<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] 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 Rule 14a-11(c) or Rule 14a-12
Mathers Fund, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Mathers Fund, Inc.
- -------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
MATHERS FUND, INC.
Suite 201
100 Corporate North - Bannockburn, Illinois 60015
800-962-FUND 847-295-7400
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
March 16, 1998
TO THE STOCKHOLDERS OF MATHERS FUND, INC.:
Notice is hereby given that a special meeting of stockholders of MATHERS
FUND, INC. will be held at 100 Corporate North, Lower Level Conference Room,
Bannockburn, Illinois on Monday, April 20, 1998 at 1:30 P.M., Central Time, for
the following purposes, and to transact such other business as may properly come
before the meeting or any postponement or adjournment thereof:
(1) To elect directors of the Fund;
(2) To consider and vote upon ratification of the appointment of Arthur
Andersen LLP as auditors of the Fund for 1998; and
(3) To approve or disapprove of changes in the by-laws and the fundamental
investment policies of the Fund to permit the Fund to effect short
sales of securities.
The close of business on March 10, 1998 has been fixed as the record date
for determination of the stockholders entitled to notice of and to vote at the
special meeting and any adjournments thereof.
Please complete, date, sign and return the enclosed proxy in the reply
envelope whether or not you plan to attend the meeting. Your vote is important
no matter how many shares you own. Prompt return of your proxy will save expense
to the Fund. If you attend the meeting, you may, if you wish, withdraw your
proxy and vote in person.
ANNE E. MORRISSY
Executive Vice President and Secretary
<PAGE> 3
PROXY STATEMENT
Your proxy is solicited on behalf of the Board of Directors of Mathers
Fund, Inc. (the "Fund") for its special meeting of stockholders to be held at
100 Corporate North, Lower Level Conference Room, Bannockburn, Illinois on
Monday, April 20, 1998 at 1:30 P.M., Central Time, and for any postponement or
adjournment thereof. The Fund expects to mail this Proxy Statement and each
proxy to stockholders on or about March 16, 1998.
The Fund's investment adviser is Mathers and Company, Inc. (the "Adviser"),
100 Corporate North, Bannockburn, Illinois 60015. The Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940, as amended, and
has served as investment adviser to the Fund since its inception in 1965 and as
investment adviser to pension and profit sharing funds, charitable foundations,
insurance company separate accounts and/or others since 1961.
A proxy may be revoked at any time before its exercise by the submission of
a subsequently dated proxy or by oral or written notice of revocation given to
the Secretary of the Fund. To be effective, such revocation must be received by
the Fund prior to the meeting and must indicate the stockholder's name and
account number. In addition, if you attend the meeting in person, you may, if
you wish, vote by ballot at the meeting, thereby canceling any proxy previously
given. All valid proxies received by the Fund will be voted unless revoked.
Proxies will be voted in accordance with the specifications thereon and, in the
absence of specification, for the election of the nominees listed below as
directors of the Fund, for the ratification of the appointment of auditors and
for the proposal to permit the Fund to effect short sales of securities. The
Board of Directors recommends a vote FOR each proposal.
Stockholders of record at the close of business on March 10, 1998 will be
entitled to vote in person or by proxy at the meeting. As of the close of
business on such date, there were 10,194,650 full shares of the Fund's Capital
Stock outstanding, each entitled to one vote. Certain information as to all
persons known to the Fund who, as of February 27, 1998, owned of record or
beneficially more than 5% of such shares is set forth under "Principal
Stockholders" below.
A majority of the Fund's shares outstanding and entitled to vote,
represented in person or by proxy, constitutes a quorum at all meetings of
stockholders. If a quorum is not present at the meeting, or if a quorum is
present at the meeting but sufficient votes to approve any of the proposals
described in this Proxy Statement are not received, the persons named as proxies
may propose one or more adjournments of the meeting to permit further
solicitation of proxies. Any adjournment will require the affirmative vote of
the holders of a majority of shares represented in person or by proxy at the
meeting. The persons named as proxies will vote all proxies that they are
entitled to vote FOR approval of any such proposal in favor of adjournment and
will vote all proxies required to be voted AGAINST any such proposal against
adjournment.
Abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for or
against any adjournment or proposal. Accordingly, abstentions and broker
non-votes will have no effect on the election of directors or ratification of
the appointment of auditors, for which the required vote is a plurality or a
majority of the votes cast, but will have the effect of a vote against
adjournment and approval of short sales of securities, for which the required
vote is a percentage of the
2
<PAGE> 4
shares present or outstanding. Broker non-votes are shares held in the name of a
broker or nominee for which instructions have not been received from the
beneficial owners or other persons entitled to vote and the broker or nominee
does not have discretionary voting authority.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
TO ANY STOCKHOLDER UPON REQUEST. A STOCKHOLDER WHO WISHES TO RECEIVE A COPY OF
THE FUND'S ANNUAL REPORT MAY WRITE THE FUND AT 100 CORPORATE NORTH, BANNOCKBURN,
ILLINOIS 60015, OR CALL (800) 962-FUND.
PROPOSAL 1. ELECTION OF DIRECTORS
Proposal 1 relates to the election of directors of the Fund. The Board of
Directors proposes the election of the nine nominees named in the table below.
Each nominee, including those who are not "interested persons" of the Fund
("Non-Interested Directors") as that term is defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), has indicated his or her willingness
to serve if elected. If elected, each nominee will hold office until the next
meeting of shareholders held for the purpose of electing directors and until the
election and qualification of his or her successor. Unless you give contrary
instructions on the enclosed proxy card, the persons named on such proxy card
will nominate and vote the shares represented by proxy in favor of the election
of the nine nominees. Should any of the nominees withdraw or otherwise become
unavailable for election, which the Fund does not anticipate, shares represented
by proxy may be voted in favor of such other nominee or nominees as management
may recommend.
Directors shall be elected by the affirmative vote of a plurality of the
votes cast for the election of directors, in person or by proxy and entitled to
vote thereon, provided a quorum is present. Five nominees for director of the
Fund -- Messrs. Becker, Cain, Freund, Reynolds and Van der Eb -- currently serve
as directors of the Fund. Under the charter and by-laws of the Fund, the Board
of Directors, by a vote of a majority of the entire Board, may increase or
decrease the number of directors of the Fund. While the number of directors
which currently constitutes the entire Board of Directors is five, the Board of
Directors has authorized an increase in the number of directors to nine
effective as of the election of directors at the meeting. If elected, the nine
nominees will constitute all of the directors of the Fund.
The following table shows the nominees who are standing for election as a
director of the Fund and their principal occupations which, unless specified
dates are shown, are of more than five years' duration, although the titles may
not have been the same throughout:
<TABLE>
<CAPTION>
YEAR
POSITION WITH BUSINESS EXPERIENCE; BECAME SHARES
NAME; AGE THE FUND OTHER DIRECTORSHIPS DIRECTOR OWNED(1)
--------- ------------- -------------------- -------- --------
<S> <C> <C> <C> <C>
Karl M. Becker; 54............... Director Attorney; prior to 1991 1,856(2)
1991, Senior Vice
President and
General Counsel,
Beatrice Company
(food company).
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
YEAR
POSITION WITH BUSINESS EXPERIENCE; BECAME SHARES
NAME; AGE THE FUND OTHER DIRECTORSHIPS DIRECTOR OWNED(1)
--------- ------------- -------------------- -------- --------
<S> <C> <C> <C> <C>
Tyler R. Cain; 57................ Director President, TRC 1993 8,056
Trading, Inc.
(private investment
company).
Charles G. Freund; 74............ Director Retired; prior to 1986 16,041(3)
1987, Vice
President, Secretary
and Treasurer,
MidCon Corp.
(natural gas
pipeline); Director,
Lincoln National
Direct Placement
Fund, Inc. and
Lincoln Convertible
Securities Fund
(registered closed-
end investment
companies) and
Success Bancshares
Inc.
Jon P. Hedrich; 57............... Nominee for Private Investor; -- --
Director prior to 1992,
President and
Partner, Steiner
Diamond
Institutional
Services.
Robert E. Kohnen; 64............. Nominee for Vice President and -- 2,320(4)
Director Investment Manager,
Protection Mutual
Insurance Company.
Anne E. Morrissy; 37*............ Executive Vice President, -- 4,451(5)
Vice Mathers and Company,
President and Inc.
Secretary,
and Nominee
for Director
Robert J. Reynolds; 47*.......... President and Senior Vice 1987 3,849(6)
Director President and
Secretary, Mathers
and Company, Inc.
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
YEAR
POSITION WITH BUSINESS EXPERIENCE; BECAME SHARES
NAME; AGE THE FUND OTHER DIRECTORSHIPS DIRECTOR OWNED(1)
--------- ------------- -------------------- -------- --------
<S> <C> <C> <C> <C>
Jack O. Vance; 73................ Nominee for Managing Director, -- --
Director Management Research,
Inc. (management
consulting); prior
to 1990, Managing
Director of McKinsey
and Company
(management
consulting);
Director,
International
Rectifier
Corporation (semi-
conductors),
Semtech, Inc. and
FCG Enterprises,
Inc. (management
consulting)
Henry G. Van der Eb, Jr.; 52*.... Chairman and President, Mathers 1976 304,541(7)
Director and Company, Inc.
</TABLE>
- -------------------------
* These nominees are interested persons of the Adviser and of the Fund, as
defined in the 1940 Act.
(1) Full shares of the Fund owned beneficially as of February 27, 1998, based on
information furnished by each nominee. On that date, the directors and
officers of the Fund, as a group, beneficially owned 341,114, constituting
3.32%, of the Fund's outstanding shares.
(2) Mr. Becker shares investment and voting power over these shares with his
wife.
(3) Includes 1,500 shares held by Mr. Freund's wife.
(4) Includes 780 shares held by Mr. Kohnen's wife.
(5) Includes 2,839 shares held in the Employee's Profit Sharing and Savings
Trust of Mathers and Company, Inc. over which Ms. Morrissy has investment
and voting power. Also includes 85 shares held by Ms. Morrissy as custodian
for a minor child.
(6) Mr. Reynolds shares investment and voting power over these shares with his
wife.
(7) Constitutes 2.96% of outstanding shares. Includes 44,195 shares held in the
Employees' Profit Sharing and Savings Trust of Mathers and Company, Inc.
over which Mr. Van der Eb has investment and voting power. Also includes
206,838 shares over which Mr. Van der Eb shares investment and voting power
with his wife and 53,508 shares held by Mr. Van der Eb's wife, either
individually or as custodian for children.
During the Fund's last fiscal year ended December 31, 1997, the Board of
Directors met four times. Each of the directors attended 75% or more of the
meetings of the Board of Directors held during such year. The Board does not
have a standing audit, nominating or compensation committee.
5
<PAGE> 7
The Board of Directors is responsible for the overall management of the
Fund, including general oversight and review of its investment policies and
activities. The Board of Directors elects the officers of the Fund. The officers
are responsible for supervising and administering the Fund's day-to-day
operations.
The Fund pays each Non-Interested Director an annual retainer of $5,000
plus $1,000 for attendance at each Board of Directors meeting. Directors are
reimbursed for any expenses incurred in attending meetings. Directors of the
Fund who are "interested persons" as defined in the 1940 Act receive no direct
remuneration from the Fund. The Adviser serves as investment adviser to the
Fund. The Fund pays a fee to the Adviser as investment adviser to the Fund, and
certain of the directors, director nominees and officers of the Fund are
directors, officers and shareholders of the investment adviser.
The aggregate compensation paid by the Fund to each of its Non-Interested
Directors during its fiscal year ended December 31, 1997 is set forth below. The
Fund's investment adviser does not provide investment advisory services to any
other registered investment company, and therefore the Fund's directors receive
compensation only from the Fund. The Fund does not maintain any deferred
compensation, pension or retirement plans, and no pension or retirement benefits
are accrued as part of Fund expenses.
<TABLE>
<CAPTION>
NAME OF NON-INTERESTED AGGREGATE
DIRECTOR OF THE FUND COMPENSATION
- ---------------------- ------------
<S> <C>
Karl M. Becker........ $9,000
Tyler R. Cain......... 9,000
Charles G. Freund..... 8,000
</TABLE>
Since the beginning of the Fund's fiscal year ended December 31, 1997,
there were no transactions involving purchases or sales of securities of the
Adviser by any director or nominee.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE ELECTION OF MESSRS. BECKER,
CAIN, FREUND, HEDRICH, KOHNEN, REYNOLDS, VANCE AND VAN DER EB, JR. AND MS.
MORRISSY
PROPOSAL 2. RATIFICATION OF SELECTION OF AUDITORS
The Fund's financial statements for the fiscal year ended December 31,
1997, were audited by Arthur Andersen LLP, independent auditors. In addition,
Arthur Andersen LLP prepares the Fund's federal and state annual income tax
returns.
On February 9, 1998, the Board of Directors of the Fund, by a vote of all
directors, including all Non-Interested Directors, appointed Arthur Andersen LLP
as auditors of the Fund for its fiscal year ending December 31, 1998. This firm
of independent public accountants has served as auditors of the Fund since its
organization in 1965 and holds no material direct or indirect financial interest
in the Fund. The ratification of the appointment of Arthur Andersen LLP as
independent auditors for the fiscal year ending December 31, 1998 is to be voted
upon at the meeting, and it is intended that the persons named in the
accompanying proxy
6
<PAGE> 8
will vote for such ratification unless contrary instructions are given. Approval
of this proposal requires the affirmative vote of the holders of a majority of
the shares of the Fund cast at the meeting, in person or by proxy and entitled
to vote thereon, provided a quorum is present.
Representatives of Arthur Andersen LLP are not expected to be present at
the meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF
ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS FOR THE FUND
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998
PROPOSAL 3. APPROVAL OR DISAPPROVAL OF SHORT SALES OF SECURITIES
Introduction. When the Taxpayer Relief Act of 1997 became law last August,
one of its provisions eliminated the "short-short" rule which had previously
placed significant tax-based disincentives on mutual funds' use of short selling
investment strategies designed to generate capital appreciation for shareholders
from declining stock prices.
The repeal of the "short-short" rule provides mutual fund portfolio
managers with new flexibility and opportunity to seek capital appreciation and
manage risk. Currently, both Article IV, Section 7(c) of the Fund's by-laws and
a fundamental policy prohibit the short sale of securities. In view of this, the
Board of Directors has proposed, subject to stockholder approval at the special
meeting, to amend the language of Article IV, Section 7(c) of the Fund's by-laws
and its fundamental investment policies to eliminate the prohibition on short
sales of securities. It is also proposed to add a clarifying phrase to the
by-law and fundamental policy restrictions on purchasing securities on margin
and to the fundamental policy restriction on pledging assets to exclude short
sales of securities. Approval of these proposals requires the affirmative vote
of the holders of the lesser of (i) 67% of the shares represented at the special
meeting, if more than 50% of the outstanding shares are represented, or (ii)
more than 50% of the outstanding shares.
Subject to stockholder approval of the proposal to permit the Fund to
effect short sales of securities, the Board of Directors has adopted, as a
non-fundamental policy, the following restrictions: (1) the Fund is prohibited
from selling any securities short if immediately thereafter the market value of
all securities sold short by the Fund would exceed 30% of the value of the
Fund's net assets, and (2) the Fund is prohibited from selling securities of any
single issuer short if immediately thereafter the market value of the securities
of that issuer that have been sold short by the Fund would exceed 3% of the
Fund's net assets or if the securities sold short would constitute more than 2%
of a class of the issuer's outstanding securities. The Board of Directors has
also adopted a proposal, subject to stockholder approval of the proposal to
permit short sales, to revise the Fund's investment objective to be "capital
appreciation over the long term." The Fund's current investment objective is
"capital appreciation over the long term principally through investment in
common stocks." The revised objective would reflect
7
<PAGE> 9
the fact that the Fund would have the flexibility to pursue its objective by
investing in common stocks and other equity securities and by engaging in
certain investment strategies designed to capitalize on potential declines in
the prices of equity securities where the Adviser believes that equity
securities are overvalued. In addition, the Fund would also continue to be able
to invest all or any portion of its assets in securities other than common
stocks, when, for instance, the Adviser believes that the risk of owning equity
securities is high.
Description of Short Sales of Securities. The Adviser currently expects
short sales would generally involve individual equity securities and would
generally not involve short sales "against the box," which are short sales of
securities that the seller already owns or has the right to obtain at no
additional cost. In entering into a short sale of a security, the Fund would,
for example, sell a stock which it does not then own in order to profit from the
potential decline in the market price of that stock. To meet its settlement
obligation, the Fund would borrow the security sold short from a broker and
deliver such security to the buyer. The Fund would then be obligated to return
the borrowed security to the broker, typically at an unspecified future date. At
that time, the Fund would purchase an equivalent number of shares of the same
shorted security at its then current market price in order to cover the short
position and effect the return. The price at such time may be more or less than
the price at which the security was sold short. The transaction will be
profitable to the Fund if the price of the security at the time it is purchased
is less than its price at the time the short sale was effected. Conversely, if
the price of the security is greater at the time of purchase than at the time of
the short sale, the transaction would result in a loss. The Fund will be
obligated to reimburse the lender for any dividends paid on the borrowed stock
during the period of the open short position and may have to pay a fee to borrow
certain stocks.
The proceeds of the short sale are retained by the broker for the purpose
of meeting its collateral requirements until such time that the short position
is closed out. In general, the Fund will also be required to pledge additional
cash or liquid securities to the broker as collateral for its obligations.
Generally, brokers require initial collateral (including the short sale
proceeds) with a value equal to 150% of the value of the securities sold short.
The amount of collateral is adjusted daily upward to reflect increases in the
market value of the securities sold short and downward to reflect decreases in
the market value of the securities sold short. In addition, pursuant to
Securities and Exchange Commission rules, until the Fund covers its short
position, the Fund will be required to maintain with its custodian a segregated
account, containing cash or liquid debt or equity securities, such that the
amount deposited in the segregated account plus the amount deposited with the
broker as collateral, excluding initial proceeds from the short sale, equals the
then current market value of the security sold short.
For federal income tax purposes, realized gains and losses of the Fund from
its short sales, regardless of the period the Fund held the security used to
close the short sale, are generally expected to be treated as short-term capital
gains or losses. Different rules would apply if, at the time of the short sale,
the Fund held securities that were substantially identical to the securities
used to close the short sale.
Intended Use by the Fund. If the proposed changes in the Fund's by-laws and
fundamental policies are approved, the Fund will have another alternative in
seeking capital appreciation
8
<PAGE> 10
in that it may sell short when it believes that prices of specific securities
are likely to decline. As such, the Fund will have the additional flexibility to
potentially profit from the decline in the price of individual equity
securities.
Special Considerations. There are risks associated with the short sales of
securities, including but not limited to the following:
1. The decision of whether, when and how to utilize short selling involves
the exercise of skill and judgment and, unless the Adviser correctly
anticipates the price movements of securities, it is possible that, for
at least certain short sales, the Fund would have been better off if the
short sale had not been made;
2. The Fund will incur a loss on the short sale of a security if the price
of the security increases between the date of the short sale and the
date the borrowed security is purchased to cover the previous sale;
3. Short selling is generally considered a speculative investment strategy
and, unlike a long purchase, where the investor cannot lose more than
the purchase price, there is no theoretical limit to the potential loss
on a short sale;
4. Possible volatility and illiquidity in the markets could result in
difficulty in closing out an existing short position causing a
continuing exposure to adverse price movements until the position is
covered; and
5. A security borrowed and sold short may be called back by the lender,
possibly causing the short position to be closed out prematurely.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO PERMIT THE
FUND TO EFFECT SHORT SALES OF SECURITIES
EXECUTIVE OFFICERS OF THE FUND
Officers of the Fund are appointed by the directors and serve at the
discretion of the Board. None of the Fund's officers receives any compensation
from the Fund. The following table sets forth certain information furnished by
each of the executive officers of the Fund in addition to Messrs. Van der Eb,
Jr. and Reynolds and Ms. Morrissy (about whom information is given above). Each
such executive officer has engaged in the principal occupation indicated (or
other executive positions with the Fund or its investment adviser) for five or
more years. The business address of each individual listed below is 100
Corporate North, Bannockburn, Illinois 60015.
<TABLE>
<CAPTION>
NAME; AGE POSITION WITH THE FUND; BUSINESS EXPERIENCE
- --------- -------------------------------------------
<S> <C>
Lawrence A. Kenyon, 32......... Senior Vice President and Chief Financial
Officer; Vice President and Treasurer, Mathers
and Company, Inc.
Edith L. Cook, 56.............. Vice President and Treasurer; Vice President,
Mathers and Company, Inc.
Mary Anne Kinnucan, 43......... Vice President
Heidi Stubner, 29.............. Vice President
</TABLE>
9
<PAGE> 11
PRINCIPAL STOCKHOLDERS
As of February 27, 1998, no person owned of record or was known by the Fund
to own beneficially more than 5% of the Fund's outstanding shares except for
Edward Pauls, who owned of record 1,421,010, or 13.82%, of the Fund's
outstanding shares as of that date.
GENERAL
Other Business. The Fund is not aware of any matters which may properly
come before the meeting other than as set forth above. If other matters do
properly come before the meeting, the persons named in the accompanying form of
proxy or their substitutes will vote the proxies in accordance with their best
judgment.
Solicitation of Proxies. Solicitation will be primarily by mail, but
officers of the Fund or regular employees of the Fund's investment adviser may
also solicit without compensation by telephone, telecopy or personal contact.
The Fund has also retained D.F. King & Co. Inc. to assist in certain aspects of
the process of solicitation of proxies from its stockholders. The fees of such
firm are estimated to be up to $7,000, plus reimbursement of out-of-pocket
expenses. The cost of solicitation will be paid by the Fund.
Future Meetings; Stockholder Proposals. The Fund is not required to hold
annual meetings of stockholders and the Fund generally does not hold a meeting
of stockholders in any year unless certain specified stockholder actions are
required to be taken or are believed to be desirable under the 1940 Act. By
observing this policy, the Fund seeks to avoid the expenses customarily incurred
in the preparation of proxy material and the holding of stockholder meetings, as
well as the related expenditure of corporate staff time.
A stockholder proposal intended to be presented at any meeting of
stockholders of the Fund hereafter called must be received by the Fund at least
120 days before the Board of Directors' solicitation relating thereto is made in
order to be included in the Fund's proxy statement and form of proxy relating to
that meeting and presented at the meeting. The mere submission of a proposal by
a stockholder does not guarantee that such proposal will be included in the
proxy statement because certain rules under the Federal securities laws must be
complied with before inclusion of the proposal is required. A stockholder
desiring to submit a proposal for presentation at a meeting of stockholders
should send the proposal to the offices of the Fund, 100 Corporate North,
Bannockburn, Illinois 60015.
By order of the Board of Directors,
ANNE E. MORRISSY
Executive Vice President and Secretary
10
<PAGE> 12
PROXY MATHERS FUND,INC. PROXY
SPECIAL MEETING OF STOCKHOLDERS, APRIL 20, 1998
The undersigned hereby appoints Anne E. Morrissy, Robert J. Reynolds, and Henry
G. Van der Eb, Jr., and each of them, with full power of substitution,
attorneys and proxies with powers the undersigned would possess if personally
present to vote all of the full shares of capital stock of the undersigned in
Mathers Fund, Inc.. at the special meeting of its stockholders to be held April
20, 1998, and at any adjournment thereof, as indicated on the reverse side.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IN THE ABSENCE OF
SPECIFIC VOTING INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
PLEASE DATE AND SIGN ON
REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
If shares are held in the name of more than one person, all holders should
sign. Signatures should correspond with the name or names as they appear on
the reverse side. Persons signing as fiduciaries, or in any capacity other than
record holder, should include such capacity. Only full shares are shown on the
reverse side.
(Continued on Reverse Side)
(Continued from Other Side)
MATHERS FUND, INC.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
1. Election of Directors
Karl M. Becker, Tyler R. Cain, Charles G. Freund, Jon P. Hedrich, Robert E.
Kohnen, Anne E. Morrissy, Robert J. Reynolds, Jack O. Vance and Henry G. Van
der Eb, Jr.
For All Nominees Withhold For All Except
[ ] [ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
the "For All Except" box and strike a line through the name(s) of the
nominees(s) in the list above.
2. Appointment of Arthur Andersen LLP as auditors
For Against Abstain
[ ] [ ] [ ]
3. Proposal to permit use of short sales of securities
For Against Abstain
[ ] [ ] [ ]
and in their discretion upon any other matters that may properly come before
the meeting or any postponement or adjournment thereof, all as set forth in the
notice of special meeting and proxy statement for such meeting, receipt of which
is acknowledged.
Please be sure to sign and date this Proxy. Date
---------------
- ------------------------ -------------------------
Stockholder sign here Co-owner sign here RECORD DATE SHARES:
<PAGE> 13
PLEASE VOTE
BY RETURNING YOUR SIGNED PROXY CARD NOW,
YOU HELP THE FUND AVOID THE EXTRA EXPENSE
OF A SECOND MAILING.
THANK YOU
