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
PAUZE FUNDS
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(Name of Registrant as Specified in Its Charter)
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(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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| 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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
PAUZE FUNDS
14340 TORREY CHASE BOULEVARD
SUITE 170
HOUSTON, TEXAS 77014
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 26, 1998
Dear Shareholders:
The Board of Trustees of Pauze Funds (the "Trust"), an open-end management
investment company organized as a Massachusetts business trust, has called a
special meeting of the shareholders of each class of shares its four portfolios,
the Pauze U.S. Government Total Return Bond Fund ("Total Return Fund"), Pauze
U.S. Government Intermediate Term Bond Fund ("Intermediate Term Fund"), Pauze
U.S. Government Short Term Bond Fund ("Short Term Fund") and Pauze Tombstone
Fund ("Tombstone Fund") (each a "Fund" and collectively, the "Funds"), to be
held at the Hilton, ________________________________, Boston, Massachusetts
________ on Monday, October 26, 1998 at _____ a.m., Eastern Standard Time, for
the following purposes:
I. Approval of new Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended; and
II. Ratification of the selection of Tait, Weller & Baker as the
independent accountants for the Trust for the fiscal year ending April
30, 1999;
III. Transaction of such other business as may properly come before the
meeting or any adjournments thereof.
Shareholders of record of the Funds at the close of business on September
28, 1998 are entitled to notice of, and to vote at, the special meeting and any
adjournment(s) or postponement(s) thereof.
By Order of the Board of Trustees
TERENCE P. SMITH
Secretary
Conshohocken, Pennsylvania
___________________________, 1998
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT YOU EXPECT
TO BE PRESENT AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
PAUZE FUNDS
14340 TORREY CHASE BOULEVARD
SUITE 170
HOUSTON, TEXAS 77014
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 26, 1998
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INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Pauze Funds (the "Trust"), on behalf of its
four portfolios, Pauze U.S. Government Total Return Bond Fund ("Total Return
Fund"), Pauze U.S. Government Intermediate Term Bond Fund ("Intermediate Term
Fund"), Pauze U.S. Government Short Term Bond Fund ("Short Term Fund") and Pauze
Tombstone Fund ("Tombstone Fund") (each a "Fund" and collectively, the "Funds"),
for use at the Special Meeting of Shareholders of the Funds (the "Meeting") to
be held at the Hilton, ________________________________, Boston, Massachusetts
________ on Monday, October 26, 1998 at______ a.m., Eastern Standard Time, and
at any and all adjournments thereof. The Notice of Meeting, Proxy Statement and
accompanying form of proxy will first be mailed to shareholders on or about
October 2, 1998.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on the proposals to be considered at the Meeting. A proxy
card for voting your shares is enclosed. The shares represented by each valid
proxy received in time will be voted at the meeting as specified in the proxy.
If no specification is made, the shares represented by a duly executed proxy
will be voted:
I. For approval of the new Distribution Plans pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the "New Plans")
relating to all classes of the Funds; and
II. For the ratification of the selection of Tait, Weller & Baker as
independent accountants for the Trust for the fiscal year ending April
30, 1999;
III. At the discretion of the holders of the proxy on any other matter that
may come before the meeting.
Any shareholder may revoke a proxy at any time before it is exercised by a
subsequently dated proxy card that is duly executed and delivered, by written
notice to the President of the Trust revoking the proxy or by attending and
voting in person at the Meeting. The solicitation of proxies will occur
primarily by mail but also may include telephone or oral communications by
regular employees of Pauze Swanson Capital Management Co. or Declaration Service
Company.
A shareholder receiving this Proxy Statement may hold shares in one or more
Funds. A proxy card with respect to each Fund of which a shareholder owns shares
accompanies this Proxy Statement.
VOTING SECURITIES AND VOTING
There were __________________ shares of beneficial interest of the Trust
issued and outstanding at the close of business on September 28, 1998, the
record date for the purpose of determining the shareholders entitled to notice
of and to vote at the Meeting and any adjournment(s) thereof (the "Record
Date"), consisting of the following shares of each class of each Fund:
<PAGE>
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CLASS A CLASS B CLASS C NO-LOAD CLASS
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TOTAL RETURN FUND
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INTERMEDIATE TERM FUND
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SHORT TERM FUND
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TOMBSTONE FUND
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Only shareholders of record on the Record Date are entitled to vote at the
Meeting. Each holder of Shares is entitled to one (1) vote per share held, and
fractional votes for fractional shares held, of record on the Record Date on any
matter submitted to a vote at the Meeting.
The presence, in person or by proxy, of the holders of at least a majority
of the shares entitled to vote is necessary to constitute a quorum at the
Meeting. If a quorum is not present at the Meeting or if a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies that
they are entitled to vote FOR any proposal in favor of such an adjournment, and
will vote those proxies required to be voted AGAINST any proposal against such
adjournment. A shareholder vote may be taken on one or more of the proposals in
this Proxy Statement prior to any such adjournment if sufficient votes have been
received and it is otherwise appropriate.
With respect to Proposal I, shareholders of each class of each Fund shall
vote separately for the approval of their respective New Plan. For each class,
approval requires the affirmative vote of a "majority" (as defined in the
Investment Company Act of 1940, as amended, the "1940 Act") of the outstanding
shares of the class entitled to vote at the Meeting. As defined in the 1940 Act,
a majority of the outstanding shares means with respect to each class of each
Fund the vote of (1) 67% or more of the voting shares present at the meeting, if
the holders of more than 50% of the outstanding shares are present in person or
represented by proxy, or (ii) more than 50% of the outstanding voting shares,
whichever is less. The affirmative vote of a simple majority of the voted shares
of each class of each Fund is required to approve Proposal II, ratification of
the selection of Tait, Weller & Baker. Unless otherwise instructed, the proxies
will vote FOR the approval of New Plans and Tait, Weller & Baker. A list of the
beneficial owners of more than 5% of the outstanding shares of each class may be
found in the section entitled "Security Ownership of Certain Beneficial Owners"
of this proxy statement.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote, and the broker does not have discretionary
voting authority. Broker non-votes and abstentions will be considered present
for purposes of determining the existence of a quorum and the number of shares
represented at the meeting, but are not affirmative votes for any proposal. With
respect to Proposal I, non-votes and abstentions will have the same effect as a
vote against the proposal because the required vote is a percentage of the
shares present or outstanding. However, with respect to Proposal II, they will
have no effect on its approval or disapproval because approval requires a
majority of voted shares.
THE TRUST WILL SUPPLY WITHOUT COST, UPON WRITTEN REQUEST, A COPY OF THE
TRUST'S MOST RECENT ANNUAL REPORT, WHICH INCLUDES FINANCIAL AND OTHER
INFORMATION ABOUT THE FUNDS. SUCH REQUEST SHOULD BE DIRECTED TO MR. TERENCE P.
SMITH, TREASURER, PAUZE FUNDS, P.O. BOX 844, CONSHOHOCKEN, PENNSYLVANIA
19428-0844, TELEPHONE NUMBER (800) ___-____.
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<PAGE>
PROPOSALS
I. APPROVAL OF DISTRIBUTION PLANS
On September 11, 1998, the Trust's Board of Trustees, by unanimous vote of
both the full Board and those trustees who have no financial interest in the
operation of the 12b-1 Plans or any agreement related thereto ("Qualified
Trustees"), approved new Distribution Plans with respect to each of the Funds
(each a "New Plan," and collectively the "New Plans"). The primary reason for
adopting the New Plans is to clarify that Fund assets may be used to compensate
a broad range of entities (including entities that are not broker-dealers) who
provide distribution related services to the Funds, such as holding shares for
individual investors in omnibus accounts and trusts. The New Plans also provide
a more comprehensive list of activities related to the distribution of Fund
shares. In addition, the New Plans for the Total Return Fund, Intermediate Term
Fund and Short Term Fund (collectively the "Bond Funds") establish a fixed
distribution expense by changing from a plan under which service providers are
reimbursed for distribution services and expenses ("reimbursement based" plan),
to a plan under which the Trust's Advisor is compensated based on a fixed fee
for all distribution related activities and expenses ("compensation based"
plan). The Existing Plan for the Tombstone Fund is already compensation based.
Significant provisions of the New Plans are summarized below; however, this
summary is qualified in its entirety by reference to the New Plans, a sample of
which is attached as Appendix A to this proxy statement.
A. EXISTING DISTRIBUTION ARRANGEMENTS
----------------------------------
On _________________, 1996, the full Board, the Qualified Trustees and the
shareholders approved a Distribution Plan pursuant to Rule 12b-1 under the 1940
Act, for each of the Bond Funds and on _____, the full Board, the Qualified
Trustees and the initial shareholder approved a Distribution Plan pursuant to
Rule 12b-1 under the 1940 Act for the Tombstone Fund (each an "Existing Plan,"
and collectively the "Existing Plans"). [insert any date of amendment]. The
Board of Trustees, including the Qualified Trustees, also approved a
Distribution Agreement between the Trust (on behalf of each Fund) and
Declaration Distributors, Inc. ("DDI") under which DDI would serve as
distributor for each Funds' Shares and would be obligated to use its best
efforts to distribute the Shares. Mr. Terence P. Smith, a Trustee of the Trust,
is the President and Chief Executive Officer of DDI and benefits indirectly from
payments received by DDI under the Plans.
Each Existing Bond Fund Plan permits Fund assets to be utilized to
reimburse DDI and others for expenditures made in connection with sales and
promotional services related to the distribution of Fund shares, including
personal services provided to prospective and existing Fund shareholders, which
include, but are not limited to, the costs of: printing and distribution of
prospectuses and promotional materials; making slides and charts for
presentations; assisting shareholders and prospective investors in understanding
and dealing with the Fund; and travel and out-of-pocket expenses (e.g., copy and
long distance telephone charges) related thereto. Each Existing Plan permits the
Fund to pay for or reimburse expenditures in connection with personal and
administrative services provided to existing Fund shareholders, provided the
total amount expended pursuant to the Plan does not exceed 0.25% of net assets
on an annual basis.
With respect to Class B shares, each Existing Bond Fund Plan includes an
additional Rule 12b-1 fee of 0.75% annually, which is used to reimburse the
Advisor, over time, for paying fees or commissions to DDI and participating
broker-dealers. As President of Pauze Swanson Capital Management Co., the Fund's
Advisor (the "Advisor"), Mr. Philip C. Pauze, a Trustee of the Trust, benefits
indirectly from payments received by the Advisor under the Plans. With respect
to Class C shares, each Existing Bond Fund Plan includes an additional fee
whereby Fund assets attributable to Class C shares in specific shareholders
accounts are utilized to pay an annual ongoing fee of 0.75% to broker-dealers
for sales and promotional services related to distribution of the shares.
The Existing Tombstone Fund Plan is substantially similar to the Existing
Bond Fund Plans except that the Existing Tombstone Fund Plan is compensation
based rather than reimbursement based and, because the Tombstone Fund is not
currently selling Class C shares, the Plan does not address Class C shares.
- 3 -
<PAGE>
For the fiscal year ended April 30, 1998, the classes of each Fund paid
under the Existing Plans the respective amounts indicated below:
<TABLE>
<CAPTION>
====================================================================================================================================
CLASS A CLASS B CLASS C NO-LOAD CLASS
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TOTAL % OF TOTAL % OF TOTAL % OF TOTAL % OF
AMOUNT AVERAGE AMOUNT AVERAGE AMOUNT AVERAGE AMOUNT AVERAGE
NET NET NET NET
ASSETS ASSETS ASSETS ASSETS
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL RETURN
FUND
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INTERMEDIATE
TERM FUND
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SHORT TERM
FUND
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TOMBSTONE
FUND
====================================================================================================================================
</TABLE>
B. PROPOSED DISTRIBUTION ARRANGEMENTS
----------------------------------
Each New Plan permits the corresponding Fund to engage, directly or
indirectly, in any activity related to the distribution of its shares. These
activities may include, but are not limited to, the following: (a) payments,
including incentive compensation, to securities dealers or other financial
intermediaries, financial institutions, investment advisors and others that are
engaged in the sale of Shares, or that may be advising shareholders of the Trust
regarding the purchase, sale or retention of Shares; (b) payments, including
incentive compensation, to securities dealers or other financial intermediaries,
financial institutions, investment advisors and others that hold Shares for
shareholders in omnibus accounts or as shareholders of record or provide
shareholder support or administrative services to the Fund and its shareholders;
(c) expenses of maintaining personnel (including personnel of organizations with
which the Trust has entered into agreements related to the Plan) who engage in
or support distribution of Shares or who render shareholder support services not
otherwise provided by the Trust's transfer agent, including, but not limited to,
allocated overhead, office space and equipment, telephone facilities and
expenses, answering routine inquiries regarding the Trust, processing
shareholder transactions, and providing such other shareholder services as the
Trust may reasonably request; (d) costs of preparing, printing and distributing
prospectuses and statements of additional information and reports of the Fund
for recipients other than existing shareholders of the Fund; (e) costs of
formulating and implementing marketing and promotional activities, including,
but not limited to, sales seminars, direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (f) costs of
preparing, printing and distributing sales literature; (g) costs of obtaining
such information, analyses and reports with respect to marketing and promotional
activities as the Trust may, from time to time, deem advisable; and (h) costs of
implementing and operating the Plan.
Under the New Bond Fund Plans, the 12b-1 fees incurred would change from a
reimbursement arrangement, whereby each Fund reimburses DDI and others up to
0.25% of the Funds' average daily net assets, to a compensation arrangement,
whereby each Fund would pay the Advisor a flat fee in an amount equal to the
annual rate of 0.25% of the Funds' average daily net assets for all distribution
related services and expenses. As President of the Advisor, Mr. Philip C. Pauze,
a Trustee of the Trust, will benefit indirectly from payments received by the
Advisor under the New Plans. Under the Existing Bond Fund Plans, each Fund is
currently incurring expenses at an annual rate of 0.25% of the Fund's average
daily net assets. THEREFORE, IF THE NEW PLANS ARE IMPLEMENTED, THE EXPENSES TO
SHAREHOLDERS OF THE BOND FUNDS ARE NOT EXPECTED TO INCREASE. Because the
Existing Tombstone Fund Plan is already compensation based, this feature of the
Plan and resulting shareholder expenses will not change.
The New Plans do not obligate a Fund to reimburse the Advisor for the
expenses that the Advisor may incur in connection with the sales and promotion
of the Funds. Thus, under the New Plans, even if the Advisor's expenses for
distributing the shares exceed the fee payable by a Fund, the Fund would not be
obligated to pay more than that fee.
- 4 -
<PAGE>
Conversely, although it is not expected to be the case in the foreseeable
future, if the Advisor's expenses are less than the fee it receives, the Advisor
would retain the full amount of the fee and thereby realize a profit. The 12b-1
fee would be paid by each Fund to the Advisor unless and until the New Plan is
terminated or not renewed. In any event, any distribution or service expenses
incurred by the Advisor in excess of the 12b-1 fee payments it has received or
accrued through the termination date would be the sole responsibility and
liability of the Advisor and would not be obligations of any Fund. In all
material respects, all other provisions of the New Bond Fund Plans are the same
as the provisions of the Existing Bond Fund Plans. In particular, the New Bond
Fund Plans provide for the same additional fees for Class B and Class C shares
as did the Existing Bond Fund Plans. The New Tombstone Plan is substantially
similar to the New Bond Fund Plans.
ADDITIONAL INFORMATION REGARDING THE NEW PLANS. Among other things, the New
Plans as well as the Old Plans also provide that (1) at least quarterly, the
Treasurer of the Trust will submit to the Trust's Board of Trustees, and the
trustees will review, reports regarding all amounts expended under the Plans and
the purposes for which such expenditures were made, (2) each Plan and any
related agreement will continue in effect only so long as it is approved at
least annually by the Trust's Board of Trustees, as well as by the Qualified
Trustees, acting in person at a meeting called for that purpose, (3) payments by
a Fund under the Plans shall not be materially increased without the affirmative
vote of the holders of a majority of the applicable class of shares, and (4)
while the Plans remain in effect, the selection and nomination of trustees who
are not "interested persons" of the Trust shall be committed to the discretion
of the trustees who are not interested persons of the Trust.
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES. Prior to approving the New
Plans, the Trust's Board of Trustees was provided with detailed information
relating thereto. Among other things, the trustees considered information
relating to the merits of certain possible alternatives to the New Plans, the
potential costs and benefits of the New Plans to shareholders and the likelihood
that the New Plans would succeed in producing their intended results.
In approving the New Plans, the trustees considered the methods of
distribution of Fund shares, which have evolved over time and currently include
provision of a variety of distribution related services by various entities
including non broker-dealers. The trustees discussed the need for flexibility in
the Funds' Distribution Plans in order to adapt to changing distribution methods
and to permit distribution of Fund shares through various means. The trustees
also considered all the features of the proposed distribution system with
respect to each Fund, including (1) the Advisor's belief that the New Plans will
make the Funds more attractive to investors and provide more flexibility in its
distribution efforts, resulting in greater growth of a Fund than might otherwise
be the case, (2) the clarity anticipated to be provided by the New Plans in
describing to whom and for what the 12b-1 fees may be used, (3) the
simplification anticipated to be provided by the New Plans in the review of and
accounting for distribution expenses, (4) the advantages to the shareholders of
economies of scale resulting from growth in a Fund's assets and potential
continued growth, (5) the services provided to each Fund and its shareholders by
the Advisor and other entities distributing the Shares, and (6) the estimated
expenses and costs in distributing the Shares.
In evaluating the New Plans, the trustees considered all compensation that
the Advisor would receive from the Funds, including the 12b-1 fees. The trustees
reviewed the existing distribution expenses and noted that expenses were
currently well in excess of the permitted reimbursement and that it was not
anticipated in the foreseeable future for the New Plans to result in an increase
in expenses to any class of any Fund. The trustees also considered the benefits
that would accrue to the Advisor under the New Plans in that the Advisor would
receive 12b-1 fees that are calculated based upon a percentage of the average
net assets of a Fund, which fees would increase if the New Plans were successful
and a Fund attained and maintained significant additional assets.
Following their consideration, the trustees, including the Qualified
Trustees, concluded that the fees payable by each Fund under the New Plans were
reasonable, in view of the services that would be provided by the Advisor and
the anticipated benefits of the New Plans, and that the new Plans would provide
the needed flexibility to the Advisor in its distribution efforts. The trustees,
including a majority of the Qualified Trustees, determined that approval of the
New Plans would be in the best interests of each respective Fund and would have
a reasonable likelihood of benefiting each Fund and its shareholders, once
approved. Accordingly, the Board of Trustees unanimously approved the New Plans.
- 5 -
<PAGE>
RECOMMENDATION OF THE BOARD OF TRUSTEES. For the above mentioned reasons,
the Board of Trustees recommends that the shareholders of each class of each
Fund vote for the New Plans. The New Plans will be effective for those classes
whose shareholders approve the Plan, even if shareholders of one or more classes
fail to approve the Plan.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" PROPOSAL I.
II. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The 1940 Act, which is the primary federal law that regulates the Funds,
requires every registered investment company to be audited at least once a year
by independent accountants selected by the Board of Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act). The 1940 Act also requires that the selection be submitted for
ratification by the shareholders at their next meeting following the selection.
Under this proposal, shareholders of the Trust are asked to ratify the Board's
unanimous selection of Tait, Weller & Baker ("Tait, Weller") as the Trust's
independent accountants for the fiscal year ending April 30, 1999. Tait, Weller
has been the Trust's independent accountants since June 13, 1997. At that time,
the Board of Directors unanimously selected Tait, Weller upon the recommendation
of the Audit Committee following an extensive selection process during which the
Audit Committee reviewed proposals from two "Big Six" accounting firms, a second
tier firm and a local accounting firm. The Board selected Tait, Weller based on
its industry experience and depth of expertise. At its meeting on June __, 1998,
the Board again elected Tait Weller upon the recommendation of the Audit
Committee.
[Tait, Weller representatives will be present at the meeting and will have
an opportunity to make a statement to the shareholders and to respond to
questions.] Unless otherwise instructed, the proxies will vote for the
ratification of the selection of Tait, Weller as the Trust's independent
auditors.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL II.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of the Record Date, with
respect to (i) each person known by the Trust to be the beneficial owner of more
than 5% of a Fund's outstanding Shares, (ii) each Trustee and officer of the
Trust, and (iii) all Trustees and officers of the Trust as a group.
<TABLE>
<CAPTION>
Amount Beneficially % Owned % Owned
Title of Name & Address of ------------------- ------- -------
Class Beneficial Owner Owned of Class of Fund
- ----- ---------------- ----- ----------------
Pauze U.S. Government Total Return Fund
---------------------------------------
<S> <C> <C> <C> <C>
No Load California Master Trust ______ ____% ____%
3170 Hilltop Mall Road, Richmond, CA 94806
No Load Pinnacle Management & Trust Co. ______ ____% ____%
American Funeral Plan / TX
5599 San Felipe, Suite 300, Houston, TX 77056
Class B Whitehurst Sullivan ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Whitehurst Loyd ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Hadley Funeral Chapel ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
- 6 -
<PAGE>
Class B Whitehurst Stephens & Bean ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Robert & Sandra Earthman ______ ____% ____%
P.O. Box 2052, Jersey City, NJ 07303
Class C Theodore F. Mallory, III IRA ______ ____% ____%
P.O. Box 778, Fayetteville, GA 30214
Class C Alice Mallory IRA ______ ____% ____%
P.O. Box 778, Fayetteville, GA 30214
Pauze U.S. Government Intermediate Term Bond Fund
-------------------------------------------------
No Load PA Funeral ______ ____% ____%
P.O. Box 7780, Philadelphia, PA 19182
No Load California Master Trust ______ ____% ____%
3170 Hilltop Mall Road, Richmond, CA 94806-1921
No Load Pinnacle Management & Trust Co. ______ ____% ____%
American Funeral Plan / TX
5599 San Felipe, Suite 300, Houston, TX 77056
No Load Strafe & Company ______ ____% ____%
F/A/O Cooper Agency
P.O. Box 160, Westerville, OH 43086
No Load Coker Funeral Home ______ ____% ____%
P.O. Box 1533, Minneapolis, MN 55480
No Load Angelus Rosedale Endowment ______ ____% ____%
1831 W. Washington, Los Angeles, CA 90007
Class B Whitehurst Sullivan ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Whitehurst Loyd ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Hadley Funeral Chapel ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Whitehurst Stephens & Bean ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class B Jim L. Cooper ______ ____% ____%
210 W. Walnut, Tecumseh, OK 74873
Pauze U.S. Government Short Term Bond Fund
------------------------------------------
No Load California Master Trust ______ ____% ____%
3170 Hilltop Mall Road, Richmond, CA 94806
- 7 -
<PAGE>
No Load Pinnacle Management & Trust Co. ______ ____% ____%
American Funeral Plan / TX
5599 San Felipe, Suite 300, Houston, TX 77056
No Load Strafe & Company ______ ____% ____%
F/A/O Cooper Agency
P.O. Box 160, Westerville, OH 43086
No Load Coker Funeral Home ______ ____% ____%
P.O. Box 1533, Minneapolis, MN 55480
Class C Whitehurst Sullivan ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class C Whitehurst Loyd ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class C Hadley Funeral Chapel ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Class C Whitehurst Stephens & Bean ______ ____% ____%
One Freedom Valley Drive, Oaks, PA 19456
Pauze Tombstone Fund
--------------------
Class A Donaldson Lufkin Jenrette
P.O. Box 2052, Jersey City, NJ 07303 ______ ____% ____%
Class A Wayne Collins
32 Autumn Crescent, The Woodlands, TX 77381 ______ ____% ____%
Class A Steven Schilling
3718 Strawberry Creek Way, Ontario, CA 91761 ______ ____% ____%
Class B Donaldson Lufkin Jenrette
P.O. Box 2052, Jersey City, NJ 07303 ______ ____% ____%
Class B Angelus Funeral Home PreNeed Trust
3875 S. Crenshaw Blvd,. Los Angeles, CA 90008 ______ ____% ____%
Class B Angelus Funeral Home
3875 S. Crenshaw Blvd,. Los Angeles, CA 90008 ______ ____% ____%
Class B Angeleus Rosedale Endowment Care Fund
1831 W. Washington Blvd., Los Angeles, CA 90007 ______ ____% ____%
Class B ABN AMRO Incorporated
P.O. Box 6108, Chicago, IL 60680 ______ ____% ____%
</TABLE>
[Insert info RE: Trustees/Offices]
- ----------------------------------
* Less than 1% of outstanding shares.
- 8 -
<PAGE>
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered for
presentation at the Meeting. Under the proxy rules of the Securities and
Exchange Commission, shareholder proposals may, under certain conditions, be
included in the Trust's proxy statement and proxy for a particular annual
meeting. Under these rules, proposals submitted for inclusion in the Trust's
proxy material for the next annual meeting after the meeting to which this proxy
statement relates must be received by the Trust a reasonable time before the
solicitation is made. The fact that the Trust receives a shareholder proposal in
a timely manner does not insure its inclusion in its proxy material because
there are other requirements in the proxy rules relating to such inclusion.
Shareholders should be aware that annual meetings of shareholders are not
required as long as there is no particular requirement under the Investment
Company Act which must be met by convening such a shareholder meeting. However,
the Trustees of the Trust serve on staggered terms such that the terms of three
Trustees expire every three years. Therefore, a shareholder meeting shall be
held at least every three years to elect Trustees. The next such meeting is
expected to be held in 1999. For presentation at that meeting, any shareholder
proposals must be received on or before June 4, 1999.
COST OF SOLICITATION
The cost of preparing and mailing this Proxy Statement, the accompanying
Notice of Special Meeting and Proxy and any additional material relating to the
meeting and the cost of soliciting proxies will be borne by the Trust. In
addition to solicitation by mail, the Trust will request banks, brokers and
other custodial nominees and fiduciaries to supply proxy material to the
beneficial owners of shares of whom they have knowledge, and will reimburse them
for their expenses in so doing. Certain officers and employees of the Trust, DDI
and the Adviser may solicit proxies in person or by telephone, facsimile
transmission or mail, for which they will not receive any special compensation.
OTHER MATTERS
The Trust's Board of Trustees knows of no other matters to be presented at
the Meeting other than as set forth above. However, if any other matters
properly come before the meeting, the holders of the proxy will vote the shares
represented by the proxy on such matters in accordance with their judgment, and
discretionary authority to do so is included in the proxy.
<TABLE>
<CAPTION>
INVESTMENT ADVISOR DISTRIBUTOR ADMINISTRATOR
<S> <C> <C>
Pauze Swanson Capital Management Co. Declaration Distributors, Inc. Declaration Service Company
14340 Torrey Chase Blvd., Suite 170 P.O. Box 844 P.O. Box 844
Houston, TX 77014 Conshohocken, PA 19428 Conshohocken, PA 19428
</TABLE>
BY ORDER OF THE BOARD OF TRUSTEES
TERENCE P. SMITH
Dated ______________, 1998 Secretary
- 9 -
<PAGE>
APPENDIX A
PLAN PURSUANT TO RULE 12b-1
OF THE PAUZE
_________________________________ FUND
Adopted by Trustees _______, 1998
RECITALS
1. PAUZE FUNDS, an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts (the "Trust") is engaged 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").
2. The Trust operates as a "series company" within the meaning of Rule
18f-2 under the Act and is authorized to issue Shares of beneficial interest in
various series or sub-trusts (collectively the "Funds"). The Shares of the
____________________________ Fund (the "Shares") have been divided into four
classes (no-load, Class A, Class B and Class C) offered pursuant to a plan
adopted pursuant to Rule 18f-3 under the Act (each, a "Class").
3. Funds of the Trust may utilize Fund assets to pay for sales or
promotional services or activities that have been or will be provided in
connection with distribution of Shares of the Funds if such payments are made
pursuant to a Plan adopted and continued in accordance with Rule 12b-1 under the
Act.
4. Pauze _________________________________ Fund, a series of the Trust (the
"Fund"), by virtue of such arrangement may be deemed to act as a distributor of
its Shares as provided in Rule 12b- 1 under the Act and desires to adopt a plan
pursuant to such Rule (the "Plan").
5. The Trustees as a whole, and the Trustees who are not interested persons
of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan and any agreements relating to
it (the "Qualified Trustees"), having 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 this Plan will benefit the Fund and its shareholders, have approved the
Plan by votes cast in person at a meeting called for the purpose of voting on
this Plan and agreements related thereto.
PLAN PROVISIONS
SECTION 1. EXPENDITURES
(a) Distribution Activities. Subject to the supervision of the Trustees of
the Trust, the Fund may, directly or indirectly, engage in any activities
related to the distribution of its Shares, which activities may include, but are
not limited to, the following: (a) payments, including incentive compensation,
to securities dealers or other financial intermediaries, financial institutions,
investment advisors and others that are engaged in the sale of Shares, or that
may be advising shareholders of the Trust regarding the purchase, sale or
retention of Shares; (b) payments including incentive
<PAGE>
compensation, to securities dealers or other financial intermediaries, financial
institutions, investment advisors and others that hold Shares for shareholders
in omnibus accounts or as shareholders of record or provide shareholder support
or administrative services to the Fund and its shareholders; (c) expenses of
maintaining personnel (including personnel of organizations with which the Trust
has entered into agreements related to this Plan) who engage in or support
distribution of Shares or who render shareholder support services not otherwise
provided by the Trust's transfer agent, including, but not limited to, allocated
overhead, office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder
transactions, and providing such other shareholder services as the Trust may
reasonably request; (d) costs of preparing, printing and distributing
prospectuses and statements of additional information and reports of the Fund
for recipients other than existing shareholders of the Fund; (e) costs of
formulating and implementing marketing and promotional activities, including,
but not limited to, sales seminars, direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (f) costs of
preparing, printing and distributing sales literature; (g) costs of obtaining
such information, analyses and reports with respect to marketing and promotional
activities as the Trust may, from time to time, deem advisable; and (h) costs of
implementing and operating this Plan. The Trust is authorized to engage in the
activities listed above, and in any other activities related to the distribution
of Shares, either directly or through other persons with which the Trust has
entered into agreements related to this Plan.
(b) Annual Fee. The Fund will pay the Fund's Advisor ("the Advisor") an
annual fee for the Advisor's services in connection with the sales and promotion
of the Fund, including its expenses in connection therewith (collectively,
"Distribution Expenses"). The annual fee paid to the Advisor under this Plan
will be calculated daily and paid monthly by the Fund on the first day of each
month at an annual rate of 0.25% of the average daily net assets of the classes
of the Fund as to which this Plan is effective. Payments received by the Advisor
pursuant to this Plan are in addition to fees paid by the Fund pursuant to the
Advisory Agreement.
(c) Distribution Expenses in Excess of or Less Than Amount of Fee. All
Distribution Expenses in excess of its compensation hereunder shall be borne by
the Advisor. The fees paid by the Fund shall not be refundable in the event that
in any given year the fees are greater than the Advisor's Distribution Expenses
for that year.
(d) Additional Fee for Class B Shares. Class B Shares are sold without an
initial sales charge. The entire purchase price is invested in the Fund and the
Advisor pays the fee or commission of the Fund's principal underwriter (the
"Distributor") and the participating broker-dealer. In addition to the fee paid
by each Class pursuant to section 1(b), the Fund will pay the Advisor, as
compensation for financing the Class B broker-dealer fees and commissions, a fee
(accrued daily and paid monthly) at an annual rate of 0.75% of the Class B
Shares' average daily net assets. The Advisor will also receive any contingent
deferred sales charge ("CDSC") imposed in accordance with the Fund's then
current Prospectus and Statement of Additional Information.
(e) Additional Fee for Class C Shares. Class C Shares are sold subject to
an annual ongoing fee of 0.75% in order to compensate broker-dealers for sales
and promotional services related to distribution of said Shares. The Fund will
pay each broker-dealer an ongoing trail commission, at an annual rate of 0.75%,
based on the amount of Class C Shares sold by such broker-dealer and remaining
outstanding for the specified payment period.
- 2 -
<PAGE>
SECTION 2. TERM AND TERMINATION
(a) Initial Term. This Plan shall become effective with respect to a Class
of the Fund when approved by a majority of the outstanding voting securities (as
defined in the Act) of the respective Class and shall continue in effect for a
period of one year thereafter unless terminated or otherwise continued or
discontinued as provided in this Plan. The Plan shall be effective for those
classes whose shareholders have approved the Plan, even if shareholders of one
or more classes fail to approve the Plan.
(b) Continuation of the Plan. The Plan and any related agreements shall
continue in effect for periods of one year thereafter for so long as such
continuance is specifically approved at least annually by votes of a majority of
both (a) the Trustees of the Trust and (b) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on this Plan and such
related agreements.
(c) Termination of the Plan. This Plan may be terminated at any time as to
any Class by vote of a majority of the Qualified Trustees, or by vote of a
majority of the outstanding voting securities of the applicable Class.
SECTION 3. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 1 hereof as to any Class
unless such amendment is approved by a vote of the majority of the outstanding
voting securities of the applicable Class, and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 2(b) hereof.
SECTION 4. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to the Fund, the selection and
nomination of Trustees who are not interested persons of the Trust (as defined
in the Act) shall be committed to the discretion of the Trustees who are not
interested persons of the Trust.
SECTION 5. QUARTERLY REPORTS
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts accrued and
the amounts expended under this Plan for distribution, along with the purposes
for which such expenditures were made.
SECTION 6. RECORDKEEPING
The Trust shall preserve copies of this Plan and any related agreements and
all reports made pursuant to Section 5 hereof, for a period of not less than six
years from the date of this Plan, the agreements or such report, as the case may
be, the first two years in an easily accessible place.
SECTION 7. AGREEMENTS RELATED TO THIS PLAN
Agreements with persons providing distribution services to be paid for or
reimbursed under this Plan shall provide that:
- 3 -
<PAGE>
(a) the agreement will continue in effect for a period of one year and will
continue thereafter only if specifically approved by vote of a majority of
the Trustees of the Trust;
(b) the agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of (i) the Qualified Trustees or (ii) the
outstanding voting securities of the applicable Class, on not more than
sixty (60) days' written notice to any other party to the agreement;
(c) the agreement will terminate automatically in the event of an
assignment;
(d) in the event the agreement is terminated or otherwise discontinued, no
further payments or reimbursements will be made by the Fund with regard to
obligations incurred after the effective date of such action; and
(e) payments and/or reimbursements may only be made for the specific sales
or promotional services or activities identified in Section 1 of this Plan.
- 4 -
<PAGE>
PROXY
PAUZE FUNDS
PAUZE U.S. GOVERNMENT TOTAL RETURN BOND FUND
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 26, 1998
The undersigned shareholder of the Pauze U.S. Government Total Return Bond
Fund (the "Fund"), a portfolio of Pauze Funds (the "Trust"), hereby nominates,
constitutes and appoints Philip C. Pauze and ____________________, and each of
them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the Hilton, ________________________________, Boston, Massachusetts ________
on October 26, 1998 at ______ a.m. Eastern Standard Time and at any and all
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
PROPOSAL I. APPROVAL OF THE DISTRIBUTION PLAN
Approval or disapproval of the new Distribution Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended.
|_| FOR |_| AGAINST |_| ABSTAIN
PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
Ratification of the appointment of Tait, Weller & Baker as independent
accountants of the Trust for the fiscal year ending April 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS I AND II. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
_________________ DATED:______________ ___________________________________
(Number of Shares) (Please Print Your Name)
___________________________________
(Signature of Shareholder)
___________________________________
(Please Print Your Name)
___________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE>
PROXY
PAUZE FUNDS
PAUZE U.S. GOVERNMENT INTERMEDIATE TERM BOND FUND
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 26, 1998
The undersigned shareholder of the Pauze U.S. Government Intermediate Term
Bond Fund (the "Fund"), a portfolio of Pauze Funds (the "Trust"), hereby
nominates, constitutes and appoints Philip C. Pauze and ____________________,
and each of them, the attorney, agent and proxy of the undersigned, with full
powers of substitution, to vote all the stock of the Fund which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the Fund to be
held at the Hilton, ________________________________, Boston, Massachusetts
________ on October 26, 1998 at ______ a.m. Eastern Standard Time and at any and
all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
PROPOSAL I. APPROVAL OF THE DISTRIBUTION PLAN
Approval or disapproval of the new Distribution Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended.
|_| FOR |_| AGAINST |_| ABSTAIN
PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
Ratification of the appointment of Tait, Weller & Baker as independent
public accountants of the Trust for the fiscal year ending April 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS I AND II. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
_________________ DATED:______________ ___________________________________
(Number of Shares) (Please Print Your Name)
___________________________________
(Signature of Shareholder)
___________________________________
(Please Print Your Name)
___________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE>
PROXY
PAUZE FUNDS
PAUZE U.S. GOVERNMENT SHORT TERM BOND FUND
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 26, 1998
The undersigned shareholder of the Pauze U.S. Government Short Term Bond
Fund (the "Fund"), a portfolio of Pauze Funds (the "Trust"), hereby nominates,
constitutes and appoints Philip C. Pauze and ____________________, and each of
them, the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the Hilton, ________________________________, Boston, Massachusetts ________
on October 26, 1998 at ______ a.m. Eastern Standard Time and at any and all
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
PROPOSAL I. APPROVAL OF THE DISTRIBUTION PLAN
Approval or disapproval of the new Distribution Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended.
|_| FOR |_| AGAINST |_| ABSTAIN
PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
Ratification of the appointment of Tait, Weller & Baker as independent
public accountants of the Trust for the fiscal year ending April 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS I AND II. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
_________________ DATED:______________ ___________________________________
(Number of Shares) (Please Print Your Name)
___________________________________
(Signature of Shareholder)
___________________________________
(Please Print Your Name)
___________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE>
PROXY
PAUZE FUNDS
PAUZE TOMBSTONE FUND
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 26, 1998
The undersigned shareholder of the Pauze Tombstone Fund (the "Fund"), a
portfolio of Pauze Funds (the "Trust"), hereby nominates, constitutes and
appoints Philip C. Pauze and ____________________, and each of them, the
attorney, agent and proxy of the undersigned, with full powers of substitution,
to vote all the stock of the Fund which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund to be held at the Hilton,
________________________________, Boston, Massachusetts ________ on October 26,
1998 at ______ a.m. Eastern Standard Time and at any and all adjournments
thereof, as fully and with the same force and effect as the undersigned might or
could do if personally present as follows:
PROPOSAL I. APPROVAL OF THE DISTRIBUTION PLAN
Approval or disapproval of the new Distribution Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended.
|_| FOR |_| AGAINST |_| ABSTAIN
PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
Ratification of the appointment of Tait, Weller & Baker as independent
public accountants of the Trust for the fiscal year ending April 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS I AND II. THE
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF
THE PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES, IF ANY.
_________________ DATED:______________ ___________________________________
(Number of Shares) (Please Print Your Name)
___________________________________
(Signature of Shareholder)
___________________________________
(Please Print Your Name)
___________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
