BMC FUND INC, DEF 14A, 1999-07-07

BMC FUND INC
DEF 14A, 1999-07-07

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SCHEDULE 14A

Information Required in Proxy Statement

Reg. ss. 240.14a-101

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

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

Check the appropriate box:

|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

BMC Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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:

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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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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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:
<PAGE>

BMC FUND, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 31, 1999

NOTICE IS HEREBY GIVEN THAT the annual meeting of shareholders of BMC
Fund, Inc. (the "Corporation") will be held on Saturday, July 31, 1999, at 9:30
a.m., at Linville Ridge Country Club, Linville, North Carolina (telephone:
828-898-5151), for the following purposes:

1. To elect 12 directors to hold office until the next annual
meeting of shareholders and until their successors have been elected and
qualified.

2. To approve an Investment Advisory Agreement between the
Corporation and The Northern Trust Company dated as of August 1, 1999.

3. To approve an Investment Advisory Agreement between the
Corporation and Wellington Management Company, LLP dated as of August 1, 1999.

4. To approve an amendment to the Corporation's fundamental
investment policies to permit the issuance of certain senior securities
representing indebtedness.

5. To ratify or reject the selection by the Board of Directors of
the firm of Deloitte & Touche as the Corporation's auditor.

6. To transact such other business as may properly come before the
meeting.

Only shareholders of record as of the close of business on June 21, 1999
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 6, 1999 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 31, 1999

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 Linville Ridge Country Club, Linville, North
Carolina, on Saturday, July 31, 1999, 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 6, 1999.

The Board of Directors has fixed the close of business on June 21, 1999 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 other proposals
described in this proxy statement.

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

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<PAGE>

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, 1999 to a shareholder upon request. Any such
request should be directed to Carol Frye, Assistant Secretary of 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 25, 1999.

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 12 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 21, 1999 is set forth in the
following table, and information about their business experience is set forth in
the paragraphs that follow the table.

<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership of Common Stock
----------------------------------------------------

Voting and
Investment Power Percent of
---------------- Outstanding
Name and Age Sole Shared Common Stock
- ------------ ---- ------ ------------
<S> <C> <C> <C>
E. D. Beach (74)* 300 87,043 (1) 1.8%

James T. Broyhill (71)* See "Principal Shareholders"

Paul H. Broyhill (75)* See "Principal Shareholders"

William E. Cooper (77) 3,240 0 (2)

Lawrence Z. Crockett (70) 200 0 (2)
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership of Common Stock
----------------------------------------------------

<S> <C> <C> <C>
Willard A. Gortner (73)* 166,469 691,653 17.4%
</TABLE>

<TABLE>
<CAPTION>
Voting and
Investment Power Percent of
---------------- Outstanding
Name and Age Sole Shared Common Stock
- ------------ ---- ------ ------------
<S> <C> <C> <C>
Allene B. Heilman (77)* See "Principal Shareholders"

Harry Heltzer (87) 200 6,060 (2)

Gene A. Hoots (60) 25 0 (2)

Dolph W. von Arx* (64) 25 -- (2)

Michael Landry (53) 25 -- (2)

L. Glenn Orr, Jr. (59) -- -- (2)

All directors, nominees for director and
executive officers as a group (12 persons) 2,727,990 1,030,980 76.2%
</TABLE>

- ----------
* Interested person of the Corporation as defined in the Investment Company
Act of 1940.

(1) See note (2) to the table beneath the heading "Principal Shareholders"
elsewhere in this Proxy Statement.

(2) Total shares represent less than 1.0% of the Corporation's outstanding
Common Stock.

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 36 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.

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<PAGE>

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
since 1978 he has been an investor in and developer of various real estate and
other entrepreneurial activities.

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."

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<PAGE>

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 Counsel
("Cornercap"), a registered investment adviser serving private and pension fund
clients. Cornercap 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 receives annual advisory fees from the
Foundation not to exceed 1% of the value of the Foundation assets managed by
Cornercap. 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 Inc. (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 management 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 is chairman of Isolux America
and a member of the boards of directors of Ruby Tuesday, Inc., International
Multifoods, Mackenzie Investment Management, Inc., Northern Trust of Florida
Corporation and Cree Research, Inc. By virtue of his ownership of shares of
Northern Trust Corporation, the parent company of The Northern Trust Company and
a party to an Investment Advisory Agreement with the Corporation submitted for
approval by the shareholders at the 1999 annual meeting, Mr. von Arx is an
interested person of the Corporation.

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<PAGE>

Mr. L. Glenn Orr, Jr. is Chairman, President and CEO of Orr Management
Company, an investment banking firm. A thirty year veteran of the banking
industry, he is Chairman Emeritus and former Chairman, CEO and President of BB&T
Corporation, formerly Southern National Corporation, which he served in various
capacities beginning in 1982. In addition to his tenure at Southern National, he
served as President and CEO of Forsyth Bank & Trust Co. in Winston-Salem, NC;
President of Community Bank in Greenville, SC; and Vice President of Wachovia
Bank, N.A., in Winston-Salem, NC. In addition, Mr. Orr serves on the Board of
Directors of Ladd Furniture Company, AgriBioTech, Inc., Highwoods Properties and
Polymer Group. He is a graduate of Wofford College and the University of South
Carolina.

Mr. Orr is standing for election as a director for the first time at the
1999 annual meeting. 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 shareholder 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.

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<PAGE>

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 Whitehall Bank
& Trust Company ("Whitehall") and W.H. Reaves & Co., Inc. ("Reaves"). Whitehall
and Reaves are responsible for managing a total of approximately $26,882,684 of
the Corporation's assets. The shareholders of the Corporation approved the
agreements with Whitehall 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. Whitehall is located at One State Street, New
York, New York 10004. Reaves is located at 10 Exchange Place, Jersey City, New
Jersey 07032.

The shareholders approved an agreement with Northern Trust Bank of
Florida, N. A. ("Northern Trust of Florida") and with Wellington Management
Company, LLP at a special meeting of shareholders held on March 19, 1999. As
explained below, thereafter the parties determined not to enter into such
agreements.

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.

PROPOSALS RELATING TO INVESTMENT ADVISORY AGREEMENTS

Background

Investment Advisory Agreement with Northern Trust. Subject to approval of
the holders of the majority of the outstanding voting securities of the
Corporation, the Corporation proposes to enter into an Investment Advisory
Agreement, dated as of August 1, 1999, with The Northern Trust Company
("Northern Trust"). If the shareholders approve the Investment Advisory
Agreement (the "Northern Trust Agreement"), the Corporation will use the
services of Northern Trust in addition to (and not in lieu of) the services of
its other advisers. The description set forth below is qualified in its entirety
by the terms of the Northern Trust Agreement, a copy of which is attached hereto
as Exhibit A. First Union National Bank, the Corporation's Custodian, will
maintain custody of all assets managed by Northern Trust under the terms of the
Corporation's existing Custodian Agreement with First Union National Bank.

On February 17, 1999, the Board of Directors of the Corporation approved,
subject to

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<PAGE>

shareholder approval, an Investment Advisory Agreement, to be dated as of April
1, 1999, between the Corporation and Northern Trust of Florida, a sister
corporation of Chicago-based Northern Trust and a subsidiary of Northern Trust
Corporation. Following distribution of proxy materials for the March 19, 1999
special meeting of shareholders called for the purpose of approving the proposed
Investment Advisory Agreement with Northern Trust of Florida (as well as an
Investment Advisory Agreement with Wellington Management), Northern Trust of
Florida advised the Corporation that its sister corporation, Northern Trust,
might be better positioned to serve as investment adviser to the Corporation.
Pending resolution of this matter, the Corporation permitted the shareholders to
vote on the proposed agreement with Northern Trust of Florida at the special
meeting, and such agreement was approved. Following the special meeting, the
Corporation entered into discussions with Northern Trust regarding its serving
as investment adviser to the Corporation. As a result of these meetings,
management of the Corporation determined to recommend to the Board of Directors
that the Corporation enter into the proposed Investment Advisory Agreement with
Northern Trust, which agreement is identical in all material respects to the
agreement between the Corporation and Northern Trust of Florida.

The Corporation and Northern Trust of Florida did not enter into the
agreement approved by the Board in February and the shareholders in March.
Northern Trust of Florida provided no advisory services to, nor received
compensation from, the Corporation. The portfolio managers under the proposed
Investment Advisory Agreement with Northern Trust will be different from the
portfolio managers who would have advised the Corporation on behalf of Northern
Trust of Florida.

Dolph W. von Arx, who is a member of the Boards of Directors of the
Corporation and of Northern Trust of Florida Corporation, which is a subsidiary
of Northern Trust Corporation and a sister corporation of Northern Trust, owns
2002 shares of common stock of Northern Trust Corporation. By virtue of his
relationship with Northern Trust resulting from his owning such shares, Mr. von
Arx is an "interested person" of the Corporation as defined in the Investment
Company Act of 1940. Currently, five members of the eleven-member Board of
Directors of the Corporation are interested persons. Following the effectiveness
of the Investment Advisory Agreement with Northern Trust, and assuming Mr. Orr
is elected as a director, six of the members of the twelve-member Board will be
interested persons.

Investment Advisory Agreement with Wellington Management. Subject to
approval of the holders of the majority of the outstanding voting securities of
the Corporation, the Corporation proposes to enter into an Investment Advisory
Agreement, dated as of August 1, 1999, with Wellington Management (the
"Wellington Agreement" and, together with the Northern Trust Agreement, the
"Agreements"). If the shareholders approve the Wellington Agreement, the
Corporation will use the services of Wellington in addition to (and not in lieu
of) the services of its other advisers. The description set forth below is
qualified in its entirety by the terms of the Wellington Agreement, a copy of
which is attached hereto as Exhibit B. First Union National Bank, the
Corporation's Custodian, will maintain custody of all assets managed by
Wellington Management under the terms of the Corporation's existing Custodian
Agreement with First Union National Bank.

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<PAGE>

On March 19, 1999, the shareholders of the Corporation approved an
Investment Advisory Agreement dated as of April 1, 1999 between the Corporation
and Wellington Management. At the time the shareholders approved the agreement,
the parties contemplated that Wellington Management's investment activities on
behalf of the Corporation would be limited to investments in fixed income
securities. After the March 19 shareholders meeting and prior to April 1, 1999,
the Board of Directors determined that it would be in the Corporation's best
interests for management of the Corporation to continue to internally manage the
Corporation's fixed income assets it had previously intended to allocate to
Wellington Management, but to authorize Wellington Management to manage a
portion of the Corporation's equity portfolio. The Wellington Agreement is
identical in all material respects to the agreement approved by the Board in
February and by the shareholders in March, except that it reflects Wellington
Management's fees for managing equity investments, which are higher than its
fees for managing fixed income investments. The Corporation and Wellington
Management did not enter into the agreement approved by the Board in February
and the shareholders in March. Wellington Management provided no services to,
nor received compensation from, the Corporation thereunder.

Terms of the Agreements

The Agreements authorize Northern Trust and Wellington Management
(collectively, the "Advisers") to manage separate portions of the Corporation's
investment portfolio. The Board of Directors has authorized Paul H. Broyhill,
the Chairman of the Corporation, or E. D. Beach, the President of the
Corporation, to allocate a portion of the portfolio over which the Advisers
shall be given investment discretion. The Corporation from time to time may
increase or decrease the amount of assets under the Advisers' management,
depending on such factors as its investment performance in relation to the fees
charged by it, management's perception of the benefits of diversification of
external management of the Corporation's investments and administrative
considerations. The Corporation's investment portfolio as of March 31, 1999 was
valued at approximately $143 million, of which Whitehall and Reaves managed $19
million and $7.6 million, respectively, with the balance of approximately $115.7
million being managed internally. The Corporation currently expects that
management will maintain investment discretion with respect to approximately
$85.7 million of the Corporation's investment portfolio (based on the
Corporation's March 31, 1999 valuation) and will initially allocate $15 million
to Northern Trust and $15 million to Wellington Management.

The Agreements authorize and direct the Advisers to provide a continuous
investment program consistent with the Corporation's investment objectives and
policies and instructions of the Board of Directors. The Corporation's
investment in the aggregate must comply at all times with the Corporation's
objectives and policies, regardless of whether such investments are under the
direct management of the Board of Directors or of external investment advisers.
The Corporation may provide the Advisers with written instructions to enable
them to comply with the Corporation's investment objectives and policies. Such
instructions would reflect limitations on the Advisers investment activities
designed to prevent inadvertent violations of the Corporation's policies that
might otherwise result from more than one adviser managing separate portions of
the Corporation's assets. Except for compliance with these instructions, the
Advisers will not be responsible for

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<PAGE>

compliance with any requirement that the overall mix of the Corporation's assets
meets specified percentages.

The Agreements are each for a term of two years and may be renewed from
year to year by mutual consent, provided that such renewal shall be specifically
approved at least annually by the Board of Directors of the Corporation or by a
vote of the holders of the majority of the outstanding shares of the Corporation
to the extent required by the Investment Company Act of 1940. In either event,
the Agreements must be approved by a majority of those Directors who are not
interested persons of the Corporation. The Agreements may be terminated at any
time, without payment of any penalty, by the Board of Directors of the
Corporation or by a vote of the holders of a majority of the Corporation's
shares on 60 days' written notice to the Advisers, or by the Advisers on 90
days' written notice to the Corporation. The Agreements are not assignable by
either party. In the event of assignment by the Advisers, the Agreements
automatically terminate.

The Northern Trust Agreement provides for the payment of quarterly fees to
Northern Trust. The quarterly fee payable to the Northern Trust will be payable
in advance and will be the product of the closing value of the assets under
management on the last day of the preceding fiscal quarter multiplied by
0.0875%, subject to adjustment in the event the Corporation contributes assets
to or withdraws assets from Northern Trust's management during the quarter and
in the event that the Agreement is terminated prior to the end of a quarter. The
applicable percentage for assets in excess of $15 million will be 0.075% and for
assets in excess of $20 million will be 0.0625%. The minimum fee is $50,000 on
an annual basis. Northern Trust's investment activities on behalf of the
Corporation will include both fixed income investments and equity investments.
The foregoing fees were negotiated by the Corporation with Northern Trust and
reflect the customary fee structures of Northern Trust for the type of
investment program requested by the Corporation.

The Wellington Agreement provides for the payment of quarterly fees to
Wellington Management. The quarterly fee will be payable in advance and will be
the product of the average daily value of the assets under management for the
preceding fiscal quarter multiplied by 0.15% for equity investments and 0.075%
for fixed income investments, in each case subject to adjustment in the event
the Agreement is terminated prior to the end of a quarter. It is anticipated
that Wellington Management's activities will initially be limited to equity
security investments. The foregoing fees were negotiated by the Corporation with
Wellington Management and reflect the customary fee structures of Wellington
Management for the type of investment program requested by the Corporation.

Information Concerning Northern Trust

Northern Trust is an Illinois state bank with its principal offices
located at 50 South LaSalle Street, Chicago, Illinois 60675. Exhibit C is a list
of Northern Trust's principal executive officers and directors and their
addresses.

Northern Trust also serves as adviser to the Northern Institutional Funds
Balanced Portfolio, which had assets of $74.4 million as of May 31, 1999.
Northern Trust's agreement with such fund

-10-
<PAGE>

entitles Northern Trust to a fee equal to 0.80% of the assets under management
on an annual basis. Such rate has been reduced pursuant to a waiver to 0.50% on
an annual basis.

None of the officers or directors of the Corporation and none of the
directors or executive officers of Northern Trust has purchased or sold any
securities of Northern Trust or its parent, Northern Trust Corporation, in
excess of one percent of the outstanding shares since the beginning of the
Corporation's last fiscal year. None of the officers or directors of the
Corporation owns any securities of or has any other direct or indirect interest
in Northern Trust, except for Mr. von Arx as described above.

Information Concerning Wellington Management

Wellington Management is a Massachusetts limited liability partnership
with principal offices at 75 State Street, Boston, Massachusetts 02109.
Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations and other institutions and individuals. Wellington
Management's predecessor organizations have provided investment advisory
services for over 70 years. As of May 31, 1999, Wellington Management had
investment management authority with respect to approximately $217.9 billion in
assets.

Wellington Management is managed by its active partners. The managing
partners of Wellington Management as of June 15, 1999 were Laurie A. Gabriel,
Duncan M. McFarland and John R. Ryan. Exhibit D is a listing of the general
partners and senior vice presidents of Wellington Management as of June 15,
1999, all of whom may be reached at the principal offices of the firm.

Wellington Management serves as investment sub-adviser to other mutual
funds that have investment objectives similar to those of the Corporation. The
following table identifies those funds and sets forth the contractual investment
sub-advisory fee rates. All fees may be subject to waivers.

-11-
<PAGE>

Net Assets Schedule of Advisory Fees
at 5/31/99 -------------------------
Fund (mil) Net Assets Annual Rates
---- ---------- ---------- ------------

Hartford Stock HLS* $7,978.6 First $ 50,000,000 0.325%

Next 100,000,000 0.250%

Next 350,000,000 0.200%

Over 500,000,000 0.150%

The Hartford Stock Fund* $ 873.5 First $ 50,000,000 0.325%

Next 100,000,000 0.250%

Next 350,000,000 0.200%

Next 500,000,000 0.150%

Over 1,000,000,000 0.125%

- ----------
* As of May 31, 1999, Wellington Management managed approximately $36.1 billion
for mutual funds sponsored by Hartford Life Insurance Company, including this
Fund.

Impact of Agreements on the Corporation's Expenses

The Agreements with Northern Trust and Wellington Management will result
in an increase in the management fees currently being paid by the Corporation.
To illustrate this increase in fees, the following table shows in the left hand
column the actual fees (as a percentage of net assets) paid by the Corporation
for the year ended March 31, 1999 and in the right hand column the fees the
Corporation would have paid in such fiscal year had the Agreements been in
effect. The table assumes an allocation of $15 million in assets under
management to Northern Trust and $15 million in assets (equity securities) under
management to Wellington Management.

-12-
<PAGE>

Percentage of Net Assets
------------------------
Actual Pro Forma(1)
------ ------------

Annual Expenses

Management Fees............................ .080%
Northern Trust Agreement.......... .035%
Wellington Agreement.............. .060%
Total Management Fees....... .175%

Other Expenses(2).......................... .240%
Northern Trust Agreement.......... .000%
Wellington Agreement.............. .000%
Total Other Expenses........ .240%

Total Annual Expenses ..................... .320%
Northern Trust Agreement.......... .035%
Wellington Agreement.............. .060%
Total Annual Expenses....... .415%

----------
(1) After giving effect to the payment of advisory fees to the Advisers,
assuming the Agreements had been in effect beginning April 1, 1998
and the allocation of assets set forth above.

(2) Includes salaries, professional fees and other expenses.

The table set forth above and the following example are intended to assist
the Corporation's shareholders in understanding the indirect effect of the fees
payable under the Agreements on the shareholders' investment in the Corporation.
To facilitate the shareholders' comparison of this fee structure with fee
structures of other funds, the Securities and Exchange Commission requires the
Corporation to assume a 5% annual return. The Corporation has interpreted "5%
annual return" to mean growth in assets under management at a compounded annual
rate of 5%. The information set forth above and below should not be considered
to be a representation of past or future expenses, and actual expenses may be
greater or less than those shown.

-13-
<PAGE>

Example

You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------

Northern Trust Agreement........... $3.50 $10.99 $19.20 $43.40

Wellington Agreement............... $6.00 $18.80 $32.76 $73.39

Brokerage Commissions

The Corporation paid brokerage commissions in the aggregate of $54,000
during the fiscal year ended March 31, 1999. Except with respect to brokerage
commissions paid to Reaves, which is an affiliated person of the Corporation by
virtue of its serving as an investment adviser to the Corporation, no brokerage
commissions were paid to affiliated persons of the Corporation or to affiliated
persons of such affiliated persons, or to any broker an affiliated person of
which is an affiliated person of the Corporation or of Whitehall or Reaves. For
the fiscal year ended March 31, 1999, the Corporation paid Reaves brokerage
commissions in the aggregate amount of $23,000. For the fiscal year ended March
31, 1999, such amount represented 42.6% of the aggregate brokerage commissions
paid by the Corporation to all brokers. The commissions charged by the
Corporation's advisers for agency transactions using affiliated brokers are
limited to the lesser of (i) 50% of the regular New York Stock Exchange rates,
(ii) the maximum amount permissible pursuant to Section 17(e) of the Investment
Company Act of 1940 or (iii) $.07 per share. In addition, the amounts paid to an
adviser in commissions and fees (as described above) shall not exceed 2% of the
average daily market value of the Corporation's assets under such adviser's
management for the preceding fiscal year. Certain of the Corporation's advisers
may pay higher commission rates than otherwise would be applicable in exchange
for brokerage and research services in accordance with the Securities Exchange
Act of 1934. In no event may an adviser pay a brokerage commission in excess of
$0.07 per share.

Recommendation of the Board of Directors

The Board of Directors approved the Agreements with Northern Trust and
with Wellington Management at a meeting of the Board of Directors held on
Monday, June 21, 1999 in Lenoir, North Carolina. The principal factor in the
Board's approval of the Agreements is the Board's judgment that the engagement
of additional advisers with strong reputations in fixed income investments and
equity investments would be in the best interests of the Corporation's
shareholders in that it would better enable the Corporation to execute the
change in investment strategy, recently adopted by the Board, that involves
replacing the Corporation's municipal bond portfolio with investments in taxable
obligations pursuant to its current income objective and with investments in
equity securities pursuant to its capital appreciation objective.

-14-
<PAGE>

In this connection, the Board considered the reputation of each of
Northern Trust and Wellington Management, the amount of assets under their
respective management, the financial strength of each institution and similar
factors.

In order for each of the proposed Investment Advisory Agreements to become
effective, it must be approved by the holders of a majority of the shares of the
Corporation's common stock entitled to vote. The Board of Directors believes the
Corporation's proposed Investment Advisory Agreements with Northern Trust and
Wellington Management are in the best interests of the Corporation's
shareholders and recommends a vote FOR approval of each of the Agreements.

PROPOSAL RELATING TO AMENDMENT OF
FUNDAMENTAL INVESTMENT POLICIES

Subject to approval by the holders of the majority of the outstanding
voting securities of the Corporation, the Board of Directors has adopted an
amendment to the Corporation's fundamental investment policies, as described
below.

The Corporation's fundamental investment policies govern the Corporation's
investment activities and may not be changed without approval by the holders of
a majority of the Corporation's vote of securities. They are set forth in a
statement of Investment Objectives and Policies of BMC Fund, Inc., which was
most recently amended at a special meeting of shareholders held on March 19,
1999. The Corporation's fundamental investment policies include a policy
prohibiting the Corporation from issuing senior securities. The Investment
Company Act of 1940 defines a "senior security" to include:

"any bond, debenture, note, or similar obligation or instrument
constituting a security and evidencing indebtedness, and any stock
of a class having priority over any other class as to distribution
of assets or payment of dividends; and senior security representing
indebtedness' means any senior security other than stock."

Because "senior security" includes any instrument evidencing indebtedness
(for example, a promissory note), the effect of the prohibition contained in the
Corporation's fundamental investment policies is to prohibit the Corporation
from borrowing money. Historically, the Corporation has conducted its business
without borrowing money. It has relied instead on income from its investment
portfolio for cash necessary to satisfy its operating expenses, pay dividends
and other general corporate purposes. The fixed income nature of the
Corporation's investment portfolio has enabled the Corporation to generate
predictable cash flow in the form of scheduled interest payments, which the
Corporation has used to operate its business and to pay dividends. Earlier this
year, however, the Board of Directors adopted a change in the Corporation's
investment strategy, which involved replacing the Corporation's tax-exempt bond
portfolio with investments in taxable obligations pursuant to its current income
objective and with investments in equity securities pursuant to its capital
appreciation objective. The Corporation anticipates that this change in

-15-
<PAGE>

investment strategy will make it more difficult to manage the Corporation's
assets in a manner that ensures receipt of interest and dividends on a schedule
consistent with the Corporation's cash management objectives. Accordingly,
management believes that it would be in the best interests of the Corporation's
shareholders to amend the Corporation's investment policies to permit the
Corporation to borrow funds, from time to time, typically on a short-term basis,
to meet its expenses, pay dividends and for other general corporate purposes.

As a result of the foregoing, the Board of Directors has adopted the
following amendment to its fundamental investment policies, subject to approval
by the holders of the majority of the outstanding voting securities of the
Corporation:

The fundamental investment policy numbered "1" in the Investment
Obligations and Policies of BMC fund, Inc. shall be amended to read as
follows:

"1. The Corporation will not issue any senior securities,
except that the Corporation may issue, from time to time, any
"senior security representing indebtedness" as such term is defined
in Section 18(g) of the Investment Company Act of 1940; provided,
that any senior security representing indebtedness issued by the
Corporation shall comply with the asset coverage and other
requirements of Section 18 of the Investment Company Act of 1940."

Except as set forth above, the Corporation's remaining fundamental
investment policies would remain unchanged.

Section 18(a) of the Investment Company Act of 1940 (the "1940 Act")
provides that it shall be unlawful for a registered closed-end company (such as
the Corporation) to issue or sell any class of senior security representing
indebtedness unless, immediately after such issuance or sale, such senior
security shall have an asset coverage of at least 300%. In addition, the 1940
Act provides that if the senior security representing indebtedness consists of
indebtedness other than a promissory note or other evidence of indebtedness
issued in consideration of a privately arranged and privately placed loan (or an
extension or renewal of such a loan), the senior security representing
indebtedness must contain terms that would (1) restrict the Corporation's
payment of dividends or other distributions if the asset coverage falls below
300% and (2) entitle the holders of such senior security to elect a majority of
the board of directors of the closed-end investment company, or make it an event
of default under the senior security, if the asset coverage is less than 100%.

If the shareholders approve the above amendment, the management of the
Corporation would not anticipate borrowing funds in an amount that would
jeopardize the 300% asset coverage requirement of Section 18 of the 1940 Act.

In order for the proposed amendment to become effective, it must be
approved by the holders of a majority of the shares of the Corporation's common
stock and entitled to vote. The Board of Directors believes the proposed
amendment is in the best interests of the Corporation's shareholders and
recommends a vote FOR the approval of the proposed amendment to the
Corporation's fundamental investment policies.

-16-
<PAGE>

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, 1999, subject to ratification by shareholders. Deloitte & Touche served
as the Corporation's auditor for the fiscal year ended March 31, 1999.

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 is expected to 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 21, 1999:

<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership of Common Stock
----------------------------------------------

Voting and Investment Power Percent of
--------------------------- Outstanding
Name and Age Sole Shared Common Stock
- ------------ ---- ------ ------------
<S> <C> <C> <C>
Paul H. Broyhill 1,301,420(1) 206,208(2) 30.6%
135 Claron Place, S.E.
Lenoir, NC

James T. Broyhill 785,788 96,212 17.9%
1930 Virginia Road
Winston-Salem, NC 27104

Satie E. Gortner 661,877 122,493 15.9%
PH-1 4601 Gulf Shore Blvd. North
Naples, FL 33940-2215
</TABLE>

-17-
<PAGE>

<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership of Common Stock
----------------------------------------------

Voting and Investment Power Percent of
--------------------------- Outstanding
Name and Age Sole Shared Common Stock
- ------------ ---- ------ ------------
<S> <C> <C> <C>
Allene B. Heilman 470,298 29,777 10.1%
941 Bay Esplanade
Clearwater, FL 34630

Broyhill Investments, Inc. 316,871 0 6.4%
Golfview Park
Lenoir, NC 28645
</TABLE>

- ----------

(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 75
(Chief Executive Officer), and E. D. Beach, age 74 (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, 1999, 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 $3,000 per year, plus $1,000 per
meeting attended, for service on the Board. Each such outside director is paid
an additional $500 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, 1999 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.

-18-
<PAGE>

Name of Person and Position Aggregate Compensation From Fund
- --------------------------- --------------------------------
Paul H. Broyhill
(Chairman, Chief Executive $16,000
Officer and Director)

E. D. Beach 50,000
(Director and President)

James T. Broyhill --
(Director)

William E. Cooper 3,500
(Director)

Lawrence Z. Crockett 4,500
(Director)

Willard A. Gortner --
(Director)

Allene B. Heilman --
(Director)

Harry Heltzer 4,500
(Director)

Gene A. Hoots 5,500
(Director)

Dolph W. von Arx 3,500
(Director)

Michael G. Landry
(Director) 4,500

-19-
<PAGE>

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, Inc. during the term of the
lease, which is now on a month to month basis.

CORPORATE GOVERNANCE

The Board of Directors met three times during the fiscal year ended March
31, 1999. The Board of Directors has an Audit Committee, the members of which
are William E. Cooper (Chairman), Lawrence Z. Crockett, Harry Heltzer, Gene
Hoots, Michael Landry 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, 1999, 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 attended at least 75% of the meetings held by the Board
and any committee(s) on which he or she served, except for Mrs. Heilman, who
attended one of the three Board meetings.

SHAREHOLDER PROPOSALS

In order to be included in proxy material for the 2000 annual meeting of
shareholders, shareholder proposals must be received at the offices of the
Corporation by March 28, 2000.

* * * *

-20-
<PAGE>

EXHIBIT A

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT, is made as of the 1st day of August, 1999, between BMC
Fund, Inc., a North Carolina corporation (the "Fund"), and The Northern Trust
Company (the "Adviser").

WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940 (the "1940 Act");

WHEREAS, the Adviser provides investment advisory services as a part of
its general banking activities; and

WHEREAS, the Fund desires to retain the Adviser to render investment
services with respect to a portion of the Fund's investment assets, and the
Adviser is willing to render such services;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Fund and the Adviser agree as follows:

1. Appointment of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser with respect to the investment assets identified in Annex A
attached hereto (the "Assets") in accordance with the terms and conditions set
forth below, and the Adviser hereby accepts such appointment.

2. Assets. The Fund may add or remove assets from the Adviser's management
upon 10 days' notice to the Adviser or such shorter period agreed to by the Fund
and the Adviser. The Fund represents that the Assets are lawfully owned by the
Fund, that there are no restrictions (whether arising out of contract, operation
of law or otherwise) on the transfer, sale or public distribution thereof and
that neither the Fund nor any affiliated person of the Fund is an affiliated
person of any issuer whose securities are included in the Assets.

3. Advisory Duties. The Adviser shall manage, subject to the supervision
and control of the Board of Directors of the Fund, the Assets in accordance with
the Fund's investment objectives and policies, a copy of which has been provided
to the Adviser (the "Objectives and Policies"), as amended from time to time,
and in accordance with the following understandings:

(a) The Adviser shall provide a continuous investment program with
respect to the Assets in accordance with the Objectives and Policies and
the instructions of the Board of Directors of the Fund. The Adviser will
have no responsibility for determining that the total assets of the Fund
are invested in compliance with any requirement of the Objectives and
Policies that specific percentages of such total assets be invested
pursuant to particular objectives.

(b) The Adviser shall provide investment advisory, research,
statistical and clerical services relating to its management of the
Assets.

A-1

<PAGE>

(c) The Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation and Bylaws of the Fund, the instructions of the Board of
Directors of the Fund, the requirements of the 1940 Act, the rules of the
Securities and Exchange Commission (the "Commission") and all other
applicable federal and state laws and regulations.

(ii) Without the written consent of the Fund and compliance
with the 1940 Act and the rules of the Commission thereunder, the Adviser
shall not cause the Fund to purchase securities from the Adviser, or any
affiliated person of the Adviser, acting as principal and shall not cause
the Adviser to purchase securities from any syndicate or selling group of
which the Adviser or any affiliated person of the Adviser is a member. The
Adviser may refrain from advising the Fund concerning securities of
companies of which any of the directors, officers or employees of the
Adviser or of affiliated persons of the Adviser are directors, officers or
employees, or concerning securities of companies for which the Adviser or
its affiliated persons act as financial adviser.

(iii) When the Adviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other
customers, the Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in order
to obtain the best execution and most favorable price. 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 Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers.

(e) The Adviser shall provide the Custodian, as defined below, and
the Fund on each business day with a list of all securities transactions
directed by the Adviser for the prior business day and shall render to the
Fund's Board of Directors such other periodic and special reports as the
Board may reasonably request.

(f) The investment management services of the Adviser to the Fund
under this Agreement are not to be deemed exclusive, and the Adviser shall
be free to render similar services to others.

A-2
<PAGE>

custodial responsibilities. Instructions concerning purchases and sale of
securities by the Adviser on behalf of the Fund shall be communicated to the
Custodian and the Fund in a manner agreed to by the Fund, the Custodian and the
Adviser. Fees charged by the Custodian shall continue to be the responsibility
of the Fund.

5. Books and Records. The Adviser shall maintain and preserve the books
and records relating to securities transactions on behalf of the Fund in
accordance with Section 31 of the 1940 Act and the rules of the Commission
thereunder, including, without limitation, Rule 31a-1(f). The Adviser agrees
that all such books and records are the property of the Fund and that it will
surrender promptly to the Fund any of such books and records upon the Fund's
request. The Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such books and records as are required to be
maintained by Rule 31a-1(f) under the 1940 Act.

6. Reports to Adviser. The Fund agrees to furnish the Adviser at its
principal office all prospectuses, proxy statements, reports to shareholders,
sales literature or other material prepared for distribution to shareholders of
the Fund or the public, which refer in any way to the Adviser, 10 days prior to
use thereof and not to use such material if the Adviser should object thereto in
writing within seven days after receipt of such material. The Fund shall furnish
or otherwise make available to the Adviser such other information relating to
the business affairs of the Fund as the Adviser at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.

7. Expenses. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities purchased for the Fund and the taxes and
brokerage commissions, if any, payable in connection with the purchase and of
such securities.

8. Compensation of the Adviser.

Applicable Percentage Closing Value
--------------------- -------------

.0875% of the first $15 million
.075% of the next $ 5 million
.0625% of amounts over $20 million

The minimum fee on an annual basis shall be $50,000. The quarterly fee
calculated as set forth above will be subject to the following
adjustments:

(i) In the event the Fund, during any fiscal quarter, contributes
additional assets to be managed by the

A-3
<PAGE>

Adviser (the "Additional Assets"), the quarterly fee shall be
the product of the Closing Value times the Applicable
Percentage, reduced by an amount equal to the closing market
value of the Additional Assets on the date of contribution
multiplied by a fraction the numerator of which is the number
of days during such fiscal quarter that the Additional Assets
were under management and the denominator of which is the
total number of days in such fiscal quarter.

(ii) In the event the Fund, during any fiscal quarter, withdraws
assets from the Adviser's management (the "Withdrawn Assets"),
the quarterly fee shall be the product of the Closing Value
times the Applicable Percentage, increased by an amount equal
to the closing value of the Withdrawn Assets on the date of
withdrawal multiplied by a fraction the numerator of which is
the number of date during such fiscal quarter that the
Withdrawn Assets were under management and the denominator of
which is the total number of days in the fiscal quarter.

(iii) In the event of termination of this Agreement prior to the end
of a quarter, the Adviser shall repay the Fund a pro rata
portion of the quarterly fee for such quarter based on the
number of days elapsed in the then-current fiscal quarter as a
percentage of the total number of days in such quarter.

There shall be no adjustment of the fee payable under this Agreement for
fluctuations during a fiscal quarter in the value of Assets under
management prior to the date the Closing Value is determined in accordance
with this Section 8.

(b) After the end of each fiscal quarter, the Adviser shall submit
to the Fund a report showing the amount of the fee properly payable to the
Adviser hereunder and the detailed calculation thereof. The Fund shall pay
the Adviser such fee not later than 30 days after its receipt of such
report. Failure of the Fund to pay the fee when due shall entitle the
Adviser to pay the fee from cash assets of the Fund under its management.

9. Limitation of Liability. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation of services (in which
case any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), the Adviser shall not be subject to
any liability whatsoever to the Fund, or to any shareholder of the Fund, for any
error of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Fund. The

A-4
<PAGE>

federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore nothing herein shall in any way
constitute a waiver or limitation of any rights which the undersigned may have
under any federal securities laws.

10. Duration and Termination. This Agreement shall, if approved by the
vote of a majority of the outstanding voting securities of the Fund at the
annual meeting of shareholders on July 31, 1999, become effective on August 1,
1999 and shall continue in effect until July 31, 2001, and thereafter only so
long as such continuance is approved at least annually by a vote of the Fund's
Board of Directors (including at least a majority of the directors who are not
interested persons of the Fund), cast in person at a meeting called for the
purpose of voting on such approval. In addition, the Fund may present to its
shareholders the question of continuance of the Agreement; in such event, such
continuance shall be effective only if approved by the affirmative vote of a
majority of the outstanding voting securities of the Fund.

This Agreement may be terminated at any time, without payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on 60 days' written
notice to the Adviser. This Agreement shall not be assigned by either party and
shall automatically terminate in the event of its assignment. This Agreement may
be terminated by the Adviser on 60 days' written notice to the Fund. Any notice
under this Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party as follows:

If to the Fund: E. D. Beach
President
BMC Fund, Inc.
P. O. Box 500
Golfview Park
Lenoir, NC 28645

If to the Adviser: The Northern Trust Company
50 S. LaSalle Street
Chicago, Illinois 60675
Attention: Kristina V. L. Warland

11. Independent Contractor. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Directors of the Fund from time to
time, have no authority to act for or represent the Fund in any way or otherwise
be deemed an agent for the Fund.

12. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of the members of the Board of Directors who are not interested persons of the
Fund, cast in person at a meeting called for the purpose of voting on such
amendment, and (b) by vote of a majority of the outstanding voting securities of
the Fund to the extent required by the Investment Company Act of 1940.

13. Definitions. As used in this Agreement, the terms "affiliated person,"
"assignment," "interested persons" and "vote of a majority of the outstanding
voting securities" shall have the respective meanings set forth in Section
2(a)(3), Section 2(a)(4), Section 2(a)(19) and Section 2(a)(42) of the 1940 Act.

A-5
<PAGE>

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.

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

ATTEST: BMC FUND, INC.

___________________________________ ________________________________________
E. D. Beach
President

ATTEST: THE NORTHERN TRUST COMPANY

___________________________________ ________________________________________
Name: Kristina V. L. Warland
Title: Vice President

A-6
<PAGE>

ANNEX A

DESCRIPTION OF ASSETS

A-7
<PAGE>

EXHIBIT B

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT, is made as of the 1st day of August, 1999, between BMC
Fund, Inc., a North Carolina corporation (the "Fund"), and Wellington Management
Company, LLP, a Massachusetts limited liability partnership (the "Adviser").

WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940 (the "1940 Act");

WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940; and

WHEREAS, the Fund desires to retain the Adviser to render investment
services with respect to a portion of the Fund's investment assets, and the
Adviser is willing to render such services;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Fund and the Adviser agree as follows:

B-1
<PAGE>

(b) The Adviser shall provide investment advisory, research,
statistical and clerical services relating to its management of the
Assets.

(d) (i) The Adviser will execute all trades on behalf of the
Registrant involving exchange listed securities through floor brokers
selected by the Adviser. Commissions paid to the Adviser by the Fund with
respect to such transactions shall not exceed the lesser of (i) 50% of the
regular New York Stock Exchange, Inc. rates in effect immediately prior to
the institution of fully negotiated rates, (ii) $0.07 per share or (iii)
the maximum amount permissible pursuant to Section 17(e) of the 1940 Act
and the rules of the Securities and Exchange Commission thereunder;
provided, the amounts paid to the Adviser in commissions, when added to
the fees paid to the Adviser pursuant to Section 8 of the Agreement, shall
not exceed 2% of the average daily total market value of the Registrant's
assets under the Adviser's management for the preceding fiscal year. It is
understood that the previous sentence shall apply only with respect to
trades executed through brokers or dealers that are affiliated persons (as
defined in the 1940 Act) of the Adviser. In connection with the investment
and reinvestment of the Assets, the Adviser is authorized to select the
brokers or dealers that will execute purchase and sale transactions for
the Fund and to use its best efforts to obtain the best available price
and most favorable execution with respect to all such purchases and sales
of portfolio securities for the Fund. The Adviser shall maintain records
adequate to demonstrate compliance with this requirement. Subject to this
primary requirement, and maintaining as its first consideration the
benefits to the Fund and its shareholders, the Adviser shall have the
right, subject to the control of the Board of Directors of the Fund, and
to the extent authorized by the Securities Exchange Act of 1934, to follow
a policy of selecting brokers who furnish brokerage and research services
to the Fund or to the Adviser, and who charge a higher commission rate to
the Fund than may result when allocating brokerage solely on the basis of
seeking the most favorable price and execution. The Adviser shall
determine in good faith that such higher cost was reasonable in relation
to the value of the brokerage and research services provided.
Notwithstanding the foregoing, in no event shall the Adviser incur a
brokerage commission in excess of $0.07 per share.

B-2
<PAGE>

(f) The investment management services of the Adviser to the Fund
under this Agreement are not to be deemed exclusive, and the Adviser shall
be free to render similar services to others.

4. Custody of Assets. First Union National Bank, Charlotte, North Carolina
(the "Custodian") will retain custody of the Assets. The Fund will cause the
Custodian to settle purchases and sales of securities made by the Adviser in
connection with the Adviser's management of the Assets, through delivery of
securities, payment of funds or such other acts as may be necessary to fulfill
such custodial responsibilities. Instructions concerning purchases and sale of
securities by the Adviser on behalf of the Fund shall be communicated to the
Custodian and the Fund in a manner agreed to by the Fund, the Custodian and the
Adviser. Fees charged by the Custodian shall continue to be the responsibility
of the Fund.

7. Expenses. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities purchased

B-3
<PAGE>

for the Fund and the taxes and brokerage commissions, if any, payable in
connection with the purchase and of such securities.

8. Compensation of the Adviser.

(a) For the services to be rendered by the Adviser as provided in
this Agreement, the Fund shall pay to the Adviser a quarterly fee in
advance. The fee for a succeeding quarter will be the product of the
average daily market value of the Assets for the preceding fiscal quarter
(the "Average Value") multiplied by 0.075% in the case of fixed income
securities and 0.15% in the case of equity securities; provided, however,
that the quarterly fee payable to the Adviser with respect to the quarter
commencing June 1, 1999 will be the product of the average daily market
value of the Assets for the period August 1 through August 31, 1999,
multiplied by one-third of the applicable percentage. In the event of
termination of this Agreement prior to the end of a quarter, the Adviser
shall repay the Fund a pro rata portion of the quarterly fee for such
quarter based on the number of days elapsed in the then-current fiscal
quarter as a percentage of the total number of days in such quarter.

B-4
<PAGE>

If to the Fund: E. D. Beach
President
BMC Fund, Inc.
P. O. Box 500
Golfview Park
Lenoir, NC 28645

If to the Adviser: Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109
Attention: Sean P. Kelly

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.

15. Miscellaneous. The Fund acknowledges that it has reviewed the
Adviser's Form ADV, Part II, as amended, at least forty-eight hours prior to
entering into this Agreement.

B-5
<PAGE>

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

ATTEST: BMC FUND, INC.

___________________________________ ________________________________________
E. D. Beach
President

ATTEST: WELLINGTON MANAGEMENT COMPANY, LLP

___________________________________ ________________________________________
Name: _________________________________
Title: _________________________________

B-6
<PAGE>

ANNEX A

DESCRIPTION OF ASSETS

B-7
<PAGE>

EXHIBIT C

PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF
THE NORTHERN TRUST COMPANY
(As of June 16, 1999)

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Duane L. Burnham Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Abbott Laboratories Chairman of the Board
150 Field Drive and Director
Suite 160
Lake Forest, IL 60045

Sara Lee Corporation Director
3 First National Plaza
Chicago, IL 60602

Dolores E. Cross Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Morris Brown College President (6/99)
Administration Building, 2nd Fl President-elect (10/98)
643 Martin Luther King Jr. Dr.
Atlanta, GA 30314

The Graduate School and GE Fund
University Center Distinguished Professor
The City University of NY of Leadership and
33 W. 42nd Street, Room 1400N Diversity
New York NY 10036

General Electric Company Former President, GE Fund
3135 Easton Turnpike
Fairfield, CT 06432

Chicago State University Former President
95th Street at King Drive
Chicago, IL 60643
</TABLE>

C-1
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Susan Crown Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60606

Henry Crown and Company Vice President
222 N. LaSalle Street
Suite 2000
Chicago, IL 60601

Baxter International, Inc. Director
One Baxter Parkway
Deerfield, IL 60015

Illinois Tool Works Inc. Director
3600 W. Lake Avenue
Glenview, IL 60025

John R. Goodwin Northern Trust Quantitative Director, Managing
Senior Vice President Advisors, Inc. ("NTQA") Director, Chief
50 S. LaSalle Street Investment Officer
Chicago, IL 60675

Robert S. Hamada Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

The University of Chicago Dean and Edward Eagle Brown
Graduate School of Business Distinguished Service
1101 East 58th Street Professor of Finance
Chicago, IL 60637

A. M. Castle & Co. Director
3400 North Wolf Road
Franklin Park, IL 60131

Chicago Board of Trade Director
141 West Jackson Boulevard
Chicago, IL 60604

Barry G. Hastings Northern Trust Corporation President & Chief Operating
President & Chief Operating 50 S. LaSalle Street Officer and Director
Officer & Director Chicago, IL 60675
</TABLE>

C-2
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Northern Trust of California Director
Corporation
355 S. Grand Avenue
Los Angeles, CA 90017

Northern Trust of Florida Vice Chairman of the Board of
Corporation Directors
700 Brickell Avenue
Miami, FL 33131

Nortrust Realty Management, Inc. Director
50 South LaSalle Street
Chicago, IL 60675

Robert A. Helman Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Mayer, Brown & Platt Partner
190 S. LaSalle Street, 38th Fl.
Chicago, IL 60603

Chicago Stock Exchange Governor
One Financial Plaza
440 S. LaSalle Street
Chicago, IL 60605

Brambles USA, Inc. Director
400 N. Michigan Avenue
Chicago, IL 60611

Zenith Electronics Director
1000 Milwaukee Avenue
Glenview, IL 60025

Dreyer's Grand Ice Cream, Inc. Director
5929 College Avenue
Oakland, CA 94618

Arthur L. Kelly Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675
</TABLE>

C-3
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
KEL Enterprises, L.P. Managing Partner
Two First National Plaza
20 S. Clark Street, Suite 2222
Chicago, IL 60603

Bayerische Motoren Director
Werke (BMW) A.G. BMW Haus
Petuelring 130
Postfach 40 02 40
D 8000
Munich 40 Germany

Deere & Company Director
John Deere Road
Moline, IL 61265

Nalco Chemical Company Director
One Nalco Center
Naperville, IL 60563-1198

Snap-On Incorporated Director
2801 80th Street
Kenosha, WI 53140

Thyssen Industrie AG Director
AM Thyssenhaus 1
45128 Essen
Germany

Frederick A. Krehbiel Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Molex Incorporated Chairman, CEO and Director
2222 Wellington Court
Lisle, IL 60532-1682

Nalco Chemical Company Director
One Nalco Center
Naperville, IL 60563-1198

Tellabs, Inc. Director
4951 Indiana Avenue
Lisle, IL 60532
</TABLE>

C-4
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
DeVry, Inc. Director
One Tower Lane
Oakbrook Terrace, IL 60181

Robert A. LaFleur None
Senior Vice President

Thomas L. Mallman None
Senior Vice President

James J. Mitchell The Northern Trust Company Director
Executive Vice President of New York
40 Broad Street, 8th Floor
New York, NY 10004

William G. Mitchell Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Peoples Energy Corporation Director
122 South Michigan Avenue
Chicago, IL 60603

The Sherwin Williams Company Director
101 Prospect Avenue, NW
Cleveland, OH 44115-1075

Edward J. Mooney Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Nalco Chemical Company Chairman, Chief Executive
One Nalco Center Officer, President & Director
Naperville, IL 60563-1198

Morton International, Inc. Director
100 North Riverside Plaza
Chicago, IL 60605

FMC Corporation Director
200 E. Randolph
Chicago, IL 60601

William A. Osborn Northern Trust Corporation Director
Chairman and Chief 50 S. LaSalle Street
Executive Officer Chicago, IL 60675
</TABLE>

C-5
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Nortrust Realty Management, Inc. Director
50 S. LaSalle Street
Chicago, IL 60675

Northern Futures Corporation Director
50 S. LaSalle Street
Chicago, IL 60675

Sheila A. Penrose Northern Trust Global Director
President-Corporate and Advisors, Inc.
Institutional Services and 29 Federal Street
Executive Vice President Stamford, CT 06901

Nalco Chemical Company Director
One Nalco Center
Naperville, IL 60563-1198

Northern Trust Retirement Manager
Consulting
400 Perimeter Center Terrace
Suite 850
Atlanta, GA 30346

NTQA Director
50 S. LaSalle Street
Chicago, IL 60675

Perry R. Pero Northern Futures Corporation Director
Senior Executive Vice 50 S. LaSalle Street
President, Chief Financial Chicago, IL 60675
Officer
Northern Investment Corporation President and Director
50 S. LaSalle Street
Chicago, IL 60675

Northern Trust Global Advisors, Director
Inc.
29 Federal Street
Stamford, CT 06901

Northern Trust Securities, Inc. Director
50 S. LaSalle Street
Chicago, IL 60675
</TABLE>

C-6
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Nortrust Realty Management, Inc. Director
50 S. LaSalle Street
Chicago, IL 60675

NTQA Director
50 S. LaSalle Street
Chicago, IL 60675

Stephen N. Potter NTQA Director,
Senior Vice President 50 S. LaSalle Street Managing Director
Chicago, IL 60675

Peter L. Rossiter None
Executive Vice President and
General Counsel

Harold B. Smith Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

Illinois Tool Works Inc. Chairman of the Executive
3600 West Lake Avenue Committee and Director
Glenview, IL 60025-5811

W. W. Grainger, Inc. Director
5500 West Howard Street
Skokie, IL 60077

Northwestern Mutual Life Insurance Trustee
Company
720 East Wisconsin Avenue
Milwaukee, WI 53202

William D. Smithburg Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

The Quaker Oats Company Retired Chairman, President and
321 North Clark Street Chief Executive Officer
Chicago, IL 60610

Abbott Laboratories Director
One Abbott Park Road
Abbott Park, IL 60064

Corning Incorporated Director
Corning, NY 14831
</TABLE>

C-7
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Prime Capital Corporation Director
10275 W. Higgins Road
Suite 200
Rosemont, IL 60018

James M. Snyder Northern Trust Global Advisors, Director
Executive Vice President Inc.
29 Federal Street
Stamford, CT 06901

NTQA Chairman, CEO
50 S. LaSalle Street and Director
Chicago, IL 60675

Bide L. Thomas Northern Trust Corporation Director
Director 50 S. LaSalle Street
Chicago, IL 60675

MYR Group Inc. Director
*(formerly L.E. Myers Company)
2550 W. Golf Road
Rolling Meadows, IL 60008

R. R. Donnelley & Sons Company Director
77 West Wacker Drive
Chicago, IL 60601

Stephen B. Timbers Northern Trust Global Advisors, Director
President -- Northern Trust Inc.
Global Investments and 29 Federal Street
Executive Vice President Stamford, CT 06901

Zurich-Kemper Investments Former President & CEO
222 Riverside Plaza
Chicago, IL 60606

LTV Steel Co. Director
200 Public Square
Cleveland, OH 44114-2308

NTQA Director
50 S. LaSalle Street
Chicago, IL 60675
</TABLE>

C-8
<PAGE>

<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of Other Company Other Company
- ----------------------- ---------------- -------------
<S> <C> <C>
Jeffrey H. Wessel NTQA President, Director
Executive Vice President 50 S. LaSalle Street
Chicago, IL 60675

Northern Trust Global Advisors, Director
Inc.
29 Federal Street
Stamford, CT 06901

Northern Trust Retirement Manager
Consulting
401 Perimeter Center Terrace
Suite 850
Atlanta, GA 30346
</TABLE>

C-9
<PAGE>

EXHIBIT D

GENERAL PARTNERS AND
SENIOR VICE PRESIDENTS OF
WELLINGTON MANAGEMENT COMPANY

Kenneth L. Abrams Matthew E. Megargel
Nicholas C. Adams James N. Mordy
Rand L. Alexander Diane C. Nordin
Deborah L. Allinson Stephen T. O'Brien
James H. Averill Edward P. Owens
Karl E. Bandtel Saul J. Pannell
Marie-Claude Bernal Thomas L. Pappas
William N. Booth Jonathan M. Payson
Paul Braverman Stephen M. Pazuk
Robert A. Bruno Robert D. Rands
Maryann E. Carroll Eugene E. Record, Jr.
Pamela Dippel James A. Rullo
Charles T. Freeman John R. Ryan
Laurie A. Gabriel Joseph H. Schwartz
Frank J. Gilday Theodore Shasta
John H. Gooch Binkley C. Shorts
Nicholas P. Greville Trond Skramstad
Paul Hamel Catherine A. Smith
William C. S. Hicks Stephen A. Soderberg
Lucius T. Hill, III Brendan J. Swords
Paul D. Kaplan Harriett Tee Taggart
John C. Keogh Perry M. Traquina
George C. Lodge, Jr. Gene R. Tremblay
Nancy T. Lukitsh Michael A. Tyler
Mark T. Lynch Mary Ann Tynan
Christine S. Manfredi Clare Villari
Patrick J. McCloskey Ernst H. von Metzsch
Earl E. McEvoy James L. Walters
Duncan M. McFarland Kim Williams
Paul M. Mecray III Francis V. Wisneski

D-1
<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
21, 1999, at the annual meeting of shareholders to be held on July 31, 1999, or
at any adjournment thereof.

1. The election of 12 directors:

<TABLE>
<S> <C>
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked below to the contrary) |_| to vote for all nominees listed below |_|
</TABLE>

(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, L. Glenn Orr, Jr., Dolph W. von Arx

2. To approve an Investment Advisory Agreement between the Corporation and The
Northern Trust Company dated as of August 1, 1999.

APPROVE |_| DISAPPROVE |_| ABSTAIN |_|

3. To approve an Investment Advisory Agreement between the Corporation and
Wellington Management Company, LLP dated as of August 1, 1999.

APPROVE |_| DISAPPROVE |_| ABSTAIN |_|

4. To approve an amendment to the Corporation's fundamental investment policies
to permit the issuance of certain senior securities representing indebtedness.

APPROVE |_| DISAPPROVE |_| ABSTAIN |_|

5. Ratify the selection of the firm of Deloitte & Touche as the Corporation's
auditor for the fiscal year beginning April 1, 1999.

APPROVE |_| DISAPPROVE |_| ABSTAIN |_|

6. 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 PROPOSALS 2, 3, 4
and 5.

Dated ____________, 1999 ________________________________________
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.