<PAGE>
SCHOONER FUND/(R)/
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 15, 1996
To Our Shareholders:
The Annual Meeting of Shareholders of Schooner Fund/(R)/ will be held on
Friday, March 15, 1996 at 9:00 a.m., at the Peninsula Hotel, Magnolia Room, 9882
Santa Monica Blvd., Beverly Hills, California. The purpose of the Annual Meeting
is to consider and vote upon the following matters, which are more fully
described in the accompanying Proxy Statement, which is incorporated into this
notice by reference:
1. Election of a Board of Trustees;
2. Ratification of the selection by the Board of Trustees of Ernst & Young
LLP as independent auditors for the Fund for the year ending December 31,
1996; and
3. Such other business as may properly come before the meeting.
The Board of Trustees has fixed the close of business on January 31, 1996 as
the record date for the determination of shareholders entitled to vote at the
Annual Meeting and to receive notice thereof.
By Order of the Board of Trustees
/s/
James Gipson
Chairman & President
FEBRUARY 16, 1996
IMPORTANT
SHAREHOLDERS ARE REQUESTED TO DATE, FILL IN, SIGN AND RETURN THE ENCLOSED PROXY
IN THE ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE UNITED
STATES.
<PAGE>
SCHOONER FUND/(R)/
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 15, 1996
This Proxy Statement is furnished in connection with a solicitation of proxies
by the Board of Trustees of Schooner Fund/(R)/ (the "Fund") for use at the
Annual Meeting of Shareholders of the Fund, to be held on Friday, March 15, 1996
at 9:00 a.m. at the Peninsula Hotel, Magnolia Room, 9882 Santa Monica Blvd.,
Beverly Hills, California, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. Shareholders of record at the close of
business on January 31, 1996 will be entitled to receive notice of and to vote
at the meeting. This proxy statement will be mailed to shareholders on or about
February 16, 1996.
Each share of beneficial interest is entitled to one vote. Shares represented
by executed and unrevoked proxies will be voted in accordance with the
specifications made thereon, or, if no specification is made, according to the
recommendations of the Board of Trustees in this Proxy Statement. If the
enclosed form of proxy is executed and returned, it nevertheless may be revoked
by giving another proxy or by a writing delivered to the Fund. This revocation
must show the shareholder's name and account number and must be received prior
to the voting at the meeting to be effective. In addition, a shareholder
attending the meeting in person, who wishes to do so, may vote by ballot at the
meeting, thereby canceling any proxy previously given. All proxies not voted,
including broker non-votes, will not be counted toward establishing a quorum.
Shareholders should note that while votes to abstain will count toward
establishing a quorum, passage of any proposal being considered at the meeting
will occur only if a sufficient number of votes are cast for the proposal.
Accordingly, votes to abstain and votes against a proposal will have the same
effect in determining whether the proposal is approved. The Fund had 230,206
shares of beneficial interest outstanding as of January 31, 1996.
Copies of the Fund's Annual Report for the year ended December 31, 1995 have
previously been mailed to shareholders. The Fund will furnish to any
shareholder, upon request and without charge, a copy of the Annual Report which
may be obtained by calling (800)420-7556 or by writing the Fund. The principal
executive offices of the Fund are located at Suite 800, 9601 Wilshire Boulevard,
Beverly Hills, California 90210 Attention: Ted Bradpiece.
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PRINCIPAL SHAREHOLDERS
The following is information about persons known to the Fund to own
beneficially or of record five percent or more of the outstanding shares of the
beneficial interest of the Fund as of January 31, 1996:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OWNED PERCENT
NAME AND ADDRESS OF RECORD OF CLASS
<S> <C> <C>
James H. Gipson (1) 57,556 25.0%
9601 Wilshire Boulevard, Suite 800
Beverly Hills, California 90210
City National Bank TR 17,331 7.5%
Harbor-UCLA Research
& Education Institute
A/T/F #74821203
120 South Spalding Drive
Beverly Hills, CA 90212
Firlin & Co. (2) 16,172 7.0%
c/o National Bank of Commerce
Attn: Trust Resources
Post Office Box 68501
Lincoln, NE 68501
State Street Bank & Trust Co. 14,352 6.2%
IRA R/O Susan McLane Bernfeld
4955 Los Feliz Boulevard
Los Angeles, CA 90027
State Street Bank & Trust Co. 13,358 5.8%
IRA Rollover FBO Gifford Combs
c/o Pacific Financial Research
9601 Wilshire Blvd, #800
Beverly Hills, CA 90210
</TABLE>
(1) Mr. Gipson is President, Trustee and Chairman of the Board of Trustees of
the Schooner Fund/(R)/, and is President and majority shareholder of Pacific
Financial Research, Inc., the Investment Adviser to the Fund.
(2) Firlin & Co. is the nominee account for many individual shareholder
accounts; the Fund is not aware of the size or identity of any of the
individual accounts.
<PAGE>
PROPOSAL 1. ELECTION OF BOARD OF TRUSTEES
It is proposed that a Board of six trustees be elected, each trustee to hold
office indefinitely or until the next annual meeting of shareholders and until
his or her successor is elected and qualified. It is the intention of the proxy
holders named in the accompanying form of proxy to vote such proxy for the
election of the persons listed below unless shareholders specifically indicate
in their proxies their desire to vote against or withhold authority to vote for
such persons. The Board of Trustees does not contemplate that any nominee will
be unable to serve as a trustee for any reason, but if that should occur prior
to the meeting, the proxy holders reserve the right to substitute another person
or persons of their choice as nominee or nominees.
Each nominee who is deemed an "interested person" of the Fund, as defined in
the Investment Company Act of 1940 (the "1940 Act"), is indicated by an
asterisk. Mr. Gipson and Mr. Grey are each deemed an "interested person" of the
Fund because each is an officer of Pacific Financial Reseach, Inc. ("PFR" or the
"Investment Adviser") and is an officer of the Fund. Each person listed below is
already a Trustee of the Fund and each nominee consented to being named in this
Proxy Statement and has indicated a willingness to serve as a trustee if
elected.
<TABLE>
<CAPTION>
SHARES OF BENEFICIAL INTEREST
OF THE FUND TOTAL 1995
BENEFICIALLY OWNED COMPENSATION
DIRECTLY OR AGGREGATE FROM FUND
CURRENT INDIRECTLY ON PERCENT 1995 AND
POSITION(S) POSITION(S) JANUARY 31, OF COMPENSATION FUND
NOMINEE NAME WITH FUND HELD SINCE AGE 1996 CLASS FROM FUND COMPLEX(2)
<S> <C> <C> <C> <C> <C> <C> <C>
James H. Trustee, 1993 54 57,556(1) 25.0% $-0- $-0-
Gipson* Chairman
and President
Douglas Trustee 1994 36 -0- (1) - $-0- $-0-
Grey*
Susan M. Trustee 1993 40 14,352 6.2% $5,000 $10,000
Bernfeld
Norman B. Trustee 1993 64 -0- - $5,000 $10,000
Williamson
Lawrence P. Trustee 1993 61 -0- - $5,000 $10,000
McNamee
F. Otis Trustee 1993 72 4,505 2.0% $5,000 $10,000
Booth, Jr.
</TABLE>
<PAGE>
(1) Of the 57,556 shares attributed to Mr. Gipson, 8,262 are held by the
Pacific Financial Research, Inc. Money Purchase Plan and Trust (the
"Plan"), 3,602 are held by Pacific Financial Research, Inc. Employee
Savings Plan (the "ESP"), and 45,692 are held by Mr. Gipson. The 8,262
shares held by the Plan include 2,129 shares in which Mr. Grey has a vested
interest and 1,229 shares in which Mr. Gipson has a vested interest. The
3,602 shares held by the ESP include 522 shares in which Mr. Gipson has a
vested interest and 544 shares in which Mr. Grey has a vested interest.
(2) Total 1995 Compensation from Fund and Fund Complex consists of compensation
and fees paid to directors and trustees by both of the Pacific Financial
Research Funds: Clipper Fund, Inc. and Schooner Fund/(R)/.
Mr. Gipson has been President of PFR, an investment management firm, since he
founded it in 1980, and holds a similar position with and is a director of the
Clipper Fund/TM/, a registered investment company for which PFR acts as the
investment adviser. He is the controlling shareholder of PFR. Prior to 1980, he
was a portfolio manager with Batterymarch Financial Company and with other
investment management firms. Mr. Gipson holds 49,274 shares of the Clipper
Fund/TM/.
Mr. Grey has been with PFR since 1986. He currently serves as Vice President
and Portfolio Manager of PFR. Prior to 1986, he was a General Motors Scholar and
worked for General Motors as a design analysis engineer. Mr. Grey holds no
shares of the Clipper Fund/TM/.
Ms. Bernfeld was in charge of operations for PFR from 1981 to 1994. She was
treasurer of the Fund from the Fund's inception in May 1993 until September
1994. She is a Director of the Clipper Fund/TM/, a registered investment
company. Prior to that, she was an accountant with Kendall and Warner,
independent certified public accountants. Ms. Bernfeld holds 2,928 shares of the
Clipper Fund/TM/ in an IRA plan.
Mr. Williamson was a Vice President and Portfolio Manager with PFR from 1983
until his retirement in 1990. From 1980 to 1983, he was self-employed as an
investment manager. Prior to that, he was Assistant Treasurer and Manager of
Pension Trust Administration for FMC Corporation. He is also a Director of the
Clipper Fund/TM/. Mr. Williamson holds 12,256 shares of the Clipper Fund/TM/ in
an IRA plan.
Professor McNamee has been a Professor of Computer Science at UCLA since 1966.
He is also a Director of the Clipper Fund/TM/. Professor McNamee holds 6,652
hares of the Clipper Fund./TM/
<PAGE>
Mr. Booth has been a private investor and rancher from 1973 to the present. He
is also a Director of the Clipper Fund/TM/. Mr. Booth holds 41,723 shares of the
Clipper Fund./TM/
Over the last two years no nominee for director has had any material interest
in a material transaction, or a proposed material transaction, to which PFR or
the Fund was or is to be a party. During the last two years no nominee has been
indebted to the Fund. No nominee has been a party adverse to the Fund in any
material pending legal proceedings. In addition, no nominee has been the subject
of any adverse securities-related judgments or orders.
The Fund's Board of Trustees has no standing audit, nominating or compensation
committee or any committee performing similar functions. The Trustees who are
not "interested persons" of PFR serve as a de facto audit committee.
Mr. Gipson has been a Trustee and executive officer of the Fund since its
organization in March 1993. Messrs. McNamee, Williamson and Booth and Ms.
Bernfeld have been Trustees of the Fund since its organization in March 1993. In
addition to the executive officers listed above, Michael Kromm is the
Secretary/Treasurer of the Fund. Mr. Kromm, age 50, has been with PFR since 1990
and is presently its Operations Manager. He has been Secretary of the Fund since
1992 and Treasurer since 1994. Prior to 1990, he worked for the RNC Mutual Fund
Group as Chief Financial Officer and Secretary.
The seven Trustees and officers of the Fund as a group owned beneficially
76,413 shares of beneficial interest on January 31, 1996, which was
approximately 33.2% of the outstanding shares.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF TRUSTEES, INCLUDING ALL "NON-INTERESTED" TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE NOMINEES AS TRUSTEES OF THE FUND.
In order to elect a Trustee, a plurality of the aggregate shares of the Fund
voting at the meeting is required.
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Fund's independent auditors be selected by a
majority of those trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund or the
<PAGE>
Investment Adviser; that such selection be submitted for ratification or
rejection at the Annual Meeting of Shareholders; and that the employment of such
independent auditors be conditioned on the right of the Fund, by vote of a
majority of its outstanding securities at any meeting called for that purpose,
to terminate such employment forthwith without penalty. The Board of Trustees of
the Fund, including those trustees who are not "interested persons" of the Fund
or the Investment Adviser, have approved the selection of Ernst & Young LLP as
independent auditors for the calendar year ending December 31, 1996.
Accordingly, such selection of Ernst & Young LLP as independent auditors of
the Fund is submitted to shareholders for ratification or rejection. To the
knowledge of the Fund and the Investment Adviser, apart from its fees received
as independent auditors, neither the firm of Ernst & Young LLP nor any of its
partners has a direct, or material indirect, financial interest in the Fund or
the Investment Adviser or affiliates of the Investment Adviser.
A representative of Ernst & Young LLP is expected to be present at the
meeting, will have the opportunity to make a statement, and will be available to
respond to appropriate questions.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF TRUSTEES, INCLUDING ALL "NON-INTERESTED" TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF ERNST & YOUNG AS
INDEPENDENT AUDITORS OF THE FUND.
In order to ratify the selection of Auditors, the affirmative vote of the
holders of a majority of the aggregate shares of the Fund voting at the meeting
is required.
OTHER MATTERS
The Board of Trustees is not aware of any other matters which may come before
the meeting. However, should any such matters properly come before the meeting,
it is the intention of the proxy holders named in the accompanying form of proxy
to vote the proxy in accordance with their judgment on such matters.
The Fund will bear the cost of soliciting proxies. In addition to the use of
the mails, proxies may be solicited personally by telephone and the Fund may pay
persons holding shares of the Fund in their names or those of their nominees for
their expenses in sending soliciting material to their principals.
<PAGE>
Proposals of shareholders intended to be presented at the next annual meeting
of the Fund must be received by the Fund for inclusion in the Fund's proxy
statement relating to that meeting at the principal executive offices of the
Fund at 9601 Wilshire Boulevard, Beverly Hills, California 90210, not later than
December 31, 1996.
NOTICE TO BANKS, BROKERS/DEALERS AND VOTING
TRUSTEES AND THEIR NOMINEES
Please advise the Fund, in care of National Financial Data Services, Inc., P.O.
Box 5229, Kansas City, Missouri 64120, whether other persons are the beneficial
owners of the shares for which proxies are being solicited from you and, if so,
the number of copies of the Proxy Statement, other soliciting material and
Annual Report you wish to receive in order to supply copies to the beneficial
owners of shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. ALL SHAREHOLDERS ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY BALLOT IN THE ENCLOSED STAMPED
ENVELOPE. IF YOU PAN TO ATTEND THE MEETING, YOU MAY CHANGE YOUR VOTE, IF
DESIRED, AT THAT TIME.
FEBRUARY 16, 1996
