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:
X Preliminary proxy statement
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 transaction
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:
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Pilgrim America Masters Series, Inc.
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004
November 7, 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 the proposed reorganization of CRM Advisors,
LLC, the Fund's current Portfolio Manager, will cause the current Portfolio
Management Agreement to terminate on 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,
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
JAMES M. HENNESSY, Secretary
November 7, 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 7, 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.
<PAGE>
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
October 20, 1997, there were 4,196,149 shares of Common Stock outstanding and
entitled to vote as of such record date, representing total net assets of
$66,008,478.
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
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.
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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.
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.
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. On October __, 1997, the Principals, CRM, Management and New
Adviser entered into various agreements with W.T. Investments, Inc. ("WTI"), an
indirectly wholly-owned subsidiary of Wilmington Trust Corporation ("WTC"),
pursuant to which:
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1. WTI will purchase 91.50% 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 some of its assets as well as
the investment advisory contracts subject to a majority 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. Pergament and Trainor will receive the right to
have their ownership interests in New Adviser purchased by WTC,
and WTI will receive the option to 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.
The foregoing transactions will 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. The change in ownership interests resulting from
these transactions is deemed by the Rules under the Investment Company Act of
1940 (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 there has
been no change in the investment advisory and other personnel since or in
connection with 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 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.
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<PAGE>
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 sock of Wilmington Trust
Company, a Delaware chartered bank and trust company engaged in commercial and
trust banking activities since 1903. WTC also 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 subsidiaries,
WTC engages in residential, commercial and construction lending, deposit taking,
insurance, travel, investment advisory and broker-dealer services and mutual
fund administration. On December 31, 1996, WTC, together with its subsidiaries,
had total assets of over $5.5 billion. WTC is among the nation's ten largest
personal trust companies and is responsible for $100 billion in assets on behalf
of its customers. Wilmington Trust Company, the largest subsidiary of WTC holds
approximately $95 billion in a fiduciary capacity and has _____ operating
subsidiaries through which it engages in various lines of business. [WTI,
organized in _____, under the laws of Delaware, is a direct subsidiary of
Wilmington Trust Company.]
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
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<PAGE>
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. The Fund currently pays and will continue to pay
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.
Duration and 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 [date], and is a registered investment adviser under
the Investment Advisers Act of 1940. 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 principal executive officers and directors and their
principal occupations are listed below.
Position with New Adviser
Name and Principal Occupation
Gerald B. Cramer Chairman
Edward J. Rosenthal Vice Chairman
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<PAGE>
Ronald H. McGlynn Director, President and Chief Executive Officer
Jay B. Abramson Director, Executive Vice President and Director of
Research
Fred M. Filoon Director, Senior Vice President
Eugene A. Trainor III Senior Vice President and Chief Financial Officer
Arthur J. Pergament Senior Vice President
Accounts managed by CRM hold a substantial 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.
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 compensation to be received by New Adviser
and the fairness of such compensation; (2) the nature and quality of the
services to be rendered; (3) the results achieved by Current Adviser and New
Adviser in other areas of investment management, including portfolios comparable
to the Fund; (4) the personnel, operations and financial condition, and
investment management capabilities, methodologies, and performance of New
Adviser; and (5) 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. In this regard, the Board evaluated such factors
as New Adviser's experience in providing various financial services to
individuals and businesses, as well as its reputation, integrity and financial
responsibility and stability. The Board of Directors considered the skills and
capability of New Adviser and the representations by New Adviser that no
material change was currently planned in New Adviser's management and facilities
and that New Adviser would be able to provide high quality portfolio management
services with respect to the Fund.
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.
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<PAGE>
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.
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:
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<S> <C> <C>
Position with Principal Occupation
Name the Company for the Last Five Years
Robert W. Stallings (Age Chairman of the Board, Chairman, Chief Executive Officer and
48) Chief Executive Officer and President of Pilgrim America Group, Inc.
President (since April 1995) ("PAGI") (since December 1994); Chairman, PAII
(since December 1994); Director (since
December 1994) and Chairman (since November
1995), Pilgrim America Securities, Inc.
("PASI"); Chairman, Chief Executive 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 President Director, Vice Chairman (since December 1994),
(Age 40) (since April 1995), Executive Vice President (since April 1995),
Treasurer, Assistant and Treasurer (since
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Secretary, Principal September 1996), PAGI and
Accounting Officer (since PAII; Director (since December 1994), Vice
May 1997) Chairman (since November
1995) and Assistant Secretary (since
January 1995) of PASI;
Executive Vice
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 President Executive Vice President (since August 1996),
(Age 47) (since August 1996) PAGI; President and Chief Executive Officer
(since August 1996),
PAII; Executive Vice
President (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.
James M. Hennessy Senior Vice President and Senior Vice President and Secretary (since
(Age 48) Secretary (since April 1995) April 1995), PACC, PAGI, PASI and PAII. Senior
Vice 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 May Vice President, PAII (since April 1997) and
(Age 34) 1997) and Asst. Secretary PAGI (since February 1997). Vice President
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(since July 1996) and Assistant Secretary of each of the funds
in the 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.
JAMES M. HENNESSY, Secretary
November 7, 1997
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004
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PILGRIM AMERICA FUNDS
PROXY SERVICES
P.O. BOX 9139
FARMINGDALE, NY 11735
PILGRIM AMERICA MASTERS SERIES, INC.
The undersigned owner of Common Stock, par value $.001 per share (the "Common
Stock") of the Pilgrim America Masters MidCap Value Fund (the "Fund") 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 TO YOUR FUND,
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 SERIES, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
Vote On Proposals
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1. To approve a Portfolio Management Agreement with For Against Abstain
Cramer Rosenthal McGlynn, LLC
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/ / / / / /
2. To transact such other business as may properly
come before the Special Meeting of Shareholders or
any adjournments thereof
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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
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 New York 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 a 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.
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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) 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.
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(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 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
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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 filed with the SEC that contains
disclosure about the Portfolio Manager, and represents and warrants that, with
respect to the disclosure about the Portfolio Manager, such Registration
Statement contains, 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 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.
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6. Compensation. For the services provided, the Manager will pay the
Portfolio Manager a monthly fee, in arrears, equal to 1/12 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.
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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.
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
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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, 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
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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), 13, 14 and 17
of this Agreement shall remain in effect, as well as any applicable provision of
this Section numbered 15 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.
If to the Fund:
Pilgrim America Masters Series, Inc.
40 North Central Avenue, Suite 1200
Phoenix, AZ 85004
Attention: James M. Hennessy
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If to the Portfolio Manager:
Cramer Rosenthal McGlynn, Inc.
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.
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(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 14 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.
(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.
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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
