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SEQUOIA FUND, INC. Principal Executive Office:
767 Fifth Avenue
New York, New York 10153
(212) 832-5280
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 16, 1996
The Annual Meeting of Stockholders of Sequoia Fund,
Inc., a Maryland corporation (the "Corporation"), will be held at
10:00 A M. New York City time, on April 16, 1996 at The
University Club, One West Fifty-fourth Street, New York, New York
for the following purposes, all of which are more fully discussed
in the accompanying Proxy Statement dated March 8, 1996:
1. To elect seven Directors of the Corporation, each
to hold office until the next Annual Meeting of Stockholders and
until his successor is duly elected and qualified;
2. To ratify or reject the selection of McGladrey &
Pullen, LLP as independent accountants of the Corporation for the
Corporation's current fiscal year;
3. To approve or disapprove renewal for the
Corporation's current fiscal year of the Investment Advisory
Contract between the Corporation and Ruane, Cunniff & Co., Inc.
dated July 1, 1993; and
4. To transact such other business as may properly
come before the meeting.
Only stockholders of record at the close of business on
February 16, 1996 are entitled to notice of and to vote at the
meeting and at any adjournment thereof.
By order of the Board of Directors
Joseph Quinones, Jr.
Secretary and Treasurer
New York, New York
March 8, 1996
If you do not expect to attend the meeting in person, please date
and sign the enclosed proxy and return it promptly in the
envelope enclosed for that purpose to assure that a quorum will
be present at the meeting.
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PR0XY STATEMENT
March 8, 1996
Page
Introduction................................................ 3
Election of Directors....................................... 5
Approval or Disapproval of Selection of
Independent Accountants..................................... 8
Approval or Disapproval of Renewal of
Investment Advisory Contract................................ 8
Certain Information as to Directors and
Officers of the Corporation and its
Investment Adviser.......................................... 10
Allocation of Portfolio Brokerage and
Portfolio Turnover.......................................... 10
Stockholder Proposals for the 1997
Annual Meeting.............................................. 11
Definition of "Vote of a Majority of the
Outstanding Voting Securities of the Corporation"........... 11
Other Matters............................................... 11
EXHIBIT A (Investment Advisory Contract dated
July 1, 1993)............................................... 13
2
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PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the management of Sequoia Fund, Inc.,
a Maryland corporation (the "Corporation"), for use at the Annual
Meeting of Stockholders to be held at The University Club, One
West Fifty-fourth Street, New York, New York 10019, April 16,
1996 at 10:00 A M., New York City time. Such solicitation will
be by mail, and the cost will be borne by the Corporation
pursuant to the terms of the Investment Advisory Contract
described below. The approximate date of the mailing of this
Proxy Statement to the stockholders of the Corporation is
March 8, 1996.
The Corporation's Annual Report for the fiscal Year
ended December 31, 1995 was mailed to stockholders on
February 28, 1996.
The outstanding voting stock of the Corporation as of
February 16, 1996 consisted of approximately 28,115,817 shares of
Common Stock, each share being entitled to one vote. Only
stockholders of record at the close of business on February 16,
1996 are entitled to vote at the meeting.
Shares represented by the proxies received in response
to this solicitation will, unless contrary instructions are
given, be voted in favor of the election as directors of the
nominees set forth below, in favor of ratification of the Board
of Directors' selection of independent accountants and in favor
of approval of renewal of the Investment Advisory Contract.
Any person giving a proxy has the power to revoke it at
any time before it is exercised, either by personal attendance at
the meeting or by written notice received by the Corporation
prior to the meeting.
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The following table sets forth information regarding
beneficial owners of more than five percent of the outstanding
Common Stock of the Corporation on February 16, 1996:
Percent
of Total
No. of Shares
Name Address Shares Outstanding
Trustees of Grinnell College Grinnell, Iowa 50112 3,578,578 12.73
Boston Safe Deposit Company 1 Boston Place 2,389,449 8.50
as Trustee for the Capital Boston, Massachusetts
Cities/ABC, Inc. Employees 02106;
Master Retirement Plan Trust 82 Devonshire Street
and the Capital Cities/ABC, Boston, Massachusetts
Inc. Publishing Pension Plan 02109
Trust and Fidelity Management
Trust Company as Trustee for
the Capital Cities ABC, Inc.
Employees Profit Sharing Plan
Trust
Bankers Trust Company as 280 Park Avenue 2,043,924 7.27
Trustee for FMC New York, New York
Corporation Master 10022
Retirement Trust
State Street Bank and 225 Franklin Street 1,457,740 5.18
Trust Company as Trustee Boston, Massachusetts
for Supermarkets General 02110
Corp. Master Retirement
Plan Trust and Profit
Sharing Plan Trust
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ELECTION OF DIRECTORS
The following persons are nominees for election as
directors, each to hold office until the next annual meeting of
the stockholders and until his successor has been elected and has
qualified, and each such nominee has consented to so serve.
Messrs. Ruane and Cunniff have served as directors (and Chairman
and President, respectively) of the Corporation since its
organization in November 1969, Messrs. Swiggett and Matthews were
first elected by the Board of Directors in May 1970 and May 1972,
respectively, and Mr. Neuhauser was first elected by the
stockholders in September 1974. Messrs. Goldfarb and Harding
were first elected by the Board of Directors in September 1980.
The Board of Directors, which met four times during 1995, has no
compensation committee.
The Corporation has a Nominating Committee of the Board
of Directors, composed of Messrs. Harding, Matthews, Neuhauser
and Swiggett.1 The Nominating Committee meets whenever vacancies
occur on the Board of Directors to consider and make
recommendations to the Board of Directors as to proposed nominees
for election as directors of the Corporation. Should vacancies
occur, the Nominating Committee will consider recommendations for
nomination as director made by stockholders of the Corporation.
Any such recommendations should be sent to the offices of the
Corporation at the address above, Attention of the Secretary.
_________________________
1. Such persons are not "interested persons" of the Corporation
within the meaning of Section 2(a)(19)(A) of the Investment
Company Act of 1940.
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Shares of Common Percent
Name, Age and Office Stock Owned of Total
if Any, in the Beneficially on Shares
Corporation Principal Occupation February 16, 1996 Outstanding
William J. Ruane,* 70, Chairman of the Board 247,407 shares(1)(2) .88
Chairman of the Board of directors and
of Directors and Director, Ruane,
Director Cunniff & Co., Inc.
(member firm of the New
York Stock Exchange,
Inc.), with which he
has been associated for
more than five years.
Mr. Ruane is also a
Director of The
Washington Post Company
and GEICO Corporation.
Richard T. Cunniff,* President and Director, 12,672 shares (2)(3) .05
73, President and Ruane, Cunniff & Co.,
Director Inc., with which he
has been associated
for more than five
years. Mr. Cunniff is
also a Director of
Sturm, Ruger & Company,
Inc.
Robert D. Goldfarb,* Executive Vice President 1,305 shares (2) .00
51, Vice President and Director, Ruane
and Director Cunniff & Co., Inc. with
which he has been
associated for more
than five years.
John M. Harding, 74, Currently retired. 2,462 shares (4) .01
Director Mr. Harding was
Associate Professor
of Business
at Albers School of
Business, Seattle
University from 1976
to 1989.
Francis P. Matthews, Currently retired. 25,657 shares .09
74, Director Mr. Matthews
was Of Counsel to
Matthews & Cannon,
P.C. (law firm) from
1986 to 1990.
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_________________________
* Such persons are "interested persons" of the Corporation
within the meaning of Section 2(a)(19)(A) of the Investment
Company Act of 1940 because of their affiliation with the
Corporation's investment adviser.
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Shares of Common Percent
Name, Age and Office Stock Owned of Total
if Any, in the Beneficially on Shares
Corporation Principal Occupation February 16, 1996 Outstanding
C.William Neuhauser, Currently retired. 2,925 shares(5) .01
70, Director Mr. Neuhauser
was Executive
Secretary of National
Maritime Council from
1979 to 1981.
Robert L. Swiggett, Director of UNUM 17,421 shares (6) .06
74, Director Corporation. Mr.
Swiggett was Chairman
of the Board of
Directors and
Director of Kollmorgen
Corporation (electro-
optical instruments,
direct-drive motor and
control devices and
systems) from l983 to
1990.
(1) In addition, (a) 61,O93 shares of such stock are owned by
Mr. Ruane's relatives or by trusts in which Mr. Ruane's
relatives have beneficial interests and (b) Mr. Ruane is
Trustee of the Carmel Hill Fund, the assets of which include
143,132 shares of such stock; however, beneficial ownership
by Mr. Ruane of such shares shall not be deemed to be hereby
admitted.
(2) Messrs. Ruane, Cunniff and Goldfarb are officers, directors
and voting stockholders of Ruane, Cunniff & Co., Inc., which
is the owner of 17,013 shares of the Corporation's Common
Stock. (See "Certain Information as to Directors and
Officers of the Corporation and its Investment Advisers,"
below). In addition, Messrs. Ruane and Cunniff are trustees
and beneficiaries of the Profit-Sharing and Money Purchase
Plans of Ruane Cunniff & Co., Inc., which own 132,909 shares
of the Corporation's Common Stock.
(3) In addition, 12,475 shares of such stock are owned by
Mr. Cunniff's relatives, but beneficial ownership by
Mr. Cunniff of such shares shall not be deemed to be hereby
admitted.
(4) In addition, 5,357 shares of such stock are owned by
Mr. Harding's relatives, but beneficial ownership by
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Mr. Harding of such shares shall not be deemed to be hereby
admitted.
(5) In addition, 1,625 shares of such stock are owned by
Mr. Neuhauser's relatives, but beneficial ownership by
Mr. Neuhauser of such shares shall not be deemed to be hereby
admitted.
(6) In addition, 488 shares of such stock are owned by
Mr. Swiggett's relatives, but beneficial ownership by
Mr. Swiggett of such shares shall not be deemed to be hereby
admitted.
On February 16, 1996, the directors and officers of the
Corporation collectively owned approximately 1.13%, or, including
shares owned by their respective relatives and affiliates,
approximately 2.46%, of the total number of the outstanding
shares of the Corporation's Common Stock.
The Corporation does not pay any fees to, or reimburse
expenses of, its Directors who are considered "interested
persons" of the Corporation. The aggregate compensation for the
fiscal year ended December 31, 1995 paid by the Corporation to
each of the Directors is set forth below. Ruane, Cunniff & Co.,
Inc. does not provide investment advisory services to any
investment companies registered under the Investment Company Act
of 1940, as amended, other than the Corporation.
Pension or
Benefits Retirement
Aggregate Accrued Estimated Total
Compensation as Part of Annual Compensation
From Corporation Benefits Upon from
Name Of Director Corporation Expenses Retirement Corporation
William J. Ruane $ 0 $-0- $-0- $ 0
Richard T. Cunniff 0 -0- -0- 0
Robert D. Goldfarb 0 -0- -0- 0
John M. Harding 30,000 -0- -0- 30,000
Francis P. Matthews 30,000 -0- -0- 30,000
C. William Neuhauser 30,000 -0- -0- 30,000
Robert L. Swiggett 30,000 -0- -0- 30,000
APPROVAL OR DISAPPROVAL OF
SELECTION
OF INDEPENDENT ACCOUNTANTS
The management recommends that the stockholders ratify
the selection of McGladrey & Pullen, LLP, independent
accountants, to audit the accounts of the Corporation for its
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current fiscal year. Their selection is scheduled to be
considered by the Board of Directors, including all the
disinterested directors, on March 11, 1996.
It is expected that a representative of McGladrey &
Pullen, LLP wil1 attend the Annual Meeting. He will be afforded
an opportunity to make a statement if he so desires and wil1 be
available to respond to appropriate questions.
The Corporation has an Audit Committee of the Board of
Directors composed of Messrs. Harding, Matthews, Neuhauser and
Swiggett.2 The Audit Committee meets annually to review the
Corporation's financial statements with the independent
accountants and to report on its findings to the Board of
Directors, and so met once during 1995.
APPROVAL OR DISAPPROVAL
OF RENEWAL OF
INVESTMENT ADVISORY CONTRACT
The Corporation retains as its investment adviser Ruane,
Cunniff & Co., Inc., 767 Fifth Avenue, New York, New York 10153
(the "Investment Adviser"). The Investment Adviser is a member
corporation of the New York Stock Exchange, Inc. and is also the
distributor of the shares of the Corporation.
The existing Investment Advisory Contract, a copy of
which is attached hereto as Exhibit A, became effective on
July 1, 1993, and was most recently approved by the stockholders
of the Corporation on April 26, 1995.
The terms of the Investment Advisory Contract provide
that it shall remain in force until December 31, 1993 and
thereafter for successive twelve-month periods computed from each
January 1 provided that such continuance is specifically approved
annually by vote of a majority of the Corporation's outstanding
voting securities or by the Corporation's Board of Directors, and
by a majority of the Corporation's directors who are not parties
to the contract or interested persons of any such party, by vote
cast in person at a meeting called for the purpose of voting on
such approval. Renewal of the Investment Advisory Contract for
such period commencing January 1, 1996 was so approved by the
Board of Directors and by the disinterested directors at such a
meeting of the Board of Directors held on December 11, 1995, at
which meeting the Board of Directors also approved the submission
_________________________
2. Such persons are not "interested persons" of the Corporation
within the meaning of Section 2(a)(19)(A) of the Investment
Company Act of 1940.
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to stockholders of the Corporation of the renewal of the
Investment Advisory Contract for such period commencing
January 1, 1996, pursuant to the provisions of the Investment
Company Act of 1940 and the terms of the Investment Advisory
Contract as described above.
Pursuant to the terms of the Investment Advisory
Contract, the Investment Adviser furnishes advice and
recommendations with respect to the Corporation's portfolio of
securities and investments and provides persons satisfactory to
the Corporation's Board of Directors to act as officers and
employees of the Corporation. Such officers and employees, as
well as certain directors of the Corporation, may be directors,
officers or employees of the Investment Adviser or its
affiliates.
The Investment Adviser is obligated under the Investment
Advisory Contract to pay or reimburse the Corporation for the
following expenses incurred by the Corporation: (i) the
compensation of any of the Corporation's directors, officers and
employees who are interested persons of the Investment Adviser or
its affiliates (other than by reason of being directors, officers
or employees of the Corporation); (ii) fees and expenses of
registering the Corporation's shares under the appropriate
Federal securities laws and of qualifying its shares under the
applicable State Blue Sky laws, including expenses attendant upon
renewing and increasing such registrations and qualifications;
and (iii) expenses of printing and distributing the Corporation's
prospectuses and sales and advertising materials. The
Corporation is responsible and has assumed the obligation for
payment of all of its other expenses, including (a) brokerage and
commission expenses; (b) Federal, State or local taxes, including
issue and transfer taxes, incurred by or levied on the
Corporation; (c) interest charges on borrowings; (d) compensation
of any of the Corporation's directors, officers or employees who
are not interested persons of the Investment Adviser or its
affiliates (other than by reason of being directors, officers or
employees of the Corporation); (e) charges and expenses of the
Corporation's custodian, transfer agent and registrar; (f) costs
of proxy solicitations; (g) legal and auditing expenses; and
(h) payment of all investment advisory fees.
The Investment Advisory Contract provides that in the
absence of willful misfeasance, bad faith or gross negligence on
the part of the Investment Adviser, or of reckless disregard of
its obligations thereunder, the Investment Adviser is not liable
for any action or failure to act in accordance with its duties
thereunder. The Investment Adviser may act as an investment
adviser to other persons, firms or corporations (including
investment companies) and has numerous advisory clients besides
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the Corporation, none of which, however, is a registered
investment company.
The Investment Advisory Contract provides that it is
terminable on 60 days' written notice by vote of a majority of
the Corporation's outstanding shares or by vote of a majority of
the Corporation's entire Board of Directors, or by the Investment
Adviser on 60 days' written notice and automatically terminates
in the event of its assignment.
For its services under the Investment Advisory Contract,
the Investment Adviser receives from the Corporation a management
fee equal to 1% per annum of the Corporation's average daily net
asset values. The entire management fee is accrued daily and
paid to the Investment Adviser at the end of each month of the
Corporation's fiscal year. Such fee is in excess of the
management fees paid by most registered investment companies.
The Investment Advisory Contract also provides that the
Investment Adviser is obligated to reimburse the Corporation for
the amount, if any, by which the operating expenses of the
Corporation (excluding for such purpose the Corporation's
brokerage and commission expenses, Federal, State or local taxes,
including issue or transfer taxes, incurred by or levied on the
Corporation and interest charges on borrowings, but including the
management fee) in any year exceed 1 1/2% of the average daily
net asset values of the Corporation during such year up to a
maximum of $30,000,000, plus 1% of the average daily net asset
values in excess of $30,000,000. Computation of this limitation
is made monthly during the Corporation's fiscal year, on the
basis of the average daily net asset values and operating
expenses thus far during such year, and the amount of the excess,
if any, over the prorated amount of the expense limitation is
paid by the Investment Adviser to the Corporation (or, where such
amount of the excess is less than the monthly payment by the
Corporation to the Investment Adviser with respect to the
management fee, is deducted from such money payment), after
taking into account, however, any previous monthly payments under
the operating expense limitation during such fiscal year.
For the fiscal year ended December 31, 1995, the
Corporation's average daily net asset value was $1,855,856,400
and the Investment Adviser received a total management fee of
$18,558,564. Of this fee, the Investment Adviser reimbursed the
Corporation for the amount of $505,000 in accordance with the
expense limitation described in the preceding paragraph, so that
the Investment Adviser received the net amount of $18,053,564.
Approval by the stockholders of renewal of the
Investment Advisory Contract for the Corporation's current fiscal
year will require the affirmative vote of a majority of the
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outstanding voting securities of the Corporation, as defined
below.
CERTAIN INFORMATION AS TO
DIRECTORS AND OFFICERS OF THE
CORPORATION AND ITS INVESTMENT ADVISER
With the exception of Messrs. Harding, Matthews,
Neuhauser and Swiggett, all directors and officers of the
Corporation are officers or employees of Ruane, Cunniff & Co.,
Inc., the Corporation's Investment Adviser, and all remuneration
received by such directors and officers of the Corporation, in
their capacities as such, is paid by the Investment Adviser.
Under the Investment Advisory Contract, the Investment Adviser or
its affiliates bear the expenses of any remuneration paid to
directors and officers of the Corporation who are interested
persons of the Investment Adviser or its affiliates (other than
by reason of being directors, officers or employees of the
Corporation). The Corporation's officers are elected annually.
Messrs. Ruane, Cunniff and Goldfarb are directors of the
Investment Adviser. Mr. Ruane is chairman of the board of
directors and Mr. Cunniff is president of the Investment Adviser.
Mr. Goldfarb is an executive vice president of the Investment
Adviser, with which he has been associated for more than five
years. Ms. Carol L. Cunniff, 45, has been vice president of the
Corporation since 1994. Ms. Cunniff is an executive vice
president and a director of the Investment Adviser, with which
she has been associated for more than five years. Ms. Cunniff's
address is 767 Fifth Avenue, New York, New York 10153.
Mr. Joseph Quinones, Jr., 50, has been vice president, secretary
and treasurer of the Corporation and a vice president, secretary
and treasurer of the Investment Adviser since 1995. Previously,
Mr. Quinones had been a vice president of Weiss Peck & Greer (a
money management firm), the chief financial officer of Woodward &
Associates (a money management firm) and a vice president of
Lazard Freres Asset Management. Mr. Quinones' address is 767
Fifth Avenue, New York, New York 10153.
Each of Messrs. Ruane, Cunniff, Goldfarb and Quinones
and Ms. Cunniff is a beneficial owner of common stock of the
Investment Adviser. As of February 16, 1996, Messrs. Ruane,
Cunniff and Goldfarb collectively owned beneficially 28,241
shares of common stock of the Investment Adviser (the only class
of voting securities of the Investment Adviser), collectively
constituting approximately 73.4%, and individually constituting
approximately 31.7%, 18.3% and 23.5%, respectively, of such
shares outstanding. None of Messrs. Harding, Matthews, Neuhauser
and Swiggett is a beneficial owner of voting securities of the
Investment Adviser.
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The Investment Adviser is also the distributor of the
Corporation's Common Stock and is a member corporation of the New
York Stock Exchange, Inc. Pursuant to a distribution agreement
dated July 15, 1970, as amended (the "Distribution Agreement"),
the Investment Adviser serves without compensation as the
Corporation's distributor. The distributor acts in this capacity
merely as the Corporation's agent and all subscriptions must be
accepted by the Corporation as principal. Under the Distribution
Agreement, the Corporation has agreed to indemnify the
distributor, in the absence of the distributor's willful
misfeasance, bad faith, gross negligence or reckless disregard of
its obligations thereunder, against certain civil liabilities,
including liabilities under the Securities Act of 1933. The
distributor also serves as the regular broker for the Corporation
(see "Allocation of Portfolio Brokerage and Portfolio Turnover,"
below).
ALLOCATION OF PORTFOLIO
BROKERAGE AND PORTFOLIO TURNOVER
The Investment Adviser furnishes advice and
recommendations with respect to the Corporation's portfolio
decisions and, subject to the instructions of the Board of
Directors of the Corporation, determines the broker to be used in
each specific transaction. The Investment Adviser attempts to
obtain from brokers the lowest possible commission consistent
with best price and execution. In doing so, the Investment
Adviser takes into account a number of considerations including,
among other factors, the overall net economic result to the
Corporation (involving both price paid or received and any
commissions and other costs paid), the efficiency with which the
specific transaction is effected, the ability to effect the
transaction at all where a large block is involved, the known
practices of brokers and their availability to execute possibly
difficult transactions in the future and the financial strength
and stability of the broker. Because of such factors, most of
which are judgmental, a broker-dealer effecting a transaction may
be paid a commission higher than that charged by another broker-
dealer. Subject to these considerations, the Investment Adviser,
an affiliated corporation, is the Corporation's regular broker
and is the normal channel through which securities transactions
(other than on a principal basis) are effected. The Corporation
does not normally effect agency-cross transactions involving
portfolio securities through the Investment Adviser (i.e.,
transactions in which the Investment Adviser is acting as broker
both for the Corporation and for the other party to the
transaction) but may do so in circumstances which comply with the
requirements of the Investment Advisers Act of 1940, as amended.
Pursuant to Section 11(a) of the Securities Exchange Act of 1934,
the Investment Adviser is restricted as to the nature and extent
of the brokerage services it may perform for the Corporation. In
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accordance with rules adopted by the Securities and Exchange
Commission (the "SEC") under Section 11(a), the Investment
Adviser may effect, on a national securities exchange,
transactions in portfolio securities of the Corporation, that is,
to cause such transactions to be transmitted, executed, cleared
and settled and to arrange for unaffiliated brokers to execute
such transactions. The Board of Directors of the Corporation, in
accordance with the SEC rules, has authorized the Corporation to
enter into a written contract with the Investment Adviser
pursuant to which the Investment Adviser may continue to receive
compensation for effecting, in compliance with the SEC rules,
such transactions. Certain affiliated persons of the Investment
Adviser are interested persons of the Corporation. (See
"Election of Directors," above).
Neither the Investment Adviser nor any affiliated person
thereof either participates in commissions paid by the
Corporation to other brokers or dealers or receives any
reciprocal business, directly or indirectly, as a result of such
commissions.
The Corporation and the Investment Adviser generally do
not direct the Corporation's portfolio transactions to persons or
firms because of research services provided by such person or
firm. While neither the Corporation nor the Investment Adviser
has a present intention of doing so, the Investment Adviser may
execute transactions in the Corporation's portfolio securities
through persons or firms which supply investment information to
the Corporation or the Investment Adviser, but only when
consistent with the Corporation's policy to seek the most
favorable markets, prices and executions in its securities
transactions. Such investment information may also be used by
the Investment Adviser in servicing other accounts with respect
to which it acts as investment adviser.
During the year ended December 31, 1995, the Corporation
paid a total of $385,518 in brokerage commissions, $187,900 of
which was paid to the Investment Adviser. During such year, the
brokerage commissions paid to the Investment Adviser represented
approximately 49% of the total brokerage commissions paid by the
Corporation during the year and were paid on account of
transactions having an aggregate dollar value equal to
approximately 56% of the aggregate dollar value of all portfolio
transactions of the Corporation during the year for which
commissions were paid.
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STOCKHOLDER PROPOSALS FOR
THE 1997 ANNUAL MEETING
All stockholder proposals intended for presentation at
the 1997 Annual Meeting of Stockholders of the Corporation must
be received by the Corporation at its principal executive office
no later than November 7, 1996 in order to qualify for inclusion
in the form of proxy and the proxy statement relating to such
meeting.
DEFINITION OF "VOTE OF A MAJORITY
OF THE OUTSTANDING VOTING SECURITIES
OF THE CORPORATION"
The vote of a majority of the outstanding voting
securities of the Corporation, as defined in Section 2(a)(42) of
the Investment Company Act of 1940, means the lesser of the vote
of:
(1) 67% or more of the outstanding voting securities of
the Corporation present at any meeting, if the holders of more
than 50% of the outstanding voting securities of the Corporation
are present or represented by proxy thereat; or
(2) more than 50% of the outstanding voting securities
of the Corporation.
The only voting security of the Corporation is its
Common Stock.
OTHER MATTERS
The management does not know of any matters to be
presented at the Annual Meeting other than those mentioned in
this Proxy Statement. If any of the persons listed above is
unavailable for election as a director, an event not now
anticipated, or if any other matters properly come before the
meeting, the shares represented by proxies will be voted with
respect thereto in accordance with the view of the management.
By Order of the Board of Directors
Joseph Quinones, Jr.
Secretary and Treasurer
New York, New York
March 8, 1996
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EXHIBIT A
SEQUOIA FUND, INC.
Ruane, Cunniff & Co., Inc. July 1, 1993
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. We are engaged in the business of investing and
reinvesting our capital in securities of the type and in
accordance with the limitations specified in our Certificate of
Incorporation, By-Laws, Registration Statement filed with the
Securities and Exchange Commission under the Investment Company
Act, and any representations made in our Prospectus, all in such
manner and to such extent as may from time to time be authorized
by our Board of Directors. We enclose copies of the documents
listed above and will from time to time furnish you with
amendments thereof. We will also keep you currently advised as
to the make-up of our portfolio of securities.
2. (a) We hereby employ you to advise us in respect of
investing and reinvesting our capital as above specified, and,
without limiting the generality of the foregoing, to provide
management and other services specified below.
(b) You on your own motion will advise us whenever
in your opinion conditions are such as to make it desirable that
a specified security or group of securities be eliminated from
the portfolio or added to it. You will also keep us in touch
with important developments affecting our portfolio and on your
own initiative will furnish us from time to time with such
information as you may believe appropriate for this purpose,
whether concerning the individual companies whose securities are
included in our portfolio, or the industries in which they
engage, or the economy generally. Similar information is to be
furnished us with reference to securities which you may believe
desirable for inclusion in our portfolio. You will also furnish
us with such statistical information with respect to the
securities which may hold or contemplate purchasing as you may
believe appropriate or as we reasonably may request. In advising
us, you will bear in mind the limitations imposed by our
Certificate of Incorporation and statement of policy included in
our Registration Statement under the Investment Company Act and
the limitations in the Internal Revenue Code in respect of
regulated investment companies.
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(c) It is understood that you will from time to
time employ or associate with you such persons as you believe to
be particularly fitted to assist you in the execution of this
agreement, the compensation of such persons to be paid by you.
No obligation may be incurred on our behalf in any such respect.
During the continuance of this agreement you will provide persons
satisfactory to our Board of Directors to serve as officers and
employees of our corporation, if elected or appointed as the case
may be. These shall be a chairman of the board, a president, a
secretary, a treasurer, and such additional officers and
employees as may reasonably be necessary for the conduct of our
business. You or your affiliates (other than us) shall pay the
entire salaries and wages of all of our officers, directors, and
employees who are interested persons of you or your affiliates
(other than by reason of being our directors, officers or
employees), and the salaries of such persons shall not be deemed
to be expenses incurred by us for purposes of paragraph 3 hereof.
3. It is further agreed that you shall be responsible
for the following expenses incurred by us during each year or
portion thereof that this agreement is in effect between us:
(i) the compensation of any of our directors, officers and
employees who are interested persons of you or your affiliates
(other than by reason of being our directors, officers or
employees), (ii) fees and expenses of registering our shares
under the appropriate Federal securities laws and of qualifying
our shares under applicable State Blue Sky laws, including
expenses attendant upon renewing and increasing such
registrations and qualifications, and (iii) expenses of printing
and distributing our prospectus and sales and advertising
materials. We shall be responsible and hereby assume the
obligation for payment of all our other expenses, including
(a) brokerage and commission expenses, (b) Federal, State or
local taxes, including issue and transfer taxes, incurred by or
levied on us, (c) interest charges on borrowings,
(d) compensation of any of our directors, officers or employees
who are not interested persons of you or your affiliates (other
than by reason of being our directors, officers or employees),
(e) charges and expenses of our custodian, transfer agent and
registrar, (f) costs of proxy solicitations, (g) legal and
auditing expenses and (h) payment of all investment and advisory
fees (including the fees payable to you hereunder). However, you
shall reimburse us for the excess, if any, in any year of our
operating expenses over 1 1/2% of our average daily net asset
values up to a maximum of $30,000,000, plus 1% of our average
daily net asset values in excess of $30,000,000. Such operating
expenses will not include expenses listed in clauses (a), (b) and
(c). Computations under this expense limitation shall be made
monthly during our fiscal year, on the basis of the average daily
net asset values and operating expenses thus far during such
year, and the amount of the excess, if any, over the prorated
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<PAGE>
amount of the expense limitation shall be paid by you to us (or,
where such amount of the excess is less than the monthly payment
by us to you of the management fee set forth below, shall be
deducted from such monthly payment of the management fee), after
taking into account, however, any previous monthly payments under
the operating expense limitation during such fiscal year. This
operating expense limitation will be prorated for the portion of
the fiscal year from July 1, 1993 through December 31, 1993.
4. We shall expect of you, and you will give us the
benefit of, your best judgment and efforts in rendering these
services to us, and we agree as an inducement to your undertaking
these services that you shall not be liable hereunder for any
mistake of judgment or in any event whatsoever, except for lack
of good faith, provided that nothing herein shall be deemed to
protect, or purport to protect, you against any liability to us
or to our security holders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder or by
reason of your reckless disregard of your obligations and duties
hereunder.
5. In consideration of the foregoing we will pay you,
for each year or portion of a year during which this agreement is
effective between us, a management fee of 1% per annum of our
average daily net asset values. The management fee will be
accrued daily and paid to you at the end of each month of our
fiscal year.
6. This agreement shall become effective on July 1,
1993, and shall continue in force until December 31, 1993 and
thereafter for successive twelve-month periods (computed from
each January 1) provided that such continuance is specifically
approved annually by vote of a majority of our outstanding voting
securities (as defined in the Investment Company Act) or by our
Board of Directors; and by a majority of our directors who are
not parties to this agreement or interested persons, as defined
in the Investment Company Act, of any such party (other than as
directors of our corporation) cast in person at a meeting called
for the purpose of voting on such approval. This agreement may
be terminated at any time, without the payment of any penalty, by
vote of a majority of our outstanding voting securities (as so
defined), or by a vote of a majority of our entire Board of
Directors on sixty days' written notice to you, or by you on
sixty days' written notice to us.
7. This agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged by you and this
agreement shall terminate automatically in the event of its
assignment. The terms "transfer", "assignment" and "sale" as
used in this paragraph shall have the meanings ascribed thereto
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<PAGE>
by governing law and any interpretation thereof contained in
rules or regulations promulgated by the Securities and Exchange
Commission thereunder.
8. Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your officers,
directors or employees who may also be a director, officer or
employee of ours, or persons otherwise affiliated with us (within
the meaning of the Investment Company Act of 1940) to engage in
any other business or to devote time and attention to the
management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind
to any other corporation, firm, individual or association. It is
understood that you and your affiliates may render similar
investment advisory services to clients other than us for
compensation which may be more or less than the compensation
charged to us for such services.
9. It is understood that, whether or not we follow the
investment advice and recommendations given by you to us
thereunder, the provisions contained herein concerning your
compensation hereunder shall be binding on you and us.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
SEQUOIA FUND, INC.
By /s/ William J. Ruane
______________________
Chairman of the Board
Accepted:
Ruane, Cunniff & Co., Inc.
By /s/ Richard T. Cunniff
_______________________
President
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<PAGE>
APPENDIX
SEQUOIA FUND, INC.
Annual Meeting of Stockholders - April 16, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Revoking any such prior appointments, the undersigned
stockholder of SEQUOIA FUND, INC., a Maryland corporation (the
"Corporation"), hereby appoints RICHARD T. CUNNIFF and JOSEPH
QUINONES, JR. (or if only one shall act, then that one) proxies,
with power of substitution, to vote all the common stock of the
Corporation registered in the name of the undersigned at the
Annual Meeting of Stockholders of the Corporation to be held at
The University Club, One West Fifty-fourth Street, New York, New
York on April 16, 1996 at 10:00 A.M. and at any adjournments
thereof.
PROPOSALS
1) The shares of common stock represented by this Proxy
will be voted (except to the extent authority to vote is withheld
as described below) for the election of William J. Ruane,
Richard T. Cunniff, Robert D. Goldfarb, John M. Harding,
Francis P. Matthews, C. William Neuhauser and Robert L. Swiggett,
as directors, each to hold office until the next Annual Meeting
of Stockholders and until his successor is elected and qualified,
as more fully described in the Proxy Statement for the
stockholders' meeting to be held on April 16, 1996. (You may
withhold your vote for any one or more of the foregoing nominees
by lining through or otherwise striking out the name of the
particular nominee or nominees);
2) With respect to ratification of the selection of
McGladrey & Pullen, LLP as independent accountants for the
Corporation's current fiscal year, as more fully described in
said Proxy Statement;
3) With respect to renewal for the Corporation's
current fiscal year ending December 31, 1996 of the Investment
Advisory Contract between the Corporation and Ruane, Cunniff &
Co., Inc. dated July 1, 1993; and
4) In accordance with their discretion, upon such other
matters as may properly come before the meeting.
The shares of common stock represented by this Proxy
will be voted and such voting will be in accordance with the
specifications above. With respect to the proposals set forth in
items 2 and 3, if no specification is made, such shares will be
<PAGE>
voted FOR the proposals set forth in those items. Should any
other matters properly come before the meeting, the persons named
in this Proxy will vote and act with respect thereto in
accordance with the views of the management.
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE
ENCLOSED ENVELOPE AND RETAIN THE TOP PORTION. Place the ballot
so that the return address, located on the reverse side of the
ballot, appears through the window of the envelope.
PROXY VOTING MAIL-IN-STUB
PROPOSAL 1: Election of Directors: To WITHHOLD authority to vote
for any individual nominee, strike a line through the nominee's
name in the list below.
/ / FOR all nominees listed below
/ / Vote withheld for all nominees listed below
/ / FOR all nominees listed below (except as marked to the
contrary below)
William J. Ruane Richard T. Cunniff Robert D. Goldfarb
John M. Harding Francis P. Matthews C. William Neuhauser
Robert L. Swiggett
PROPOSALS
2) / / FOR / / AGAINST / / ABSTAIN
3) / / FOR / / AGAINST / / ABSTAIN
SEQUOIA FUND, INC.
RECORD DATE SHARES
Please sign exactly as your name or names appear on the ballot.
When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such. Receipt is
acknowledged of the Proxy Statement for the stockholders' meeting
to be held April 16, 1996.
Dated:_____________________, 19__
_________________________________
_________________________________
Signature(s) of Stockholder(s)
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