THE ROYCE FUND
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ROYCE MICRO-CAP FUND
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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To the Shareholders of
The Royce Fund:
Royce Micro-Cap Fund
NOTICE IS HEREBY GIVEN that a Special Meeting of
Shareholders 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 June 28, 1995 at 4:30 p.m. (E.D.T.), for the following
purposes related to Royce Micro-Cap Fund (the "Fund"):
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 solicita-
tion, 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
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PROXY STATEMENT
FOR ROYCE MICRO-CAP FUND
_____________________________
SPECIAL MEETING OF SHAREHOLDERS
OF
ROYCE MICRO-CAP FUND
1414 Avenue of the Americas
New York, New York 10019
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.D.T.) on
June 28, 1995, and at any adjournments thereof.
The purposes of the meeting relative to the Fund 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 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 his Proxy with respect to Purpose 1, his shares will be
voted accordingly. If no directions are given, his shares will be
voted in favor of such Purpose.
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 _______ shares of beneficial interest
of the Fund, and the following persons were known to the Trust to
be beneficial owners of 5% or more of the outstanding shares of the
Fund:
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Amount and
Nature of
Name and Address Ownership Percentage
As of the record date, no Trustee other than Charles M. Royce
beneficially owned shares of the Fund, and all of the Trustees and
officers of the Trust as a group (8 persons) owned _______ shares
of the Fund (_____% 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.
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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
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 other 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.
<PAGE>
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.
<PAGE>
Preliminary Proxy Material
THE ROYCE FUND: ROYCE MICRO-CAP FUND
1414 Avenue of the Americas
New York, NY 10019 PROXY
This Proxy is solicited on behalf of the Board of
Trustees. The undersigned hereby appoints Stephen L. Isaacs
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.
1. PROPOSAL TO CHANGE THE FUND'S STATED INVESTMENT OBJECTIVE.
FOR AGAINST ABSTAIN
2. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY COME
BEFORE THE MEETING.
(Continued on other side)
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(Continued from other side)
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. Please sign exactly as name appears below. 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.
DATED:____________________, 1995_____________________________________________
Signature
____________________________________________
PLEASE MARK, SIGN AND RETURN THE PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE ___________________________________
Signature if held jointly
