BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414
Chicago, Illinois 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 10, 2003
November 14, 2003
Dear Shareholder:
The annual meeting of Bruce Fund, Inc. (the "Fund") will be held
at
4:00 PM on Monday, December 10, 2003 in the Conference Room at
20 North Wacker Drive, 31st Floor, Chicago, Illinois 60606.
The purpose of the meeting is:
(1) to elect three directors of the Fund;
(2) to ratify or reject the selection of Grant Thornton LLP as
independent certified public accountant for the Fund for the
year ending June 30, 2004;
(3) to transact any other business that comes before the meeting.
Enclosed herewith is the Proxy Statement, which discusses each of
the
above items. If you were a shareholder of the Fund at November
10, 2003
you may vote at the meeting (or at any adjournment of the
meeting).
For those who may not be able to attend, the enclosed Proxy is for
your vote.
Please complete and return the Proxy to us. The Fund's latest
annual report
was previously mailed to you.
R. Jeffrey Bruce
Secretary
BRUCE FUND, INC.
20 North Wacker Drive
Suite 2414
Chicago, Illinois 60606
PROXY STATEMENT
Your proxy is solicited by the Board of Directors of Bruce Fund,
Inc.
for the annual meeting of shareholders to be held Monday,
December 10, 2003, and at any adjournments of the meeting.
ELECTION OF DIRECTORS
The Funds By-laws presently provide that the number of directors
of the
Fund shall be not less than three. Independent directors (I.D.)
constitute a majority of the board. Proxies may not be voted for
a greater
number of persons than the number of nominees.
The persons named below, with one exception, have served
continuously on
the Board of Directors for more than 10 years. Mr. John R. Nixon
was
elected to the Board in December 1999 to replace a retiring
Director. The
three persons, identified and described below, will constitute the
full
Board of Directors of the Fund until the next annual meeting of
stockholders, and until the successor of each shall have been duly
elected
and shall have qualified. Robert B. Bruce currently owns shares
of the
Fund. Information concerning the nominees, including certain
information
supplied by them, is as follows:
Names and Ages of
Nominees to be Business Experience for Last
Directors of the Fund Five Years
Robert B. Bruce* 1974 to present--principal, Bruce and
Age 72 Co. (investment adviser); 1982 to
present--
Chairman of Board of Directors,
Treasurer, Professional Life &
Casualty
Company (life insurance issuers).
*Mr. Bruce owns a controlling interest in Bruce and Co., the
investment
adviser to the Fund, and is an Interested Person, as defined in
the
Investment Company Act of 1940, of the Fund. He presently owns
11,857 shares of the Fund.
Ward M. Johnson(I.D.) 2002 to present - Real Estate Sales,
Landings
Age 66 Co.; 2000 to 2002 - President, Savannah
Capital; 1997 to 2000 - Publisher, Florida Golfer.
John R. Nixon(I.D.) Member, Chicago Board Options
Exchange, Trader.
Age 62
All directors listed above are presently serving and each has
agreed to
continue serving as a director of the Fund. Should any of the
nominees
become unavailable, however, it is intended that the persons named
in the enclosed proxy will vote for the election of such other
persons
as the Board of Directors may recommend.
The Board of Directors does not have a nominating, audit or
compensation
committee.
The above-named nominees for directors will receive a small annual
fee
from the Fund for services rendered as directors of the Fund
during the
year for which this election is being held; Mr. Bruce, the owner
of the
investment advisor to the Fund, will not receive any directors
fee.
INVESTMENT ADVISORY AGREEMENT
Bruce and Co. has been serving as investment adviser to the Fund
under an
Investment Advisory Agreement since 1983. Bruce and Co. is an
Illinois
corporation located at 20 North Wacker Drive (Suite 2414),
Chicago, Illinois
60606. Robert B. Bruce is the principal executive officer and
owns controlling
interest in the adviser; his office is also at 20 North Wacker
Drive
(Suite 2414), Chicago, Illinois 60606. He is a nominee for
election as a
director of Bruce Fund.
On November 6, 2003, at a meeting of the Board of Directors called
for the
purpose of considering the terms of the Investment Advisory
Agreement and
voting upon approval thereof, the independent directors present in
person
voted to approve and extend the Investment Advisory Agreement with
Bruce
and Co. dated September 30, 1996.
Bruce and Co.'s compensation for its services to the Fund are, and
at all times
have been, calculated as follows:
Annual Percentage Fee Applied To Net Assets Of Fund
1.0% Up to $20,000,000; plus
0.6% $20,000,000 through $100,000,000;
plus
0.5% over $100,000,000
Bruce and Co. received fees of $40,913 from the Fund during the
fiscal year
ended June 30, 2003.
The Fund paid brokerage commissions of $9,600 during fiscal 2003.
The Fund
also purchased securities from dealers acting as principals.
These
transactions are at net prices which include markups for the
dealers. None
of the broker-dealers with whom the Fund dealt was affiliated in
any manner
with the Fund, or with any affiliated person of the Fund,
including the
investment adviser.
Brokers are selected by Bruce and Co. to effect securities
transactions for the Fund based on the adviser's overall
evaluation of the
commission rates charged, the reliability and quality of the
broker's
services and the value and expected contribution of such services
to the
performance of the Fund. Where commissions paid reflect services
furnished
in addition to execution, such commissions may, on occasion, be
somewhat
higher than could be obtained from brokers not supplying such
services. The
adviser considers the supplementary research and statistical or
other
factual information provided by dealers in allocating portfolio
business to
dealers. Such allocation is not on the basis of any formula,
agreement or
understanding.
The Board of Directors of the Fund has in previous years permitted
the
Fund to pay brokerage commissions which may be in excess of those
which
other brokers might have charged for effecting the same
transactions, in
recognition of the value of the brokerage and research services
provided by
the executing brokers. The research which is received from
brokers includes
such matters as information on companies, industries, areas of the
economy
and market factors. The information received may or may not be
useful to
the Fund, and may or may not be useful to the investment adviser
in
servicing other of its accounts. Bruce and Co. has attempted and
will
attempt to evaluate the overall reasonableness of the commissions
paid by
the Fund by attempting to negotiate commissions which are within a
reasonable range, in the light of any knowledge available as to
the levels
of commissions being charged, but keeping in mind the brokerage
and research
services provided. None of the Fund's securities transactions
during the
last fiscal year were placed pursuant to an agreement or
understanding with
a broker or otherwise through an internal allocation procedure
because
of research services provided.
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Registration of the Fund shares under the Securities Act of 1933
requires
the Fund to make at least annual filings with the Securities and
Exchange
Commission, which filings include financial statements which must
be signed
or certified by an independent public accountant. The Board of
Directors
has unanimously selected the firm of Grant Thornton LLP, 130 East
Randolph
Street, Chicago, Illinois to serve as such independent public
accountant
for the fiscal year ending in 2004, and will submit this selection
for
ratification or rejection by the stockholders. The Annual Report
for
fiscal 2003 was mailed to shareholders in August, 2003. The Fund
does not
plan to request a representative of Grant Thornton LLP (which
certified
the June 30, 2003 financial statements) to be present at the
annual
meeting.
QUORUM AND VOTE REQUIRED
The presence in person or by proxy of the holders of record of
a majority of the issued and outstanding capital stock constitutes
a
quorum at all meetings of stockholders of the Fund. All matters
described in this Proxy Statement will be decided by a majority of
all votes cast at a duly constituted meeting.
REVOCABILITY OF PROXY AND OTHER MATTER
The enclosed form of proxy, when signed and returned, may
nevertheless be revoked at any time prior to its exercise by
written
notice to the Fund, execution of a subsequent proxy or personal
attendance at the Meeting. Unless so revoked, the enclosed form
of
proxy, properly executed and returned, will be voted in accordance
with the instructions thereon. The proxy will be voted in favor
of
each nominee for director named herein unless a choice is
indicated
to withhold authority to vote for all of the listed nominees or
any
individual nominee. As to the proposal, the proxy will be voted
in
favor of that proposal unless a choice is indicated to vote
against
or to abstain from voting on that proposal.
This statement is being mailed to stockholders of the Fund on
or about November 14, 2003. The solicitation of proxies for the
Meeting will be made primarily by mail, but some solicitation may
take place by telephone, telegraph and personal interview. The
Fund
will be responsible for the direct payment of all costs, fees and
expenses in connection with such solicitation.
Only stockholders of record at the close of business on
November 10, 2003, the record date for the Meeting, will be
entitled
to vote at the Meeting. At the close of business on the record
date
there were 30,973 shares of the Fund outstanding and entitled to
vote. Each such share entitles the holder of record to one vote.
PROPOSALS OF SECURITY HOLDINGS
Any Fund security holder who wishes to present a proposal to
the next (2004) annual meeting of shareholders must make such
submission in sufficient time for it to be received at Bruce Fund,
Inc.'s executive offices not less than 60 days in advance of the
month and day of this proxy statement.
Board of Directors
BRUCE FUND, INC.
November 14, 2003, at Chicago, Illinois