SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.___ )
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
U.S. GLOBAL ACCOLADE FUNDS - GLOBAL BLUE CHIP FUND
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state
how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid:
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(3) Filing Party:
(4) Date Filed:
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PRELIMINARY NOTICE OF SPECIAL MEETING
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U.S. GLOBAL ACCOLADE FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TEXAS 78229
PROXY STATEMENT FOR SPECIAL MEETING
OF SHAREHOLDERS OF
U.S. GLOBAL ACCOLADE FUNDS
GLOBAL BLUE CHIP FUND
Dear Shareholder:
A special meeting of shareholders of the Global Blue Chip Fund (the
"Fund"), a series of U.S. Global Accolade Funds, a Massachusetts business trust
(the "Trust"), will be held at 7900 Callaghan, San Antonio, Texas 78229, on July
16, 1999, at 3:00 p.m., local time, for the following purposes:
1. To consider and vote upon approval of the termination of the Global
Blue Chip Fund, which liquidation is to occur as soon as practicable
following shareholder approval; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
On June 11, 1999, the Board of Trustees voted to recommend to shareholders
that they approve termination of the Fund. Section 4.2(d) of the First Amended
and Restated Master Trust Agreement requires approval of a majority of the
outstanding voting shares of the Fund as set forth in the proxy statement. The
Board of Trustees has directed officers of the Trust to take the steps necessary
to obtain shareholder approval. The proposed change is fully discussed in the
attached proxy statement.
Shareholders of record at the close of business on June 26, 1999, will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
We hope you will be represented at the meeting. The vote of every
shareholder is important. If you have questions or comments, contact the
undersigned anytime (1-800-873-8637 or 210-308-1234).
Susan B. McGee
Secretary of the Trust
Dated: June 29, 1999
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PRELIMINARY PROXY STATEMENT
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U.S. GLOBAL ACCOLADE FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TEXAS 78229
PROXY STATEMENT FOR SPECIAL MEETING
OF SHAREHOLDERS OF
U.S. GLOBAL ACCOLADE FUNDS
GLOBAL BLUE CHIP FUND
INTRODUCTION
This proxy statement is furnished to shareholders of the Global Blue Chip
Fund (the "Fund"), a series of U.S. Global Accolade Funds, a Massachusetts
business trust (the "Trust"), in connection with the solicitation of proxies by
and on behalf of the Board of Trustees of the Trust to be used at a special
meeting of shareholders to be held in the first floor board room at 7900
Callaghan Road, San Antonio, Texas 78229, on July 16, 1999, at 3:00 p.m. local
time, or at any adjournments thereof.
This proxy statement and the accompanying proxy were mailed to shareholders
on or about June 29, 1999. Shareholders of record at the close of business on
June 24, 1999, shall be entitled to notice of and to vote at the meeting or any
adjournment thereof.
On June 24, 1999, there were X,XXX,XXX.XXX shares of the Global Blue Chip
Fund outstanding, with each full share outstanding entitled to one full vote and
each fractional share outstanding entitled to a proportionate share of one vote.
PURPOSE OF THE MEETING. The Board of Trustees for the U.S. Global Accolade
Funds approved the termination of the Global Blue Chip Fund, subject to
shareholder approval. The purpose of this meeting is: (1) to consider and vote
upon approval of the termination of the Global Blue Chip Fund as approved by the
Board of Trustees on June 11, 1999. The termination is to occur as soon as
practicable following shareholder approval; and (2) to consider and act upon any
other matters which may properly come before the meeting or any adjournments
thereof.
All shares represented at the meeting by properly executed proxies will be
voted in accordance with the instructions received, if any; and if no
instructions are given, the proxy will be voted for approval of the proposal.
The Board of Trustees does not know of any action to be considered at the
meeting other than Proposal One, which is discussed below.
The proxy may be revoked at any time before it is exercised by the
subsequent execution and submission of a revised proxy, by written notice of
revocation to the Secretary of the Trust, or by voting in person at the meeting.
In addition to the solicitation of proxies by mail or by any other means of
communication, officers and employees of the Trust and U.S. Global Investors,
Inc. ("Adviser"), without additional compensation, may solicit proxies in person
or by telephone or other means of communication. The cost of the solicitation of
proxies by the Board of Trustees of the Trust for this meeting of shareholders
will be borne by the Fund and will include any reimbursement paid to
fiduciaries, brokerage firms, nominees, and custodians for their expenses in
forwarding
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solicitation material regarding the meeting to beneficial owners. All other
costs of the liquidation of the Fund will also be borne by the Fund.
PRINCIPAL SHAREHOLDERS OF THE FUND. On June 24, 1999, the officers and
Trustees of the Trust owned less than 1% of the outstanding shares of the Fund.
Xxx,Xxx.Xxx, Inc. , held xxx,xxx.xxx or X% of the Fund as record holder and not
as beneficial owner. No other shareholders held more than 5% on that date.
THE ADVISER. U.S. Global Investors, Inc. is a Texas corporation with its
principal executive offices located at 7900 Callaghan Road, San Antonio, Texas
78229. U.S. Global Investors, Inc. is the investment adviser to the Fund.
THE PRINCIPAL UNDERWRITER. U.S. Global Brokerage, Inc. ("U.S. Global
Brokerage"),a wholly owned subsidiary of U.S. Global Investors, Inc., is a Texas
corporation with its principal executive offices at 7900 Callaghan Road, San
Antonio, Texas, 78229. U.S. Global Brokerage is the principal underwriter and
distributor for the Fund.
PROPOSAL ONE - TERMINATION OF THE FUND
TERMINATION. It is recommended that shareholders approve the termination of
the Fund. The Fund commenced operation on February 20, 1997, and currently has
total net assets of approximately $1,179,000. The Fund has not attracted the
shareholder following that was originally anticipated, and the Adviser believes
that there is no reasonable prospect for increased investor interest in the
foreseeable future. The Fund's small asset base results in a high per share
expense ratio for the Fund, which adversely affects the Fund's performance. In
addition, the size of the Fund impairs the ability of the Fund to participate in
many attractive investments. For these reasons, the Adviser determined that the
continued operation of the Fund would not be in the best interest of the
shareholders, and at a meeting of the Board of Trustees held on June 11, 1999,
the Adviser recommended that the Trustees consider the advisability of
terminating the Fund. On June 11, 1999, the Trustees considered such information
as they deemed reasonably necessary to evaluate the Adviser's recommendation.
The Trustees also considered the alternative of merging or reorganizing the Fund
into a similar fund. Based upon this information and after consideration of the
alternatives, the Trustees determined that it would be in the best interest of
shareholders to liquidate the Fund and voted unanimously to recommend that
shareholders approve a proposal to terminate the Fund. In connection with the
pending vote on the termination of the Fund, the Fund ceased selling its shares
to new investors and existing shareholders on June 16, 1999.
In anticipation of the Fund's termination, Fund assets will be sold in an
orderly manner, and after payment of expenses, the remaining cash and other
assets will be distributed as soon as practicable. Each share of the Fund will
entitle the holder to receive cash or other assets equal to the per share net
asset value of the Fund at the time of liquidation. The receipt by a shareholder
of such cash and other assets may have tax consequences as discussed below.
GENERAL FEDERAL INCOME TAX CONSEQUENCES. The following is only a general
summary of the federal income tax consequences of the termination and
liquidation of the Fund to shareholders who are United States citizens. The
summary does not address the federal income tax consequences to shareholders who
are corporations, trusts, estates, tax-exempt organizations or non-U.S.
citizens. SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISERS FOR ADVICE
REGARDING THE APPLICATION OF CURRENT FEDERAL TAX LAW IN THEIR PARTICULAR
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SITUATIONS AND WITH RESPECT TO STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES
OF THE TERMINATION AND LIQUIDATION OF THE FUND.
As a general rule, the liquidation distribution paid to each shareholder
will be treated for federal income tax purposes as a payment in exchange for the
shareholder's shares. Thus, a shareholder who is a United States resident or
citizen will be taxed only to the extent that the distribution exceeds his or
her basis in such shares: if the amount received is less than his or her basis,
the shareholder will realize a loss. A gain or loss will be a capital gain or
capital loss if the shareholder's shares are held as capital assets, but certain
exemptions may apply.
Further information concerning the sources of the funds distributed to
shareholders will be forwarded with the liquidating distribution.
Under the Internal Revenue Code, some shareholders may be subject to a 31%
withholding tax on their liquidating distributions ("backup withholding").
Generally, shareholders subject to a backup withholding will be those for whom a
certified taxpayer identification number is not on file with the Fund or who the
Internal Revenue Service has identified as having furnished an incorrect number
or as having failed to report interest or dividend income on their tax returns.
There may be additional tax consequences for shareholders holding shares of
the Fund in IRAs or qualified retirement plans. Some IRAs or qualified
retirement plans that hold shares may have been established with custodians who
do not possess the power to reinvest the liquidating distribution, but instead
must immediately distribute such amounts to the beneficiary. In this situation,
the amount received by the beneficiary will constitute a taxable distribution;
and if the beneficiary has not attained 59 1/2 years of age, such distribution
will generally constitute a premature distribution subject to a 10% penalty tax.
This penalty tax is in addition to the beneficiary's regular federal income tax.
However, beneficiaries who receive a distribution from their IRAs or qualified
retirement plans on account of the liquidation of the fund may be able to avoid
the above-described taxes and characterize the receipt of the liquidating
distribution as a tax-free distribution, if, within 60 days of receipt of the
liquidating distribution, it is "rolled over" into another IRA or an otherwise
qualifying retirement plan. If the shareholder holds shares in an IRA, the
shareholder may only make a rollover to another IRA if the shareholder has not
made a tax-free rollover from his IRA during the one-year period preceding the
receipt of the liquidating distribution. Such a rollover will not generate a
deduction for the current year. Tax results will vary depending upon the status
of each beneficiary; therefore, each beneficiary who receives a distribution
from his IRA or qualified retirement plan on account of the liquidation of the
Fund must consult with his own tax adviser regarding his personal tax results in
this matter.
Trustees of IRAs or qualified retirement plans are required by law to
withhold 20% of the taxable portion of any distribution that is eligible to be
"rolled over." This 20% withholding requirement does not apply to distributions
from IRAs or any part of a distribution that is transferred directly to another
qualified retirement plan, (403(b)(7) account or IRA (i.e., an asset transfer).
In addition, an asset transfer is not subject to the one-year limitation on
rollovers. Shareholders should consult with their tax advisers regarding the 20%
withholding requirement and asset transfers.
EXCHANGE OPTION. Prior to the Fund's liquidation, shareholders of the Fund
may exchange their Fund shares for shares of any other U.S. Global Fund that is
open to new investors. Shareholders may implement an exchange prior to
liquidation by calling 1-800-US-FUNDS.
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BOARD CONSIDERATION. As previously stated, the Trustees voted on June 11,
1999, that the Global Blue Chip Fund be terminated, subject to shareholder
approval, as soon as practicable. If adopted by shareholders at the meeting, the
liquidation and distribution are expected to occur on or about July 16, 1999.
The Trustees considered a variety of factors, including the information
described above, and concluded that the proposed change would be in the best
interest of the Fund and its shareholders.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
OF THE FUND VOTE FOR APPROVAL OF PROPOSAL ONE.
REQUIRED VOTE
Approval of Proposal One for the Fund requires the affirmative vote of the
holders of a "majority of the outstanding voting securities" of the Fund, as
defined under the 1940 Act, which means the lesser of (1) a majority of the
outstanding shares of the Fund or (2) 67% or more of the shares of the Fund
represented at the special meeting if more than 50% of the outstanding shares of
the Fund are present or represented by proxy at the meeting. Abstentions and
proxies with respect to shares held by a broker or other nominees that are not
voted because the nominee lacks discretionary authority to vote the shares
(referred to as "broker non-votes") will have the effect of "no" votes.
If at the announced time of the meeting insufficient votes have been
received to approve the proposal, the meeting may be adjourned to one or more
later dates to allow time to solicit additional proxies sufficient to approve
the proposal. It is anticipated that the persons designated as proxies will vote
proxies in favor of such a motion to adjourn the meeting to a later date if
believed to be in the best interest of shareholders.
SUBMISSION OF SHAREHOLDER PROPOSALS
Since the Fund does not hold annual shareholders' meetings, the anticipated
date of the next special shareholders' meeting (if any) cannot be provided.
Shareholders will be provided reasonable prior notice of the next special
meeting of shareholders.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interests of the Fund.
The foregoing notice and proxy statement are sent by order of the Board of
Trustees.
Susan B. McGee
Secretary of the Trust
Dated: June 29, 1999
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PRELIMINARY FORM OF PROXY
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PROXY
U.S. GLOBAL ACCOLADE FUNDS - GLOBAL BLUE CHIP FUND
7900 Callaghan Road
San Antonio, Texas 78229
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Susan B. McGee and Anthony A. Rabago, proxies
with full power of substitution to act for and vote on behalf of the undersigned
all shares of the Global Blue Chip Fund (the "Fund"), a series of U.S. Global
Accolade Funds, which the undersigned would be entitled to vote if personally
resent at the Special Meeting of Shareholders of the Fund to be held on July 16,
1999.
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement furnished in connection with the meeting and
hereby instructs said proxies to vote said shares as indicated hereon. The
proxies present and acting at the meeting in person or by substitute shall have
and may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
IF A CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED AS INDICATED. IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL ONE. In their discretion, the
proxies are authorized to vote upon such business as may properly come before
the meeting. The Board of Trustees recommends a vote FOR Proposal One.
This proxy may be revoked at any time prior to the exercise of the powers
conferred by the proxy.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
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PROXY: U.S. GLOBAL ACCOLADE FUNDS -- FOR AGAINST ABSTAIN
GLOBAL BLUE CHIP FUND
PROPOSAL ONE Approve termination of the U.S. Global [ ] [ ] [ ]
Accolade Funds - Global Blue Chip Fund.
PROPOSAL TWO Transact such other business as may [ ] [ ] [ ]
properly come before the meeting or
any adjournment thereof.
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(SIGNATURE) (DATE)
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(SIGNATURE IF HELD JOINTLY)
Please sign exactly as your name appears
on this proxy card. When signing as
attorney, executor, administrator,
trustee or guardian, give full title as
such. If a corporation, sign in the full
corporate name by president or other
authorized officer. If a partnership,
sign in partnership name by authorized
person.
