<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Bergstrom Capital Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
BERGSTROM CAPITAL CORPORATION
505 MADISON STREET, SUITE 220
SEATTLE, WASHINGTON 98104
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 3, 1997
To the Stockholders of
BERGSTROM CAPITAL CORPORATION
NOTICE IS HEREBY GIVEN that by order of the Board of Directors, the Annual
Meeting of Stockholders of Bergstrom Capital Corporation, a Delaware corporation
(the "Company"), will be held in the Cutter Room, The Rainier Club, Fourth
Avenue and Marion Street, Seattle, Washington, on November 3, 1997, at 11:00
a.m., Seattle time, for the following purposes, all as more fully described in
the accompanying Proxy Statement:
1. To elect three directors, two to hold office until the Annual
Meeting of Stockholders in 2000 and one to hold office until the Annual
Meeting of Stockholders in 1998, and in all cases until their respective
successors shall be elected and shall qualify;
2. To ratify or reject the selection by the Company's Board of
Directors of Deloitte & Touche LLP as the independent accountants of the
Company for the year ending December 31, 1997; and
3. To transact any other business which may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 15,
1997, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting or any adjournment thereof, and only
stockholders of record at the close of business on such date are entitled to so
vote. The stock transfer books of the Company will not be closed. A complete
alphabetical listing of stockholders entitled to vote at the meeting or any
adjournment thereof, including their addresses and number of shares registered
in the name of each such stockholder, will be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for the ten days prior to the meeting, at the office of the Company in
Seattle, Washington, specified above, and will be available for inspection by
any stockholder at the time of the meeting, at the place thereof.
THE BOARD OF DIRECTORS OF THE COMPANY, INCLUDING ALL OF THE DIRECTORS WHO
ARE NOT "INTERESTED PERSONS" WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED, RECOMMENDS THAT STOCKHOLDERS ELECT THE NOMINEES FOR DIRECTOR
AND RATIFY THE SELECTION OF AUDITORS BY VOTING FOR THE NOMINEES LISTED UNDER
PROPOSAL 1 AND FOR PROPOSAL 2 IN THE ENCLOSED PROXY.
Please execute and return the enclosed Proxy promptly in the enclosed
envelope, whether or not you intend to be present at the meeting. You are urged
to attend and vote in person. If you are not able to attend, it is important
that your shares be represented by Proxy. You may revoke your Proxy at any time
before it is voted.
By Order of the Board of Directors
Pamela A. Fiorini
Secretary
Seattle, Washington
September 26, 1997
<PAGE>
BERGSTROM CAPITAL CORPORATION
505 MADISON STREET, SUITE 220
SEATTLE, WASHINGTON 98104
------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Bergstrom Capital Corporation, a Delaware corporation
(the "Company"), of Proxies to be used at the Annual Meeting of Stockholders of
the Company, to be held on November 3, 1997, and any adjournment thereof, for
action upon the matters set forth in the foregoing Notice of Annual Meeting of
Stockholders.
All shares represented by each properly signed Proxy received prior to the
meeting will be voted at the meeting. If a stockholder specifies how the Proxy
is to be voted on any of the business to come before the meeting, it will be
voted in accordance with such specification. If no specification is made, the
Proxy will be voted FOR the election of each of the directors nominated by the
Board of Directors (Proposal 1) and FOR Proposal 2. The Proxy may be revoked by
a stockholder, at any time prior to its use, by written notice to the Company,
by submission of a subsequent Proxy or by voting in person at the meeting.
If a vote is taken on adjournment of the meeting, or any other procedural
matters, Proxies will be voted at the discretion of the persons voting the
Proxies so as to facilitate the election of each of the directors proposed by
the Board of Directors (Proposal 1) and the adoption of Proposal 2.
Accordingly, absent contrary instructions on the Proxy card, Proxies withholding
votes on Proposal 1 or abstaining on or opposing Proposal 2 may be voted on
procedural matters, such as adjournment, to facilitate an opposite result.
The representation in person or by proxy of at least one-third of the
shares of Capital Stock entitled to vote is necessary to constitute a quorum
for transacting business at the meeting. For purposes of determining the
presence of a quorum, abstentions, withheld votes and broker "non-votes" will be
counted as present. Broker "non-votes" occur when the Company receives a Proxy
from a broker or nominee who does not have discretionary power to vote on a
particular matter and has not received instructions from the beneficial owner or
other person entitled to vote the shares represented by the Proxy. The
directors nominated in Proposal 1 will be elected by a plurality of the shares
voting and entitled to vote thereon at the meeting, and Proposal 2 requires the
approval of a majority of the shares voting and entitled to vote thereon at the
meeting. Withheld votes and broker non-votes will not be counted in favor of or
against, but will have no other effect on, the vote for both proposals. An
abstention will have the effect of a vote against Proposal 2.
The cost of solicitation, including postage, printing and handling, and the
expenses incurred by brokerage houses, custodians, nominees and fiduciaries in
forwarding proxy material to beneficial owners, will be borne by the Company.
The solicitation is to be made primarily by mail, but may be supplemented by
telephone calls, telegrams and personal interviews. This Proxy Statement and
the enclosed form of Proxy were first mailed to stockholders on or about
September 26, 1997.
At the close of business on September 15, 1997, the record date for the
determination of stockholders entitled to vote at the meeting, there were
outstanding 1,062,800 shares of Capital Stock. Each share is entitled to one
vote.
The following table sets forth information as of June 30, 1997 with respect
to all persons known by the Company to be the beneficial owners of more than 5%
of the Company's Capital Stock and with
-1-
<PAGE>
respect to the beneficial ownership of the Company's Capital Stock by all
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP (1) OF CLASS
---- ------------------------ ----------
<S> <C> <C>
Erik E. Bergstrom 222,460(2) 20.57%
P.O. Box 126
Palo Alto, CA 94302
Directors and executive 230,810(3) 21.34%
officer as a group
(5 persons)
</TABLE>
_________________________________
(1) Sole voting and investment power unless otherwise indicated in the notes
below.
(2) Includes 65,781 shares owned by Federal United Corporation and 6,779 shares
owned by Bergstrom Advisers, Inc. (the "Adviser"), corporations controlled
by Mr. Bergstrom. Does not include 24,000 shares beneficially owned by Mr.
Bergstrom's wife, 58,200 shares owned by Erik E. and Edith H. Bergstrom
Foundation, Inc., and 14,305 shares owned by Sharon's Trust, of which Mr.
Bergstrom is one of three trustees, as to all of which Mr. Bergstrom
disclaims any beneficial interest.
(3) Includes the shares shown in the table above as beneficially owned by Mr.
Bergstrom. See "ELECTION OF DIRECTORS" for information regarding shares
owned by the other directors and the executive officer.
So far as is known to management of the Company, on June 30, 1997 no other
person owned beneficially more than 5% of the Capital Stock of the Company,
although on such date Cede & Co., a nominee of Depository Trust Company ("DTC"),
owned of record 770,339 shares of Capital Stock of the Company, including a
portion of the shares beneficially owned by Mr. Bergstrom, or approximately
71.2% of the number of shares outstanding as of such date. DTC is a depository
of securities for brokers, dealers and other institutional investors.
Securities are so deposited for the purpose of permitting book entry transfers
of securities among such investors. Except as otherwise indicated above, the
Company does not know the names of beneficial owners of Capital Stock which is
on deposit with DTC.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS 1996 ANNUAL REPORT
AND 1997 SEMI-ANNUAL REPORT TO ANY STOCKHOLDER UPON REQUEST BY TELEPHONE AT 1-
800-426-5523 OR IN WRITING DIRECTED TO: STATE STREET BANK AND TRUST COMPANY,
P.O. BOX 8200, BOSTON, MASSACHUSETTS, 02266-8200.
State Street Bank and Trust Company is the custodian, accounting agent,
transfer agent and dividend paying agent for the Company. William L. McQueen &
Associates, whose address is the same as that of the Company, provides certain
administrative services to the Company, as described herein under "ELECTION OF
DIRECTORS -- Officers of the Company."
Each proposal to be voted upon has been independently considered by the
Board of Directors. The Board of Directors is recommending that stockholders
vote FOR the election of the persons named below as directors of the Company
(Proposal 1) and FOR Proposal 2.
-2-
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL 1)
EXPLANATION AND HISTORY OF COMPANY'S CLASSIFIED BOARD OF DIRECTORS
At the 1979 Annual Meeting of Stockholders of the Company, approximately
84% of the shares voted on the proposal were cast in favor of a proposal to
amend the Certificate of Incorporation to classify directors into three classes,
each of approximately the same size, with one class of directors to be elected
annually. In addition, the stockholders then approved amendments to the
Certificate of Incorporation to require the affirmative vote of at least two-
thirds of the number of shares of voting stock outstanding to approve any
proposal to dissolve, merge or consolidate the Company, to sell its assets or to
effect any amendment to the Certificate of Incorporation to make the stock a
redeemable security (or to amend any of the foregoing provisions). The impetus
for these proposals was the Board of Directors' awareness that there were
efforts being made to effect structural changes in other closed-end investment
companies, such as dissolution or merger, or causing the companies to become
open-ended and thus stand ready to redeem their outstanding shares. The Board
of Directors is not aware of any such efforts currently being made with respect
to the Company.
The Board of Directors believed in 1979 and continues to believe that the
primary purpose of such structural changes is to generate a one-time profit
through the elimination of the discount between the market price and the net
asset value of closed-end investment companies. The Board of Directors also
believed that the present closed-end structure which was adopted by the Company
when it was founded in 1968 was a more appropriate vehicle for long-term capital
growth, since there is no need to consider the possible impact of purchases and
redemptions upon investment strategy, which, in the Board's view, would be a
consideration if the Company were open-ended. Further, in the event the Company
were an open-end mutual fund, and its share redemptions exceeded sales of new
shares, the amount of its assets would decline, as would the advisory fee paid
to the Adviser (which is controlled by Erik E. Bergstrom), unless an increase in
this fee were approved by the Board of Directors and stockholders.
One of the purposes of the 1979 amendments was to discourage attempts to
take over control of the Company in a transaction not approved by the Company's
Board of Directors by making it more difficult for anyone to obtain control in a
short time and thereby impose his will on the remaining stockholders. With
respect to the classified Board of Directors which was approved at the 1979
Annual Meeting, the Board then believed and continues to believe that a
staggered election of directors moderates the pace of any attempted change in
management by extending the time required to elect the majority of the directors
from one to two years. Further, under Delaware law, directors who are members
of a board which is classified (as is the case of the Company's Board) may not
be removed from office except for cause unless the Certificate of Incorporation
provides otherwise, which the Company's does not.
NOMINEES FOR ELECTION AND DIRECTORS
Pursuant to the classified system for electing directors described above,
at the Annual Meeting of Stockholders held in 1994, the stockholders elected
this year's nominees for the Board of Directors, Erik E. Bergstrom and George
Cole Scott, to serve for a term of three years. Mr. Bergstrom and Mr. Scott
have each been nominated to hold office as a director of the Company for an
additional three-year term which will expire at the time of the Annual Meeting
of Stockholders of the Company to be held in 2000. If authority is granted to
vote in the election to fill the director positions open in 1997, the enclosed
Proxy will be voted for Mr. Bergstrom and Mr. Scott, each of whom has consented
to continue to serve as a director of the Company.
-3-
<PAGE>
Clayton H. Williams, who was elected a director at the Annual Meeting of
Stockholders in 1995, has tendered his resignation, after serving nineteen years
as a director of the Company. The Board of Directors has accepted Mr. Williams'
resignation, effective upon his successor being elected and qualified. The
Board of Directors has nominated William H. Sperber to serve the remainder of
Mr. Williams' term, which will expire at the time of the Annual Meeting of
Stockholders of the Company in 1998. If authority is granted to vote in the
election to fill the director position opened by Mr. Williams' resignation, the
enclosed Proxy will be voted for Mr. Sperber, who has consented to serve as a
director of the Company.
In the unanticipated event that any or all nominees cannot for some reason
be a candidate, then the Proxy holders may vote in favor of such substitute
nominee(s) as the Board of Directors shall designate or the Board of Directors
may reduce the number of directors to be elected. The Company knows of no
current circumstances which would render any nominee unable to accept nomination
or election.
The following table sets forth a list of the individuals nominated for
election as a director and the Company's directors whose terms will continue
following the Annual Meeting, together with their ages, the number of shares of
Capital Stock of the Company beneficially owned by each such director as of June
30, 1997, and other information.
-4-
<PAGE>
<TABLE>
<CAPTION>
CAPITAL STOCK
OF THE
COMPANY
BENEFICIALLY
POSITION, IF ANY, WITH THE COMPANY PRESENT OWNED AT
AND THE ADVISER, PRINCIPAL OCCUPATION DIRECTOR TERM JUNE 30, PERCENT
NAME AND AGE AND BUSINESS EXPERIENCE SINCE EXPIRES 1997(1) OF CLASS
- ------------- ------------------------------------- ------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Erik E. Bergstrom* Chairman of the Board of Directors October 1997 222,460(2) 20.57%
(59) (but not an officer) of the Company; 1976
President and director of the Adviser;
private investor; officer of Federal
United Corporation (a personal
holding company); President and
director of Erik E. and Edith H.
Bergstrom Foundation, Inc. (a private
foundation which makes grants to
charitable organizations), all for
more than five years.
George Cole Scott* Account Executive and Investment October 1997 300(3) 0.03%
(60) Advisor Representative for Anderson 1976
& Strudwick,Inc. (a securities broker
and dealer) for more than five years;
President of Closed-End Fund Advisors,
Inc. (an investment adviser) since
October 1996; and President and sole
owner of Cole Publishing, Inc. (an
investment consulting firm) from
February 1988 to April 1996.
William H. Sperber President, Chief Executive Officer, ---- 1998 500 0.05%
(64) Managing Director, and co-founder of
The Trust Company of Washington
since July 1992.
William L. McQueen* President of the Company since November 1999 110(4) 0.01%
(66) November 1980; Treasurer of the 1980
Company from October 1986 to June
1987 and since January 1988; Secretary
of the Company from October 1976 to
November 1980; in practice as a
certified public accountant and sole
proprietor of William L. McQueen &
Associates for more than five years.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
CAPITAL STOCK
OF THE
COMPANY
BENEFICIALLY
POSITION, IF ANY, WITH THE COMPANY PRESENT OWNED AT
AND THE ADVISER, PRINCIPAL OCCUPATION DIRECTOR TERM JUNE 30, PERCENT
NAME AND AGE AND BUSINESS EXPERIENCE SINCE EXPIRES 1997(1) OF CLASS
- ------------- ------------------------------------- ------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Norman R. Nielsen Manager and Senior Member of October 1999 6,840(5) 0.63%
(56) research staff, SRI Consulting, a 1976
wholly owned subsidiary of SRI
International (a research and
consulting organization), for more
than five years.
</TABLE>
- -------------------------
(*) An "interested person" of the Company, as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). Mr. Bergstrom
is an interested person by virtue of the magnitude of his stock ownership
in the Company and his affiliation with the Company's investment adviser,
Bergstrom Advisers, Inc.; Mr. McQueen is an interested person by virtue of
his status as President and Treasurer of the Company; and Mr. Scott is an
interested person by virtue of his affiliation with a securities broker and
dealer.
(1) Sole voting and investment power unless otherwise indicated in the notes
below.
(2) Includes 65,781 shares owned by Federal United Corporation and 6,779 shares
owned by Bergstrom Advisers, Inc., corporations which Mr. Bergstrom
controls. Does not include 24,000 shares owned by Mr. Bergstrom's wife,
58,200 shares owned by Erik E. and Edith H. Bergstrom Foundation, Inc., and
14,305 shares owned by Sharon's Trust, of which Mr. Bergstrom is one of
three trustees, as to all of which he disclaims any beneficial interest.
(3) Includes 100 shares held in a Keogh plan for the benefit of Mr. Scott.
Does not include 1,500 shares owned by Mr. Scott's wife, 1,000 shares held
by Mr. Scott's son, 400 shares held by Mr. Scott's daughter, 3,156 shares
owned by Mr. Scott's mother, and 1,468 shares owned by Mr. Scott's sister,
as to all of which Mr. Scott disclaims any beneficial interest.
(4) These shares are held in an individual retirement account for the benefit
of Mr. McQueen.
(5) Includes 6,400 shares owned by the Nielsen Family Trust, of which Mr.
Nielsen is a trustee, and 440 shares owned by the Lenore Nielsen Trust, of
which Mr. Nielsen is also a trustee, but does not include 1,550 shares
owned by Mr. Nielsen's daughter, as to all of which he disclaims any
beneficial interest.
-6-
<PAGE>
MEETINGS OF DIRECTORS AND COMMITTEES THEREOF
During 1996, the Board of Directors held four meetings. All directors
attended all of these meetings. The Board of Directors established an Audit
Committee in mid-1978, the members of which are currently Messrs. Nielsen and
Williams. It is contemplated that, if elected, Mr. Sperber will replace Mr.
Williams on the Audit Committee. During 1996, the Audit Committee held two
meetings and all members attended all of these meetings. The Audit Committee
reviews with the independent accountants of the Company the Company's annual
audited financial statements, considers any comments which the independent
accountants may have regarding the Company's financial statements or books of
account and considers the adequacy of the Company's internal accounting
controls. The Board of Directors has no Nominating Committee. The Board of
Directors reviews the qualifications of and recommends a director or slate of
directors for election by the stockholders at each Annual Meeting of
Stockholders and appoints candidates to fill vacancies on the Board, subject to
their qualifying under the 1940 Act. The Board of Directors will consider
nominees for director recommended by stockholders. Such recommendations should
include qualifications and biographical information and should be submitted to
the Secretary of the Company.
OFFICERS OF THE COMPANY
The present officers of the Company are William L. McQueen, President and
Treasurer, Pamela A. Fiorini, Secretary, and Elizabeth C. Hedlund, Assistant
Secretary. It is contemplated that the Board of Directors will re-elect Mr.
McQueen, Ms. Fiorini and Ms. Hedlund to their respective offices. Officers
serve at the discretion of the Board of Directors. Neither Mr. McQueen, Ms.
Fiorini nor Ms. Hedlund is an officer, director or employee of the Adviser. Mr.
McQueen's accounting firm, William L. McQueen & Associates, has been engaged by
the Adviser to provide fund administration services and related office
facilities to the Company. William L. McQueen & Associates receives no
compensation from the Adviser or the Company for these services. However, Mr.
McQueen receives compensation as a director and officer of the Company, as
described under "Compensation of Directors and Executive Officer" below. From
time to time, William L. McQueen & Associates has provided accounting services
to William H. Sperber, one of the nominees for director.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICER
The following table sets forth the compensation paid by the Company to
directors and the executive officer of the Company in 1996.
-7-
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Pension or Total Director
Aggregate Retirement Benefits Estimated Compensation
Name of Person and Compensation Accrued As Part of Annual Benefits From Company and
Position From Company Company Expenses Upon Retirement Fund Complex/1/
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Erik E. Bergstrom, $ 0/2/ $0 $0 $ 0
Director
Norman R. Nielsen, $10,500/3/ $0 $0 $10,500
Director
William L. McQueen, $69,000/4/ $0 $0 $ 9,000
President, Treasurer
and Director
George Cole Scott, $ 9,000/5/ $0 $0 $ 9,000
Director
Clayton H. Williams, $10,500/3/ $0 $0 $10,500
Director
</TABLE>
- ---------------------
/1/ A Fund Complex consists of investment companies that hold themselves out
to investors as related companies for purposes of investment and investor
services, have a common investment adviser or have an investment adviser that is
an affiliated person of the investment adviser of any other investment
companies. RCM Capital Management, L.L.C. ("RCM"), a Delaware limited liability
company, one of the subadvisers of the Company, and certain of its affiliates
act as investment advisers to investment companies other than the Company.
However, none of the directors or the executive officer of the Company received
any compensation from any such investment companies.
/2/ Does not include the fee of $880,853 paid to the Adviser pursuant to the
Advisory Agreement as described below under "GENERAL INFORMATION."
/3/ Consisted of a $9,000 director fee and a $1,500 fee for serving on the
Audit Committee.
/4/ Consisted of a $9,000 director fee and a $60,000 salary for serving as
President and Treasurer of the Company, which salary is reimbursed to the
Company by the Adviser pursuant to the Advisory Agreement described below under
"GENERAL INFORMATION."
/5/ Consisted of a $9,000 director fee.
Directors fees and Audit Committee fees are payable quarterly in
arrears. Directors other than Mr. Bergstrom are also entitled to reimbursement
for their expenses of attending meetings of the Board of Directors or its
committees.
REQUIRED VOTE
The election of the directors requires the affirmative vote of a
plurality of the shares voting and entitled to vote thereon at the meeting, in
person or by proxy. The Board of Directors recommends a vote FOR the election of
each of the nominees named above.
-8-
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
On February 26, 1996, the directors who were not "interested persons" of
the Company, within the meaning of the 1940 Act, selected Deloitte & Touche LLP
to carry out the audit of the Company's financial statements for the year ended
December 31, 1996. Also in February 1996, the Audit Committee of the Board of
Directors reviewed the proposed audit and non-audit services to be performed by
Deloitte & Touche LLP for the Company during 1996, and after giving
consideration to the effect upon that firm's independence, approved its
performing audit and audit function services and specified categories of non-
audit services (up to a dollar amount limit on services to be performed). From
time to time thereafter during 1996, the Audit Committee reviewed the services
actually performed to see that they were consistent with the earlier approvals.
At the regular meeting of the Board of Directors of the Company held on
August 11, 1997, the directors of the Company who were not "interested persons"
of the Company selected Deloitte & Touche LLP, through its Boston office, to be
the independent public accountants of the Company, to carry out the audit of the
Company's financial statements for the year ending December 31, 1997, and to
perform such other services as may be requested from time to time by the
Company. Deloitte & Touche LLP has no connection with the Company except in
such capacity, although it audits the financial statements of the Adviser
through its San Francisco office, and it has no direct or indirect financial
interest in the Company.
A representative of Deloitte & Touche LLP is expected to be present at the
meeting to respond to appropriate questions and will have an opportunity to make
a statement if he or she chooses to do so.
REQUIRED VOTE
The ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the shares voting and entitled to vote thereon
at the meeting, in person or by proxy. The Board of Directors recommends a vote
FOR such ratification.
GENERAL INFORMATION
INVESTMENT ADVISORY ARRANGEMENTS
Information About Bergstrom Advisers, Inc. Bergstrom Advisers, Inc., a
Delaware corporation (the "Adviser"), the sole stockholder, director, officer
and investment management employee of which is Mr. Bergstrom, is the Company's
investment adviser. Mr. Bergstrom's address and that of the Adviser is P.O. Box
126, Palo Alto, California 94302. Mr. Bergstrom has been engaged professionally
in securities investments since 1967. In addition to his services as President
of the Adviser, Mr. Bergstrom is a private investor and serves as President and
Treasurer of Federal United Corporation, a personal holding company which is
controlled by Mr. Bergstrom. The Adviser provides investment advisory or
management services only to the Company. The Adviser has been the Company's
investment adviser since 1976.
Terms of the Investment Management and Advisory Agreement with the Adviser.
The Investment Management and Advisory Agreement between the Company and the
Adviser (the "Advisory Agreement") continues automatically for successive annual
periods, provided that such continuance is specifically approved at least
annually by vote of a majority of the outstanding voting securities of the
Company or by the Board of Directors of the Company, together with, in each
instance, the vote of a majority of those directors who are not "interested
persons" of the Company or the Adviser. On August 11, 1997, the Board of
Directors of the Company unanimously approved the continuance of the
-9-
<PAGE>
Advisory Agreement until November 6, 1998. The Advisory Agreement may be
terminated at any time without penalty by vote of the majority of the
outstanding voting securities of the Company or by a vote of a majority of the
entire Board of Directors of the Company on sixty days' written notice to the
Adviser or by the Adviser on sixty days' written notice to the Company. The
Advisory Agreement automatically terminates upon its assignment.
Under the Advisory Agreement, the Adviser provides investment management,
advisory and research services to the Company, advising the Company on the
composition of its portfolio and determining, subject to overall supervision by
the Company's Board of Directors, which securities may be bought and sold. In
addition, the Adviser furnishes to the Company office facilities and simple
business equipment and pays the cost of keeping the Company's books and records.
It also pays the fees and expenses of any director of the Company who is an
"affiliated person" of the Adviser (the only such person being Mr. Bergstrom)
and reimburses the Company for compensation paid to any officer of the Company.
The Advisory Agreement provides that the services to be performed by the
Adviser also may be performed by any organization with which the Adviser may
contract, subject to approval by the Company's Board of Directors and compliance
with applicable law, without relieving the Adviser of any responsibilities to
the Company it would have if it performed such services directly. Pursuant to
this provision, the Adviser has entered into two subadvisory agreements which
are described below.
The Advisory Agreement provides for the Company to pay the Adviser an
advisory fee which, on an annual basis, amounts to 3/4 of 1%, which rate is
higher than rates charged most other investment companies, of the first
$50,000,000 of the Company's average net assets, plus 1/2 of 1% of the value of
the average net assets in excess of $50,000,000, all in consideration of
providing the services described above. Such fee is to be computed weekly and
paid monthly. During the fiscal year ended December 31, 1996, the Company paid
the Adviser $880,853 in fees pursuant to the Advisory Agreement.
The Advisory Agreement also provides that the Company will generally pay
all of its operating expenses subject to the following limitation on expenses:
if in any fiscal year of the Company the sum of the fee paid and payable to the
Adviser for such year plus the operating expenses of the Company for such year
exceeds 1-1/2% of the first $50,000,000 of the Company's average net assets,
plus 1% of the Company's average net assets in excess of $50,000,000, the
Adviser will reimburse the Company for such excess, up to the amount of the fee
received by the Adviser for such year. In the event the excess operating
expenses are greater than the fee for such year, the maximum amount payable by
the Adviser would be the amount of the fee received, and there would be no
carry-forward or carry-back of the unrecovered portion to any other period. The
Advisory Agreement provides for quarterly reviews of the operating expenses and
for interim reductions in the amount of the fee then payable to the Adviser for
the balance of the year (subject to later adjustment) if it appears likely that
the operating expense limitation for the year will be exceeded. During the 1996
fiscal year, there were no fee reductions nor reimbursements for excess
expenses.
Mr. Bergstrom has licensed to the Company, on a royalty-free, non-exclusive
basis, the word Bergstrom for use in the Company's name in connection with its
business as an investment company. Mr. Bergstrom has the right to terminate
this license upon the termination of the Advisory Agreement. Mr. Bergstrom may
use or license the word Bergstrom in connection with the Adviser, other
investment companies and other business enterprises.
INVESTMENT RESEARCH AND SUBADVISORY ARRANGEMENTS
General Information. At present, the Adviser has investment research and
subadvisory arrangements with RCM and Frank A. Branson, Inc. ("Branson") with
respect to certain portions of the marketable securities held or to be acquired
by the Company. Pursuant to such arrangements, the Adviser has given RCM and
Branson authority, in varying degrees, to effect purchases and sales of
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<PAGE>
portfolio securities on behalf of the Company. At June 30, 1997, RCM and
Branson had subadvisory responsibilities for approximately $82.9 million and
$40.4 million, or 51.3% and 25.0%, respectively, of the net assets of the
Company. The balance of the assets of the Company was under the direct
investment management responsibility of the Adviser. During 1996, the Adviser
paid RCM and its predecessor, RCM Capital Management, a California Limited
Partnership ("RCMLP"), aggregate fees of $302,346, and Branson aggregate fees of
$122,218, out of the fees the Adviser received from the Company.
Information About RCM Capital Management, L.L.C. RCM is a wholly owned
subsidiary of Dresdner Bank AG, an international banking organization
headquartered in Frankfurt, Germany. RCM has been a subadviser to the Company
since June 1996, when it acquired RCMLP. From 1986 until June 1996, RCMLP acted
as a subadviser to the Company. Subject to the oversight of RCM's Board of
Managers, the day-to-day business of RCM is managed by RCM Limited L.P. ("RCM
Limited"), the former general partner of RCMLP. The sole general partner of RCM
Limited is RCM General Corporation ("RCM General"). The business address of
RCM, RCM Limited and RCM General is Four Embarcadero Center, San Francisco,
California 94111.
Terms of the Investment Management and Advisory Agreement between RCM and
the Adviser. The Investment Management and Advisory Agreement between RCM and
the Adviser (the "RCM Agreement") continues in effect until November 6, 1997,
and thereafter continues automatically for successive annual periods, provided
that such continuance is specifically approved at least annually by vote of a
majority of the outstanding voting securities of the Company or by the Board of
Directors of the Company, together with, in each instance, the vote of a
majority of those directors who are not "interested persons" of the Company, the
Adviser or RCM. The Board of Directors expects to consider the continuation of
the RCM Agreement at its regular meeting to be held on November 3, 1997. The
Company may at any time terminate the RCM Agreement upon sixty days' written
notice to RCM and to the Adviser either by majority vote of the Board of
Directors of the Company or by the vote of a majority of the outstanding voting
securities of the Company. With the prior approval of the Board of Directors of
the Company, the Adviser may at any time terminate the RCM Agreement upon sixty
days' written notice to RCM. RCM may at any time terminate the RCM Agreement
upon sixty days' written notice to the Company and to the Adviser. The RCM
Agreement automatically terminates upon its assignment or upon termination of
the Advisory Agreement.
Under the RCM Agreement, the Adviser grants to RCM full authority to manage
the investment and reinvestment of a portion of the Company's assets (the "RCM
Portfolio"). Such investment and reinvestment are in RCM's discretion but are
required to be consistent with the investment objectives, policies and
restrictions of the Company as furnished to RCM by the Adviser. The Adviser has
the authority to vary the amount of assets in the RCM Portfolio in its
discretion. Under the RCM Agreement, RCM is required to furnish the Company and
the Adviser with quarterly statements of the RCM Portfolio, as well as
statements evidencing any purchases and sales for the RCM Portfolio.
Set forth below is the schedule of annual fees payable by the Adviser to
RCM under the RCM Agreement. The fee is calculated quarterly.
<TABLE>
<CAPTION>
MARKET VALUE OF SECURITIES AND CASH FEE
----------------------------------- ---
<S> <C>
On the first $10,000,000 or fraction thereof........... 0.70% annually
On the next $10,000,000 or fraction thereof............ 0.60% annually
On the next $20,000,000 or fraction thereof............ 0.50% annually
On the next $20,000,000 or fraction thereof............ 0.35% annually
On the next $40,000,000 or fraction thereof............ 0.30% annually
On sums exceeding $100,000,000......................... 0.25% annually
</TABLE>
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<PAGE>
RCM has authority to invest a portion of the Company's assets in the shares of
any investment company advised by RCM. Such shares are not included in the
calculation of the market value of securities and cash managed by RCM for
purposes of determining the fee paid by the Adviser to RCM, but are included in
such calculation for purposes of determining the fee paid by the Company to the
Adviser.
As of June 30, 1997, approximately $2.3 million, $2.2 million and $2.2
million, respectively, of the Company's assets were invested in the RCM Growth
Equity Fund, the RCM Small Cap Fund and the RCM International Growth Equity Fund
A (the "RCM Funds"), each a series of the RCM Capital Funds, Inc., an open-end
investment company which is advised by RCM. The RCM Growth Equity Fund and the
RCM International Growth Equity Fund A pay RCM an annual fee of 0.75% of average
net assets, and the RCM Small Cap Fund pays RCM an annual fee of 1% of average
net assets. These fees are higher than the fees that are paid by most
investment companies; however, these fees are comparable to the fees paid by
other investment companies with similar investment objectives. Although the
Company does not pay these fees to RCM directly, any return of the Company on
its investment in the RCM Funds, like any return of the Company on its
investment in other investment companies, is reduced by the amount of these
fees. As of June 30, 1997, approximately 8.1% of the Company's total assets was
invested in investment companies, including the RCM Funds. The RCM Funds do not
charge any sales load, redemption fee or distribution fee.
Information About Frank A. Branson, Inc. Branson is a California
corporation with its business address at 555 Twin Dolphin Drive, Suite 185,
Redwood City, California 94065. Branson has been a subadviser to the Company
since 1986.
Terms of the Investment Research Agreement between Branson and the Adviser.
The Investment Research Agreement (the "Branson Agreement") between Branson and
the Adviser continues automatically for successive annual periods, provided that
such continuance is specifically approved at least annually by vote of a
majority of outstanding voting securities of the Company or by the Board of
Directors of the Company, together with, in each instance, the vote of a
majority of those directors of the Company who are not "interested persons" of
the Company, the Adviser or Branson. On August 11, 1997, the Board of Directors
of the Company unanimously approved the continuance of the Branson Agreement
until November 6, 1998. The Branson Agreement may be terminated at any time by
vote of the majority of the outstanding voting securities of the Company or by a
vote of a majority of the entire Board of Directors of the Company on sixty
days' written notice to Branson and the Adviser; or with the prior approval of
the Board of Directors of the Company, by the Adviser on sixty days' written
notice to Branson; or by Branson on sixty days' written notice to the Adviser
and to the Company. The Branson Agreement automatically terminates upon its
assignment or upon termination of the Advisory Agreement.
Under the Branson Agreement, Branson provides to the Adviser investment
research relating to marketable securities useful to the Adviser in the
performance of its activities under the Advisory Agreement. The Adviser from
time to time advises Branson as to the amount of the assets of the Company for
which Branson has subadvisory responsibility, and such responsibility is limited
to that amount and continues until modified by the Adviser. The Branson
Agreement provides that, except to the extent expressly authorized by the
Adviser, Branson has no authority to determine the nature or timing of changes
in the portfolio of the Company or the manner of effecting such changes or to
cause the purchase or sale of portfolio securities. The Adviser has delegated
and intends to continue to delegate to Branson discretionary authority in
varying degrees to purchase or sell portfolio securities for the Company,
typically with limitations on maximum amounts of securities which may be
purchased or sold and limitations on maximum purchase and minimum sale prices,
outside of which limitations Branson would be required to consult with the
Adviser.
The Adviser pays to Branson compensation at the annual rate of 3/8 of 1% of
the value of the assets of the Company for which Branson has investment or
advisory responsibility as of the date of such computation. Compensation under
the Branson Agreement is calculated and accrued quarterly.
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<PAGE>
COMPLIANCE WITH SECTION 30(h) OF THE 1940 ACT
Section 30(h) of the 1940 Act requires the Company's officers, directors
and investment advisers, the affiliated persons of such investment advisers, and
the beneficial owners of more than ten percent of the Company's Capital Stock to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission and the American Stock Exchange, and to
provide copies of such reports to the Company.
Based solely on a review of the copies of such reports received by it and
of written representations by reporting persons that no additional reports are
due, the Company believes that all Section 30(h) filing requirements for 1996
were satisfied, except as follows. Gerhard Eberstadt and George N. Fugelsang,
directors of RCM, failed to file on a timely basis their initial reports of
ownership on Form 3. This information was subsequently reported, as required,
on Form 5.
STOCKHOLDER PROPOSALS FOR 1998 PROXY STATEMENT
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders to be held during 1998 must be received at the Company's principal
office on or before June 1, 1998 in order to be considered for inclusion in the
Company's Proxy Statement and form of Proxy for such meeting.
OTHER BUSINESS
As of the date of this Proxy Statement neither management of the Company
nor the Adviser knows of any business other than as set forth in the Notice of
Annual Meeting of Stockholders to come before the meeting. If any other
business is properly brought before the meeting, or any adjournment thereof, all
Proxies will be voted in accordance with the best judgment of the persons voting
such Proxies as to such business.
September 26, 1997
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<PAGE>
P R O X Y
BERGSTROM CAPITAL CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints WILLIAM L. McQUEEN, PAMELA A. FIORINI
and ELIZABETH C. HEDLUND, and each of them, with full power of substitution, as
proxies for the undersigned, to vote, act and consent with respect to any and
all shares of the Capital Stock, $1 par value, of Bergstrom Capital Corporation
(the "Company"), which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of the Company (the "Meeting") to be held in the Cutter Room,
The Rainier Club, Fourth Avenue and Marion Street, Seattle, Washington, at 11:00
a.m., Seattle time, on November 3, 1997, and at any continuation or adjournment
thereof, with all powers the undersigned would possess if personally present,
upon such business as may properly come before the Meeting including the
following:
1. Election of Directors (unless authority to vote for the nominees named
below is withheld as provided below).
FOR WITHHELD
Erik E. Bergstrom [_] [_]
George Cole Scott [_] [_]
William H. Sperber [_] [_]
2. Ratification of selection of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as independent [_] [_] [_]
accountants of the Company for
the year ending December 31, 1997.
3. To vote in their discretion on such other matters as may properly come
before the Meeting or any adjournment thereof.
This Proxy will be voted as directed. In the absence of direction, this Proxy
will be voted FOR each of the nominees for election and FOR proposal 2.
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting and Proxy Statement.
DATED:_____________________________, 1997
_________________________________________
_________________________________________
(Please date and sign exactly as your
name appears at left. Joint owners
should each sign. If signing as
executor, administrator, attorney,
trustee, or guardian, give title as
such. If a corporation, sign in full
corporate name by authorized officer.
If a partnership, sign in the name of
authorized person.)
This Proxy covers shares registered as
designated at left. Proxies for other
forms of registration must be voted
separately.
STOCKHOLDERS ARE URGED TO MARK, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
PLEASE DO NOT FORGET TO DATE THIS PROXY.
