BMC FUND, INC.
POST OFFICE BOX 500
800 GOLFVIEW PARK
LENOIR, NORTH CAROLINA 28645
828-758-6100 extension 22
828-754-7335 fax
August 14, 1998
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, NW
Washington, DC 20549
Re: BMC Fund, Inc. - Definitive Proxy Materials
Ladies or Gentlemen:
We hereby transmit electronically the notice of the
annual meeting, proxy statement and form of proxy
schedule which was mailed by BMC Fund, Inc. ("the
Company") on July 1, 1998, in connection
with the annual meeting of shareholders of the
Company held July 25, 1998.
Please accept our sincere apologies for the late
date of this filing, which is due to an
administrative oversight.
Please contact the undersigned or E. D. Beach,
President (828-758-6102) with your questions or
comments.
Yours very truly,
/s/ Carol Frye
Carol Frye
Assistant Secretary and
Assistant Treasurer
Enclosures
<PAGE>
BMC FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 25, 1998
NOTICE IS HEREBY GIVEN THAT the annual meeting of
shareholders of BMC Fund, Inc. (the "Corporation") will be held on
Saturday, July 25, 1998, at 9:30 a.m., The Greenbrier, White
Sulphur Springs, WV 24986, for the following purposes:
i. To elect 11 directors to hold office until the next annual
meeting of shareholders and until their successors have been elected
and qualified.
ii. To ratify or reject the selection by the Board of Directors
of the firm of Deloitte & Touche as the Corporation's auditor.
iii. To transact such other business as may properly come
before the meeting.
Only shareholders of record as of the close of business on
June 1, 1998 are entitled to notice of, and to vote at, the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED FORM OF PROXY AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AT THAT TIME AND VOTE IN PERSON.
July 1, 1998
By Order of the Board of Directors
Paul H. Broyhill
Chairman of the Board
<PAGE>
BMC FUND, INC.
Golfview Park
Lenoir, North Carolina 28645
(Tel.: (828) 758-6102)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 25, 1998
This proxy statement is furnished in connection with
the solicitation by BMC Fund, Inc. (the "Corporation") of proxies
for use at the annual meeting of shareholders to be held at The
Greenbrier, White Sulphur Springs, WV 24986 on Saturday, July
25, 1998, at 9:30 a.m., and at any and all adjournments thereof, for
the purpose of considering and acting upon the matters specified in
the accompanying notice of the meeting and detailed below. The
Corporation is soliciting such proxies by mail on behalf of its Board
of Directors and is bearing the expenses of the solicitation. This
proxy statement and the enclosed proxy form are first being sent to
shareholders on or about July 1, 1998.
The Board of Directors has fixed the close of
business on June 1, 1998 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting. On the
record date, 4,933,281 shares of Common Stock of the Corporation
were issued and outstanding, each share being entitled to one vote.
Information concerning beneficial ownership of Common Stock by
principal shareholders and by the management of the Corporation is
set forth below. See "Principal Shareholders" and "Election of
Directors."
Shares represented by proxies will be voted by the
proxy agents named therein unless such proxies are revoked. The
proxy agents will vote the proxies that they hold in accordance with
the choices specified by the person giving the proxy. If the enclosed
proxy reflects no specification but is properly signed, the proxy
agents will vote the shares represented thereby for the election of the
slate of nominees listed on the proxy and in favor of the ratification
of the appointment of accountants.
Any shareholder who submits the accompanying
proxy has the right to revoke it by notifying the Secretary of the
Corporation in writing at any time prior to the voting of the proxy.
A proxy is suspended if the person giving the proxy attends the
meeting and elects to vote in person.
A majority of votes entitled to be cast on a particular
matter, represented in person or by proxy, constitutes a quorum for
purposes of matters to be considered at the annual meeting. Once a
share is represented for any purpose at a meeting, it is considered
present for quorum purposes for the remainder of the meeting and
any adjournment thereof (unless a new record date is set for the
adjourned meeting). Shares which are withheld as to voting with
respect to one or more nominees for director and abstentions are
counted in determining the existence of a quorum.
The Board of Directors is not aware of any business
to come before the meeting other than the matters described in the
accompanying notice of the meeting. If any other matters of
business are properly presented at the meeting, however, the proxy
agents will vote upon such matters in accordance with their best
judgment.
The Corporation will furnish, without charge, a copy
of its annual report (and the most recent semi-annual report
succeeding the annual report, if any) for the fiscal year ended March
31, 1998 to a shareholder upon request. Any such request should be
directed to the Assistant Secretary of the Corporation by writing to
Carol Frye at the Corporation, Golfview Park, Lenoir, North
Carolina 28645. (A stamped, addressed postal card is enclosed for
use in requesting such report.) This annual report was previously
furnished to shareholders on May 22, 1998.
ELECTION OF DIRECTORS
The bylaws of the Corporation provide that the
number of directors of the Corporation shall be not less than three
nor more than 17. Unless contrary action is specified by a
shareholder on the enclosed proxy, the proxy agents named in the
proxy intend to vote the proxies received by them for the election of
the 11 nominees listed below, who, if elected, will hold office until
the next annual meeting of shareholders and until their respective
successors have been elected and qualified. Information about the
nominees' beneficial ownership of the Corporation's Common Stock
as of June 1, 1998 is set forth in the following table, and information
about their business experience is set forth in the paragraphs that
follow the table.
Amount and Nature of Beneficial
Ownership of Common Stock
Percent of
Voting and InvestmentPower Outstanding
Name and Age Sole Shared Common Stock
E. D. Beach (73)* 300 87,043 (2) 1.8%
James T.
Broyhill (70)* See "Principal Shareholders"
Paul H.
Broyhill (74)* See "Principal Shareholders"
William E.
Cooper (76) 3,240 0 (1)
Lawrence Z.
Crockett (69) 200 0 (1)
Willard A.
Gortner (72)* 166,469 661,877 16.8%
Allene B.
Heilman (76)* See "Principal Shareholders"
Harry Heltzer (86) 200 6,060 (1)
Gene A. Hoots (59) 25 0 (1)
Dolph W.
von Arx (63) 25 -- (1)
Michael
Landry (52) 25 -- (1)
All directors and
officers as a
group (12 persons) 2,725,119 1,039,026 76.3%
__________________________
* Interested person of the Corporation as defined in the
Investment Company Act of 1940.
(1) Total shares represent less than 1.0% of the Corporation's
outstanding Common Stock.
(2) See note (2) to the table beneath the heading "Principal
Shareholders" elsewhere in this Proxy Statement.
Mr. E. D. Beach, a Certified Public Accountant,
retired in February 1986 as Vice President and Vice Chairman of the
Board of Broyhill Furniture Industries, Inc. ("BFI"), which he had
served in an executive capacity for over 10 years. He is President of
the Corporation and has served as a director from 1976 until March
1981 and from April 1981 until the present. He is a director and
holds executive positions with Broyhill Industries, Inc. and P. B.
Realty, Inc., the Corporation's two wholly owned subsidiaries, and
with Broyhill Investments, Inc. ("Broyhill Investments"), an affiliate
of the Corporation. Mr. Beach also is a director or trustee of 37
funds, all of which are registered investment companies, sponsored
by Prudential Securities, Inc. or its affiliates. He also serves on the
Southern Advisory Board of Arkwright Mutual Insurance
Company. Mr. Beach is an interested person of the Corporation
by virtue of his serving as President of the Corporation.
Mr. James T. Broyhill served as the Secretary of the
North Carolina Department of Economic and Community
Development from February 10, 1989 until March 31, 1991. From
January 1984 to February 1989, Mr. Broyhill served as Chairman
of The North Carolina Economic Development Board. Mr.
Broyhill was a United States Senator for North Carolina from his
appointment in July 1986 until November 1986. Prior to serving
as United States Senator, Mr. Broyhill served North Carolina as a
Representative in the United States House of Representatives for
over 23 years. Mr. Broyhill is an interested person of the
Corporation by virtue of his beneficial ownership of more than five
percent of the Corporation's Common Stock. See "Principal
Shareholders."
Mr. Paul H. Broyhill served BFI as President until
1980, Chief Executive Officer until 1984 and Chairman of the
Board until 1986. He resigned as Vice President and a director of
BFI's parent company, Interco Incorporated, effective December
31, 1985. He has been Chief Executive Officer and Chairman of
the Board of Directors of the Corporation since 1976 and is
Chairman and a director of the Corporation's two wholly owned
subsidiaries. He is also Chairman and a director of Broyhill
Investments, an affiliate of the Corporation. Mr. Broyhill is a
trustee of Mackenzie Series Trust and Ivy Funds and a director of
Mackenzie Funds, Inc., all of which are registered investment
companies. He serves as a member of the audit committee of these
funds. Mr. Broyhill is an interested person of the Corporation by
virtue of his serving as Chief Executive Officer of the Corporation
and his beneficial ownership of more than five percent of the
Corporation's Common Stock. See "Principal Shareholders."
Mr. William E. Cooper was associated with Dallas
Market Center Company (a wholesale merchandise mart in Dallas,
Texas) for 25 years. He served that company during its
development in various executive capacities starting as Vice
President and General Manager in 1958, and was Chairman of the
Board of Directors and Chief Executive Officer prior to his
retirement in 1983, when he was voted Chairman Emeritus. He
continues to serve on the Board of Dallas Market Center Company.
Concurrently, Mr. Cooper served as President or Chairman of the
World Trade Center Company, Houston Decorative Center and
Dallas Market Center Development Company. He is past
Chairman of the Dallas/Fort Worth International Airport Board.
Mr. Cooper is very active in many Dallas civic organizations.
Mr. Lawrence Z. Crockett was, until 1978, a
Director and the Chief Executive Officer of Mortgage Corporation
of the South, a subsidiary of Bank of Boston. His career spanned
over 25 years in the mortgage banking industry and subsequent to
1978 he has been an investor in and developer of various
entrepreneurial activities mostly involved in real estate.
Mr. Willard A. Gortner served as a Vice President--
Sales Division of Smith Barney, Harris Upham & Co., Inc., prior
to his taking medical leave in May 1981 and his retirement in
1982. He has served the Corporation as a director from 1976 until
March 1981 and from April 1981 until the present. Mr. Gortner is
an interested person of the Corporation by virtue of his marriage to
Satie E. Gortner, who beneficially owns more than five percent of
the Corporation's Common Stock. See "Principal Shareholders."
Mrs. Allene B. Heilman, a principal shareholder of
the Corporation, was married to W. E. Stevens, Jr., who was a
director of the Corporation until his death in June 1983. She is an
interested person of the Corporation by virtue of her beneficial
ownership of more than five percent of the Corporation's Common
Stock. See "Principal Shareholders."
Mr. Harry Heltzer is a former President, Chief
Executive Officer and Chairman of the Board of Minnesota Mining
& Manufacturing Co., which he served in executive capacities for
many years until his retirement in 1975.
Mr. Gene A. Hoots is a principal in Cornercap
Investment Capital, a registered investment adviser serving private
and pension fund clients. Cornercap Investment Capital is an
investment adviser to Broyhill Family Foundation, Inc. (the
"Foundation"), a nonprofit corporation affiliated with Paul H.
Broyhill and members of his family. Cornercap Investment
Capital receives annual advisory fees from the Foundation not to
exceed 1% of the value of the Foundation assets managed by
Cornerstone Capital. From 1986 until June 1988, Mr. Hoots was
Vice President of Reich & Tang, Inc., a New York investment
counseling firm serving private pension funds, university
endowments and individuals. Prior to joining that firm, Mr. Hoots
was employed by RJR Nabisco, Inc., where for several years he
was responsible for monitoring the investment of that company's
pension and employee savings fund assets and was involved in
other investment activities.
Mr. Michael G. Landry, president and chief
executive officer of Mackenzie Investment Management (MIMI),
has been involved in the investment management business for 23
years. Concurrently, he is president of Ivy Management, Inc. and
serves as head of MIMI's global investment team for the Ivy
Funds. Prior to joining MIMI in 1987, he was a senior vice
president and global portfolio manager with Templeton
International. Mr. Landry is a founding member and former
director of the International Society of Financial Analysts. He is
also a former director of the Association of Canadian Pension
Management.
Mr. Dolph W. von Arx is the former chairman,
president and chief executive officer of Planters LifeSavers
Company, an affiliate of RJR Nabisco, Inc. He retired in 1991
from this position after 33 years in the consumer products business.
Mr. von Arx joined R.J. Reynolds Tobacco Company, another RJR
Nabisco affiliate, in December 1987 as president and chief
executive officer. He became president of Planters LifeSavers in
December 1988. Mr. von Arx is a former member of the Reynolds
Tobacco and Planters LifeSavers boards of directors. Prior to
joining the RJR organization, Mr. von Arx was executive vice
president of Thomas J. Lipton, Inc.'s general management group
and a member of its board of directors and executive committee.
Mr. von Arx serves as chairman of the board of directors of
Morrison's Fresh Cooking, Inc., and is a member of the boards of
directors of Ruby Tuesday, Inc., International Multifoods,
Mackenzie Investment Management, Inc., Village Banc Naples and
Cree Research, Inc.
Messrs. von Arx and Landry were elected to the
Board of Directors in August 1993. Gene A. Hoots was elected to
the Board of Directors in October 1987. Allene B. Heilman and
Larry Z. Crockett were elected as directors in October 1983. E. D.
Beach, William E. Cooper, Willard A. Gortner and Harry Heltzer
were elected to the Board of Directors in April 1981 (Messrs.
Beach and Gortner having first been elected to the Board in 1976
and having resigned in March 1981). The remaining nominees
have served on the Board of Directors continuously since 1976.
Paul and James Broyhill and Allene B. Heilman are
the children of J. E. Broyhill, a principal shareholder of the
Corporation until his death on July 1, 1988. Mr. Gortner is their
brother-in-law, by virtue of his marriage to Satie E. Gortner, who
is also a daughter of Mr. J. E. Broyhill and a principal shareholder
of the Corporation.
It is not anticipated that any of the nominees will be
unable or unwilling to serve; but, if that should occur, the proxies
shall be voted for a replacement nominee designated by the present
Board of Directors or the number of directors to be elected shall be
reduced.
The corporation laws of North Carolina, under
which the Corporation is incorporated, provide that shareholders of
a company, such as the Corporation, incorporated before July 7,
1957, under a charter not granting the right of cumulative voting
and which has at the time of the election of directors one
shareholder who owns or controls more than 25% of the company's
voting stock shall have the right to cumulate their votes for
directors. Paul H. Broyhill is expected to own or control more than
25% of such voting shares at such time, and therefore shareholders
of the Corporation shall have the right to cumulate their votes for
the election of directors at the meeting.
When cumulative voting is applicable, every share-
holder entitled to vote at such election shall have the right to vote,
in person or by proxy, the number of shares standing of record in
his name for as many persons as there are directors to be elected
and for whose election he has a right to vote, or to cumulate his
votes by giving one nominee as many votes as the number of such
directors multiplied by the number of his shares shall equal, or by
distributing such votes on the same principle among any number of
such nominees. The proxy agents named in the accompanying
proxy also shall have the right in their discretion to cumulate votes
represented by the proxies that they hold, and to cast such
cumulated votes for less than all of the nominees, provided that
such agents in no event shall cast a vote for a nominee with regard
to whom authority to vote has been withheld by the person giving
the proxy.
Under the laws of North Carolina, the persons
receiving a plurality of the votes cast by the shares entitled to vote
will be elected as directors. The Board of Directors recommends a
vote FOR the entire slate of nominees set forth above.
ADMINISTRATION OF THE CORPORATION
Administration of the Corporation is primarily the
responsibility of the Corporation's Chairman and Chief Executive
Officer, Paul H. Broyhill, and its President, E. D. Beach. The
Corporation's portfolio is managed primarily by such officers,
under the supervision of the Board of Directors. The Corporation
has investment advisory agreements with two investment advisers,
IBJ Schroder Bank & Trust Company ("Schroder") and W. H.
Reaves & Co., Inc. ("Reaves"). Schroder and Reaves are
responsible for managing approximately $24,000,000 of the
Corporation's assets. The shareholders of the Corporation
approved the agreements with Schroder and Reaves in 1986 and
1990, respectively, and the Board of Directors, including a
majority of the directors who are not interested persons of the
Corporation, has approved such agreements annually since such
shareholder approval was obtained. Schroder is located at One
State Street, New York, New York 10004. Reaves is located at 10
Exchange Place, Jersey City, New Jersey 07032.
The Custodian of the Corporation's portfolio
securities is First Union National Bank of North Carolina,
Charlotte, North Carolina, pursuant to an Amended and Restated
Custodian Agreement dated as of December 31, 1986.
RATIFICATION OR REJECTION OF AUDITOR
The Board of Directors of the Corporation has
selected the firm of Deloitte & Touche as the Corporation's auditor
for the fiscal year beginning April 1, 1998, subject to ratification
by shareholders. Deloitte & Touche served as the Corporation's
auditor for the fiscal year ended March 31, 1998.
Neither Deloitte & Touche nor any of its members
has any direct or indirect financial interest in or any connection
with the Corporation in any capacity other than as independent
public accountants.
A representative of Deloitte & Touche may attend
the meeting. Such representative will have an opportunity to make
a statement if he desires to do so and will be available to respond
to appropriate questions.
In order for the Board's selection of Deloitte &
Touche to be effective, the holders of a majority of the shares
entitled to vote at the meeting must ratify such selection. The
Board of Directors recommends a vote FOR the approval of such
ratification.
PRINCIPAL SHAREHOLDERS
The following table reflects information concerning
those persons known to the Corporation to own beneficially 5% or
more of the Corporation's Common Stock as of June 1, 1998:
Voting and Percent of
Name Investment Power Outstanding
and Address Sole Shared Common Stock
Paul H. Broyhill 1,273,099(1) 328,583(2) 32.5%
135 Claron Place, S.E.
Lenoir, NC
James T. Broyhill 810,788 130,765 19.1%
1930 Virginia Road
Winston-Salem, NC 27104
Satie E. Gortner 661,877 92,717 15.3%
PH-1 4601 Gulf Shore Blvd. North
Naples, FL 33940-2215
Allene B. Heilman 470,298 0 9.5%
941 Bay Esplanade
Clearwater, FL 34630
Broyhill Investments, Inc. 316,871 0 6.4%
Golfview Park
Lenoir, NC 28645
__________________________
(1) Includes 316,871 shares owned of record by Broyhill
Investments, Inc., the voting stock of which is principally owned
by Paul H. Broyhill and his immediate family.
(2) Includes 85,973 shares owned of record by Broyhill Family
Foundation, Inc., a non-profit corporation. By resolution of the
Foundation trustees, E. D. Beach and Paul H. Broyhill control the
voting and disposition of shares of the Corporation owned by the
Foundation.
MANAGEMENT
Executive Officers
The executive officers of the Corporation are Paul
H. Broyhill, age 74 (Chief Executive Officer), and E. D. Beach,
age 73 (President, Secretary and Treasurer). Messrs. Broyhill and
Beach have served in executive capacities with the Corporation
and its predecessors for more than five years.
Compensation
For the fiscal year ended March 31, 1998, the
Corporation paid Paul H. Broyhill and E. D. Beach an annual
salary of $16,000 and $50,000, respectively, for their services to
the Corporation as executive officers. Directors other than those
who are officers of the Corporation or who are related by blood or
marriage to the Broyhill family are paid $1,000 per year, plus
$1,000 per meeting attended, for service on the Board. Each such
outside director is paid an additional $1,000 for each day of
attending a committee meeting held other than on the date of a
Board meeting. In addition, all directors are reimbursed for their
reasonable expenses incurred in attending meetings.
The following table sets forth the aggregate
compensation from the Corporation for the fiscal year ended
March 31, 1998 for each director and for Paul H. Broyhill and E.
D. Beach in their capacities as directors and executive officers.
The Corporation currently has no pension or retirement plan for
directors or employees.
Name of Person and Position
Aggregate Compensation From Fund
Paul H. Broyhill
(Chairman, Chief Executive
Officer and Director)
$16,000
E. D. Beach
(Director and President)
50,000
Clarence E. Beach
(Former Director)
1,500
James T. Broyhill
(Director)
0
William E. Cooper
(Director)
3,000
Lawrence Z. Crockett
(Director)
3,000
Willard A. Gortner
(Director)
0
Allene B. Heilman
(Director)
0
Harry Heltzer
(Director)
3,000
Clarence A. Holden
(Former Director)
1,500
Gene A. Hoots
(Director)
4,000
Michael G. Landry
(Director)
3,000
Dolph W. von Arx
(Director)
2,000
Certain Transactions
The Corporation leases its executive offices from
Broyhill Investments, a corporation controlled by Paul H. Broyhill
and members of his family. The terms of the lease, which have
been approved by the Corporation's Board of Directors, including
those persons who are not interested persons of the Corporation,
provide that the Corporation and its two wholly owned subsidiaries
shall pay an annual rental of $18,000 to Broyhill Investments
during the term of the lease, which will expire November 30, 1998.
CORPORATE GOVERNANCE
The Board of Directors met two times during the
fiscal year ended March 31, 1998. The Board of Directors has an
Audit Committee, the members of which are William E. Cooper
(Chairman), Lawrence Z. Crockett, Harry Heltzer, Gene Hoots and
Dolph W. von Arx. The Audit Committee is responsible for
evaluating the effectiveness and independence of the Corporation's
independent auditors, inquiring into and considering the
effectiveness of management's financial and accounting functions
and its implementation of the auditors' recommendations with
respect to internal accounting controls and recommending to the
Board of Directors the appointment of auditors for the ensuing
year. The Audit Committee had one meeting during the fiscal year
ended March 31, 1998, with all members of the Committee in
attendance. The Board of Directors did not have a Compensation
or Nominating Committee during such year. Each member of the
Board except Mr. Clarence Beach attended at least 75% of the
meetings held by the Board and any committee(s) on which he or
she served.
SHAREHOLDER PROPOSALS
In order to be included in proxy material for the
1999 annual meeting of shareholders, shareholder proposals must
be received at the offices of the Corporation by March 19, 1999.
* * * *
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
BMC FUND, INC.
The undersigned hereby appoints Paul H. Broyhill and E. D.
Beach, or either of them, as agents, each with the power to appoint
his substitute, and hereby authorizes them to vote, as designated
below, all of the shares of Common Stock of BMC Fund, Inc. (the
"Corporation"), held of record by the undersigned on June 1, 1998,
at the annual meeting of shareholders to be held on July 25, 1998,
or at any adjournment thereof.
1. The election of 11 directors:
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked below to vote for all
to the contrary) [ ] nominees listed
below [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
E. D. Beach, James T. Broyhill, Paul H. Broyhill, William E.
Cooper, Lawrence Z. Crockett, Willard A. Gortner, Allene B.
Heilman, Harry Heltzer, Gene A. Hoots, Michael G. Landry,
Dolph W. von Arx,
2. Ratify the selection of the firm of Deloitte & Touche as the
Corporation's auditor for the fiscal year beginning April 1, 1998.
APPROVE [ ] DISAPPROVE [ ] ABSTAIN [ ]
3. In their discretion, the proxy agents are authorized to vote upon
such other business as may come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES FOR DIRECTOR AND
TO APPROVE PROPOSAL 2.
Dated __________________, 1998
______________________________
Signature*
_______________________________
Signature*
*Please sign exactly as the name appears hereon.
When shares are held in joint accounts, each joint
owner should sign. Executors, administrators,
trustees, guardians, attorneys and corporate officers
should indicate their titles.
