SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE ROYCE FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): | |
[X] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
1) Title of each class of securities to which transaction applies: | |
2) Aggregate number of securities to which transaction applies: | |
3) Per unit price or other underlying value of transaction computed | |
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which | |
the filing fee is calculated and state how it was determined): | |
4) Proposed maximum aggregate value of transaction: | |
5) Total fee paid: | |
[ ] | Fee paid previously with preliminary materials. |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) Amount Previously Paid: | |
2) Form, Schedule or Registration Statement No.: | |
3) Filing Party: | |
4) Date filed: | |
The Royce Fund
1414 Avenue of the Americas |
____________, 2007
December 22, 2008
Dear Shareholder:
Enclosed is a Proxy Statement describing proposed changes to the fundamental and non-fundamental investment policies of eight series (each a "Fund," collectively, the "Funds") of The Royce Select Fund II (the "Fund") to be voted on at a Special Meeting of Shareholders of the Funds.Fund.Your voteIt is extremely important that you vote,regardless of the number of shares that you own.
We propose to eliminate or amendthe Fund's fundamental investment restrictions that: (1) limit investment in the securities of foreign issuers (all eight Funds); (2) prohibit investment in restricted securities (four Funds); (3) limit the percentage of ownership of outstanding voting securities of any one issuer (one Fund); (4) prohibit investment in the securities of other investment companies (three Funds); and (5) prohibit purchases of warrants, rights or options (one Fund). Investment by each Fund in accordance with newly approved investment restrictions concerningrestriction that limits its investment in foreign securitiesissuers to no more than 10% of the Fund's assets and investment in restricted securities will be limited byestablish a non-fundamental investment restrictions adopted byrestriction limiting such investments to no more than 25% of the Funds' BoardFund's net assets. Any future change to this non-fundamental investment restriction would be subject to the approval of Trustees. Thethe Board of Trustees of the Funds could change these investment restrictions in the future withFund and not less than 30 days prior written notice to each affected series'the Fund's shareholders.
I believe that the proposed changes arechange is important to the Funds'Fund's operations andbut will not change the overall investment strategy of the Fund. Rather, I believe that the greater flexibilitychange will be beneficial to shareholders. These Proposals areshareholders because it will give Royce & Associates, LLC more flexibility to achieve the Fund's investment goals. This Proposal is discussed more fully in the Proxy Statement. Please vote your shares promptly by following the instructions onusing the enclosed proxy card.card and postage-paid envelope. Be sure to complete and sign each proxy card.
If we have not received your vote as the date of the meeting approaches, you may receive a call from a representative of the Funds or _____________, a professional proxy solicitation firm that has been retained by the Funds to assist in the solicitation of proxies,Fund to request that you vote and assist you in the voting process. If you have any questions, please call the proxy information lineInvestor Information at 1-800___________.1-800-221-4268.
Sincerely,
CHARLES M. ROYCE
President
IMPORTANT INFORMATION
Enclosed is a Proxy Statement for an upcoming special shareholder meeting. While we encourage you to carefully read the full text of the enclosed Proxy Statement, here is a brief overview of matters to be voted on:
Q. What am I being asked to vote "FOR" on this proxy?
A. This proxy has five proposals to approve certain changes to the fundamental investment restrictions of Pennsylvania Mutual Fund ("Pennsylvania Mutual"), Royce Premier Fund ("Premier"), Royce Low-Priced Stock Fund ("Low-Priced"), Royce Total Return Fund ("Total Return"), Royce Value Fund, Royce Value Plus Fund, Royce 100 Fund and Royce Dividend Value Fund (each a "Fund,"collectively the "Funds"), as set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
Q. Why am I being asked to vote on changes to the fundamental investment restrictions?
A. Royce & Associates, LLC ("Royce") believes that these changes would benefit shareholders because they will give Royce more flexibility to seek to achieve the Funds' investment goals and/or earn additional income for the Funds.
Q. How does the Board of Trustees recommend shareholders vote on the proposals?
A. The Board of Trustees has unanimously recommended that shareholders vote "FOR" the proposals. The Board believes that the proposed changes are in the best interests of the Funds and their shareholders.
Q. How can I vote my proxy?
A. For your convenience, there are several ways you can vote. Please see your proxy card for specific instructions on how to vote via telephone, facsimile or the internet. It is important that you vote your proxy promptly.
THE ROYCE SELECT FUND (8 Series)
|
|
|
|
|
|
|
|
II
1414 Avenue of the Americas
New York, NY 10019
____________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
____________
TO BE HELD ON SEPTEMBER 6, 2007JANUARY 29, 2009
To the Shareholders of:of
ROYCE SELECT FUND II:
THE ROYCE FUND (8 Series)
|
|
|
|
|
|
|
|
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the "Meeting") of each of Pennsylvania Mutual Fund ("Pennsylvania Mutual"ROYCE SELECT FUND II (the "Fund"), Royce Premier Fund ("Premier"), Royce Low-Priced Stock Fund ("Low-Priced"), Royce Total Return Fund ("Total Return"), Royce Value Fund, Royce Value Plus Fund, Royce 100 Fund and Royce Dividend Value Fund (each a "Fund" and collectively, the "Funds")series of The Royce Fund (the "Trust"), will be held at the offices of the Trust, 1414 Avenue of the Americas, New York, NYNew York 10019 (10th Floor), on September 6, 2007January 29, 2009 at 3:12:00 p.m. (Eastern Time), for the following purposes:
1. | To approve the elimination of |
2. |
|
|
|
|
|
|
|
| To transact such other business as may come before the meeting or any adjournment thereof. |
The Board of Trustees has fixed the close of business on June 28, 2007December 10, 2008 as the record date for the determination of those shareholders entitled to vote at the Meeting, and only holders of record at the close of business on that date will be entitled to vote.
A complete list of the shareholders of the Funds entitled to vote at the Meeting will be available and open to examination by any shareholder of the Funds for any purpose relevant to the Meeting during ordinary business hours from and after __________, 2007, at the office of the Trust, 1414 Avenue of the Americas, New York, NY 10019.
IMPORTANT
To save the FundsFund the expense of additional proxy solicitation, please insert your instructions on the enclosed Proxy, date and sign it and return it in the enclosed envelope (which requires no postage if mailed in the United States) or utilize the other methods as indicated on the enclosed Proxy, even if you expect to be present at the Meeting.TheMeeting.The Proxy is solicited on behalf of the Board of Trustees, is revocable and will not affect your right to vote in person in the event that you attend the Meeting.
By order of the Board of Trustees. | |
John E. Denneen, |
Dated: ____________, 2007December 22, 2008
PROXY STATEMENT
THE
ROYCE SELECT FUND (8 Series)
|
|
|
|
|
|
|
|
II
1414 Avenue of the Americas
New York, NY 10019
SPECIAL MEETING OF SHAREHOLDERSSeptember 6, 2007JANUARY 29, 2009
INTRODUCTION
The enclosed Proxy is solicited on behalf of the Trustees of The Royce Fund (the "Trust") for use at a Special Meeting of Shareholders (the "Meeting") of each of Pennsylvania MutualRoyce Select Fund ("Pennsylvania Mutual"II (the "Fund"), Royce Premier Fund ("Premier"), Royce Low-Priced Stock Fund ("Low-Priced"), Royce Total Return Fund ("Total Return"), Royce Value Fund, Royce Value Plus Fund, Royce 100 Fund and Royce Dividend Value Fund (each a "Fund" and collectively, the "Funds"), each a series of the Trust, to be held at the offices of the Trust, 1414 Avenue of the Americas, New York, NYNew York 10019 (10th Floor), at 3:12:00 p.m., Eastern Time, on September 6, 2007January 29, 2009 and at any adjournments thereof. The approximate mailing date of this Proxy Statement is ________, 2007.December 22, 2008.
The purpose of the Meeting is to vote on the elimination and/or amendment of certaina fundamental investment restrictionsrestriction of the Funds.Fund. All properly executed Proxies received prior to the Meeting will be voted at the Meeting in accordance with the instructions marked thereon or otherwise as provided therein. Unless instructions to the contrary are marked, Proxies will be voted "FOR" the approval of the proposed changeschange to the Funds'Fund's fundamental investment restrictions.
You may revoke your Proxy at any time before it is exercised by sending written instructions to the Secretary of the Trust at the Trust's address indicated above or by filing a new Proxy with a later date, and any shareholder attending the Meeting may vote in person, whether or not he or she has previously filed a Proxy.
The Trust has retained ______________, to aid in the solicitation of Proxies, at an estimated cost of $_______soliciting proxies will be borne by the Fund, which will reimburse brokerage firms, custodians, nominees and fiduciaries for their expenses in forwarding proxy material to $________.the beneficial owners of the Fund's shares. Some officers and employees of the Trust Royce and/orand Royce Fund Services, Inc., the Funds' distributor ("RFS"), and ____________the Fund's distributor, may solicit proxies personally and by telephone, if deemed desirable. Shareholders vote at the Meeting by casting ballots (in person or by proxy) which are tabulated by one or two persons, appointed by the Board of Trustees before the Meeting, who serve as Inspectors and Judges of Voting at the Meeting and who have executed an Inspectors and Judges Oath.
The Board of Trustees has set the close of business on June 28, 2007December 10, 2008 as the record date (the "Record Date") for determining those shareholders of the FundsFund entitled to notice of and to vote at the Meeting or any adjournment thereof, and only holders of record at the close of business on that day will be entitled to vote. Each share is entitled to one vote on each item of business at the Meeting (proportional voting rights for fractional shares held). The vote required for approval of Proposals 1- 5 (elimination or amendment of certainthe Proposal (change to a fundamental investment restrictions)restriction) is a majority of athe Fund's outstanding voting securities as defined in the Investment Company Act of 1940, as amended, which is the lesser of (i) more than 50% of athe Fund's outstanding shares or (ii) 67% or more of a Fund's shares present at the Meeting, if the holders of more than 50% of a Fund's shares are present or represented at the Meeting.
The Board of Trustees knows of no business other than that stated in the ProposalsProposal in the Notice of Special Meeting that will be presented for consideration at the Meeting. If any other
matter is properly presented at the Meeting or any adjournment thereof, it is the intention of the persons named on the enclosed proxy card to vote in accordance with their best judgment.
Information About Share Ownership
As of the Record Date, eachthere were ______ shares of beneficial interest of the Fund had outstanding the number of shares as indicated in Appendix 1 to this Proxy Statement.outstanding. Except as set forth in Appendix 1, to the Trust's knowledge, as of the Record Date, no person is the beneficial owner of five percent of more of the Trust's outstanding shares or five percent or more of the shares of any Fund.Fund's outstanding shares. In addition, as of the Record Date, all of the Trustees and officers of the Trust, individually and as a group, owned the approximate percentage of shares of the Funds as indicated on Appendix 1 to this Proxy Statement.
Charles M. Royce, Chairman of the Board of Trustees of the Trust and the Fund's portfolio manager, who beneficially held approximately ___% of __________'sthe Fund's outstanding shares as of the Record Date, has indicated he intends to vote his shares in favor of the Proposals.Proposal.
SUMMARY OF VOTING RIGHTS ON PROXY PROPOSALS*
|
|
|
|
|
|
|
|
|
|
|
|
* Please see Appendix 2 for a list of the existing proposed fundamental investment restrictions for the Funds.
The Board of Trustees of the Trust has approved, and unanimously recommends to the Fund's shareholders for their approval, a proposal to eliminate the fundamental investment restriction that limits eachthe Fund's investment in the securities of foreign issuers to no more than 10% of their respectiveits total assets. In addition, the Board of Trustees has approved, subject to shareholder approval of the Proposal, 1, the establishment of a non-fundamental investment restriction that would prohibit eachthe Fund from investing more than 25% of their respectiveits net assets in the securities of foreign issuersissuers. (For purposes of this restriction, securities issued by a foreign domiciled company that are registered with the SEC under Section 12(b) or (g) of the Securities Exchange Act of 1934 are not treated as securities of foreign issuers). issuers.)This non-fundamental investment restriction would only be subjectsubjec t to elimination or change by action of the Trust's Board of Trustees (without shareholder approva l)approval) after not less than 30 days prior written notice to the Funds'Fund's shareholders. Royce & Associates, LLC ("Royce") and the Trust's Board of Trustees believe that thisthe proposed change is appropriate and in the best interests of eachthe Fund's shareholders because it will give Royce more flexibility to seek to achieve eachthe Fund's investment goal of long-term growth of capital.
Current Fundamental Restriction
Currently, as a matter of fundamental policy, eachthe Fund may not invest more than 10% of theirits total assets in the securities of foreign issuers.
Proposed Elimination
If the Proposal 1 is approved by athe Fund's shareholders, thatthe Fund will be permitted to invest in the securities of foreign issuers in amounts greater than 10% of total assets. Royce believes that the ability to invest a higher percentage of the Funds'Fund's assets in the securities of foreign issuers may provide enhanced investment opportunities including increased diversification to the FundsFund by giving themit the ability to add securities from various foreign countries (i) which offer different investment opportunities, (ii) that generally are affected by different economic trends and (iii) whose stock markets do not generally move in a manner parallel to U.S. markets. At the same time, these opportunities and trends involve risks that may not be encountered in U.S.
investments, including adverse political, social, economic or other developments that are unique to a particular region or country. Therefore, the prices of foreign companies in particular countries or regions may, at times, move in a different direction than those of the securities of U.S. issuers. From time to time, foreign capital markets may exhibit more volatility than those in the United States. It is expected that the Funds'Fund's investments in foreign companies will usually be denominated in or tied to the currencies of the countries in which they are primarily traded. Because the Funds doFund does not intend to hedge theirits foreign currency exposure, the U.S. dollar value of the Funds'Fund's investments may be harmed by declines in the value of foreign currencies in relation to the U.S. dollar. This may occur even if the value of the investment in the currency's home country has not declined. These risk factors may affect the prices of foreign securities issued by companies domiciled in developing countries (also known as "emerging markets") more than those domiciled in developed countries. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries, and there may be delays in settlement procedures.
There may be less information available about a foreign company than a domestic company; foreign companies may not be subject to accounting, auditing and reporting standards and requirements comparable to those applicable to domestic companies; and foreign markets, brokers and issuers are generally subject to less extensive government regulation than their domestic counterparts. Markets for foreign securities may be less liquid and may be subject to greater price volatility than those for domestic securities. Foreign brokerage commissions and custodial fees are generally higher than those in the United States. Foreign markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, thereby making it difficult to conduct such transactions. Delays or problems with settlements might affect the liquidity of at he Fund's portfolio. Foreign investments may also be s ubjectsubject to local economic and political risks, political, economic and social instability, military action or unrest or adverse diplomatic developments, and possible nationalization of issuers or expropriation of their assets, which might adversely affect athe Fund's ability to realize on its investment in such securities. Royce may not be able to anticipate these potential events or counter their effects. Furthermore, some foreign securities are subject to brokerage taxes levied by foreign governments, which have the effect of increasing the cost of such investment and reducing the realized gain or increasing the realized loss on such securities at the time of sale.
Exchange control regulations in such foreign markets may also adversely affect the Funds'Fund's foreign investments and the Funds'Fund's ability to make certain distributions necessary to maintain their eligibility as regulated investment companies and avoid the imposition of income and excise taxes may, to that extent, be limited.
The risks described above for foreign investments, including the risks of nationalization and expropriation of assets, would generally be increased to the extent that a Fund invests in companies located in developing countries.
PROPOSAL 2:TO APPROVE
REASON FOR THE ELIMINATION OF CERTAIN OF THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION THAT PROHIBITS INVESTMENT IN RESTRCITED SECURITIESPROPOSAL
The Board of Trustees of the Trust has approved, and unanimously recommends to Pennsylvania Mutual's, Premier's, Low-Priced's and Total Return's shareholders for their approval, a proposal to eliminate the fundamental investment restriction that prohibits investment in restricted securities. In addition, the Board of Trustees has approved, subject to shareholder approval of Proposal 2, the establishment of non-fundamental investment restriction that would prohibit each Fund from investing more than 15% of their respective net assets in the restricted securities. This non-fundamental investment restriction would only be subject to elimination or change by action of the Trust's Board of Trustees (without shareholder approval) after not less than 30 days prior written notice to the Funds' shareholders. Royce and the Trust's Board of Trustees believe that this proposed change is appropriate and in the best interests of each Fund's shareholders because it will give Royce more flexibi lity to seek to achieve each Fund's investment goal of long-term growth of capital.
Current Fundamental Restriction
As a matter of fundamental policy, Pennsylvania Mutual, Premier, Low-Priced and Total Return may not invest in restricted securities.
Proposed Elimination
If Proposal 2 is approved by a Fund's shareholders, the above current fundamental investment restriction would be eliminated and a non-fundamental investment restriction would go into effect that would permit that Fund to invest up to 15% of their respective net assets in restricted securities. Royce believes that the ability to invest in restricted securities may provide enhanced investment opportunities that would not otherwise be available to the Funds. In addition, Royce believes that allowing the Funds to invest in restricted securities may provide the Funds with the opportunity to realize more income from its securities lending transactions than it would if the cash collateral consisted solely of U.S. government securities. The Funds currently may each loan up to 25% of their assets to qualified brokers, dealers or institutions for their use relating to short sales or other security transactions (provided that such loans are secured by collateral equal at all times to at least 10 0% of the value of the securities loaned). Loans of the Funds' portfolio securities must be fully collateralized by securities issued or guaranteed by the U.S. government or its agencies or instrumentalities or by cash. When the collateral is cash, the Funds are responsible for investing it. If the Funds engage in securities lending transactions, they will have the opportunity to invest such cash collateral in a money market fund sponsored by its custodian bank. Although the money market fund is registered under the Investment Company Act of 1940, its shares are offered for sale only in private placement transactions to certain institutional investors such as the Funds. Its shares are not registered under the Securities Act of 1933 (the "Securities Act") and, therefore, constitute restricted securities. Allowing the Funds to invest in the shares of such a money market fund should enable the Funds to realize more income from their securities lending transactions than they would if the collateral consisted of U.S. government securities.
In addition to the money market fund discussed above, the elimination of the investment restriction will also allow the Funds to invest in other restricted securities. Restricted securities include securities subject to contractual or legal restrictions on resale because they are not registered under the Securities Act. Securities which are not registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer, a control person of the issuer or another investor holding such securities. Such securities may have to be held for a substantial period of time because of market or industry conditions, the developmental stage at which they are purchased and/or legal restrictions on sale. The Trust does not consider securities to be "restricted" if they may be sold by the Funds without restriction in the market in which they are primarily traded outside the United States.
PROPOSAL 3: TO APPROVE THEAMENDMENT OF PENNSYLVANIA MUTUAL'S FUNDAMENTAL INVESTMENT RESTRICTION THAT PROHIBITS "OWNERSHIP" OF MORE THAN 10% THE OUTSTANDING VOTING SECURITIES OF ANY ONE ISSUER SO THAT IT PROHIBITS THE "ACQUISITION" OF MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY ONE ISSUER
The Board of Trustees of the Trust has approved, and unanimously recommends to Pennsylvania Mutual's shareholders for their approval, a proposal to amend the fundamental investment restriction that prohibits Pennsylvania Mutual from owning more than 10% of the outstanding voting securities of any one issuer. Royce and the Trust's Board of Trustees believe that this proposed change is appropriate and in the best interests of the Fund's shareholders because it may avoid the need for the Fund to sell voting securities of one issuer because of that issuer's repurchase of its own securities or due to some other corporate action of the issuer beyond the Fund's control that has caused the Fund's ownership in such issuer to increase above 10% of its outstanding voting securities.
Current Fundamental Restriction
As a matter of fundamental policy, Pennsylvania Mutual may not "own" more than 10% of the outstanding voting securities of any one issuer.
Proposed Amendment
Unlike other series of the Trust, Pennsylvania Mutual currently is subject to a fundamental restriction stating that it may not "own" more than 10% of the outstanding voting securities of any one issuer. If Proposal 3 is approved by the Fund's shareholders, this fundamental investment restriction would be amended to state that Pennsylvania Mutual may not "acquire" more than 10% of the outstanding voting securities of any one issuer. Royce believes that this amendment would benefit the Fund by eliminating the necessity to reduce a holding of a particular security when the Fund's ownership in such security exceeds 10% of the issuing companies outstanding voting securities through actions outside the control of the Fund.
PROPOSAL 4:TO APPROVE THE ELIMINATION OF CERTAIN OF THE FUNDS' FUNDAMENTAL INVESTMENT RESTRICTION THAT PROHIBITS INVESTMENT IN THE SECURITIES OF OTHER INVESTMENT COMPANIES
The Board of Trustees of the TrustRoyce has approved, and unanimously recommends to Premier's, Low-Priced's and Total Return's shareholders for their approval, a proposal to eliminate the fundamental investment restriction that prohibits each Fund from investing in the securities of other investment companies. Royce and the Trust's Board of Trustees believe that this proposed change is appropriate and in the best interests of each Fund's shareholders because it will give Royce more flexibility to seek to achieve each Fund's investment goal of long-term growth of capital.
Current Fundamental Restriction
As a matter of fundamental policy, Premier, Low-Priced and Total Return may not invest in the securities of other investment companies.
Proposed Elimination
If Proposal 4 is approved by a Fund's shareholders, the above current fundamental investment restriction would be eliminated and that Fund would be permitted to invest in other investment companies to the extent permitted under the Investment Company Act of 1940, as amended. In general, this means that each Fund will be permitted to invest up to 10% of its total assets in the securities of other investment companies (open or closed-end), including up to 5% of its total assets in the securities in any one other investment company, provided that the Fund doeschange its fundamental investment restrictions as described above. Royce advised the Board that this change is not own more than 3% of the total outstanding voting stock of such investment company. The Securities and Exchange Commission (the "SEC") has adopted a rule to permit investments in money market funds in excess of the above described limits. The SEC has also granted orders for exemptive relief to certain exchange-traded funds that permit investments in those exchange-traded funds by other investment companies, such as the Funds, in excess of the above-described limits. Royce believes that the ability to invest in the securities of other investment companies may provide enhanced investment opportunities, and as discussed above under Proposal 2, enable the Funds to invest collateral received on their securities lending activities in other investment companies.
The other investment companies in which each Fund may invest usually have their own management fees and other expenses, and Royce will also earn its own fee on Fund assets invested in such other companies, which would result in a duplication of fees to the extent of any such investment. However, Royce will waive its management fee on any Fund net assets invested in U.S. registered investment companies (other than exchange-traded funds, closed-end funds, and any cash collateral received in connection with securities lending activities that may be invested in money market funds). The Funds have no basis to estimate what the increase in their expenses, if any, would be due to their investment in securities issued by other investment companies. It is anticipated that the Funds will invest in money market funds primarily as a means to invest cash collateral received from securities lending activities which will not negatively impact the Funds' expense ratios. The Funds do not believe that other investments in investment companies would have a material impact onalter the overall expense ratio of anyinvestment strategy of the Funds.Fund but rather is an opportunity that Royce believes would benefit
PROPOSAL 5: TOAPPROVE THE AMENDMENT TO PENNSYLVANIA MUTUAL'S FUNDAMENTAL INVESTMENT RESTRICTION THAT PROHIBITS PURCHASES OF WARRANTS, RIGHTS OR OPTIONS IN ORDER TO ALLOW IT INVESTMENT OF UP TO 5% OF ITS TOTAL ASSETS IN WARRANTS, RIGHTS AND OPTIONS
The Board of Trustees of the Trust has approved, and unanimously recommends to Pennsylvania Mutual's shareholders for their approval, a proposal to amend a fundamental investment restriction prohibiting Pennsylvania Mutual from purchasing warrants, rights or options. Royce and the Trust's Board of Trustees believe that this proposed change is appropriate and in the best interests of the Fund's shareholders because it will give Royce more flexibility to seek to achieve the Fund's investment goal of long-term growth of capital.
Current Fundamental Restriction
As a matter of fundamental policy, Pennsylvania Mutual may not purchase any warrants, rights or options.
Proposed Amendment
If Proposal 5 is approved by the Fund's shareholders, the above current fundamental investment restriction would be amended to permit Pennsylvania Mutual to invest no more than 5% of its total assets in warrants, rights and options.
A warrant, right or call option entitles the holder to purchase a given security within a specified period for a specified price and does not represent an ownership interest. A put option gives the holder the right to sell a particular security at a specified price during the term of the option. These securities have no voting rights, pay no dividends and have no liquidation rights. In addition, their market prices do not necessarily move parallel to the market prices of the underlying securities.
Investing in warrants, rights and call options on a given security will allow the Fund to hold an interest in that security without having to commit assets equal to the market price of the underlying security and, in the case of securities market indices, to participate in a market without having to purchase all of the securities comprising the index. Put options, whether on shares of common stock of a single company or on a securities market index, would permit the Fund to protect the value of a portfolio security against a decline in its market price and/or to benefit from an anticipated decline in the market price of a given security or of a market. Thus, investing in warrants, rights and options permits a Fund to incur additional risk and/or to hedge against risk.
The sale of warrants, rights or options held for more than one year generally results in a long-term capital gain or loss to the Fund, and the sale of warrants, rights or options held for one year or less generally results in a short term capital gain or loss. The holding period for securities acquired upon exercise of a warrant, right or call option, however, generally begins on the day after the date of exercise, regardless of how long the warrant, right or option was held. The securities underlying warrants, rights and options could include shares of common stock of a single company or securities market indices representing shares of the common stocks of a group of companies, such as the S&P Small-Cap 600.
REASONS FOR THE PROPOSALS
Royce has proposed that the Funds change certain of their fundamental investment restrictions as described above in Proposals 1 - 5 of this Proxy Statement. Royce advised the Board that these changes are not a means to alter the overall investment strategy of the Funds but rather are an opportunity that Royce believes would benefit shareholders because they will give Royce more flexibility to seek to achieve the Funds' investment goals.
At a meeting of the Board of Trustees held on June 4, 2007,December 3, 2008, the Board considered the impact of the proposed changeschange to the Funds'Fund's fundamental investment restrictions and weighed the potential advantages of expanded investment flexibility and additional income, as applicable, with the possibility that the changes would cause the FundsFund to engage in investment strategies that involve increased risk and could result in lower returns for the Funds'Fund shareholders. The Board concluded that recommending approval of Proposals 1- 5the Proposal was in the best interests of shareholders because the ProposalsProposal potentially benefitbenefits shareholders with improved performance by allowing Royce to seek broader investment opportunities to achieve the Funds'Fund's investment goals.
Recommendation of the Trustees; Required VotesRECOMMENDATION OF THE TRUSTEES; REQUIRED VOTES
The Trustees unanimously recommend that eachthe Fund's shareholders vote to approve the changeschange to the Funds'Fund's fundamental investment restrictions. Such approval must be by the favorable vote of the lesser of (i) more than 50% of athe Fund's outstanding shares or (ii) 67% or more of athe Fund's shares present at the Meeting, if the holders of more than 50% of athe Fund's shares are present or represented at the Meeting.
Adjournment of Meeting; Other MattersADJOURNMENT OF MEETING; OTHER MATTERS
A quorum of shareholders is necessary to hold a valid meeting. Under the By-laws of the Trust, a quorum will exist if shareholders entitled to vote more than 50% of the issued and outstanding shares of athe Fund on the Record Date are present at the Meeting in person or by proxy. Abstentions are counted for the purposes of determining both the presence or absence of a quorum at the Meeting and the total number of shares present at the Meeting. In the event that sufficient votes in favor of Proposals 1 - 5the Proposal are not received by the time scheduled for the Meeting, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies for such Proposals.Proposal. Any such adjournment will require the affirmative vote of a majority of the shares present in person or by proxy at the session of the Meeting to be adjourned. The persons named as proxies will vote in favor of such adjournment those proxies which they are entitled to vote in fav orfavor of Proposals 1 - 5.the Proposal. They will vote against any such adjournment those proxies required to be voted against Proposals 1 - 5.the Proposal.
While the Meeting has been called to transact any business that may properly come before it, the only matters which the Trustees intend to present are the matters stated in the Notice of Special Meeting. However, if any additional matter properly comes before the Meeting and on all matters incidental to the conduct of the Meeting, it is the intention of the persons named in the enclosed proxy to vote the proxy in accordance with their judgment on such matters unless instructed to the contrary.
Under the New York Stock Exchange rules that govern brokers who have record ownership of shares that are held in "street name" for their customers, who are the beneficial owners of the shares, brokers have the discretion to vote such shares on routine matters, but do not have the discretion to vote such shares on non-routine matters. With respect to the Proposals,Proposal, it is not expected that brokers will be permitted to vote Fund shares in their discretion. Proxies that are returned but that are marked "abstain" or on which a broker-dealer has declined to vote on any proposal ("broker non-votes") will be counted as present for the purposes of a quorum. Abstentions and broker non-votes will not be counted as votes cast. Therefore, abstentions and broker non-votes will have the same effect as a vote against the Proposals.Proposal.
Address of the Investment AdviserADDRESS OF THE INVESTMENT ADVISER
Royce's principal office is located at 1414 Avenue of the Americas, New York, NYNew York 10019.
Address of the DistributorADDRESS OF THE DISTRIBUTOR
Royce Fund Services, Inc.'s
RFS's principal office is located at 1414 Avenue of the Americas, New York, NYNew York 10019.
Annual Report Delivery
ANNUAL REPORT DELIVERY
The Funds'Fund's Annual Report to Shareholders for the year ended December 31, 2006 was previously2008 will be mailed to shareholders in late February 2007.2009. The Fund's Semi-Annual Report to Shareholders for the six months ended June 30, 2008 and the Fund's Annual Report to Shareholders for the year ended December 31, 2007 were previously mailed in late August 2008 and late February 2008, respectively. Copies of the Annual Reportthese reports are available upon request, without charge, by writing to the Trust at 1414 Avenue of the Americas, New York, NYNew York 10019 or calling toll-free at 1-800-221-4268.
Shareholder Proposals
SHAREHOLDER PROPOSALS
Neither the FundsFund nor the Trust holds annual shareholder meetings. Shareholders wishing to submit proposals for inclusion in a proxy statement for a subsequent Trust or Fund shareholder meeting should send their written proposals to the Secretary of the Trust, 1414 Avenue of the Americas, New York, NYNew York 10019.
Proxy DeliveryPROXY DELIVERY
If you and another shareholder share the same address, the Trust may send only one proxy statement unless you or the other shareholder(s) request otherwise. Call or write to the Trust if you wish to receive a separate copy of the proxy statement, and the Trust will promptly mail a copy to you. You may also call or write to the Trust if you wish to receive a separate proxy in the future, or if you are receiving multiple copies now, and wish to receive a single copy in the future. For such requests, call 1-800-221-4268, or write the Trust at 1414 Avenue of the Americas, New York, NYNew York 10019.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
By order of the Board of Trustees. | |
John E. Denneen, |
Dated: __________, 2007December 22, 2008
AppendixAPPENDIX 1
As of the Record Date, Pennsylvania Mutual Fund ("Pennsylvania Mutual"), Royce Premier Fund ("Premier"), Royce Low-Priced Stock Fund ("Low-Priced"), Royce Total Return Fund ("Total Return"), Royce Value Fund ("Value"), Royce Value Plus Fund ("Value Plus"), Royce 100 Fund ("100 Fund") and Royce Dividend Value Fund ("Dividend Value") each had outstanding the number of shares as indicated in the table below:
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
The following persons were known to the Trust to be beneficial owners or owners of record of 5% or more of the Fund's outstanding shares of beneficial interest of each of the Funds as of the Record Date:
|
| Amount and |
|
Information regarding the ownership of each Funds'the Fund's shares and the shares of other funds in the group of registered investment companies comprising The Royce Funds, by the Trust's Trustees and officers as of the Record Date is set forth in the table below:
|
|
|
|
|
Charles M. Royce | ||||
Donald R. Dwight | ||||
Mark R. Fetting | ||||
Richard M. Galkin | ||||
Stephen L. Isaacs | ||||
William L. Koke | ||||
Arthur S. Mehlman | ||||
David L. Meister | ||||
G. Peter O'Brien | ||||
John D. Diederich | ||||
Jack E. Fockler, Jr. | ||||
W. Whitney George | ||||
Daniel A. O'Byrne | ||||
John E. Denneen | ||||
Lisa Curcio | ||||
* The address of each Trustee and officer is 1414 Avenue of the Americas, New York, | ||||
Appendix 2
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
PENNSYLVANIA MUTUAL
ROYCE SELECT FUND II,
A SERIES OF THE ROYCE FUND
|
|
PROXY PROXY
1414 Avenue of the Americas
New York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Pennsylvania Mutual Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposals 1, 2, 3 and 5.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
PENNSYLVANIA MUTUAL FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE PREMIER FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007December 10, 2008 at the Special Meeting of Shareholders of Royce PremierSelect Fund II to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 4.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE PREMIER FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE LOW-PRICED STOCK FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce Low-Priced Stock Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 4.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE LOW-PRICED STOCK FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE TOTAL RETURN FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce Total Return Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 4.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE TOTAL RETURN FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE VALUE FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce Value Fund to be held on September 6, 2007,January 29, 2009, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposal 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
HAS YOUR ADDRESS CHANGED? | DO YOU HAVE ANY COMMENTS? |
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
ROYCE VALUESELECT FUND
II
_____________________________________________
| For | Against | Abstain |
1. Approve |
|
|
|
|
|
|
|
Please be sure to sign and date this Proxy. Date: | Mark box at the right [ ] | |
Shareholder sign here | Co-owner sign here | RECORD DATE SHARES: |
_________________ | _________________ | _________________ |
CONTROL NUMBER: | ||
_________________ | ||
ROYCE VALUE PLUS FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce Value Plus Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposal 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE VALUE PLUS FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE 100 FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce 100 Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposal 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE 100 FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||
ROYCE DIVIDEND VALUE FUND,A SERIES OF THE ROYCE FUND
|
|
1414 Avenue of the AmericasNew York, NY 10019
This Proxy is solicited on behalf of the Board of Trustees.
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or either of them acting in absence of the other, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse, all shares of beneficial interest of the Fund held of record by the undersigned on June 28, 2007 at the Special Meeting of Shareholders of Royce Dividend Value Fund to be held on September 6, 2007, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR Proposals 1 and 2.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on other side. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
|
|
X PLEASE MARK VOTESAS IN THIS EXAMPLE
ROYCE DIVIDEND VALUE FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ||
| ||