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Previous: ADVANCE FINANCIAL BANCORP, DEF 14A, 1999-09-28 |
Next: MC INFORMATICS INC, 8-K/A, 1999-09-28 |
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 (ss.) 240.14a-11(c) or (ss.) 240.14a-12
Bexil Corporation
--------------------------------------------------------------------
(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:
Notes:
BEXIL CORPORATION
Notice of Annual Meeting of Stockholders
To the Stockholders:
Notice is hereby given that the Annual Meeting of
Stockholders of Bexil Corporation (the "Fund") will be held at the offices
of the Fund at 11 Hanover Square, New York, New York on Tuesday, November
23, 1999 at 8:30 a.m. for the following purposes:
1. To elect to the Board
of Directors the Nominees, Douglas Wu and Robert D. Anderson, as respectively,
Class II
Director and Class III Director, each to serve for a five year term and
until his successor is duly elected and qualified.
2. To ratify the selection
of Tait, Weller & Baker as the Fund's independent auditors.
3. To change the Fund's
investment objective and certain investment policies.
4. To change the classification
of the Fund from a diversified investment company to a non-diversified
investment
company.
Stockholders
of record at the close of business on October 18, 1999 are entitled to
receive notice of and to vote at the meeting.
| By Order of the Board of Directors
Deborah Ann Sullivan
|
New York, New York
___________, 1999
| Please Vote Immediately by Signing and Returning the
Enclosed Proxy Card.
Delay may cause the Fund to incur additional expanses to solicit sufficient votes for the meeting. |
BEXIL CORPORATION
PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held ___________, 1999
This Proxy Statement, dated ___________, 1999, is
furnished in connection with a solicitation of proxies by the Board of
Directors of Bexil Corporation (the "Fund") to be voted at the Annual Meeting
of Stockholders of the Fund to be held at the offices of the Fund at 11
Hanover Square, New York, New York on Tuesday, November 23, 1999 at 8:30
a.m. and at any postponement or adjournment thereof ("Meeting") for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
Stockholders of record at the close of business on October 18, 1999 ("Record
Date") are entitled to be present and to vote on matters at the Meeting.
Stockholders are entitled to one vote for each Fund share held and fractional
votes for each fractional Fund share held. Shares represented by executed
and unrevoked proxies will be voted in accordance with the specifications
made thereon. If the enclosed form of proxy is executed and returned, it
nevertheless may be revoked by another proxy or by letter or telegram directed
to the Fund, which must indicate the stockholder's name. To be effective,
such revocation must be received prior to the Meeting. In addition, any
stockholder who attends the Meeting in person may vote by ballot at the
Meeting, thereby canceling any proxy previously given. As of the date hereof,
the Fund had 761,953.550 shares of common stock issued and outstanding
entitled to be voted at the Meeting. Stockholders of the Fund will vote
as a single class. It is estimated that proxy materials will be mailed
to stockholders of record on or about ___________, 1999. The Fund's principal
executive offices are located at 11 Hanover Square, New York, New York
10005. Copies of the Fund's most recent Annual and Semi-Annual Reports
are available without charge upon written request to the Fund at 11 Hanover
Square, New York, New York 10005, or by calling toll-free 1-888-847-4200.
PROPOSAL 1: ELECTION OF DIRECTORS
The Fund's Board of Directors is divided into five classes with the
term of office of one class expiring each year. It is proposed that stockholders
of the Fund elect one Class II Director and one Class III Director to serve
for a five year term, and until his successor is duly elected and qualified.
Each nominee currently serves as a Director of the Fund. The following
table sets forth certain information concerning the nominees for Class
II Director and Class III Director of the Fund.
| Name, Principal Occupation, Business Experience
for Past Five Years,
Address, and Age |
Director
Since |
Year Term
Expires |
|
CLASS II: |
||
| DOUGLAS WU -- He is Principal of Maxwell Partners. From July 1998 to December 1998 he was a Principal of Libra Advisors LLC. From 1996 to June 1998, he was Managing Director - Private Equity Investments, of Croesus Capital Management Corporation. From 1992 to 1996, he was a partner of Medall Partners, a merchant banking firm. His address is 114 East 90th Street, New York, New York 10128. He was born on July 31, 1960. | 1997 | 2004 |
| CLASS III: | ||
| ROBERT D. ANDERSON* He is Vice Chairman of the Fund, as well as the other investment companies in the Investment Company Complex, and of WCI and certain of its affiliates. He also is Vice Chairman of the Investment Manager. He was a member of the Board of Governors of the Mutual Fund Education Alliance, and of its predecessor, the No-Load Mutual Fund Association. He has also been a member of the District #12, District Business Conduct and Investment Companies Committees of the NASD. He was born on December 7, 1929. | 1999 | 2000 |
*Mr. Anderson is an "interested person" because he is an "affiliated
person" as defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
The persons named in the accompanying form of proxy intend to vote each
such proxy for the election of the nominees listed above, unless stockholders
specifically indicate on their proxies the desire to withhold authority
to vote for the nominee. It is not contemplated that either nominee will
be unable to serve as a Director for any reason, but if that should occur
prior to the Meeting, the proxyholders reserve the right to substitute
another person of their choice as nominee. Each nominee listed above has
consented to being named in this Proxy Statement and has agreed to serve
as a Director if elected.
The Fund has an audit committee comprised of Douglas Wu, Frederick A.
Parker, Jr., and Thomas B. Winmill, the function of which is routinely
to review financial statements and other audit-related matters as they
arise throughout the year. The Fund has an executive committee comprised
of Thomas B. Winmill, the function of which is to exercise the powers of
the Board of Directors between meetings of the Board to the extent permitted
by law to be delegated and not delegated by the Board to any other committee.
Mr. Winmill is an "interested person" because he is an "affiliated person"
as defined in the 1940 Act. The Fund has no standing nominating or compensation
committee or any committee performing similar functions. Certain information
concerning the Fund's Directors and executive officers is set forth in
Exhibit A hereto.
The Fund pays its Directors who are not "interested persons" of the
Fund an annual retainer of $2,500, and a per meeting fee of $2,750, and
reimburses them for their meeting expenses. The Fund also pays such Directors
$250 per special telephonic meeting attended and per committee meeting
attended. The Fund does not pay any other remuneration to its executive
officers and Directors, and the Fund has no bonus, pension, profit-sharing,
or retirement plan. The Fund had 8 Board meetings and 1 committee meeting
during the Fund's most recently completed fiscal year. Each Director attended
a majority of all Board and all committee meetings held during such year
during the period such Director was in office. For the fiscal year ended
June 30, 1999, the aggregate amount of compensation paid to the nominee
by the Fund and by all other investment companies advised by CEF Advisers,
Inc. (the "Investment Manager"), the Fund's investment adviser, and its
affiliates (collectively, the "Investment Company Complex") for which such
nominee is a Board member (the current number of which is set forth in
parenthesis next to the nominee's total compensation) was as follows:
|
Name of Nominee |
Aggregate Compensation from the Fund |
Total Compensation from Fund and Investment Company Complex (the number of other funds) Paid to Nominee |
| Robert D. Anderson |
|
|
| Douglas Wu |
|
|
The aggregate amount of compensation paid to each continuing Director
by the Fund and by all other funds in the Investment Company Complex for
which such continuing Director is a Board Member (the number of which is
set forth in parenthesis next to the continuing Director's total compensation)
for the fiscal year ended June 30, 1999, was as follows:
| Name of Continuing Director | Aggregate Compensation from the Fund | Total Compensation from Fund and Investment Company Complex (the number of other funds) Paid to Continuing Director |
| Frederick A. Parker, Jr. |
|
|
| Bassett S. Winmill |
|
|
| Thomas B. Winmill |
|
|
The Investment Manager, located at 11 Hanover Square, New York, New
York 10005, is a wholly-owned subsidiary of Winmill & Co. Incorporated
("WCI"), a publicly-owned company whose securities are listed on The Nasdaq
Stock Market. During the fiscal year ended June 30, 1999, the Fund paid
the Investment Manager no investment management fees. Bassett S. Winmill,
a Director of the Fund, may be deemed a controlling person of WCI on the
basis of his ownership of 100% of WCI's voting stock and, therefore, of
the Investment Manager. In February and March 1999, Robert D. Anderson,
Bassett S. Winmill and Thomas B. Winmill sold 29,000, 36,500, and 52,250
shares respectively of WCI's Class A common stock on the open market at
prices varying between $3.69 and $9.25 per share. In September 1999, Robert
D. Anderson, Bassett S. Winmill, and Thomas B. Winmill received from WCI,
respectively, 10,000, 40,000, and 40,000 incentive stock options to purchase
shares of WCI's Class A common stock at, respectively, $2.375, $2.6125,
and $2.6125 per share. These options expire after five years.
Vote Required
Inasmuch as the election of the nominees was approved by the vote of
a majority of the Board of Directors, the election of the nominees requires
the affirmative vote of a plurality of the votes cast at the Meeting.
THE FUND'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED"
DIRECTORS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE
NOMINEES.
PROPOSAL 2: RATIFICATION OF THE SELECTION
OF INDEPENDENT AUDITORS
The Investment Company Act of 1940, as amended (the "1940 Act"), requires
that the Fund's independent auditors be selected by a majority of those
Directors who are not "interested persons" (as defined in the 1940 Act)
of the Fund; that such selection be submitted for ratification or rejection
at the Meeting; and that the employment of such independent auditors be
conditioned upon the right of the Fund, by vote of a majority of its outstanding
securities at any meeting called for that purpose, to terminate such employment
forthwith without penalty. The Fund's Board of Directors, including a majority
of those Directors who are not "interested persons," approved the selection
of Tait, Weller & Baker for the fiscal period commencing July 1, 1999
at a Board meeting held on September 8, 1999. Accordingly, the selection
by the Fund's Board of Tait, Weller & Baker as independent auditors
for the fiscal period commencing July 1, 1999 is submitted to stockholders
for ratification or rejection. Apart from its fees received as independent
auditors, neither Tait, Weller & Baker nor any of its partners has
a direct, or material indirect, financial interest in the Fund or the Investment
Manager. Tait, Weller & Baker acted as independent auditors of the
Fund since its organization through the fiscal year ended June 30, 1998,
and acts as independent auditors of WCI. Sanville & Company acted as
independent auditors of the Fund for the fiscal year ended June 30, 1999.
The Fund's Board believes that the employment of the services of Tait,
Weller & Baker, as described herein, is in the best interests of the
Fund. A representative of Tait, Weller & Baker is expected to be present
at the Meeting, will have the opportunity to make a statement, and will
be available to respond to appropriate questions.
THE FUND'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED"
DIRECTORS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF TAIT, WELLER & BAKER AS INDEPENDENT AUDITORS OF THE FUND.
PROPOSAL 3: TO CHANGE THE FUND'S INVESTMENT
OBJECTIVE AND CERTAIN
INVESTMENT POLICIES.
Introduction
The Fund currently seeks to achieve its investment objective of providing a high level of current income, liquidity, and safety of principal by investing primarily in securities backed by the full faith and credit of the United States ("U.S. Government Securities"). It currently is a fundamental policy of the Fund to invest at least 65% of the value of its total assets in U.S. Government Securities, including direct obligations of the United States (such as U.S. Treasury bills, notes, and bonds) and certain agency securities, such as those issued by the Government National Mortgage Association ("GNMA"). The Fund may invest up to 35% of the value of its total assets in other securities, including common stocks and other equity securities and securities issued by agencies and instrumentalities of the U.S. Government that may have different levels of government backing but which are not backed by the full faith and credit of the U.S. Government. In addition, the Fund may engage in various investment techniques, such as leveraging, lending portfolio securities, writing covered call options, and purchasing securities on a when-issued basis as described in its Prospectus and Statement of Additional Information. On August 17, 1998, the Fund announced that it intended to invest up to 35% of its total assets in equity and other securities, commencing on October 19, 1998.
Management believes that a portion of the Fund's assets may be invested
more effectively if the permissible investments are broadened to include
those described below. In a rapidly changing market, it is important for
the Fund to have the flexibility to purchase a variety of instruments because
while under certain market conditions certain types of securities may be
deemed most appropriate for purchase by the Fund, under other market conditions
other types of securities may be deemed preferable. By expanding the universe
of securities the Fund may purchase, the Fund's management will be given
the opportunity to adjust the Fund's portfolio from time to time in such
manner as it then deems appropriate. The proposed securities in which the
Fund would be permitted to invest are described below and in Exhibit B
to this Proxy Statement.
The Fund's management believes that the Fund will be able to preserve
and increase the "purchasing power" value of its shares (i.e., real total
return) over the long term by combining the Fund's portfolio of U.S. Government
Securities with equity securities, convertible securities, and fixed income
securities, particularly those issued by companies involved in natural
resources and commodities. Issuers of these securities may include U.S.
and foreign entities, including small capitalization companies and private
companies, and such securities may be denominated in U.S. dollars or foreign
currencies. Real total return is a measure of the change in purchasing
power of money invested in a particular instrument after adjusting for
inflation. The proposed changes to the Fund's policies are designed to
cause the net asset value of the Fund's shares to rise at a rate equal
to or greater than the rate of general price inflation, thereby preserving
the "purchasing power" value of the Fund's shares. The proposed changes
to the Fund's policies are designed to combine the growth potential of
equities and other securities with the more regular income that investing
in U.S. Government Securities can provide. The approach proposed by management
will attempt to balance the potential for growth and greater volatility
of equity and other securities with the generally more stable income and
the relatively more moderate price fluctuations of U.S. Government Securities.
These changes, however, may cause the net asset value of the Fund's shares
to fall at a faster rate, under certain conditions, and may increase the
overall risk to the Fund's portfolio.
This Proposal involves changing the Fund's investment objective, fundamental
policies and investment restrictions. Management also believes it appropriate
to change the Fund's investment objective, which currently is fundamental,
which cannot be changed without approval by the holders of a majority (as
defined in the 1940 Act) of the Fund's outstanding shares, to non-fundamental
policies, which may be changed by vote of the Fund's Directors at any time
without stockholder approval, subject to compliance with applicable Securities
and Exchange Commission ("SEC") requirements.
The 1940 Act requires that a relatively limited number of investment
policies and restrictions be designated as fundamental policies which may
not be changed without stockholder approval. These policies relate to (a)
the classification and subclassification under the 1940 Act within which
the Fund may operate, (b) borrowing money, (c) issuing senior securities,
(d) engaging in the business of underwriting securities issued by other
persons, (e) concentrating investments in a particular industry or group
of industries, (f) purchasing and selling real estate or commodities, (g)
making loans to others persons, and (h) changing the nature of the business
so as to cease to be an investment company. When the Fund was formed, its
Board designated a number of other policies as fundamental, in large part
in response to certain regulatory requirements or business or industry
conditions that no longer exist, and adopted certain restrictions which
now are believed to be unduly restrictive. In addition, stockholders of
the Fund are being asked in Proposal 3 to change the Fund's classification
from a diversified to a non-diversified investment company, which would
call for the deletion of the Fund's investment restriction pertaining to
diversification.
To enable the Fund to broaden its permissible investments as described
below, the Fund's Board, at a meeting held on September 8, 1999 unanimously
approved changes in the Fund's investment objective, fundamental policies
and investment restrictions, and directed that this Proposal be submitted
to stockholders for their approval. If this Proposal is approved, it will
increase the Fund's ability to invest in equity securities and other types
of non-fixed income investments. Inasmuch as these types of investment
often tend to be more volatile than U.S. Government Securities and earn
less income, stockholders should consider that this could have the effect
of increasing the volatility of the net asset value and market price of
the Fund's shares and result in the Fund's shares trading at a greater
discount to net asset value, with less liquidity, and/or greater spreads
and earn a lower yield than other closed-end fund shares that invest primarily
in U.S. Government Securities.
Changes to Investment Objective and Management Policies
If the Proposal is approved, the Fund would change its investment objective
to preserving and increasing the purchasing power value of its shares over
the long term. To achieve this new investment objective, the Fund would
invest at least 50% of the value of its total assets in U.S. Government
Securities, obligations of other U.S. Government agencies or instrumentalities,
including inflation-indexed instruments, and money market instruments described
below. The Fund would invest the remainder of its total assets primarily
in securities of selected growth companies that, in the Investment Manager's
opinion, will grow faster than the economy as a whole, and securities issued
by companies that invest or deal in natural resources or commodities, based
on its analysis of issuer fundamentals, technical and economic trends,
and other factors. The securities in which the Fund would be permitted
to invest also would include equity securities, such as common stocks and
preferred stocks, convertible securities, non-municipal debt securities,
mortgage-related securities (including inverse floaters), asset-backed
securities, warrants, loan participation interests, securities of other
investment companies, and securities issued by companies that invest or
deal in natural resources or commodities ("Additional Portfolio Securities").
Issuers of these securities may include U.S. and foreign entities, including
small capitalization companies and private companies, and such securities
may be denominated in U.S. dollars or foreign currencies. The new investment
objective and management policies, except as described below, would be
non-fundamental.
Additional Portfolio Securities
If this Proposal is approved, the Fund would be permitted to invest,
except where noted, up to 50% of the value of its total assets in the following
Additional Portfolio Securities. For a more detailed discussion of the
Additional Portfolio Securities and their related risks, see Exhibit
B to this Proxy Statement.
Equity Securities. The Fund would be permitted to invest in equity
securities, including common stocks, preferred stocks and securities that
are convertible into common stocks of domestic and foreign issuers ("convertible
securities"). The Fund also would be permitted to invest in equity securities
in the form of depositary receipts, and in warrants to purchase equity
securities.
Fixed-Income Securities. The Fund would be permitted to invest
in fixed-income securities, such as bonds, debentures, notes, mortgage-related
securities, and asset-backed securities of domestic and foreign issuers
(collectively, "Fixed Income Securities"). The issuers of these obligations
may include domestic and foreign corporations, partnerships or trusts,
and governments or their political subdivisions, agencies or instrumentalities.
The Fund will invest less than 50% of its total assets in convertible securities
rated below investment grade. These instruments may be subject to certain
risks with respect to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated Fixed Income Securities. For
a discussion of the risks related to investing in convertible securities
rated below investment grade, see the Exhibit B to this Proxy Statement.
Money Market Instruments. The Fund would be permitted to invest
in money market instruments, which include U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments,
and repurchase agreements. The Fund currently may invest in money market
instruments under certain conditions as described above.
Investment Company Securities. The Fund also would be permitted
to invest in securities of other investment companies which principally
invest in securities of the type in which the Fund invests and other securities.
Under the 1940 Act, purchasers of the securities of other investment companies,
subject to certain exceptions, are limited to a maximum of (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Fund's
total assets with respect to any one investment company and (ii) 10% of
the Fund's total assets in the aggregate. Investments in the securities
of investment companies may involve duplication of advisory fees and certain
other expenses. Nonetheless, the Fund's Board believes that these changes
will provide the Fund greater flexibility to achieve its proposed investment
objective.
Corresponding Changes in Investment Restrictions
If this Proposal is approved by stockholders, the Fund's current Investment Restrictions numbered 5 and 6 (proposed to be renumbered as Investment Restrictions 4 and 5) will be revised to reflect the Fund's proposed investment objective and management policies described in this Proxy Statement, and generally to clarify the extent to which the Fund may invest in certain types of securities or engage in various investment techniques. In addition, current Investment Restriction No. 1, which pertains to the Fund's classification as a "diversified" investment company, will be deleted if Proposal 4 is approved by the Fund's stockholders. If Proposal 4 is not so approved, Investment Restriction No. 1 will remain in effect and the remaining Investment Restrictions will be renumbered.
Investment Restriction No. 5, proposed to be renumbered as Investment Restriction No. 4, which prohibits the Fund from purchasing or selling commodities or commodity futures contracts, except for financial and foreign currency futures contracts and options thereon, and options and forward contracts on foreign currencies, will be amended to permit the Fund to purchase and sell options, futures contracts, including those relating to indices, and options on futures contracts or indices. The Fund currently has no intention of engaging in futures and options transactions and, thus, a non-fundamental policy will be adopted to prohibit the Fund from purchasing and selling options, futures contracts, including those relating to indices, and options on futures contracts or indices.
Investment Restriction No. 6, proposed to be renumbered as Investment
Restriction No. 5, which prohibits the Fund from purchasing or selling
real estate, but permits the Fund to invest in securities (excluding limited
partnership interests) secured by real estate or issued by companies which
invest in real estate, will be revised to clarify that the Fund may invest
in companies, limited partnerships, or other entities that deal in real
estate and REITs and to reserve for the Fund the freedom of action to hold
and sell real estate acquired as a result of the Fund's ownership of securities.
If approved by Fund stockholders, the Fund's Investment Restrictions would read as follows (new language is underscored and language to be deleted is in brackets):
The Fund may not:
[1.
Purchase the securities of any one issuer if, as a result, more than 5%
of the Fund's total assets would be invested in
the securities of such issuer, or the Fund would own or hold 10% or more
of the outstanding voting securities of
that issuer, except that up to 25% of the Fund's total assets may be invested
without regard to those limitations
and provided that those limitations do not apply to securities issued or
guaranteed by the U.S. government, its
agencies or instrumentalities.]
1[2]. Issue senior
securities as defined in the 1940 Act (including borrowing money) except
as permitted by applicable
law.
2[3]. Lend its assets,
except as permitted by applicable law.
3[4]. Underwrite the
securities of other issuers, except to the extent that the Fund may be
deemed to be an underwriter
under the Federal securities laws in connection with the disposition of
the Fund's authorized investments.
4[5]. Purchase or
sell commodities [or commodity futures contracts, although it may enter
into (i) financial and
foreign currency futures contracts and options thereon, (ii) options on
foreign currencies, and (iii) forward
contracts on foreign currencies], except that the Fund may purchase
and sell options, futures contracts,
including those relating to indices, and options on futures contracts
or indices, and currencies.
5[6]. Purchase or sell real estate, [provided that] but the Fund may [invest in] purchase and sell securities [(excluding limited partnership interests)] that are secured by real estate or interests therein or issued by companies, limited partnerships, or other entities which invest or deal in real estate or interests therein or real estate investment trusts and hold and sell real estate as a result of ownership of such securities or instruments.
6[7]. Purchase a security if, as a result, 25% or more of the value of the Fund's total assets would be invested in the securities of issuers in a single industry, provided that this limitation does not apply to securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
7. Purchase or sell options, futures contracts, including those related to indices, and options on futures contracts or indices. This Investment Restriction will be designated as a non-fundamental policy.
Approval of this Proposal will be sought by three separate votes. Approval
of this Proposal, with respect to each separate vote, requires the affirmative
vote of (a) 67% of the Fund's voting securities present at the Meeting,
if the holders of more than 50% of the Fund's outstanding voting securities
are present in person or represented by proxy, or (b) more than 50% of
the Fund's outstanding voting securities, whichever is less.
THE FUND'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED"
DIRECTORS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL 3 TO CHANGE
THE FUND'S INVESTMENT OBJECTIVE AND CERTAIN INVESTMENT POLICIES, AS DESCRIBED
IN THE PROPOSAL.
PROPOSAL 4: TO CHANGE THE CLASSIFICATION
OF THE FUND FROM A DIVERSIFIED TO
A NON-DIVERSIFIED INVESTMENT COMPANY
The Fund currently is classified as a "diversified" investment company.
A diversified investment company is required by the 1940 Act generally
to limit its investment, with respect to 75% of its total assets, to not
more than 5% of such assets in the securities of a single issuer and to
not more than 10% of the outstanding voting securities of such issuer.
By approving the Proposal, stockholders would authorize the reclassification
of the Fund as a "non-diversified" investment company, which means that
the portion of the Fund's assets that may be invested in the securities
of a single issuer would not be limited by the 1940 Act. Management of
the Fund believes that changing the classification of the Fund from a diversified
to a non-diversified investment company would give the Investment Manager
more flexibility to focus the Fund's investments in investments that it
views as offering the best opportunities to achieve the Fund's investment
objective. If the Proposal is approved, a relatively high percentage of
the Fund's assets then could be invested in the securities of a limited
number of issuers and in more than 10% of the outstanding voting securities
of issuers, including small capitalization companies and private companies.
Therefore, the Fund's portfolio would be more sensitive to changes in the
market value of a single issuer and less liquid. The Fund, however, intends
to continue to conduct its operations so as to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986,
as amended ("Code"), which requires that, at the end of each quarter of
the taxable year, (i) at least 50% of the market value of the Fund's total
assets be invested in cash, U.S. Government securities, the securities
of other regulated investment companies and other securities, with such
other securities of any one issuer limited for the purposes of this calculation
to an amount not greater than 5% of the value of the Fund's total assets,
and (ii) not more than 25% of the value of its total assets be invested
in the securities of any one issuer (other than U.S. Government securities
or the securities of other regulated investment companies).
Corresponding Changes in Investment Restrictions
If this Proposal is approved by stockholders, the Fund's current Investment
Restriction numbered 1 will be deleted. This Investment Restriction is
set forth under "Proposal 3 -- Corresponding Changes in Investment Restrictions."
Vote Required and the Board's Recommendation
Approval of this Proposal requires the affirmative vote of (a) 67% of
the Fund's voting securities present at the Meeting, if the holders of
more than 50% of the Fund's outstanding voting securities are present in
person or represented by proxy or (b) more than 50% of the Fund's outstanding
voting securities, whichever is less.
THE FUND'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED"
DIRECTORS, RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL 4 TO CHANGE
THE CLASSIFICATION OF THE FUND FROM A DIVERSIFIED INVESTMENT COMPANY TO
A NON-DIVERSIFIED INVESTMENT COMPANY.
ADDITIONAL INFORMATION
A quorum is constituted with respect to the Fund by the presence in
person or by proxy of the holders of a majority of the outstanding shares
of the Fund entitled to vote at the Meeting. In the event that a quorum
is not present at the Meeting, or if a quorum is present but sufficient
votes to approve any of the proposals are not received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. In determining whether to adjourn the
meeting the following factors may be considered: the nature of the proposals
that are the subject of the Meeting, the percentage of votes actually cast,
the percentage of negative votes actually cast, the nature of any further
solicitation, and the information to be provided to stockholders with respect
to the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares affected by the adjournment that are
represented at the meeting in person or by proxy. A stockholder vote may
be taken for one or more of the proposals in this Proxy Statement prior
to any adjournment if sufficient votes have been received for approval.
If a quorum is present, the persons named as proxies will vote those proxies
which they are entitled to vote "for" a Proposal in favor of any adjournment,
and will vote those proxies required to be voted "against" a Proposal against
any adjournment. If a proxy is properly executed and returned accompanied
by instructions to withhold authority to vote, represents a broker "non-vote"
(that is, a proxy from a broker or nominee indicating that such person
has not received instructions from the beneficial owner or other person
entitled to vote shares of the Fund on a particular matter with respect
to which the broker or nominee does not have discretionary power) or marked
with an abstention (collectively, "abstentions"), the Fund's shares represented
thereby will be considered to be present at the Meeting for purposes of
determining the existence of a quorum for the transaction of business.
Under Maryland law, abstentions do not constitute a vote "for" or "against"
a matter and will be disregarded in determining "votes cast" on an issue.
Abstentions, however, will have the effect of a "no" vote for the purpose
of obtaining requisite approval for Proposals 2, 3, and 4.
In addition to the use of the mails, proxies may be solicited personally,
by telephone, or by other means, and the Fund may pay persons holding its
shares in their names or those of their nominees for their expenses in
sending soliciting materials to their principals. The Fund will bear the
cost of soliciting proxies. In addition, the Fund will retain D.F. King
& Co., Inc. ("D.F. King"), 77 Water Street, 20th Floor, New York, NY
10005, to solicit proxies on behalf of its Board for a fee estimated at
$_______ plus expenses, primarily by contacting stockholders by telephone
and telegram. Authorizations to execute proxies may be obtained by telephonic
instructions in accordance with procedures designed to authenticate the
stockholder's identity. In all cases where a telephonic proxy is solicited,
the stockholder will be asked to provide his or her address, social security
number (in the case of an individual) or taxpayer identification number
(in the case of an entity) or other identifying information and the number
of shares owned and to confirm that the stockholder has received the Fund's
Proxy Statement and proxy card in the mail. Within 48 hours of receiving
a stockholder's telephonic voting instructions and prior to the Meeting,
a confirmation will be sent to the stockholder to ensure that the vote
has been taken in accordance with the stockholder's instructions and to
provide a telephone number to call immediately if the stockholder's instruction
are not correctly reflected in the confirmation. Stockholders requiring
further information with respect to telephonic voting instructions or the
proxy generally should contact D.F. King toll-free at 1-800-431-9646. Any
stockholder giving a proxy may revoke it at any time before it is exercised
by submitting to the Fund a written notice of revocation or a subsequently
executed proxy or by attending the meeting and voting in person.
To the knowledge of the management of the Fund, as of the record date,
the following purported to beneficially own 5% or more of the outstanding
shares of the Fund: Investor Service Center, Inc., 11 Hanover Square, New
York, New York 10005, owned, according to its Schedule 13D filed on August
3, 1999, 121,475 shares, which constitutes approximately 15.94% of the
Fund's total outstanding shares.
Discretionary Authority, Submission Deadlines
Although no business may come before the Meeting other than that specified
in the Notice of Annual Meeting of Stockholders and the stockholder proposal
described in this sentence, shares represented by executed and unrevoked
proxies will confer discretionary authority to vote on matters which the
Fund did not have notice of by __________, 1999. The deadline for submitting
stockholder proposals for inclusion in the Fund's proxy statement and form
of proxy for the Fund's next annual meeting is ___________, 2000 and the
date after which notice of a stockholder proposal submitted outside the
processes of Rule 14a-8 under the Securites Exchange Act of 1934, as amended
(the "1934 Act"), is considered untimely for purposes of Rule 14a-4(c)
of the 1934 Act is ___________, 2000. In addition to any other applicable
requirements, for a nomination to be made by a stockholder or for any other
business to be properly brought before the annual meeting by a stockholder,
such stockholder must have given timely notice thereof in proper written
form to the Secretary of the Fund in the manner set forth in the Fund's
By-laws. As of the date hereof, the Fund's By-laws provide that to be timely,
a stockholder's notice to the Secretary must be delivered to or mailed
and received at the principal executive offices of the Fund (a) in the
case of an annual meeting, not less than sixty (60) calendar days nor more
than ninety (90) calendar days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within thirty
(30) calendar days before or sixty (60) calendar days after such anniversary
date, notice by the stockholder in order to be timely must be so received
not later than the close of business on the later of the sixtieth (60th)
calendar day prior to such annual meeting or the tenth (10th) calendar
day following the day on which notice of the date of the annual meeting
was mailed or public disclosure of the date of the annual meeting was made,
whichever first occurs; and (b) in the case of a special meeting of stockholders
called for the purpose of electing directors, not later than the close
of business on the tenth (10th) calendar day following the day on which
notice of the date of the special meeting was mailed or public disclosure
of the date of the special meeting was made, whichever first occurs. For
the foregoing purposes, the date of a public disclosure shall include,
but not be limited to, the date on which such disclosure is made in a press
release reported by the Dow Jones News Services, the Associated Press or
any comparable national news service or in a document publicly filed by
the Fund with the Securities and Exchange Commission pursuant to Sections
13, 14 or 15(d) (or the rules and regulations thereunder) of the 1934 Act
or pursuant to Section 30 (or the rules and regulations thereunder) of
the 1940 Act.
As set forth in the Fund's Articles of Incorporation, any action submitted to a vote by stockholders requires the affirmative vote of at least eighty percent (80%) of the outstanding shares of all classes of voting stock, voting together, in person or by proxy at a meeting at which a quorum is present, unless such action is approved by the vote of a majority of the Board of Directors, in which case such action requires (A) if applicable, the proportion of votes required by the 1940 Act, or (B) the lesser of (1) a majority of all the votes entitled to be cast on the matter with the shares of all classes of voting stock voting together, or (2) if such action may be taken or authorized by a lesser proportion of votes under applicable law, such lesser proportion.
Notice to Banks, Broker/dealers and Voting Trustees and Their
Nominees
Please advise the Fund, at its principal executive offices, to the attention
of Deborah Ann Sullivan, Secretary, whether other persons are the beneficial
owners of the shares for which proxies are being solicited and, if so,
the number of copies of this Proxy Statement and other soliciting material
you wish to receive in order to supply copies to the beneficial owners
of shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
EXHIBIT A
Information relevant to the Continuing Directors is set forth below.
Each Director who is deemed to be an "interested person" because he is
an "affiliated person" as defined in the 1940 Act is indicated by an asterisk.
| Name, Principal Occupation, Business Experience
for Past Five Years,
Address, and Age |
Director Since | Year Term Expires |
| CLASS I: | ||
| FREDERICK A. PARKER, JR. -- He is retired President and Chief Executive Officer of American Pure Water Corporation, a manufacturer of water purifying equipment. His address is 219 East 69th Street, New York, New York 10021. He was born on November 14, 1926. | 1996 | 2003 |
| CLASS IV: | ||
| THOMAS B. WINMILL* -- He is President, Chief Executive Officer, and General Counsel of the Fund, as well as the other investment companies in the Investment Company Complex, and of WCI and certain of its affiliates. He also is President of the Investment Manager. He is a member of the New York State Bar and the SEC Rules Committee of the Investment Company Institute. He is a son of Bassett S. Winmill, the Chairman of the Board of the Fund. His address is 11 Hanover Square, New York, New York 10005. He was born on June 25, 1959. | 1996 | 2001 |
| CLASS V: | ||
| BASSETT S. WINMILL* -- He is Chairman of the Board of the Fund, as well as other investment companies in the Investment Company Complex, and of WCI. He is a member of the New York Society of Security Analysts, the Association for Investment Management and Research, and the International Society of Financial Analysts. He is the father of Thomas B. Winmill, the President, Chief Executive Officer, and General Counsel of the Fund. His address is 11 Hanover Square, New York, New York 10005. He was born on February 10, 1930. | 1996 | 2002 |
The executive officers, other than those who serve as Directors, and
their relevant biographical information are set forth below:
STEVEN A. LANDIS Senior Vice President. He also is Senior Vice
President of the other investment companies in the Investment Company Complex,
and the Investment Manager and certain of its affiliates. From 1993 to
1995, he was Associate Director - Proprietary Trading at Barclays de Zoete
Wedd Securities Inc. and, from 1992 to 1993, he was Director, Bond Arbitrage
at WG Trading Company. He was born on March 1, 1955.
JOSEPH LEUNG, CPA Treasurer and Chief Accounting Officer. He also
is Treasurer and Chief Accounting Officer of the other investment companies
in the Investment Company Complex, and the Investment Manager and its affiliates.
From 1992 to 1995, he held various positions with Coopers & Lybrand
LLP, a public accounting firm. He is a member of the American Institute
of Certified Public Accountants. He was born on September 15, 1965.
DEBORAH ANN SULLIVAN Vice President, Secretary and Chief Compliance
Officer. She also is Vice President, Secretary and Chief Compliance Officer
of the other investment companies in the Investment Company Complex, and
the Investment Manager and certain of its affiliates. From 1993 to 1994,
she was the Blue Sky Paralegal for SunAmerica Asset Management Corporation
and, from 1992 to 1993, she was Compliance Administrator and Blue Sky Administrator
with Prudential Securities, Inc. and Prudential Mutual Fund Management,
Inc. She is a member of the New York State Bar. She was born on June 13,
1969.
The address of each executive officer of the Fund is 11 Hanover Square,
New York, New York 10005.
The following table presents certain information regarding the beneficial
ownership of the Fund's shares as of the Record Date by each officer and
Director of the Fund owning shares on such date. In each case, such amount
constitutes less than 1% of the Fund's outstanding shares.
| Name of Officer or Director | Number of Shares |
| Robert D. Anderson |
|
| Steven A. Landis |
|
| Joseph Leung |
|
| Frederick A. Parker, Jr. |
|
| Deborah Ann Sullivan |
|
| Bassett S. Winmill |
|
| Thomas B. Winmill |
|
| Douglas Wu |
|
WCI and its subsidiaries, of which Bassett S. Winmill may be deemed
a controlling person, also own in the aggregate 121,476.174 Fund shares,
or 15.94% of all outstanding on the Record Date. Mr. Winmill disclaims
beneficial ownership of such shares.
EXHIBIT B
If Proposal 3 is approved, the Fund, except as noted, would be permitted
to invest up to 50% of its total assets in the portfolio securities described
below.
Certain Additional Portfolio Securities
Common and Preferred Stocks -- Stocks represent shares of ownership
in a company. Generally, preferred stock has a specified dividend and ranks
after bonds and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After other claims
are satisfied, common stockholders participate in company profits on a
pro-rata basis; profits may be paid out in dividends or reinvested in the
company to help it grow. Increases and decreases in earnings are usually
reflected in a company's stock price, so common stocks generally have the
greatest appreciation and depreciation potential of all corporate securities.
While most preferred stocks pay a dividend, the Fund may purchase preferred
stock where the issuer has omitted, or is likely to omit, payment of its
dividend. Such investments would be made primarily for their capital appreciation
potential.
Warrants -- A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified amount of
the corporation's capital stock at a set price for a specified period of
time.
Convertible Securities -- Convertible securities may be converted
at either a stated price or stated rate into underlying shares of common
stock. Convertible securities have characteristics similar to both fixed-income
and equity securities. Convertible securities generally are subordinated
to other similar but non-convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations, enjoy seniority in right
of payment to all equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower ratings than
similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the market
value of convertible securities tends to decline as interest rates increase
and, conversely, tends to increase as interest rates decline. In addition,
because of the conversion feature, the market value of convertible securities
tends to vary with fluctuations in the market value of the underlying common
stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend
to trade increasingly on a yield basis, and so may not experience market
value declines to the same extent as the underlying common stock. When
the market price of the underlying common stock increases, the prices of
the convertible securities tend to rise as a reflection of the value of
the underlying common stock. While no securities investments are without
risk, investments in convertible securities generally entail less risk
than investments in common stock of the same issuer.
Convertible securities are investments that provide for a stable stream
of income with generally higher yields than common stocks. There can be
no assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases
in the market price of the underlying common stock. There can be no assurance
of capital appreciation, however, because securities prices fluctuate.
Convertible securities, however, generally offer lower interest or dividend
yields than non-convertible securities of similar quality because of the
potential for capital appreciation.
Convertible securities generally are not investment grade, that is,
not rated within the four highest categories by a credit rating agency,
such as Standard & Poor's Ratings Group ("S&P") or Moody's Investor
Services, Inc. ("Moody's"). To the extent that such convertible securities
and other non-convertible debt securities, which are acquired by the Fund,
are rated lower than investment grade or are not rated, there would be
a greater risk as to the timely repayment of the principal of, and timely
payment of interest or dividends on, those securities. Securities rated
BB or lower by S&P or Ba or lower by Moody's are often referred to
as "junk bonds" and may include securities of issuers in default. "Junk
bonds" are considered by the rating agencies to be predominantly speculative
and may involve major risk exposures such as: (i) vulnerability to economic
downturns and changes in interest rates; (ii) sensitivity to adverse economic
changes and corporate developments; (iii) redemption or call provisions
which may be exercised at inopportune times; (iv) difficulty in accurately
valuing or disposing of such securities; (v) subordination to other debt
of the issuer; and (vi) junk bonds are generally unsecured.
As a non-fundamental policy, the Fund's investments in securities of
issuers in default will be limited to not more than 5% of the total assets
of the Fund. Further, the Fund will invest in securities of issuers in
default only when the Investment Manager believes that such issuers will
emerge from bankruptcy and the value of such securities will appreciate.
By investing in securities of issuers in default the Fund bears the risk
that such issuers will not emerge from bankruptcy or that the value of
such securities will not appreciate. Securities rated BBB by S&P or
Baa by Moody's, in the opinion of the rating agencies, also have speculative
characteristics. Securities need not meet a minimum rating standard in
order to be acceptable for investment by the Fund.
In the absence of adequate anti-dilution provisions in a convertible
security, dilution in the value of the Fund's holding may occur in the
event the underlying stock is subdivided, additional securities are issued
for below market value, a stock dividend is declared, or the issuer enters
into another type of corporate transaction which has a similar effect.
Every convertible security may be valued, on a theoretical basis, as if
it did not have a conversion privilege. This theoretical value is determined
by the yield it provides in comparison with the yields of other securities
of comparable character and quality which do not have a conversion privilege.
This theoretical value, which may change with prevailing interest rates,
the credit rating of the issuer and other pertinent factors, often referred
to as the "investment value," represents the security's theoretical price
support level.
"Conversion value" is the amount a convertible security would be worth in market value if it were to be exchanged for the underlying equity security pursuant to its conversion privilege. Conversion value fluctuates directly with the price of the underlying equity security, usually common stock. If, because of low prices for the common stock, the conversion value is substantially below the investment value, the price of the convertible security is governed principally by the factors described in the preceding paragraph. If the conversion value rises near or above its investment value, the price of the convertible security generally will rise above its investment value and, in addition, will sell at some premium over its conversion value. This premium represents the price investors are willing to pay for the privilege of purchasing a fixed-income security with a possibility of capital appreciation due to the conversion privilege. If this appreciation potential is not realized, this premium may not be recovered. In its selection of convertible securities for the Fund, the Investment Manager will not emphasize either investment value or conversion value, but will consider both in light of the Fund's overall investment objective.
The Fund has no limit on the amount of its assets it may invest in unregistered
and otherwise illiquid convertible securities and other investments. Unregistered
securities are securities that cannot be sold publicly in the United States
without registration under the Securities Act of 1933, as amended (the
"1933 Act"). Unregistered securities generally can be resold only in privately
negotiated transactions with a limited number of purchasers or in a public
offering registered under the 1933 Act. Considerable delay could be encountered
in either event and, unless otherwise contractually provided for, the Fund's
proceeds upon sale may be reduced by the costs of registration or underwriting
discounts. The difficulties and delays associated with such transactions
could result in the Fund's inability to realize a favorable price upon
disposition of unregistered securities, and at times might make disposition
of such securities impossible. When unregistered convertible securities
are converted into common stock and the common stock is publicly traded
(as is typically the case), the common stock normally may be resold publicly
under certain volume and other restrictions beginning one year following
the acquisition of the unregistered convertible securities and without
any restrictions beginning two years after the acquisition of the unregistered
convertible securities. Securities freely salable among qualified institutional
investors under special rules adopted by the SEC may be treated as liquid
if they satisfy institutional liquidity standards established by the Board
of Directors. The continued liquidity of such securities is not as well
assured as that of publicly traded securities.
Real Estate Investment Trusts -- A real estate investment trust
("REIT") is a corporation, or a business trust that would otherwise be
taxed as a corporation, which meets the definitional requirements of the
Code. The Code permits a qualifying REIT to deduct dividends paid, thereby
effectively eliminating corporate level Federal income tax and making the
REIT a pass-through vehicle for Federal income tax purposes. To meet the
definitional requirements of the Code, a REIT must, among other things,
invest substantially all of its assets in interests in real estate (including
mortgages and other REITs) or cash and government securities, derive most
of its income from rents from real property or interest on loans secured
by mortgages on real property, and distribute to stockholders annually
a substantial portion of its otherwise taxable income.
REITs are characterized as equity REITs, mortgage REITs and hybrid REITs.
Equity REITs, which may include operating or finance companies, own real
estate directly and the value of, and income earned by, the REITs depends
upon the income of the underlying properties and the rental income they
earn. Equity REITs also can realize capital gains (or losses) by selling
properties that have appreciated (or depreciated) in value. Mortgage REITs
can make construction, development or long-term mortgage loans and are
sensitive to the credit quality of the borrower. Mortgage REITs derive
their income from interest payments on such loans. Hybrid REITs combine
the characteristics of both equity and mortgage REITs, generally by holding
both ownership interests and mortgage interests in real estate. The value
of securities issued by REITs are affected by tax and regulatory requirements
and by perceptions of management skill. They also are subject to heavy
cash flow dependency, defaults by borrowers or tenants, self-liquidation
and the possibility of failing to qualify for tax-free status under the
Code or to maintain exemption from the 1940 Act.
U.S. Treasury Securities -- U.S. Treasury securities include
Treasury Inflation-Protection Securities ("TIPS"), which are newly created
securities issued by the U.S. Treasury designed to provide investors a
long term investment vehicle that is not vulnerable to inflation. The interest
rate paid by TIPS is fixed, while the principal value rises or falls semi-annually
based on changes in a published Consumer Price Index. Thus, if inflation
occurs, the principal and interest payments on the TIPS are adjusted accordingly
to protect investors from inflationary loss. During a deflationary period,
the principal and interest payments decrease, although the TIPS' principal
will not drop below its face amount at maturity.
In exchange for the inflation protection, TIPS generally pay lower interest
rates than typical Treasury securities. Only if inflation occurs will TIPS
offer a higher real yield than a conventional Treasury bond of the same
maturity. In addition, it is not possible to predict with assurance how
the market for TIPS will develop; initially, the secondary market for these
securities may not be as active or liquid as the secondary market for conventional
Treasury securities. Principal appreciation and interest payments on TIPS
will be taxed annually as ordinary interest income for Federal income tax
calculations. As a result, any appreciation in principal must be counted
as interest income in the year the increase occurs, even though the investor
will not receive such amounts until the TIPS are sold or mature. Principal
appreciation and interest payments will be exempt from state and local
income taxes.
Money Market Instruments -- Money market instruments include
the following:
U.S. Government Securities. Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the
U.S. Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating
or variable rates of interest. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies and instrumentalities,
no assurance can be given that it will always do so since it is not so
obligated by law.
Repurchase Agreements. In a repurchase agreement, a Fund buys,
and the seller agrees to repurchase, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
Repurchase agreements could involve risks in the event of a default or
insolvency of the other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of the underlying securities.
The Fund may enter into repurchase agreements with certain banks or non-bank
dealers.
Bank Obligations. Bank obligations include certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued
by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, domestic savings
and loan associations and other banking institutions. With respect to such
securities issued by foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, the Fund may
be subject to additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt obligations of
U.S. domestic issuers.
Certificates of deposit are negotiable certificates evidencing the obligation
of a bank to repay funds deposited with it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time (in no event longer than seven days) at
a stated interest rate. Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and the drawer to pay
the face amount of the instrument upon maturity. The other short-term obligations
may include uninsured, direct obligations bearing fixed, floating or variable
interest rates.
Commercial Paper. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. These instruments
include variable amount master demand notes, which are obligations that
permit a Fund to invest fluctuating amounts at varying rates of interest
pursuant to direct arrangements between the Fund, as lender, and the borrower.
These notes permit daily changes in the amounts borrowed. Because these
obligations are direct lending arrangements between the lender and borrower,
it is not contemplated that such instruments generally will be traded,
and there generally is no established secondary market for these obligations,
although they are redeemable at face value, plus accrued interest, at any
time. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem
is dependent on the ability of the borrower to pay principal and interest
on demand.
Zero Coupon Securities -- Zero coupon U.S. Treasury securities
are Treasury Notes and Bonds that have been stripped of their unmatured
interest coupons, the coupons themselves and receipts or certificates representing
interests in such stripped debt obligations and coupons. Zero coupon securities
also are issued by corporations and financial institutions which may constitute
a proportionate ownership of the issuer's pool of underlying U.S. Treasury
securities. A zero coupon security pays no interest to its holder during
its life and is sold at a discount to its face value at maturity. The market
prices of zero coupon securities generally are more volatile than the market
prices of securities that pay interest periodically and are likely to respond
to a greater degree to changes in interest rates than non-zero coupon securities
having similar maturities and credit qualities.
Foreign Government Obligations; Securities of Supranational Entities
-- These are obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or instrumentalities
and may include debt obligations of supranational entities. Supranational
entities include international organizations designated or supported by
governmental entities to promote economic reconstruction or development
and international banking institutions and related government agencies.
Examples include the International Bank for Reconstruction and Development
(the World Bank), the European Coal and Steel Community, the Asian Development
Bank and the InterAmerican Development Bank.
Corporate Debt Securities -- Corporate debt securities include
bonds, debentures, notes and other similar instruments, including convertible
securities issued by domestic and foreign entities. Debt securities may
be acquired with warrants attached. These securities also may include forms
of preferred or preference stock. The rate of interest on a corporate debt
security may be fixed, floating or variable, and may vary inversely with
respect to a reference rate. The rate of return or return of principal
on some debt obligations may be linked or indexed to the level of exchange
rates between the U.S. dollar and a foreign currency or currencies. Variable
and floating rate securities provide for a periodic adjustment in the interest
rate paid on the obligations. The terms of such obligations must provide
that interest rates are adjusted periodically based upon an interest rate
adjustment index as provided in the respective obligations. The adjustment
intervals may be regular, and range from daily up to annually, or may be
event based, such as based on a change in the prime rate. The interest
rate on floating rate debt instruments ("floaters") is a variable rate
which is tied to another interest rate, such as a money-market index or
Treasury bill rate. The interest rate on a floater resets periodically.
Because of the interest rate reset feature, floaters provide the Fund with
a certain degree of protection against rises in interest rates, although
the Fund will participate in any declines in interest rates as well. The
interest rate on inverse floating rate debt instruments ("inverse floaters")
resets in the opposite direction from the market rate of interest to which
the inverse floater is indexed. An inverse floating rate security may exhibit
greater price volatility than a fixed rate obligation of similar credit
quality. See "Mortgage-Related Securities" below.
Participation Interests -- Participation interests are corporate
obligations, denominated in U.S. dollars or foreign currencies, that are
originated, negotiated and structured by a syndicate of lenders ("Co-Lenders")
consisting of commercial banks, thrift institutions, insurance companies,
finance companies or other financial institutions, one or more of which
administers the security on behalf of the syndicate ("Agent Bank"). Co-Lenders
may sell such securities to third parties called "Participants." The Fund
may invest in such securities either by participating as a Co-Lender at
origination or by acquiring an interest in the security from a Co-Lender
or a Participant (collectively, "participation interests"). Co-Lenders
and Participants interposed between the Fund and the corporate borrower
("Borrower"), together with Agent Banks, are referred to herein as "Intermediate
Participants." The Fund will not act as an Agent Bank, guarantor or sole
negotiator with respect to securities that are the subject of a participation
interest. A participation interest gives the Fund an undivided interest
in the security in the proportion that the Fund's participation interest
bears to the total principal amount of the security. These instruments
may have fixed, floating or variable rates of interest. The Fund also may
purchase a participation interest in a portion of the rights of an Intermediate
Participant, which would not establish any direct relationship between
the Fund and the Borrower. In such cases, the Fund would be required to
rely on the Intermediate Participant that sold the participation interest
not only for the enforcement of the Fund's rights against the Borrower,
but also for the receipt and processing of payments due to the Fund under
the security. Because it may be necessary to assert through an Intermediate
Participant such rights as may exist against the Borrower, if the Borrower
fails to pay principal and interest when due, the Fund may be subject to
delays, expenses and risks that are greater than those that would be involved
if the Fund were to enforce its rights directly against the Borrower. Moreover,
under the terms of a participation interest, the Fund may be regarded as
a creditor of the Intermediate Participant (rather than of the Borrower),
so that the Fund also may be subject to the risk that the Intermediate
Participant may become insolvent. Similar risks may arise with respect
to the Agent Bank if, for example, assets held by the Agent Bank for the
benefit of the Fund were determined by the appropriate regulatory authority
or court to be subject to the claims of the Agent Bank's creditors. In
such case, the Fund might incur certain costs and delays in realizing payment
in connection with the participation interest or suffer a loss of principal
and/or interest. Further, in the event of the bankruptcy or insolvency
of the Borrower, the obligation of the Borrower to repay the loan may be
subject to certain defenses that can be asserted by such Borrower as a
result of improper conduct by the Agent Bank or Intermediate Participant.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the security, plus accrued interest. As
to these instruments, the Fund intends to exercise its right to demand
payment only upon a default under the terms of the security, as needed
to provide liquidity or to maintain or improve the quality of its investment
portfolio.
Mortgage-Related Securities -- Mortgage-related securities are
a form of derivative collateralized by pools of commercial or residential
mortgages. Pools of mortgage loans are assembled as securities for sale
to investors by various governmental, government-related and private organizations.
These securities may include complex instruments such as collateralized
mortgage obligations and stripped mortgage-backed securities, mortgage
pass-through securities, interests in real estate mortgage investment conduits
("REMICs") or other kinds of mortgage-backed securities, including those
with fixed, floating and variable interest rates, those with interest rates
that change based on multiples of changes in a specified index of interest
rates and those with interest rates that change inversely to changes in
interest rates.
Government-Agency Securities -- Mortgage-related securities issued
by GNMA include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the timely payment of principal
and interest by GNMA and such guarantee is backed by the full faith and
credit of the United States. GNMA is a wholly-owned U.S. Government corporation
within the Department of Housing and Urban Development. GNMA certificates
also are supported by the authority of GNMA to borrow funds from the U.S.
Treasury to make payments under its guarantee.
Government-Related Securities -- Mortgage-related securities
issued by the Federal National Mortgage Association ("FNMA") include FNMA
Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes")
which are solely the obligations of FNMA and are not backed by or entitled
to the full faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). FHLMC is a corporate instrumentality
of the United States created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie Macs are not guaranteed by
the United States or by any Federal Home Loan Bank and do not constitute
a debt or obligation of the United States or of any Federal Home Loan Bank.
Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. When
FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal
at any time after default on an underlying mortgage, but in no event later
than one year after it becomes payable.
Private Entity Securities -- These mortgage-related securities
are issued by commercial banks, savings and loan institutions, mortgage
bankers, private mortgage insurance companies and other non-governmental
issuers. Timely payment of principal and interest on mortgage-related securities
backed by pools created by non-governmental issuers often is supported
partially by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance. The insurance and guarantees are
issued by government entities, private insurers and the mortgage poolers.
There can be no assurance that the private insurers or mortgage poolers
can meet their obligations under the policies, so that if the issuers default
on their obligations the holders of the security could sustain a loss.
No insurance or guarantee covers the Fund or the price of the Fund's shares.
Mortgage-related securities issued by non-governmental issuers generally
offer a higher rate of interest than government-agency and government-related
securities because there are no direct or indirect government guarantees
of payment.
Commercial Mortgage-Related Securities -- Commercial mortgage-related
securities generally are multi-class debt or pass-through certificates
secured by mortgage loans on commercial properties. These mortgage-related
securities generally are structured to provide protection to the senior
classes investors against potential losses on the underlying mortgage loans.
This protection generally is provided by having the holders of subordinated
classes of securities ("Subordinated Securities") take the first loss if
there are defaults on the underlying commercial mortgage loans. Other protection,
which may benefit all of the classes or particular classes, may include
issuer guarantees, reserve funds, additional Subordinated Securities, cross-collateralization
and over-collateralization.
Subordinated Securities are issued or sponsored by commercial banks,
savings and loan institutions, mortgage bankers, private mortgage insurance
companies and other non-governmental issuers. Subordinated Securities have
no governmental guarantee, and are subordinated in some manner as to the
payment of principal and/or interest to the holders of more senior mortgage-related
securities arising out of the same pool of mortgages. The holders of Subordinated
Securities typically are compensated with a higher stated yield than are
the holders of more senior mortgage-related securities. On the other hand,
Subordinated Securities typically subject the holder to greater risk than
senior mortgage-related securities and tend to be rated in a lower rating
category, and frequently a substantially lower rating category, than the
senior mortgage-related securities issued in respect of the same pool of
mortgage. Subordinated Securities generally are likely to be more sensitive
to changes in prepayment and interest rates and the market for such securities
may be less liquid than is the case for traditional fixed-income securities
and senior mortgage-related securities.
The market for commercial mortgage-related securities developed more
recently and in terms of total outstanding principal amount of issues is
relatively small compared to the market for residential single-family mortgage-related
securities. In addition, commercial lending generally is viewed as exposing
the lender to a greater risk of loss than one- to four-family residential
lending. Commercial lending, for example, typically involves larger loans
to single borrowers or groups of related borrowers than residential one-
to four-family mortgage loans. In addition, the repayment of loans secured
by income producing properties typically is dependent upon the successful
operation of the related real estate project and the cash flow generated
therefrom. Consequently, adverse changes in economic conditions and circumstances
are more likely to have an adverse impact on mortgage-related securities
secured by loans on commercial properties than on those secured by loans
on residential properties.
Collateralized Mortgage Obligations ("CMOs") -- A CMO is a multi-class
bond backed by a pool of mortgage pass-through certificates or mortgage
loans. CMOs may be collateralized by (a) Ginnie Mae, Fannie Mae, or Freddie
Mac pass-through certificates, (b) unsecuritized mortgage loans insured
by the Federal Housing Administration or guaranteed by the Department of
Veterans' Affairs, (c) unsecuritized conventional mortgages, (d) other
mortgage-related securities, or (e) any combination thereof. Each class
of CMOs, often referred to as a "tranche," is issued at a specific coupon
rate and has a stated maturity or final distribution date. Principal prepayments
on collateral underlying a CMO may cause it to be retired substantially
earlier than the stated maturities or final distribution dates. The principal
and interest on the underlying mortgages may be allocated among the several
classes of a series of a CMO in many ways. One or more tranches of a CMO
may have coupon rates which reset periodically at a specified increment
over an index, such as the London Interbank Offered Rate ("LIBOR") (or
sometimes more than one index). These floating rate CMOs typically are
issued with lifetime caps on the coupon rate thereon. The Fund also may
invest in inverse floating rate CMOs. Inverse floating rate CMOs constitute
a tranche of a CMO with a coupon rate that moves in the reverse direction
to an applicable index such a LIBOR. Accordingly, the coupon rate thereon
will increase as interest rates decrease. Inverse floating rate CMOs are
typically more volatile than fixed or floating rate tranches of CMOs.
Many inverse floating rate CMOs have coupons that move inversely to
a multiple of the applicable indices. The effect of the coupon varying
inversely to a multiple of an applicable index creates a leverage factor.
Inverse floaters based on multiples of a stated index are designed to be
highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and loss of principal. The markets
for inverse floating rate CMOs with highly leveraged characteristics at
times may be very thin. A Fund's ability to dispose of its positions in
such securities will depend on the degree of liquidity in the markets for
such securities. It is impossible to predict the amount of trading interest
that may exist in such securities, and therefore the future degree of liquidity.
Stripped Mortgage-Backed Securities -- Stripped mortgage-backed
securities are created by segregating the cash flows from underlying mortgage
loans or mortgage securities to create two or more new securities, each
with a specified percentage of the underlying security's principal or interest
payments. Mortgage securities may be partially stripped so that each investor
class receives some interest and some principal. When securities are completely
stripped, however, all of the interest is distributed to holders of one
type of security, known as an interest-only security, or IO, and all of
the principal is distributed to holders of another type of security known
as a principal-only security, or PO. Strips can be created in a pass-through
structure or as tranches of a CMO. The yields to maturity on IOs and POs
are very sensitive to the rate of principal payments (including prepayments)
on the related underlying mortgage assets. If the underlying mortgage assets
experience greater than anticipated prepayments of principal, the Fund
may not fully recoup its initial investment in IOs. Conversely, if the
underlying mortgage assets experience less than anticipated prepayments
of principal, the yield on POs could be materially and adversely affected.
Adjustable-Rate Mortgage Loans ("ARMs") -- ARMs eligible for
inclusion in a mortgage pool generally will provide for a fixed initial
mortgage interest rate for a specified period of time, generally for either
the first three, six, twelve, thirteen, thirty-six, or sixty scheduled
monthly payments. Thereafter, the interest rates are subject to periodic
adjustment based on changes in an index. ARMs typically have minimum and
maximum rates beyond which the mortgage interest rate may not vary over
the lifetime of the loans. Certain ARMs provide for additional limitations
on the maximum amount by which the mortgage interest rate may adjust for
any single adjustment period. Negatively amortizing ARMs may provide limitations
on changes in the required monthly payment. Limitations on monthly payments
can result in monthly payments that are greater or less than the amount
necessary to amortize a negatively amortizing ARM by its maturity at the
interest rate in effect during any particular month.
Other Mortgage-Related Securities -- Other mortgage-related securities
include securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage
loans on real property, including CMO residuals. Other mortgage-related
securities may be equity or debt securities issued by agencies or instrumentalities
of the U.S. Government or by private originators of, or investors in, mortgage
loans, including savings and loan associations, homebuilders, mortgage
banks, commercial banks, investment banks, partnerships, trusts and special
purpose entities of the foregoing.
Asset-Backed Securities -- Asset-backed securities are a form
of derivative. The securitization techniques used for asset-backed securities
are similar to those used for mortgage-related securities. These securities
include debt securities and securities with debt-like characteristics.
The collateral for these securities has included home equity loans, automobile
and credit card receivables, boat loans, computer leases, airplane leases,
mobile home loans, recreational vehicle loans and hospital account receivables.
The Fund may invest in these and other types of asset-backed securities
that may be developed in the future.
Asset-backed securities present certain risks that are not presented
by mortgage-backed securities. Primarily, these securities may provide
the Fund with a less effective security interest in the related collateral
than do mortgage-backed securities. Therefore, there is the possibility
that recoveries on the underlying collateral may not, in some cases, be
available to support payments on these securities.
Depositary Receipts -- American Depositary Receipts ("ADRs")
are receipts typically issued by a United States bank or trust company
which evidence ownership of underlying securities issued by a foreign corporation.
European Depositary Receipts ("EDRs"), which are sometimes referred to
as Continental Depositary Receipts ("CDRs"), are receipts issued in Europe
typically by non-United States banks and trust companies that evidence
ownership of either foreign or domestic securities. Generally, ADRs in
registered form are designed for use in the United States securities markets
and EDRs and CDRs in bearer form are designed for use in Europe. These
securities may be purchased through "sponsored" or "unsponsored" facilities.
A sponsored facility is established jointly by the issuer of the underlying
security and a depositary, whereas a depositary may establish an unsponsored
facility without participation by the issuer of the deposited security.
Holders of unsponsored depositary receipts generally bear all the costs
of such facilities and the depositary of an unsponsored facility frequently
is under no obligation to distribute stockholder communications received
from the issuer of the deposited security or to pass through voting rights
to the holders of such receipts in respect of the deposited securities.
These securities may not necessarily be denominated in the same currency
as the securities into which they may be converted.
Additional Investment Considerations and Risks
Equity Securities -- Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus
the Fund's total return to investors. The value of a Fund's investments
in certain equity securities may be affected by changes in the price of
precious metals, such as gold, platinum and silver. Precious metals have
been subject to substantial price fluctuations over short periods of time.
The prices have been influenced by industrial and commercial demand, investment
and speculation, and monetary and fiscal policies of central banks and
governmental and international agencies. Changes in political, social and
economic conditions affecting the countries which are major producers of
precious metals also pose certain risks to a Fund's investments.
Fixed-Income Securities -- Even though interest bearing securities
are investments which promise a stable stream of income, the prices of
such securities generally are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price fluctuations.
The values of fixed-income securities also may be affected by changes in
the credit rating or financial condition of the issuer. Certain securities
purchased by a Fund, such as convertible securities rated below investment
grade by a nationally recognized statistical rating organization, may be
subject to such risk with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated fixed income
securities. Once the rating of a portfolio security has been changed, the
Fund will consider all circumstances deemed relevant in determining whether
to continue to hold the security.
Private Placements, Private Companies -- The Fund may invest
in securities that are sold in private placement transactions between the
issuers and their purchasers and that are neither listed on an exchange
nor traded in the secondary market and private companies. In many cases,
privately placed securities will be subject to contractual or legal restrictions
on transfer. As a result of the absence of a public trading market, privately
placed securities may in turn be less liquid and more difficult to value
than publicly traded securities. Although privately placed securities may
be resold in privately negotiated transactions, the prices realized from
the sales could, due to illiquidity, be less than if such securities were
more widely traded. In addition, private companies (issuers whose securities
are not publicly traded) may not be subject to the disclosure and other
investor protection requirements that may be applicable if their securities
were publicly traded. If any privately placed securities held by the Fund
are required to be registered under the securities laws of one or more
jurisdictions before being resold, the Fund may be required to bear the
expenses of registration and may be deemed to be an underwriter.
Small Capitalization Companies -- The Fund may invest in companies
that are small or thinly capitalized, and may have a limited operating
history. As a result, investment in these securities involves greater risks
and may be considered speculative. For example, such companies may have
more limited product lines, markets or financial resources than companies
with larger capitalizations, and may be more dependent on a small management
group. In addition, the securities of such companies may trade less frequently
and in smaller volume, and may be subject to more abrupt or erratic price
movements, than securities of large companies. The Fund's positions in
securities of such companies may be substantial in relation to the market
of such securities. Accordingly, it may be difficult for the Fund to dispose
of securities of these companies at prevailing market prices. Full development
of these companies takes time, and for this reason the Fund should be considered
a long term investment and not a vehicle for seeking short term profit.
The securities of small or thinly capitalized companies may also be more
sensitive to market changes than the securities of large companies. Such
companies may not be well known to the investing public and may not have
institutional ownership. Such companies may also be more vulnerable than
larger companies to adverse business or economic developments.
Foreign Markets, Securities, and Currencies -- Foreign securities
markets generally are not as developed or efficient as those in the United
States. Securities of some foreign issuers are less liquid and more volatile
than securities of comparable U.S. issuers. Similarly, volume and liquidity
in most foreign securities markets are less than in the United States and,
at times, volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are held outside
the United States, the Fund will be subject to additional risks which include
possible adverse political and economic developments, seizure or nationalization
of foreign deposits or adoption of governmental restrictions which might
adversely affect or restrict the payment of principal and interest on the
foreign securities to investors located outside the country of the issuer,
whether from currency blockage or otherwise. Since foreign securities often
are purchased with and payable in currencies of foreign countries, the
value of these assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency rates and exchange control regulations.
Your vote is important!
Please sign and date the proxy/voting instructions card above and
return it promptly in the enclosed postage-paid envelope or otherwise to
Bexil Corporation c/o Corporate Election Services, P.O. Box 1150, Pittsburgh,
PA 15230, so that your shares can be represented at the Meeting.
Please fold and detach card at perforation before mailing.
| Bexil Corporation |
Proxy/Voting Instruction Card
|
The undersigned stockholder of Bexil Corporation (the "Fund") hereby
appoints Thomas B. Winmill and Deborah Ann Sullivan and each of them, the
attorneys and proxies of the undersigned, with full power of substitution
in each of them, to attend the Annual Meeting of Stockholders to be held
at the offices of the Fund at 11 Hanover Square, New York, New York on
Tuesday, November 23, 1999 at 8:30 a.m., and at any postponement or adjournment
thereof ("Meeting") to cast on behalf of the undersigned all votes that
the undersigned is entitled to cast at the Meeting and otherwise to represent
the undersigned at the Meeting with all of the powers the undersigned possesses
and especially (but without limiting the general authorization and power
hereby given) to vote as indicated on the proposals, as more fully described
in the proxy statement for the Meeting. The undersigned hereby acknowledges
receipt of the Notice of the Annual Meeting and the accompanying Proxy
Statement and revokes any proxy heretofore given for the Meeting. If
no directions are given, the proxies will vote FOR all proposals and in
their discretion on any other matter that may properly come before the
Meeting.
Sign here as name(s) appear to the left.
_________________________
_________________________
Signature(s) should be exactly as name or names appearing on this form.
Please sign this proxy and return it promptly whether or not you plan
to
attend the Meeting. If signing for a corporation or partnership or
as agent,
attorney or fiduciary, indicate the capacity in which you are signing.
If
you do attend the Meeting and decide to vote by ballot, such vote will
supersede this proxy.
Dated: , 1999
Proxy to be signed and dated on the reverse side.
Please fold and detach card at perforation before mailing.
| Bexil Corporation |
Please mark your votes as in this example: [X]
|
1. To elect to the Board of Directors the Nominees, Douglas Wu and Robert
D. Anderson, as respectively, Class II Director and Class III Director,
each to serve for a five year term and until his successor is duly elected
and qualified.
| [_] FOR All Nominees | [_] WITHHOLD authority
only for those
Nominee(s) whose name(s) I have written below |
[_] WITHHOLD
authority for ALL Nominees |
2. To ratify the selection of Tait, Weller & Baker as the Fund's
independent auditors.
| [_] FOR | [_] AGAINST | [_] ABSTAIN |
3. To change the Fund's investment objective and certain investment policies.
A.
To change the Fund's investment objective and fundamental policies concerning
investments in U.S. Government
Securities.
| [_] FOR | [_] AGAINST | [_] ABSTAIN |
B.
To revise Investment Restriction No. 5 (commodities)
| [_] FOR | [_] AGAINST | [_] ABSTAIN |
C.
To revise Investment Restriction No. 6 (real estate)
| [_] FOR | [_] AGAINST | [_] ABSTAIN |
4. To change the classification of the Fund
from a diversified investment company to a non-diversified investment company.
| [_] FOR | [_] AGAINST | [_] ABSTAIN |
|
|