NOTICE OF ANNUAL MEETING
TO BE HELD XXX,XX,2002
To the shareholders of The O'Higgins Fund
NOTICE HEREBY GIVEN that the Annual Meeting of The O'Higgins Fund will be held
at 1375 Anthony Wayne Drive, Wayne, Pennsylvania 19087 on XXXXX XX, 2002 at 7:30
PM for the following purposes.
1) To elect or reject six (6) directors to serve until the next Annual Meeting
of Shareholders or until their successors are elected and qualified.
2) To ratify or reject the selection of Sanville & Company, Certified Public
Accountants, as independent public accounts to audit and certify financial
statements o the Fund for the fiscal year ending December 31, 2002.
3) To ratify or reject complementation of the O'Higgins "Beating the Dow - with
Bonds" strategies by granting approval to allow the Fund to be able to invest
up to 20% of its assets to seek capital gains and income through the purchase of
securities such as gold mining stocks, foreign company stocks traded in the
United States and options that move inversely with the major US stock indicies.
While these securities are beyond the strategies of the Fund stated in its
Prospectus, they are totally acceptable according to the Investment Restrictions
given in its Statement of Additional Information. This modification is being
subjected to shareholder selection to allow management to be more responsive to
changing world conditions.
4) To transact such other business as may properly come before the meeting or
any general adjournments thereof.
PLEASE FILL IN, SIGN & RETURN THE ENCLOSED PROXY IF
YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON
PROMPT RETURN OF YOUR PROXY WILL BE APPRECIATED
XXXXXX XX, 2002
Dear Shareholders:
The Federal Securities and Exchange Commission has adopted a ruling regarding
the "Privacy of Consumer Financial Information" known as Regulation S-P. This
ruling states that financial institutions such as your Fund must provide you
with this notice of our privacy policies and practices on an annual basis. We
are pleased to report that:
A. Information We Collect - Our application forms contain names, addresses,
phone numbers, W9 status and social security or tax ID numbers for regular
accounts. Our IRA application forms also contain birth date and beneficiary
information. Of course, we also keep record of all of your security transactions
such as your account balances and transaction histories.
B. Our Disclosure Statement -We only disclose personal information about you
either while you are a shareholder or if you have left the Fund as required by
law. And, since we handle regular transactions internally, the number of emplo-
yees that even see your information is limited. However, funds cannot be IRA
trustees. We use Delaware Charter Guarantee & Trust Co. to provide this service
which requires that we disclose our IRA shareholder name and address list to it
on an annual basis. In this regard, we have forwarded a letter requiring them to
get permission from our IRA shareholders if they wish to use the information we
supply other than that required by law.
You may call 1-800-548-1942 if there are any questions about our Regulation S-P
status.
Respectfully submitted
/s Bernard B. Klawans
President
PROXY STATEMENT
THE O'HIGGINS FUND
1375 Anthony Wayne Dr.
Wayne, PA. 19087 Tel. 1-800-548-1942
Enclosed herewith is notice of an Annual Meeting of Shareholders of The O'Hi-
ggins Fund (the "Fund") and a proxy form solicited by the Board of Directors
of the Fund. This proxy material was first mailed to shareholders on XXXXXX XX,
2002.
The proxy may be revoked at any time before it is exercised either by mail no-
tice to the Fund or through resubmittal at a later date. Please place your in-
structions on the enclosed one, then sign, date and return it. All costs of so-
liciting this proxy will be borne by your Fund. You may also vote in person at
the meeting that would override all your previously filed proxies.
The Fund has one class of capital stock of the Fund, having equal voting rights.
On XXXX XX, 2002, the date of record, there were XXX,XXX shares outstanding,
held by shareholders entitled to notice of and to vote at the meeting. In all
matters, each share has one vote.
PROPOSAL #1: ELECTION OF DIRECTORS
The six directors listed below have consented to serve as directors, if elected,
until the next Annual Meeting of Shareholders or until their successors are
elected and qualified. All officers of the Fund are also presented in the fol-
lowing table.
Name, Address Position in Term of Office Principal Number of Other
and Age the Fund & Occupation Portfolios Dorctor-
Length of Time Past 5 Years in Fund Com- ships
Served plex Overseen Held by
Director Director
Interested Directors & Officers
*Bernard B. Klawans President Elected for One President of Both Two None
1375 Anthony Wayne Dr and Year. Served The O'Higgins &
Wayne PA Director Since Inception Valley Forge
81 Jan. 30 1998 Funds
*William A. Texter Secretary Elected for One Retired Manager Two None
551 Red Coat Lane and Year. Served PECO Energy
Phoenixville PA Director Since Philadelphia PA
55 Jan 30, 2001
Other Officers
*Sandra K. Texter Treasurer Elected for One System Analyst Two None
551 Red Coat Lane Year. Served Lockeed Martin
Phoenixville PA Since King of Prussia PA
51 Jan 30. 2001
Dirctors of the Fund who are "interested persons" as defined in the Investment
Company Act of 1940. Mr. Klawans is an "interested person" by virtue of his po-
sition as the Fund's Investment Adviser. Mr. and Mrs. Texter are "interested
persons" because all officers of the Fund are considered to be so.
Name, Address Position in Term of Office Principal Number of Other
and Age the Fund & Occupation Portfolios Direc-
Length of Time Past 5 Years in Complex torships
Served Overseen by Held by
Director Director
Independent Directors
Victor J. Belanger Director Elected for One Chief Operational Two None
PO Box 96 Year. Served Officer
Princeton Junction NJ Since Inception Linearizer Tech. Inc
60 Jan 30,1998 Rbbinsville NJ
Dr. Gerd H. Dahl Director Elected for One Retired Chemist Two None
679 Jefferson Road Year. Served Elf Atochem N. A.
Bryn Mawr PA Since Inception Philadelphia PA
71 Jan 30, 1998
Dr. James P. King Director Elected for One President Two None
904 Breezewood Lane Year. Served Desilube Tech. Inc.
Lansdale PA Since Inception Lansdale PA
70 Jan 30, 1998
Donald A. Peterson Director Elected for One Retired Program Two None
3741` Worthington Road Year. Served Manager
Collegeville PA Since Inception Lockeed Martin
61 Jan 30, 1998 King of Prussia PA
Shareholders have one vote for each share they own for each of six directors of
their choice. All proxies returned to the Fund, except those specifically marked
to withhold authority will be cast for the nominees listed above. A majority of
the votes cast, when a quorum is present, will elect each director. All nominees
stood for election last year and were overwhelmingly reelected.
BOARD MEETINGS AND DIRECTOR DUTIES
Meetings: There were six Board of Directors meetings in 2001. Dr. Dahl attended
four and Messrs. Belanger and Peterson attended five. The remaining three direc-
tors attended all six.
Director Duties: The Board of Directors select the officers to run the Fund,
propose all changes in operating procedures where approval of a majority of the
Independent Directors is required, pass on the Fund's auditor on a yearly basis
and monitor Fund activities to insure to the best of their collective abilities
that the Fund Officers are meeting Fund commitments to their shareholders, the
Securities and Exchange Commission, the Internal Revenue Service and Blue Sky
arrangements with the various states where the Fund offers its shares.
FUND HOLDINGS OF THE OFFICERS AND DIRECTORS
Name Dollar Range of Equity Aggregate Dollar Range of Equity
Securities in the Fund Securities in All Registered
Investment Companies Overseen
by Director in Family of
Investment Companies
Bernard B. Klawans over $100,000 over $100,000
Sandra K. Texter none over $100,000
William A. Texter $ 1 to $10,000 $ 10,001 to $ 50,000
Victor J. Belanger $ 10,000 to $50,000 $ 50,000 to $ 100,000
Dr. Gerd H. Dahl $ 1 to $10,000 $ 10,001 to $ 50,000
Dr. James P. King $ 1 to $10,000 $ 10,001 to $ 50,000
Donald A. Peterson $ 1 to $10,000 over $100,000
RENUMERATION OF DIRECTORS AND OFFICERS
The Fund pays $49.50 a month to Mr. Texter to cover his miscellaneous expenses
associated with services rendered as an officer of the Fund. In addition, all
directors except Mr. Texter & Mr. Klawans are paid $99 for expenses associated
with each Directors meeting they attend. The actual payments in the year 2001
were:
Name Compensation in the year 2001
Bernard B. Klawans none*
William A. Texter $ 594
Sandra K. Texter $ 1,000**
Victor J. Belanger $ 495
Dr. Gerd H. Dahl $ 594
Dr. James P. King $ 594
Donald A. Peterson $ 495
* Mr. Klawans serves the Fund in many capacities but only receives compensation
in the form of the Advisory Fee for Investment advice paid to the Management
Company that he owns.
**Mrs. Texter received the $1,000 fee for rental of computer equipment to the
Fund.
BROKERAGE
The fund requires all brokers to effect transactions in portfolio securities in
such a manner as to get prompt execution of orders at the most favorable price.
Where consistent with best price and execution and in light of its limited re-
sources, the Fund will deal with primary market makers in placing over-the-coun-
ter portfolio orders. The Fund places all orders for purchase and sale of its
securities through its president who is answerable to the Board of Directors.
The President may select brokers who, in addition to meeting the primary requi-
rements of execution and price, have furnished statistical or other factual
information and services, which, in the opinion of management, are helpful or
necessary to the Fund's normal operations. Those services may include economic
or industry studies, security analysis & reports, sales literature and statis-
tical services furnished either directly to the Fund or to the Adviser. No ef-
fort is made in any given circumstance to determine the value of these services
or the amount they might have reduced Adviser expenses.
Other than as set forth above, the Fund has no fixed policy, formula, method or
criteria used in allocating brokerage business to brokers furnishing these ma-
terials and services. In its most recently completed year, 2001, the Fund paid
$0 in brokerage commissions. Brokerage commissions were $50 in 2000 and $0 in
1999 largely because all US zero Coupon Bonds were purchased flat. The Board of
Directors evaluates and reviews annually the reasonableness of brokerage com-
missions paid.
PROPOASAL #2: RATIFICATION OR REJECTION OF SELECTION OF AUDITORS
Your Board of Directors recommends, subject to shareholder approval, Sanville &
Company, Certified Public Accountants ("S&C") to audit and certify financial
statements of the Fund for the year 2001 since they performed our 2001 audit
in an exemplary fashion at competitive prices.
Audit Fees: The annual audit fee charged for the 2001 audit by Sanville & Co.
was $4,000. The fee for the year 2002 is expected to be the same. This fee in-
cludes charges for the certified audit along with checking the Fund's securities
three times a year as required since the Fund acts as self custodian and repor-
ting its findings to the Securities and Exchange Commission and the Fund's Board
of Directors.
All Other Fees: There were no additional fees charged by S&C for any other aid
they provided in the course of events during the audit year 2001 and none are
expected during the audit year of 2002.
Financial Information Design: The Board of Directors has adopted procedures to
pre-approve the types of professional services for which the Fund may retain
such auditors. As part of the approval process, the Board of Directors consi-
ders whether the performance of each professional service is likely to affect
the independence of S&C. Neither S&C nor any of its partners have any direct
or material indirect financial interest in the Fund and will provide no non-
auditing services. A representative of Sanville & Co. will not be present at the
meeting unless requested by a shareholder (either in writing or by telephone)
in advance of the meeting. Such requests should be directed to the Secretary
of the Fund.
PROPOSAL #3: COMPLIMENTATION OF THE FUND'S INVESTMENT STRATEGIES
The O'Higgins Fund was established to follow investment strategies presented in
Mr. O'Higgins second book, "Beating the Dow - With Bonds" Harper Collins, 1999.
Strict adherence to these strategies has produced positive results on average
since inception in early 1998. However conditions in the financial markets have
changed and Mr. O'Higgins believes that the Fund would benefit from the ability
to deviate slightly from the current strategies by investing in securities such
as gold mining stocks, foreign company stocks traded in the United States and
options that move inversely with the major US stock indicies. These securities
while not eligible for purchase under the "Beating the Dow" strategy do fall
well within the limits of the Fund's Investment Restrictions as stated in its
Statement of Additional Information.
Your Board of Directors desire shareholder approval for allowing your Fund to be
able to invest up to 20% of it's assets at the time of purchase to seek capital
gains and income through the purchase of securities such as those mentioned in
the above paragraph when they are expected to perform well in the market enviro-
nment that Mr. O'Higgins foresees.
This modified policy could increase risk accompanied by higher volatility becau-
se management may misjudge future world conditions. The Investment Adviser,
Mr. Klawans, has examined the effects expected and agrees with Mr. O'Higgins
suggestions. The Board of Directors has considered the risk involved, the com-
bined 55 years investment practice of Messrs O'Higgins and Klawans and the ac-
tual recommendations. They urge you to vote for the modification.
SHAREHOLDER PROPOSALS
Your Fund tentatively expects to hold its next annual meeting in August 2003.
Shareholder proposals may be presented at that meeting provided they are recei-
ved by the Fund not later than January 4, 2003 in accordance with Rule 14a-8 un-
der the Securities & Exchange Act of 1934 that sets forth certain requirements.
OTHER MATTERS
The Board of Directors knows of no matters to be presented at the meeting other
than those mentioned above. Should other business come before the meeting,
proxies will be voted in accordance with the view of the Board of Directors.
PROXY- SOLICITED BY THE BOARD OF DIRECTORS
THE O'HIGGINS FUND ANNUAL MEETING OF SHAREHOLDERS XXX. XX, 2002
The annual meeting of The O'HIGGINS FUND will be held XXX. XX, 2002 at 1375
Anthony Wayne Dr., Wayne, PA. at 7:30 P.M. The undersigned hereby appoints
Bernard B. Klawans and/or William A. Texter as proxies to represent and to vote
all shares of the undersigned at the annual meeting of shareholders and all ad-
journments thereof, with all powers the undersigned would possess if personally
present, upon the matters specified below.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED: IF NO DIRECTION
IS INDICATED AS TO A PROPOSAL, THE PROXIES SHALL VOTE FOR SUCH PROPOSAL.THE
PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPER-
LY COME BEFORE THE MEETING.
The Board of Directors recommends that you vote FOR on all items.
1. Election of Directors
___
l___l FOR all nominees except as marked to the contrary below.
___
l___l WITHHOLD AUTHORITY to vote for all nominees.
Instructions: To withhold authority to vote for nominees, strike a line th-
rough his/their names in the following list.
Bernard B Klawans William A. Texter Victor J Belanger
Dr. Gerd H. Dahl Dr. James P King Donald A. Peterson
2. Proposal to ratify or reject the selection of Sanville & Co. by the Board of
Directors as independent public accountants to audit and certify financial sta-
tements of the Fund for the fiscal year ending December 31, 2002.
___ ___ ___
l___l FOR l___l AGAINST l___l ABSTAIN
3. Proposal to ratify or reject complementation of the O'Higgins "Beating the
Dow - with Bonds" strategy by adding the ability to invest up to 20 percent of
total assets outside this strategy within the limits of the Investment Restric-
tions placed on the Fund to be responsive to changing world conditions.
___ ___
l___l FOR l___l AGAINST
4. To transact such other business as may properly come before the meeting or
any general adjournments thereof.
Please mark, date, sign & return the proxy promptly in the enclosed envelope.
For joint registrations, both parties should sign.
Dated ___________________, 2002
_______________________
Shareholder's Signature
You should review your address and note corrections below.
______________________
Shareholder's Signature