. 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 Balanced Fund (the "Fund"), have entered into an Investment
Management Agreement dated as of October 16, 1992 (the "Investment Management
Agreement") pursuant to which PGIMC provides investment advisory and
administrative services to the Fund; and
WHEREAS, PGIMC proposes to engage the services of H&B as sub-adviser
("Sub-Adviser") to manage the Fund as permitted by the Investment Management
Agreement; and
WHEREAS, H&B is willing to perform sub-advisory services for the Fund upon
the terms and conditions and for the compensation hereinafter set forth;
<PAGE>
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. PGIMC hereby employs H&B to serve as Sub-Adviser with respect to the
assets of the Fund under management of PGIMC and to perform the services
hereinafter set forth. H&B hereby accepts such employment and agrees for the
compensation herein provided to assume all obligations herein set forth and to
bear all expenses of its performance of such obligations (but no other
expenses).
2. Subject to the supervision and control of the Corporation's Board of
Directors and of PGIMC, H&B shall manage the investment and 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 PGIMC. PGIMC shall promptly inform H&B of such further limitations
imposed by the Corporation. H&B shall establish the overall investment program
for the management of the Fund's assets. PGIMC shall assist in the formulation
and implementation of a continuing investment program for the management of the
Fund's assets. H&B 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 and PGIMC, H&B shall each have the authority to make all
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. As an
initial matter, H&B shall make all determinations with respect to the purchase
or sale of investments of the Fund; provided, however, that PGIMC may from time
to time, upon five (5) days written notice to H&B, reassign or reallocate the
duties, as PGIMC deems necessary, appropriate, or desirable. Consistent with its
duties hereunder, H&B shall advise PGIMC and 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 reports to PGIMC for PGIMC's use in
discharging its obligations under the Investment Management Agreement, which
reports may be distributed by
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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 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 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 placed in compliance
with procedures established by the Corporation's Board of Directors. When
placing such orders, H&B shall use its best efforts to obtain the best available
price and most favorable execution for the Fund. H&B shall use its 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 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 shall advise the Board of Directors of the
Corporation of any fees or payments of whatever type that it may be possible for
H&B or any affiliate of H&B to receive in connection with the purchase or sale
of investment securities for the Fund.
(b) Subject to prior authorization by PGIMC and to the appropriate
policies, procedures, and/or guidelines established by the Board of Directors,
H&B may also effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if H&B determines 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 H&B's overall responsibilities
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 shall promptly communicate to PGIMC and the Corporation's Board
of Directors such information relating to portfolio transactions as PGIMC or the
Board of Directors may reasonably request.
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(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 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 PGIMC or H&B 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;
(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, PGIMC, and H&B, persons, who may be employees of PGIMC, H&B, 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 or PGIMC 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
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(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 H&B, 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 shall cooperate with and make available to PGIMC, the Corporation,
and any agents engaged by the Corporation, H&B's 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 rendered by H&B under this
Agreement, PGIMC shall have the sole responsibility to pay to H&B a fee
calculated at the annual rate of .40% on the first $200 million of the average
daily net asset value of the Fund, .37% on the next $200 million, .34% of the
next $200 million, .31% of the next $200 million, .28% of the next $200 million
and .25% in excess of $1 billion of average daily net asset value.
The sub-advisory 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 sub-advisory 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
sub-advisory fee shall be payable through the date of termination.
H&B shall promptly reduce its 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
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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.
(b) H&B shall not be entitled to receive any payment for the
performance of its services hereunder from the Fund and shall look solely and
exclusively to PGIMC for payment of all fees for such services.
(c) H&B shall bear all expenses in connection with the performance of its
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 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 shall have acted in good faith and with due care; and, in any event, H&B
shall be liable for its willful misfeasance, bad faith, or negligence in the
performance of its investment advisory duties or for failure to exercise due
care in rendering other services under this Agreement. A good faith mistake in
judgement 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 October 31, 1994. 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 H&B, or (d) by H&B on sixty (60) days' prior written
notice to the Fund, provided, that if H&B terminates this Agreement for any
reason other than the Corporation's decision to make a change in fundamental
investment policies or restrictions applicable to the Fund over H&B's written
objection to such change, the termination by H&B will not be effective until
PGIMC shall have contracted with one or more persons to serve as a successor
sub-adviser
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for the Fund and such person or persons shall have assumed such position but in
no event will the termination be delayed more than one hundred eighty (180) days
after the end of the notice period. 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., 411
North Central Avenue, Suite 270, Glendale, CA 91203; (b) if to PGIMC, to Pacific
Global Investment Management Company, 215 North Marengo Avenue, Suite 115,
Pasadena, CA 91101; 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.
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.
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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
enforced in accordance with, the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PACIFIC GLOBAL
ATTEST: INVESTMENT MANAGEMENT COMPANY
/s/ /s/ George A.Henning
- ---------------------------- --------------------------------------
President
ATTEST: HAMILTON & BACHE,
COMPANY, INC.
/s/ Stephen K. Bache /s/ Mary N. Hamilton
- ---------------------------- --------------------------------------
President
ATTEST: PACIFIC GLOBAL FUND, INC. d/b/a
PACIFIC ADVISORS FUND INC.
/s/ /s/ George A.Henning
- ---------------------------- --------------------------------------
President
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EXHIBIT 4(f)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT made as of the 16th day of October, 1992,
by and between Pacific Global Fund, Inc., a Maryland corporation doing business
as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the Small Cap
Fund (the "Fund"), and Pacific Global Investment Management Company, a
California corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and register as such under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is a separately designated series of shares of Common
Stock of the Corporation; and
WHEREAS, the Investment Manager is engaged principally in the business of
rendering investment management and investment advisory services and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Corporation desires to retain the Investment Manager to
render investment supervisory and administrative services to the Fund in the
manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Corporation and the Investment Manager propose to engage a
subadviser ("Sub-Adviser") to provide certain investment advisory and other
services to the Fund, subject to the approval of the Board of Directors of the
Corporation and, to the extent required by law, subject to the approval of the
shareholders of the Fund;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1 INVESTMENT SUPERVISORY SERVICES. The Investment Manager shall, subject
to the supervision of the Board of Directors of the Corporation, act as
investment manager of the Corporation with respect to the Fund and, as such,
shall:
1.1.1 INVESTMENT OF FUND'S ASSETS. Supervise and direct, or cause
the Sub-Adviser to supervise and direct, the investment of the Fund's
assets in accordance with applicable
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law, and the investment objectives, investment program, policies, and
restrictions set forth in the then-current prospectus ("Prospectus") and
the then-current Statement of Additional Information ("SAI") relating to
the Fund contained in the Corporation's Registration Statement under the
1940 Act and the Securities Act of 1933, as amended ("1933 Act"), and
subject to such further limitations as the Board of Directors of the
Corporation may, from time to time, impose by written notice to the
Investment Manager.
1.1.2 INVESTMENT PROGRAM. Formulate and implement, or cause the
Sub-Adviser to formulate and implement, a continuing program for the
management of the Fund's assets and resources.
In furtherance of these duties and responsibilities, the Investment
Manager is authorized, in its discretion and without prior consultation
with the Corporation to: (i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and other securities or assets for
the Fund; and (ii) place orders and negotiate the commissions (if any) for
the execution of transactions in securities with or through such brokers,
dealers, underwriters, or issuers as the Investment Manager or Sub-Adviser
may select for the Fund.
1.2 RELATED SERVICES. The Investment Manager shall supervise the Transfer
Agent's performance of the administration of all aspects of the Corporation's
business and affairs with respect to the Fund as performed by the transfer agent
pursuant to an Administrative Services Agreement.
1.2.1 AGENTS. Assist the Corporation and transfer agent in
selecting, coordinating the activities of, supervising, and acting as
liaison with any other persons and agents engaged by the Corporation,
including the Corporation's custodian, accounting services agent, transfer
agent, dividend disbursing agent, shareholder servicing agent, independent
auditors, and independent legal counsel.
1.2.2 DIRECTORS AND OFFICERS. Authorize and permit the Investment
Manager's directors, officers and employees who may be elected or
appointed as directors or officers of the Corporation to serve in such
capacities, without remuneration from or additional cost to the
Corporation.
1.2.3 REPORTS TO THE CORPORATION. Furnish to or place at the
disposal of the Corporation such information, reports, evaluations,
analyses, and opinions relating to its functions as the Corporation may,
at any time or from time to time, reasonably request or as the Investment
Manager may deem helpful to the Corporation.
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2. ALLOCATION OF EXPENSES.
2.1 EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1 SALARIES AND FEES OF DIRECTORS AND OFFICERS. As between the
Corporation, with respect to the Fund, and the Investment Manager, the
Investment Manager shall pay all salaries, expenses, and fees, if any, of
the directors, officers, and employees of the Investment Manager who are
directors, or employees of the Corporation.
2.1.2 WAIVER OR ASSUMPTION AND REIMBURSEMENT OF CORPORATION EXPENSES
BY THE INVESTMENT MANAGER. The waiver or assumption and reimbursement by
the Investment Manager of any expense of the Corporation that the
Investment Manager is not required by this Agreement to waive, or assume
and reimburse, shall not obligate the Investment Manager to waive, or
assume or reimburse, the same or any similar expense of the Corporation on
any subsequent occasion, unless so required pursuant to a separate
agreement between the Corporation and the Investment Manager.
2.2 EXPENSES PAID BY THE CORPORATION. The Corporation, with respect to the
Fund, shall bear all expenses of its organization, operations, and business not
specifically waived, assumed, or agreed to be paid by the Investment Manager as
provided in this Agreement or any other agreement between the Corporation and
the Investment Manager. In particular, the expenses that the Corporation, with
respect to the Fund, shall bear include, but are not limited to:
2.2.1 CUSTODY AND ACCOUNTING SERVICES. All fees and expenses of
depositories, custodians, accounting service agents, and other agents for
the transfer, receipt, safekeeping, servicing of, and accounting for the
Fund's cash, securities, and other property, including, among other
things, fees and expenses for the calculation of standardized effective
and compound yield quotations for the Fund, maintenance of ledgers,
position and income reports, and settlement of Fund purchases and sales.
2.2.2 DISTRIBUTION EXPENSES. Distribution expenses of the Fund paid
pursuant to any plan of distribution adopted in accordance with the
provision of Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan").
2.2.3 TRANSFER AGENCY, SHAREHOLDER SERVICING, AND DIVIDED
DISBURSEMENT. All costs of establishing, maintaining, and servicing
accounts of shareholders of the Fund, including the Fund's proportionate
share of all fees and expenses of the Corporation's transfer agent,
administrative services agent, shareholder services agent, dividend
disbursing agent, and any other agents engaged by the Corporation to
service such Fund accounts. In addition, the Corporation shall reimburse
the Investment Manager and charge to the Fund the Fund's proportionate
share of all expenses incurred by the Investment Manager in responding to
telephonic and written inquiries from, and in mailing information to Fund
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shareholders and others requesting information on behalf of Fund
shareholders, regarding matters such as shareholder account or transaction
status, net asset value of Fund shares, Fund performance and general
information about the Fund.
2.2.4 SHAREHOLDER REPORTS AND OTHER COMMUNICATIONS. All costs of
preparing, setting in type, printing, and distributing reports and other
communications to shareholders of the Fund.
2.2.5 PROSPECTUSES. All cost of preparing, setting in type,
printing, and mailing to shareholders of the Fund annual or more frequent
revisions of the Corporation's Prospectus and SAI and any supplements
thereto.
2.2.6 SHAREHOLDER MEETINGS. All costs incidental to holding meetings
of shareholders of the Fund, including the printing of notices and proxy
materials, and proxy solicitations therefor.
2.2.7 PRICING AND PORTFOLIO VALUATION. All costs of daily valuation
of the individual portfolio securities of the Fund and daily computation
of the net asset value per share of the Fund, including a proportionate
share of the cost of any equipment obtained by the Corporation, the
Investment Manager, or agents of the Corporation, or proportionate share
of the cost of any equipment currently owned by the Investment Manager,
that will be used to price the Fund's shares or value the Fund's assets or
the cost of the services of any agents engaged by the Corporation for the
purpose of pricing Fund shares or valuing the assets of the Fund.
2.2.8 COMMUNICATIONS. All charges for equipment or services used for
communications with respect to the Fund between the Investment Manager or
the Corporation and the custodian, accounting services agent, transfer
agent, shareholder servicing agent, dividend disbursing agent, or any
other agent engaged by the Corporation to provide services to the Fund.
2.2.9 INDEPENDENT LEGAL AND ACCOUNTING FEES. The Fund's
proportionate share of all charges for services and expenses of the
Corporation's independent legal counsel and independent auditors.
2.2.10 DIRECTORS' FEES AND EXPENSES. The Fund's proportionate share
of all compensation of Directors (other than those directors affiliated
with the Investment Manager), all expenses incurred in connection with
their services as directors, and all expenses of meetings of the Board of
Directors of the Corporation and committees of the Board of Directors.
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2.2.11 FEDERAL REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of maintaining the registration of the Corporation
under the 1940 Act and maintaining the registration of the Fund's shares
or registering additional shares of the Fund under the 1933 Act, including
all fees and expenses incurred in connection with the preparation, setting
in type, printing, and filing of any post-effective amendments or
supplements to the Registration Statement, Prospectus, and SAI for the
Corporation under the 1933 Act or the 1940 Act that may be prepared from
time to time.
2.2.12 STATE REGISTRATION FEES. The Fund's proportionate share of
all fees and expenses of (i) maintaining the registration and
qualification of the Corporation or the Fund, as appropriate, and of the
Fund's shares for sale under the securities laws of various states and
jurisdictions, (ii) of registering and qualifying additional shares of the
Fund, and (iii) of maintaining the registration and qualification of the
Corporation or the Fund, as appropriate, under all other laws applicable
to the Corporation or the Fund, as appropriate, or its business
activities.
2.2.13 ISSUE, REDEMPTION, AND TRANSFER OF THE FUND'S SHARES. All
expenses incurred in connections with the issue, redemption, and transfer
of the Fund's shares, including the expenses of confirming all share
transactions and of transmitting any share certificates for the Fund.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable
by the Board of Directors of the Corporation, including, without
limitation, such bond, liability, and other insurance expense that may
from time to time be allocated to the Fund in a manner approved by the
Board of Directors of the Corporation.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions, if any, and
other charges incident to the purchase, sale, or lending of the Fund's
portfolio securities.
2.2.16 TAXES. The Fund's proportionate share of all taxes or
governmental fees payable to federal, state, or other governmental
agencies, domestic or foreign, including issue, stamp, or transfer taxes.
2.2.17 TRADE ASSOCIATION FEES. The Fund's proportionate share of all
fees, dues, costs of attendance at meeting and conferences, and other
expenses incurred in connection with the Corporation's membership in any
trade association or other investment organization.
2.2.18 PERFORMANCE INFORMATION. Industry performance reporting
services fees reasonably necessary for Board of Directors of the
Corporation to keep current regarding industry and regulatory
requirements.
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2.2.19 NONRECURRING AND EXTRAORDINARY EXPENSES. The Fund's
proportionate share of such nonrecurring and extraordinary expenses as may
arise, including the costs of actions, suits, or proceedings to which the
Corporation is a party and the expenses the Corporation may incur as a
result of its legal obligation to provide indemnification to its
directors, officers, and employees, and agents.
2.2.20 ORGANIZATIONAL EXPENSES. The Fund shall pay or assume all its
organizational expenses, subject to such expense limitation or
reimbursement arrangements as may be separately agreed to by the
Investment Manager and specified in the Registration Statement pursuant to
which the Fund makes the initial public offering of its shares.
3. MANAGEMENT FEES.
3.1 COMPENSATION. The Corporation, with respect to the Fund, shall pay the
Investment Manager, as compensation for all services rendered, facilities
provided, and expenses waived or assumed and reimbursed by the Investment
Manager, investment management fees at the annual rate of .75% of the first $200
million of average daily net assets of the Fund; .72% of average daily net
assets of the Fund up to the next $200 million; .69% of average daily net assets
of the Fund up to the next $200 million; and .66% of average daily net assets of
the Fund in excess of $600 million.
3.2 METHOD OF COMPUTATION. The investment management fee shall accrue on
each calendar day and the sum of the daily fee accruals for the Fund shall be
paid monthly to the Investment Manager on the first business day of the next
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 rates for the Fund, described in subparagraph 3.1. above, and multiplying
the product by the net assets of the Fund as determined in accordance with the
current Prospectus of the Corporation as of the close of business on the last
preceding business day on which the Corporation was open for business.
3.3 PRORATION OF FEE. If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
4. BROKERAGE.
Subject to seeking best execution, and subject to any policies or
procedures as then approved by the Board of Directors of the Corporation, the
Investment Manager, in carrying out its duties under Paragraph 1.1, may cause,
or permit the sub-Adviser to cause, the Corporation, on behalf of the Fund, to
pay a broker-dealer that furnishes brokerage or research services (as such
services are defined under Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"))
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a higher commission than that which might be charged by another broker-dealer
that does not furnish brokerage or research services or that furnishes brokerage
or research services deemed to be of lesser value, if the Investment Manager or
Sub-Adviser determines in good faith that the amount of such commission is
reasonable in relation to the value of the brokerage and research services
provided by the broker-dealer viewed in terms of either that particular
transaction or the overall responsibilities of the Investment Manager or
Sub-Adviser with respect to the other accounts, if any, as to which it exercises
investment discretion (as such term is defined under Section 3(a)(35) of the
1934 Act).
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 of this Agreement) employ, retain, or otherwise avail itself of the
services or facilities of other persons or organizations for the purpose of
providing the Investment Manager, the Corporation, or the Fund with (i) such
statistical and other factual information; (ii) such advice regarding economic
factors and trends; (iii) such advice as to occasional transactions in specific
securities; (iv) or such other information, advice, or assistance as the
Investment Manager may deem necessary, appropriate, or convenient for the
discharge of its obligations hereunder or otherwise helpful to the Investment
Manager, the Corporation, or the Fund, or in the discharge of the Investment
Manager's overall responsibilities with respect to the other accounts which it
serves as an investment manager.
6. OWNERSHIP OF RECORDS.
All records required to be maintained and preserved by the Corporation,
with respect to the Fund, pursuant to the provisions of rules and regulations of
the Securities and Exchange Commission under Section 31(a) of the 1940 Act and
maintained and preserved by the Investment Manager on behalf of the Corporation,
with respect to the Fund, are the property of the Corporation and shall be
surrendered by the Investment Manager promptly on request by the Corporation.
7. REPORTS TO THE INVESTMENT MANAGER.
The Corporation shall furnish or otherwise make available to the
Investment Manager such Prospectuses, Statements of Additional Information,
financial statements, proxy statements, reports, and other information relating
to the business and affairs of the Corporation, with respect to the Fund, as the
Investment Manager may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
8. REPORTS TO THE CORPORATION.
The Investment Manager shall furnish to or place at the disposal of the
Corporation such information, reports, evaluations, analyses, and opinions as
the Corporation may, at any time or from
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time to time, reasonably request with respect to the Fund or as the Investment
Manager may deem helpful to the Fund.
9. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment Manager
or any affiliated person of the Investment Manager to render investment
supervisory and corporate administrative services to other investment companies
(including but not limited to one or more series of the Corporation), to act as
investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Corporation.
10. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER.
Neither the Investment Manager nor any of its directors, officers, or
employees performing services for the Corporation, with respect to the Fund, at
the direction or request of the Investment Manager in connection with the
Investment Manager's discharge of its obligations undertaken or reasonably
assumed with respect to this 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 this Agreement
relates; PROVIDED, that nothing herein contained shall be construed to protect
the Investment Manager or any such persons against any liability to the
Corporation or its shareholders to which the Investment Manager 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 the Investment Manager or any such persons to
exercise due care in rendering other services to the Corporation.
11. RETENTION OF SUB-ADVISER.
Subject to the Fund's obtaining the initial and periodic approvals
required under Section 15 of the 1940 Act, the Investment Manager may retain a
Sub-Adviser to perform investment advisory and other services to the Fund. The
retention of a Sub-Adviser shall be at the risk, cost, and expense of the
Investment Manager. The retention of a Sub-Adviser shall in no way reduce the
responsibilities or obligations of the Investment Manager under this Agreement
and the Investment Manager shall be responsible to the Corporation for all acts
or omissions of the Sub-Adviser in connection with the performance of the
Investment Manager's duties hereunder. The Investment Manager shall pay and
shall be solely responsible for the payment of the fees of the Sub-Adviser for
the performance of its services for the Fund.
12. TERM OF AGREEMENT.
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The term of this Agreement shall begin on the day and year first above
written, and unless sooner terminated as hereinafter provided, shall continue in
effect through October 16, 1994. Thereafter, this Agreement shall continue in
effect from year to year, subject to the termination provisions and all other
terms and conditions hereof; PROVIDED, that such continuance is specifically
approved at least annually by the Board of Directors of the Corporation or by
vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act; and PROVIDED FURTHER, that in
either event such continuance also is approved annually by vote, cast in person
at a meeting called for the purpose of voting on such approval of a majority of
the Board of Directors of the Corporation who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act and rules thereunder) of any
such party (hereinafter "non-interested Directors"). In any event, continuance
of this Agreement is subject to the approval of this Agreement by a majority of
the outstanding voting securities of the Fund, as a "series" of the Corporation
(as that term is defined in the 1940 Act and rules thereunder), within sixteen
months after the initial effectiveness of the Corporation's Registration
Statement under the 1933 Act pursuant to which the Corporation makes the initial
public offering of its shares.
Any approval of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act and rules thereunder)
of the Fund shall be effective to continue this Agreement, notwithstanding (i)
that a comparable agreement has not been approved by the holders of a majority
of the outstanding shares of any other series of the Corporation and (ii) that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Corporation, unless such approval shall be required by
any other applicable law or otherwise. The Investment Manager shall furnish to
the Corporation, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal or amendment thereof.
13. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; PROVIDED, that no such material amendment shall be effective
unless authorized on behalf of the Corporation (i) by resolution of the Board of
Directors of the Corporation, including a majority of the non-interested
Directors and (ii) if required by law, by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall automatically and
immediately terminate in the event of its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' prior written notice to the other party;
PROVIDED, that in the case of termination by the Corporation such action shall
have been authorized (i) by resolution of the Board of Directors of the
Corporation, including a majority of the non-interested Directors, or (ii) by
vote of a majority of the outstanding voting securities of the Fund; PROVIDED
FURTHER, that in the case of
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termination by the Investment Manager, such termination shall not be effective
until the Corporation shall have contracted with one or more persons to serve as
successor investment manager for the Fund and such person(s) shall have assumed
such position.
15. MISCELLANEOUS.
15.1 NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, (a) if to the Investment Manager,
to Pacific Global Investment Management Company, 215 North Marengo Avenue, Suite
115, Pasadena, CA 91101, and (b) if to the Corporation, at the foregoing office
of the Investment Manager.
15.2 CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
15.3 INTERPRETATION. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Directors
of its responsibility for and control of the conduct of the affairs of the
Corporation.
15.4 DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested person,"
"assignment," and "affiliated person," shall have the meanings assigned to them
by Section 2(a) of the 1940 Act. In addition, where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is relaxed by a
rule, regulation, or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, or order.
15.5 GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE SMALL CAP FUND
/s/ Thomas H. Hanson By: /s/ George A. Henning
- ------------------------ ---------------------------------
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
/s/ George A. Henning By: /S/ Kathleen A. Scott
- ------------------------ ---------------------------------
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EXHIBIT 5(a)
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT made this 16th day of October, 1992, by and between
Pacific Global Fund, Inc., a Maryland corporation doing business as Pacific
Advisors Fund Inc. (the "Corporation"), and Pacific Global Fund Distributors,
Inc., a California corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and is registered as such under the Investment
Company Act 1940, as amended (the "1940 Act"); and
WHEREAS, the Corporation is authorized to issue shares of its Common
Stock, par value $.01 per share (the "Shares"), in separately designated series
("Funds") each with its own investment objectives, investment program, policies,
and restrictions; and
WHEREAS, the Corporation has registered the Shares of the Funds under the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to a registration
statement on Form N-1A (the "Registration Statement"), including a prospectus
("Prospectus") and a statement of additional information ("Statement of
Additional Information"); and
WHEREAS, the Corporation has adopted a Plan of Distribution Pursuant to
Rule 12b-1 under the 1940 Act (the "Distribution Plan") and may enter into
related agreements providing for the distribution of the Shares of the Funds;
and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"); and
WHEREAS, the Corporation wishes to engage the services of the Distributor
as distributor of the Shares of the Funds and the Distributor is willing to
serve in that capacity;
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. APPOINTMENT OF DISTRIBUTOR. (a) The Corporation hereby appoints the
Distributor as principal underwriter and distributor of the Corporation to sell
the Shares of the Funds in jurisdictions wherein the Shares may be legally
offered for sale. The Distributor shall be the exclusive agent for the
distribution of Shares of the Funds; PROVIDED, HOWEVER, that the Corporation
<PAGE>
in its absolute discretion may issue Shares of the Funds otherwise than through
the Distributor in connection with (i) the payment or reinvestment of dividends
or distributions, (ii) any merger or consolidation of the Corporation or a Fund
with any other investment company or trust or any personal holding company, or
the acquisition of the assets of any such entity or another series of the
Corporation, (iii) any offer of exchange authorized by the Board of Directors of
the Corporation, (iv) any sales of Shares to directors and officers of the
Corporation and such other persons identified in the current Prospectus and
Statement of Additional Information of the Corporation, or (v) the issuance of
such Shares to a unit investment trust if such unit investment trust has elected
to use Shares as an underlying investment. Notwithstanding any other provision
hereof, the Corporation may terminate, suspend, or withdraw the offering of the
Shares of a Fund whenever, in its sole discretion, it deems such action to be
desirable.
(b) The Distributor hereby accepts such appointment as principal
underwriter and distributor of the Corporation and agrees that it will use its
best efforts to promote the Funds and to solicit orders for the purchase of
Shares. The Distributor shall sell Shares of the Funds as agent for the
Corporation at prices determined as hereinafter provided and on the terms set
forth herein, all according to applicable federal and state laws and regulations
and the Articles of Incorporation and By-Laws of the Corporation. The
Distributor may sell Shares of the Funds to or through qualified brokers,
dealers or others and shall require each such person to conform to the
provisions hereof, the Registration Statement, the current Prospectus and
Statement of Additional Information, and applicable law. Neither the Distributor
nor any such person shall withhold the placing of purchase orders for Shares so
as to make a profit thereby.
(c) The Distributor shall order Shares of the Funds from the Corporation
only to the extent that it shall have received purchase orders therefor. The
Distributor will not make, or authorize any brokers, dealers, or others to make,
(i) any short sales of Shares or (ii) any sales of Shares to any director or
officer of the Corporation, the Distributor, or any corporation or association
furnishing investment advisory, managerial, or supervisory services to the
Corporation, or to any such corporation or association, unless such sales are
made in accordance with the then current Prospectus and Statement of Additional
Information.
(d) The Distributor is not authorized by the Corporation to give any
information or to make any representation other than those contained in the
current Prospectus, Statement of Additional Information, and shareholder
reports, or in supplementary sales materials specifically approved by the
Corporation.
2. OFFERING PRICE OF SHARES. All Shares of each Fund sold under this
Agreement shall be sold at the public offering price per Share in effect at the
time of the sale as described in the then current Prospectus and Statement of
Additional Information; PROVIDED, HOWEVER, that any public offering price for
the Shares shall be the net asset value per Share plus a sales charge of not
more than 5.75% of such public offering price. The excess, if any, of the public
offering price over the net asset value of the Shares sold by the Distributor as
agent shall be retained by the Distributor as
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a commission for its services hereunder. Out of such commission the Distributor
may allow commissions or concessions to brokers or dealers, and, in its
discretion, to others, in such amounts as the Distributor shall determine from
time to time. Except as may be otherwise determined by the Distributor from time
to time, such commissions or concessions shall be uniform to all brokers and
dealers. At no time shall the Corporation receive less than the full net asset
value of the Shares, determined in the manner set forth in the then current
Prospectus and Statement of Additional Information.
3. DISTRIBUTION PLAN PAYMENTS. (a) The Distributor shall be entitled to
reimbursement of its expenses incurred in promoting the sale of Shares of each
Fund, including payments made to qualified brokers, dealers, and others in
respect of Shares of each Fund sold by such persons. Such payments to the
Distributor shall be made by the Funds pursuant to the Distribution Plan at such
times and in such amount as the Board of Directors of the Corporation may from
time to time determine.
(b) The Distributor shall prepare and deliver reports to the Board of
Directors of the Corporation on a regular basis, at least quarterly, showing the
payments made by the Distributor to qualified brokers, dealers, and others and
the payments made by the Funds to the Distributor pursuant to the Distribution
Plan, and other amounts expended by the Distributor in connection with its
activities hereunder and the purposes for which such expenditures were made, as
well as any supplemental reports as the Board of Directors of the Corporation
may from time to time reasonably request.
4. PAYMENT OF EXPENSES. (a) Except as otherwise provided herein, the
Distributor shall pay, or arrange for others to pay, all its expenses, including
the following: (i) payments to sales representatives of the Distributor and to
qualified brokers, dealers and others in respect of the sale of Shares of the
Funds; (ii) compensation and expenses of employees of the Distributor who engage
in or support distribution of Shares of the Funds or render shareholder support
services not otherwise provided by the Corporation's transfer and shareholder
servicing agent; (iii) formulation and implementation of marketing and
promotional activities; (iv) preparation, printing, and distribution of
supplementary sales materials and the printing and distribution of Prospectuses,
Statements of Additional Information, and shareholder reports for recipients
other than existing shareholders of the Funds; (v) qualification of the
Corporation as a broker or dealer under state law as well as qualification of
the Corporation as an entity authorized to do business in certain states; and
(vi) obtaining such information, analyses, and reports with respect to marketing
and promotional activities as the Corporation may from time to time reasonably
request.
(b) The Corporation shall pay or arrange for others to pay the following
expenses: (i) preparation, printing, and distribution to shareholders of
Prospectuses and Statements of Additional Information; (ii) preparation,
printing, and distribution of shareholder reports and other communications to
shareholders; (iii) registration of the Shares of the Funds under the federal
securities laws;
3
<PAGE>
(iv) qualification of the Shares of the Funds for sale in such states as the
Distributor and the Corporation may approve; (v) maintaining facilities for the
issue and transfer of Shares; (vi) supplying information, prices, and other data
to be furnished by the Corporation under this Agreement; and (vii) taxes
applicable to the sale or delivery of the Shares of the Funds or certificates
therefor.
5. FURNISHING OF INFORMATION. The Corporation shall furnish to the
Distributor for use in connection with the sale of Shares of the Funds such
information, financial statements, and other documents as the Distributor may
reasonably request. The Corporation shall also make available such number of
copies of the current Prospectus, Statement of Additional Information, and
shareholder reports as the Distributor shall reasonably request.
6. REPURCHASE OF SHARES. The Distributor as agent and for the account of
the Corporation may repurchase Shares of the Funds offered for resale to it and
redeem such Shares at their net asset value determined as set forth in the
Prospectus and Statement of Additional Information.
7. INDEMNIFICATION. (a) The Corporation agrees to indemnify and hold
harmless the Distributor and each person, if any, who controls the Distributor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any losses, claims, damages, or liabilities to which the Distributor or
such controlling person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto or
the Prospectus (other than an omitting prospectus prepared pursuant to
Rule 482 under the 1933 Act unless such omitting prospectus has been
specifically approved by the Corporation) or the Statement of Additional
Information or any amendment or supplement thereto or an annual or interim
report to shareholders; or
(ii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto or the Prospectus (other than an
omitting prospectus prepared pursuant to Rule 482 under the 1933 Act
unless such omitting prospectus has been specifically approved by the
Corporation) or the Statement of Additional Information or any amendment
or supplement thereto or an annual or interim report to share holders, a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
and shall reimburse, as incurred, the Distributor and each such controlling
person for any legal or other expenses reasonably incurred by the Distributor or
such controlling person in connection with
4
<PAGE>
investigating, defending against, or appearing as a third-party witness in
connection with any such loss, claim, damage, liability, or action; PROVIDED,
HOWEVER, that the Corporation shall not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or any amendment thereto, or the
Prospectus or Statement of Additional Information or any amendment or supplement
thereto, or in an annual or interim report to shareholders, in reliance upon and
in conformity with written information furnished to the Corporation by the
Distributor specifically for use therein; and PROVIDED, FURTHER, that this
indemnity agreement shall not protect the Distributor or any such controlling
person against any liability to which it would otherwise be subject by reason of
willful misfeasance, bad faith, or negligence in the performance of its duties,
or by reason of its failure to exercise due care in rendering services
hereunder. This indemnity agreement shall be in addition to any liability which
the Corporation may otherwise have.
(b) The Distributor agrees to indemnify and hold harmless the Corporation,
each of the Corporation's directors, each of the Corporation's officers who
signed the Registration Statement, and each person, if any, who controls the
Corporation within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any losses, claims, damages or liabilities to which the
Corporation or any such director, officer, or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto or
the Prospectus or Statement of Additional Information, or any amendment or
supplement thereto, or the omission or alleged omission to state in the
Registration Statement or any amendment thereto, or the Prospectus or
Statement of Additional Information or any amendment or supplement
thereto, a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Corporation by the Distributor specifically
for use therein; or
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any unauthorized supplementary sales materials or
omitting prospectus prepared pursuant to Rule 482 under the 1933 Act, or
the omission or alleged omission to state in any such materials or
prospectus, a material fact required to be stated therein or necessary to
make the statements therein not misleading; or
(iii) any act or deed of the Distributor, its employees, or its
sales representatives which has not been authorized by the Corporation in
any Prospectus or Statement of Additional Information or by this
Agreement;
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and shall reimburse, as incurred, any legal or other expenses reasonably
incurred by the Corporation or any such director, officer, or controlling person
in connection with investigating, defending against, or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action; PROVIDED, HOWEVER, that this indemnity agreement shall not protect
any director or officer of the Corporation against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. This indemnity agreement shall be in addition to any liability which the
Distributor may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 7. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party shall not be liable to such indemnified party
under this Section 7 for any legal or other expense, other than reasonable costs
of investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
or (ii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
shall not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party, unless such indemnifying party waived its rights under this Section 7 in
which case the indemnified party may effect such a settlement without such
consent.
8. TERM AND TERMINATION. (a) This Agreement shall become effective as
of the date hereof. Unless sooner terminated as herein provided, this Agreement
shall remain in full force and effect until October 16, 1994, and thereafter may
be continued for successive periods of one year, but only so long as each such
continuance is specifically approved at least annually (i) by the Board of
Directors of the Corporation, and (ii) by vote of a majority of the directors of
the Corporation who are not interested persons of the Corporation and who have
no direct or indirect financial interest in
6
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the operation of the Distribution Plan or in this Agreement or any other
agreement related to the Distribution Plan (the "Rule 12b-1 Directors"), cast in
person at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors of the Corporation or a majority of the
Rule 12b-1 Directors, by vote of a majority of the outstanding voting securities
of the Corporation, or by the Distributor, on not more than 60 days' nor less
than 30 days' written notice to the other party or upon such shorter notice as
may be mutually agreed upon.
(c) This Agreement shall automatically terminate in the event of its
assignment.
(d) The reimbursement and indemnification provisions contained in Section
7 of this Agreement shall remain in full force and effect regardless of any
termination of this Agreement.
9. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement the terms
"assignment," "interested person," "majority of the outstanding voting
securities," and "principal underwriter" shall have their respective meanings
defined in the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted to either the Distributor or the
Corporation by the Securities and Exchange Commission, or such interpretative
positions as may be taken by the Commission or its staff under the 1940 Act.
10. NOTICES. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, (a) if to the Corporation, to
Pacific Global Fund, Inc., 215 North Marengo Avenue, Suite 115, Pasadena, CA
91101, and (b) if to the Distributor, to Pacific Global Fund Distributors,
Inc., at the foregoing office of the Corporation.
11. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
12. INTERPRETATION. Nothing herein contained shall be deemed to require
the Corporation to take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Directors
of its responsibility for and control of the conduct of the affairs of the
Corporation.
7
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13. GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC
d/b/a PACIFIC ADVISORS FUND INC.
/s/ Thomas H. Hanson By: /s/ George A. Henning
- ------------------------ ---------------------------------
ATTEST: PACIFIC GLOBAL FUND
DISTRIBUTORS, INC.
/s/ George A. Henning By: /s/ Kathleen A. Scott
- ------------------------ ---------------------------------
8
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EXHIBIT 8(a)(1)
TRANSFER AGENCY, DIVIDEND DISBURSING AGENCY AND
ADMINISTRATIVE SERVICE AGREEMENT
This agreement, dated as of the 22nd day of December, 1992, made by and
between Pacific Global Investor Services, Inc. ("PGIS") a Registered Transfer
Agent duly organized and existing under the laws of the State of California and
Pacific Global Fund, Inc. d/b/a Pacific Advisors Fund Inc. ("Fund" or "PAF"), a
corporation and Registered Investment Company duly organized and existing under
the laws of the State of Maryland.
WITNESSETH THAT:
WHEREAS, PGIS is a Registered Transfer Agent under Section 17A (c) of the
Securities Exchange Act of 1934 ("1934 Act") is willing to arrange to have
performed or will act as Transfer Agent of Pacific Advisors Fund Inc., Dividend
Disbursing Agent, as Administrator of the Exchange, Telephone Redemption and
Expedited (Wire) Redemption Privileges of the Fund, Administrator of Blue Sky
registrations, and Administrator of qualified retirement plans offered by the
Fund, to assist Pacific Global Investment Management Company (the "Adviser" or
"PGIMC") in the performance of certain administrative duties, as well as to act
for the Fund in other respects as hereinafter stated; and
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WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in four series, which
together with all other series subsequently established by the Fund, are made
subject to this Agreement and are herein referred to as the "Portfolio(s)"; and
WHEREAS, PGIS acknowledges that the Fund is organized as a series
investment company consisting of a number of individual Portfolios to which
PGIS's performance of duties may vary for each Portfolio; and
WHEREAS, the Fund desires to appoint PGIS the Transfer Agent of all shares
of the Fund, and as Dividend Disbursing Agent and Administrative Service Agent
during the period of this Agreement; and
WHEREAS, PGIS has agreed to provide the office equipment, employees and
office space necessary to provide the services contemplated by this Agreement;
and
WHEREAS, the parties hereto desire to set forth certain terms relating to
the activities of PGIS under this Agreement.
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NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto, intending to be legally bound, do hereby
agree as follows:
THE TRANSFER AGENCY
SECTION 1. PAF hereby appoints PGIS as the Fund's Transfer Agent, and PGIS
accepts such appointment and agrees to act in such capacity upon terms set forth
in this Agreement.
SECTION 2. The term "Plan" as used in this Agreement shall include the
services and privileges offered to Shareholders of the Fund in compliance with
the Fund's current prospectus, including but not limited to: Automatic Dividend
Reinvestment Plan; Exchange, Telephone Redemption and Expedited (Wire)
Redemption Privileges; and other types of services or privileges, in a form
acceptable to PGIS, which the Fund may from time to time adopt and make
available to its Shareholders.
SECTION 3. PGIS or its agent will perform the following services in
accordance with the current prospectus of the Fund, on behalf of each Portfolio,
as in effect from time to time:
(a) Receive for acceptance orders for the purchase of shares ("Shares")
of the Fund, with respect to each Portfolio, and promptly deliver
payment and appropriate documentation thereof to the Custodian of
the Fund, on behalf of each Portfolio, as appropriate;
3
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(b) Pursuant to purchase orders upon receipt by PGIS or its agent, or
the Fund's Custodian, of a check or other funds in payment of the
purchase price, issue the appropriate number of Shares and hold such
Shares in the appropriate Shareholder account;
(c) Receive for acceptance redemption requests and redemption directions
and promptly deliver the appropriate documentation thereof to the
Fund's Custodian, on behalf of each Portfolio, as appropriate;
(d) In respect to the transactions in paragraphs (a), (b), and (c)
above, PGIS or its agent shall execute transactions directly with
broker-dealers authorized in writing by the Fund who shall thereby
be deemed to be acting on behalf of the Fund;
(e) At the appropriate time and when it has monies made available to it
by the Fund's Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders; and
(f) Effect exchanges of Shares by registered owners thereof upon receipt
of appropriate instructions.
SECTION 4. PGIS or its agent will record Shareholder holdings on the books
of the Fund, with respect to each Portfolio, in noncertificate form (unless
share certificates ("Share Certificates") are
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issued upon written request by a Shareholder) and PGIS agrees to regularly
advise Shareholders of their ownership positions. Upon written request by
Shareholders for Share Certificates, PAF authorizes PGIS or its agent to
countersign Share Certificates for issuance and delivery. Share Certificates
shall be supplied by the Fund. The Fund does not intend to distribute dividends
in certificate form.
PGIS or its agent will issue replacement Share Certificates for those
Certificates alleged to have been lost, stolen, or destroyed, in accordance with
procedures approved by the Board of Directors of the Fund and upon receipt by
PGIS or its agent of indemnification satisfactory to PGIS or its agent and
protecting PGIS, its agent, and the Fund. PGIS or its agent may, at their
option, issue replacement certificates in place of mutilated Stock Certificates
upon presentation thereof and without such indemnity.
SECTION 5. PGIS or its agent will maintain records, which at all times
will be the property of and under the control of the Fund and available for
inspection by the Fund, showing for each Shareholder's account the following:
(a) Name, address and United States taxpayer identification or
Social Security number, if provided (or amounts withheld with respect to
dividends and distribution on Shares if a taxpayer identification or Social
Security number is not provided);
(b) Number of Shares held and number of Shares for which
certificates have been issued:
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(c) Historical information regarding the account of each
Shareholder, including dividends and distributions paid, if any, and the date
and price for all transactions on a Shareholder's account during the preceding
twenty-four months;
(d) Any stop or restraining order placed against a Shareholder
account:
(e) Information with respect to withholdings of taxes on dividends
paid to foreign accounts; and
(f) Any instructions as to record address, and any correspondence or
instructions relating to the current maintenance of a Shareholder's account.
PGIS or its agent will also:
(a) Abide by and administer on behalf of the Fund Abandoned Property
laws of the various states, to include the escheat of dividends, redemption
proceeds and Shares returned as undeliverable;
(b) Provide the Fund, with respect to each Portfolio, with Blue Sky
Reports produced at month end by the transfer agency system; and
(c) Remail dividend checks, redemption checks, periodic statements,
daily trade confirmations and daily confirmations of financial transactions
returned as undeliverable. PGIS or its agent shall report to the Fund within 90
days of the Fund's request regarding Shareholders with respect to which checks
or other communications have been returned and shall follow the Fund's
reasonable instructions with respect thereto.
In addition, PGIS as Transfer Agent will keep and maintain on behalf of
the Fund all records which the Fund is required to keep and maintain pursuant to
any applicable statute, rule or regulation, including without limitation Rule
l7AD-l0(e) under the Securities Exchange Act of 1934, and Rule 31a-l under the
Investment Company Act of 1940, relating to the maintenance of records in
connection with the services to be provided hereunder. PGIS as Transfer Agent
shall also maintain those records necessary to carry out its duties hereunder.
Such records at all times will be the property and under the control of the
Fund.
6
<PAGE>
PGIS may rely conclusively and act without further investigation upon any
list, instruction, certification, authorization, Share Certificate or other
instrument or paper believed by it in good faith to be genuine and unaltered,
and to have been signed, countersigned, or executed by a duly authorized person
or persons, or upon the instructions of a designated officer of the Fund, or
upon the advice of counsel for the Fund.
THE DIVIDEND DISBURSEMENT AGENCY
SECTION 6. PAF hereby appoints PGIS as Dividend Disbursing Agent, and PGIS
accepts such appointment and agrees to act in such capacity upon terms set forth
in this Agreement.
Upon declaration of each dividend and each capital gains distribution by
the Board of Directors of the Fund, on behalf of each Portfolio, PAF shall
notify PGIS of the name of the Fund's Portfolio as to which such dividend or
capital gains distribution applies, date of such declaration, the amount payable
per share, the record date for determining the Shareholders entitled to payment,
the payment date, and the reinvestment date ("Ex-Dividend Date") and price which
is to be used to purchase Shares for reinvestment. As specified in Section 11
below, PGIS as Dividend Disbursing Agent will calculate the amount of dividend
or distribution owed to each Shareholder account, but shall in no way be
responsible for the determination of the dividend or distribution amount, and
may rely conclusively on the information it receives from a duly authorized
officer of the Fund.
7
<PAGE>
SECTION 7. On or before each payment date, the Fund will transfer, or
cause the Fund's Custodian, with respect to each Portfolio, to transfer, to PGIS
or its agent, in its capacity as Dividend Disbursing Agent, the total amount of
the dividend or distribution currently payable, and PGIS or its agent in such
capacity will, on the designated payment date, mail distribution checks to those
Shareholders electing to receive such payments in such form for the proper
amounts payable to them. Dividends and capital gains distributions directed to
be reinvested under the Plans will be transferred to PGIS or its agent in its
capacity as Administrative Service Agent for application as provided in Section
11.
THE ADMINISTRATIVE SERVICE AGENCY
SECTION 8. PAF hereby appoints PGIS as Administrative Service Agent with
respect to the Fund's Plans and Blue Sky registration matters, and PGIS accepts
such appointment and agrees to act in such capacity upon the terms set forth in
this Agreement. As provided in Sections 4 and 5, PGIS or its agent will maintain
records, which will be part of the stock registry records as well as its records
of the administration of the Plans, in which it will record, among other things,
the transactions effected for the respective Shareholders and the number of
Shares and fractions from time to time owned by them.
SECTION 9. As to the Fund, it will be the practice of PGIS or its agent to
process payments by Shareholders received by PGIS or its agent in acceptable
form until the time of the closing of the New York Stock Exchange on each day on
which said exchange is open since the same time on the
8
<PAGE>
prior business day in which said exchange was open, and to obtain from the Fund,
with respect to each Portfolio, or the Fund Accounting and Pricing Agent a
quotation (on which it may conclusively rely) as of the close of the said
exchange. PGIS or its agent will proceed to calculate the amount available for
investment in Shares at the public offering price (net asset value) so quoted.
PGIS, or its agent, while the public offering price so quoted is still in
effect, will, as agent for Shareholders, place an order with the Fund, (or if
applicable), the Fund's Distributor for the proper number of Shares and
fractions.
SECTION 10. As to the Fund, PGIS or its agent will pay over to the
respective Portfolio's Custody Account (residing at the Bank of America NT & SA,
"Bank of America") an amount equal to the net proceeds of the subscriptions
received by PGIS or its agent and previously deposited by PGIS or its agent to
the Fund's deposit account, based on the availability of funds set forth by the
Fund's Cash Management Agent (the Bank of America). PGIS or its agent will
furnish said Custodian with such information as may be required by the Custody
Agreement with the Fund. The proper number of Shares and fractions will then be
recorded on the books of the Fund in noncertificate form.
SECTION 11. In connection with dividends and capital gains distributions
to be reinvested in Shares of the Portfolios, the Fund will promptly provide
PGIS or its agent with the net asset values of the Shares of each Portfolio
computed as of the close of business on the Ex-Dividend Date, whereupon PGIS or
its agent will calculate the number of Shares and fractions thereof issuable to
each Shareholder. PGIS or its agent will advise the Fund, with respect to each
Portfolio, of the
9
<PAGE>
number of Shares and fractions thereof to be issued to each Shareholder, and
will record such information on the books of the Fund, with respect to each
Portfolio, as appropriate, in noncertificate form.
SECTION 12. PGIS as Transfer Agent or its agent is authorized upon receipt
of Share Certificates registered in the name of the Shareholder to cancel such
Share Certificates, to debit the individual stock accounts and to record the
Shares as a credit on the books of the Fund in noncertificate form.
SECTION 13. PGIS or its agent will administer the Exchange and Redemption
Plans for the Shareholders. PGIS or its agent will record in the accounts of the
Shareholders the share balances from time to time, the additional Shares
purchased with the reinvested dividends and distributions, and the Shares
redeemed to provide any withdrawals.
SECTION 14. As to the Fund, whenever PGIS or its agent shall have received
requests from Shareholders to redeem Shares and remit proceeds, as Transfer
Agent PGIS or its agent will advise the respective Portfolio that it has Shares
for redemption, stating the number of Shares and fractions to be redeemed. The
Fund, on behalf of the appropriate Portfolio, will then quote to PGIS or its
agent the applicable net asset value or redemption price whereupon PGIS or its
agent will furnish the Fund, on behalf of such Portfolio, with an appropriate
confirmation of the redemption and will process the redemption by filing with
the Fund's Custodian an appropriate statement of PGIS as may be required by the
Custody Agreement. The Fund, on behalf of the appropriate Portfolio, shall
authorize the
10
<PAGE>
Custodian pay over to PGIS as Transfer Agent, or its agent the total redemption
price stated in the statement of PGIS for proper distribution and application.
The stock registry books recording outstanding Shares, shares issued in
noncertificate form and the individual accounts of the Shareholders shall be
properly debited.
SECTION 15. Subject to the supervision and control of the Fund's Board of
Directors and its Adviser, PGIS, as Administrative Service Agent, or its agent,
shall determine the jurisdictions in which the Fund's shares shall be registered
or qualified for sale and, in connection therewith, PGIS or its agent shall be
responsible for the initial registration or qualification for sale and
maintenance of the registrations or qualifications of shares for sale under the
securities laws (Blue Sky laws) of any state, and shall maintain all records
relating thereto. Payment of share registration fees (Blue Sky fees) for
qualifying or continuing the qualification of the Fund shall be made by the
Fund.
SECTION 16. Subject to the supervision and control of the Fund's Board of
Directors and its Adviser, PGIS, as Administrative Service Agent, or its agent,
shall supervise the maintenance and compliance with applicable laws and
regulations of all Qualified Retirement Plans offered by the Fund.
SECTION 17. The practices and procedures of PGIS and the Fund above
outlined in Sections 6 to 16, inclusive, may be altered or modified from time to
time as may be mutually agreed by the parties to this Agreement, so long as the
intent and purposes of the Plans, as stated from time to time in the current
prospectus of the Fund, are observed. For special cases, the parties hereto may
adopt
11
<PAGE>
such procedures as may be appropriate or practical under the circumstances and
PGIS may conclusively assume that any special procedure which has been approved
by PGIS and the Fund does not conflict with or violate any requirements of the
Fund's Articles of Incorporation, By-Laws or current prospectus, or any rule,
regulation or requirement of any regulatory body.
SECTION 18. PGIS or its agent in acting for Shareholders, or in any
other capacity, shall not be liable for any loss or damage, including counsel
fees resulting from its actions or omissions to act or otherwise, except for any
loss or damage arising out of its own failure to act in good faith, negligence
or willful misconduct. Nor shall PGIS or its agent be liable for any taxes,
assessments or governmental charges which may be levied or assessed on any basis
whatsoever in connection with the administration of the Plans, excepting only
for taxes assessed against it in its corporate capacity out of its compensation
hereunder.
MISCELLANEOUS
SECTION 19. As to the Fund, in addition to the services as Transfer Agent,
Dividend Disbursing Agent and Administrative Service Agent as above set forth,
PGIS or its agent may assist the Adviser in the performance of its
administrative duties and may perform other services for the Fund as agreed from
time to time, including but not limited to: withholding taxes on U.S. resident
and non-resident alien accounts and establishing exemptions from withholding;
preparing and filing U.S. Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and capital gains distributions by
federal authorities for all Shareholders and mailing
12
<PAGE>
copies of such forms to Shareholders where required; mailing of proxy materials
of the Fund; receiving and tabulating proxies; preparing and mailing Shareholder
activity statements; mailing of semi-annual and annual reports of the Fund; and
the preparation of one annual list of Shareholders. All material and data
supplied to PGIS or its agents shall be compatible with the mechanical and
electronic equipment used by PGIS and its agents. The Fund agrees that prior to
effecting any change in its prospectus which would increase or alter the duties
and obligations of PGIS hereunder, PGIS shall be advised of such proposed change
at least 60 days or as otherwise mutually agreed upon by all parties, prior to
the intended date of the same, and shall proceed with such change only with the
prior written consent of PGIS thereto.
SECTION 20. The Fund agrees to pay PGIS compensation for its services as
set forth in Schedule A attached hereto (or as shall be set forth in amendments
to such schedule approved by PAF and PGIS), and to reimburse it for reasonable
out of pocket expenses.
SECTION 21. PGIS may from time to time, with prior written agreement from
the Fund, subcontract some or all of its duties hereunto to any qualified
entity, including any affiliate(s), which shall perform such functions as the
agent of PGIS. To the extent of such delegation, the term "PGIS" in this
Agreement shall be deemed to refer to both PGIS and such qualified entity or
affiliate(s) or either of them, as the context may indicate. PGIS shall be
fully responsible to the Fund for the acts and omissions of any subcontractor as
it is for its own acts and omissions.
13
<PAGE>
SECTION 22. Nothing contained in this Agreement is intended to or shall
require PGIS, in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observances on which the Fund, PGIS and the
New York Stock Exchange are closed. Functions or duties normally scheduled to be
performed on such days shall be performed on, and as of, the next business day
on which both the Fund and PGIS are open. Additionally, if on any given day PGIS
or its agent shall be delayed in its performance of services or prevented
entirely or in part from performing services because of causes or events beyond
its control, including and without limitation, acts of god, interruption of
power of other utility, transportation or communication services, acts of civil
or military authority, sabotages, national emergencies, explosion, flood,
accident, earthquake or other catastrophe, fire, strike or other labor problems,
legal action, present or future law, governmental order, rule or regulation, or
shortage of suitable parts, materials, labor or transportation, then such delay
or nonperformance shall be excused and a reasonable time for performance in
connection with this Agreement shall be extended to include the period of such
delay or nonperformance. In the event of equipment failures beyond PGIS's or its
agent's control. PGIS shall take all steps necessary to minimize service
interruptions but shall have no liability with respect thereto.
SECTION 23. This Agreement may be terminated by either PGIS or the Fund
only, by giving at least ninety (90) days' advance written notice stating when
thereafter such termination shall be effective. In case such notice is given by
the Fund, it shall be accompanied by a copy of notification to the Board of
Directors of the Fund, explaining PAF's election to terminate this Agreement and
designating a successor Transfer Agent. In the event such notice is given by
PGIS, PAF shall, on
14
<PAGE>
or before the termination date, deliver to PGIS notification designating a
successor Transfer Agent, signed by a duly authorized officer of PAF, and a copy
of such notification to the Fund's Board of Directors. In the absence of such
designation, PGIS may, but is not obligated to designate a successor Transfer
Agent. If the Fund fails to designate a successor Transfer Agent, and PGIS does
not designate a successor Transfer Agent, PAF shall upon the date specified in
such notice of termination be deemed to be its own transfer agent and PGIS shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement. PGIS or its agent will promptly relinquish all shareholder records in
its possession which are the property of the Fund, which records shall be free
from any claim or retention of rights by PGIS or its agent.
SECTION 24. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided however,
that this Agreement shall not be assigned by the Fund without the written
consent of PGIS.
SECTION 25. This Agreement shall be governed by the laws of the State of
California.
SECTION 26. The Fund shall indemnify and exonerate, save and hold harmless
PGIS, its directors, officers, employees, shareholders and agents from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including attorney's fees) and liabilities of any and every
nature (except liability for consequential damages) which the Transfer Agent may
sustain or incur or which may be asserted against the Transfer Agent by any
person by reason of or as a result of any action taken or omitted to be taken by
the Transfer Agent in good faith and without
15
<PAGE>
negligence or willful misconduct or in reliance upon (i) any provision of this
Agreement; (ii) the Fund's current Prospectus and Statement of Additional
Information; (iii) any instruction or order, including without limitation any
computer tape, reasonably believed by the Transfer Agent to have been received
from the Fund, its Custodian, Adviser, Sub-Adviser(s), Distributor, or agent
authorized to act for the Fund or on behalf of its Portfolio; (iv) any
instrument, order or Share Certificate reasonably believed by PGIS to have been
received from the Fund, its Custodian, Adviser, Sub-Adviser(s), Distributor, or
agent authorized to act for the Fund or on behalf of its Portfolio, or any
instrument, order, or Share Certificate reasonably believed by it to be genuine
and to be signed, countersigned or executed by a duly authorized officer of the
Fund; (v) any opinion of counsel for the Fund; or (vi) in reliance upon any law,
act, regulation or any reasonable interpretation of the same even though such
law, act or regulation may thereafter have been altered, changed, amended or
repealed.
SECTION 27. PGIS shall indemnify and exonerate, save and hold harmless the
Fund, its directors, officers, employees, shareholders and agents from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including attorney's fees) and liabilities of any and every
nature (except liability for consequential damages) which the Fund may sustain
or incur or which may be asserted against the Fund by any person by reason of or
as a result of any action taken or omitted to be taken by the Fund in good faith
and without negligence or willful misconduct or in reliance upon (i) any
provision of this Agreement; (ii) any instruction or information received by the
Fund from PGIS or its agent; (iii) any instrument, order or Share Certificate
reasonably believed by the Fund to have been received from PGIS or its agent, or
any
16
<PAGE>
instrument, order, or Share Certificate reasonably believed to be genuine and
to be signed, countersigned or executed by a duly authorized officer of PGIS;
(iv) any opinion of counsel for PGIS; or (v) in reliance upon any law, act or
regulation or any reasonable interpretation of the same even though such law,
act or regulation may thereafter have been altered, changed, amended or
repealed.
SECTION 28. PGIS or its agent will not disclose any of the Fund's records
and/or information pertaining to Shareholder accounts to any other person or
party unless authorized in writing by the Fund or as required by law.
SECTION 29. Schedule A: Transfer Agency Fee Schedule and Administrative
Service Agent Fee Schedule.
SECTION 30. Schedule B: Transfer Agency and Administrative Agent Services
provided by PGIS.
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and their seals hereunto duly affixed
and attested as of the day and year first above written.
ATTEST: PACIFIC GLOBAL FUND, INC. d/b/a
PACIFIC ADVISORS FUND INC.
/s/ By: /s/ George A. Henning, Chairman
- ---------------------------------- --------------------------------
(Name and Title) (Name and Title)
ATTEST: PACIFIC GLOBAL INVESTOR
SERVICES, INC.
/s/ By: /s/ Thomas H. Hanson, President
- ---------------------------------- --------------------------------
(Name and Title) (Name and Title)
18
<PAGE>
SCHEDULE A
TRANSFER AGENCY FEE SCHEDULE
Account Maintenance and Processing Fees:
(1) $11.00 per open account per year, and
$2.00 per closed account per year; or
A Minimum Fee of $15,000.00 per Portfolio per year.
(2) Out-of-Pocket Expenses authorized by this Agreement.
Account or Minimum Fees, whichever is applicable, are billed monthly at 1/12th
of the stated annual rate. Out-of-Pocket fees are billed monthly, as incurred.
Benefit Plan Processing:
Benefit Plan Processing Fees, which can be charged to the Shareholder or the
Fund, for Individual Retirement Accounts ("IRAs"):
Acceptance fee $10.00 per account
Annual Maintenance fee $100.00 per account per year
Liquidation/Transfer fee $10.00 per transaction
ADMINISTRATIVE SERVICE AGENT FEE SCHEDULE
PGIS shall receive an annual fee equal to 0.05% of the average daily net asset
value of each Portfolio of the Fund, subject to a maximum annual fee of
twenty-five thousand dollars ($25,000.00) per Portfolio. The fee is to be
computed daily and is payable on the first business day following the calendar
month being billed.
CONVERSION/TERMINATION OF AGREEMENT
Upon termination of this Agreement, PGIS reserves the right to assess reasonable
fees to cover conversion expenses incurred by it in effecting such conversion.
19
<PAGE>
SCHEDULE B
SERVICES PERFORMED
Receive orders for the purchase and redemption of Shares directly from
broker-dealers who have a selling agreement with Fund or Fund's Distributor as
well from Shareholders; and provide a dealer services functions/support to such
Fund Distributors
Issue Shares and hold Shares in book form in the Shareholders account
Receive, process and distribute redemption proceeds to the Shareholders
Effect exchange of Shares
Prepare, distribute and report to the Shareholders of record dividends and
capital gains information
Process and maintain Systematic Purchase Plan
Process and maintain Systematic Withdrawal Plan
Process adjustments
Process dividends - cash, reinvestment and capital gains distributions as set
forth in the respective Fund's prospectus
Process Rights of Accumulation and Letters of Intent
Settle institutional and broker transactions processed through NSCC (FUND/SERV).
There may be set up and transaction charges associated with use of NSCC to book
and settle trades
Process and maintain allocation of investments by percentage and Fund
Process account record changes - including addresses, dividend options,
expedited redemption information, multiple payable addresses, state codes, type
account, dealer cross account number information
Maintain Third Party files
Issue/Cancel certificates, Issue and Replacement Certificates
Prepare the necessary reports by state for~abandoned property
20
<PAGE>
Maintain and keep a current and accurate account for Shareholders of the Fund
The preparation of one proxy mailing per year, per Fund/Portfolio including
tabulation and officers of Election (travel expenses will be charged to the
Fund)
Mail prospectus and financial statements and shareholder reports to current
shareholders.
Maintain TIN and EIN information.
Mail W-9 and W-8 forms as required, monitor and maintain account status
Calculate and withhold Non-Resident and TEFRA withholding
Prepare and mail forms, 1099-Div, 1099B, 1099R, 1042S and 1096
Prepare and mail transactions confirmations and periodic statements to
Shareholders
Provide Shareholder account information to Shareholders and authorized
distributors or administrators
Provide Blue Sky reports as generated by the transfer agent system
Prepare and file U.S. Treasury Forms, including but not limited to form 5498 and
other forms required for Qualified Retirement Plans
Withhold taxes on U.S. Resident and non-resident alien accounts
Determine, together with the Fund's Board of Directors and Adviser, the
jurisdictions in which the Fund's shares are to be registered or qualified for
sale (Blue Sky registration program).
Perform initial and maintenance registrations or qualifications of shares for
sale under the securities laws (Blue Sky laws) of the states selected.
Supervise, together with the Fund's Board of Directors and Adviser, the
maintenance and compliance with applicable laws and regulations of al qualified
retirement plans offered by the Fund.
Assist the Fund's Adviser in performing its administrative duties.
21
<PAGE>
EXHIBIT 13(a)
PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
WHEREAS, Pacific Global Fund, Inc., a Maryland corporation doing
business as Pacific Advisors Fund Inc. (the "Corporation"), intends to engage in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, a majority of the Board of Directors of the Corporation,
including a majority of those Directors who are not "interested persons" of the
Corporation as defined in the Act (the "non-interested directors") and who have
no direct or indirect financial interest in the operation of the Plan of
Distribution Pursuant to Rule 12b-1 described below (the "Plan") or in any
agreements related to the Plan (the "Rule 12b-1 Directors"), have determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the Act, that there is
a reasonable likelihood that adoption of the Plan will benefit each series
("Fund") of the Corporation and the shareholders of each Fund; and
WHEREAS, a majority of the Board of Directors of the Corporation,
including a majority of the Rule 12b-1 Directors, have approved the Plan by
votes cast in person at a meeting called for the purpose of voting on the Plan;
and
WHEREAS, expenditures under this Plan by the Corporation are primarily
intended to result in the sale of shares of each Fund of the Corporation within
the meaning of paragraph (a)(2) of Rule 12b-1 promulgated under the Act;
NOW, THEREFORE, the Corporation hereby adopts this Plan in accordance
with Rule 12b-1 under the Act, on the following terms and conditions.
1. DEFINITIONS. The following terms used in this Plan shall
have the following meanings:
(a) "Recipient" shall mean any broker or dealer, administrator, or
others that (i) has rendered assistance (whether direct, administrative, or
both) in the distribution of shares of the Corporation; (ii) has furnished or
will furnish the Corporation's principal underwriter and distributor
("Distributor") (with respect to a Fund) with such information as the
Distributor has requested or may request to answer such questions as may arise
concerning the sale of shares of the Corporation; and (iii) has been selected by
the Distributor to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Rule 12b-1 Directors may remove any broker or
dealer as a Recipient.
<PAGE>
(b) "Qualified Holdings" shall mean, as to any Recipient, all shares of
the Corporation owned beneficially or of record by (i) such Recipient, or (ii)
such brokerage or other customers, investment advisory or other clients, and/or
accounts as to which such Recipient is a fiduciary or custodian or co-fiduciary
or co-custodian (collectively, the "Customers"), but in no event shall any such
shares be deemed owned by more than one Recipient.
2. REIMBURSEMENT FOR DISTRIBUTION ACTIVITIES.
(a) The Corporation shall reimburse the Distributor for distribution
expenses incurred in promoting the sale of each Fund's shares at the rate of
0.25% per annum of each Fund's average daily net assets attributable to shares
that were sold by or through such Recipients. Each Fund shall bear its own costs
of distribution and reimbursement shall be made from the assets of the Fund the
shares of which have been sold. Such expenses shall be calculated and accrued
daily and paid within forty-five (45) days of the end of each fiscal quarter of
the Corporation. In no event shall such payments exceed the Distributor's actual
distribution expenses for that fiscal quarter. The Distributor shall use such
payments received from each Fund in its entirety to reimburse itself for its
direct distribution expenses, of the type contemplated herein and reviewed from
time to time by the Board of Directors, in promoting the sale of such Fund's
shares, including, but not limited to, (i) compensating Recipients for providing
distribution assistance and administrative support services with respect to
assets invested in the Fund, as described below, (ii) costs of sales literature,
advertising, and prospectuses (other than those furnished to current
shareholders), (iii) promotional and incentive programs, and (iv) state "blue
sky" registration expenses.
The distribution assistance and administrative support services to be
rendered by Recipients may include, but shall not be limited to, the following:
distributing sales literature and prospectuses, other than those furnished to
current shareholders; answering routine inquiries concerning a Fund; assisting
in the establishment and maintenance of accounts or sub-accounts in a Fund and
in processing purchase and redemption transactions; making a Fund's investment
plans and dividend options available; and providing such other information and
services in connection with the distribution of shares of a Fund as the
Distributor or the Corporation, on behalf of a Fund, may reasonably request. It
may be presumed that a Recipient has provided such distribution assistance or
administrative support services if it has sufficient Qualified Holdings of
shares of the Corporation to entitle it to payments under the Plan. In the event
that either the Distributor or the Board of Directors of the Corporation should
have reason to believe that, notwithstanding the level of Qualified Holdings, a
Recipient may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of shares of the
Corporation, then the Distributor, at the request of the Board of Directors,
shall require the Recipient to provide a written report or other information to
verify that said Recipient is providing appropriate services in this regard.
Payments received by the Distributor from a Fund under this Plan shall
not be used to pay any interest expense, carrying charge, or other financial
costs, or allocation of overhead by the
2
<PAGE>
Distributor. Any unreimbursed expenses incurred for any quarter by the
Distributor may not be recovered in later periods.
(b) The Distributor shall make payments to any Recipient within
forty-five (45) days of the end of each fiscal quarter of the Corporation, at a
rate not to exceed 0.25% of the net asset value of Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers during such
quarter; PROVIDED, HOWEVER, that no such payments shall be made to any Recipient
for any such quarter in which its Qualified Holdings do not equal or exceed, at
the end of such quarter, the asset minimum ("Minimum Qualified Holdings") to be
set from time to time by the Distributor with the approval of the Rule 12b-1
Directors. Such payments to Recipients may be made by the Corporation's
investment manager from its own resources (which may include profits derived
from the advisory fee it receives from a Fund), or by the Distributor from its
own resources.
A majority the Rule 12b-1 Directors may at any time, or from time to
time, decrease and thereafter adjust the percentage rate payable to the
Distributor not to exceed the rate set forth above, direct the Distributor to
increase or decrease the Minimum Qualified Holdings and/or decrease and
thereafter adjust the percentage rate being paid to any Recipient not to exceed
the rate set forth above. The Distributor shall notify any and all Recipients of
the Minimum Qualified Holdings and the level of payment to such Recipient, and
shall provide each such Recipient with written notice within thirty (30) days
after any change in these requirements. Including of such change in a revised
current prospectus of the Corporation shall be sufficient notice.
3. QUARTERLY REPORTS.
(a) Any agreement adopted pursuant to this Plan shall require the
Distributor to provide to the Board of Directors of the Corporation, and the
Directors shall review, at least quarterly, a written report specifying in
reasonable detail the amounts expended pursuant to this Plan and the purposes
for which such expenditures were made.
(b) The Distributor shall inform the Board of Directors of the
Corporation of any commissions and account servicing fees to be paid by the
Distributor to broker-dealers and financial institutions which have agreements
with the Distributor.
4. EFFECTIVENESS, CONTINUATION.
(a) This Plan shall not take effect until it has been approved by a
vote of at least a majority of the outstanding voting securities (as defined in
the Act) of the Corporation.
(b) This Plan shall continue in effect until October 16, 1993 and from
year to year thereafter, provided such continuance is specifically approved at
least annually by a majority of
3
<PAGE>
the Board of Directors of the Corporation and a majority of the Rule 12b-1
Directors by votes cast in person at a meeting called for the purpose of voting
on the Plan.
5. TERMINATION.
This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors or by vote of a majority of the outstanding voting
securities of the Corporation. The Plan shall terminate automatically in the
event of its assignment (as defined in the Act).
6. AMENDMENTS.
This Plan may not be amended to increase materially the amount of
distribution expenses provided for in paragraph 1 hereof unless such amendment
to this Plan shall be approved by the vote of a majority of the outstanding
voting securities of the Corporation (as defined in the Act). All material
amendments shall be approved by a majority of the Board of Directors of the
Corporation and a majority of the Rule 12b-1 Directors by votes cast in person
at a meeting called for the purpose of voting on the Plan.
7. NON-INTERESTED DIRECTORS.
While this Plan is in effect, the selection and nomination of the
non-interested directors of the Corporation shall be committed to the discretion
of such non-interested directors.
8. RECORDS
The Corporation shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 2 hereof, for a period of
not less than six years from the date of this Plan or such agreements or
reports, as the case may be, and for at least the first two years in an easily
accessible place.
9. RELATED AGREEMENTS
Any agreement related to this Plan shall be in writing and shall
provide that (a) it may be terminated at any time upon sixty (60) days' written
notice, without the payment of any penalty, by vote of a majority of the Rule
12b-1 Directors, or by vote of a majority of the outstanding voting securities
of the Corporation; (b) it shall automatically terminate in the event of its
assignment (as defined in the Act); and (c) it shall continue in effect for a
period of more than one year from the date of its execution or adoption only so
long as such continuance is specifically
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approved at least annually by a majority of the Board of Directors of the
Corporation and a majority of the Rule 12b-1 Directors by votes cast in person
at a meeting called for the purpose of voting on such agreement.
IN WITNESS WHEREOF, the Corporation has executed this Plan as of the
day and year set forth below.
Date: October 16, 1992
Attest: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
/s/ Kathleen A. Scott By: /s/ George A. Henning
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<PAGE>
EXHIBIT 13(b)
AGREEMENT PURSUANT TO THE PLAN OF DISTRIBUTION
THIS AGREEMENT is made as of the 16th day of Ocotber, 1992 by and
between the Pacific Global Fund, Inc., a Maryland corporation doing business as
Pacific Advisors Fund Inc. (the "Corporation"), and Pacific Global Fund
Distributors, Inc., a California corporation, ("Pacific Distributors").
WHEREAS, the Corporation intends to engage in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, Pacific Distributors is a broker-dealer registered as such
under the Securities Exchange Act of 1934, as amended, and intends to engage in
the business of selling shares of investment companies either directly to
purchasers or through other broker-dealers; and
WHEREAS, pursuant to a Distribution Agreement between the Corporation
and Pacific Distributors dated as of October 16, 1992, Pacific Distributors is
the principal underwriter and distributor of the shares of each series ("Fund")
of the Corporation to the public;
WHEREAS, the Corporation has adopted a Plan of Distribution Pursuant to
Rule 12b-1 under the Act (the "Plan") pursuant to which the Corporation shall
reimburse its principal underwriter and distributor for payments made to
Recipients (as defined in the Plan), at the rate of 0.25% per annum of each
Fund's average daily net assets attributable to shares that were sold through
Recipients; and
WHEREAS, this Agreement between the Corporation and Pacific
Distributors is an agreement related to the Plan;
NOW, THEREFORE, the Corporation and Pacific Distributors,
intending to be legally bound, hereby agree as follows;
1. REIMBURSEMENT BY THE CORPORATION PURSUANT TO THE PLAN.
The Corporation shall reimburse Pacific Distributors for any expense
properly incurred for distribution activities to the extent permitted by the
Plan.
In this respect, each Fund shall bear its own costs of distribution and
reimbursement shall be made from the assets of the Fund, the shares of which
have been sold. Pacific Distributors shall keep accurate and detailed records of
all share sales made, which records shall be presented to the Corporation when
reimbursement is requested.
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2. QUARTERLY REPORTS.
So long as the Plan or any amendment thereof is in effect, Pacific
Distributors shall provide to the Board of Directors of the Corporation for its
review, at least quarterly, a written report specifying in reasonable detail the
amounts expended for distribution activities and the purposes for which such
expenditures were made and shall inform the Board of Directors of the
commissions and account servicing fees to be paid by Pacific Distributors to
broker-dealers and financial institutions that have agreements with Pacific
Distributors.
3. EFFECTIVE DATE OF THIS AGREEMENT.
A. This Agreement shall not become effective until the Plan
takes effect according to its terms.
B. This Agreement, or any amendments thereto, shall not take effect
until it has been approved by votes of a majority of both (a) the Board of
Directors of the Corporation and (b) those Directors of the Corporation who are
not "interested persons" of the Corporation and who have no direct or indirect
financial interest in the operation of the Plan or any agreement related to the
Plan (the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings)
called for the purpose of voting on this Agreement.
C. This Agreement shall continue in effect for one year from the date
of effectiveness and from year to year thereafter provided such continuance is
specifically approved at least annually in the manner provided in subparagraph
3.B of this Agreement.
4. TERMINATION.
This Agreement may be terminated upon sixty (60) days' written notice,
and without payment of any penalty, by either party hereto or by vote of a
majority of the Rule 12b-1 Directors, or by a vote of the majority of the
outstanding voting securities of the Funds. This Agreement shall terminate
automatically in the event of its assignment.
5. DEFINITION OF CERTAIN TERMS.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested person," when used in this Agreement, shall have
the respective meanings specified in the Act and rules thereunder.
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6. GOVERNING LAW.
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Maryland as at the time in effect and
the applicable provisions of the Act as from time to time amended and any rules
or regulations promulgated thereunder. In the event that the applicable law of
the State of Maryland or any of the provision herein conflict with the
applicable provisions of the Act, the latter shall control.
The parties hereto have executed this Agreement as of the day and year
first above written.
Attest: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
/s/ Kathleen A. Scott By: /s/ George A. Henning
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Attest: PACIFIC GLOBAL FUND
DISTRIBUTORS, INC.
/s/ Kathleen A. Scott By: /s/ George A. Henning
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