UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X|
[X]
Filed by a Party other than the Registrant |_|
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Check the appropriate box:
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[_] Preliminary Proxy Statement
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[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|X|
[x] Definitive Proxy Statement
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[_] Definitive Additional Materials
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[_] Soliciting Material Pursuant to ss.240.14a-12
§240.14a-12
BMC FUND, INC.
(Name
(Name of Registrant as Specified In Its Charter)
------------------------------------
(Name
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X|
[X] No fee required.
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[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[_] 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.
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BMC FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 25, 2006
24, 2007
NOTICE IS HEREBY GIVEN THAT the annual meeting of shareholders of BMC Fund, Inc. (the "Fund"“Fund”) will be held on Saturday, February 25, 2006,24, 2007, at 9:00 a.m., at Thethe Hyatt Regency Coconut Point, 5001 Coconut Road, Bonita Springs,Sarasota, 1000 Boulevard of the Arts, Sarasota, Florida (telephone: 941-444-1234)941-953-1234), for the following purposes:
1.To elect 1110 directors to hold office until the next annual meeting of shareholders and until their successors have been elected and qualified.
2.To transact such other business as may properly come before the meeting.
Only shareholders of record as of the close of business on January 10, 20062007 are entitled to notice of, and to vote at, the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED FORM OF PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AT THAT TIME AND VOTE IN PERSON.
January 30, 2006 By Order of the Board of Directors
Paul H. Broyhill
Chairman of the Board
| January 29, 2007 | By Order of the Board of Directors |
| Paul H. Broyhill |
| Chairman of the Board |
BMC FUND, INC.
800 Golfview Park
Lenoir, North Carolina 28645
(Tel.
(Tel.: 828-758-6100)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 25, 2006
24, 2007
GENERAL
This proxy statement is furnished in connection with the solicitation by the Board of Directors of BMC Fund, Inc. (the "Fund"“Fund”) of proxies for use at the annual meeting of shareholders and at any and all adjournments thereof (the "annual meeting"“annual meeting” or the "meeting"“meeting”) to be held at Thethe Hyatt Regency Coconut
Point, 5001 Coconut Road, Bonita Springs,Sarasota, 1000 Boulevard of the Arts, Sarasota, Florida, on Saturday, February 25,
2006,24, 2007, at 9:00 a.m., for the purpose of considering and acting upon the matters specified in the accompanying notice of the meeting and detailed below. The Fund is soliciting such proxies by mail on behalf of its Board of Directors and is bearing the expenses of the solicitation. This proxy statement and the enclosed proxy form are first being sent to shareholders on or about January 30, 2006.
29, 2007.
The Board of Directors has fixed the close of business on January 10, 20062007 as the record date for the determination of shareholdersshare-holders entitled to notice of and to vote at the meeting. On the record date, 4,933,281 shares of Common Stock of the Fund were issued and outstanding, each share being entitled to one vote. InformationInforma-tion concerning beneficial ownership of Common Stock by principal shareholders and by the management of the Fund is set forth below. See "Beneficial“Beneficial Ownership of Principal Shareholders and Management"Management” and "Certain“Certain Beneficial Interests of Directors in the Fund,"” below.
Shares represented by proxies will be voted by the proxy agents named therein unless such proxies are revoked. The proxy agents will vote the proxies that they hold in accordance with the choices specified by the person giving the proxy. If the enclosed proxy reflects no specification but is properly signed, the proxy agents will vote the shares represented thereby for the election of the slate of nominees listed on the proxy.
Any shareholder who submits the accompanying proxy has the right to revoke it by notifying the Secretary of the Fund in writing at any time prior to the voting of the proxy. A proxy is suspended if the person giving the proxy attends the meeting and elects to vote in person.
The holders of a majority of the shares entitled to vote, represented in person or by proxy, constitute a quorum for purposes of the matters to be considered at the annual meeting. Once a share is represented for any purpose at a meeting, it is considered present for quorum purposes for the remainder of the meeting and any adjournment thereof (unless a new record date is set for the adjourned meeting). Abstentions and shares which are withheld as to voting with respect to a proposal are counted in determining the existence of a quorum, but shares held by a broker, as nominee, and not voted on any matter will not be counted for such purpose.
Assuming the existence of a quorum, the persons receiving a plurality of the votes cast by the shares entitled to vote will be elected as directors. Abstentions, shares which are withheld as to voting with respect to a proposal and shares held of record by a broker, as nominee, that are not voted with respect to a proposal will not be counted as a vote in favor of or against the proposal and, therefore, will have no effect on the election of directors.
The Board of Directors is not aware of any business to come before the meeting other than the matters described in the accompanying notice of the meeting. If any other matters of business are properly presented at the meeting, however, the proxy agents will vote upon such matters in accordance with their best judgment.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The bylaws of the Fund provide that the number of directors of the Fund shall be not less than three nor more than 15. Those members of the Board of Directors who are considered not to be "interested persons"“interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”), have approved the selection and nomination of each candidate who, if elected, would be a director under the 1940 Act. Unless contrary action is specified by a shareholder on the enclosed proxy, the proxy agents named in the proxy intend to vote the proxies received by them for the election of the 1110 nominees listed below, who, if elected, will hold office until the next annual meeting of shareholders and until their respective successors have been elected and qualified. All of the nominees are currently serving as directors of the Fund.
If any of the nominees will be unable or unwilling to serve, the proxies shall be voted for a replacement nominee designated by the present Board of Directors or the number of directors to be elected shall be reduced.
The corporation laws of North Carolina, under which the Fund is incorporated, provide that shareholders of a company, such as the Fund, incorporated before July 7, 1957, under a charter not granting the right of cumulative voting and which has at the time of the election of directors one shareholder who owns or controls more than 25% of the company'scompany’s voting stock shall have the right to cumulate their votes for directors. Because no shareholder currently owns or controls more than 25% of the Fund'sFund’s voting shares, cumulative voting will not be available to shareholders of the Fund at the meeting.
Information About Directors and Officers
The following table provides certain information about the nominees for election as directors and the officers of the Fund:
2
Directors Who Are Interested Persons
Term of
Position(s) Office and Other
Directors Who Are Interested Persons |
Name, Held Length of Principal Occupation(s) Directorships
Address and Age With | | Position(s) Held with Fund | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | | Other Directorships Held by Director
- ----------------------------- ------------- ------------- ------------------------- --------------------
|
James T. Broyhill (78)(79) (1) 1930 Virginia Road Winston-Salem, NC 27104 | | Director Vice Chairman | | Since 1976 Since 2005 | | Retired; President of The Shepherd Street
1930 Virginia Road Vice Chairman Since 2005 Old Clemmons School Equity Fund
Winston-Salem, NC 27104 Properties, Inc. (1998-present); former Secretary of the North Carolina Department of Commerce (1989-1991); former Chairman of the North Carolina Economic Development Board (1987-1989); former member, U. S. Senate (1986); former member, U.S. House of Representatives (1963-1986) | | The Shepherd Street Equity Fund |
| | | | | | | | |
Paul H. Broyhill (81)(82) (1) (2) Director Since 1976 Director, President,
135 Claron Place, S.E. President Since 2001 Chairman and Chief
Lenoir, NC 28645 | | Director President and Chief Executive Officer Chairman | | Since 1976 Since 2001 Since 1976 | | Director, President, Chairman and Chief Executive Officer of Executive the Fund
Officer
Chairman Since 1976
| | |
| | | | | | | | |
Allene B. Heilman (83)(84) (3) Director Since 1983 Private Investor
153 Hillhaven Place SE Lenoir, NC 28645 | | Director | | Since 1983 | | Private Investor | | |
| | | | | | | | |
Michael G. Landry (59)(60) (4) Director Since 1993 President of Grayrocks
2501 Barcelona Drive Vice Since 2001 Asset Management, LLC
Ft. Lauderdale, FL 33301 | | Director Vice President and Chief Investment Officer | | Since 1993 Since 2001 | | Investment Committee Chairman, HFG India Continuum Fund (April 2006 - present); President of Grayrocks Asset Management, LLC and Landry Trebbi and Chief Investment Corporation
Investment (1999-present); CEO of
Officer Mackenzie Investment Management, Inc., Chairman of Ivy Funds and Executive Vice President of Mackenzie Financial Fund (1987-1999) | | |
Term of
Position(s) Office and Other Directors |
Name, Held Length of Principal Occupation(s) Directorships
Address and Age With | | Positions Held with Fund | | Term of Office and Length of Time Served | | Principal Occupation During Past 5 Years | | Other Directorships Held by Director
- ----------------------------- ------------- ------------- ------------------------- --------------------
|
William E. Cooper (84) (85) 5418 Preston Haven Drive Dallas, TX 75207 | | Director | | Since 1981 | | Investor (since 1983); 5418 Preston Haven Drive Chairman Emeritus,
Dallas, TX 75207 former chairman and CEO of Dallas Market Center Company, a wholesale marketing complex
Lawrence Z. Crockett (76) Director Since 1983 Retired; former
201 S. Narcissus Avenue, #604 director and CEO of
West Palm Beach, FL 33401 Mortgage Corporation
of the South
| | |
| | | | | | | | |
Jan E. Gordon (54) Director Since 2001 Retired; former
(55) 3075 Rolling Woods Drive election assistant,
Palm Harbor, FL 34683 | | Director | | Since 2001 | | Retired; former election assistant, Pinellas County, FL Supervisor of Elections (1992 - 2005) | | |
| | | | | | | | |
Gene A. Hoots (66) Director Since 1987 Chairman Emeritus,
(67) 3524 Kylemore Court CornerCap Investment
Charlotte, NC 28210 | | Director | | Since 1987 | | Chairman Emeritus, CornerCap Investment Counsel, a registered investment adviser serving private and pension fund clients (since 2001) | | |
| | | | | | | | |
Brent B. Kincaid (74) Director Since 2005 Retired since 1998;
(75) 2703 Lakeview Drive Lenoir, NC 28645 | | Director | | Since 2005 | | Retired since 1988; former President and
Lenoir, NC 28645 CEO of Broyhill Furniture Industries, Inc. | | |
| | | | | | | | |
John S. Little (74) Director Since 2001 Retired; former
(75) 4601 Gulf Shore Blvd. N. #18 Naples, FL 34103 | | Director | | Since 2001 | | Retired; former Managing Director and
Naples, FL 34103 Chief Executive, Associated Octel, London (1989-1995); former Senior Vice President of Corporate Technology, Great Lakes Chemical Corporation (1981-1989) | | |
| | | | | | | | |
L. Glenn Orr, Jr. (65) (66) 2735 Forest Drive Winston-Salem, NC 27104 | | Director | | Since 1999 | | President, Orr Holdings, LLC, an investment banking firm (since 2006); Managing Director, The Highwoods Properties,
2735 Forest Drive Orr Group, an investment banking firm (1995-2006) | | Highwoods Properties, Inc.; Medical Winston-Salem, NC 27104 investment Properties Trust
banking firm (since
1995)
|
4
Other Executive Officers
Term of
Office and
Other Executive Officers |
Name, Positions Held Length of Principal Occupation
Address and Age With | | Positions Held with Fund | | Term of Office and Length of Time Served | | Principal Occupation During Past 5 Years
- ------------------------- -------------- ------------- ----------------------------------
|
M. Hunt Broyhill (41)(42)(5) 1870 9th Street Court, NW Hickory, NC 28601 | | Vice President | | Since 2001 | | Vice President of the Fund since 1870 9th Street Court, NW March 2001; Chief Executive of
Hickory, NC 28601 Broyhill Asset Management, LLC (1997 - present); President of Broyhill Investments, Inc. and Broyhill Family Foundation, Inc. (1988 - present); General Partner of CapitalSouth Partners I, LP and CapitalSouth Partners II, LP (2000-present) |
| | | | | | |
Boyd C. Wilson, Jr. (54) 646 Pleasant Hill Road Lenoir, NC 28645 | | Vice President Chief Financial Officer | | Since 2006 Since 2006 | | Vice President and Chief Financial Officer of the Fund since February 2006; Vice President - Finance & Administration of Kincaid Furniture Company, Incorporated (1984 - 2005) |
| | | | | | |
D. Eugene Hendricks (70) (71) 3021 Cedar Crest Drive Lenoir, NC 28645 | | Vice President Chief Compliance Officer | | Since 2002 Since 2003 | | Vice President since August 2002; 3021 Cedar Crest Drive Chief Since 2001 Chief Financial Officer of the Lenoir, NC 28645 Financial Fund since March 2001;2001 - February 2006; Staff
Officer Accountant for the Fund Chief Since 2003 (1990-2001); Lecturer in
Compliance Accounting at Appalachian State Officer University, Boone, NC (1998-2001) |
- --------------------
(1) Messrs. James Broyhill and Paul Broyhill are interested persons within the
meaning of the 1940 Act by virtue of their beneficial ownership of more
than five percent of the Fund's Common Stock. See "Principal Shareholders"____________________
| (1) | Messrs. James Broyhill and Paul Broyhill are interested persons within the meaning of the 1940 Act by virtue of their beneficial ownership of more than five percent of the Fund’s Common Stock. See “Beneficial Ownership of Principal Shareholders and Management” below. Mr. Paul Broyhill is also an interested person by virtue of his serving as President and Chief Executive Officer of the Fund. Messrs.
James Broyhill and Paul Broyhill and Ms. Heilman are siblings.
(2) Mr. Paul Broyhill is President of P. B. Realty, Inc. and Broyhill
Industries, Inc., wholly owned subsidiaries of the Fund.
(3) Ms. Heilman is an interested person by virtue of her immediate family
relationship to Messrs. James Broyhill and Paul Broyhill.
(4) Mr. Landry is an interested person by virtue of his serving as Vice
President and Chief Investment Officer of the Fund.
(5) Mr. Hunt Broyhill is the son of Paul H. Broyhill and the Vice President of
P. B. Realty, Inc. and Broyhill Industries, Inc., wholly owned
subsidiaries of the Fund. Messrs. James Broyhill and Paul Broyhill and Ms. Heilman are siblings. |
| (2) | Mr. Paul Broyhill is President of P. B. Realty, Inc. and Broyhill Industries, Inc., wholly owned subsidiaries of the Fund. |
| (3) | Ms. Heilman is an interested person by virtue of her immediate family relationship to Messrs. James Broyhill and Paul Broyhill. |
| (4) | Mr. Landry is an interested person by virtue of his serving as Vice President and Chief Investment Officer of the Fund. |
| (5) | Mr. Hunt Broyhill is the son of Paul H. Broyhill and the Vice President of P. B. Realty, Inc. and Broyhill Industries, Inc., wholly owned subsidiaries of the Fund. |
The Fund consists of a single fund managed internally by its Board of Directors (at October 31, 2005,2006, the Board of Directors managed investment securities valued at approximately $138$146 million). Accordingly, information called for by the disclosure rules of the Securities and Exchange Commission (the "Commission"“Commission”) relating to the number of portfolios in the fund complex overseen by the directors is not applicable.
The Board of Directors recommends a vote FOR the entire slate of nominees set forth above.
CORPORATE GOVERNANCE
Board Composition
In accordance with the requirements of the 1940 Act and the Fund'sFund’s Corporate Governance Guidelines, at least 40% of the members of the Fund'sFund’s Board of Directors must not be interested persons of the Fund. The Board has determined that William E. Cooper, Lawrence Z. Crockett, Jan E. Gordon, Gene A. Hoots, Brent B. Kincaid, John S. Little and L. Glenn Orr, Jr. are not interested persons of the Fund.
Committees
The Board of Directors has an Audit Committee, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), which operates under a written charter adopted by the Board in July 2000 and amended and restated by the Board in July 2003. A copy of the Audit Committee charter is attached as Appendix A to this proxy statement. The Fund does not post committee charters on a website. The members of the Audit Committee are William E. Cooper (Chairman), Lawrence Z. Crockett, Brent B. Kincaid and L. Glenn Orr, Jr.,John S. Little, each of whom is an "independent“independent director,"” as defined under the rules of the New York Stock Exchange, and not an interested person of the Fund. (The requirements of the New York Stock Exchange are not applicable to the Fund.) The Audit Committee is directly responsible for the hiring, firing, overseeing the work of and determining the compensation for the Fund'sFund’s independent auditors (subject to the requirement of the 1940 Act that a majority of the Fund'sFund’s directors who are not interested persons of the Fund ratify the selection of the independent auditors). The independent auditors report directly to the Audit Committee.
The Board of Directors has an Investment Committee, the members of which are James T. Broyhill, Paul H. Broyhill, Allene B. Heilman, Gene A. Hoots and Michael G. Landry (Chairman). In addition, M. Hunt Broyhill, a Vice President of the Fund, serves as a nonvoting consultant to the Committee. Each member of the Investment Committee, with the exception of Mr. Hoots, is an interested person of the Fund. The Investment Committee is responsible for reviewing the Fund'sFund’s investments at the request of management. Under the Fund'sFund’s investment objectives and policies, the Investment Committee has substantial oversight responsibility with respect to the Fund'sFund’s investments.
The Board of Directors has a Nominating Committee, the members of which are William E. Cooper, Lawrence Z. Crockett, Jan E. Gordon, Gene A. Hoots, Brent B. Kincaid, John S. Little (Chairman) and L. Glenn Orr, Jr. The Board has determined that each member of the Nominating Committee is an “independent director,” as defined under the rules of the New York Stock Exchange, and not an interested person of the Fund. The Nominating Committee is responsible for identifying and recommending to the Board qualified candidates for Board membership. The Nominating Committee was formed on September 28, 2004 and operates under a written charter adopted on December 8, 2004. AThe Fund does not post committee charters on a website; however, a copy of the Nominating Committee charter was attached to the proxy statement provided to the Fund'sFund’s shareholders in connection with the 2005 annual meeting.
The Board of Directors has a Valuation Committee, the members of which are William E. Cooper, Lawrence Z. Crockett, Jan E. Gordon, Gene A. Hoots (Chairman), Brent B. Kincaid, John S. Little and L. Glenn Orr, Jr. No member of the Valuation Committee is an interested person of the Fund. The purpose of the Valuation Committee is to assist the Board of Directors in its duty to determine the valuation of the assets of the Fund in accordance with the Fund'sFund’s Asset Valuation Procedures.
Procedures.
Meeting and Attendance
During the fiscal year ended October 31, 2005,2006, the Board held four meetings, the Audit Committee held four meetings, the Investment Committee held fivefour meetings, the Nominating Committee held one meetingtwo meetings and the Valuation Committee held four meetings. Each incumbent member of the Board of Directors attended at least 75% of the aggregate number of meetings of the Board and the committees on which he or she served during the fiscal year ended October 31, 2005.2006, except for L. Glenn Orr, Jr. who attended 62% of such meetings. Under the Fund'sFund’s Corporate Governance Guidelines, all directors are expected to make every effort to attend meetings of the Board, the committees of which they are members and annual meetings of shareholders. TenAll members of the Board of Directors attended the 20052006 annual meeting of shareholders.
shareholders, except for L. Glenn Orr, Jr.
Procedures for Director Nominations
In accordance with the Fund'sFund’s Corporate Governance Guidelines, members of the Board are expected to collectively possess a broad range of skills, industry and other knowledge and expertise, and business and other experience useful for the effective oversight of the Fund'sFund’s business. The Nominating Committee is responsible for identifying and recommending to the Board qualified candidates for membership. Candidates are evaluated based on criteria established from time to time by the Board and the criteria identified in the Corporate Governance Guidelines. These criteria include, but are not limited to:
o
| · | Integrity, demonstrated sound business judgment and high moral and ethical
character;
o Diversity of viewpoints, backgrounds, experiences and other demographics;
o Business or other relevant professional experience;
o Capacity and desire to represent the balanced, best interests of the Fund
and its shareholders as a whole and not primarily a special interest group
or constituency;
o Ability and willingness to devote time to the affairs and success of the
Fund and in fulfilling the responsibilities of a director; and high moral and ethical character; |
7
o The extent to which the interplay of the candidate's expertise, skills,
knowledge and experience with that of other Board members will build a
Board that is effective, collegial and responsive to the needs of the
Fund.
| · | Diversity of viewpoints, backgrounds, experiences and other demographics; |
| · | Business or other relevant professional experience; |
| · | Capacity and desire to represent the balanced, best interests of the Fund and its shareholders as a whole and not primarily a special interest group or constituency; |
| · | Ability and willingness to devote time to the affairs and success of the Fund and in fulfilling the responsibilities of a director; and |
| · | The extent to which the interplay of the candidate’s expertise, skills, knowledge and experience with that of other Board members will build a Board that is effective, collegial and responsive to the needs of the Fund. |
The Nominating Committee is authorized to develop additional policies regarding Board size, composition and member qualification.
The Nominating Committee evaluates suggestions concerning possible candidates for election to the Board submitted to the Fund, including those submitted by Board members and shareholders. All candidates, including those submitted by shareholders, will be similarly evaluated by the Nominating Committee using the Board membership criteria described above and in accordance with applicable procedures. Once candidates have been identified, the Nominating Committee will determine whether such candidates meet the qualifications for director nominees established in the Corporate Governance Guidelines or under applicable laws, rules or regulations. The Board, taking into consideration the recommendations of the Nominating Committee, is responsible for selecting the nominees for director and for appointing directors to fill vacancies.
The Nominating Committee has authority to retain and approve the compensation of search firms to be used to identify director candidates. No third party is currently retained by the Nominating Committee to identify such candidates.
As noted above, the Nominating Committee will consider qualified director nominees recommended by shareholders when such recommendations are submitted in accordance with applicable SEC requirements, the Fund'sFund’s bylaws and Corporate Governance Guidelines and any other applicable law, rule or regulation regarding director nominations. When submitting a nomination to the Fund for consideration, a shareholder must provide certain information that would be required under applicable SEC rules, including the following minimum information for each director nominee: full name, age and address; principal occupation during the past five years; current directorships on publicly held companies and investment companies; and number of shares of Fund common stock owned, if any.
ShareholderCommunications with Directors
Any shareholder desiring to contact the Board, or any specific director(s), may send written communications to: Board of Directors (Attention: (Name(s) of director(s), as applicable)), c/o the Fund'sFund’s Secretary, Post Office Box 500, Lenoir, North Carolina 28645. Any proper communications so received will be processed by the Secretary. If it is unclear from the communication received whether it was intended or appropriate for the Board, the Secretary will (subject to any applicable regulatory requirements) use her judgment to determine whether such communication should be conveyed to the Board or, as appropriate, to the member(s) of the Board named in the communication.
AUDIT COMMITTEE REPORT
As noted above, the Audit Committee is directly responsible for hiring, firing, overseeing the work of and determining the compensation for the Fund'sFund’s independent auditors (subject to the requirement of the 1940 Act that a majority of the Fund'sFund’s directors who are not interested persons of the Fund ratify the selection of the independent auditors). The independent auditors report directly to the Audit Committee.
8
Management is responsible for preparing the Fund'sFund’s financial statements. The independent auditors are responsible for performing an independent audit of the Fund'sFund’s audited financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee'sCommittee’s responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has reviewed and discussed the audited financial statements with management and the independent auditors. The Audit Committee also has discussed with the independent auditors the matters required to be discussed by SAS 61 (Codification of Statementsthe Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU ss.§ 380), as it may be modified or supplemented.
adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Fund'sFund’s independent auditors also provided to the Audit Committee the written disclosures and letter required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees)Committees), as it may be modified or
supplemented,adopted by the Public Company Accounting Oversight Board in Rule 3600T, and the Audit Committee discussed with the independent auditors that firm'sfirm’s independence.
Based on the above discussions and review with management and the independent auditors, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Fund'sFund’s annual report to shareholders for the fiscal year ended October 31, 20052006 for filing with the Commission.
Respectfully submitted by the Audit Committee:
William E. Cooper (Chairman)
Lawrence Z. Crockett
Brent B. Kincaid
L. Glenn Orr, Jr.
Respectfully submitted by the Audit Committee: William E. Cooper (Chairman) Brent B. Kincaid John S. Little |
ADMINISTRATION OF THE FUND
Administration of the Fund is primarily the responsibility of the Fund'sFund’s President and Chief Executive Officer, Paul H. Broyhill, its Vice President, M. Hunt Broyhill, its Vice President and Chief Investment Officer, Michael G. Landry, and its Vice President and Chief Financial Officer, Boyd C. Wilson, Jr., and its Vice President and Chief Compliance Officer, D. Eugene Hendricks. The Fund'sFund’s portfolio is managed primarily by Paul H. Broyhill, M. Hunt Broyhill, Michael G. Landry, and Christopher R. Pavese, CFA, and Dan J. Wakin, under the supervision of the Board of Directors. The Fund does not have an external investment adviser.
The Custodian of the Fund'sFund’s portfolio securities is WachoviaU.S. Bank, National Association, Charlotte, North Carolina, pursuant to an Amended and Restated Custodian Agreement dated as of December 31, 1986.
1985.
MANAGEMENT
Executive Officers
The executive officers of the Fund are Paul H. Broyhill, age 8182 (President and Chief ExecutiveExecu-tive Officer), M. Hunt Broyhill, age 4142 (Vice President), Michael G. Landry, age 5960 (Vice President and Chief Investment Officer), Boyd C. Wilson, Jr., age 54 (Vice President and Chief Financial Officer), and D. Eugene Hendricks, age 7071 (Vice President Chief Financial Officer and Chief Compliance Officer). Mr. Paul Broyhill has served in executive capacities with the Fund and
its predecessors for more than five years. Messrs. Hunt Broyhill, Landry and
HendricksAll of such officers have served in executive capacities with the Fund since March 2001. In
addition, Mr. Hendricks and Mr. Hunt Broyhill have served in administrative
capacities with the Fund for more than five years.
years, except Mr. Wilson, who joined the Fund in July 2005 and was appointed Vice President and Chief Financial Officer in February 2006.
Compensation
For the fiscal year ended October 31, 2005,2006, the Fund paid Paul H. Broyhill an annual salary of $18,488$19,805 for his services to the Fund as a President and Chief Executive Officer.(1) M. Hunt Broyhill, Boyd C. Wilson, Jr., D. Eugene Hendricks and Michael G. Landry were paid $60,528, $42,558$72,102, $65,405, $46,608 and $122,500,$136,166, respectively, for their services to the Fund as executive officers.(1) Directors other than those who are officers of the Fund or who are related by blood or marriage to the Broyhill family (with the exception of Ms. Gordon) are paid $3,000 per year, plus $1,000 per meeting attended (or $500 for participating in a Board meeting by telephone), for service on the Board during a full year. Each such outside director is paid an additional $1,000 for each day of attending a committee meeting held other than on the date of a Board meeting (or $500 for participating in a committee meeting by telephone). In addition, all directors are reimbursed for their reasonable expenses incurred in attending meetings.
| (1) | Includes a 401(k) plan employer safe harbor contribution in the amount of 3% of each employee’s salary. |
The following table sets forth the aggregate compensation from the Fund for the fiscal year ended October 31, 20052006 for each director and for each officer who received compensation from the Fund in excess of $60,000:
10
Name of Person; Position Aggregate Compensation From Fund
- ------------------------ --------------------------------
M. Hunt Broyhill $ 60,528
(Vice President)
Michael G. Landry $ 122,500
(Vice President and Chief
Investment Officer)
Name of Person; Position | Aggregate Compensation From Fund |
| James T. Broyhill | $0 |
| Paul H. Broyhill | $19,228 |
| Allene B. Heilman | $0 |
| Michael G. Landry | $132,200 |
| William E. Cooper | $8,000 |
| Jan E. Gordon | $7,500 |
| Gene A. Hoots | $10,500 |
| Brent B. Kincaid | $12,000 |
| John S. Little | $8,000 |
| L. Glenn Orr, Jr. | $7,000 |
| M. Hunt Broyhill | $70,002 |
| Boyd C. Wilson, Jr. | $63,500 |
CERTAIN TRANSACTIONS
The Fund leases its executive offices from Broyhill Investments, Inc., a corporation controlled by Paul H. Broyhill and members of his family. The terms of the lease, which have been approved by the Fund'sFund’s Board of Directors, including those persons who are not interested persons of the Fund, provide that the Fund and its two wholly owned subsidiaries shall pay an annual rental of $18,000 to Broyhill Investments, Inc. during the term of the lease, which is on a month-to-month basis.
On May 25, 2004, Paul H. Broyhill and certain other members of the Fund's
Board of Directors who are related to Jan E. Gordon provided a personal guaranty
for a loan in the amount of $300,000 secured by Jan E. Gordon. The guarantors
were released from all obligations with respect to the loan on July 26, 2004.
INDEPENDENT AUDITORS AND AUDIT FEES
Selection of Auditors
The Audit Committee of the Board of Directors of the Fund, at a meeting to be held prior to the annual meeting of shareholders, intends to select the firm of Dixon Hughes PLLC as the Fund'sFund’s independent auditors for the fiscal year beginning November 1, 2005.2006. Dixon Hughes PLLC has served as the Fund'sFund’s independent auditor since April 17, 2001.
Neither Dixon Hughes PLLC nor any of its members has any direct or indirect financial interest in or any connection with the Fund in any capacity other than as independent public auditors.
A representative of Dixon Hughes PLLC is expected to attend the meeting via teleconference. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
Audit Fees
Fees billed the Fund for the fiscal years ended October 31,
20042005 and
20052006 by Dixon Hughes PLLC for services rendered are set forth in the following table:
11
Fiscal Year Ended Fiscal Year Ended
Type of Service October 31, 2004 October 31, 2005
- ---------------------------------------- ------------------ ------------------
Audit Fees ............................. $ 23,377 $ 24,802
Audit-Related Fees ..................... $ 0 $ 0
Tax Fees ............................... $ 2,555 $ 2,200
All Other Fees ......................... $ 904 $ 0
Type of Service | Fiscal Year Ended October 31, 2005 | Fiscal Year Ended October 31, 2006 |
| Audit Fees | $24,802 | $29,000 |
| Audit-Related Fees | $0 | $1,817 |
| Tax Fees | $2,220 | $1,025 |
| All Other Fees | $0 | $2,370 |
Audit-related fees were miscellaneous fees incurred in connection with the audit. Tax fees were incurred in connection with federal, state and local tax planning and advice, including advice regarding the calculation of dividends and other distributions the Fund is required to make in order to preserve its status as a regulated investment company under Subchapter M of the Internal Revenue Code. The fees listed under "All“All Other Fees"Fees” above were incurred in connection with the preparation and printing of the Fund'sFund’s semiannual and annual reports to shareholders.
During the fiscal year ended October 31, 2005,2006, Dixon Hughes PLLC did not
utilize any leased personnelutilized only full-time, permanent employees in connection with the audit.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires the Audit Committee to approve all audit and permissible non-audit services to be provided by an independent auditing firm. The Audit Committee has established a general pre-approval policy for certain non-audit services, up to a total of $15,000 during any fiscal year. All of the services described above were approved in accordance with the Audit Committee'sCommittee’s pre-approval policy. As a result, none of such services were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
CERTAIN BENEFICIAL INTERESTS OF
DIRECTORS IN THE FUND
Beneficial Ownership by Directors in the Fund
Certain information about the dollar range of equity securities of the Fund beneficially owned by the directors and director nominees as of January 10, 20062007 is set forth in the following table:
Dollar Range of Equity
Name of Director Securities in the Fund
- ---------------- ----------------------
Interested Persons
James T. Broyhill Over $100,000
Paul H. Broyhill Over $100,000
Michael G. Landry $1-$10,000
Allene B. Heilman Over $100,000
Other Directors
William E. Cooper Over $100,000
Lawrence Z. Crockett $1-$10,000
Jan E. Gordon Over $100,000
Gene A. Hoots $10,001-$50,000
Brent B. Kincaid $10,001-$50,000
John S. Little None
L. Glenn Orr, Jr. $10,001-$50,000
12
Name of Director | Dollar Range of Equity Securities in the Fund |
| Interested Persons | |
James T. Broyhill | Over $100,000 |
Paul H. Broyhill | Over $100,000 |
Michael G. Landry | $1-$10,000 |
Allene B. Heilman | Over $100,000 |
| Other Directors | |
William E. Cooper | Over $100,000 |
Jan E. Gordon | Over $100,000 |
Gene A. Hoots | $10,001-$50,000 |
Brent B. Kincaid | $10,001-$50,000 |
John S. Little | $10,001-$50,000 |
L. Glenn Orr, Jr. | $10,001-$50,000 |
BMC consists of a single fund managed internally by its Board of Directors and officers. Accordingly, information called for by the disclosure rules of the Commission relating to the value of securities in various funds within the
Fund'sFund’s family of funds is not applicable.
13
BENEFICIAL OWNERSHIP
OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table reflects information concerning directors, executive officers and those persons known to the Fund to own beneficially 5% or more of the Fund'sFund’s Common Stock as of January 10, 2006:
2007:
| | Amount and Nature of Beneficial Ownership of Common Stock |
| |
| | Voting and Investment Power | Percent of Outstanding Common Stock |
Name | Sole | Shared | |
James T. Broyhill | 785,788 | 96,212 | 17.9% |
Paul H. Broyhill | 418,540(1) | 85,973(2) | 10.2% |
Michael G. Landry | 25 | 0 | (3) |
Allene B. Heilman | 29,777(4) | 0 | (3) |
William E. Cooper | 3,240 | 0 | (3) |
Jan E. Gordon | 147,215 | 239,807 | 7.8% |
Gene A. Hoots | 607 | 0 | (3) |
Brent B. Kincaid | 884 | 0 | (3) |
John S. Little | 300 | 0 | (3) |
L. Glenn Orr, Jr. | 558 | 0 | (3) |
M. Hunt Broyhill | 5,847 | 1,065,932(2)(5) | 21.7% |
Boyd C. Wilson, Jr. | 300 | 0 | (3) |
D. Eugene Hendricks | 0 | 292,653 | 5.9% |
Broyhill Investments, Inc. 800 Golfview Park Lenoir, NC 28645 | 316,871 | 0 | 6.4% |
Eastwind Investments, LLC 153 Hillhaven Place SE Lenoir, NC 28645 | 669,715 | 0 | 13.6% |
Directors and officers as a group | 1,393,081 | 1,780,577 | 64.3% |
__________________________
Amount and Nature| (1) | Includes 316,871 shares owned of Beneficial
Ownershiprecord by Broyhill Investments, Inc., the voting stock of Common Stock
---------------------------------------------------
Percentwhich is principally owned by a trust, of Voting and Outstanding
Investment Power Common Stock
----------------------------- ------------
Name Sole Shared
- --------------------------------- ------------ ------------
James T. Broyhill 785,788 96,212 17.9%which Paul H. Broyhill 418,540(1) 85,973(2) 10.2%
Michael G. Landry 25 0 (3)
Allene B. Heilman 29,777(4) 0 (3)
William E. Cooper 3,240 0 (3)
Lawrence Z. Crockett 200 0 (3)
Jan E. Gordon 147,215 239,807 7.8%
Gene A. Hoots 607 0 (3)
Brent B. Kincaid 884 0 (3)
John S. Little 0 0 0
L. Glenn Orr, Jr 558 0 (3)is the trustee, and by Mr. Broyhill’s immediate family. Does not include 979,959 shares owned by Hibriten Investments of N. C., LP, which is controlled indirectly by Mr. Broyhill’s son. See note (5) below. |
| (2) | Includes 85,973 shares owned of record by Broyhill Family Foundation, Inc., a non-profit corporation. By resolution of the Foundation trustees, Paul H. Broyhill and M. Hunt Broyhill 5,847 1,065,932(5) 21.7%
D. Eugene Hendricks 0 292,653 5.9%
Broyhill Investments, Inc. 316,871 0 6.4%
800 Golfview Park
Lenoir, NC 28645control the voting and disposition of shares of the Fund owned by the Foundation. |
| (3) | Total shares represent less than 1.0% of the Fund’s outstanding Common Stock. |
| (4) | Does not include 669,715 shares owned by Eastwind Investments, LLC, 669,715 0 13.6%
153 Hillhaven Place SE
Lenoir, NC 28645
Directorswhich is controlled by James W. Stevens, Rebecca S. Elliott, John F. Stevens and officers as a group 1,392,681 1,780,577 64.3%
Anne S. Hsu, children of Allene B. Heilman. |
14
- ------------
(1) Includes 316,871 shares owned of record by Broyhill Investments, Inc., the
voting stock of which is principally owned by a trust, of which Paul H.
Broyhill is the trustee, and by Mr. Broyhill's immediate family. Does not
include 979,959 shares owned by Hibriten Investments of N. C., LP, which
is controlled indirectly by Mr. Broyhill's son. See note (5) below.
(2) Includes 85,973 shares owned of record by Broyhill Family Foundation,
Inc., a non-profit corporation. By resolution of the Foundation trustees,
Paul H. Broyhill and M. Hunt Broyhill control the voting and disposition
of shares of the Fund owned by the Foundation.
(3) Total shares represent less than 1.0% of the Fund's outstanding Common
Stock.
(4) Does not include 669,715 shares owned by Eastwind Investments, LLC, which
is controlled by James W. Stevens, Rebecca S. Elliott, John F. Stevens and
Anne S. Hsu, children of Allene B. Heilman.
(5)
| (5) | Includes 979,959 shares owned by Hibriten Investments of N.C., LP. The General Partner of Hibriten Investments of N.C., LP is Hibriten Management
of N.C., LLC. M. Hunt Broyhill is the Manager and owns 30% of the
interests in Hibriten Management of N.C., LLC. The Estate of Faye Arnold
Broyhill, of which Paul H. Broyhill is Executor, owns 70% of the interests
in Hibriten Management of N.C., LLC. M. Hunt Broyhill is the Manager and owns 100% of the interests in Hibriten Management of N.C., LLC. |
The addresses of each of James T. Broyhill, Paul H. Broyhill, Michael G. Landry, Jan E. Gordon, M. Hunt Broyhill, Boyd C. Wilson, Jr. and D. Eugene Hendricks are set forth under "Information“Information about Directors and Officers,"” above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Fund'sFund’s directors, officers and beneficial owners of more than 10% of the Common Stock are required to report their beneficial ownership of Common Stock and any changes in that ownership to the Commission. Specific dates for such reporting have been established, and the Fund is required to report in this Proxy Statement any failure to file by the established dates during the last fiscal year. In the last fiscal year, to the Fund'sFund’s knowledge, all of these filing requirements were satisfied by the Fund'sFund’s directors, officers and principal shareholders.
15
SHAREHOLDER PROPOSALS
In order to be included in proxy material for the 20072008 annual meeting of shareholders, shareholder proposals must be received at the offices of the Fund by October 2, 20061, 2007 and must be submitted in accordance with applicable procedures.
Shareholder proposals which are not intended to be included in the proxy materials for the 20072008 annual meeting must be submitted to the Fund no later than December 16, 2006.15, 2007. Only business properly brought before an annual meeting may be subject to action at the meeting. The chairman of the meeting may refuse to consider any business that is not raised in accordance with these procedures. A proxy may confer discretionary authority to vote on any matter at an annual meeting if the Fund does not receive proper notice of the matter within the timeframe described above.
ANNUAL AND SEMI-ANNUAL REPORTS
The Fund will furnish, without charge, a copy of its annual report (and the most recent semi-annual report succeeding the annual report, if any) for the fiscal year ended October 31, 20052006 to a shareholder upon request. Any such request should be directed to the Secretary of the Fund by writing to Carol Frye at the Fund, 800 Golfview Park, P. O. Box 500, Lenoir, North Carolina 28645. (A stamped, addressed postal card is enclosed for use in requesting such report.) This annual report was previously furnished to shareholders on or about December 29, 2005.
22, 2006.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors knows of no other business to come before the annual meeting for consideration by the Fund'sFund’s shareholders. If any other business properly comes before the meeting, the persons named as proxy agents in the accompanying proxy card will vote the shares represented by the proxy in accordance with their best judgment.
By Order of the Board of Directors Carol Frye Secretary |
BMC FUND, INC.
AUDIT COMMITTEE CHARTER
I.Committee Purpose
The purpose of the Audit Committee is to assist the Board of Directors
Carol Frye
Secretary
16
of BMC Fund, Inc. (the “Company”) in its duty to oversee the Company’s accounting, financial reporting and internal control functions and the audit of the Company’s financial statements. The Committee will accomplish this purpose by performing the responsibilities enumerated in this Charter, which include among others direct responsibility for hiring, firing, overseeing the work of and determining the compensation for the Company’s independent auditors (subject to the requirement of the Investment Company Act of 1940 that a majority of the Company’s directors who are not interested persons of the Company ratify the selection of the independent auditors). The independent auditors will report directly to the Committee. The Committee’s responsibilities under this Charter do not relieve the Company’s management of its responsibilities for preparing the Company’s financial statements so that they comply with generally accepted accounting principles (“GAAP”) and fairly present the Company’s financial condition, results of operations and cash flows; issuing financial reports that comply with the requirements of the Securities and Exchange Commission (the “SEC”); and establishing and maintaining adequate internal control structures and procedures for financial reporting.
II.Committee Membership and Procedure
The Committee will consist of three or more directors, each of whom must:
A.Be an independent director as defined in Section 10A(m) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules of the SEC under the Exchange Act, which means that no member of the Committee may:
i.Accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary of the Company, other than in his or her capacity as a director; or
ii.Be an interested person as defined in Section 2(a)(19) of the Investment Company Act of 1940.
B.Be able to read and understand fundamental financial statements.
The Board of Directors recognizes that it is desirable for at least one member of the Committee to be an “audit committee financial expert” as such term is defined in Item 3 of Form N-CSR. The inability of the Board and the Committee to satisfy this objective, however, will not affect the validity of any actions taken by the Committee.
The Board will appoint the members of the Committee annually. The members will serve until their successors are appointed or until their earlier death, resignation or removal. The Board will designate the Chairman of the Committee or, if it fails to do so, the members of the Committee will elect a Chairman by majority vote. The Board will have the power at any time to change the size and membership of the Committee and to fill vacancies on the Committee, provided that any new member satisfy the requirements of this Charter and any other applicable requirements. The rules and procedures of the Committee will be governed by the North Carolina Business Corporation Act and the Company’s bylaws and, to the extent not inconsistent with such Act and the bylaws, this Charter.
The Committee will meet at least semi-annually to discharge its responsibilities as set forth in Section III of this Charter. At a minimum, the Committee will meet (i) after the end of the first six months of the fiscal year and prior to the filing with the SEC of the Company’s semi-annual report to review with management and, if appropriate, with the independent auditors the financial statements for such six-month period and to address other matters as necessary to discharge its responsibilities as set forth in Section III of this Charter, and (ii) following the end of the fiscal year and in connection with the completion of the fiscal year audit to review with management and the independent auditors the financial statements for the full fiscal year and to address other matters as necessary to discharge its responsibilities as set forth in Section III of this Charter. Upon the call of the Chairman of the Committee or the Chairman of the Board, the Committee will meet at such other times and for such other purposes as are necessary to carry out the Committee’s responsibilities. At such times as the Committee determines, the Committee will meet separately with management and the Company’s independent auditors in discharge of the Committee’s obligations under Section III of this Charter.
The Committee will record and maintain minutes of its meetings. The Chairman of the Committee or a Committee member designated by the Chairman will make a report to the Board of the Committee’s meetings, actions taken at meetings or by consent, and recommendations made since the most recent Board meeting, unless the Committee has previously circulated an interim report addressing the matter or matters.
III.Committee Authority and Responsibilities
The authority and responsibilities of the Committee are as follows:
Annual Responsibilities
A.Review and reassess annually the adequacy of this Charter and recommend any changes to the Board. The Chairman of the Committee will confirm to the Board and management annually that the Committee has reviewed and reassessed the adequacy of this Charter.
B.Be solely and directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditors engaged to prepare or issue an audit report or perform other audit, review or attest services, including resolution of disagreements between the independent auditors and management regarding financial reporting. The authority of the Committee under this paragraph is subject to the requirements of the Investment Company Act of 1940 and the rules of the SEC under the Act that the selection of the independent auditors be ratified by the shareholders of the Company (to the extent such requirement is applicable to the Company) and ratified or selected by a majority of the Company’s directors who are not interested persons of the Company.
C.Prior to engaging the independent auditors to perform an audit of the Company’s financial statements, (i) obtain from the independent auditors a formal written statement delineating all relationships between their firm and the Company, consistent with Independence Standards Board Standard No. 1 or such other standard as may be promulgated by the Public Company Accounting Oversight Board; (ii) actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors; and (iii) take, or recommend that the Board of Directors take, appropriate action to oversee the independence of the independent auditors.
D.Review with the independent auditors their proposed audit scope and approach, including staffing, locations and coordination of independent audit work with the work of the Company’s accounting (and, if applicable, internal audit) personnel.
E.Approve, in advance, the engagement letter for the annual audit to be conducted by the independent auditors, including the compensation to be paid for such services.
F.Following completion of the annual audit and at such other times as the Committee deems appropriate, review separately with the independent auditors and management any significant difficulties encountered during the course of the audit.
G.Establish a policy for the Committee’s pre-approval of audit and non-audit services to be provided by the independent auditors and annually review the continuing adequacy of the pre-approval policy.
H.At least annually, review the Company’s system of internal controls and evaluate the adequacy of the Company’s financial reporting systems and business process controls.
I.Prepare the Committee’s report that the SEC rules require to be included in the Company’s annual proxy statement.
Periodic Responsibilities
J.Approve, in advance, all audit services not provided for in the engagement letter for the annual audit, and all permissible non-audit services to be provided by the independent auditors (including the compensation to be paid for such services);
K.Review the Company’s hiring policies for, and approve the hiring of, any employees or former employees of the independent auditors.
L.Approve all transactions between the Company and a related party and any other conflict of interest situations.
M.Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters and review the continuing adequacy of such procedures.
N.Engage and determine the compensation of any professional advisers as the Committee determines are appropriate to carry out its responsibilities under this Charter.
O.Cause the Company to pay the ordinary administrative expenses of the Committee as are necessary or appropriate in carrying out the Committee’s duties.
P.Perform any other activities consistent with this Charter, the Company’s bylaws and governing law as the Committee or the Board deems necessary or appropriate.
Q.Perform the responsibilities of a Qualified Legal Compliance Committee as set forth in 17 C.F.R. Part 205 of the SEC’s regulations (“Part 205”) and Section IV of this Charter.
IV.Part 205 Matters
A.QLCC. The Audit Committee is authorized to serve as a Qualified Legal Compliance Committee (“QLCC”) for the purpose of Part 205 and to receive reports from outside counsel and in-house counsel of evidence of material violations of securities laws and breaches of fiduciary duty and similar violations by officers, directors, employees and agents of the Company (“Material Violations”), to instruct or retain counsel to conduct an investigation, and to direct and oversee such investigation, concerning whether such reports have merit, and, if so, to recommend to the Company’s Board of Directors an appropriate response to such Material Violations. Part 205 will govern the rights and responsibilities of the Committee and its members in the event of a conflict between this Charter and Part 205.
B.Meetings. The Committee will meet as soon as practicable following the report of evidence of a Material Violation and as necessary thereafter in connection with such report.
C.Authority and Responsibilities. The Committee will have the authority and responsibility to:
i.Adopt written procedures for the confidential receipt, retention, and consideration of any report of evidence of a Material Violation;
ii.Receive reports of evidence of a Material Violation from outside or in-house counsel;
iii.Notify the Company’s Chief Executive Officer (“CEO”) and the Company’s chief legal officer (“CLO”) upon receipt of any such report of evidence of a Material Violation. The CEO will be deemed to be the CLO for the purpose of this notification, unless the Company has employed a general counsel to serve in the capacity of CLO;
iv.Decide whether an investigation is necessary to determine whether the Material Violation described in the report has occurred, is occurring or is about to occur;
v.If the Committee determines an investigation is necessary regarding a report of evidence of a Material Violation, to engage or appoint counsel (which may be outside counsel or, at the Committee’s election, the Company’s general counsel if the Company has employed one) to undertake an investigation of such report;
vi.Retain such expert personnel as the Committee deems necessary;
vii.At the conclusion of any such investigation, to recommend by majority vote that the Company implement an “appropriate response” (as such term is defined in Part 205) to such Material Violation; and inform the CEO, the CLO (if applicable) and the Board of Directors of the results of any such investigation and the appropriate remedial measures to be adopted; and
viii.Acting by majority vote, take all other appropriate action, including the authority to notify the SEC in the event that the Company fails in any material respect to implement an appropriate response that the Committee has recommended that the Company take.
V.Additional Resources
The Committee will have the right to use reasonable amounts of time of the Company’s accounting personnel and independent auditors, other internal staff and legal counsel and also will have the right to hire independent accounting experts, lawyers and other consultants to assist and advise the Committee in connection with its responsibilities.
The Committee will keep the Company’s CEO advised as to the general range of anticipated expenses for outside consultants.
Amended and Restated: July 26, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
BMC FUND, INC.
The undersigned hereby appoints Paul H. Broyhill and Carol Frye, or either of them, as agents, each with the power to appoint his substitute, and hereby authorizes them to vote, as designated below, all of the shares of Common Stock of BMC Fund, Inc. (the "Fund"“Fund”), held of record by the undersigned on January 10, 20062007 at the annual meeting of shareholders to be held on February 25, 2006,24, 2007, or at any adjournment thereof.
1.The election of 1110 directors:
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked below to to vote for all nominees listed below |_|
the contrary) |_|
(INSTRUCTION:
| FOR all nominees listed below | WITHHOLD AUTHORITY |
| (except as marked below to the contrary) [ ] | to vote for all nominees listed below [ ] |
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'SNOMINEE’S NAME IN THE LIST BELOW.)
James T. Broyhill, Paul H. Broyhill, William E. Cooper, Lawrence Z. Crockett, Jan E. Gordon, Allene B. Heilman, Gene A. Hoots, Brent B. Kincaid, Michael G. Landry, John S. Little, L. Glenn Orr, Jr.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS PROPERLY SIGNED BUT NO DIRECTION IS GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR. IN THEIR DISCRETION, THE PROXY AGENTS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated _________________, 2006.
-----------------------------------------
Signature*
-----------------------------------------
Signature*
| Dated _________________, 2007. | |
| Signature* |
| |
| |
| |
| Signature* |
*Please sign exactly as the name appears hereon. When shares are held in joint accounts, each joint owner should sign. Executors, administrators, trustees, guardians, attorneys and corporate officers should indicate their title.