<PAGE>
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 Section 240.14a-11(c) or
Section 240.14a-12
The Royce Fund/Royce MicroCap Fund
.................................................................
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) 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:
.................................................................
[X] 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>
THE ROYCE FUND
------------------------
ROYCE MICRO-CAP FUND
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
------------------------
To the Shareholders of
THE ROYCE FUND:
ROYCE MICRO-CAP FUND
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of ROYCE
MICRO-CAP FUND (the 'Fund'), a series of The Royce Fund (the 'Trust'), will be
held at the offices of the Trust, 1414 Avenue of the Americas, New York, New
York, on Wednesday, June 28, 1995 at 4:30 p.m. (E.T.), for the following
purposes:
1. To approve a change in the Fund's stated investment objective by
eliminating the requirement that the securities in which the Fund will
primarily invest be traded in the over-the-counter market.
2. To transact such other business as may come before the meeting or
any adjournment thereof.
The Board of Trustees has fixed the close of business on May 18, 1995 as
the record date for the determination of those shareholders entitled to vote at
the meeting, and only holders of record at the close of business on that day
will be entitled to vote.
The Fund's Annual Report to Shareholders for the year ended December 31,
1994 was previously mailed to shareholders, and copies of it are available upon
request, without charge, by writing to the Trust at 1414 Avenue of the Americas,
New York, New York 10019 or calling toll-free at 1-800-221-4268.
IMPORTANT
To save the Fund the expense of additional proxy solicitation, if you do
not now expect to be present at the meeting, please insert your instructions on
the enclosed Proxy, date and sign it and return it in the enclosed envelope
(which requires no postage if mailed in the United States). The enclosed Proxy
is solicited on behalf of the Board of Trustees, is revocable and will not
affect your right to vote in person in the event that you attend the meeting.
By order of the Board of Trustees
SUSAN I. GRANT,
Secretary
May 22, 1995
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS
OF
ROYCE MICRO-CAP FUND
1414 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
WEDNESDAY, JUNE 28, 1995
----------------------------------
PROXY STATEMENT
----------------------------------
The enclosed Proxy is solicited on behalf of the Trustees of The Royce Fund
(the 'Trust') for use at a Special Meeting of Shareholders of Royce Micro-Cap
Fund (the 'Fund'), a series of the Trust formerly named Royce OTC Fund, which is
to be held at the offices of the Trust at the above address at 4:30 p.m. (E.T.)
on June 28, 1995, and at any adjournments thereof.
The purposes of the meeting are to approve a change in the Fund's stated
investment objective of seeking long-term capital appreciation by investing
primarily in common stocks and securities convertible into such common stocks
traded in the over-the-counter market and to transact such other business
related to the Fund as may come before the meeting.
The Proxy may be revoked at any time before it is exercised by written
instructions to the Trust or by filing a new Proxy with a later date, and any
shareholder attending the meeting may vote in person, whether or not he or she
has previously filed a Proxy. The shares represented by all properly executed
Proxies received in time for the meeting will be voted. Where a shareholder has
specified a choice on the Proxy with respect to Proposal 1, his or her shares
will be voted accordingly. If no directions are given, the shareholder's shares
will be voted in favor of such Proposal.
The cost of soliciting Proxies will be borne by the Fund, which will
reimburse brokerage firms, custodians, nominees and fiduciaries for their
expenses in forwarding proxy material to the beneficial owners of the Fund's
shares. Some officers and employees of the Trust and/or Quest Advisory Corp.
('Quest'), the Fund's investment adviser, may solicit Proxies personally and by
telephone, if deemed desirable.
INFORMATION ABOUT SHARE OWNERSHIP
As of May 18, 1995, the record date for the meeting, there were issued and
outstanding 5,915,354.908 shares of beneficial interest of the Fund, and the
following persons were known to the Trust to be beneficial owners or owners of
record of 5% or more of the outstanding shares of the Fund:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF OWNER AMOUNT AND NATURE OF OWNERSHIP PERCENTAGE
- ------------------------------------------------------- ------------------------------ ----------
<S> <C> <C>
Charles Schwab & Co. Inc. ............................. 1,139,912 shares -- Record 19.3%
101 Montgomery Street
San Francisco, CA 94104
Donaldson Lufkin Jenrette ............................. 454,347 shares -- Record 7.7%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303
</TABLE>
<PAGE>
As of the record date, the Trustees beneficially owned the following shares
of beneficial interest of the Fund:
<TABLE>
<CAPTION>
NAME OF TRUSTEE AMOUNT PERCENTAGE
- ---------------------------------------------------------------------- -------------- ----------
<S> <C> <C>
Charles M. Royce...................................................... 58,474 shares 0.99%
Richard M. Galkin..................................................... None --
Stephen L. Isaacs..................................................... None --
David L. Meister...................................................... 2,449 shares 0.04%
</TABLE>
Mr. Royce has sole voting power and sole investment power as to all but
2,189 of the shares beneficially owned by him. Mr. Meister has shared voting
power and shared investment power as to all of the shares beneficially owned by
him. As of the record date, all Trustees and officers of the Trust as a group (8
persons) beneficially owned 74,105 shares of the Fund (1.25% of the outstanding
shares).
1. CHANGE IN FUND'S STATED INVESTMENT OBJECTIVE (PROPOSAL 1).
PRESENT STATED INVESTMENT OBJECTIVE
The Fund's present stated investment objective is to seek long-term capital
appreciation, primarily by investing in common stocks and securities convertible
into common stocks of companies primarily traded in the over-the-counter market.
The Fund will, in pursuit of this objective, normally invest at least 80% of its
assets in the common stocks and convertible securities of small and micro-sized
companies. At least 75% of these securities will be traded in the
over-the-counter market, and at least 65% of these securities will be issued by
companies with stock market capitalizations under $300 million at the time of
investment. The over-the-counter market securities will generally be listed on
the Nasdaq system.
PROPOSED STATED INVESTMENT OBJECTIVE
It is proposed to eliminate the requirement that the common stocks and
securities convertible into common stocks of companies in which the Fund will
normally invest be traded primarily in the over-the-counter market, thereby
allowing the Fund to invest in small and micro-cap companies without regard to
the market in which their securities are traded. Quest, the Fund's investment
adviser, views such an expansion of the markets in which the Fund may seek
investment opportunities as important, particularly since there are many
micro-cap companies whose common stocks are listed for trading on the New York
or American Stock Exchanges. The Board of Trustees has concluded that limiting
the Fund's primary source of small and micro-cap stocks to the over-the-counter
market is no longer in the best interests of shareholders.
After giving effect to this change, the Fund would normally invest at least
80% of its assets in the common stocks and convertible securities of small and
micro-cap companies which are listed for trading on the New York, American or
other stock exchanges or traded in the over-the-counter market, and at least 65%
of these securities would be issued by companies with stock market
capitalizations under $300 million at the time of investment.
VOTE REQUIRED
The investment objective of the Fund is deemed to be a fundamental policy,
which may not be changed without the approval of a majority of the outstanding
shares of the Fund. Accordingly, for the proposed change to become effective, it
must be adopted by a vote of the lesser of (i) 67% of the shares of beneficial
2
<PAGE>
interest of the Fund present or represented at the meeting (assuming that more
than 50% of the shares are present or represented) or (ii) more than 50% of the
outstanding shares of beneficial interest of the Fund. Neither abstentions nor
broker non-votes are counted in the tabulation of such votes.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED CHANGE IN THE STATED
INVESTMENT OBJECTIVE OF THE FUND DESCRIBED ABOVE.
2. OTHER BUSINESS.
Management knows of no business to be brought before the meeting other than
Proposal 1 in the Notice of Special Meeting. If other matters do come before the
meeting, it is intended that the shares represented by Proxies will be voted in
accordance with the judgment of the person or persons exercising at the meeting
the authority conferred by the Proxies.
ADDITIONAL INFORMATION
Quest Advisory Corp., located at 1414 Avenue of the Americas, New York, New
York 10019, serves as the Fund's investment adviser.
Quest Distributors, Inc., also located at such address, serves as the
distributor of the Fund's shares.
SHAREHOLDER PROPOSALS
As a Massachusetts business trust, the Trust does not hold annual meetings
of its shareholders. Shareholders who wish to present proposals for action by
all shareholders should follow procedures to request a special meeting as set
forth in the Trust's Declaration of Trust, which is on file with the Secretary
of the Commonwealth of Massachusetts.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND RETURN IT IN THE
ACCOMPANYING POSTAGE-PAID ENVELOPE.
May 22, 1995
3
<PAGE>
APPENDIX 1
PROXY CARD
<TABLE>
<S> <C>
IN ORDER TO VOTE YOUR SHARES, PLEASE DETACH THE LOWER PORTION OF THIS THE ROYCE FUND:
CARD, MARK, SIGN AND DATE THE CARD, AND RETURN IT IN THE ENVELOPE ROYCE MICRO-CAP FUND
PROVIDED. BY SIGNING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE 1414 AVENUE OF THE AMERICAS
THE PROXIES TO VOTE ON THE PROPOSAL AS MARKED, OR, IF NOT MARKED, NEW YORK, NY 10019
SHARES WILL BE VOTED 'FOR' PROPOSAL 1. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES
The undersigned hereby appoints Stephen L. Issacs and Charles
M. Royce, or either of them acting in the absence of the
other, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to
vote, as designated below, all the shares of the Fund held of
record by the undersigned on May 18, 1995, at the Special
Meeting of Shareholders to be held on June 28, 1995, or at
any adjournment thereof. This Proxy when properly executed
will be voted in the manner directed by the undersigned
shareholder. If no direction is made, this Proxy will be
voted 'For' Proposal 1.
THE ROYCE FUNDS
P.O. BOX 9152
FARMINGDALE, NY 11736-9811
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [x] ROYCE1 KEEP THIS PORTION FOR YOUR RECORDS.
- ------------------------------------------------------------------------------------------------------------------------------------
ROYCE MICRO-CAP FUND DETACH AND RETURN THIS PORTION ONLY.
</TABLE>
- ------------------------------
VOTE ON PROPOSAL
- ------------------------------
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ] 1. PROPOSAL TO CHANGE THE FUND'S STATED INVESTMENT OBJECTIVE.
2. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
</TABLE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------- ---------------------------------------------- ------------------------------
SIGNATURE SIGNATURE IF HELD JOINTLY DATE
Please sign exactly as name appears above. When shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
</TABLE>
