As filed with the Securities and Exchange Commission on July 9, 1997.
1933 Act Registration No. 333-23639
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SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
{ } Pre-Effective Amendment No.
{X} Post-Effective Amendment No. 1
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THE ROYCE FUND
Telephone Number: (212) 355-7311
1414 Avenue of the Americas, New York, N. Y. 10019
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Charles M. Royce, President
The Royce Fund
1414 Avenue of the Americas New York, N. Y. 10019
(Agent for Service)
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
Registrant has elected to register pursuant to Rule 24f-2 an
indefinite number of shares of beneficial interest. Accordingly,
no fee is payable herewith because of reliance upon Rule 24f-2.
The Rule 24f-2 Notice for the fiscal year ended December 31, 1996
was filed on February 27. 1997.
Page 1 of __ pages
The Exhibit Index is located on page
Cross-Reference Sheet
Form N-14 Item Caption in Prospectus/Proxy Statement
- -------------- -------------------------------------
1
Beginning of Registration Statement Cross-Reference Sheet;
and Outside Front Cover Page Front Cover
of Prospectus
2
Outside Back Cover Page of Prospectus Back Cover
3
Fee Table, Synopsis Information, Summary of Proposed Transaction; Fee
Riks Factors Table; Comparison of Pennsylvania
Mutual Fund and Royce Value Fund Fund;
and Reasons for the Proposed
Combination; and Determination by
the Trustee Regarding the Combination
4
Information about the Transaction Information about the Combination;
Comparison of Pennsylvania Mutual Fund
and Royce Value Fund Reasons for the
Proposed Combination; Consequences
of the Combination. See also Prospectus
for Pennsylvania Mutual Fund's
Consultant Class Dated April 30, 1997
5, 6
Information about Registrant, Comparison of Pennsylvania Mutual Fund
Information about Acquired Series and Royce Value Fund; Reasons for the
Proposed Combination; and
Capitalization
7
Voting Information Statement Concerning the Special
Meeting; and Required Vote
8
Interests of Certain Persons Not applicable
Form N-14 Item Caption in Statement of Additional
- --------------- Information
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9 Not applicable
Additional Information
For Reoffering by Persons
Deemed to be Underwriters
10, 11
Cover Page; Table of Contents Cover Page; Back Cover
12, 13
Additional Information about Registrant Statement of Additional Information
and about Series being Acquired of The Royce Fund dated April 30,
1997; Prospectus of Pennsylvani Mutual
Fund's Consultant Class dated April 30,
1997
14
Financial Statements 1996 Annual Report to Shareholders
including Schedule of Investments of
Pennsylvania Mutual Fund, which
includes audited financial statement
for the year ended December 31, 1996;
1996 Annual Report to Shareholders
including Schedule of Investments of
Royce Value Fund, which includes
audited financial statements as of and
for the year ended December 31, 1996;
and ProForma Combining Financial
Statements of Pennsylvania Mutual Fund
as of and for the year ended December
31, 1996 (unaudited)
PART A
Part A of pre-effective amendment no. 1 to The Royce Fund
registration statement (File No. 333-23639) filed on Form N-
14 under the Securities Act of 1933, as amended, on April 29,
1997 is incorporated herein by reference.
PART B
Part B of pre-effective amendment no. 1 to The Royce Fund
registration statement (File No. 333-23639) filed on Form N-
14 under the Securities Act of 1933, as amended, on April 29,
1997 is incorporated herein by reference.
PART C -- OTHER INFORMATION
Item 15. Indemnification
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(a) Article XI of the Declaration of Trust of the
Registrant provides as follows:
"ARTICLE XI
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LIMITATION OF LIABILITY AND INDEMNIFICATION
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LIMITATION OF LIABILITY
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Section l. Provided they have exercised reasonable
care and have acted under the belief that their actions are
in the best interest of the Trust, the Trustees shall not be
responsible for or liable in any event for neglect or
wrongdoing of any other Trustee or any officer, employee,
agent or Investment Adviser, Principal Underwriter, transfer
agent, custodian or other independent contractor of the
Trust, but nothing contained herein shall protect any
Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of his duties or reckless
disregard of the obligations and duties involved in the
conduct of his office.
Every note, bond, contract, instrument, certificate
or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust or the
Trustees or any of them in connection with the Trust shall
be conclusively deemed to have been executed or done only in
or with respect to their or his capacity as Trustees or
Trustee, and such Trustees or Trustee shall not be
personally liable thereon.
INDEMNIFICATION
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Section 2.
(a) Subject to the exceptions and limitations contained in
Section 2(b) below:
(i) Every person who is, or has been, a Trustee
or officer of the Trust (including persons who serve at the
Trust's request as directors, officers or trustees of
another entity in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") shall be indemnified by the
appropriate Fund to the fullest extent not prohibited by law
against liability and against all expenses reasonably
incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a
party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by
him in the settlement thereof; and
(ii) The words "claim", "action", "suit" or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, administrative, investigatory
or other, including appeals), actual or threatened, while
in office or thereafter, and the words "liability" and
"expenses" shall include, without limitation, attorneys'
fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to
a Covered Person:
(i) Who shall, in respect of the matter or
matters involved, have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to
the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence in the performance
of his duties or reckless disregard of the obligations and
duties involved in the conduct of his office or (B) not to
have acted in the belief that his action was in the best
interest of the Trust; or
(ii) In the event of a settlement, unless there
has been a determination that such Trustee or officer did
not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of his office,
(A) By the court or other body approving the
settlement;
(B) By a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to
the matter, based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) By written opinion of independent legal
counsel, based upon a review of readily available facts (as
opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may
be insured against by policies maintained by the Trust,
shall be severable, shall not be exclusive of or affect any
other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a person who has
ceased to be such Trustee or officer and shall inure to the
benefit of the heirs, executors and administrators of such
a person. Nothing contained herein shall affect any rights
to indemnification to which Trust personnel, other than
Trustees and officers, and other persons may be entitled by
contract or otherwise under law.
(d) Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit or
proceeding of the type described in subsection (a) of this
Section 2 may be paid by the applicable Fund from time to
time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the applicable Fund if
and when it is ultimately determined that he is not entitled
to indemnification under this Section 2; provided, however,
that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is
insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are
neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion,
shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such
Covered Person will be found entitled to indemnification
under this Section 2."
(b)(1) Paragraph 8 of the Investment Advisory Agreements by and
between the Registrant and Royce & Associates, Inc. provides
as follows:
"8. Protection of the Adviser. The Adviser shall
not be liable to the Trust or to any portfolio series
thereof for any action taken or omitted to be taken by the
Adviser in connection with the performance of any of its
duties or obligations under this Agreement or otherwise as
an investment adviser of the Trust or such series, and the
Trust or each portfolio series thereof involved, as the case
may be, shall indemnify the Adviser and hold it harmless
from and against all damages, liabilities, costs and
expenses (including reasonable attorneys' fees and amounts
reasonably paid in settlement) incurred by the Adviser in or
by reason of any pending, threatened or completed action,
suit, investigation or other proceeding (including an action
or suit by or in the right of the Trust or any portfolio
series thereof or its security holders) arising out of or
otherwise based upon any action actually or allegedly taken
or omitted to be taken by the Adviser in connection with the
performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser of the Trust
or such series. Notwithstanding the preceding sentence of
this Paragraph 8 to the contrary, nothing contained herein
shall protect or be deemed to protect the Adviser against or
entitle or be deemed to entitle the Adviser to
indemnification in respect of, any liability to the Trust or
to any portfolio series thereof or its security holders to
which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its duties and obligations under this
Agreement.
Determinations of whether and the extent to which the
Adviser is entitled to indemnification hereunder shall be
made by reasonable and fair means, including (a) a final
decision on the merits by a court or other body before whom
the action, suit or other proceeding was brought that the
Adviser was not liable by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties
or (b) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the
Adviser was not liable by reason of such misconduct by (i)
the vote of a majority of a quorum of the Trustees of the
Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the Investment Company Act of
1940) nor parties to the action, suit or other proceeding
or (ii) an independent legal counsel in a written opinion."
(c) Paragraph 9 of the Distribution Agreement made
October 31, 1985 by and between the Registrant and Royce
Fund Services, Inc. provides as follows:
"9. Protection of the Distributor. The
Distributor shall not be liable to the Trust or to any
series thereof for any action taken or omitted to be taken
by the Distributor in connection with the performance of any
of its duties or obligations under this Agreement or
otherwise as an underwriter of the Shares, and the Trust or
each portfolio series thereof involved, as the case may be,
shall indemnify the Distributor and hold it harmless from
and against all damages, liabilities, costs and expenses
(including reasonable attorneys' fees and amounts reasonably
paid in settlement) incurred by the Distributor in or by
reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or
suit by or in the right of the Trust or any series thereof
or its security holders) arising out of or otherwise based
upon any action actually or allegedly taken or omitted to
be taken by the Distributor in connection with the
performance of any of its duties or obligations under this
Agreement or otherwise as an underwriter of the Shares.
Notwithstanding the preceding sentences of this Paragraph 9
to the contrary, nothing contained herein shall protect or
be deemed to protect the Distributor against, or entitle or
be deemed to entitle the Distributor to indemnification in
respect of, any liability to the Trust or to any portfolio
series thereof or its security holders to which the
Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its duties and obligations under this
Agreement.
Derminations of whether and to the extent to which the
Distributor is entitled to indemnification hereunder shall
be made by reasonable and fair means, including (a) a final
decision on the merits by a court or other body before whom
the action, suit or other proceeding was brought that the
Distributor was not liable by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of its
duties or (b) in the absence of such a decision, a
seasonable determination, based upon a review of the facts,
that the Distributor was not liable by reason of such
misconduct by (a) the vote of a majority of a quorum of the
Trustees of the Trust who are neither "interested persons"
of the Trust (as defined in Section 2(a)(19) of the 1940
Act) nor parties to the action, suit or other proceeding or
(b) an independent legal counsel in a written opinion."
Item 16. Exhibits:
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The Exhibits required by Items (1) through (4), (5),
(7), (8), (10), (13) (16) and (17), to the extent
applicable to the Registrant, have been filed with
Registrant's initial Registration Statement (No. 2-
80348) and Post-Effective Amendment Nos. 4, 5, 6, 8, 9,
11, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27,
28, 29, 30, 31, 32, 33, 34 and 35 thereto and, with
respect to Pennsylvania Mutual Fund, its initial
Registration Statement (No. 2-19995) and Post-Effective
Amendment Nos. 43, 45, 46, 47, 48, 49, 51, 52, 53, 56,
and 58 and with the Registrant's Registration Statement
and Pre-Effective Amendment No. 1 (No. 333-23639)
thereto, and are incorporated by reference herein.
(12)(b) Opinion and Consent of Counsel as to tax matters
and consequences to shareholders.
Item 17. Undertakings
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(1) The undersigned Registrant agrees that prior to
any public reoffering of the securities registered
through the use of a prospectus which is a part of this
registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule
145(c) of the Securities Act [17 CFR 230.145c], the
reoffering prospectus will contain the information
called for by the applicable registration form for the
reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every
prospectus that is filed under paragraph (1) above will
be filed as a part of an amendment to the registration
statement and will not be used until the amendment is
effective, and that, in determining any liability under
the 1933 Act, each post-effective amendment shall be
deemed to be a new registration statement for the
securities offered therein, and the offering of the
securities at that time shall be deemed to be the
initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 8th day of July, 1997.
THE ROYCE FUND
By: S/CHARLES M. ROYCE
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Charles M. Royce, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
S/CHARLES M. ROYCE President, Treasurer and 7/8/97
- ------------------ Trustee (Principal
Charles M. Royce Executive, Accounting
and Financial Officer)
S/HUBERT L. CAFRITZ Trustee 7/8/97
- -------------------
Hubert L. Cafritz
S/THOMAS R. EBRIGHT Trustee 7/8/97
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Thomas R. Ebright
S/RICHARD M. GALKIN Trustee 7/8/97
- -------------------
Richard M. Galkin
S/STEPHEN L. ISAACS Trustee 7/8/97
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Stephen L. Isaacs
S/WILLIAM L. KOKE Trustee 7/8/97
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William L. Koke
S/DAVID L. MEISTER Trustee 7/8/97
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David L. Meister
June 17, 1997
The Royce Fund
1414 Avenue of the Americas
New York, New York 10019
Re: Combination of Royce Value Fund
With and Into Pennsylvania Mutual Fund
--------------------------------------
Gentlemen:
We have been requested to render this opinion
concerning certain matters of U.S. federal income tax law in
connection with the combination (the "Transaction") of Royce
Value Fund (the "Acquired Series"), a series of The Royce Fund
(the "Fund"), a Delaware business trust registered as an open-
end diversified management investment company under the
Investment Company Act of 1940, with and into Pennsylvania
Mutual Fund (the "Acquiring Series"), a separate series of the
Fund.
The Transaction is being effectuated as the transfer
by the Acquired Series of all its assets and liabilities to the
Acquiring Series, solely in exchange for newly issued shares of
a class of beneficial interests of the Acquiring Series and the
assumption by the Acquiring Series of the liabilities of the
Acquired Series, followed by the distribution to the
shareholders of the Acquired Series, in complete liquidation of
the Acquired Series, of all the shares of the Acquiring Series
issued in the Transaction, pursuant to a Plan of Reorganization
for the Transaction adopted by the Fund as of March 13, 1997
(the "Plan of Reorganization").
In connection with rendering this opinion, we have
examined and are relying upon (without any independent
investigation or review thereof) the truth and accuracy, at all
relevant times, of the statements, covenants, representations
and information contained in the following documents:
1. The Plan of Reorganization;
2. A letter from the Fund to us, dated the date hereof
and incorporated herein by reference, setting forth certain
representations by the Fund (on behalf of the Acquired Series
and the Acquiring Series) upon which we are relying in rendering
this opinion;
3. The Prospectus/Proxy Statement, dated April 30, 1997,
furnished to shareholders of the Acquired Series in connection
with a special meeting of the shareholders held on May 28, 1997;
and
4. Such other instruments and documents as we have deemed
necessary or appropriate to review in rendering this opinion.
In rendering this opinion, we have assumed (without
any independent investigation or review thereof) that: original
documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents
(which are authentic), and there has been (or will be by the
effective time of the Transaction) due execution and delivery of
all documents where due execution and delivery are prerequisites
to effectiveness thereof; and the Transaction will be
consummated in accordance with and effective under applicable
state law.
Our opinion is based on the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated under the Code, published revenue
rulings, revenue procedures and other announcements of the
Internal Revenue Service (the "Service"), and existing judicial
decisions, any of which could be changed at any time. Any such
changes might be retroactive with respect to transactions
entered into prior to the effective date of such changes and
could adversely affect the conclusions set forth herein.
Based upon and subject to the foregoing, it is our
opinion that, for federal income tax purposes:
(i) the Transaction will qualify as a reorganization
within the meaning of Section 368(a)(1)(C) of the Code, and the
Acquired Series and the Acquiring Series each will be a "party
to the reorganization" within the meaning of Section 368(b) of
the Code;
(ii) no gain or loss will be recognized by (A) the Acquired
Series upon the transfer of all its assets and liabilities to
the Acquiring Series solely in exchange for shares of the
Acquiring Series and the assumption by the Acquiring Series of
the liabilities of the Acquired Series, or (B) the Acquiring
Series upon its receipt of the assets of the Acquired Series in
exchange for Acquiring Series shares;
(iii) no gain or loss will be recognized by the shareholders
of the Acquired Series on their receipt of shares of the
Acquiring Series in exchange for their Acquired Series shares;
(iv) the tax basis of the Acquiring Series shares received
by a shareholder of the Acquired Series will be the same as the
tax basis of the Acquired Series shares exchanged therefor; and
(v) the holding period of the Acquiring Series shares
received by a shareholder of the Acquired Series will include
the holding period of the shareholder's Acquired Series shares
exchanged therefor, provided that such Acquired Series shares
were held by the shareholder as a capital asset on the date of
the Transaction.
Our opinion represents our conclusions regarding the
application of existing U.S. federal income tax law to the
Transaction. If the facts vary from those relied upon
(including if any representations, covenants, information or
assumptions upon which we have relied are inaccurate,
incomplete, breached or ineffective), the conclusions contained
herein could be inapplicable. You should be aware that an
opinion of counsel represents only counsel's best legal
judgment, and has no binding effect or official status of any
kind.
Except as expressly set forth above, we express no
opinion on any other issue relating to the Transaction, the Fund
or its shareholders. This opinion is being delivered for the
purpose of satisfying the condition set forth in Section 5 of
the Plan of Reorganization, and may not be relied upon or
utilized for any other purpose or by any person other than the
Fund and its shareholders without our prior written consent.
Very truly yours,
Rosenman & Colin LLP
By: S/JILL E. DARROW
----------------
Jill E. Darrow, a Partner
