UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(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
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Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to §240.14a-12
BMC FUND, INC.
(Name of Registrant as Specified In Its Charter)
____________________________________
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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BMC FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 27, 2010
NOTICE IS HEREBY GIVEN THAT the annual meeting of shareholders of BMC Fund, Inc. (the “Fund”) will be held on Saturday, February 27, 2010, at 10:00 a.m., at the executive offices of the Fund, 800 Golfview Park, Lenoir, North Carolina 28645 (telephone: 828-758-6100), for the following purposes:
1. To elect 12 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, 2010 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 29, 2010 | By Order of the Board of Directors |
| | |
| | |
| | Paul H. Broyhill |
| | Chairman of the Board |
| | |
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on February 27, 2010: The Proxy Statement is available on our corporate website at http://www.bmcfund.com. |
BMC FUND, INC.
800 Golfview Park
Lenoir, North Carolina 28645
(Tel.: 828-758-6100)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 27, 2010
GENERAL
This proxy statement is furnished in connection with the solicitation by the Board of Directors of BMC Fund, Inc. (the “Fund”) of proxies for use at the annual meeting of shareholders and at any and all adjournments thereof (the “annual meeting” or the “meeting”) to be held at the executive offices of the Fund, 800 Golfview Park, Lenoir, North Carolina 28645, on Saturday, February 27, 2010, at 10:00 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 29, 2010.
The Board of Directors has fixed the close of business on January 10, 2010 as the record date for the determination of shareholders 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. Information concerning beneficial ownership of Common Stock by principal shareholders and by the management of the Fund is set forth below. See “Beneficial Ownership of Principal Shareholders and Management” and “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” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “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 12 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.
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’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’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:
| Directors Who Are Interested Persons |
Name, Address and Age | | 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 (82)(1) 1930 Virginia Road Winston-Salem, NC 27104 | | Director Vice Chairman | | Since 1976 Since 2005 | | Retired; Director of Shepherd Street Equity Fund (1998-2008); President of Old Clemmons School 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) | | None |
| | | | | | | | | |
M. Hunt Broyhill (45)(2) 1870 9th Street Court, NW Hickory, NC 28601 | | Director President Vice President | | Since 2008 Since 2007 2001-2007 | | President of the Fund since February 2007; former Vice President of the Fund (2001-2007); Chief Executive of Broyhill Affinity Fund, LLC (2008-present), Broyhill Asset Management, LLC and Broyhill Wakin General Partners, LLC (1997-present); Director and President of Broyhill Investments, Inc. (1988-present); Director (1983-present) and President of Broyhill Family Foundation, Inc. (1988-present); General Partner of CapitalSouth Partners Fund I, LP and Capital South Partners Fund II, LP (2000-present); General Partner of CapitalSouth Partners Fund III, LP (2007-present); Senior Managing Partner and Director of Flagship Capital Partners, LLC (2007-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1995-present) | | None |
| Directors Who Are Interested Persons |
Name, Address and Age | | 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 |
| | | | | | | | | |
Paul H. Broyhill (85) (1) 135 Claron Place, S.E. Lenoir, NC 28645 | | Director Chief Executive Officer Chairman | | Since 1976 Since 2001 Since 1976 | | Director, Chairman and Chief Executive Officer of the Fund; former President of the Fund (2001-2007); Director (1972-present) and Chairman of Broyhill Investments, Inc. (1988-present); Director (1946-present) and Chairman of Broyhill Family Foundation, Inc. (1989-present); former President of Broyhill Family Foundation, Inc. (1980-1988); Manager and President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1983-present) | | None |
| | | | | | | | | |
Jan E. Gordon (58)(1) 3075 Rolling Woods Drive Palm Harbor, FL 34683 | | Director | | Since 2001 | | Retired; former election assistant, Pinellas County, FL Supervisor of Elections (1992-2005) | | None |
| | | | | | | | | |
Michael G. Landry (63)(4) 2501 Barcelona Drive Ft. Lauderdale, FL 33301 | | Director Vice President and Chief Investment Officer | | Since 1993 Since 2001 | | Director; Vice President and Chief Investment Officer of the Fund (2001-present); President, Landry Trebbi Investment Corp. (2005-present); Investment Committee Chairman, Hudson Fairfax India Fund (2006-2008); CEO of Mackenzie Investment Management, Inc., Chairman of Ivy Funds and Executive Vice President of Mackenzie Financial Fund (1987-1999) | | None |
| | | | | | | | | |
Allene B. Stevens (87)(3) 153 Hillhaven Place SE Lenoir, NC 28645 | | Director | | Since 1983 | | Private Investor | | None |
Name, Address and Age | | Position(s) Held with Fund | | Term of Office and Length of Time Served | | Principal Occupation During Past 5 Years | | Other Directorships Held
by Director |
| | | | | | | | | |
R. Donald Farmer (62) 273 Leeward Point Loop Taylorsville, NC 28681 | | Director | | Since 2008 | | President of Don Farmer, CPA, PA, an independent public accounting firm and producer of federal income tax seminars and seminar materials (1984-present) | | None |
| | | | | | | | | |
Robert G. Fox, Jr. (60) 6525 Robin Hollow Drive Charlotte, NC 28227 | | Director | | Since 2008 | | President and Chief Banking Officer of NewDominion Bank (2005-present); Executive Vice President of First Charter Bank/First Charter Corporation (1993-2005) | | None |
| | | | | | | | | |
Gene A. Hoots (70) 3524 Kylemore Court Charlotte, NC 28210 | | Director | | Since 1987 | | Chairman Emeritus, CornerCap Investment Counsel, a registered investment adviser serving private and pension fund clients (since 2001) | | None |
| | | | | | | | | |
Brent B. Kincaid (78) 2703 Lakeview Drive Lenoir, NC 28645 | | Director | | Since 2005 | | Retired since 1998; former President and CEO of Broyhill Furniture Industries, Inc. | | None |
| | | | | | | | | |
John S. Little (78) 4601 Gulf Shore Blvd. N. #18 Naples, FL 34103 | | Director | | Since 2001 | | Retired; former Managing Director and Chief Executive, Associated Octel, London (1989-1995); former Senior Vice President of Corporate Technology, Great Lakes Chemical Corporation (1981-1989) | | None |
| | | | | | | | | |
L. Glenn Orr, Jr. (69) 2735 Forest Drive Winston-Salem, NC 27104 | | Director | | Since 1999 | | Managing Director, Orr Holdings, LLC, a private investment company (since 2009); Managing Director, The Orr Group, an investment banking firm (1995-2008) | | Highwoods Properties, Inc.; Medical Properties Trust |
Name, Address and Age | | Position(s) Held with Fund | | Term of Office and Length of Time Served | | Principal Occupation During Past 5 Years |
| | | | | | | |
Boyd C. Wilson, Jr. (57) 646 Pleasant Hill Road Lenoir, NC 28645 | | Vice President and Chief Financial Officer | | Since 2006 | | Vice President and Chief Financial Officer of the Fund since February 2006; Director (2007-present) and Executive Vice President of Broyhill Investments, Inc. (2005-present); Vice President of Broyhill Family Foundation, Inc. (2007-present); Treasurer of Broyhill Wakin General Partners, LLC (2008-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2006-present); Vice President – Finance & Administration of Kincaid Furniture Company, Incorporated (1990-2005) |
| | | | | | | |
Carol Frye (52) 210 Beall Street Lenoir, NC 28645 | | Secretary and Treasurer | | Since 2001 | | Secretary and Treasurer of the Fund since 2001; Secretary and Treasurer of Broyhill Investments, Inc. (2000-present); Director (2001-present), Secretary and Treasurer of Broyhill Family Foundation, Inc. (2003-present); Secretary of Broyhill Wakin General Partners, LLC (1997-present); Secretary and Treasurer of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2001-present) |
________________
| (1) | Messrs. James Broyhill and Paul Broyhill and Ms. Gordon 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 Chairman and Chief Executive Officer of the Fund and as President of Broyhill Industries, Inc., a wholly owned subsidiary of the Fund. Mr. James Broyhill is also an interested person by virtue of his serving as Vice Chairman of the Fund. Messrs. James Broyhill and Paul Broyhill and Mrs. Stevens are siblings. |
| (2) | Mr. Hunt Broyhill is the son of Paul H. Broyhill and the Vice President of Broyhill Industries, Inc., a wholly owned subsidiary of the Fund. Mr. Broyhill is also an interested person by virtue of his serving as President of the Fund. |
| (3) | Mrs. Stevens 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. |
The Fund consists of a single fund managed internally by its Board of Directors (at October 31, 2009, the Board of Directors managed investment securities valued at approximately $105 million). Accordingly, information called for by the disclosure rules of the Securities and Exchange Commission (the “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’s Corporate Governance Guidelines, at least 40% of the members of the Fund’s Board of Directors must not be interested persons of the Fund. The Board has determined that R. Donald Farmer, Robert G. Fox, Jr., 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”), which operates under a written charter adopted by the Board in July 2000 and amended and restated by the Board in July 2003 and February 2007. A copy of the Audit Committee’s charter is available on the Fund’s website (http://www.bmcfund.com). The Audit Committee currently consists of Brent B. Kincaid (Chairman), R. Donald Farmer, Robert G. Fox, Jr. and John S. Little. Each such Audit Committee member is or was an “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’s independent registered public accounting firm (subject to the requirement of the 1940 Act that a majority of the Fund’s directors who are not interested persons of the Fund ratify the selection of the independent registered public accounting firm). The independent registered public accounting firm reports directly to the Audit Committee.
The Board of Directors has an Investment Committee, the members of which are James T. Broyhill, M. Hunt Broyhill, Paul H. Broyhill, Allene B. Stevens, Gene A. Hoots and Michael G. Landry (Chairman). 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’s investments at the request of management. Under the Fund’s investment objectives and policies, the Investment Committee has substantial oversight responsibility with respect to the Fund’s investments.
The Board of Directors has a Nominating Committee, the members of which are R. Donald Farmer, Robert G. Fox, Jr., 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. A copy of the Nominating Committee’s charter is available on the Fund’s website (http://www.bmcfund.com).
The Board of Directors has a Valuation Committee, the members of which are R. Donald Farmer, Robert G. Fox, Jr., 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’s Asset Valuation Procedures.
Meeting and Attendance
During the fiscal year ended October 31, 2009, the Board held four meetings, the Audit Committee held three meetings, the Investment Committee held four meetings, the Nominating Committee held one meeting and the Valuation Committee held four meetings. In addition, the members of the Board who are not interested persons of the Fund held one meeting. 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, 2009. Under the Fund’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 the annual meeting of shareholders. All members of the Board of Directors attended the 2009 annual meeting of shareholders.
Procedures for Director Nominations
In accordance with the Fund’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’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:
| | · | Integrity, demonstrated sound business judgment and high moral and ethical character; |
| | · | 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 Commission requirements, the Fund’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 Commission 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.
Shareholder Communications 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’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’s independent registered public accounting firm (subject to the requirement of the 1940 Act that a majority of the Fund’s directors who are not interested persons of the Fund ratify the selection of the independent registered public accounting firm). The independent registered public accounting firm reports directly to the Audit Committee.
Management is responsible for preparing the Fund’s financial statements. The independent registered public accounting firm is responsible for performing an independent audit of the Fund’s audited financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee’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 registered public accounting firm. The Audit Committee also has discussed with the independent registered public accounting firm the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU § 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Fund’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence.
Based on the above discussions and review with management and the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Fund’s annual report to shareholders for the fiscal year ended October 31, 2009, for filing with the Commission.
| | Respectfully submitted by the Audit Committee:
Brent B. Kincaid (Chairman) R. Donald Farmer Robert G. Fox, Jr. John S. Little |
ADMINISTRATION OF THE FUND
Administration of the Fund is primarily the responsibility of the Fund’s Chairman and Chief Executive Officer, Paul H. Broyhill, its President, M. Hunt Broyhill, its Vice President and Chief Financial Officer, Boyd C. Wilson, Jr., its Vice President and Chief Investment Officer, Michael G. Landry, its Chief Compliance Officer, Jeffrey W. Clark, and its Secretary and Treasurer, Carol Frye. The Fund’s portfolio is managed primarily by Paul H. Broyhill, M. Hunt Broyhill, Michael G. Landry, 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’s portfolio securities is U.S. Bank, National Association, Minneapolis, Minnesota, pursuant to an Amended and Restated Custodian Agreement dated as of December 31, 1986.
MANAGEMENT
Executive Officers
The executive officers of the Fund are Paul H. Broyhill, age 85 (Chairman and Chief Executive Officer), M. Hunt Broyhill, age 45 (President), Boyd C. Wilson, Jr., age 57 (Vice President and Chief Financial Officer), Michael G. Landry, age 63 (Vice President and Chief Investment Officer), and Carol Frye, age 52 (Secretary and Treasurer). All of such officers have served in executive capacities with the Fund for more than five years, except Mr. Wilson, who joined the Fund in 2005 and was appointed Vice President and Chief Financial Officer in February 2006.
Compensation
For the fiscal year ended October 31, 2009, the Fund paid Paul H. Broyhill an annual salary of $23,204 for his services to the Fund as Chairman and Chief Executive Officer. M. Hunt Broyhill, Boyd C. Wilson, Jr., Michael G. Landry and Carol Frye were paid $80,340, $71,946, $44,861 and $48,458, respectively, for their services to the Fund as executive officers. The Fund also paid D. Eugene Hendricks $4,218 for his services to the Fund as Vice President and Chief Compliance Officer through February 27, 2009. These salary amounts include a 401(k) plan employer safe harbor contribution in the amount of 3% of each employee’s salary.
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 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.
The following table sets forth the aggregate compensation from the Fund for the fiscal year ended October 31, 2009, for each director and for each of the three highest paid officers who received compensation from the Fund in excess of $60,000:
Name of Person; Position | Aggregate Compensation From Fund |
| James T. Broyhill; Director, Vice Chairman | $0 |
| M. Hunt Broyhill; Director, President | $80,340 |
| Paul H. Broyhill; Director, Chief Executive Officer and Chairman | $23,204 |
| Jan E. Gordon; Director | $5,000 |
| Michael G. Landry; Director, Vice President and Chief Investment Officer | $44,861 |
| Allene B. Stevens; Director | $0 |
| R. Donald Farmer; Director | $10,500 |
| Robert G. Fox, Jr., Director | $9,000 |
| Gene A. Hoots; Director | $9,500 |
| Brent B. Kincaid; Director | $12,000 |
| John S. Little; Director | $8,000 |
| L. Glenn Orr, Jr.; Director | $7,000 |
| Boyd C. Wilson, Jr.; Vice President and Chief Financial Officer | $71,946 |
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 provide that the Fund and its wholly owned subsidiary shall pay an annual rental of $24,000 to Broyhill Investments, Inc. during the term of the lease, which is on an annual basis.
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’s independent registered public accounting firm for the fiscal year beginning November 1, 2009. Dixon Hughes PLLC has served as the Fund’s independent registered public accounting firm 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 a registered independent public accounting firm.
A representative of Dixon Hughes PLLC is expected to attend the annual meeting of shareholders 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 paid by the Fund for the fiscal years ended October 31, 2008 and 2009 by Dixon Hughes PLLC for services rendered are set forth in the following table:
| Type of Service | Fiscal Year Ended October 31, 2008 | Fiscal Year Ended October 31, 2009 |
| | | |
| Audit Fees | $41,484 | $53,900 |
| Audit-Related Fees | $1,844 | $2,054 |
| Tax Fees | $0 | $0 |
| All Other Fees | $0 | $1,899 |
Audit-related fees include miscellaneous fees incurred in connection with the audit. The fees listed under “All Other Fees” above were incurred in connection with the preparation and printing of the Fund’s semiannual and annual reports to shareholders.
During the fiscal year ended October 31, 2009, Dixon Hughes PLLC utilized 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’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, 2010, is set forth in the following table:
| Name of Director | Dollar Range of Equity Securities in the Fund |
| Interested Persons | |
James T. Broyhill | Over $100,000 |
M. Hunt Broyhill | Over $100,000 |
Paul H. Broyhill | Over $100,000 |
Jan E. Gordon | Over $100,000 |
Michael G. Landry | $1-$10,000 |
Allene B. Stevens | Over $100,000 |
| | |
| Other Directors | |
R. Donald Farmer | $10,001-$50,000 |
Robert G. Fox, Jr. | $10,001-$50,000 |
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’s family of funds is not applicable.
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’s Common Stock as of January 10, 2010:
| | 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% |
| M. Hunt Broyhill | 9,340 | 1,065,932(1)(2) | 21.8% |
| Paul H. Broyhill | 296,519(3) | 85,973(3) | 7.8% |
| Jan E. Gordon | 147,215 | 222,304 | 7.5% |
| Michael G. Landry | 25 | 0 | (4) |
| Allene B. Stevens | 29,777 | 669,715(5) | 14.2% |
| R. Donald Farmer | 2,240 | 0 | (4) |
| Robert G. Fox, Jr. | 1,000 | 0 | (4) |
| Gene A. Hoots | 607 | 0 | (4) |
| Brent B. Kincaid | 884 | 0 | (4) |
| John S. Little | 600 | 0 | (4) |
| L. Glenn Orr, Jr. | 558 | 0 | (4) |
| Boyd C. Wilson, Jr. | 600 | 0 | (4) |
| Carol Frye | 1,100 | 341,488(6) | 6.9% |
Eastwind Investments, LLC 153 Hillhaven Place SE Lenoir, NC 28645 | 669,715(5) | 0 | 13.6% |
D. Eugene Hendricks 3021 Cedar Crest Drive Lenoir, NC 28645 | 0 | 341,488(6) | 6.9% |
| Directors and officers as a group | 1,276,253 | 2,395,651 | 74.4% |
__________________________
| (1) | 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 100% of the interests in Hibriten Management of N.C., LLC. |
| (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) | 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 (1), above. |
| (4) | Total shares represent less than 1.0% of the Fund’s outstanding Common Stock. |
| (5) | Represents shares owned by Eastwind Investments, LLC, which is controlled by James W. Stevens, Rebecca S. Elliott, Martha S. Sutton, John F. Stevens, Anne S. Hsu, Richard D. Stevens and Allene B. Stevens. |
| (6) | Represents shares held in trusts of which Ms. Frye and Mr. Hendricks are co-trustees. |
The addresses of each of James T. Broyhill, M. Hunt Broyhill, Paul H. Broyhill, Jan E. Gordon, Allene B. Stevens and Carol Frye are set forth under “Information about Directors and Officers,” above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Fund’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’s knowledge, all of these filing requirements were satisfied by the Fund’s directors, officers and principal shareholders.
SHAREHOLDER PROPOSALS
In order to be included in proxy material for the 2011 annual meeting of shareholders, shareholder proposals must be received at the offices of the Fund by October 1, 2010, and must be submitted in accordance with applicable procedures.
Shareholder proposals which are not intended to be included in the proxy materials for the 2011 annual meeting must be submitted to the Fund no later than December 15, 2010. 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, 2009, 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. This annual report was previously furnished to shareholders on or about December 29, 2009.
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’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 |
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”), held of record by the undersigned on January 10, 2010, at the annual meeting of shareholders to be held on February 27, 2010, or at any adjournment thereof.
| 1. | The election of 12 directors: | |
| | | |
| | 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’S NAME IN THE LIST BELOW.)
James T. Broyhill, M. Hunt Broyhill, Paul H. Broyhill, R. Donald Farmer, Robert G. Fox, Jr., Jan E. Gordon, Gene A. Hoots, Brent B. Kincaid, Michael G. Landry, John S. Little, L. Glenn Orr, Jr., Allene B. Stevens
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 _________________, 2010. | |
| | 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.
