BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414
Chicago, Illinois 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 18, 1996
November 14, 1996
Dear Shareholder:
The annual meeting of Bruce Fund, Inc. (the 'Fund") will be
held at 4:00 p.m. on Wednesday, December 18, 1996 in the
Conference Room at 500 West Madison Street, 39th Floor, Chicago,
Illinois 60661. The purpose of the meeting is:
(1) to elect three directors of the Fund;
(2) to approve amendment of the Fund's investment
restrictions to permit the Fund to invest excess cash
by the purchase of securities issued by money market
funds;
(3) to ratify or reject the selection of Arthur Andersen
LLF' as independent certified public accountant for
the Fund for the year ending June 30, 1997;
(4) to transact any other business that comes before the
Meeting.
Enclosed herewith is the Proxy Statement, which discusses
each of the above items. if you were a shareholder of the Fund
at November 14, 1996, you may vote at the meeting (or at any
adjournment of the meeting). For those of who may not be able
to attend, the enclosed Proxy is for your vote. Please complete
and return the Proxy to us. The Fund's Prospectus dated October
11, 1996 and its latest annual report were previously mailed to
you.
R. Jeffrey Bruce
Secretary
BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414 Chicago, Illinois 60606
PROXY STATEMENT
Your proxy is solicited by the Board of Directors of Bruce Fund, Inc.
for the annual meeting of shareholders to be held December 18, 1996, and at
any adjournments of the meeting.
ELECTION OF DIRECTORS
The Fund's By-laws presently provide that the number of directors of
the Fund shall be not less than three. Proxies may not be voted for a
greater number of persons than the number of nominees.
The persons named below, with one exception, were elected to the Board
of Directors in 1983, and have been serving continuously since that date.
Mr. Ward M. Johnson was elected by the Board in March, 1986 to fill a
vacancy created by a resignation. The three persons, identified and
described below, will constitute the full Board of Directors of the Fund
untfl the next annual meeting of stockholders, and until the successor of
each shall have been duly elected and shall have qualified. Robert B.
Bruce and James S. Van Pelt, currently owr4 directly or indirectly, shares
of the Fund. Information concerning the nominees, including certain
information supplied by them, is as follows:
Names and Ages of Nominees
to be Directors of the Fund Business Experience for Last Five Years
Robert B. Bruce* 1974 to present--principal, Bruce and Co.
Age 65 (investment adviser); 1982 to present--Chairman of
Board of Directors, Treasurer, Professional Life &
Casualty Company (life insurance issuers).
'Mr. Bruce owns a controlling interest in Bruce and Co., the investment
adviser to the Fund, and is an Interested Person, as defined in the
Investment Company Act of 1940, of the Fund. He presently owns 6,620
shares of the Fund.
James S. Van Pelt, Jr. 1986 to present--President, Grundy Industries, Age
60 Inc. (roofing material manufacturer).
Ward M. Johnson 1995 to present--Independent Insurance Sales
Agent. 1993-1995 - CTR Industries, National
Age 59 Sales Manager (manufacturer of cable
assemblies). 1991-1993 - President, Barcode
Addressing Corp.
Each nominee is presently serving and has agreed to continue serving
as a director of the Fund. Should any of the nominees become unavailable,
however, it is intended that the persons named in the enclosed proxy will
vote for the election of such other persons as the Board of Directors may
recommend.
The Board of Directors does not have a nominating, audit or
compensation committee.
The above-named nominees for directors will receive a small annual fee
from the Fund for services rendered as directors of the Fund during the
year for which this election is being held; Mr. Bruce, the owner of the
investment advisor to the Fund, will not receive any fee.
INVESTMENT ADVISORY AGREEMENT
Bruce and Co. has been serving as investment adviser to the Fund under
an Investment Advisory Agreement since 1983. Bruce and Co. is an Illinois
corporation located at 20 North Wacker Drive (Suite 2414), Chicago,
Illinois 60606. Robert B. Bruce is the principal executive officer and
owns controlling interest in the adviser; his office is also at 20 North
Wacker Drive (Suite 2414), Chicago, Illinois 60606. He is a nominee for
election as a director of Bruce Fund, Inc.
On September 30, 1996, at a meeting of the Board of Directors called
for the purpose of considering the terms of the Investment Advisory
Agreement and voting upon approval thereof, the independent directors
present in person voted to approve the Investment Advisory Agreement with
Bruce and Co. dated September 30, 1996. The Agreement is identical in all
material respects to the Agreement approved by the shareholders in October,
1983.
Bruce and Co.'s compensation for its services to the Fund are, and at
all times have been, calculated as follows:
Annual Percentage Fee Applied To Net Assets Of
Fund
1.0% Up to $20,000,000; plus 0.6% $20,000,000 through
$100,000,000; plus 0.5% over $100,000,000
2 -
Bruce and Co. received fees of $24,553 from the Fund during the
fiscal year ended June 30, 1996.
The Fund paid brokerage commissions of $2,000 during 1996.
In addition, the Fund purchased securities from dealers acting
as principals. These transactions are at net prices which
include markups for the dealers. None of the brokers with whom
the Fund dealt was affiliated in any manner with the Fund, or
with any affiliated person of the Fund, including the investment
adviser.
Brokers are selected by Bruce and Co. to effect securities
transactions for the Fund based on the adviser's overall
evaluation of the commission rates charged, the reliability and
quality of the broker's services and the value and expected
contribution of such services to the performance of the Fund.
Where commissions paid reflect services furnished in addition
to execution, such commissions may, on occasion, be somewhat
higher than could be obtained from brokers not supplying such
services. The adviser considers the supplementary research and
statistical or other factual information provided by dealers in
allocating portfolio business to dealers. Such allocation is
not on the basis of any formula, agreement or understanding.
The Board of Directors of the Fund has in previous years
permitted the Fund to pay brokerage commissions which may be in
excess of those which other brokers might have charged for
effecting the same transactions, in recognition of the value of
the brokerage and research services provided by the executing
brokers. The research which is received from brokers includes
such matters as information on companies, industries, areas of
the economy and market factors. The information received may
or may not be useful to the Fund, and may or may not be useful
to the investment adviser in servicing other of its accounts.
Bruce and Co. has attempted and will attempt to evaluate the
overall reasonableness of the commissions paid by the Fund by
attempting to negotiate commissions which are within a
reasonable range, in the light of any knowledge available as to
the levels of commissions being charged, but keeping in mind
the brokerage and research services provided. None of the
Fund's securities transactions during the last fiscal year were
placed pursuant to an agreement or understanding with a broker
or otherwise through an internal allocation procedure because
of research services provided.
AMENDMENT OF INVESTMENT RESTRICTION
The Fund has adopted certain investment restrictions which
are matters of fundamental policy and cannot be changed without
the approval of the holders of a majority of the outstanding
shares of the Fund as defined by the Investment Company Act.
At present, one such restriction prohibits the Fund from
purchasing securities of other investment companies. The Fund
manager has recommended to the Board of Directors that this
restriction be modified to allow the Fund to invest cash in one
or more money market funds. At a meeting of the Board of
Directors, it was unanimously resolved that, subject to
stockholders approval, the above described restrictions
appearing in Article TEIRD, Section (1), subsection (g) of the
Fund's Articles of Incorporation be repealed, and that in its
place and stead, the investment restriction provide that the
Corporation shall not -
(g) purchase the securities of any investment
company, except the Fund may purchase such securities
issued by money market funds which are subject to SEC
Rule 2a-7 under the Investment Company Act of 1940.
The Board of Directors recommends the shareholders approve the
above amendment to the Fund's investment restrictions.
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Registration of the Fund shares under the Securities Act of
1933 requires the Fund to make at least annual filings with the
Securities and Exchange Commission, which filings include
financial statements which must be signed or certified by an
independent public accountant. The Board of Directors has
unanimously selected the firm of Arthur Andersen LLP, 33 West
Monroe Street, Chicago, Illinois to serve as such independent
public accountant for the fiscal year ending in 1997 (as it
served during fiscal 1984 through 1996), and will submit this
selection for ratification or rejection by the stockholders.
The Annual Report for fiscal 1996 was mailed to shareholders in
August, 1996. The Fund does not plan to request a
representative of Arthur Andersen LLP to be present at the
annual meeting.
QUORUM AND VOTE REQUIRED
The presence in person or by proxy of the holders of record
of a majority of the issued and outstanding capital stock
constitutes a quorum at all meetings of stockholders of the
Fund. All matters described in this Proxy Statement will be
decided by a majority of all votes cast at a duly constituted
meeting.
REVOCABILITY OF PROXY AND OTHER MATTER
The enclosed form of proxy, when signed and returned, may
nevertheless be revoked at any time prior to its exercise by
written notice to the Fund, execution of a subsequent proxy or
personal attendance at the Meeting. Unless so revoked, the
enclosed form of proxy, properly executed and returned, will be
voted in accordance with the instructions thereon. The proxy
will be voted in favor of each nominee for director named herein
unless a choice is indicated to withhold authority to vote for
all of the listed nominees or any individual non-@nee. As to
the proposal, the proxy will be voted in favor of that proposal
unless a choice is indicated to vote against or to abstain from
voting on that proposal.
4 -
This statement is being mailed to stockholders of the Fund
on or about November 28, 1996. The solicitation of proxies for
the Meeting will be made primarily by mail, but some
solicitation may take place by telephone, telegraph and personal
interview. The Fund will be responsible for the direct payment
of a costs, fees and expenses in connection with such
solicitation.
Only stockholders of record at the close of business on
November 14, 1996, the record date for the Meeting, will be
entitled to vote at the Meeting. At the close of business on
the record date there were 18,882 shares of the Fund outstanding
and entitled to vote. Each such share entitles the holder of
record to one vote.
PROPOSALS OF SECURITY HOLDINGS
Any Fund security holder who wishes to present a proposal
to the next (1997) annual meeting of shareholders must make such
submission in sufficient time for it to be received at Bruce
Fund, Inc.'s executive offices not less than 120 days in advance
of the month and day of this proxy statement.
Board of Directors
BRUCE FUND, INC.
November 14,1996
Chicago, Illinois
PROXY
THE BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414
Chicago, Illinois 606061@
The undersigned hereby appoints Robert B. Bruce, James S. Van Pelt, Jr. and
Ward M Johnson, an each of them, proxies of the undersigned, with full
power of substitution, to vote and act with respect to all shares of Bruce
Fund, Inc. (the "Fund") to which the undersigned is entitled to vote and
act as fully as the undersigned could vote and act if personally present at
the Annual Meeting of Stockholders, to be held on Wednesday, December 18,
1996 at 4:00 p.m. in the Conference Room at 500 West Madison Street, 39th
Floor, Chicago, Illinois 60661.
C)
YOUR VOTE IS IMPORTANT
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT BY NOT LATER THAN DECEMBER
11, 1996 IN THE ENCLOSED ENVELOPE TO UNIFIED ADVISERS, INC., 429 N.
PENNSYLVANIA STREET, INDIANAPOLIS, INDIANA 46204.
This proxy will not be voted unless it is dated and signed exactly as
instructed below.
1. Election of DIRECTORS - FOR all nominees listed below F-I WITHHOLD
AUTHORITY to vote F-I
Nominees: Robert B. Bruce, James S. Van Pelt, Jr. and Ward
M. Johnson
(INSTRUCTION: To withhold authority to vote for any individual
nominee or nominees, write each such nominee's name in the space
provided below.)
2. For approval of amendment of the Fund's investment restrictions to
permit the Fund to invest excess cash by the purchase of securities
issued by money market funds.
FOR AGAINST, ABSTAIN
3. For approval of Arthur Andersen L.L.P. to act as independent certified
public accountants for the Fund for the present fiscal year.
FOR AGAINST ABSTAIN
4. In their discretion upon such other matters as may properly come
before the meeting. The Board of Directors recommends that
stockholders vote FOR each of the proposals.
Recipient of the Notice of Annual Meeting of Stockholders and
related Proxy Statement, dated November 14, 1996 is hereby acknowledged.
signature
Date 1996
signature
jointly, each Shareholder named should sign. If only one
signs, his or her signature If the shares are held s
will be binding. If the Shareholder is a corporation, the President or
Vice President should sign in his or her own name, indicating title. If
the Shareholder is a partnership, a partner should sign in his or her own
name, indicating that he or she is a "Partner".
(except as marked to the contrary below) for all nominees below
