SPECTRA FUND INC, DEFS14A, 2000-03-17

SPECTRA FUND INC
DEFS14A, 2000-03-17

Previous: 7 ELEVEN INC, 10-K, 2000-03-17

Next: BP AMOCO CORP, 13F-NT, 2000-03-17

| ONE WORLD TRADE CENTER
S P E C T R A | SUITE 9333
F U N D | NEW YORK, NY 10048
| (800) 368-3411

March 13, 2000

Dear Shareholder:

A Special Meeting of Shareholders of the Spectra Fund (the "Fund") will
be held at 2:00 p.m., local time, on April 28, 2000 at the offices of the Fund.
Formal notice of the Meeting appears on the next page, followed by the proxy
statement. We hope that you can attend the Meeting in person; however, we urge
you in any event to vote your shares by completing and returning the enclosed
proxy in the envelope provided at your earliest convenience.

At the Meeting, you will be asked to consider approving certain
proposals. After carefully considering each proposal, the Fund's Board of
Trustees recommends that you vote "FOR" the proposal.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. IN
ORDER TO AVOID THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE
ADJOURNMENTS, PLEASE TAKE A FEW MINUTES TO READ THE PROXY STATEMENT AND CAST
YOUR VOTE. IT IS IMPORTANT THAT YOUR VOTE BE RECEIVED NO LATER THAN APRIL 27,
2000.

The Fund is using Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist shareholders in the voting
process. As the date of the Meeting approaches, if we have not already heard
from you, you may receive a telephone call from SCCreminding you to exercise
your right to vote.

We appreciate your participation and prompt response in this matter and
thank you for your continued support.

Sincerely,

/s/ DAVID D. ALGER
---------------------
David D. Alger
PRESIDENT AND TRUSTEE

<PAGE>

SPECTRA FUND
ONE WORLD TRADE CENTER, SUITE 9333, NEW YORK, NY 10048
1-800-368-3411

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS OF SPECTRA FUND:

NOTICE IS HEREBY GIVEN that a Special Meeting of the Shareholders (the
"Meeting") of Spectra Fund (the "Fund") will be held at the offices of the Fund,
One World Trade Center, Suite 9333, New York, NY 10048, at 2:00 p.m. on Friday,
April 28, 2000. The purpose of the meeting is to consider and act upon the
following proposals, and to transact such other business as may properly come
before the Meeting or any adjournments thereof.

1. To elect a Board of Trustees.

2. To ratify or reject the selection of Arthur Andersen LLP as the
independent public accountants for the Fund for the fiscal year
ended October 31, 2000.

3. To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.

Shareholders of record as of the close of business on March 6, 2000
will be entitled to vote at the Meeting. The enclosed proxy is being solicited
on behalf of Management of the Fund.

IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO THEADDRESSNOTEDON THE POSTPAID
RETURN ENVELOPE ENCLOSED FOR YOUR USE.

By order of the Board of Trustees

DAVID D. ALGER
PRESIDENT

Dated: March 13, 2000
New York, New York

<PAGE>

PROXY STATEMENT
FOR
THE SPECIAL MEETING OF SHAREHOLDERS
OF
SPECTRA FUND
TO BE HELD ON APRIL 28, 2000

INTRODUCTION

The accompanying Proxy is being solicited by the Management of the Fund
for use at the Special Meeting of Shareholders to be held at 2:00 p.m. on April
28, 2000 and at any adjournments thereof. All costs of solicitation, including
printing and mailing of this Proxy Statement and the accompanying Notice of
Meeting and Proxy, the reimbursement of brokerage firms and others for their
expenses in forwarding solicitation material to the beneficial owners of shares
of the Fund, and supplementary solicitations to submit proxies, which may be
made by mail, telephone, telegraph, e-mail and personal interviews by officers
of the Fund, will be borne by the Fund. In order to obtain the necessary quorum
at the Meeting, such solicitation may be made by, among others, officers and
employees of the Fund, the Investment Adviser, the Distributor, and the Transfer
Agent of the Fund. It is anticipated that the cost of such supplementary
solicitation, if any, will be nominal. Shareholder Communications Corporation
("SCC") may be retained to assist in the solicitation of proxies. If retained,
SCC will be paid by the Fund and the Fund will reimburse SCC for its related
expenses; it is anticipated that this additional expense will be immaterial.

If the enclosed Proxy is properly executed and returned in time to be
voted at the meeting, the full and fractional shares represented thereby (each
full share is entitled to one vote and each fractional share is entitled to
proportionate voting rights) will be voted in accordance with the instructions
marked thereon. Except when instructions to the contrary are marked thereon with
respect to a proposal, the Proxy will be voted FOR the proposals stated in the
accompanying notice of meeting. All Proxies not voted, including broker
non-votes, will not be counted toward establishing a quorum. Shareholders should
note that while votes to ABSTAINwill count toward establishing a quorum, passage
of any proposal being considered at the meeting will occur only if a sufficient
number of votes are cast for the proposal. Accordingly, votes to ABSTAINand
votes AGAINST will have the same effect in determining whether the proposal is
approved. On any motion for adjournment of the Meeting, even if a quorum is
present, Management will vote all Proxies in its discretion pursuant to Item 3
thereof. Any shareholder giving a Proxy has the right to attend the meeting to
vote his shares in person (thereby revoking any prior Proxy) and also the right
to revoke the Proxy at any time by written notice received by the Fund prior to
its exercise.

This Proxy Statement and accompanying Proxy are being mailed to
shareholders on or about March 13, 2000. As mentioned above, SCC may be engaged
to assist in the solicitation of proxies. As the meeting date approaches,
certain shareholders of the Fund may receive a call from a representative of SCC
if the Fund has not yet received their votes. Authorization to permit SCC to
execute proxies may be obtained by telephonic or elec-

<PAGE>

tronically transmitted instructions from shareholders of the Fund. Proxies that
are obtained telephonically will be recorded in accordance with the procedures
set forth below. Management of the Fund believes that these procedures are
reasonably designed to ensure that the identity of the shareholder casting the
vote is accurately determined.

In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask the shareholder such shareholder's full name,
address, social security or employer identification number, title (if the person
giving the proxy is authorized to act on behalf of an entity, such as a
corporation), the number of shares owned and to confirm that the shareholder has
received the Proxy Statement in the mail. If the information solicited agrees
with the information provided to SCC by the Fund, then the SCC representative
has the responsibility to explain the process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on each proposal.
Although the SCC representative is permitted to answer questions about the
process, he or she is not permitted to recommend to the shareholder how to vote,
other than to read any recommendation set forth in the Proxy Statement. SCC will
record the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram to confirm the shareholder's vote and
asking the shareholder to call SCC immediately if the shareholder's instructions
are not correctly reflected in the confirmation.

If a shareholder wishes to participate in the Meeting of Shareholders,
but does not wish to give a proxy by telephone, such shareholder may still
submit the proxy card originally sent with the Proxy Statement or attend in
person. Any proxy given by a shareholder, whether in writing or by telephone, is
revocable. A shareholder may revoke the accompanying proxy or proxy given
telephonically at any time prior to its use by filing with the Fund a written
revocation or duly executed proxy bearing a later date. In addition, any
shareholder who attends the Meeting in person may vote by ballot at the Meeting,
thereby canceling any proxy previously given.

The address of the principal executive office of the Fund is One World
Trade Center, Suite 9333, New York, NY 10048.

A COPY OF THE FUND'S MOST RECENT SEMI-ANNUAL AND ANNUAL REPORTS WILL BE
SENT TO YOU WITHOUT CHARGE UPON WRITTEN REQUEST TO THE FUND AT ONE WORLD TRADE
CENTER, SUITE 9333, NEW YORK, NY 10048 OR BY CALLING 800-368-3411.

2
<PAGE>

INFORMATION REGARDING VOTING SECURITIES

The number of shares outstanding for the Fund as of the close of
business on March 6, 2000, the record date for determining shareholders entitled
to receive notice of, and to vote at the Meeting and all adjournments thereof,
is 71,363,540.275. Each share is entitled to one vote at the Meeting.

The following table sets forth those persons known to the Fund to be
beneficial owners of more than 5% of the outstanding voting shares of the Fund
as of March 6, 2000.

AMOUNT OF
TITLE OF NAMES & ADDRESSES BENEFICIAL PERCENT OF
CLASS OF BENEFICIAL OWNERS OWNERSHIP CLASS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Spectra Fund Shares Charles Schwab & Co., Inc. 30,357,111.607 42.54%
Special Custody Acct.
101 Montgomery Street
San Francisco, CA 94104

National Financial Services 9,896,790.531 13.87%
200 Liberty Street
New York, NY 10281
</TABLE>

PROPOSAL NO. 1: ELECTION OF TRUSTEES

Eight Trustees are to be elected at the Meeting, to serve until the
next shareholder meeting at which Trustees are elected, and until their
successors are elected and qualified. Each of the nominees has indicated an
intention to serve if elected and has consented to be named in this Proxy
Statement; certain of the nominees are currently Trustees of the Fund.

Three of the nominees, Charles F. Baird, Jr., Roger P. Cheever and
Lester L. Colbert, Jr., are new nominees recommended by the current Board. Mr.
Colbert has been a member of the Board of Directors of another fund managed by
Fred Alger Management, Inc., Castle Convertible Fund, Inc., since 1974.

Fred Alger Management, Inc. (the "Adviser") has served as the
investment adviser to the Fund since 1974. The Adviser is a wholly-owned
subsidiary of Fred Alger & Company, Incorporated ("Alger"). Alger, which is a
wholly-owned subsidiary of Alger Associates, Inc. ("Alger Associates"), is a
securities broker-dealer and member firm of the New York Stock Exchange, Inc.
The principal place of business of the Adviser and Alger Associates is One World
Trade Center, Suite 9333, New York, NY 10048. The principal place of business of
Alger is 30 Montgomery Street, Jersey City, NJ 07302. Alger Associates and the
Adviser are New York corporations and Alger is a Delaware corporation.

3
<PAGE>

The following table provides certain information about the nominees,
including age, position, if any, with the Fund, business experience and
ownership, if any, of shares of the Fund.

<TABLE>
<CAPTION>
SHARES OF THE
FUND BENEFICIALLY
POSITION WITH OWNED DIRECTLY
NAME, AGE AND BUSINESS THE FUND AND OR INDIRECTLY, PERCENT
EXPERIENCE FOR THE PERIOD OF AS OF OF SHARES
LAST FIVE YEARS SERVICE MARCH 6, 2000 OUTSTANDING
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* Fred M. Alger III, 65
Chairman of the Boards Trustee and 1,531,791.08 Shs.** 2.15%
of Alger Associates, the Chairman of the
Adviser, Alger, Alger Board since 1974
Properties, Inc.
("Properties"), Alger
Shareholder Services, Inc.
("Services"), Alger Life
Insurance Agency, Inc.
("Agency"), the Fund,
The Alger Fund, The Alger
American Fund, The Alger
Retirement Fund, Castle
Convertible Fund, Inc.,
Fred Alger International
Advisory S.A.
("International"), The Alger
American Asset Growth Fund
("Asset Growth") and Analysts
Resources, Inc. ("ARI").
Formerly President of Alger
Associates, the Adviser,
Alger, Properties, Services,
Agency, the Fund, The Alger
Fund, Castle Convertible Fund,
Inc., The Alger American Fund
and The Alger Retirement Fund.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
SHARES OF THE
FUND BENEFICIALLY
POSITION WITH OWNED DIRECTLY
NAME, AGE AND BUSINESS THE FUND AND OR INDIRECTLY, PERCENT
EXPERIENCE FOR THE PERIOD OF AS OF OF SHARES
LAST FIVE YEARS SERVICE MARCH 6, 2000 OUTSTANDING
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* David D. Alger, 56
President and Director of Alger Trustee 1,496,326.954 Shs.** 2.10%
Associates, Adviser, Alger, since 1993
Properties, Services, Agency, and President
International and the Castle since 1995
Convertible Fund, Inc.; President
and Trustee of the Fund, The
Alger American Fund, The Alger
Retirement Fund and The Alger
Fund; Executive Vice President
and Director of ARI; Director of
Asset Growth. Formerly Executive
Vice President of Alger
Associates, the Adviser, Alger,
Properties, Services and Agency;
and Vice President of the Fund,
Castle Convertible Fund, Inc.,
The Alger Fund, The Alger
American Fund and The Alger
Retirement Fund.

Charles F. Baird, Jr., 46
Managing Partner of North N/A 0 Shs. 0%
Castle Partners, a private
equity securities group, since
1997. Formerly Managing Director
of AEA Investors Inc.
</TABLE>

5
<PAGE>

Lester L. Colbert, Jr., 65
Private investor since 1988; N/A 0 Shs. 0%
Director of Castle Convertible
Fund, Inc. Formerly Chairman
of the Board, President and
Chief Executive Officer of
Xidex Corporation.

Stephen E. O'Neil, 67
Attorney; private investor Trustee 0 Shs. 0%
since 1981; Director of Nova since 1972
Care, Inc., Brown-Forman
Corporation and Castle
Convertible Fund, Inc.;
Trustee of the Fund, The
Alger American Fund,
The Alger Retirement
Fund and The Alger Fund.
Formerly of Counsel to
the law firm of Kohler &
Barnes; formerly President
and Vice Chairman of City
Investing Company; formerly
Director of Centerre
Bancorporation and Syntro
Corporation.
</TABLE>

6
<PAGE>

B. Joseph White, 52
Dean, University of Michigan Trustee 366.838 Shs. 0%
Business School; President, since 1999
William Davidson Institute at
the University of Michigan
Business School; Professor of
Business Administration,
University of Michigan
Business School; Director,
Gordon Food Service and
Castle Convertible Fund, Inc.;
Trustee and Chair, Audit
Committee, Equity Residential
Properties Trust; Director and
Chair, Compensation Committee,
Kelly Services, Inc. Trustee
of the Fund, The Alger Fund, The
Alger Retirement Fund and
The Alger American Fund.
</TABLE>

- --------------------------------------------------------------------------------
* Fred M. Alger III and David D. Alger may be considered "interested persons"
of the Fund as such term is defined in the Investment Company Act of 1940
because they are "interested persons" of the Adviser and officers of the
Fund. Fred M. Alger III and David D. Alger are brothers.

** Includes 1,491,934.221 shares of the Fund beneficially owned by Alger
Associates, Inc. directly or through wholly-owned subsidiaries. Fred M.
Alger III and David D. Alger may be deemed beneficially to own such shares
by virtue of their control of Alger Associates, Inc.

7
<PAGE>

OFFICERS, TRUSTEES AND RELATED MATTERS

No Trustee, officer or employee of the Adviser or its affiliates will
receive any compensation from the Fund for serving as an officer or Trustee of
the Fund. Each Trustee of the Fund who is not an "interested person" of the
Fund, as defined in the Investment Company Act of 1940, receives from the Fund a
fee of $2,000 for each meeting he attends, to a maximum of $8,000 annually, plus
travel expenses he incurred for attending meetings. During the fiscal year ended
October 31, 1999, such Trustees who are nominees received an aggregate of
$18,500 of such fees. The Fund has no bonus, profit sharing, pension or
retirement plans. The following table provides compensation amounts paid to
nominees who are not interested persons of the Fund and who were Trustees during
the fiscal year ended October 31, 1999.

COMPENSATION TABLE

TOTAL COMPENSATION PAID TO
TRUSTEES FROM THE FUND,
AGGREGATE THE ALGER FUND,
COMPENSATION THE ALGER AMERICAN FUND,
FROM CASTLE CONVERTIBLE FUND,INC.,
TRUSTEE THE FUND AND THE ALGER RETIREMENT FUND
- --------------------------------------------------------------------------------
Stephen E. O'Neil $6,250 $34,250
Nathan E. Saint-Amand 6,250 34,250
B. Joseph White 6,000 27,000

Four regular meetings of the Board of Trustees were held during the
fiscal year ended October 31, 1999. During that period, with the exception of
Fred M. Alger III, each of the Trustees attended at least 75% of the meetings of
the Board and, if he was a member, the Audit Committee.

The Fund's Audit Committee, which oversees the Fund's accounting and
financial reporting policies and the independent audit of its financial
statements, consists of the following independent Trustees: Mr. O'Neil and Mr.
White. It is anticipated that Mr. Colbert will join the Audit Committee at the
time he becomes a Trustee of the Fund. The Committee met once during the fiscal
year ended October 31, 1999. The Fund's Board of Trustees has no nominating or
compensation committee or any committee performing similar functions.

8
<PAGE>

The following table provides certain information about the officers of
the Fund other than Fred M. Alger III and David D. Alger, both of whom are
listed above in the table of Trustee nominees. Officers are elected annually.

NAME, AGE & BUSINESS POSITION WITH THE FUND
EXPERIENCE FOR THE LAST 5 YEARS & PERIOD OF SERVICE
- --------------------------------------------------------------------------------

Gregory S. Duch, 48 Treasurer since 1989
Executive Vice President, Treasurer and
Director of Alger Associates, the Adviser
and Properties; Executive Vice President and
Treasurer of Alger, Services, Agency and ARI;
Treasurer of the Fund, The Alger Fund,
The Alger American Fund, The Alger Retirement
Fund and Castle Convertible Fund, Inc.;
Treasurer and Director of International.

Mary Marsden-Cochran, 47 Secretary since 1996
Since 1996, Vice President, General Counsel
and Secretary of Alger Associates, the Adviser,
Properties, Alger, Services, Agency and ARI;
Secretary of the Fund, The Alger Fund,
The Alger American Fund, The Alger Retirement
Fund, Castle Convertible Fund, Inc.
and International.

Frederick A. Blum, 46 Assistant Secretary and
Senior Vice President of Alger; Assistant Treasurer
since 1997, Assistant Secretary and Assistant since 1997
Treasurer of the Fund, The Alger Fund,
The Alger American Fund, The Alger Retirement
Fund and Castle Convertible Fund, Inc.

Management recommends that shareholders vote FOR all of the listed
nominees.

PROPOSAL NO. 2: RATIFICATION OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Fund or the Adviser, have selected and approved
Arthur Andersen LLP as the independent public accountants to examine the
financial statements of the Fund for the fiscal year ending October 31, 2000.
The Fund has been advised that no member of such firm has a material direct or
indirect interest in the Fund. Pursuant to Section 32(a) of the Investment
Company Act of 1940, such selection is subject to ratification or rejection by
shareholders of the Fund. A representative of Arthur Andersen LLP is expected to
be present at the meeting to answer any questions which the Fund's shareholders
may have. The representative will have an opportunity to make a statement if he
or she so desires.

Management recommends that shareholders vote FOR Proposal No. 2.

9
<PAGE>

OTHER MATTERS

Management knows of no other matters to be brought before the meeting;
however, if any other matters come before the meeting, the persons named in the
enclosed Proxy will vote proxies that do not contain specific restrictions in
accordance with their best judgment on such matters.

One World Trade Center, Suite 9333
New York, NY 10048

Dated: March 13, 2000

IF YOU CANNOT ATTEND THE MEETING, YOU ARE URGED TO FILL IN, SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE. AN ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.

10
<PAGE>

SPECTRA FUND
PROXY
SPECIAL MEETING OF SHAREHOLDERS APRIL 28, 2000

The undersigned shareholder of Spectra Fund hereby appoints David D. Alger,
Gregory S. Duch and Stephen E. O'Neil, and each of them, the attorneys and
proxies of the undersigned, with power of substitution to vote, as indicated
herein all of the shares of Spectra Fund standing in the name of the undersigned
at the close of business on March 6, 2000, at the Special Meeting of
Shareholders of the Fund to be held at the offices of the Fund, 1 World Trade
Center, Suite 9333, New York, New York 10048 at 2:00 P.M. on April 28, 2000, and
at all adjournments thereof, with all of the powers the undersigned would
possess if then and there personally present and especially (but without
limiting the general authorization and power hereby given) to vote as indicated
on the proposals, as more fully described in the Proxy Statement of the meeting,
and to vote and act on any other matter which may properly come before the
meeting.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES AND WILL BE VOTED IN ACCORDANCE
WITH INSTRUCTIONS GIVEN BY THE HOLDERS, BUT IF NO INSTRUCTIONS ARE GIVEN IT WILL
BE VOTED FOR PROPOSALS 1 AND 2, AND, AS TO ANY OTHER MATTERS, IN ACCORDANCE WITH
THE ATTORNEYS' BEST JUDGMENT.

(Continued and to be signed on the reverse side.)

<PAGE>

PLEASE MARK BOXES [=] OR (X) IN BLUE OR BLACK INK.

1. ELECTION OF TRUSTEES [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
below (except as marked vote for all nominees
to the contrary below) listed below

INSTRUCTIONS: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.

Fred M. Alger III, David D. Alger, Charles F. Baird, Jr., Roger P. Cheever,
Lester L. Colbert, Jr., Stephen E. O'Neil, Nathan E. Saint-Amand,
B. Joseph White

2. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as independent
accountants for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. PROPOSAL TO CONSIDER AND ACT UPON such other matters as may properly come
before the meeting or any adjournment thereof.

PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY. Signature(s) should be
exactly as name or names appear on this
proxy. If stock is held jointly, each holder
should sign. If signing is by attorney,
executor, administrator, trustee or
guardian, please give full title.

--------------------------------------------
Signature(s) Signature(s)

--------------------------------------------

Dated Social Security or Tax
Identification Number

THIS PROXY, WHEN DATED AND SIGNED, SHOULD BE
MAILED PROMPTLY TO THE ADDRESS ON THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES IN THE ENCLOSED
ENVELOPE.