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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ROYCE VALUE TRUST, INC.
(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) or
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:
[ ] 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>
ROYCE VALUE TRUST, INC.
1414 Avenue of the Americas
New York, NY 10019
1-800-221-4268
May __, 1996
Dear Stockholder:
Enclosed is a Proxy Statement describing the items to be voted on
at the Annual Meeting of Stockholders. The items include the election
of directors, a new Investment Advisory Agreement with Quest Advisory
Corp., a change in the Fund's stated investment policies to permit the
Fund to invest in warrants, rights and options and ratification of the
selection of auditors.
The new Investment Advisory Agreement maintains the 1% basic
advisory fee and the plus or minus 0.5% performance adjustment feature.
The new Agreement changes, among other things, the benchmark index, against
which the Fund's performance is measured, from the S&P 500 Index, which
represents large capitalization stocks, to the S&P 600 SmallCap Stock
Price Index, which we believe is more appropriate for determining the
Fund's relative performance. Additionally, the performance period is
being lengthened from three years to five, which we believe is more in
keeping with our long-term investment horizon and, in a rising market,
will have the further effect of lowering the average net assets on
which the fee is based.
At its inception in 1986, the Fund chose the S&P 500 Index for
performance benchmarking because it was one of the few market indices
available at the time, although it primarily represents large
companies. In January 1994, Standard & Poor's introduced the S&P 600
Index as a benchmark for small-cap performance. The S&P 600 (weighted
average market cap of $524 million) is much more representative of the
Fund's small-cap area of investing (weighted average market cap of $344
million) than the S&P 500 (weighted average market cap of $24 billion).
The new Agreement retains the important feature that Quest is not
entitled to any fee for any trailing 36 month period for which the Fund
has a negative return, and will continue to base the fee on average net
assets over a designated performance period, which would be expected to
provide a lower fee than if it were based on current net assets.
In order to prevent any immediate benefit to Quest from the
changes, the fee paid over the first 18 months of the new Agreement
will be the lower of the fee determined based on the new terms or the
fee which would have been paid under the current Agreement.
The change to permit the Fund to invest in warrants, rights and
options will enable the Fund to, among other things, promptly invest
any available cash in small-cap index options in order to be fully
invested in the market.
Your vote is very important! If the Fund does not receive a
sufficient number of votes prior to the meeting date, it will have
additional expenses for proxy solicitation and the meeting may have to
be postponed. Please complete, sign and mail your proxy card as soon
as possible. If you have any question regarding the proxy material,
please call Investor Information at 1-800-221-4268.
The Fund has retained an outside firm that specializes in proxy
solicitation to assist it with any necessary follow-up. If the Fund
has not received your vote as the meeting date approaches, you may
receive a telephone call from Shareholder Communications Corporation to
ask for your vote. We hope that their telephone call does not
inconvenience you.
Sincerely,
CHARLES M. ROYCE
President
<PAGE>
Preliminary Proxy Material
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ROYCE VALUE TRUST, INC.
To the Stockholders of
ROYCE VALUE TRUST, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ROYCE VALUE TRUST, INC. (the "Fund") will be held at the offices of the
Fund, 1414 Avenue of the Americas, New York, New York, on June __, 1996
at _____ _.m. (E.D.T.) for the following purposes:
1.To elect a board of five directors.
2.To approve a new Investment Advisory Agreement between the Fund
and Quest Advisory Corp.
3.To approve a change in the Fund's fundamental investment policy
to permit the Fund to invest up to 5% of its total assets in
warrants, rights and options.
4.To ratify the selection of Ernst & Young LLP as independent
public accountants of the Fund for the year ending December 31,
1996.
5.To transact such other business as may come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on May _____,
1996 as the record date for the determination of those stockholders
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 Stockholders for the year ended December
31, 1995 was previously mailed to stockholders, and copies of it are
available upon request, without charge, by writing to the Fund 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
Directors, 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 Directors.
Daniel A. O'Byrne
Assistant Secretary
May __, 1996
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
ROYCE VALUE TRUST, INC.
1414 Avenue of the Americas
New York, New York 10019
__________, June __, 1996
_____________________________
PROXY STATEMENT
_____________________________
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders and a form of Proxy for the meeting solicited on behalf of
the directors of Royce Value Trust, Inc. (the "Fund").
The Proxy may be revoked at any time before it is exercised by
written instructions to the Fund or by filing a new Proxy with a later
date, and any stockholder 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 stockholder has specified a choice on the
Proxy with respect to Proposals 2, 3 and 4 in the Notice of Annual
Meeting, his or her shares will be voted accordingly. If no directions
are given, the stockholder's shares will be voted in favor of these
Proposals. Unless authority to vote for all nominees or for an
individual nominee pursuant to Proposal 1 is specifically withheld, the
Proxy will be voted for the election of all of the persons nominated by
the Board of Directors to become directors. 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 Fund and/or Quest Advisory Corp. ("Quest"),
the Fund's investment adviser, may solicit Proxies personally and by
telephone, if deemed desirable. In addition, the Fund has engaged
Shareholder Communications Corporation to solicit Proxies on its behalf
at a cost to the Fund of $___ plus out-of-pocket expenses.
On May __, 1996, the record date for the meeting, there were
24,836,018 shares of Common Stock of the Fund outstanding. The
stockholders 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.
Stockholders vote at the Annual Meeting by casting ballots (in person or
by proxy) which are tabulated by one or two persons, appointed by the
Board of Directors before the meeting, who serve as Inspectors and Judges
of Election 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.
<PAGE>
The following persons were known to the Fund to be beneficial owners
or owners of record of 5% or more of its outstanding shares of Common
Stock as of the record date:
Amount and Nature Percentage
Name and Address of Owner of Ownership of Class
Yale University ____ shares-Beneficial __%
451 College Street (sole voting and investment
P.O. Box 1074 Yale Station power)
New Haven, CT 06520
Depository Trust Company ____ shares-Record __%
Cede & Co.
P.O. Box 20 Bowling Green Station
New York, NY 10274
1. ELECTION OF DIRECTORS (Proposal 1)
At the meeting, it is proposed to elect five directors, each
director to hold office until the next Annual Meeting of Stockholders and
until his successor shall have been elected and qualifies. The Fund's
Board of Directors has nominated the following five persons, each of whom
has served as a director since July 1986, to become directors of the
Fund. Certain information concerning them is set forth below. Each of
these persons has agreed to serve if elected, and the Fund's management
has no reason to believe that any of them will be unavailable for
election as a director. However, if any of them become unwilling or
unable to serve, the persons named in the accompanying form of Proxy will
vote for the election of such other persons, if any, as the Board of
Directors may nominate.
Positions With
Name Age The Fund
Charles M. Royce ...... 56 Director, President and Treasurer
Thomas R. Ebright...... 51 Director
Richard M. Galkin...... 58 Director
Stephen L. Isaacs...... 56 Director
David L. Meister ...... 56 Director
A total of five meetings of the Board of Directors were held during
the year ended December 31, 1995, and each director attended 75% or more
of the meetings.
The Board of Directors has an Audit Committee, comprised of Richard
M. Galkin, Stephen L. Isaacs and David L. Meister, which is responsible
for recommending the selection and nomination of the independent auditors
of the Fund and for conducting post-audit reviews of the Fund's financial
condition with the auditors. The Audit Committee held two meetings
during the year ended December 31, 1995, and each member of the Audit
Committee attended both of the meetings. The Board of Directors does not
have any other standing committees.
<PAGE>
There are no family relationships between any of the Fund's
directors and officers.
As of the record date, the Fund's directors beneficially owned the
following shares of its Common Stock:
Name of Director Amount Percentage of
Class
Charles M. Royce ......................... ____
shares __%
Thomas R. Ebright......................... None ___
Richard M. Galkin......................... None ___
Stephen L. Isaacs......................... None ___
David L. Meister ......................... None ___
Mr. Royce has sole voting power and sole investment power as to the
shares beneficially owned by him. As of the record date, all directors
and officers of the Fund as a group (9 persons) beneficially owned
________ shares of the Fund's Common Stock, constituting __% of the
class.
During the year ended December 31, 1995, each of Messrs. Royce and
Ebright failed to file on a timely basis one report required by Section
16(a) of the Securities Exchange Act of 1934. Mr. Royce's report related
to two transactions, and Mr. Ebright's report related to one transaction.
Business Experience
Set forth below is certain information as to the principal business
experience of the Fund's directors during the past five years.
Charles M. Royce is the President, Secretary, Treasurer and sole
director and sole voting shareholder of Quest, the investment adviser to
the Fund. He became affiliated with Quest in June 1972, and has served
as its President and Treasurer since November 1972. Mr. Royce also
manages three private investment partnerships through Quest Management
Company ("QMC"), a registered investment adviser, of which he is the
managing general partner.
Thomas R. Ebright has been a Vice President of Quest since September
1981. He has also been President, Treasurer, a director and principal
shareholder of Royce, Ebright & Associates, Inc., the investment adviser
to a series of The Royce Fund, since June 1994. He was a general partner
of QMC and its predecessor until June 1994. Mr. Ebright is also a
director of Atlantic Pro Sports, Inc. and of the Strasburg Rail Road Co.
since March 1993 and was the President and principal owner of Baltimore
Professional Hockey, Inc. until May 1993.
Richard M. Galkin is a private investor and the President of Richard
M. Galkin Associates, Inc., tele-communications consultants.
Stephen L. Isaacs is an attorney, Director of the Columbia
University Development Law and Policy Program, a Professor at Columbia
University and President of Stephen L. Isaacs Associates, consultants.
<PAGE>
David L. Meister is a consultant in the communications industry. He
was an executive officer of Digital Planet Inc. from April 1991 to
December 1992 and a consultant to the communications and television
industry from August 1990 to April 1991.
Mr. Royce is also President and Treasurer of Royce Micro-Cap Trust,
Inc. ("RMT"), Pennsylvania Mutual Fund ("PMF") and The Royce Fund
("TRF"), registered management investment companies. Messrs. Royce,
Ebright, Galkin, Isaacs and Meister are also directors/trustees of RMT
and PMF, and Messrs. Royce, Galkin, Isaacs and Meister are also trustees
of TRF. Mr. Ebright is also a Vice President of TRF and a Vice President
and Treasurer, and Mr. Royce is also the sole shareholder and director
and Secretary, of Quest Distributors, Inc., the distributor of TRF's
shares.
Messrs. Royce and Ebright are "interested persons" of the Fund
within the meaning of Section 2(a)(19) under the Investment Company Act
of 1940.
In addition to Mr. Royce, three Vice Presidents of the Fund are also
officers of Quest.
Remuneration of Directors and Officers
Set forth below is the compensation paid by the Fund and the three
other registered investment companies comprising The Royce Funds to each
director for the year ended December 31, 1995.
Aggregate Total Compensation
Compensation From From the Fund and
Director the Fund Other Royce Funds
Charles M. Royce ... $ 0 $ 0
Thomas R. Ebright ... 0 0
Richard M. Galkin ... 16,000 60,000
Stephen L. Isaacs ... 16,000 60,000
David L. Meister ... 16,000 60,000
The Fund paid $15,190 cash remuneration to one officer of the Fund
for the year ended December 31, 1995.
Each of the Fund's non-affiliated directors receives a base fee of
$10,000 per year plus $1,000 for each meeting of the Board of Directors
attended. No director of the Fund received remuneration for services as
a director for the year ended December 31, 1995 in addition to or in lieu
of this standard arrangement.
Vote Required
A quorum consists of stockholders representing a majority of the
outstanding shares of the Fund's Common Stock entitled to vote who are
present in person or by proxy, and a plurality of all of the votes cast
at a meeting at which a quorum is present is sufficient to elect a
director.
The Board of Directors recommends a vote FOR all nominees.
<PAGE>
2. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT (Proposal 2)
At the meeting, it is proposed to replace the present Investment
Advisory Agreement between the Fund and Quest with a new Investment
Advisory Agreement. The principal differences between the present and
the proposed Investment Advisory Agreements are in the provisions
concerning the methods for determining the compensation of Quest. Both
Agreements provide for a Basic Fee of 1% per annum of the Fund's average
net assets and for increases and decreases in the Basic Fee rate of up to
.5%, depending on the investment performance of the Fund in relation to
the record of a securities index.
The present Investment Advisory Agreement (i) uses the Standard &
Poor's 500 Composite Stock Price Index (the "S&P 500") and a rolling
period of 36 months for measuring performance and the average net assets
on which the fee rate is paid and (ii) decreases to the minimum amount of
compensation at a rate that is twice as fast as the rate at which it
increases to the maximum amount. The proposed Investment Advisory
Agreement (i) uses the Standard & Poor's 600 SmallCap Stock Price Index
(the "S&P 600") and a rolling period of 60 months for measuring
performance and average net assets and (ii) decreases to the minimum
amount of compensation at the same rate at which it increases to the
maximum amount.
In deciding to recommend to stockholders that they approve the
proposed Investment Advisory Agreement with Quest, the Fund's Board of
Directors considered (i) the investment performance of the Fund over
various periods, both absolutely and in relation to the records of the
S&P 500 and the S&P 600 and relative to that of other open and closed-end
funds with similar investment objectives; (ii) Quest's approach to
managing the Fund's assets; and (iii) the costs and expenses of the Fund,
both absolutely and relative to these other funds. When focusing on the
changes made by the proposed Agreement, the directors considered other
factors, including (iv) the differences between the S&P 500 and the S&P
600 and the relative appropriateness of each index for the Fund; (v) the
use of a 36 versus a 60 month rolling period for measuring the Fund's
performance and for determining the average net assets on which the fee
rate is paid; and (vi) the impact on the Fund of changing from the
present to the proposed fee arrangement.
The directors concluded, among the other things, (i) that because of the
Fund's concentration on small capitalization stocks, the S&P 600, which
was introduced in January 1994 and is comprised of small capitalization
companies, was a more appropriate index for the Fund than the S&P 500,
which consists of large capitalization stocks; (ii) that a performance
period of 60 months was more consistent with the Fund's long-term
investment approach and, in a rising market, will have the effect of
lowering the average net assets on which the fee is based; and (iii) that
the proposed Investment Advisory Agreement would not result in excessive
compensation to Quest or be unfair to the Fund.
Present Investment Advisory Agreement
Except for several subsequent minor revisions, the provisions of the
present Investment Advisory Agreement between the Fund and Quest have
been in effect since November 1986, when the Fund commenced operations.
The present Investment Advisory Agreement is dated October 21, 1992 and
was
<PAGE>
approved by vote of the Fund's stockholders on that date in order to
replace the initial Investment Advisory Agreement between the Fund and
Quest. The only difference between the initial and the present
Investment Advisory Agreements was the one year period for its annual
continuance (from November 18 to the following November 17 versus from
May 1 to April 30). Continuance of the present Investment Advisory
Agreement was approved by the Fund's Board of Directors on April 18,
1996, and it will remain in effect until April 30, 1997, unless it is
terminated sooner or is replaced by the proposed Agreement.
Under the present Agreement, Quest determines the composition of the
Fund's portfolio, the nature and timing of the changes in it and the
manner of implementing the changes; provides the Fund with investment
advisory, research and related services for the investment of its funds;
furnishes, without expense to the Fund, the services of those members of
its organization as may be duly elected officers or directors of the
Fund; pays all executive officers' salaries and executive expenses; and
pays all expenses incurred in performing its investment advisory duties
under the Agreement.
The Fund pays all of its own expenses (except those set forth above), and
Quest does not incur substantial fixed expenses. There are no applicable
state limitations on the Fund's operating expenses.
Present Advisory Fee
As compensation for its services under the present Investment
Advisory Agreement, Quest receives a fee comprised of a basic fee (the
"Basic Fee") and an adjustment to the Basic Fee based on the investment
performance of the Fund in relation to the investment record of the S&P
500 for certain prescribed performance periods, as described below.
The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an
annualized basis) of the average of the net assets of the Fund at the end
of each month included in the applicable performance period. The
performance period is a rolling 36 month period ending with the most
recent calendar month. The Basic Fee for each month in the performance
period is subject to increase or decrease, depending on the extent, if
any, by which the investment performance of the Fund exceeds by more than
two percentage points, or is exceeded by more than one percentage point
by, the percentage change in the investment record of the S&P 500 for the
performance period. For each percentage point in excess of two that the
investment performance of the Fund exceeds the percentage change in the
investment record of the S&P 500, the Basic Fee is increased at the rate
of 1/12 of .05%. For each percentage point in excess of one that the
percentage change in the investment record of the S&P 500 exceeds the
investment performance of the Fund, the Basic Fee is decreased at the
rate of 1/12 of .1%. The maximum increase or decrease in the Basic Fee
for any month may not exceed 1/12 of .5%. Accordingly, for each month,
the maximum monthly fee rate as adjusted for performance is 1/12 of 1.5%
and is payable if the investment performance of the Fund exceeds the
percentage change in the investment record of the S&P 500 by 12 or more
percentage points for the performance period, and the minimum monthly fee
rate as adjusted for performance is 1/12 of .5% and is payable if the
percentage change in the investment record of the S&P 500 exceeds the
investment performance of the Fund by 6 or more percentage points for the
performance period.
The Investment Advisory Agreement also provides that,
notwithstanding the foregoing, Quest is not entitled to receive any fee
for any performance period for which the investment performance of the
Fund is less than zero. In the event that the Fund's investment
performance for a performance period is less than zero, Quest is not
required to refund to the Fund any fee earned in respect of any prior
performance period.
<PAGE>
In calculating the investment performance of the Fund and the
percentage change in the investment record of the S&P 500, all dividends
and other distributions during the performance period are treated as
having been reinvested.
For the year ended December 31, 1995, the 1% Basic Fee of $2,502,111 was
subject to an upward adjustment of 22% ($553,420) based on the sum of
each month's separate performance calculation, with Quest earning a fee
of $3,055,531 or 1.0% of the Fund's average net assets for the year
(before giving effect to a voluntary fee waiver of $104,206). (The fee
rate is applied to the Fund's average net assets of $269,674,207 for the
rolling 36 month performance period ended December 31, 1995.)
To the extent that Quest receives a fee in excess of .75% per annum of
the Fund's average net assets, its compensation may be higher than that
paid by most other mutual funds with similar investment objectives.
Proposed Investment Advisory Agreement
It is proposed to replace the present Investment Advisory Agreement with
the new one in order to change the methods for determining the
compensation payable by the Fund to Quest, while continuing in place the
Basic Fee and the minimum and maximum performance-related adjustment
rates. The methods for determining the compensation payable will include
measuring the Fund's performance relative to that of a small-cap index,
combined with the use of a longer period for measuring such performance
and for determining the average net assets on which the fee rate is
applied.
New Advisory Fee
As compensation for its services under the proposed Investment Advisory
Agreement, Quest would receive a fee comprised of a basic fee (the "Basic
Fee") and an adjustment to the Basic Fee based on the investment
performance of the Fund in relation to the investment record of the S&P
600 for certain prescribed performance periods, as described below.
Beginning with the month of July 1997 and for each succeeding month, the
Basic Fee would be a monthly fee equal to 1/12 of 1% (1% on an annualized
basis) of the average of the net assets of the Fund at the end of each
month included in the applicable performance period. The performance
period for each such month would be from July 1, 1996 to the most recent
month-end, until the Investment Advisory Agreement had been in effect for
60 full calendar months, when it would become a rolling 60 month period
ending with the most recent calendar month.
The Basic Fee for each such month would be increased or decreased at the
rate of 1/12 of .05% per percentage point, depending on the extent, if
any, by which the investment performance of the Fund exceeds by more than
two percentage points, or is exceeded by more than two percentage points
by, the percentage change in the investment record of the S&P 600 for the
performance period. The maximum increase or decrease in the Basic Fee
for any month could not exceed 1/12 of .5%. Accordingly, for each month,
commencing with the month of July 1997, the maximum monthly fee rate as
adjusted for performance would be 1/12 of 1.5% and would be payable if
the investment performance of the Fund exceeded the percentage change in
the investment record of the S&P 600 by 12 or more percentage points for
the performance period, and the minimum monthly fee rate as adjusted for
performance would be 1/12 of .5% and would be payable if the percentage
change in the investment record of the S&P 600 exceeded the investment
performance of the Fund by 12 or more percentage points for the
performance period.
<PAGE>
For the period from July 1, 1996 through June 30, 1997, the Basic Fee
would be a monthly fee equal to 1/12 of 1% of the net assets of the Fund
at the end of each month in such period. The performance period relating
to such period would be from July 1, 1996 through June 30, 1997. The
Basic Fee for such period would also be subject to increase or decrease
as set forth in the preceding paragraph, with the rate of such increase
or decrease being applied on an annualized basis. The maximum increase or
decrease in the Basic Fee for such period could not exceed .5%. Any
portion of the fee for such period, as adjusted as set forth above, in
excess of .5% would be paid at the end of such period.
The proposed Investment Advisory Agreement would also provide that,
notwithstanding the foregoing, Quest would not be entitled to receive any
fee for any performance period consisting of a rolling 36 month period
ending with the most recent calendar month for which the investment
performance of the Fund is less than zero. In the event that the Fund's
investment performance for such a performance period is less than zero,
Quest would not be required to refund to the Fund any fee earned in
respect of any prior performance period.
Because the Basic Fee is and would remain a function of the Fund's net
assets and not of its total assets, Quest does not now and would not
receive any fee in respect of those assets of the Fund equal to the
aggregate unpaid principal amount of the Fund's indebtedness. However,
because preferred stock is a form of equity, Quest would receive a fee in
respect of any assets of the Fund equal to the liquidation preference of
and any potential redemption premium for any Preferred Stock that may
hereafter be issued and sold by the Fund, and the proposed Investment
Advisory Agreement, unlike the present one, specifically addresses this
issue.
If the proposed Investment Advisory Agreement had been in effect for a
rolling 60 month performance period ended December 31, 1995 but had been
applied to the rolling 36 month average net assets as under the present
Agreement, the 1% Basic Fee of $2,502,111 for the year ended December 31,
1995 would have been subject to a downward adjustment of $49,986, and
Quest would have earned a fee of $2,452,125 for the year. thereby
decreasing its compensation for the year by $603,406 or 20% (before
giving effect to Quest's voluntary fee waiver).
In order to avoid unfairness to the Fund, the proposed Investment
Advisory Agreement provides that, for the 18 month period from July 1,
1996 to December 31, 1997, the monthly fee payable to Quest will be the
lower of the fee calculated under the proposed Agreement or the fee that
would have been payable to Quest for the month involved under the present
Investment Advisory Agreement.
Under the proposed Agreement, the performance period used to determine
average net assets and to measure the Fund's relative performance will be
restarted at July 1, 1996. As a result, the fees payable to Quest over
the 17 month period from January 1, 1998 to May 31, 1999 under the
proposed Agreement will probably be higher than the fees that would have
been payable under the present Agreement because average net assets for
this period can be expected to be higher than if the performance period
were not restarted and because the Fund's underperformance for the 15
month period ended March 31, 1996 relative to the S&P 500 will be
excluded. For example, if it is assumed that the Fund's net assets of
approximately $349,104,000 as of March 31, 1996 remain unchanged from
that date through May 31, 1999, and that the Fund's performance at all
relevant times during that period was the same as the records of both the
S&P 500 and the S&P 600 and was greater than zero, then Quest would
receive annualized fees during this 17 month portion of the transition
period of $3,491,040, an amount equal to 1% of the Fund's average annual
net assets over this 17 month period, compared to the .69% of the Fund's
average annual net assets over this period which Quest would have
received under the present Agreement. (However, actual and comparative
results will vary, probably
<PAGE>
considerably, based on the Fund's absolute
and relative performance during the period from April 1, 1996 to May 31,
1999 and because of increases in its net assets from possible rights
offerings and any issuance and sale of its Preferred Stock during this
period.) Under no circumstances will the annual fees payable to Quest
under the proposed Agreement be higher than 1.5% of average net assets as
defined.
In summary, the effects of the proposed changes to the advisory fee are
as follows:
During the first half of the transition period (the first 18 months)
under the proposed Agreement, stockholders will be advantaged because the
fees payable to Quest cannot exceed, and may possibly be less than, the
fees payable to Quest under the present Agreement.
For the second half of the transition period (the next 17 months), Quest
will be advantaged because it will probably receive higher fees under the
proposed Agreement compared to the fees it would have received under the
present Agreement, .
After this 35 month transition period, as the proposed Agreement becomes
fully phased in, the comparative advantage or disadvantage to
stockholders or to Quest of the proposed versus the present Agreement
will depend on the future records of the S&P 600 versus the S&P 500 and
whether markets are rising or falling over the applicable performance
periods. There has historically been a higher probability of rising
markets over rolling 60 month periods than over rolling 36 month periods.
Thus, stockholders are probably advantaged by the lengthening of the
performance period because, in a rising market, a rolling 60 month
performance period would result in a lower average asset base and,
therefore, lower fees compared to those payable using a rolling 36 month
period.
Quest is also the investment adviser of RMT, PMF and eight series of TRF.
These funds or series have assets ranging from approximately $532,000 to
$581,173,000 (as of March 31, 1996) and compensate Quest at rates of up
to 1.5% of their respective average net assets. Quest has generally
voluntarily reduced its compensation under its contracts with these funds
or series to the extent necessary to maintain expenses, other than
interest expense, at or below 1.99% of average net assets.
Appendix 1 to this Proxy Statement contains cumulative total return data
for the Fund (at net asset values), the S&P 500 and the S&P 600 for each
of the 8 three year periods ended December 31, 1989 - 1995 and March 31,
1996 and for each of the 6 five year periods ended December 31, 1991 -
1995 and March 31, 1996.
The proposed Investment Advisory Agreement between the Fund and Quest
would become effective on July 1, 1996, following its approval by the
Fund's stockholders. The text of the proposed Agreement is set forth in
Exhibit A to this Proxy Statement.
Vote Required
The proposed Investment Advisory Agreement between the Fund and Quest
requires the approval of the lesser of (i) 67% of the shares of the
Fund's Common Stock present or represented at the meeting (assuming that
more than 50% of such shares are present or represented) or (ii) more
than 50% of the outstanding shares of the Fund's Common Stock.
<PAGE>
The Board of Directors recommends a vote FOR Proposal 2.
3. APPROVAL OF CHANGE IN FUNDAMENTAL POLICY CONCERNING INVESTMENTS IN
WARRANTS, RIGHTS AND OPTIONS (Proposal 3)
The Fund currently has the following fundamental policy, which may not be
changed without the affirmative vote of the holders of a majority of the
Fund's outstanding voting securities, concerning its investing in
warrants, rights and options:
"The Fund may not purchase any warrants, rights or options."
It is proposed to change this fundamental policy to read in its
entirety as follows:
"The Fund may not invest more than 5% of its total assets in
warrants, rights and options."
Warrants, Rights and Options
A warrant, right or call option entitles the holder to purchase a given
security within a specified period for a specified price and does not
represent an ownership interest. A put option gives the holder the right
to sell a particular security at a specified price during the term of the
option. These securities have no voting rights, pay no dividends and
have no liquidation rights. In addition, their market prices do not
necessarily move parallel to the market prices of the underlying
securities. The sale of warrants, rights or options held for more than
one year generally results in a long-term capital gain or loss to the
Fund, and the sale of warrants, rights or options held for less than one
year generally results in a short-term capital gain or loss. The holding
period for securities acquired upon exercise of a warrant, right or call
option, however, generally begins on the day after the date of exercise,
regardless of how long the warrant, right or option was held. The
securities underlying warrants, rights and options could include shares
of common stock of a single company or securities market indices
representing shares of the common stocks of a group of companies, such as
the S&P 600.
Reasons for Proposed Change
Investing in warrants, rights and call options on a given security would
allow the Fund to hold an interest in that security without having to
commit assets equal to the market price of the underlying security and,
in the case of securities market indices, to participate in a market
without having to purchase all of the securities comprising the index.
Put options, whether on shares of common stock of a single company or on
a securities market index, would permit the Fund to protect the value of
a portfolio security against a decline in its market price and/or to
benefit from an anticipated decline in the market price of a given
security or of a market. Thus, investing in warrants, rights and options
would permit the Fund to incur additional risk and/or to hedge against
risk and, therefore, represents a useful investment technique. By
limiting the amount of its total assets that may be invested in warrants,
rights and options to 5%, the Fund would not put a substantial portion of
its assets at risk in those cases where the purpose of such investments
is speculative rather than hedging.
<PAGE>
Vote Required
The vote required for approval of Proposal 3 is a majority of the Fund's
outstanding voting securities, which is the lesser of (i) 67% of the
shares of Common Stock 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 Common Stock of the Fund.
The Board of Directors recommends a vote FOR Proposal 3.
4. RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS (Proposal 4)
At the meeting, the stockholders will be asked to ratify the selection by
the Board of Directors, including a majority of the directors who are not
"interested persons" (as such term is defined in the Investment Company
Act of 1940), of Ernst & Young LLP, independent auditors, to serve as the
Fund's auditors for the year ending December 31, 1996.
Ernst & Young LLP has informed the Fund that neither Ernst & Young LLP
nor any of its partners has any direct or indirect financial interest in
the Fund except as auditors and independent public accountants. Ernst &
Young LLP served as the Fund's independent public accountants for the
year ended December 31, 1995. Representatives of Ernst & Young LLP are
not expected to be present at the meeting, but have been given an
opportunity to make a statement if they so desire, and will be available
should any matter arise requiring their participation.
Vote Required
Ratification of the selection of Ernst & Young LLP as the independent
public accountants of the Fund requires the affirmative vote of a
majority of the outstanding shares of the Fund.
The Board of Directors recommends a vote FOR Proposal 4.
5. OTHER BUSINESS
Management knows of no business to be brought before the meeting other
than Proposals 1,2, 3 and 4 in the Notice of the Annual 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
<PAGE>
Quest Advisory Corp., the Fund's investment adviser, is located at 1414
Avenue of the Americas, New York, New York 10019.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Fund's 1997
Annual Meeting of Stockholders must be received by the Fund by January
31, 1997, for inclusion in the Fund's Proxy Statement and form of Proxy
relating to that meeting.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND RETURN IT IN THE
ACCOMPANYING POSTAGE-PAID ENVELOPE
<PAGE>
Appendix 1
Period ended 3 Year Cumulative Total Return 5 Year Cumulative Total Return
12/31 RVT S&P 500 S&P 600 RVT S&P 500 S&P 600
1989 35.04% 61.06% 17.71%
1990 27.04% 48.23% 3.85%
1991 44.36% 66.10% 29.05% 63.62% 103.53% 33.38%
1992 45.21% 36.08% 37.16% 112.36% 108.37% 86.65%
1993 97.05% 54.63% 113.49% 103.95% 96.75% 85.55%
1994 42.84% 20.01% 36.93% 73.07% 51.66% 55.16%
1995 46.09% 53.25% 46.99% 144.20% 115.43% 164.19%
3/31/96 41.06% 54.92% 50.03% 104.37% 98.30% 120.25%
RVT total returns are presented on a net asset value basis and
assume a continuous stockholder who fully exercised all rights issued.
RVT, S&P 500 and S&P 600 total returns are computed with all dividends
and other distributions reinvested.
<PAGE>
Exhibit A
INVESTMENT ADVISORY AGREEMENT
BETWEEN
ROYCE VALUE TRUST, INC.
AND
QUEST ADVISORY CORP.
Agreement dated as of June ___, 1996 by and between ROYCE VALUE
TRUST, INC., a Maryland corporation (the "Fund"), and QUEST ADVISORY
CORP., a New York corporation (the "Adviser").
The Fund and the Adviser hereby agree as follows:
1.Duties of the Adviser. The Adviser shall, during the term and subject
to the provisions of this Agreement, (a) determine the composition of the
portfolio of the Fund, the nature and timing of the changes therein and
the manner of implementing such changes and (b) provide the Fund with
such investment advisory, research and related services as the Fund may,
from time to time, reasonably require for the investment of its assets.
The Adviser shall perform such duties in accordance with the applicable
provisions of the Fund's Articles of Incorporation, By-laws and stated
investment objectives, policies and restrictions and any directions it
may receive from the Fund's Board of Directors.
2.Expenses Payable by the Fund. Except as otherwise provided in
Paragraphs 1 and 3 hereof, the Fund shall be responsible for determining
the net asset value of its shares and for all of its other operations and
<PAGE>
shall pay all administrative and other costs and expenses attributable to
its operations and transactions, including, without limitation,
registrar, transfer agent and custodian fees; legal, administrative and
clerical services; rent for its office space and facilities; auditing;
preparation, printing and distribution of its proxy statements,
stockholders' reports and notices; supplies and postage; Federal and
state registration fees; securities exchange listing fees and expenses;
Federal, state and local taxes; non-affiliated directors' fees; interest
on its borrowings; brokerage commissions; and the cost of issue, sale and
repurchase of its shares.
3.Expenses Payable by the Adviser. The Adviser shall furnish, without
expense to the Fund, the services of those of its executive officers and
full-time employees who may be duly elected executive officers or
directors of the Fund, subject to their individual consent to serve and
to any limitations imposed by law, and shall pay all the salaries and
expenses of such persons. For purposes of this Agreement, only a
president, a treasurer or a vice-president in charge of a principal
business function shall be deemed to be an executive officer. The
Adviser shall also pay all expenses which it may incur in performing its
duties under Paragraph 1 hereof and shall reimburse the Fund for any
space leased by the Fund and occupied by the Adviser.
4.Compensation of the Adviser.
(a)The Fund agrees to pay to the Adviser, and the Adviser agrees to
accept, as compensation for the services
<PAGE>
provided by the Adviser
hereunder, a fee comprised of a basic fee (the "Basic Fee") and an
adjustment to the Basic Fee based on the
investment performance of the Fund in relation to the investment record
of the Standard & Poor's SmallCap 600 Stock Price Index (as the same may
be constituted from time to time, the "Index"). Such fee shall be
calculated and payable as follows:
(1)Beginning with the month of July 1997 and for each succeeding month,
the Basic Fee shall be a monthly fee equal to 1/12 of 1% (1% on an
annualized basis) of the average of the net assets of the Fund at the end
of each month included in the applicable performance period. (The net
assets of the Fund shall be computed by subtracting the amount of any
indebtedness and other liabilities of the Fund from the value of the
total assets of the Fund, and the liquidation preference of and any
potential redemption premium for any Preferred Stock of the Fund that may
hereafter be issued and outstanding shall not be treated as an
indebtedness or other liability of the Fund for this purpose.) The
performance period for each such month shall be from July 1, 1996 to the
most recent month-end, until this Agreement has been in effect for sixty
(60) full calendar months, when it shall become a rolling sixty (60)
month period ending with the most recent calendar month.
The Basic Fee rate for each such month shall be increased at the rate of
1/12 of .05% for each percentage point in excess of two (2), rounded to
the nearer point (the higher point if exactly one-half a point), that the
investment
<PAGE>
performance of the Fund for the performance period then ended
exceeds the percentage change in the investment record of the Index for
such performance period (subject to a maximum of twelve (12) percentage
points). If, however, the investment performance of the Fund for such
performance period shall be exceeded by the percentage change in the
investment record of the Index for such performance period, then such
Basic Fee rate shall be decreased by 1/12 of .05% for each percentage
point in excess of two (2), rounded to the nearer point (the higher point
if exactly one-half a point), that the percentage change in the
investment record of the Index exceeds the investment performance of the
Fund for such performance period (subject to a maximum of twelve (12)
percentage points).
The maximum increase or decrease in the Basic Fee for any month may
not exceed 50%, and the Fund shall pay such Basic Fee, as so adjusted, to
the Adviser at the end of each performance period.
(2) For the initial performance period of twelve (12) calendar
months ending June 30, 1997, the Basic Fee for such performance period
shall be equal to 1/12 of 1% of the net assets of the Fund at the end of
each month included in such period, and such Basic Fee shall be subject
to adjustment, as described in subparagraph (a)(1) above, with the rate
of such adjustment being applied on an annualized basis. Any portion of
the fee for such period, as adjust, in excess of .5 shall be paid at the
end of the initial performance period.
<PAGE>
(3) Notwithstanding the preceding provisions of this subparagraph
(a) to the contrary, for each of the eighteen (18) calendar months ending
December 31, 1997, the Basic Fee, as so adjusted, shall be reduced if
and to the extent necessary so that such fee does not exceed the fee that
would have been payable to the Adviser for such month under the
Investment Advisory Agreement dated as of October 21, 1992 (the "Prior
Agreement") by and between the Fund and the Adviser.
(b) Notwithstanding the provisions of subparagraph (a) above to the
contrary, the Adviser shall not be entitled to receive any monthly fee in
respect of any performance period consisting of a rolling thirty-six (36)
month period ending with the most recent calendar month for which the
investment performance of the Fund shall be negative on an absolute basis
(i.e., the investment performance of the Fund, rounded to the nearer
whole point, is less than zero).
(c) The investment performance of the Fund for any period shall be
expressed as a percentage of the Fund's net asset value per share of
Common Stock at the beginning of such period and shall mean and be the
sum of: (i) the change in the Fund's net asset value per share of Common
Stock during such period; (ii) the value of the Fund's cash distributions
per share of Common Stock accumulated to the end of such period; and
(iii) the value of capital gains taxes per share of Common Stock paid or
payable on undistributed realized long-term capital gains accumulated to
the end of such period. For this purpose, the value of distributions per
share of Common Stock of realized
<PAGE>
capital gains, of dividends per share
of Common Stock paid from investment income and the capital gains taxes
per share of Common Stock paid or payable on undistributed realized long-
term capital gains shall be treated as reinvested in shares of Common
Stock of the Fund at the net asset value per share of Common Stock in
effect at the close of business on the record date for the payment of
such distributions and dividends and the date on which provision is made
for such taxes, after giving effect to such distributions, dividends and
taxes. Notwithstanding any provisions of this subparagraph (c) or of the
other subparagraphs of Paragraph 4 hereof to the contrary, the investment
performance of the Fund for any period shall not include, and there shall
be excluded from the change in the Fund's net asset value per share of
Common Stock during such period and the value of the Fund's cash
distributions per share of Common Stock accumulated to the end of such
period shall be adjusted for, any increase or decrease in the investment
performance of the Fund for such period computed as set forth in the
preceding two sentences and resulting from the Fund's capital stock
transactions.
(d) The investment record of the Index for any period, expressed as
a percentage of the Index level at the beginning of such period, shall
mean and be the sum of (i) the change in the level of the Index during
such period; and (ii) the value, computed consistently with the Index, of
cash distributions made by companies whose securities comprise the Index
accumulated to the end of such period. For this purpose, cash
distributions on
<PAGE>
the securities which comprise the Index shall be treated
as reinvested in the Index at the end of each calendar month following
the payment of the dividend.
(e) Any calculation of the investment performance of the Fund and the
investment record of the Index shall be in accordance with any then
applicable rules of the Securities and Exchange Commission.
(f) In the event of any termination of this Agreement, the fee
provided for in this Paragraph 4 shall be calculated on the basis of a
period ending on the last day on which this Agreement is in effect,
subject to a pro rata adjustment based on the number of days elapsed in
the current period as a percentage of the total number of days in such
period.
5.Excess Brokerage Commissions. The Adviser is hereby authorized,
to the fullest extent now or hereafter permitted by law, to cause the
Fund to pay a member of a national securities exchange, broker or dealer
an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of such exchange, broker or
dealer would have charged for effecting that transaction, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and/or research services provided
by such member, broker or dealer, viewed in terms of either that
particular transaction or its over-all responsibilities with respect to
the Fund and its other accounts.
<PAGE>
6. Limitations on the Employment of the Adviser. The services of
the Adviser to the Fund shall not be deemed exclusive, and the Adviser
may engage in any other business or render similar or different services
to others so long as its services to the Fund hereunder are not impaired
thereby, and nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Adviser to engage in any
other business or to devote his time and attention in part to any other
business, whether of a similar or dissimilar nature. So long as this
Agreement or any extension, renewal or amendment remains in effect, the
Adviser shall be the only investment adviser to the Fund, subject to the
Adviser's right to enter into sub-advisory agreements. The Adviser
assumes no responsibility under this Agreement other than to render the
services called for hereunder, and shall not be responsible for any
action of or directed by the Board of Directors of the Fund, or any
committee thereof, unless such action has been caused by the Adviser's
gross negligence, willful malfeasance, bad faith or reckless disregard of
its obligations and duties under this Agreement.
7. Responsibility of Dual Directors, Officers and/or Employees. If
any person who is a director, officer or employee of the Adviser is or
becomes a director, officer and/or employee of the Fund and acts as such
in any business of the Fund pursuant to this Agreement, then such
director, officer and/or employee of the Adviser shall be deemed to be
acting in such capacity solely for the Fund, and not as a director,
officer and/or employee of
<PAGE>
the Adviser or under the control or direction
of the Adviser, although paid by the Adviser.
8. Protection of the Adviser. The Adviser shall not be liable to
the Fund 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 Fund, and the
Fund 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 Fund 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 Fund. 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 Fund 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.
<PAGE>
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 directors of the Fund who
are neither "interested persons" of the Fund (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.
9. Effectiveness, Duration and Termination of Agreement. The Prior
Agreement (other than the provisions of Paragraph 8 thereof, which shall
remain in full force and effect) shall terminate at the close of business
on June 30, 1996. This Agreement shall become effective on July 1,
1996, and shall remain in effect until April 30, 1998 and thereafter
shall continue automatically for successive annual periods from May 1 to
April 30, provided that such continuance is specifically approved at
least annually by (a) the vote of the Fund's directors, including a
majority of such directors who are not parties to this Agreement or
"interested persons" (as such term is defined in Section 2(a)(19) of the
Investment Company Act of
<PAGE>
1940) of any such party, cast in person at a
meeting called for the purpose of voting on such approval, or (b) the
vote of a majority of the outstanding voting securities of the Fund and
the vote of the Fund's directors, including a majority of such directors
who are not parties to this Agreement or "interested persons" (as so
defined) of any such party. This Agreement may be terminated at any
time, without the payment of any penalty, on sixty (60) days' written
notice by the vote of a majority of the outstanding voting securities of
the Fund or by the vote of a majority of the Fund's directors or by the
Adviser, and will automatically terminate in the event of its
"assignment" (as such term is defined for purposes of Section 15(a)(4) of
the Investment Company Act of 1940); provided, however, that the
provisions of Paragraph 8 of this Agreement shall remain in full force
and effect, and the Adviser shall remain entitled to the benefits
thereof, notwithstanding any such termination.
10. Name. The Fund may, so long as this Agreement remains in
effect, use "Royce" as part of its name. The Adviser may, upon
termination of this Agreement, require the Fund to refrain from using the
name "Royce" in any form or combination in its name or in its business,
and the Fund shall, as soon as practicable following its receipt of any
such request from the Adviser, so refrain from using such name.
<PAGE>
11. Notices. Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed, postage prepaid, to the other
party at its principal office.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed the day and year first above written.
ROYCE VALUE TRUST, INC.
By:________________________________
Charles M. Royce, President
QUEST ADVISORY CORP.
By:________________________________
Charles M. Royce, President
<PAGE>
PROXY ROYCE VALUE TRUST, INC. PROXY
1414 Avenue of the Americas
New York, NY 10019
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Charles M. Royce and Stephen L.
Isaacs, 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 on the
reverse, all the shares of the Fund held of record by the
undersigned on May 20, 1996, at the Annual Meeting of Stockholders
to be held on June 26, 1996, or at any adjournment thereof.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE.
Please sign exactly as name appears on other side. 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?
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
ROYCE VALUE
TRUST, INC.
With-
For All
For hold
Except
1. ELECTION OF
DIRECTORS (Page __) [ ] [ ] [ ]
Charles M. Royce Thomas R. Ebright Richard M. Galkin
Stephen L. Isaacs David L. Meister
If you do not wish your shares voted for a
particular nominee, mark the "For All Except"
box and strike a line through the nominee(s)'
name. Your shares will be voted for the
remaining nominee(s).
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
<PAGE>
For Against Abstain
2. PROPOSAL TO APPROVE A NEW [ ] [ ] [ ]
INVESTMENT ADVISORY AGREE-
MENT (Page _)
3. PROPOSAL TO CHANGE THE [ ] [ ] [ ]
FUND'S INVESTMENT POLICY
ON WARRANTS, RIGHTS AND
OPTIONS (Page _)
4. PROPOSAL TO RATIFY THE [ ] [ ] [ ]
SELECTION OF ERNST &
YOUNG LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS (Page _)
5. THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER
BUSINESS AS MAY COME BEFORE THE
MEETING.
This Proxy when properly executed will be voted in
the manner directed by the undersigned stockholder.
If no direction is made, this Proxy will be voted for
Proposals 1, 2, 3 and 4.
Mark box at the right if comments or address changes
have been noted on the reverse.
RECORD DATE SHARES:
<PAGE>
Royce Value Trust, Inc.
1414 Avenue of the Americas
New York, NY 10019
(212) 355-7311
May 1, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Royce Value Trust, Inc.
File No. 811-4870
CIK No. 000804116
Ladies and Gentlemen:
Enclosed herewith for filing pursuant to Rule 14a-6 under the
Securities Exchange Act of 1934, as amended, are the Notice of
Meeting and Preliminary Proxy Statement (including exhibit) and
form of proxy, to be sent to stockholders of Royce Value Trust,
Inc. (the "Fund") in connection with the Fund's Annual Meeting
scheduled to be held on June 26, 1996.
The applicable $125 filing fee was previously sent to Mellon
Bank for this Fund's account.
The Proxy Statement covers the election of directors and the
appointment of auditors. It also seeks stockholder approval of a
new Investment Advisory Agreement between the Fund and Quest
Advisory Corp. and of a change in the Fund's stated investment
policy concerning warrants, rights and options.
The Fund expects to mail its definitive proxy materials to
stockholders promptly after the May 16, 1996 record date for the
Meeting.
If you have any questions or comments with respect to the
enclosed materials, please contact Howard J. Kashner at (212) 508-
4529.
Sincerely,
Susan I. Grant
Secretary
SIG:am
C:\WPWIN\QUEST\RVT\PXYPRELM.LTR
Enclosures
