PILGRIM AMERICA MASTERS SERIES INC
DEFS14A, 1997-11-07
Previous: YES ENTERTAINMENT CORP, 424B3, 1997-11-07
Next: RESIDENTIAL FUNDING MORTGAGE SECURITIES II INC, 8-K, 1997-11-07



                                  SCHEDULE 14A
                                 (Rule 14a-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

Filed by the registrant X 
                       ---
Filed by a party other than the registrant_  

Check the appropriate box:

        Preliminary proxy statement
- ---
 X      Definitive proxy statement
- ---
        Definitive additional materials
- ---
        Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
- ---

     Pilgrim America Masters Series, Inc.
- ------------------------------------------------------------------
        (Name of Registrant as Specified in Its Charter)

     Pilgrim America Masters Series, Inc.
- ------------------------------------------------------------------
        (Name of Person(s) Filing Proxy Statement)

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 transactiion  computed
        pursuant to Exchange Act Rule 0-11:

        ------------------------------------------------------------------------

        (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 identifying 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:

        ------------------------------------------------------------------------

        (2) Form, schedule or registration statement no.:

        ------------------------------------------------------------------------
        (3) Filing party:

        ------------------------------------------------------------------------

        (4) Date filed:

        ------------------------------------------------------------------------
<PAGE>
                     Pilgrim America Masters Series, Inc.
                      40 North Central Avenue, Suite 1200
                            Phoenix, Arizona 85004

                                                               November 10, 1997

Dear Shareholder:

     Your  Board  of  Directors  has called a Special Meeting of Shareholders of
the  Pilgrim  America  Masters MidCap Value Fund (the "Fund") of Pilgrim America
Masters  Series,  Inc.  (the  "Company")  to  be  held  on  December 18, 1997 to
consider  a  proposal  to  approve  a new Portfolio Management Agreement between
Pilgrim  America  Investments,  Inc.  (the  "Investment  Manager"),  and  Cramer
Rosenthal McGlynn, LLC to provide sub-advisory services to the Fund.

     This   meeting  is  required  because  a  proposed  reorganization  of  CRM
Advisors,  LLC,  the  Fund's  current  Portfolio Manager, will cause the current
Portfolio  Management  Agreement to terminate on the date of the reorganization,
which  is  scheduled for January 2, 1998. Upon completion of the reorganization,
the  approval of a new Portfolio Management Agreement will allow the same people
who  currently  manage the Fund to continue to manage the Fund. In addition, the
new  Portfolio  Management  Agreement  will have substantially the same terms as
the  current  Portfolio  Management Agreement between the Investment Manager and
CRM  Advisors,  LLC.  The  Investment  Management  fees  paid by the Fund to the
Investment Manager will not change.

     After  careful  consideration,  the Board of Directors unanimously approved
this proposal and recommends that shareholders vote "FOR" the proposal.

     Your  vote  is  important  regardless  of  the number of shares you own. In
order   to  avoid  the  added  cost  of  follow-up  solicitations  and  possible
adjournments,  please  take  a  few minutes to read the proxy statement and cast
your  vote. It is important that your vote be received by no later than December
17, 1997.

     The   Company   is   using   Shareholder   Communications   Corporation,  a
professional  proxy  solicitation  firm,  to  assist  shareholders in the voting
process.  As  the  date  of the meeting approaches, if we have not already heard
from  you,  you  may  receive  a telephone call from Shareholders Communications
reminding you to exercise your right to vote.

     We  appreciate  your  participation  and prompt response in this matter and
thank you for your continued support.

                                        Sincerely,


                                        /s/ Robert W. Stallings

                                        ROBERT W. STALLINGS,
                                        President and Chairman of the Board
<PAGE>
                     Pilgrim America Masters Series, Inc.
                      40 North Central Avenue, Suite 1200
                            Phoenix, Arizona 85004
                                 (800) 331-1080

   Notice of Special Meeting of Shareholders to be Held on December 18, 1997


To the Shareholders:

     A Special  Meeting of  Shareholders  of the Pilgrim  America Masters MidCap
Value Fund (the "Fund") of Pilgrim America Masters Series,  Inc. (the "Company")
will be held on Thursday,  December 18, 1997 at 10:00 a.m.,  local time,  at the
offices of the Company, 40 North Central Avenue,  Suite 1200,  Phoenix,  Arizona
85004 for the following purposes:

          1. To approve a new Portfolio  Management  Agreement  between  Pilgrim
     America Investments,  Inc. and Cramer Rosenthal McGlynn, LLC, the successor
     to the current Portfolio Manager;

          2. To transact  such other  business as may  properly  come before the
     Special Meeting of Shareholders or any adjournments thereof.

     Shareholders  of  record  at  the close of business on November 3, 1997 are
entitled  to notice of, and to vote at, the meeting. Your attention is called to
the  accompanying  Proxy Statement. Regardless of whether you plan to attend the
meeting,  PLEASE  COMPLETE,  SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that  a  quorum  will be present and a maximum number of shares may be voted. If
you  are  present  at the meeting, you may change your vote, if desired, at that
time.

                                        By Order of the Board of Directors



                                        /s/ James Hennessy

                                        JAMES M. HENNESSY, Secretary

November 10, 1997
<PAGE>
                     Pilgrim America Masters Series, Inc.

                                PROXY STATEMENT

        Special Meeting of Shareholders to be held on December 18, 1997

     This Proxy  Statement  is  furnished  by the Board of  Directors of Pilgrim
America Masters Series, Inc. (the "Company") in connection with the solicitation
of voting  instructions  for use at the  Special  Meeting of  Shareholders  (the
"Meeting") of the Pilgrim  America  Masters MidCap Value Fund (the "Fund") to be
held on December  18,  1997,  at 10:00 a.m.,  local time,  at the offices of the
Company,  40 North Central Avenue,  Suite 1200,  Phoenix,  Arizona 85004 for the
purposes set forth below and in the accompanying  Notice of Special Meeting.  At
the Meeting, the shareholders of the Fund will be asked:

          1. To approve a new Portfolio  Management  Agreement  between  Pilgrim
     America Investments,  Inc. and Cramer Rosenthal McGlynn, LLC, the successor
     to the current Portfolio Manager;

          2. To transact  such other  business as may  properly  come before the
     Special Meeting of Shareholders or any adjournments thereof.

Solicitation of Proxies

     Solicitation  of  proxies  is  being  made primarily by the mailing of this
Notice  and  Proxy  Statement with its enclosures on or about November 12, 1997.
Shareholders  of  the  Fund  whose  shares of Common Stock are held by nominees,
such  as brokers, can vote their proxies by contacting their respective nominee.
In  addition to the solicitation of proxies by mail, officers of the Company and
employees  of  Pilgrim  America  Investments,  Inc.  ("PAII"  or the "Investment
Manager"),   Investment  Manager  to  the  Fund,  and  its  affiliates,  without
additional  compensation,  may  solicit  proxies  in  person  or  by  telephone,
telegraph,   facsimile,   or   oral  communication.  The  Company  has  retained
Shareholder  Communications Corporation, a professional proxy solicitation firm,
to  assist  with  any  necessary  solicitation  of  proxies. As the meeting date
approaches,  certain  shareholders of the Fund may receive a telephone call from
the  professional  proxy  solicitation  firm asking the shareholder to vote. The
costs associated with such solicitation will be paid by CRM Advisors, LLC.

     A  shareholder  may  revoke the accompanying proxy at any time prior to its
use  by  filing  with  the  Company  a written revocation or duly executed proxy
bearing  a  later  date. In addition, any shareholder who attends the Meeting in
person  may  vote  by  ballot  at  the  Meeting,  thereby  canceling  any  proxy
previously  given.  The  persons  named  in  the accompanying proxy will vote as
directed  by  the  proxy,  but  in the absence of voting directions in any proxy
that  is  signed and returned, they intend to vote FOR each of the proposals and
may  vote in their discretion with respect to other matters not now known to the
Board of the Company that may be presented at the Meeting.

Voting Rights

     The  proposals  in  this proxy statement affect only the Fund, which is one
of  three  series  of  the  Company.  As a result, the Board of Directors of the
Company is soliciting votes only from shareholders of the Fund.

     Each  share of each class of the Common Stock, $.001 par value, of the Fund
(the  "Common  Stock")  is entitled to one vote. Shareholders of the Fund at the
close  of  business  on November 3, 1997 (the "Record Date") will be entitled to
be  present  and  give  voting  instructions  for  the  Fund at the Meeting with
respect  to  their  shares  of  Common Stock owned as of such Record Date. As of
November  3,  1997,  there were 4,227,363 shares of Common Stock outstanding and
entitled  to  vote  as  of  such  record  date, representing total net assets of
$64,152,200.

     A  majority  of  the  outstanding  shares  of  the Fund on the Record Date,
represented  in  person  or by proxy, must be present to constitute a quorum for
the transaction of the Fund's business at the Meeting.

     Approval  of  Proposal  1  requires a "Majority Vote." For purposes of this
requirement,  a "Majority Vote" shall mean a "majority of the outstanding voting
securities"  of  the  Fund  as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), i.e., (i) 67% or more of the shares of the Fund
                                        1
<PAGE>
present  at  the Meeting, if more than 50% of the outstanding shares of the Fund
are  present  or  represented by proxy, or (ii) more than 50% of the outstanding
shares of the Fund, whichever is less.

     If  a  quorum  is not present at the Meeting, or if a quorum is present but
sufficient  votes  to  approve any or all 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. In determining whether to adjourn the
Meeting,  the  following  factors may be considered: the nature of the Proposals
that  are the subject of the Meeting, the percentage of votes actually cast, the
percentage   of  negative  votes  actually  cast,  the  nature  of  any  further
solicitation  and the information to be provided to shareholders with respect to
the  reasons  for the solicitation. Any adjournment will require the affirmative
vote  of  a  majority of those shares represented at the Meeting in person or by
proxy.  A  shareholder vote may be taken on one or more of the Proposals in this
proxy  statement prior to any adjournment if sufficient votes have been received
with  respect  to  a  Proposal.  If a shareholder abstains from voting as to any
matter,  or  if  a  broker  returns  a  "non-vote"  proxy,  indicating a lack of
authority  to  vote  on a matter, then the shares represented by such abstention
or  non-vote  shall,  with  respect to matters to be determined by a majority of
the  votes  cast  on  such  matter, be deemed present at the Special Meeting for
purposes  of  determining  a  quorum, but shall not be deemed represented at the
Special  Meeting  for  purposes  of  calculating  the  vote with respect to such
matter.  With respect to matters requiring the affirmative vote of a majority of
the  total  shares  outstanding,  an  abstention  or  broker  non-vote  will  be
considered  present  for  purposes of determining the existence of a quorum, and
will have the effect of a vote against such matters.

     To  the  knowledge  of  the  Fund,  as  of  September  30, 1997, no current
Director  of  the Fund owns 1% or more of outstanding shares of the Fund and the
officers  and  Directors of the Fund own, as a group, less than 1% of the shares
of  the  Fund. To the knowledge of the Fund, as of September 30, 1997, no person
owned beneficially more than 5% of the outstanding shares of the Fund.

Expenses

     CRM  Advisors, LLC has agreed to pay the expenses of the Fund in connection
with  this  Notice  and Proxy Statement and the Meeting, including the printing,
mailing,  solicitation  and  vote  tabulation  expenses,  legal fees, and out of
pocket expenses.

The Investment Manager

     PAII,  whose  address  is  40  North  Central  Avenue, Suite 1200, Phoenix,
Arizona 85004, is the Investment Manager of the Fund.

The Principal Underwriter

     Pilgrim  America  Securities,  Inc.,  whose  address  is  40  North Central
Avenue, Suite 1200, Phoenix, Arizona 85004, is the Distributor for the Fund.

                                 PROPOSAL NO. 1
                APPROVAL OF A NEW PORTFOLIO MANAGEMENT AGREEMENT

     Shareholders  of  the  Fund  are  being  asked  to  approve a new portfolio
management  agreement (the "New Agreement") between Pilgrim America Investments,
Inc.  (the  "Investment  Manager")  and  Cramer Rosenthal McGlynn, LLC (the "New
Adviser")  for New Adviser to serve as the Fund's Portfolio Manager. Approval of
the   New  Agreement  is  required  because  the  current  Portfolio  Management
Agreement  (the  "Current  Agreement")  between  the  Investment Manager and CRM
Advisors,  LLC (the "Current Adviser") will be terminated by a reorganization of
the Current Adviser, which is described below.

     The  same  people who currently manage the Fund will continue to manage the
Fund  under  the New Agreement. In addition, the terms of the New Agreement will
be  substantially the same as the terms of the Current Agreement, which was last
approved  by  the  Company's  Board  of  Directors,  including a majority of the
Directors  who  were  not parties to the Current Agreement or interested persons
of  such  parties,  at  a meeting held on May 5, 1997. The Current Agreement was
approved by the then sole shareholder of the Fund on June 27, 1995.
                                        2
<PAGE>
Summary of Transaction Leading to the New Agreement

     Gerald  B.  Cramer, Ronald H. McGlynn, Edward J. Rosenthal, Fred M. Filoon,
Jay  B.  Abramson,  Arthur  J.  Pergament  and  Eugene  A.  Trainor  III (each a
"Principal"  and  collectively,  the  "Principals")  together  own  all  of  the
outstanding  limited  liability company interests in Current Adviser, and all of
the  outstanding  common  shares  of Cramer, Rosenthal, McGlynn, Inc. ("CRM"), a
registered  investment  adviser  under  the Investment Advisers Act of 1940, and
CRM  Management,  Inc.  ("Management"),  a general partner in several investment
partnerships  and  the  managing  member  of two limited liability companies. On
October  31,  1997, the Principals, CRM, Management and New Adviser entered into
various   agreements   with   WT   Investments,   Inc.  ("WTI"),  an  indirectly
wholly-owned  subsidiary  of  Wilmington  Trust Corporation ("WTC"), pursuant to
which:

          1. WTI will  purchase  88.93% of the  ownership  interests  in Current
     Adviser from certain Principals;

          2. WTI will purchase certain assets of CRM for cash;

          3. New Adviser,  a newly-formed  Delaware limited  liability  company,
     will sell to WTI a 24%  interest  in New  Adviser in  exchange  for (a) the
     ownership  interests  in Current  Adviser that WTI will  purchase,  (b) the
     assets of CRM that WTI will purchase, and (c) cash;

          4. The  Principals  will  exchange the  remainder  of their  ownership
     interests in Current Adviser for an interest in New Adviser;

          5. CRM will contribute to New Adviser substantially all of its assets,
     including its investment advisory  contracts,  subject to substantially all
     of its liabilities in exchange for an ownership interest in New Adviser;

          6. As a result of the foregoing  transactions,  the Principals and CRM
     (which is owned by the  Principals)  together  will own 76% of New Adviser,
     while WTI will own 24% of New Adviser;

          7. CRM and Messrs. Abramson, Pergament and Trainor will have the right
     to sell their ownership interests in New Adviser to WTC, subject to certain
     restrictions;

          8. WTI will be required to buy the ownership interest of any Principal
     who dies,  becomes  disabled  or  retires,  and WTI may also  purchase  the
     ownership  interest of any  Principal,  and the  ownership  interest of CRM
     attributable  to that  Principal,  whose  employment  with New  Adviser  is
     otherwise  terminated  or who has sought to  exercise  options to sell more
     than 50% of his highest direct and indirect interest in New Adviser.

     The  foregoing  transactions  are  scheduled  to  take  place  on or around
January  2, 1998. As a result of these transactions, Current Adviser will become
a  wholly-owned  subsidiary  of New Adviser. Current Adviser will then be merged
or  liquidated into New Adviser. If, in the future, WTI, WTC or their affiliates
acquire  additional  ownership  interests  in  New  Adviser  through  the  means
described  above  or  otherwise,  WTI may own a controlling block (as defined in
the  Investment  Company  Act of 1940 (the "1940 Act")), or have actual control,
of  New  Adviser.  The  transaction is subject to several conditions, and if not
met,  the  transaction may not occur. In the event that the transaction does not
occur,  the  Current  Agreement with the Current Adviser would not terminate and
the Current Adviser could continue to render advisory services to the Fund.

     The  change  in  ownership  interests  resulting from these transactions is
deemed  by  the  Rules  under  the  1940  Act to be an assignment of the Current
Agreement.  The Current Agreement provides for its automatic termination upon an
assignment.  Accordingly,  the  New Agreement between the Investment Manager and
New  Adviser is proposed for approval by shareholders of the Fund. A form of the
New Agreement is attached as Exhibit A to this proxy statement.

     Current  Adviser  and  New  Adviser  have  advised  the  Fund that the same
investment  advisory  and  other  personnel who work for the Current Adviser and
its  affiliate  CRM  are  expected  to  work  for  the  New  Adviser  after  the
transaction,  and  that  the same persons responsible for management of the Fund
under  the  Current  Agreement  will  continue  to  be responsible under the New
Agreement. Neither Current
                                        3
<PAGE>
Adviser  nor  New  Adviser  anticipate  that  the  transaction  will  cause  any
reduction  in  the  quality  of  services  now provided to the Fund, or have any
adverse  effect  on  New  Adviser's  ability  to  fulfill its obligations to the
Funds.

     The  New  Agreement  was  approved  by  the  Company's  Board of Directors,
including  a  majority  of  the Directors who were not interested persons of the
parties to the New Agreement, at a meeting held on November 3, 1997.

     If  the  New  Agreement  is  approved  by  the Fund's shareholders, it will
remain  in  effect,  unless  earlier terminated, for an initial term expiring on
May  1,  1998 and will continue in effect thereafter for successive twelve-month
periods,  provided  that each such continuance is specifically approved at least
annually  (i)  by  the Company's Board of Directors or by the vote of a majority
of  the  outstanding voting securities of the Fund, and, in either case, (ii) by
a  majority  of the Company's Directors who are not parties to the New Agreement
or  interested  persons  of  any  such  party  (other  than  as Directors of the
Company).

     If  the  Shareholders  of  the  Fund  do not approve the New Agreement, the
Investment  Manager  will  manage  the  portfolio  of  the Fund. Thereafter, the
Investment  Manager  would either negotiate a new portfolio management agreement
for  the  Fund  with  another  investment  advisory  organization  or make other
appropriate  arrangements.  If  the Investment Manager retains another Portfolio
Manager,  the new portfolio management agreement would be subject to approval by
the Directors and Shareholders of the Fund.

     WTC  is  a  bank  and  thrift  holding  company organized under the laws of
Delaware.  WTC  holds  all  of the outstanding capital stock of Wilmington Trust
Company,  a  Delaware  chartered  bank  and  trust company engaged in commercial
banking  and  trust activities since 1903. WTC directly owns two other financial
institutions,  Wilmington  Trust  of Pennsylvania, a Pennsylvania-chartered bank
and   trust   company   acquired   in   1993   and   Wilmington   Trust  FSB,  a
Federally-chartered  savings  bank  organized  in  1994.  Through its direct and
indirect  subsidiaries,  WTC engages in residential, commercial and construction
lending,  deposit  taking,  insurance,  investment  advisory  and  broker-dealer
services  and  mutual  fund administration. On September 30, 1997, WTC, together
with  its  subsidiaries, had total assets of over $5.9 billion. Wilmington Trust
Company,  the  largest subsidiary of WTC, is among the nation's largest personal
trust companies and holds approximately $95 billion in a fiduciary capacity.

The Terms of the New Agreement

     On  November  3,  1997,  a  majority of the Board of Directors, including a
majority  of  the  Directors  who  are  not  parties  to  the  New  Agreement or
interested  persons  of  such  parties, approved the New Agreement. The terms of
the  New Agreement are substantially the same as those of the Current Agreement.

     The  New  Agreement,  like  the  Current Agreement, requires New Adviser to
provide,  subject  to  the  supervision  of the Investment Manager, a continuous
investment  program  for the Fund and to determine the composition of the assets
of  the Fund, including determination of the purchase, retention, or sale of the
securities,  cash,  and  other  investments for the Fund, in accordance with the
Fund's  investment  objectives, policies and restrictions. New Adviser will also
provide  investment  research  and  analysis.  The  terms  of  the New Agreement
obligate  New  Adviser to manage the Fund in accordance with applicable laws and
regulations.

     Portfolio  Management  Fee. Under the New Agreement, the Investment Manager
(not  the  Fund)  will  pay  the New Adviser a portfolio management fee, payable
monthly,  at  an annual rate of .50% of the Fund's average daily net assets. The
fee  to be paid by the Investment Manager under the New Agreement is the same as
the  fee paid under the Current Agreement. During the fiscal year ended June 30,
1997,  the  Investment Manager paid portfolio management fees to Current Adviser
of  $193,080. Pursuant to the Investment Management Agreement, the Fund pays the
Investment  Manager  a  fee  at an annual rate of 1% of the Fund's average daily
net assets.

     Liability   of  the  New  Adviser. Like  the  Current  Agreement,  the  New
Agreement  provides  that  New  Adviser  is  not subject to liability for to any
damages,  expenses,  or  losses to the Fund connected with or arising out of any
investment  advisory services rendered under the New Agreement, except by reason
of  willful  misfeasance,  bad  faith, or gross negligence in the performance of
New  Adviser's  duties or by reason of reckless disregard of its obligations and
duties under the New Agreement.
                                        4
<PAGE>
     Termination. The  termination  provisions of the New Agreement are the same
as   those   of   the  Current  Agreement.  The  New  Agreement  will  terminate
automatically  in the event of its assignment. In addition, it may be terminated
by  the  Investment  Manager  upon sixty days' written notice to New Adviser and
the  Fund,  by  New  Adviser  upon  sixty days' written notice to the Investment
Manager  and  the  Fund,  and  by  the  Fund, upon the vote of a majority of the
Fund's  Board of Directors or a majority of the outstanding voting shares of the
Fund,  upon  sixty  days'  written  notice to the Investment Manager and the New
Adviser.

Information About New Adviser

     New  Adviser is a limited liability company organized under the laws of the
State  of  Delaware  on  September  23,  1997.  It  will  operate as a successor
registered  investment  adviser  under  the  Investment  Advisers  Act  of  1940
pursuant  to the current registrations of CRM and Current Adviser, and after the
transactions  described  above  are  completed  it  will  file an application to
become  a  registered  investment  adviser. Although as a new entity New Adviser
has  no  previous  experience  managing  an  investment  company,  the principal
shareholders  and  portfolio  managers  of  New  Adviser  have  over  180  years
experience  in  portfolio  management of the Fund through Current Adviser and of
private  investment accounts through CRM, which has managed investments in small
and  mid  capitalization  companies for over twenty-four years. As of this date,
CRM has over $3.5 billion of assets under management.

     New  Adviser's  current principal executive officers and managers and their
principal occupations are listed below.

<TABLE>
<CAPTION>
Name                            Position with New Adviser and Principal Occupation
- ----                            --------------------------------------------------
<S>                             <C>
Gerald B. Cramer    .........   Chairman
Edward J. Rosenthal    ......   Vice Chairman
Ronald H. McGlynn   .........   Manager, President and Chief Executive Officer
Jay B. Abramson  ............   Executive Vice President and Director of Research
Fred M. Filoon   ............   Senior Vice President
Eugene A. Trainor III  ......   Senior Vice President and Chief Financial Officer
Arthur J. Pergament    ......   Senior Vice President
</TABLE>

     New  Adviser  will  be  managed  by  a  board of managers consiting of five
managers.  Certain  Principals,  individually and collectively, CRM and WTI will
have  the  right  to  designate  managers  depending upon each party's ownership
interest  in  New  Adviser. The remaining managers will be elected by a majority
vote  of  the  members  of  New Adviser. Initially, the board of managers of New
Adviser  is  expected  to consist of Messrs. Cramer and McGlynn, one designee of
WTI  and two other individuals selected by CRM. If WTI or its affiliates acquire
a  majority  of  the  ownership  interests  of  New  Adviser  as a result of the
exercise  of the options described above or otherwise, WTI will be able to elect
a majority of the board of managers.

     Accounts  managed  by  CRM  hold  an  interest  in  Pilgrim America Capital
Corporation  ("PACC"), which is the parent company of the Investment Manager. As
of  October  13,  1997,  the equity interest in PACC held by accounts managed by
CRM  is  19.894%,  which makes CRM, together with its accounts under management,
PACC's  largest  shareholder.  After  the restructuring, New Adviser will be the
successor  to CRM and, as a result, will manage the same accounts that currently
have substantial holdings in PACC.

Evaluation By the Board of Directors

     In  determining  whether  or  not  it  was  appropriate  to approve the New
Agreement  and  to  recommend  approval to shareholders, the Board of Directors,
including  the  Directors  who  are  not  interested  persons  of the Investment
Manager  or  New  Adviser,  considered various matters and materials provided by
New  Adviser  and  Current  Adviser.  Information  considered  by  the Directors
included,   among  other  things,  the  following:  (1)  the  Current  Adviser's
representation  that  the  same  persons  responsible for management of the Fund
under  the  Current  Agreement  will  continue  to manage the Fund under the New
Agreement; (2)
                                        5
<PAGE>
that  the  compensation to be received by New Adviser under the New Agreement is
the  same as the compensation paid under the Current Agreement; (3) the fairness
of  such  compensation;  (4)  the  nature  and  quality  of  the  services to be
rendered;  (5)  the  results  achieved  by Current Adviser for the Fund; (6) the
personnel,   operations  and  financial  condition,  and  investment  management
capabilities,  methodologies,  and performance of New Adviser; and (7) the terms
and provisions of the New Agreement and Current Agreement.

     The  Board  of Directors also considered the terms of the New Agreement and
the  possible  effects  of  the  transaction upon New Adviser and its ability to
provide  services  to the Fund. The Board of Directors considered the skills and
capability of personnel who will be associated with New Adviser.

     Based  upon its review, the Board has determined that, by approving the New
Agreement,  the  Fund can best be assured that services from Current Adviser and
New  Adviser  will  be  provided  without  interruption. The Board believes that
retaining  New  Adviser to serve as portfolio manager of the Fund is in the best
interests  of the Fund and its shareholders. Accordingly, after consideration of
the  above  factors,  and  such  other  factors  and  information  it considered
relevant,  the  Board  of  Directors  unanimously approved the New Agreement and
voted to recommend its approval by the Fund's shareholders.

Vote Required

     The  proposal  to  approve  the new Portfolio Management Agreement requires
approval by a Majority Vote.

     THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 1.
                                        6
<PAGE>
                               GENERAL INFORMATION

Other Matters to Come Before the Meeting

     The  Company's  management  does not know of any matters to be presented at
the  Meeting  other  than  those  described  in  this  Proxy Statement. If other
business  should  properly  come  before the Meeting, the proxyholders will vote
thereon in accordance with their best judgment.

Executive Officers of the Company

     The  following  persons  currently  are principal executive officers of the
Company:

<TABLE>
<CAPTION>
                            Position with                        Principal Occupation
        Name                 the Company                        for the Last Five Years
        ----                -------------                       -----------------------
<S>                   <C>                         <C>
Robert W. Stallings   Chairman of the Board,      Chairman, Chief Executive Officer and President
 (Age 48)             Chief Executive Officer     of Pilgrim America Group, Inc. ("PAGI") (since
                      and President (since        December 1994); Chairman, PAII (since December
                      April 1995)                 1994); Director (since December 1994) and Chair-
                                                  man (since November 1995), Pilgrim America
                                                  Securities, Inc. ("PASI"); Chairman, Chief Execu-
                                                  tive Officer and President of Pilgrim Government
                                                  Securities Income Fund, Inc., Pilgrim America
                                                  Investment Funds, Inc. and Pilgrim America Bank
                                                  and Thrift Fund, Inc. (since April 1995). Chairman
                                                  and Chief Executive Officer of Pilgrim America
                                                  Prime Rate Trust (since April 1995). Chairman and
                                                  Chief Executive Officer of Pilgrim America Capital
                                                  Corporation (formerly, Express America Holdings
                                                  Corporation) ("PACC") (since August 1990).

James R. Reis         Executive Vice              Director, Vice Chairman (since December 1994),
 (Age 40)             President (since April      Executive Vice President (since April 1995), and
                      1995), Treasurer,           Treasurer (since September 1996), PAGI and PAII;
                      Assistant Seretary,         Director (since December 1994), Vice Chairman
                      Principal Accounting        (since November 1995) and Assistant Secretary
                      Officer (since May          (since January 1995) of PASI; Executive Vice
                      1997)                       President, Treasurer, Assistant Secretary and
                                                  Principal Accounting Officer of most of the other
                                                  funds in the Pilgrim America Group of Funds;
                                                  Chief Financial Officer (since December 1993),
                                                  Vice Chairman and Assistant Secretary (since
                                                  April 1993) and former President (May 1991-
                                                  December 1993), PACC; Vice Chairman (since
                                                  April 1993) and former President (May 1991-
                                                  December 1993), Express America Mortgage
                                                  Corporation.

Stanley D. Vyner      Executive Vice              Executive Vice President (since August 1996),
 (Age 47)             President (since            PAGI; President and Chief Executive Officer
                      August 1996)                (since August 1996), PAII; Executive Vice Presi-
                                                  dent (since July 1996) of most of the funds in the
                                                  Pilgrim America Group of Funds. Formerly Chief
                                                  Executive Officer (November 1993-December
                                                  1995), HSBC Asset Management Americas, Inc.,
                                                  and Chief Executive Officer, and Actuary (May
                                                  1986-October 1993), HSBC Life.
</TABLE>
                                        7
<PAGE>
<TABLE>
<CAPTION>
                         Position with                        Principal Occupation
       Name               the Company                       for the Last Five Years
       ----              -------------                      -----------------------
<S>                 <C>                       <C>
James M. Hennessy   Senior Vice President     Senior Vice President and Secretary (since April
 (Age 48)           and Secretary (since      1995), PACC, PAGI, PASI and PAII. Senior Vice
                    April 1995)               President and Secretary of each of the funds in the
                                              Pilgrim America Group of Funds. Formerly Senior
                                              Vice President, Express America Mortgage
                                              Corporation (June 1992-August 1994) and
                                              President, Beverly Hills Securities Corp. (January
                                              1990-June 1992).

Robert S. Naka      Vice President (since     Vice President, PAII (since April 1997) and PAGI
 (Age 34)           May 1997) and Asst.       (since February 1997). Vice President and
                    Secretary (since July     Assistant Secretary of each of the funds in the
                    1996)                     Pilgrim America Group of Funds. Formerly
                                              Assistant Vice President, PAGI (August 1995-
                                              February 1997). Formerly Operations Manager,
                                              Pilgrim Group, Inc. (April 1992-April 1995).
</TABLE>
Shareholder Proposals

     Proposals  of  shareholders  must  be  received by the Company a reasonable
time  prior to the mailing of the proxy materials for a meeting of shareholders.
The  submission  by  a  shareholder  of  a  proposal  for inclusion in the proxy
statement  does  not  guarantee  that it will be included. Shareholder proposals
are subject to certain regulations under the federal securities laws.

Reports to Shareholders

     The  Company  will furnish, without charge, a copy of the Annual Report and
the  most  recent  Semi-Annual Report regarding the Company on request. Requests
for  such  reports  should  be  directed  to Pilgrim America at 40 North Central
Avenue,  Suite 1200, Phoenix, Arizona 85004 or to the Company at (800) 331-1080.

     IN ORDER  THAT THE  PRESENCE  OF A QUORUM AT THE  MEETING  MAY BE  ASSURED,
PROMPT   EXECUTION   AND  RETURN  OF  THE  ENCLOSED   PROXY  IS   REQUESTED.   A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.



                                        /s/ James Hennessy

                                        JAMES M. HENNESSY, Secretary

November 10, 1997
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004
                                        8
<PAGE>
                                                                      EXHIBIT A

                         PORTFOLIO MANAGEMENT AGREEMENT

     AGREEMENT  made  this  2nd  day  of  January,  1998 between Pilgrim America
Investments,  Inc., a Delaware corporation (the "Manager"), and Cramer Rosenthal
McGlynn, LLC, a Delaware limited liability company (the "Portfolio Manager").

     WHEREAS,  Pilgrim  America  Masters Series, Inc. (the "Fund") is registered
under  the  Investment  Company  Act of 1940, as amended (the "1940 Act"), as an
open-end, management investment company;

     WHEREAS,  the  Fund  is  authorized to issue separate series, each of which
will  offer  a  separate class of shares of common stock, each series having its
own investment objective or objectives, policies, and limitations;

     WHEREAS,  the  Fund currently proposes to offer shares in three series, may
offer  shares of additional series in the future, and currently intends to offer
shares of additional series in the future;

     WHEREAS,  pursuant  to  an  Investment  Management Agreement, dated June 8,
1995  (the  "Management  Agreement"),  which  was  last  renewed by the Board of
Directors  of  the Fund on May 5, 1997, a copy of which has been provided to the
Portfolio  Manager,  the  Fund  has  retained  the  Manager  to render advisory,
management,  and  administrative  services  with  respect  to each of the Fund's
series; and

     WHEREAS,  pursuant  to  authority  granted to the Manager in the Management
Agreement,  the  Manager  wishes  to  retain  the  Portfolio  Manager to furnish
investment  advisory  services to one or more of the series of the Fund, and the
Portfolio  Manager  is  willing  to  furnish  such  services to the Fund and the
Manager;

     NOW,  THEREFORE,  in  consideration  of  the  premises and the promises and
mutual  covenants  herein  contained,  it  is agreed between the Manager and the
Portfolio Manager as follows:

          1.  Appointment.  The Manager hereby appoints the Portfolio Manager to
     act as the investment  adviser and manager to the Pilgrim  America  Masters
     MidCap Value Fund series of the Fund (the  "Series") for the periods and on
     the terms set forth in this Agreement.  The Portfolio  Manager accepts such
     appointment  and agrees to furnish  the  services  herein set forth for the
     compensation herein provided.

          In the event the Fund  designates  one or more series  (other than the
     Series)  with respect to which the Manager  wishes to retain the  Portfolio
     Manager to render investment advisory services  hereunder,  it shall notify
     the Portfolio  Manager in writing.  If the Portfolio  Manager is willing to
     render such  services,  it shall  notify the Manager in writing,  whereupon
     such  series  shall  become  a Series  hereunder,  and be  subject  to this
     Agreement.

          2.  Portfolio  Management  Duties.  Subject to the  supervision of the
     Fund's  Board of  Directors  and the Manager,  the  Portfolio  Manager will
     provide a  continuous  investment  program  for the Series'  portfolio  and
     determine in its  discretion  the  composition of the assets of the Series'
     portfolio,  including determination of the purchase,  retention, or sale of
     the securities, cash, and other investments contained in the portfolio. The
     Portfolio Manager will provide investment research and conduct a continuous
     program of evaluation,  investment,  sales, and reinvestment of the Series'
     assets by determining  the securities and other  investments  that shall be
     purchased,  entered into, sold,  closed, or exchanged for the Series,  when
     these  transactions  should be executed,  and what portion of the assets of
     the Series should be held in the various  securities and other  investments
     in which it may invest. To the extent permitted by the investment  policies
     of the Series, the Portfolio Manager shall make decisions for the Series as
     to foreign currency matters and make  determinations  as to and execute and
     perform foreign currency  exchange  contracts on behalf of the Series.  The
     Portfolio  Manager  will  provide  the  services  under this  Agreement  in
     accordance with the Series' investment  objective or objectives,  policies,
     and restrictions as stated in the Fund's Registration  Statement filed with
     the Securities and Exchange Commission ("SEC"), as amended, copies of which
     shall  be sent to the  Portfolio  Manager  by the  Manager.  The  Portfolio
     Manager further agrees as follows:
                                       A-1
<PAGE>
               (a) The  Portfolio  Manager  will not take any action  that would
          cause the Series to fail to qualify as a regulated  investment company
          under Subchapter M of the Internal Revenue Code.

               (b) The Portfolio  Manager will conform with the 1940 Act and all
          rules and regulations  thereunder,  all other  applicable  federal and
          state laws and regulations,  with any applicable procedures adopted by
          the Fund's Board of Directors of which the Portfolio  Manager has been
          sent a copy, and the provisions of the  Registration  Statement of the
          Fund filed under the  Securities  Act of 1933 (the "1933 Act") and the
          1940 Act, as supplemented or amended,  of which the Portfolio  Manager
          has received a copy.

               (c) The Portfolio  Manager will vote all proxies  solicited by or
          with  respect to the  issuers  of  securities  in which  assets of the
          Series are invested.  The Portfolio Manager will maintain  appropriate
          records detailing its voting of proxies on behalf of the Fund and will
          provide  to the Fund at least  annually  a report  setting  forth  the
          proposals  voted on and how the  Series'  shares  were voted since the
          prior report, including the name of the corresponding issuers.

               (d) On occasions when the Portfolio Manager deems the purchase or
          sale of a security to be in the best interest of the Series as well as
          of other investment  advisory clients of the Portfolio  Manager or any
          of its affiliates,  the Portfolio Manager may, to the extent permitted
          by  applicable  laws and  regulations,  but shall not be obligated to,
          aggregate the  securities to be so sold or purchased with those of its
          other  clients where such  aggregation  is not  inconsistent  with the
          policies  set  forth in the  Registration  Statement.  In such  event,
          allocation  of the  securities  so purchased  or sold,  as well as the
          expenses  incurred in the  transaction,  will be made by the Portfolio
          Manager in a manner that is fair and  equitable in the judgment of the
          Portfolio Manager in the exercise of its fiduciary  obligations to the
          Fund and to such other  clients,  subject to review by the Manager and
          the Fund's Board of Directors.

               (e) In connection  with the purchase and sale of  securities  for
          the Series, the Portfolio Manager will arrange for the transmission to
          the custodian and portfolio accounting agent for the Series on a daily
          basis,  such  confirmation,  trade  tickets,  and other  documents and
          information,  including,  but not limited to, Cusip,  Sedol,  or other
          numbers that identify  securities to be purchased or sold on behalf of
          the Series, as may be reasonably necessary to enable the custodian and
          portfolio   accounting  agent  to  perform  its   administrative   and
          recordkeeping  responsibilities  with  respect  to  the  Series.  With
          respect to portfolio  securities to be settled  through the Depository
          Trust  Company,  the  Portfolio  Manager  will  arrange for the prompt
          transmission  of  the  confirmation  of  such  trades  to  the  Fund's
          custodian and portfolio accounting agent.

               (f) The Portfolio Manager will assist the custodian and portfolio
          accounting agent for the Fund in determining or confirming, consistent
          with the procedures and policies stated in the Registration  Statement
          for the Fund, the value of any portfolio securities or other assets of
          the Series for which the  custodian  and  portfolio  accounting  agent
          seeks  assistance  from or  identifies  for  review  by the  Portfolio
          Manager.  The parties  acknowledge that the Portfolio Manager is not a
          custodian of Series' assets and will not take possession or custody of
          such assets.

               (g) The Portfolio Manager will make available to the Fund and the
          Manager,  promptly upon request, all of the Series' investment records
          and ledgers  maintained  by the  Portfolio  Manager  (which  shall not
          include  the  records  and  ledgers  maintained  by the  custodian  or
          portfolio  accounting  agent for the Fund) as are  necessary to assist
          the Fund and the Manager to comply with  requirements  of the 1940 Act
          and the Investment  Advisers Act of 1940 (the "Advisers Act"), as well
          as other  applicable  laws.  The  Portfolio  Manager  will  furnish to
          regulatory  authorities having the requisite authority any information
          or reports in  connection  with such services in respect to the Series
          which may be requested in order to ascertain whether the operations of
          the Fund are being  conducted in a manner  consistent  with applicable
          laws and regulations.

               (h) The  Portfolio  Manager  will  provide  reports to the Fund's
          Board of Directors for  consideration  at meetings of the Board on the
          investment  program  for the Series  and the  issuers  and  securities
          represented  in the  Series'  portfolio,  and will  furnish the Fund's
          Board of Directors
                                       A-2
<PAGE>
          with respect to the Series such  periodic  and special  reports as the
          Directors  and the  Manager  may  reasonably  request.  The  Portfolio
          Manager will provide the Manager, no later than the 20th day following
          the end of each of the first three  fiscal  quarters of the Series and
          the 45th day following the end of the Series' fiscal year, a letter to
          shareholders  (to be  subject to review  and  editing by the  Manager)
          containing a discussion of those factors  referred to in Item 5A(a) of
          1940 Act Form N-1A in respect of both the prior quarter and the fiscal
          year to date.

          3.  Broker-Dealer  Selection.  The Portfolio  Manager is authorized to
     make  decisions to buy and sell  securities and other  investments  for the
     Series' portfolio,  broker-dealer  selection,  and negotiation of brokerage
     commission  rates.  The  Portfolio   Manager's  primary   consideration  in
     effecting a security  transaction  will be to obtain the best execution for
     the Series,  taking into account the factors  specified  in the  prospectus
     and/or statement of additional  information for the Fund, and determined in
     consultation   with  the  Manager,   which  include  price  (including  the
     applicable  brokerage  commission or dollar spread), the size of the order,
     the nature of the market for the security,  the timing of the  transaction,
     the reputation, the experience and financial stability of the broker-dealer
     involved, the quality of the service, the difficulty of execution,  and the
     execution capabilities and operational facilities of the firm involved, and
     the firm's risk positioning a block of securities.  Accordingly,  the price
     to the Series in any  transaction may be less favorable than that available
     from another  broker-dealer if the difference is reasonably  justified,  in
     the  judgment of the  Portfolio  Manager in the  exercise of its  fiduciary
     obligations  to the  Fund,  by other  aspects  of the  portfolio  execution
     services offered. Subject to such policies as the Fund's Board of Directors
     may determine and consistent with Section 28(e) of the Securities  Exchange
     Act of 1934,  the  Portfolio  Manager  shall not be  deemed  to have  acted
     unlawfully  or to have  breached  any duty  created  by this  Agreement  or
     otherwise  solely  by  reason  of its  having  caused  the  Series to pay a
     broker-dealer for effecting a portfolio investment transaction in excess of
     the amount of  commission  another  broker-dealer  would have  charged  for
     effecting that  transaction,  if the Portfolio  Manager  determines in good
     faith that such  amount of  commission  was  reasonable  in relation to the
     value  of  the   brokerage   and   research   services   provided  by  such
     broker-dealer, viewed in terms of either that particular transaction or the
     Portfolio Manager's or the Manager's overall  responsibilities with respect
     to the  Series  and to their  respective  other  clients  as to which  they
     exercise investment discretion. The Portfolio Manager will consult with the
     Manager to the end that portfolio  transactions on behalf of the Series are
     directed to broker-dealers on the basis of criteria  reasonably  considered
     appropriate by the Manager.  To the extent consistent with these standards,
     the Portfolio  Manager is further  authorized to allocate the orders placed
     by it on behalf of the Series to the Portfolio  Manager if it is registered
     as a broker-dealer with the SEC, to an affiliated broker-dealer, or to such
     brokers and dealers who also provide research or statistical  material,  or
     other services to the Series, the Portfolio Manager, or an affiliate of the
     Portfolio Manager. Such allocation shall be in such amounts and proportions
     as  the  Portfolio  Manager  shall  determine  consistent  with  the  above
     standards,  and the  Portfolio  Manager  will  report  on  said  allocation
     regularly to the Fund's Board of Directors indicating the broker-dealers to
     which such allocations have been made and the basis therefor.

          4.  Disclosure  about  Portfolio  Manager.  The Portfolio  Manager has
     reviewed the Registration Statement for the Fund, with supplements thereto,
     filed  or to be  filed  with  the SEC that  contain  disclosure  about  the
     Portfolio  Manager,  and represents and warrants that,  with respect to the
     disclosure about the Portfolio  Manager,  such  Registration  Statement and
     supplements  contain,  as of the date  hereof,  no untrue  statement of any
     material  fact and does not omit any statement of a material fact which was
     required to be stated therein or necessary to make the statements contained
     therein not  misleading.  The  Portfolio  Manager  further  represents  and
     warrants that it will take the steps  necessary to become a duly registered
     investment  adviser under the Advisers Act no later than the effective date
     of this  Agreement.  The Portfolio  Manager will provide the Manager with a
     copy of the Portfolio  Manager's Form ADV, Part II at the time the Form ADV
     is filed with the SEC.

          5. Expenses.  During the term of this Agreement, the Portfolio Manager
     will pay all expenses incurred by it and its staff and for their activities
     in connection with its portfolio management duties
                                       A-3
<PAGE>
     under this Agreement,  except as provided in Section 11. The Manager or the
     Fund shall be responsible for all the expenses of the Fund's operations.

          6. Compensation.  For the services provided,  the Manager will pay the
     Portfolio Manager a monthly fee, in arrears, equal to 1|M/12 of .50% of the
     Series' average daily net assets during the month.  Payment of the fee will
     be  due  on  the  10th  day  of  the  following  month.  The  fee  will  be
     appropriately prorated to reflect any portion of a calendar month that this
     Agreement  is not in  effect  among the  parties.  In  accordance  with the
     provisions of the Management  Agreement,  the Manager is solely responsible
     for the payment of fees to the Portfolio Manager, and the Portfolio Manager
     agrees to seek  payment  of its fees  solely  from the  Manager;  provided,
     however,  that if the Fund fails to pay the Manager all or a portion of the
     management  fee under said  Management  Agreement  when due, and the amount
     that was paid is  insufficient  to cover the Portfolio  Manager's fee under
     this Agreement for the period in question,  then the Portfolio  Manager may
     enforce  against  the  Fund  any  rights  it  may  have  as  a  third-party
     beneficiary under the Management  Agreement and the Manager will (i) not be
     obligated to pay to the Portfolio  Manager the  deficiency  until  actually
     collected  from the Fund and (ii)  take all  steps  appropriate  under  the
     circumstances to collect the amount due from the Fund.

          7. Compliance.

               (a) The Portfolio Manager agrees that it shall immediately notify
          the  Manager  and the Fund (1) in the event that the SEC has  censured
          the  Portfolio  Manager;   placed  limitations  upon  its  activities,
          functions or operations;  suspended or revoked its  registration as an
          investment adviser;  or has commenced  proceedings or an investigation
          that  may  result  in any of  these  actions,  or (2)  upon  having  a
          reasonable  basis for believing  that the Series has ceased to qualify
          or  might  not  qualify  as  a  regulated   investment  company  under
          Subchapter M of the  Internal  Revenue  Code.  The  Portfolio  Manager
          further  agrees to notify the Manager and the Fund  immediately of any
          material fact known to the Portfolio Manager respecting or relating to
          the  Portfolio  Manager  that  is not  contained  in the  Registration
          Statement or prospectus for the Fund (which describes the Series),  or
          any amendment or  supplement  thereto,  or of any statement  contained
          therein that becomes untrue in any material respect.

               (b) The  Manager  agrees  that it shall  immediately  notify  the
          Portfolio  Manager  (1) in the  event  that the SEC has  censured  the
          Manager  or  the  Fund;  placed   limitations  upon  either  of  their
          activities,   functions,  or  operations;  suspended  or  revoked  the
          Manager's  registration  as an  investment  adviser;  or has commenced
          proceedings  or an  investigation  that  may  result  in any of  these
          actions,  or (2) upon having a reasonable basis for believing that the
          Series  has ceased to  qualify  or might not  qualify  as a  regulated
          investment company under Subchapter M of the Internal Revenue Code.

          8. Books and Records.  In  compliance  with the  requirements  of Rule
     31a-3 under the 1940 Act,  the  Portfolio  Manager  hereby  agrees that all
     records  which it maintains for the Series are the property of the Fund and
     further  agrees to surrender  promptly to the Fund any of such records upon
     the Fund's or the Manager's request, although the Portfolio Manager may, at
     its own  expense,  make and retain a copy of such  records.  The  Portfolio
     Manager further agrees to preserve for the periods prescribed by Rule 31a-2
     under the 1940 Act and to preserve the records required by Rule 204-2 under
     the Advisers Act for the period specified in the Rule.

          9. Cooperation;  Confidentiality.  Each party to this Agreement agrees
     to  cooperate  with the other party and with all  appropriate  governmental
     authorities having the requisite jurisdiction  (including,  but not limited
     to, the SEC) in connection with any  investigation  or inquiry  relating to
     this Agreement or the Fund. Subject to the foregoing, the Portfolio Manager
     shall treat as  confidential  all  information  pertaining  to the Fund and
     actions of the Fund, the Manager and the Portfolio Manager, and the Manager
     shall treat as confidential  and use only in connection with the Series all
     information  furnished to the Fund or the Manager by the Portfolio Manager,
     in connection with its duties under the agreement except that the aforesaid
     information need not be treated as confidential if required to be disclosed
     under  applicable  law, if generally  available to the public through means
     other than by  disclosure by the  Portfolio  Manager or the Manager,  or if
     available from a source other than the Manager,  Portfolio  Manager or this
     Fund.
                                       A-4
<PAGE>
          10.  Representations  Respecting Portfolio Manager. The Manager agrees
     that neither the Manager, nor affiliated persons of the Manager, shall give
     any  information  or make any  representations  or statements in connection
     with the sale of shares of the Series  concerning the Portfolio  Manager or
     the Series other than the information or  representations  contained in the
     Registration Statement,  prospectus, or statement of additional information
     for the Fund's shares,  as they may be amended or supplemented from time to
     time,  or in  reports  or  proxy  statements  for  the  Fund,  or in  sales
     literature  or  other  promotional  material  approved  in  advance  by the
     Portfolio  Manager,  except  with the  prior  permission  of the  Portfolio
     Manager.  The  parties  agree  that in the  event  that the  Manager  or an
     affiliated   person  of  the  Manager  sends  sales   literature  or  other
     promotional  material to the  Portfolio  Manager for its  approval  and the
     Portfolio  Manager has not  commenced  within 10 days,  the Manager and its
     affiliated  persons may use and distribute  such sales  literature or other
     promotional material.

          11. Additional Covenants of the Portfolio Manager.

               (a) The Portfolio  Manager will make  available  Gerald Cramer or
          Edward   Rosenthal   to  accompany   representatives   of  the  Fund's
          distributor  for six (6) days per  year of "road  show"  marketing/due
          diligence presentations to dealers and potential dealers in the Fund's
          shares, the timing and location (within the United States) of such six
          presentations to be chosen by the Manager following  consultation with
          the Portfolio  Manager.  The Portfolio Manager may substitute a senior
          member of its firm for Mr. Cramer or Mr. Rosenthal, if such individual
          is reasonably  acceptable to the Manager.  The Manager will  reimburse
          the Portfolio  Manager,  or cause the Fund's  distributor to reimburse
          the  Portfolio  Manager,  for the  reasonable  out-of-pocket  expenses
          incurred by the Portfolio Manager in assisting in such presentations.

               (b) During the term of this  Agreement  and during the  six-month
          period beginning the date that this Agreement terminates,  neither the
          Portfolio Manager nor any of the Portfolio  Manager's  affiliates will
          serve or act as an investment adviser or sub-investment adviser to any
          other  SEC-registered  open-end  investment  company or series thereof
          having  investment  objectives  similar  to those of the  Series.  The
          Portfolio  Manager shall not be bound by this covenant with respect to
          the period  following the  termination  of this Agreement in the event
          the termination is not voluntarily  effected by the Portfolio Manager,
          and shall not be bound by this  covenant  for any  period in the event
          that the  Portfolio  Manager  does not  receive  compensation  for its
          services from the Manager or the Fund as required by the terms of this
          agreement.

          12. Control. Notwithstanding any other provisions of the Agreement, it
     is  understood  and  agreed  that the Fund  shall at all times  retain  the
     ultimate responsibility for and control of all functions performed pursuant
     to this  Agreement  and has  reserved  the right to  reasonably  direct any
     action hereunder taken on its behalf by the Portfolio Manager.

          13. Liability.  Except as may otherwise be required by the 1940 Act or
     the rules thereunder or other applicable law, and subject to the applicable
     provisions  of  Paragraph   2(f)  of  this   Agreement   (which  deal  with
     non-investment  advisory  services),  the Manager agrees that the Portfolio
     Manager,  any affiliated person of the Portfolio Manager,  and each person,
     if any, who,  within the meaning of Section 15 of the 1933 Act controls the
     Portfolio Manager (1) shall bear no responsibility and shall not be subject
     to any liability for any act or omission  respecting any series of the Fund
     that is not a Series hereunder, and (2) shall not be liable for, or subject
     to any damages, expenses, or losses in connection with, any act or omission
     connected  with  or  arising  out  of  any  services  rendered  under  this
     Agreement,  except by reason of willful  misfeasance,  bad faith,  or gross
     negligence in the  performance  of the Portfolio  Manager's  duties,  or by
     reason of reckless  disregard of the Portfolio  Manager's  obligations  and
     duties under this Agreement.

          14. Duration and Termination.

               (a) This  Agreement  shall  become  effective  on the date  first
          indicated  above,  subject to the  condition  that the Fund's Board of
          Directors,  including  a  majority  of  those  Directors  who  are not
          interested  persons  (as such term is  defined in the 1940 Act) of the
          Manager  or the  Portfolio  Manager,  and  the  shareholder(s)  of the
          Series,  shall have  approved  this  Agreement.  Unless  terminated as
          provided herein,  this Agreement shall remain in full force and effect
          until May 1,
                                       A-5
<PAGE>
          1988 and continue on an annual basis  thereafter  with respect to each
          Series   covered  by  this   Agreement;   provided  that  such  annual
          continuance  is  specifically  approved  each year by (a) the Board of
          Directors of the Fund, or by the vote of a majority of the outstanding
          voting securities (as defined in the 1940 Act) of each Series, and (b)
          the vote of a majority of those  Directors who are not parties to this
          Agreement or  interested  persons (as such term is defined in the 1940
          Act) of any such party to this  Agreement  cast in person at a meeting
          called  for the  purpose  of voting  on such  approval.  However,  any
          approval  of  this  Agreement  by the  holders  of a  majority  of the
          outstanding  shares (as defined in the 1940 Act) of a Series  shall be
          effective  to  continue  this  Agreement  with  respect to such Series
          notwithstanding  (i) that this  Agreement has not been approved by the
          holders of a majority of the outstanding shares of any other Series or
          (ii)  that  this  agreement  has not  been  approved  by the vote of a
          majority of the outstanding  shares of the Fund,  unless such approval
          shall  be  required  by  any  other   applicable   law  or  otherwise.
          Notwithstanding  the foregoing,  this Agreement may be terminated with
          respect to any Series covered by this Agreement: (a) by the Manager at
          any time without penalty,  upon sixty (60) days' written notice to the
          Portfolio Manager and the Fund, (b) at any time without payment of any
          penalty by the Fund, by the Fund's Board of Directors or a majority of
          the  outstanding  voting  securities  of each Series,  upon sixty (60)
          days' written notice to the Manager and the Portfolio Manager,  or (c)
          by the Portfolio  Manager upon requisite notice, as provided below, at
          any  time  after  two  years  from  the  date of this  agreement;  and
          requisite  notice for these purposes shall be three (3) months written
          notice unless the Fund or the Manager requests additional time to find
          a replacement for the Portfolio  Manager,  in which case the Portfolio
          Manager  shall  allow the  additional  time  requested  by the Fund or
          Manager  shall  allow the  additional  time  requested  by the Fund or
          Manager not to exceed three (3)  additional  months beyond the initial
          three-month notice period (however,  in the event that such additional
          time is  requested,  the covenant  described in Section  11(b) of this
          agreement shall apply as if the agreement terminates at the end of the
          initial three (3) month period);  provided further,  however, that the
          Portfolio  Manager may  terminate  this  Agreement at any time without
          penalty, effective upon written notice to the Manager and the Fund, in
          the event either the Portfolio  Manager  (acting in good faith) or the
          Manager  ceases to be registered  as an  investment  adviser under the
          Advisers  Act or  otherwise  becomes  legally  incapable  of providing
          investment  management  services  pursuant to its respective  contract
          with the  Fund,  or in the  event  the  Manager  becomes  bankrupt  or
          otherwise  incapable  of  carrying  out  its  obligations  under  this
          Agreement, or in the event that the Portfolio Manager does not receive
          compensation for its services form the Manager or the Fund as required
          by the terms of this  agreement.  In the event of termination  for any
          reason,  all  records  of each  Series  for  which  the  Agreement  is
          terminated shall promptly be returned to the Manager or the Fund, free
          from any claim or retention of rights in such record by the  Portfolio
          Manager,  although the Portfolio Manager may, at its own expense, make
          and retain a copy of such records.  This Agreement shall automatically
          terminate in the event of its assignment (as such term is described in
          the 1940 Act).  In the event this  Agreement is  terminated  or is not
          approved in the manner  described  above,  the Sections or  Paragraphs
          numbered 2(g), 8, 9, 10, 11(b),  12, 13 and 16 of this Agreement shall
          remain in effect, as well as any applicable  provision of this Section
          numbered  14 and,  to the  extent  that only  amounts  are owed to the
          Portfolio  Manager as  compensation  for services  rendered  while the
          agreement was in effect, Section 6.

               (b) Notices.

                    Any  notice  must be in  writing  and shall be  sufficiently
               given  (1) when  delivered  in  person,  (2) when  dispatched  by
               telegram or electronic  facsimile transfer  (confirmed in writing
               by  postage   prepaid   first   class  air  mail   simultaneously
               dispatched),   (3)  when  sent  by   internationally   recognized
               overnight   courier  service  (with  receipt  confirmed  by  such
               overnight  courier  service),  or (4) when sent by  registered or
               certified  mail,  to the other party at the address of such party
               set forth  below or at such other  address as such party may from
               time to time specify in writing to the other party.
                                       A-6
<PAGE>
               If to the Fund:
                    Pilgrim America Masters Series, Inc.
                    40 North Central Avenue, Suite 1200
                    Phoenix, AZ 85004
                    Attention: James M. Hennessy

               If to the Portfolio Manager:
                    Cramer Rosenthal McGlynn, LLC
                    520 Madison Avenue
                    New York, NY 10022
                    Attention: Gerald B. Cramer

          15. Amendments. No provision of this Agreement may be changed, waived,
     discharged  or  terminated  orally,  but only by an  instrument  in writing
     signed  by the party  against  which  enforcement  of the  change,  waiver,
     discharge or  termination  is sought,  and no  amendment of this  Agreement
     shall be effective until approved by an affirmative vote of (i) the holders
     of a majority of the outstanding  voting securities of the Series, and (ii)
     the  Directors  of the Fund,  including a majority of the  Directors of the
     Fund who are not interested persons of any party to this Agreement, cast in
     person at a meeting called for the purpose of voting on such  approval,  if
     such approval is required by applicable law.

          16. Use of Name.

               (a) It is understood that the name "Pilgrim America  Investments,
          Inc." or any derivative  thereof (including the name "Pilgrim" and the
          phrase  "Pilgrim  America") or logo  associated  with that name is the
          valuable  property of the Manager and/or its affiliates,  and that the
          Portfolio  Manager  has the right to use such name (or  derivative  or
          logo) only with the  approval  of the  Manager and only so long as the
          Manager is Manager to the Fund and/or the Series.  Upon termination of
          the  Management  Agreement  between  the  Fund  and the  Manager,  the
          Portfolio   Manager  shall  forthwith  cease  to  use  such  name  (or
          derivative or logo).

               (b) It is  understood  that the name "Cramer  Rosenthal  McGlynn,
          LLC" or any derivative  thereof or logo  associated  with that name is
          the valuable  property of the Portfolio Manager and its affiliates and
          that the Fund  and/or the  Series  have the right to use such name (or
          derivative  or  logo)  in  offering  materials  of the  Fund  with the
          approval of the  Portfolio  Manager  and for so long as the  Portfolio
          Manager is a portfolio  manager to the Fund  and/or the  Series.  Upon
          termination of this  Agreement,  the Manager shall forthwith cause the
          Fund to cease to use such name (or derivative or logo).

          17. Miscellaneous.

               (a) This Agreement  shall be governed by the laws of the State of
          New York,  provided that nothing herein shall be construed in a manner
          inconsistent with the 1940 Act, the Advisers Act or rules or orders of
          the SEC  thereunder,  and  without  regard for the  conflicts  of laws
          principle thereof. The term "affiliate" or "affiliated person" as used
          in this Agreement  shall be "affiliated  person" as defined in Section
          2(a)(3) of the 1940 Act.

               (b) The Manager and the Portfolio  Manager  acknowledge  that the
          Fund  enjoys  the  rights  of a  third-party  beneficiary  under  this
          Agreement,  and the Manager  acknowledges  that the Portfolio  Manager
          enjoys the rights of a third party  beneficiary  under the  Management
          Agreement.

               (c) The captions of this  Agreement are included for  convenience
          only and in no way  define  or limit any of the  provisions  hereof or
          otherwise affect their construction or effect.

               (d) To the extent  permitted  under Section 13 of this Agreement,
          this  Agreement  may only be  assigned  by any  party  with the  prior
          written consent of the other parties.
                      

               (e) If any  provision  of this  Agreement  shall  be held or made
          invalid by a court decision, statute, rule or otherwise, the remainder
          of this Agreement shall not be affected  thereby,  and to this extent,
          the provisions of this Agreement shall be deemed to be severable.
                                       A-7
<PAGE>
               (f)  Nothing  herein  shall  be  construed  as  constituting  the
          Portfolio  Manager  as an  agent  or  co-partner  of the  Manager,  or
          constituting  the Manager as an agent or  co-partner  of the Portfolio
          Manager.

               (g) This agreement may be executed in counterparts.

     IN WITNESS  WHEREOF,  the parties hereto have caused this  instrument to be
executed as of the day and year first above written.

                                        PILGRIM AMERICA INVESTMENTS, INC.


                                        By: ------------------------------------
                                         
                                            ------------------------------------
                                            Title



                                        CRAMER ROSENTHAL McGLYNN, LLC


                                        By: ------------------------------------
                                         
                                            ------------------------------------
                                            Title
                                       A-8
<PAGE>
PILGRIM AMERICA FUNDS

PILGRIM AMERICA MASTERS
MIDCAP VALUE FUND
P.O. BOX 419368
KANSAS CITY, MO 64141

                   PILGRIM AMERICA MASTERS MIDCAP VALUE FUND,
                                   a series of
                      PILGRIM AMERICA MASTERS SERIES, INC.

The  undersigned  owner of Common Stock,  par value $.001 per share (the ACommon
Stock@) of the Pilgrim  America  Masters  MidCap Value Fund (the AFund@)  hereby
instructs Robert W. Stallings or James M. Hennessy  (Proxies) to vote the shares
of the Common Stock held by him at the Special  Meeting of  Shareholders  of the
Fund to be held at 10:00  a.m.,  local time,  on  December  18, 1997 at 40 North
Central  Avenue,  Suite  1200,  Phoenix,  Arizona  85004 and at any  adjournment
thereof, in the manner directed below with respect to the matters referred to in
the Proxy  Statement for the meeting,  receipt of which is hereby  acknowledged,
and in the Proxies=  discretion,  upon such other  matters as may properly  come
before the meeting or any adjournment thereof.

Please vote, sign and date this voting instruction and return it in the enclosed
envelope.

These voting  instructions  will be voted as specified.  If no  specification is
made, this voting instruction will be voted FOR all proposals.

IN ORDER TO AVOID THE ADDITIONAL  EXPENSE OF FURTHER  SOLICITATION,  WE STRONGLY
URGE YOU TO REVIEW,  COMPLETE AND RETURN YOUR BALLOT AS SOON AS  POSSIBLE.  YOUR
VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:      /X/

KEEP THIS PORTION FOR YOUR RECORDS.

DETACH AND RETURN THIS PORTION ONLY.

               THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

PILGRIM  AMERICA  MASTERS MIDCAP VALUE FUND, a series of 
PILGRIM AMERICA MASTERS SERIES, INC.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.

Vote On Proposals
<PAGE>
<TABLE>

<S>                                                         <C>            <C>                <C>
   1. To approve a new Portfolio Management Agreement       For            Against            Abstain
between Pilgrim America Investments, Inc. and Cramer
Rosenthal McGlynn, LLC, the successor to the current        /   /          /   /              /   /
Portfolio Manager

   2. To transact  such other  business as may properly  
come before the Special Meeting of Shareholders or any 
adjournments thereof                                        /   /          /   /              /   /
</TABLE>

This voting  instruction shall be signed exactly as your name(s) appears hereon.
If as an attorney,  executor,  guardian or in some representative capacity or as
an officer of a corporation,  please add titles as such.  Joint owners must each
sign.



Signature (PLEASE SIGN WITHIN BOX) Date     Signature (Joint Owners)     Date


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission