SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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|_| Confidential, for Use of the Commission Only
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|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12-12
Bexil Corporation
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(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
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
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BEXIL CORPORATION
Notice of Special Meeting of Stockholders
To the Stockholders:
Notice is hereby given that a Special Meeting of Stockholders of Bexil
Corporation (the "Company") will be held at the offices of the Company at 11
Hanover Square, New York, New York on _________________, 2000 at 8:30 a.m. for
the following purposes:
1. To change the nature of the Company's business so as to cease to be an
investment company;
2. To amend the Company's fundamental investment restrictions; and
3. To amend Article VIII and Article XII of the Company's Articles of
Incorporation.
Stockholders of record at the close of business on September 5, 2000 are
entitled to receive notice of and to vote at the meeting.
By Order of the Board of Directors
Monica Pelaez
Secretary
New York, New York
_______________, 2000
Please Vote Immediately by Signing and Returning the Enclosed Proxy Card.
Delay may cause the Company to incur additional expenses to solicit sufficient
votes for the meeting.
<PAGE>
BEXIL CORPORATION
PROXY STATEMENT
Special Meeting of Stockholders
To Be Held _______________, 2000
This Proxy Statement, dated _______________, 2000, is furnished in
connection with a solicitation of proxies by the Board of Directors of Bexil
Corporation (the "Company") to be voted at a Special Meeting of Stockholders of
the Company to be held at the offices of the Company at 11 Hanover Square, New
York, New York on _______________, 2000 at 8:30 a.m. and at any postponement or
adjournment thereof ("Meeting") for the purposes set forth in the accompanying
Notice of Special Meeting of Stockholders. Stockholders of record at the close
of business on September 5, 2000 ("Record Date") are entitled to be present and
to vote on matters at the Meeting. Stockholders are entitled to one vote for
each Company share held and fractional votes for each fractional Company 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 Company, 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 Company had 789,991.580 shares of common stock issued
and outstanding entitled to be voted at the Meeting. Stockholders of the Company
will vote as a single class. It is estimated that proxy materials will be mailed
to stockholders of record on or about _______________, 2000. The Company's
principal executive offices are located at 11 Hanover Square, New York, New York
10005. Copies of the Company's most recent Annual and Semi-Annual Reports are
available without charge upon written request to the Company at 11 Hanover
Square, New York, New York 10005, or by calling toll-free 1-888-847-4200.
PROPOSAL 1: TO CHANGE THE NATURE OF THE COMPANY'S BUSINESS SO AS TO CEASE TO BE
AN INVESTMENT COMPANY.
The Board of Directors of the Company proposes and recommends to
shareholders that the nature of the Company's business be changed so that the
Company will cease to be an investment company. If this proposal is adopted, the
Company intends to operate businesses directly or through companies in which the
Company has a majority or other controlling interest and seek approval of the
SEC for deregistration as an investment company.
Definition of "Investment Company"
The Investment Company Act of 1940 ("1940 Act") defines an investment
company to include (i) any corporation which, on an unconsolidated basis, has,
or proposes to have, more than 40% of the value of its total assets (exclusive
of U.S. Government securities and cash items) invested in investment securities
(exclusive of such Government securities and securities issued by majority-owned
subsidiaries which are not themselves investment companies and are not relying
on certain exemptions from the definition of investment company) and (ii) any
corporation which is, or holds itself out as being, primarily engaged in the
business of investing, reinvesting or trading in
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securities. The 1940 Act excludes from classification as an investment company
(i) any corporation primarily engaged, directly or through a wholly-owned
subsidiary or subsidiaries, in a business or businesses other than that of
investing, reinvesting, owning, holding, or trading in securities and (ii) any
corporation which the SEC determines and declares to be primarily engaged,
either directly or through majority-owned subsidiaries, or controlled companies
conducting similar types of businesses, in one or more businesses other than
that of investing, reinvesting, owning, holding or trading in securities.
Regulation under the Securities Laws
As a registered investment company with shares listed on the American
Stock Exchange, the Company is regulated under a variety of securities laws and
rules, including particularly the 1940 Act, the Securities Exchange Act of 1934
(the "1934 Act") and the rules of (and the listing agreement with) the American
Stock Exchange. These rules on occasion overlap and/or complement each other as,
for example, in the area of proxy solicitation where the 1940 Act incorporates
by reference the various provisions of the 1934 Act, as well as certain rules of
the American Stock Exchange, to which the Company will remain subject. There are
rules specific to the investment company format, however, and these would no
longer be applicable after deregistration as an investment company.
The following is a brief summary of the regulatory structure imposed by
the 1940 Act; for the most part, the provisions cited are those which are
specific to registered investment companies, although in some instances, e.g.,
periodic reporting, deregistration would mean the substitution of one set of
rules and forms for another. The 1940 Act prohibits certain transactions between
the Company and affiliated persons, including directors and officers of the
Company or affiliated companies, unless such transactions are exempted by the
SEC; regulates the composition of the Board; regulates the capital structure of
the Company by restricting the issuance of senior equity and debt securities and
restricts the issuance of stock options, rights and warrants; prohibits
pyramiding of investment companies and the cross ownership of securities;
provides for the custody of securities and bonding of certain employees;
regulates the form, content and frequency of financial reports to shareholders;
requires the Company to carry its assets at fair value rather than at cost in
financial reports; requires that the Company file with the SEC periodic reports
designed to disclose compliance with the 1940 Act and to present other financial
information; prohibits the Company from changing the nature of its business or
fundamental investment policies without the prior approval of its shareholders;
prohibits voting trusts; and requires shareholder ratification of the selection
of accountants.
Other provisions of the 1940 Act state that common stock may not be issued
at less than net asset value; provide that no securities may be issued for
services or for property other than cash or securities except as a dividend or a
distribution to security holders or in connection with a reorganization;
restrict the manner in which repurchases of stock may be effected; restrict
plans of reorganization; provide for enforcement by the SEC of the 1940 Act
through administrative proceedings and court actions; and create a right in
private persons to bring injunctive and damage actions in Federal courts to
enforce compliance with the 1940 Act.
The Proposal
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At the December 21, 1999 annual meeting of shareholders, the Company's
shareholders voted to revise the Company's investment objective and certain
investment policies to increase the Company's ability to invest in equity
securities and other types of non-fixed income investments. Accordingly, the
Fund's current investment objective is to provide stockholders with an
attractive rate of total return from capital appreciation and income. To achieve
this objective, the Fund invests at least 50% of the value of its total assets
in U.S. Government Securities, obligations of U.S. Government agencies or
instrumentalities, and money market instruments, with the remainder of its total
assets invested primarily in equity and other securities of selected growth
companies and in companies that invest or deal in natural resources or
commodities. Prior thereto, the Company sought to achieve its investment
objective of providing a high level of current income, liquidity, and safety of
principal by investment primarily in U.S. government securities.
The Company's management recently recommended to the Company's Board of
Directors that the Company change its activities so as to cease to be an
investment company. The Board considered this matter at two board meetings, held
on June 14, 2000 and July 24, 2000, and determined to recommend that
shareholders vote to provide the necessary authorization. This conclusion is
based in substantial part on management's perception of the appropriate business
strategy to be pursued in the forthcoming years. In particular, management does
not feel that investment in a portfolio of government and other securities, such
as now comprise the Company's portfolio, will yield competitive returns to
shareholders, particularly in light of the substantial market discount typically
attributable to the shares of closed-end investment companies, like the Company.
Rather, management believes that enabling the Company to operate businesses
directly or through companies in which it has a majority or other controlling
interest could lead to superior results over time both through investing
substantial funds in companies which appear to have above average potential and
by being able to own sufficient shares in portfolio companies so that the
Company's officers can assist the management of those companies in realizing
greater values for shareholders. Management believes that this business strategy
is likely to result in an asset mix which will classify the Company as an
operating rather than an investment company, and could reduce the market
discount phenomenon that has historically affected the Company. In approving the
change in the nature of the Company's business, the Board of Directors
considered data obtained by management from Morningstar, Inc. indicating that
operating companies in the same capitalization range as the Company generally
trade at less of a discount to book value than closed-end investment companies
trade to net asset value.
As an operating rather than an investment company, for a significant
investment (ownership of 20% or more of a company's voting stock), the Company
may be able to include in its reported earnings and assets its proportionate
share of the earnings or losses of the investee company, provided that the
investment and related control would not be deemed temporary. In contrast, an
investment company would record as income any dividends received and the change
in the market value of the stock.
If the shareholders authorize changing the nature of the Company's
business so that it may cease to be an investment company, the Company's
investment manager, CEF Advisers, Inc. ("CEF") anticipates taking steps to
effect such change. Although CEF does not have any specific program of purchases
or sales or other activities yet identified, it is willing to conduct a business
review, development, and acquisition program for operating businesses to be
undertaken directly or through companies in which the Company has a majority or
other controlling interest. Management expects to
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seek earnings for the Company primarily from the conduct of these businesses,
although the realization of gains from the sale of a business interest may also
offer attractive potential from time to time. The proposal would permit the
Company to participate more directly and extensively in the management of its
controlled companies. Further, it is expected that the Company will continue
investing in investment securities, although the scope of such investing would
be intended to be consistent with the exclusion of the Company from the
definition of investment company under the 1940 Act. The Company may continue to
keep funds not needed for the conduct of business invested in U.S. government
securities or investment securities. There can be no assurance, however, that as
an operating company the Company will be successful in seeking earnings or
realizing gains or that the Company's participation in management of its
operating business will be beneficial.
If Proposal 1 is approved by the shareholders, CEF will remain the
Company's investment manager until the Board of Directors, including the
independent Directors, determines, based on the composition of the Company's
portfolio, that CEF's services are no longer necessary. At such time as the
Board determines to terminate the Company's agreement with CEF, the Company's
officers would manage the Company's business. Depending upon the nature of the
operating business pursued by the Company, the Company might employ additional
staff members and might engage third parties to assist it in locating
appropriate business opportunities. The costs related to such possibilities are
not presently known and could be more or less than the expenses currently
incurred by the Company as an investment company.
RISK FACTORS
Entry into a New Business
One of the risks involved in the proposed conversion to an operating
company relates to the Company's entry into a new business. Becoming an
operating company would allow the Company to acquire or develop, directly or
through one or more subsidiaries, businesses in which the Company has no
experience or operating history. Likewise, there can be no assurance that the
Company will be able to implement its proposed business plans or, if
implemented, that it will be successful.
Concentration
To provide funds for acquisitions, CEF expects to sell investment
securities with the anticipated result that the Company's holdings will become
concentrated in a relatively few companies to be owned as operating companies.
Such acquisitions and dispositions, however, would be accomplished only if and
when, in the judgment of the Company's management, favorable opportunities
therefor are available. Since there is no assurance when such opportunities may
become available, it is possible that, even if the shareholders approve the
recommended change, there may be no significant near-term change in the
Company's investments.
It may be that the acquisition program approved by the shareholders will
involve investing more than 25% of the Company's assets in a specific industry
or group of industries. The Company's fundamental policies currently prevent it
from concentrating its investments to such an extent and therefore Proposal 2 of
this Proxy Statement seeks shareholder approval to amend this restriction to
allow the Company to concentrate its investments.
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The failure of businesses in which the Company concentrates its holdings
would have a significant adverse effect on shareholders and their investment in
the Company. The investment return to shareholders would be dependent upon the
performance of a few operating businesses rather than a broad range of
investment securities. Additionally, the Company could be expected to be more
susceptible to economic, political, and regulatory developments than is
currently the case. Concentration may increase the risk to shareholders if a
given investment fails to perform satisfactorily but concentration is, of
course, a key element in the business strategy that has caused the Company to
seek approval of its program to become an operating company. It cannot be
assumed at this time that the Company will in fact concentrate its investments
in a given industry or group of industries within the meaning of those terms in
the 1940 Act prior to deregistration and no industry or group is now identified
or identifiable.
Federal Income Tax Treatment
The Company has qualified for and elected tax treatment under subchapter M
of the Internal Revenue Code ("Code") as a regulated investment company ("RIC").
A RIC, unlike an ordinary corporation, pays no federal income taxes on that
portion of its annual income distributed to shareholders, provided that at least
90% of such income is so distributed. As a consequence of this special tax
treatment, a RIC is required to act largely as a passive investment vehicle,
limited in its scope of permissible investments and in its ability to manage
directly such investments.
If a change in the Company's business to that of an operating company is
authorized by the shareholders, and certain changes are made to the Company's
portfolio to effect that mandate, the Company would cease to be taxed as a RIC.
Further, dispositions of certain portfolio securities may result in the
incursion of more taxes than otherwise. The Company may cease to be taxed as a
RIC prior to its deregistration with the SEC if and as the mix of its assets
becomes weighted toward large positions, i.e., if the Company begins functioning
as an operating company and fails to satisfy RIC qualification rules. In such
event, the Company would be taxed as a corporation for federal income tax
purposes, and its total net income would be subject to federal taxation at the
corporate level. To the extent that such income is distributed to shareholders,
these distributions are also subject to taxation at the shareholder level as
ordinary income and the Company gets no deduction for such distributions. In
addition, if the Company ceases to be taxed as a RIC, it may become subject to
certain state and local taxes to which it is not currently subject.
Procedures after Shareholder Approval
In the event of shareholder approval of this Proposal 1, the Company
intends to apply to the SEC for an order under Section 8(f) of the 1940 Act
declaring that it has ceased to be an investment company and that its
registration statement is no longer in effect, as soon as the necessary
purchases, sales and other steps have been taken. After reviewing the
application, the SEC can require the Company to supply additional information,
which may result in one or more amendments to the application. The SEC can on
its own motion or on the motion of any interested party order a public hearing
on the application. It cannot be stated with certainty whether the SEC will
grant the Company's application, and the Company anticipates it would take
approximately six to nine months from the date of filing to obtain a
deregistration order.
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If the proposal is approved and if, as a result of a change in the nature
of the Company's operations the SEC should approve deregistration under Section
8(f) of the 1940 Act, shareholders would no longer have the benefit of the
regulatory protections provided by the 1940 Act as outlined above. However,
following deregistration, shareholders would continue to have the protections
afforded by the 1934 Act, which regulates publicly traded companies, including
the following: soliciting proxies from shareholders, filing interim and annual
reports with the SEC, filing securities ownership reports by directors, officers
and principal shareholders, and engaging in insider trading in securities, using
manipulative devices in connection with certain security transactions, and
making misleading statements in reports or documents filed with the SEC.
Until the SEC issues a deregistration order, the Company's activities will
continue to be conducted in accordance with its investment policies as exist
currently or as proposed to be amended in Proposal 2. Upon issuance of an order
of deregistration, the investment policies will cease to be effective and will
no longer control the Company's affairs.
Vote Required and the Board's Recommendation
Under the 1940 Act, the Company may not change the nature of its business
so as to cease to be an investment company without the affirmative vote of the
lesser of (a) 67% of the Company's outstanding voting securities present at the
Meeting, if the holders of more than 50% of the Company's outstanding voting
securities are present in person or represented by proxy, or (b) more than 50%
of the Company's outstanding voting securities.
THE COMPANY'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL 1 TO CHANGE THE
NATURE OF THE COMPANY'S BUSINESS SO AS TO CEASE TO BE AN INVESTMENT COMPANY.
PROPOSAL 2: TO AMEND THE COMPANY'S FUNDAMENTAL INVESTMENT RESTRICTIONS.
The Company currently seeks to achieve its investment objective of
providing shareholders with an attractive rate of total return from capital
appreciation and income, by investing 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. Currently, the Company follows certain fundamental
investment restrictions that may not be changed without shareholder approval.
These fundamental restrictions read as follows:
The Company may not:
1. Issue senior securities as defined in the 1940 Act (including borrowing
money) except as permitted by applicable law.
2. Lend its assets, except as permitted by applicable law.
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3. Underwrite the securities of other issuers, except to th extent that the
Company may be deemed to be an underwriter under the Federal securities
laws in connection with the disposition of the Company's authorized
investments.
4. Purchase or sell commodities, except that the Company ma purchase and sell
options, futures contracts, including those relating to indices, and
options on futures contracts or indices, and currencies.
5. Purchase or sell real estate, but the Company may purchase and sell
securities 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. Purchase a security if, as a result, 25% or more of the value of the
Company'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.
Certain of these restrictions may prohibit the Company from effecting its
goal of converting from an investment company to an operating company as
described in Proposal 1 of this Proxy Statement. Shareholders therefore are
being asked to approve a change to fundamental investment restriction 6
prohibiting the Company from investing more than 25% of its assets in a single
industry, to permit the Company to concentrate its investments in one or more
industries. The Company's concentration policy would remain fundamental, as
required by the 1940 Act, and would be amended to read as follows: "The Company
may invest more than 25% of the value of its total assets in the securities of
issuers in a particular industry or group of industries." This would allow the
Company the flexibility to concentrate its investments in an industry or group
of industries should appropriate investment opportunities arise, but would not
require it to do so. The Board believes this investment flexibility is critical
given that management has not yet identified the investment opportunities that
the Company would pursue if Proposal 1 is approved. In addition, the
shareholders are being asked to change the remainder of the Company's investment
restrictions (numbers 1 through 5) from fundamental to non-fundamental, so that
the restrictions may be amended or deleted in the future by the Board without a
shareholder vote. As noted above, upon SEC approval of the Company's application
for deregistration as an investment company under the 1940 Act, the Company's
operations would no longer be governed by these policies.
Vote Required and the Board's Recommendation
Approval of this Proposal will be sought by six separate votes. Approval
of this Proposal, with respect to each separate vote, requires the affirmative
vote of the lesser of (a) 67% of the Company's outstanding voting securities
present at the Meeting, if the holders of more than 50% of the Company's
outstanding voting securities are present in person or represented by proxy, or
(b) more than 50% of the Company's outstanding voting securities.
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THE COMPANY'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL 2 TO CHANGE THE
COMPANY'S INVESTMENT RESTRICTIONS, AS DESCRIBED IN THE PROPOSAL.
PROPOSAL 3: TO AMEND ARTICLE VIII AND ARTICLE XII OF THE COMPANY'S ARTICLES OF
INCORPORATION.
If Proposal 1 is approved by the shareholders, it is further proposed that
the charter of the Company be amended by eliminating references to the 1940 Act,
which amendments would be filed with the Maryland State Department of
Assessments and Taxation and made effective on or after the date an order is
obtained under Section 8(f) of the 1940 Act, declaring that the Company has
ceased to be an investment company. The Company's Board of Directors determined
that the amendments were necessary and advisable, and approved and advised them,
subject to stockholder approval, on July 24, 2000. Also at that meeting, the
Board approved a minor amendment to Article IX of the Company's Articles of
Incorporation to delete a single reference therein to the 1940 Act. This
amendment does not require the approval of shareholders, and therefore such
approval is not being sought. The text of the amendments approved and advised by
the Board and requiring shareholder approval is set forth as Exhibit A hereto.
Vote Required and the Board's Recommendation
Approval of this Proposal will be sought by two separate votes. Approval
of this Proposal, with respect to each separate vote, requires the affirmative
vote of a majority of the Company's outstanding voting securities. Approval of
this Proposal is conditioned upon shareholder approval of Proposals 1 and 2.
THE COMPANY'S BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" AMENDING THE COMPANY'S
ARTICLES OF INCORPORATION.
ADDITIONAL INFORMATION
A quorum is constituted with respect to the Company by the presence in
person or by proxy of the holders of a majority of the outstanding shares of the
Company 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
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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 Company 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 Company'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 1 and 2.
In addition to the use of the mails, proxies may be solicited personally,
by telephone, or by other means, and the Company 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 Company will bear the cost of
soliciting proxies. In addition, the Company 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 Company'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 instructions 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 Company 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 Company, as of the Record Date,
the following shareholder beneficially owned 5% or more of the outstanding
shares of the Company according to its Schedule 13D filed on July 12, 2000:
Approximate Percentage of
the Company's Total
Name and Address Common Stock Outstanding Shares
---------------- ------------ -------------------------
Investor Service Center, Inc. 169,464.7 shares 21.45%
11 Hanover Square
New York, New York 10005
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The following table presents certain information regarding the beneficial
ownership of the Company's shares as of the Record Date by each officer and
Director of the Company owning shares on such date. In each case, such amount
constitutes less than 1% of the Company's outstanding shares.
Name of Officer or Director Number of Shares
--------------------------- ----------------
Robert D. Anderson
Steven A. Landis
Frederick A. Parker, Jr.
Bassett S. Winmill
Thomas B. Winmill
Douglas Wu
[name any other officers or directors owning shares on the Record Date]
Winmill & Co. Incorporated and its subsidiaries, including Investor
Service Center, Inc., of which Bassett S. Winmill may be deemed a controlling
person, also own in the aggregate _________ Company shares, or ____% of all
outstanding shares on the Record Date. Mr. Winmill disclaims beneficial
ownership of shares held by Investor Service Center, Inc.
Investment Manager
CEF Advisers, Inc., 11 Hanover Square, New York, New York, 10005, serves
as the Company's Investment Manager.
Submission Deadlines for Stockholder Proposals
Pursuant to Rule 14a-5(e) of the 1934 Act, July 12, 2000 was the deadline
for submitting shareholder proposals for inclusion in the Company's proxy
statement and form of proxy for the Company's next annual meeting was pursuant
to Rule 14a-8(e)(2) of the 1934 Act. September 18, 2000 is the date after which
notice of a shareholder proposal submitted outside the processes of Rule 14a-8
under the 1934 Act is considered untimely, as established by the Fund's By Laws,
as amended December 8, 1999. In addition, 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 Company in the manner set forth
in the Company's By-laws. As of the date hereof, the Company'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 Corporation not
less than sixty (60) calendar days not more than ninety (90) calendar days prior
to the anniversary date of the mailing date of the notice of the preceding
year's annual meeting; 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 (60) 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. For purposes of this
Section 2.11, 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 Corporation with the
-10-
<PAGE>
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 or regulations thereunder) of the 1940 Act.
As set forth in the Company'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 Company, at its principal executive offices, to the
attention of the 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.
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<PAGE>
EXHIBIT A
Articles VIII and XII of the charter of Bexil Corporation shall be amended
to read as follows (language to be deleted is enclosed within double braces;
language to be added is enclosed within double asterisks):
Article VIII Certain Votes of Stockholders
(1)(a) Except as otherwise provided in these Articles of Incorporation and
notwithstanding any other provision of the Maryland General Corporation
Law to the contrary, 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
vote required by the Investment Company Act of 1940, as amended (the "1940
Act"), or (B)}} the lesser of {{(1)}}**(A)** 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)}}**(B)** if such action may be taken or
authorized by a lesser proportion of votes under applicable law, such
lesser proportion."
{{Article XII Conversion to Open-End Company}}
{{Notwithstanding any other provisions of these Articles of Incorporation
or the By-Laws of the Corporation, the approval, adoption or authorization
of any amendment to these Articles of Incorporation that makes the Common
Stock or any other class of capital stock a "redeemable security" as that
term is defined in the 1940 Act shall require the affirmative vote of the
holders 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 approved by at least fifty
(50%) of the Directors, in which case such amendment or repeal would
require the affirmative vote of the holders of a majority of the number of
votes entitled to be cast thereon.}}
{{The Corporation shall notify the holders of all capital stock of the
approval, in accordance with the preceding paragraph of this Article VII,
of any amendment to these Articles of Incorporation that makes the Common
Stock or any other class of capital stock a "redeemable security" (as that
term is defined in the 1940 Act) no later than thirty (30) days prior to
the date of filing of such amendment with the Department of Assessments
and Taxation (or any successor agency) of the State of Maryland; such
amendment may not be filed, however, until the later of (a) ninety (90)
days following the date of approval of such amendment by the holders of
capital stock in accordance with the preceding paragraph of this Article
XII and (b) the next January 1 or July 1, whichever is sooner, following
the date of such approval by holders of capital stock"}}
A-1
<PAGE>
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
This proxy is solicited by and on behalf of the Company's Board of Directors for
the Special Meeting of Stockholders on _______________, 2000, and at any
postponement or adjournment thereof.
The undersigned stockholder of Bexil Corporation (the "Company") hereby appoints
Thomas B. Winmill and Monica Pelaez and each of them, the attorneys and proxies
of the undersigned, with full power of substitution in each of them, to attend
the Special Meeting of Stockholders to be held at the offices of the Company at
11 Hanover Square, New York, New York on _______________, 2000 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 Special 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.
<PAGE>
Dated: , 2000
<PAGE>
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: _
Please sign, date and return this proxy/voting instructions card promptly
in the enclosed postage-paid envelope. If no direction is given on a proposal,
the proxies will vote FOR the proposal, in accordance with the Company Board's
recommendations.
1. To change the nature of the Company's business so as to cease to be an
investment company.
|_| FOR |_| AGAINST |_| ABSTAIN
2. To amend the Company's fundamental investment restrictions.
A. To amend the fundamental investment restriction prohibiting the Company
from investing more than 25% of its assets in a single industry, to read
as follows: "The Company may invest more than 25% of the value of its
total assets in the securities of issuers in a particular industry or
group of industries."
|_| FOR |_| AGAINST |_| ABSTAIN
B. To change the current fundamental policy of the Company which prohibits
the Company from issuing senior securities except as permitted by
applicable law, to a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
C. To change the current fundamental policy which prohibits the Company from
lending its assets, except as permitted by applicable law, to a
non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
D. To change the current fundamental policy which prohibits the Company from
underwriting the securities of other issuers, except to the extent that
the Company may be deemed to be an underwriter under the Federal
securities laws in connection with the disposition of the Company's
authorized investments, to a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
E. To change the current fundamental policy with prohibits the Company from
purchasing or selling commodities, except that the Company may purchase
and sell options, futures contracts,
<PAGE>
including those relating to indices, and options on futures contracts or
indices, and currencies, to a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
F. To change the current fundamental policy which prohibits the Company from
purchasing or selling real estate, but the Company may purchase and sell
securities 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 trust and
hold and sell real estate as a result of ownership of such securities or
instruments, to a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
3. To amend the Company's Articles of Incorporation. Approval of this
Proposal is conditioned upon shareholder approval of Proposals 1 and 2.
A. To amend Article VIII as set forth in Exhibit A.
|_| FOR |_| AGAINST |_| ABSTAIN
B. To amend Article XII as set forth in Exhibit A.
|_| FOR |_| AGAINST |_| ABSTAIN
