BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414
Chicago, Illinois 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HEID DECEMBER 10, 1998
November 13, 1998
Dear Shareholder:
The annual meeting of Bruce Fund, Inc. (the 'Fund') will be
held at 4:00 p.m. on Thursday, December 10, 1998 in the
Conference Room at 500 West Madison Street, 39th Floor, Chicago,
Illinois 6066 1. The purpose of the meeting is:
(1) to elect three directors of the Fund;
(2) to ratify or reject the selection of Arthur Andersen
UP as independent certified public accountant for the
Fund for the year ending June 30, 1998;
(3) 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 6, 1998, 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 Funds Prospectus dated October
30, 1998 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 10, 1998, 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
until 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 own, 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 67 (investment adviser); 1982 to present--
Chairman of Board of Directors,
Professional Life Casualty
Company (life insurance issuer)
*Mr. Bruce awns 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 6,983
shares of the Fund.
James S. Van Pelt, Jr. 1986 to present--President, Grundy
Industries,
Age 62 Inc. (roofing material manufacturer).
Ward M. Johnson 1978 to present - Manufacturer's agent
representing
Age 61 manufacturers of housewares, home
furnishings, consumer electronics products,
and office equipment.
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 August 21, 1998, 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 and extend the Investment Advisory Agreement with
Bruce and Co. dated September 30, 1996.
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
Bruce and Co. received fees of $29,366 from the Fund during the fiscal
year ended June 30, 1998.
2 -
The Fund paid brokerage commissions of $4,000 during 1998.
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.
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 1999 (as it
served during fiscal 1984 through 1998), and will submit this
selection for ratification or rejection by the stockholders.
The Annual Report for fiscal 1998 was mailed to shareholders in
August, 1998. The Fund does not plan to request a
representative of Arthur Andersen LLP to be present at the
annual meeting.
3 -
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 nominee. 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.
This statement is being mailed to stockholders of the Fund
on or about November 16, 1998. 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 all costs, fees and expenses in connection with such
solicitation.
Only stockholders of record at the close of business on
November 6, 1998, 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 18,168 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 (1999) 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 13, 1998
Chicago, Illinois
4 -
Please mark box below in blue or black ink
I .Election of DIRECRORS
FOR all nominees listed below
WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all
nominees listed below
Nominees: RobertB.Bruce,jamesS.VanPelt,jr.and WardM.Johnson
(INSTRUCRION: To withhold authority to vote for any
individual nominee or nominees, write each such
noniinee7s name in the spare 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 LLP 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 13, 1998
is hereby acknowledged.
Dated:
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the Enclosed Envelope.
Signature(s)
