October 31, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Royce Fund
File Nos. 811-3599 & 2-80348
Gentlemen:
Enclosed for filing pursuant to Rule 14a-6 under the Securities Exchange
Act of 1934, as amended, are the definitive copies of the Notice of
Meeting, Proxy Statement and form of proxy in connection with the Special
Meeting of Shareholders of Royce Global Services Fund, a series of The
Royce Fund (the "Fund"), to be held on November 25, 1997.
The foregoing materials are scheduled to be sent to Fund shareholders
today.
Sincerely,
/s/ John E. Denneen
John E. Denneen
Secretary
<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
(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] No fee required.
[ ] 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:
[ ] 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>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
THE ROYCE FUND
To the Shareholders of
Royce Global Services Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of
Shareholders of Royce Global Services 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 10019 (10th Floor), on
November 25, 1997 at 3:00 p.m. (Eastern Time), for the following
purposes:
1. To approve a change in the Fund's investment objective
and in a related fundamental policy to permit the Fund to
concentrate its investments in the financial services industry.
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 October
13, 1997 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 date will be entitled to vote.
The Fund's Annual Report to Shareholders for the year ended
December 31, 1996 and its Semi-Annual Report to Shareholders for the six
months ended June 30, 1997 were previously mailed to shareholders.
Copies of these Reports 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 Trust the expense of additional proxy solicitation, 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), even if you expect to be present at the meeting. The
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.
John E. Denneen,
Secretary
October 30, 1997
<PAGE>
PROXY STATEMENT FOR SPECIAL MEETING OF
SHAREHOLDERS OF THE ROYCE FUND
The enclosed Proxy is solicited on behalf of the Trustees of The
Royce Fund for use at a Special Meeting of Shareholders of Royce Global
Services Fund (the "Fund"), a series of the Trust, to be held at the offices
of the Trust, 1414 Avenue of the Americas, New York, New York 10019
(10th Floor), at 3:00 p.m., Eastern Time, on November 25, 1997 and at any
adjournments thereof.
The purpose of the meeting is the approval of a change in the
investment objective of the Fund which will change the Fund's primary
focus to investments in companies principally engaged in the financial
services industry and in a related fundamental policy to permit the Fund to
concentrate its investments in that industry.
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 in the Notice of Special Meeting,
his or her shares will be voted accordingly. If no directions are given, the
shareholder's shares will be voted in favor of this Proposal. 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 cost of soliciting proxies will be borne by
Royce & Associates, Inc. ("Royce"), the Fund's investment adviser, 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, Royce, and/or
Royce Fund Services, Inc. ("RFS"), the Fund's distributor, may solicit
proxies personally and by telephone, if deemed desirable. Shareholders vote
at the Special Meeting by casting ballots (in person or by proxy) which are
tabulated by one or two persons, appointed by the Board of Trustees before
the meeting, who serve as Inspectors and Judges of Voting at the meeting
and who have executed an Inspectors and Judges Oath. Neither abstentions
nor broker non-votes are counted in the tabulation of such votes.
On October 13, 1997, the record date for the meeting, there was
333,960 shares of the Fund outstanding. The shareholders entitled to vote
are those of record on that date. Each share is entitled to one vote on each
item of business at the meeting. The following persons were known to the
Trust to be beneficial owners or owners of record of 5% or more of the
Fund's outstanding shares of beneficial interest as of the record date.
Name and Address Amount and Nature Percentage
of Owner of Ownership of Class
Charles M. Royce 161,538 shares 48.5%
1414 Avenue of the Americas (Record and
New York, NY 10019 beneficial--
sole investment
and voting power)
National City Bank PA Cust 50,363 shares 15.1%
Reed Smith Shaw & McClay DPS (Record)
FBO S. Zimmerman
Attn: Mutual Funds 461P10622002
P.O. Box 94777
Cleveland, OH 44101-4777
<PAGE>
Name and Address Amount and Nature Percentage
of Owner of Ownership of Class
Bruce Museum Inc 46,662 shares 14.0%
Special Program Fund (Record and
Museum Drive beneficial--
Greenwich, CT 06830 sole investment
and voting power)
As of such date, all of the Trustees and officers of the Trust as a group
owned 164,759 shares of the Fund (49.3% of the outstanding shares).
Approval or Disapproval of a
Change in the Fund's Investment Objective
and in a Related Fundamental Policy to Permit the
Fund to Concentrate Its Investments
in the Financial Services Industry
(Proposal 1)
The Board of Trustees of the Fund has approved, and recommends
to the Fund's shareholders for their approval, a proposal to change the
Fund's investment objective to allow the Fund to narrow its focus from
"global services" to "financial services" and to concentrate its investments
in the financial services industry. The Board has also approved other related
actions, including changing the name of the Fund to Royce Financial
Services Fund and certain changes in the Fund's non-fundamental
investment policies and restrictions, which will be implemented only if
shareholders approve the change in the Fund's investment objective and
concentration policy.
Current Investment Objective and Concentration Policy
The Fund's current investment objective is "long-term capital
appreciation by investing primarily in common stocks and convertible
securities of domestic and foreign companies in service industries." The
Fund currently has a fundamental investment policy that it will not
concentrate its investments by investing more than 25% of its assets in
companies principally engaged in any one industry.
Proposed New Investment Objective, Concentration Policy and
Certain Other Investment Policies
If this proposal is approved by its shareholders, the Fund would
change its investment objective to "long-term capital appreciation by
investing primarily in common stocks and convertible securities of
companies
<PAGE>
principally engaged in the financial services industry." In seeking
to achieve its proposed new investment objective, the Fund would amend
its fundamental policies to allow it to concentrate its investments by
investing more than 25% of its assets in companies principally engaged in
the financial services industry.
The Fund would continue to seek investment opportunities in both
foreign and domestic securities markets and would continue to have no
restriction on the amount of its assets that may be invested in foreign
securities. Thus, under normal circumstances, the Fund would invest at
least 65% of its assets in common stocks, convertible securities and warrants
of domestic and foreign companies principally engaged in the financial
services industry. Examples of such companies include: commercial and
industrial banks, savings and loan associations, companies engaged in
consumer and industrial finance, insurance, securities brokerage, and
investment management and other financial intermediaries. For these
purposes, a company would be treated as principally engaged in the financial
services industry if at least 50% of its consolidated assets, revenues or net
income are committed to, or are dervied from, financial services-related
activities.
The Fund's new financial services industry focus will result in its
being less diversified than other funds investing in a number of industries,
and the Fund's net asset value could, therefore, experience increased
volatility. Rising interest rates may be viewed as a negative for certain
companies in the financial services area, and a rising inflation rate may also
be viewed as a negative. The financial services industry is subject to
extensive governmental regulation. This may limit both the amounts and
types of loans and other financial commitments that banks, broker-dealers
and insurance companies are permitted to make, and, in the case of banks
and insurance companies, the interest, fees and premiums they are permitted
to charge. Insurance companies are particularly subject to rate setting,
potential anti-trust and tax law changes and industry-wide pricing and
competition cycles and may be affected by catastrophes and/or reinsurance
carrier failures. Compared to the broader market, an individual sector, such
as financial services, may be more strongly affected by changes in the U.S.
and/or foreign economies, moves in a particular dominant stock or
regulatory changes.
If shareholders approve Proposal 1, the Fund's name will be
changed to Royce Financial Services Fund, and the Fund will no longer be
required to normally invest more than 65% of its assets in securities of
companies from at least three countries, which may include the United
States. The Fund will, however, continue in most instances to make
investments in companies principally based in the United States or the other
developed countries of North America, Europe, Asia and Australia and not
in emerging market countries. In restructuring its portfolio to increase its
investments in the financial services industry, the Fund will realize
additional capital gains in 1997.
Reasons for the Proposal
The Fund's current concentration policy permits it to invest without
limit in financial services companies so long as not more than 25% of its
assets are invested in any one financial services industry classification such
as banking or insurance. Both the Fund and other registered investment
company accounts managed by Royce have historically invested significant
percentages of their respective assets in financial services companies, with
the Fund having approximately 35% of its assets invested in such companies
at September 30, 1997. As a result of this experience, Royce desires to
have a fund which concentrates by name and objective in financial services
companies. Instead of commencing operations with a newly-created fund,
Royce and the Board believe that it is more appropriate to change the
investment objective and policies of the Fund, which commenced operations
<PAGE>
in December 1994 and, as of September 30, 1997, had less than $2.5 million
net assets, for that purpose. Royce and the Board also believe that the Fund
when converted into a financial services fund should have greater prospects
for attracting new investors, increasing Fund assets and thereby reducing its
expense ratio.
-----------------------------------------
Recommendation of the Trustees; Required Votes
The Trustees recommend that the Fund's shareholders vote to approve the
change in the Fund's investment objective and to concentrate its
investments in the financial services industry. These changes involve
fundamental policies of the Fund and will, therefore, require approval by
the favorable vote of the lesser of (i) more than 50% of the Fund's
outstanding shares and (ii) 67% or more of the Fund's shares present at
the meeting, if the holders of more than 50% of the Fund's shares are
present or represented at the meeting.
Charles M. Royce, the owner of approximately 49% of the Fund's
outstanding shares, has advised the Trust that he expects to vote such
shares For the Proposal.
Adjournment of Meeting; Other Matters
In the event that sufficient votes in favor of Proposal 1 in the Notice of
Special Meeting are not received by the time scheduled for the meeting,
the persons named as proxies may propose one or more adjournments of the
meeting to permit further solicitation of proxies for such Proposal. Any
such adjournment will require the affirmative vote of a majority of the
shares present in person or by proxy at the session of the meeting to be
adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of
Proposal 1. They will vote against any such adjournment those proxies
required to be voted against Proposal 1.
While the meeting has been called to transact any business that may
properly come before it, the only matter which the Trustees intend to
present is the matter stated in the Notice of Special Meeting. However, if
any additional matter properly comes before the meeting and on all matters
incidental to the conduct of the meeting, it is the intention of the persons
named in the enclosed proxy to vote the proxy in accordance with their
judgment on such matters unless instructed to the contrary.
Royce
Royce's principal office is located at 1414 Avenue of the Americas,
New York, New York 10019. Charles M. Royce is the President,
Secretary, Treasurer, sole director and sole voting shareholder of Royce.
Mr. Royce is also the President, Treasurer and a Trustee of the Trust.
<PAGE>
Shareholder Proposals
The Trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to the
Secretary of the Trust, 1414 Avenue of the Americas, New York, New
York 10019.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND
RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE.
<PAGE>
PROXY
PROXY ROYCE GLOBAL SERVICES FUND PROXY
1414 Avenue of the Americas
New York, NY 10019
This Proxy is Solicited on Behalf of the Board of Trustees
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or
either of them, acting in 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 on the reverse, all shares of the Fund held of
record by the undersigned on October 13, 1997, at the Special Meeting of
Shareholders to be held on November 25, 1997, 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.
PLEASE VOTE , DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on reverse. 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.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
<PAGE>
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
ROYCE GLOBAL SERVICES FUND
For Against Abstain
1. PROPOSAL TO APPROVE A CHANGE [ ] [ ] [ ]
IN THE FUND'S INVESTMENT OBJECTIVE
AND IN A RELATED FUNDAMENTAL
POLICY TO PERMIT THE FUND TO
CONCENTRATE INVESTMENTS IN THE
FINANCIAL SERVICES INDUSTRY.
2. THE PROXIES ARE AUTHORIZED TO [ ] [ ] [ ]
VOTE UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE
MEETING.
Please be sure to Date: Mark box at right [ ]
sign and date this Proxy. if an address change or
comment has been noted on the
reverse side of this card.
Shareholder sign here Co-owner sign here RECORD DATE SHARES:
