SCHOONER FUND/(R)/
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 21, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of Schooner Fund/(R)/ will be
held on Friday, March 21, 1997 at 9:00 a.m., at the Regent Beverly
Wilshire, Champagne Room, 9500 Wilshire 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, 1997; 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, 1997 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 18, 1997
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.
SCHOONER FUND/(R)/
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 21, 1997
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 21, 1997 at
9:00 a.m. at the Regent Beverly Wilshire, Champagne Room, 9500
Wilshire 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, 1997 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 18, 1997.
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 200,057 shares of beneficial interest
outstanding as of January 31, 1997.
Copies of the Fund's Annual Report for the year ended
December 31, 1996 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:
Michele Smith.
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,
1997:
Number of
Shares Owned Percent
Name and Address of Record of Class
James H. Gipson (1) 63,595 31.8%
9601 Wilshire Boulevard, Suite 800
Beverly Hills, California 90210
City National Bank TR 18,372 9.2%
Harbor-UCLA Research
& Education Institute
A/T/F #74821203
120 South Spalding Drive
Beverly Hills, CA 90212
Firlin & Co. (2) 14,077 7.0%
c/o National Bank of Commerce
Attn: Trust Resources
Post Office Box 68501
Lincoln, NE 68501
State Street Bank & Trust Co. 14,160 7.1%
IRA Rollover FBO Gifford Combs
c/o Pacific Financial Research
9601 Wilshire Blvd, #800
Beverly Hills, CA 90210
National Financial Services (2) 13,543 6.8%
FEBO Our Customers
P.O. Box 3908
Church Street Station
New York, NY 1008-3908
(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. and National Financial Services Corp. are the
nominee accounts for many individual shareholder accounts; the Fund
is not aware of the size or identity of any of the individual
accounts.
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 Research, 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 1996
beneficially owned Compensation
directly or Aggregate from Fund
Current indirectly on Percent 1996 and
Position(s) Position(s) January 31, of Compensation Fund
Nominee Name with Fund held since Age 1997 Class from Fund Complex (2)
<S> <C> <C> <C> <C> <C> <C>
James H. Trustee, 1993 55 63,595 (1) 31.8% $-0- $-0-
Gipson* Chairman
and President
Douglas Trustee 1994 37 -0- (1) - $-0- $-0-
Grey* and
Vice President
Susan M. Trustee 1993 41 -0- - $5,000 $10,000
Bernfeld
Norman B. Trustee 1993 65 -0- - $5,000 $10,000
Williamson
Lawrence P. Trustee 1993 62 -0- - $5,000 $10,000
McNamee
F. Otis Trustee 1993 73 4,751 2.4% $5,000 $10,000
Booth, Jr.
</TABLE>
(1) Of the 63,595 shares attributed to Mr. Gipson, 9,592 are held
by the Pacific Financial Research, Inc. Money Purchase Plan and
Trust (the Plan ), 5,594 are held by Pacific Financial Research,
Inc. Employee Savings Plan (the ESP ), and 48,435 are held by Mr.
Gipson. The 9,592 shares held by the Plan include 2,936 shares in
which Mr. Grey has a vested interest and 1,646 shares in which Mr.
Gipson has a vested interest. The 5,594 shares held by the ESP
include 808 shares in which Mr. Gipson has a vested interest and
1,002 shares in which Mr. Grey has a vested interest.
(2) Total 1996 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 52,899 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 9,372 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 13,158 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 8,324 shares of the Clipper Fund./TM/
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 37,613 shares of the Clipper Fund./TM/
Over the last two years no nominee for trustee 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 51, 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 68,346 shares of beneficial interest on January 31,
1997, which was approximately 34.2% of the outstanding shares.
REMUNERATION F TRUSTEES, OFFICERS AND OTHERS
Officers and trustees of the Fund who are also officers, trustees,
shareholders, employees or otherwise "interested persons" of the
Investment Adviser receive no remuneration from the Fund. Each
other trustee receives an annual fee of $5,000. During the Fund s
last fiscal year, the four trustees who were not "interested
persons" of the Investment Adviser received combined fees and no
expenses totalling $20,000. There were three Board of Trustees
meetings held in calendar year 1996. Each of the trustees attended
100% of those meetings with the exception of Mr. Booth who attended
33% of those meetings and Mr. Williamson who attended 67% of those
meetings. The Fund has no bonus, profit-sharing, pension or
retirement plan.
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 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, 1997.
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 LLP 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 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.
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, Suite 800, Beverly Hills, California 90210, not later
than December 31, 1997.
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 PLAN TO ATTEND THE MEETING,
YOU MAY CHANGE YOUR VOTE, IF DESIRED, AT THAT TIME.
FEBRUARY 18, 1997
